HKEX welcomes its first active ETF listing

Active ETFs are different from traditional ETFs as they are typically managed by fund managers, who have the discretion to select securities

Hong Kong Exchanges and Clearing Limited (HKEX) welcomed its first listing of an active Exchange Traded Fund (ETF) - ICBC CICC USD Money Market ETF, marking another milestone in the development of Hong Kong’s ETF market.

Active ETFs are different from traditional ETFs in that they are typically managed by fund managers, who have the discretion to select securities, with the aim of outperforming market indices. Traditional ETFs are, primarily, passively managed with the aim of replicating the performance of the indices they track.

“The introduction of active ETFs in Hong Kong is in response to investors’ increasing demand for more investment choices in the market. We believe the product launch will help to drive product innovation in the ETF market,” says Brian Roberts, senior vice president and head of Exchange Traded Products at HKEX. “We look forward to more listings and hope to see a wider range of active ETFs as the market continues to grow.”

“Actively managed ETFs combine the potential of outperformance with the benefits generally associated with ETFs – convenience, lower cost and intra-day liquidity,” adds Roberts.

The turnover of ETFs trading in Hong Kong has doubled year-to-date from US$62 billion in January to US$130 billion in May 2019, signifying growing market interest in the product.

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