Asia ETF Roundup (Industry) – September 2022

Net inflows of USD 0.1 Billion into offshore Chinese equity ETFs in Hong Kong.

Jackie Choy, CFA 12 October, 2022 | 11:13
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For economic and market news relating to Asian ETFs, please refer to our “Asia ETF Roundup (Market) – September 2022”.

ETF Industry News

Another 4 Companies Identified Under Holding Foreign Companies Accountable Act (“HFCAA”); PCAOB Inspectors Arrive Hong Kong Accounting Firm

In September, the U.S. Securities and Exchange Commission identified a further 4 companies under the Holding Foreign Companies Accountable Act (“HFCAA”). This puts the total number of companies on the provisional list and conclusive list of issuers identified under the HFCAA at 167 as of the end of September 2022. Companies added to the list included China Health Industries Holdings (CHHE) and Hollysys Automation Technologies (HOLI). According to the HFCAA and the companies’ announcements, a company’s ADR could be delisted from a U.S. stock exchange if the company remains in the list for three consecutive years.

Recall that in August, the Public Company Accounting Oversight Board (PCAOB) signed a Statement of Protocol with the China Securities Regulatory Commission and the Ministry of Finance of the People's Republic of China which opened access for PCAOB to conduct on-site inspections. According to the South China Morning Post, PCAOB inspectors arrived Hong Kong in mid-September and began inspecting audit working papers pertaining to US-listed mainland-based companies at accounting firms. 

Chinese Equity ETF Watch – Net Inflows of USD 0.1 Billion into Offshore Chinese Equity ETFs in Hong Kong

Hong Kong-domiciled ETFs in the China Equity Category saw net inflows estimated at USD 141 million in September, mainly driven by an estimated net inflow of USD 211 million to the Hang Seng China Enterprises Index ETF (02828/82828) partly offset by an estimated net outflow of USD 66 million from the iShares Core MSCI China ETF (02801/09801).

Hong Kong-domiciled ETFs in the China Equity - A-Shares Category saw estimated net outflows of USD 43 million in September, mainly driven by the net outflows from the iShares FTSE China A50 ETF (82823/02823), estimated at USD 15 million, the Premia CSI Caixin China New Economy ETF (89173/09173), estimated at USD 10 million and the CSOP FTSE China A50 ETF (82822/02822), estimated at USD 9 million.

In the first nine months of 2022, Category Hong Kong-domiciled ETFs in the China Equity Category and the China Equity – A-Shares saw estimated net inflows of USD 1.2 billion and USD 0.1 billion, respectively.

In the U.S., the iShares China Large-Cap ETF (FXI) and the iShares MSCI China ETF (MCHI) recorded outflows, estimated at a combined USD 0.2 billion. The KraneShares CSI China Internet ETF (KWEB) saw estimated net outflows of USD 0.3 billion whereas the Xtrackers Harvest CSI 300 China A ETF (ASHR) saw net inflows of USD 50 million.

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New Launches and Listings

New Launches and Listings

China: 6 ETF New Listings

  • Chinese ETF providers listed 6 new ETFs on the Shanghai Stock Exchange and Shenzhen Stock Exchange in September. These included 4 thematic/sector ETFs, 1 ESG ETF and a strategic-beta ETF.
  • This brings the total number of ETFs listed in China to 735 (276 ETFs on the SZSE, 459 ETFs on the SSE).  

Hong Kong: 2 ETF New Listings

  • Hong Kong ETF providers listed the RMB counter of the Tracker Fund of Hong Kong ETF (an existing ETF tracking the Hang Seng Index) and a ETF tracking the FTSE Vietnam 30 Index.
  • This brings the total number of ETFs listed in Hong Kong to 256 (167 ETFs and 89 multiple counters, including 29 leveraged/inverse products).

South Korea: 12 ETF New Listings

  • Korean ETF providers listed 6 actively managed ETFs, 2 bond ETFs, 3 thematic/sector ETFs, 1 broad market ETF tracking the MSCI China A50 Connect Index.
  • A thematic ETF tracking the FnGuide K-New Deal Digital Plus Index was delisted.
  • This brings the total number of ETFs listed in South Korea to 622.

Singapore: 1 ETF New Listings

  • CSOP Asset Management launched an ESG ETF (with SGD and USD counters) in Singapore tracking the FTSE Asia Pacific Low Carbon Index.
  • This puts the total number of ETFs listed in Singapore at 56 (36 ETFs and 20 multiple counters).

Taiwan: 1 New ETF Listing

  • Cathay SITC launched a thematic ETF on the Taiwan Stock Exchange tracking the ICE FactSet Global Top 50 Brands Index.
  • A broad market ETF tracking the FTSE China A150 Index was delisted.
  • The total number of ETFs listed in Taiwan was unchanged at 228.

India: 4 New ETFs Listing

  • HDFC Asset Management in India listed 3 strategic-beta ETF and an ETF tracking silver prices on local exchanges.

ETFs Launched in September 2022 in the Asia ex-Japan Region

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About Author

Jackie Choy, CFA  is the Director of ETF Research for Morningstar Investment Management Asia

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