EIP lists first ETFs on Hong Kong exchange
Enhanced Investment Products Limited (EIP), a Hong Kong based asset management firm, has listed four new Exchange Traded Funds (ETFs). This new product suite is expected to be the first swap-based synthetic ETF platform managed by a local Hong Kong manager. The four country-specific products will track four local indices in emerging Asia, providing investors with access to markets in Korea, Malaysia Taiwan and Thailand.
XIE Shares are unique ETFs, being the first synthetic ETF platform independently managed by a local manager in Hong Kong, adopting a multiple swap counterparty approach to manage counterparty risk. This structure offers the benefits of synthetic ETFs, and holds invested assets which are non-index related equity, bonds and/or cash/cash equivalent for the value of the NAV. These advantages include simplicity, liquidity and low cost beta. The ETFs seek to track the performance of the relevant indices before fees and expenses. XIE Shares has attracted day one investment of approximate AUM HK$500 million for the first four funds. VIP guests from each stock exchange attended the listing ceremony.
Tobias Bland, CEO of EIP, says: “Today marks the success of all our hard work with the listing of XIE Shares ETFs on the Hong Kong Stock Exchange. EIP, along with the SFC, HK Stock Exchange, Asian Stock Exchanges and our commercial partners have brought XIE Shares from concept to reality. This is an achievement of which we can all be proud. Presently there is US$1.08 trillion invested in mutual funds in Asia, and US$92 billion in ETFs. I truly believe that Exchange Traded Funds are the investment vehicle of the future and will replace mutual funds over time.”
The funds will be managed by Paul So, Head of Beta Products at EIP, who says: “In investing in XIE Shares, investors can gain exposure to the local indices the funds track, hence to the companies that are index constituents to these indices. For example, in Korea, we track the KOSPI 200, which is made up of the top 200 blue chip companies. We will also be tracking the S&P CNX Nifty Index, the LQ45 Index, the FTSE Bursa Malaysia KLCI, the PSEi Index, the TAIEX Index and the SET 50 Index. We will be listing XIE Shares India, Indonesia and Philippines on the Hong Kong Stock Exchange on Tuesday, February 21, 2012.”
Calvin Tai, head of trading division, Hong Kong Exchanges and Clearing Limited, says: "We welcome Enhanced Investment Products Limited as a new ETF manager in Hong Kong. The listing of their seven new ETFs increases the total number of ETFs listed in Hong Kong to 101 and the number of managers to 16. These new ETFs will further expand the range of ETFs in Hong Kong covering single Asian markets, offering convenient choices for Hong Kong investors to access these markets in an efficient and cost effective manner.” Mr. Tai added: “We will continue to facilitate the launch of more products to further broaden our ETF product offerings.”