Hong Kong is known as the entryway to China, so the latest approval of ETF development there has opened up the path for more funds to open on subsequent exchanges. Hong Kong stock ETFs are listed in China but trade directly into shares in Hong Kong. [China ETF Market Posting Solid Growth]
The cross-market appeal of ETFs, which gives investors access to products that can trade in Shenzhen and Shanghai markets simultaneously is a major reason these tools have been approved. ETFs were first discovered on accident during the Asian financial crisis, when the Hong Kong government wanted to unload various companies in a quick and effective manner.[Three Emerging Market ETFs on an Uptrend]
Nathan Lin, head of ETFs in Hong Kong for E Fund Management, mainland China’s biggest manager of the listed investment products, says innovations including the first renminbi-denominated funds listed outside of China and the first cross-border and cross-market ETFs will help. [Hong Kong Listed A-Shares ETF Launches]
Tisha Guerrero contributed to this article.