China Exchanges Services Company Limited (CESC) has licensed its CES Stock Connect Hong Kong Select 100 Index (CES SCHK100) to HuaAn Fund Management Co, Ltd (HuaAn Fund) to serve as the underlying index for the HuaAn CES Stock Connect Hong Kong Select 100 ETF (HuaAn CES100 ETF) that will be listed on the Shanghai Stock Exchange (SSE) in mid-May.
The CES SCHK100 is comprised of the top 100 Hong Kong-listed stocks by market capitalization eligible for Southbound Trading under Stock Connect, the mutual market access programme of the stock exchanges in Hong Kong, Shanghai and Shenzhen, excluding dual-listed A+H share companies. With a robust Hong Kong stock market in recent years, the CES SCHK100 had a 40.8 per cent return in 2017. In terms of sector distribution, the CES SCHK100 is more balanced than many of the other Hong Kong indices, with higher weighting of high-growth industries, such as information technology, health care and consumer discretionary. Compared to Hong Kong’s traditional indices, it captures the growth opportunities in the market more effectively.
“The investment concept of the CES SCHK100 can satisfy Mainland investors’ needs for overseas asset allocation. The index design will help investors avoid overlapping their investment in companies dual-listed in Mainland China and Hong Kong. Compared to Mainland China’s existing financial products, which mainly focus on A shares or H shares, we believe that the HuaAn CES100 ETF will provide investors with an excellent option since the CES100 includes a wide range of Hong Kong stocks,” said HuaAn Fund Indexing and Quantitative Investment Division Associate Director and HuaAn CES100 ETF Portfolio Manager Richard Xu.
“We are delighted to license our CES SCHK100 to HuaAn Fund for an ETF for Mainland investors. We believe the CES SCHK100 will help Mainland investors to capture the investment opportunities in the Hong Kong market. In the future, CESC will continue to launch new indices to satisfy market demands and facilitate the internationalisation of the capital market in Mainland China,” said CESC Chief Executive Mao Zhirong.
An index overview and the constituent list are available in Appendix 1 and 2.
