Fund managers expect ETFs tracking Hang Seng Tech Index to take off as investors seek a piece of the red hot industry
- The Hang Seng Tech Index, which debuts on Monday, will trigger fund managers to introduce ETFs as a short cut for investors to buy into tech stocks
- New index that tracks the 30 largest tech stocks in Hong Kong is similar to the Nasdaq Composite Index
The new Hang Seng Tech Index will allow fund houses to introduce exchange traded funds (ETF) to track the tech sector and enable passive fund managers to invest in the booming sector and promote Hong Kong as a listing hub, according to fund managers.
Lee said currently about a quarter of HKIFA’s members, including US giant BlackRock and many Chinese fund houses, have passive fund managers who focus on ETFs or other index fund tracking products.
“It will be more convenient for investors to buy into tech companies if there are more ETFs based on the new tech index,” Lee said. By buying an ETF unit investors are actually buying a basket of stocks that track a particular index.
He added that as tech stocks were performing strongly this year, it provides the perfect window of opportunity for asset managers to launch tech-focused ETFs, which he expects will be popular among investors.
