The Hong Kong stock exchange celebrates 25 years since the first ETF listing. Hong Kong now hosts nearly 200 ETF products with a market capitalisation of $60 billion. And what role do ETFs play in your portfolio?
Key highlights of 25 years of Hong Kong ETFs
ETF Connect Program – Launched in 2022, it allows mutual trading of ETFs between the Chinese mainland and Hong Kong investors, showing steady growth with over 240 eligible ETFs by July 2024.
Trading Volumes – In October, Southbound Connect trading volumes reached HK$3.3 billion, while Northbound trading was HK$5.8 billion.
Historical Milestones – The first ETF, Tracker Fund (2800 HK), was launched in 1999, raising HK$33.3 billion.
Recent Developments – The listing of ETFs tracking Hong Kong stocks in Saudi Arabia and the launch of Asia’s first ETF tracking Saudi equities.
The ETF market in Hong Kong has seen significant growth, with average daily turnover reaching HK$13 billion in the first three quarters of 2024, up 10% from 2023¹².
As a comparison, at the end of 2023, the market capitalisation of exchange-traded funds (ETFs) in the United States was substantial. The largest ETF, the SPDR S&P 500 ETF Trust (SPY), had a market capitalisation of approximately $417.37 billion. Overall, the U.S. ETF market is a significant part of the global ETF landscape, with total assets under management (AUM) in U.S. ETFs reaching around $10.6 trillion in the first quarter of 2024. Hong Kong ETFs have a bright future and that makes investing for Hong Kong investors easier, cheaper and more profitable!
