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Hong Kong ETFs lack appeal
Exchange-traded funds are struggling to find traction in Hong Kong. Several managers, such as HSBC and Lyxor, have de-listed funds in recent years because of low asset sizes or poor trading volumes.
The departure of Mirae Asset Management’s Hong Kong head of ETFs last week highlights the problem. Eight of Mirae AM’s 10 Hong Kong-listed ETFs (under the Horizon brand) are far too small to be profitable, notes AsianInvestor. (paywall)
Too much sectoral diversity in Asia is one reason. Different tax regimes and accounting treatments in individual countries means it’s tough to assemble a representative list to fill a regional chemical, energy or financial ETF, for instance.
There is another reason too. As this year’s gyrations in local bourses have demonstrated, Asian retail investors like to trade rather than park their cash in a passive fund. They prefer some action.
Photo: Roberto Trombetta