Korea Investment Management Enters Hong Kong ETF Market With Debut Fund Betting 60% on China Chip Stocks
Summary
- Korea Investment Management said the CUAM Solactive China & Global Semiconductor ETF, jointly developed with CUAM HK, has been listed on the Hong Kong Stock Exchange.
- The firm said the ETF invests in 30 semiconductor companies across the US, mainland China, South Korea, Taiwan, Hong Kong and the Netherlands, with a 60% weighting to China and 40% to global markets.
- The company said the ETF is aimed at drawing mainland Chinese capital through ETF Connect inclusion and expanding its overseas ETF advisory business with about $5 million in proprietary capital investment.
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Korea Investment Management has entered Hong Kong’s exchange-traded fund market. Its first product is a semiconductor ETF that allocates 60% to Chinese chip companies.
The asset manager said on October 26 that the CUAM Solactive China & Global Semiconductor ETF, developed with China Universal Asset Management (Hong Kong), or CUAM HK, was listed on the Hong Kong Stock Exchange on October 23.
The benchmark is the Solactive ACE ETF Connect China & Global Semiconductor Top 30 Index. The fund invests in 30 semiconductor companies in the US, mainland China, South Korea, Taiwan, Hong Kong and the Netherlands, with a 60% weighting to China and 40% to global names. Its holdings include Nvidia, TSMC, Samsung Electronics, ASML and Broadcom.
Korea Investment Management was responsible for product planning and development, as well as portfolio advisory. CUAM HK handled the Hong Kong listing and local management, and makes the final investment decisions. The launch comes 11 months after the two sides signed their partnership agreement.
The ETF was created with the goal of being added to ETF Connect, the cross-border ETF trading program between Hong Kong and mainland China. If included, mainland Chinese investors would be able to trade the ETF directly in yuan, potentially attracting inflows from the mainland. The fund must meet requirements including six months of trading history after listing and one year of index calculation, making it eligible for an inclusion review after April next year.
Korea Investment Management will also invest about $5 million of its own capital to build up initial assets under management. It plans to develop additional joint ETFs and expand its overseas ETF advisory business.
Bae Jae-kyu, chief executive of Korea Investment Management, called the launch an important starting point for the company’s full-scale push into overseas ETFs. He added that the firm plans to gradually expand beyond Hong Kong into mainland China.
Park Ju-yeon, Hankyung.com reporter grumpy_cat@hankyung.com
Korea Economic Daily
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