Investors looking for easier access to Hong Kong-listed tech stocks will now have the chance to do so through Singapore’s first technology-focused exchange traded fund (ETF) set up by Lion Global Investors and OCBC Securities.
The fund, which affords investors an easy and affordable way to access Hong Kong-listed technology-themed stocks, tracks the Hang Seng TECH Index, which is made up of the top 30 technology companies listed in Hong Kong by market capitalisation.
Some of the top names listed on the index include Tencent, Alibaba, Meituan, Lenovo and Xiaomi.
According to back-tested data from Hang Seng Indexes Company, the Hang Seng TECH Index returned 36.25% in 2019 and 35.30% in the first half of 2020.
“The technology sector has significantly outperformed the broader equity market during this period and technology stocks have benefitted from changes in consumer behaviour as well as digital transformation of businesses… The Lion-OCBC Securities Hang Seng TECH ETF comes at the right time to ride this wave of change and bullish sentiment. It allows investors a chance to gain access to the rapidly-growing Chinese technology giants,” says Wilson He, managing director of OCBC Securities.
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Upon listing, the new ETF allows investors to buy lot sizes of just 10 units at a time, compared to the usual 100 units on the SGX. This means younger and newer investors can start off with less than $20 per trade based on current net asset value (NAV).
The ETF’s initial offering period (IOP) begins on Nov 23 and ends on Dec 7. It will list on the Singapore Exchange (SGX) on Dec 10 and will be available in Singapore and US dollar denominations.
The issue price of each unit during the initial offering period is HK$7.75, which is around $1.34 or US$1.
During the initial offer period, investors may subscribe to the ETF through OCBC Securities, iFAST Financial, Phillip Securities and UOB Kay Hian.
“Other than investing in the merits of companies at the forefront of disruption and innovation, this ETF gives investors an easy avenue to express their view on fundamental changes happening in geopolitics… Although there are similar ETFs listed in Hong Kong, the Lion-OCBC Securities Hang Seng TECH ETF is the first technology focused ETF established on the SGX which allows investors to invest and trade in a security denominated in SGD and USD. We’re confident that this ETF will have high trading volume and liquidity,” says Gerard Lee, Lion Global Investors CEO.
