BlackRock is launching a new exchange traded fund to track the Hang Seng TECH Index, expanding its iShares product offering in Hong Kong to meet increasing investor demand for exposure to technology companies. The iShares Hang Seng TECH ETF (HKD/USD Ticker: 3067 / 9067) will list on the Hong Kong stock exchange on September 17 2020.
With an estimated total expense ratio of only 0.25%, the fund offers the most cost-efficient Hang Seng TECH Index exposure, with the option of US and Hong Kong dollar trading counters, BlackRock said in a statement. The Hang Seng TECH Index aims to represent the performance of the 30 largest Hong Kong-listed companies that have high business exposure to five select technology themes: internet, fintech, cloud, e-commerce and digital.
Science and technology innovation industries are likely to become the new drivers of China’s economic growth, while investor demand for tech exposure has been growing steadily over the years, the investment firm notes. Since 2017, the number of tech companies listed on the mainboard of the Hong Kong stock exchange has increased by 19%, and they now represent one-third of its total equity market capitalization. Also, China’s weight in the MSCI Asia ex-Japan Index has more than doubled over the last five years. This has been led by technology firms, which account for 23% of the same index, compared with just 5% five years ago, while the technology sector now constitutes nearly half of the MSCI China Index.
Says Susan Chan, head of Asia at BlackRock: “Relaxation of the Hong Kong Stock Exchange rules to facilitate secondary listings has led to an influx of Chinese ‘new economy’ stock listings. This has been partly aided by the ‘homecoming’ of Chinese tech firms opting for a secondary listing on the HKEX after listing in the US.”
APAC head of iShares Rimmo Jolly adds: “The launch of our iShares Hang Seng TECH ETF has prompted an encouraging response from wealth clients and asset managers. BlackRock is fully committed to developing ETF markets in the region. And we will continue to expand our local iShares product offerings to offer investors an even more diversified range of ETFs, previously unavailable at local level.”