This week, CSOP Asset Management Ltd launched the first
exchange-traded fund (ETF) based on the Hang Seng TECH Index,
which tracks the 30 biggest tech companies listed in Hong Kong,
including Tencent Holdings and Alibaba Group.
China Asset Management Co (ChinaAMC) and Dacheng Fund Management
Co will follow suit, while global ETF giants Vanguard and
BlackRock are preparing for similar products, according to
company filings and people familiar with the plans.
In mainland China, four money managers, including ChinaAMC and
Huatai-PineBridge, are gearing up to launch the country's first
ETFs tracking the STAR 50 index, the newly published gauge for
Shanghai's Nasdaq-style STAR Market.
Fund managers say a looming technology decoupling between China
and the United States amid trade and security tensions will
accelerate home listings by Chinese tech companies, creating
demand for tech ETFs.
"We foresee many existing and new tech companies listing in Hong
Kong, whereas before, their choice could be listing in the
U.S.," said Melody He, managing director of CSOP Asset
Management, whose CSOP Hang Seng TECH Index ETF will be listed
on Friday.
Greed and patriotism have fuelled a strong rally in Chinese tech
stocks, as Beijing accelerates capital market reforms to fund
its technology race with the United States.
Further driving up sentiment, Alibaba's Ant Group on Tuesday
filed for a dual listing in Hong Kong and on Shanghai's STAR
Market, potentially raising as much as $30 billion.
Zhang Hongtao, manager of ChinaAMC's planned STAR50 ETF, said
increasing home listings by Chinese tech firms give local
investors access to some of China's best technology companies,
an opportunity they once missed.
The trend is accelerating after Washington recently tightened
auditing standards for U.S.-listed Chinese companies, and
sanctioned Chinese-owned apps TikTok and WeChat.
Yang Siqi, analyst at Hwabao Securities Co, said tech ETFs will
likely be popular.
"ETFs, which invest in a portfolio of companies, lower the bar
of tech investment for retail investors, who have difficulty
picking stocks" and investing in tech stocks is being promoted
by the government, Yang said.
(Reporting by Samuel Shen and Andrew Galbraith; Editng by
Lincoln Feast.)
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