Hong Kong has partnered Hang Seng Investment Management Ltd to manage the city’s largest exchange-traded fund. The Hang Seng Bank unit will replace Boston-based State Street Corp. The US firm last year said it would avoid making new investments in sanctioned companies, such as China Mobile, that are included in the index, but quickly reversed its decision after a local outcry. The Tracker Fund is the most actively traded ETF in Hong Kong with HKD112.8bn (USD14.4bn) in assets, tracking the benchmark Hang Seng Index. The fund said the shift to Hang Seng is expected to be completed in the third quarter, subject to regulatory approvals. Hang Seng will receive a maximum annual management fee 0.045% in the first three years, lower than State Street’s fee of as much as 0.05%.
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