On July 4th, the ETF Connect Program, which facilitated two way capital flows between mainland China and Hong Kong for eligible ETFs, celebrated its two-year anniversary. Over the past two years, the program strengthened its position in deepening the integration of the two capital markets, the number of eligible ETFs increasing from 87 to 151 since launch and the monthly Northbound trading volume rising from US$55 million to US$2.98 billion in June this year.
According to Hong Kong Stock Exchange, the current eligible ETFs consist of 84 listed on Shanghai Stock Exchange, 57 listed on Shenzhen Stock Exchange, and 10 listed on Hong Kong Stock Exchange. Among them, E Fund Management (“E Fund”), the largest fund manager in China, has a total of 14 ETFs included, covering a variety of indexes, including broad-based indexes such as CSI 300 Index and STAR 50 Index, thematic index such as CSI Artificial Intelligence Index, and strategic index such as CSI Dividend Index. Additionally, the average management fee of these offerings was less than 0.3% per annum, underscoring E Fund’s dedication to empower foreign investors to diversify their assets across both Hong Kong and mainland China markets in an efficient and cost-effective manner.
The scope of the program is expected to see significant expansion on July 22nd. It is believed that this expansion will serve offshore investors seeking exposure to A-share capital market with enhanced investment choices, and increase liquidity and trading activity of relevant ETFs in the same time.
