Lion-OCBC Securities Hang Seng TECH ETF

Lion-OCBC Securities Hang Seng TECH ETF

Lion-OCBC Securities Hang Seng TECH ETF replicates as closely as possible, before expenses, the performance of the Hang Seng TECH Index. The Hang Seng TECH Index was launched in July 2020 and it tracks the 30 largest Chinese TECH-themed companies listed in Hong Kong.

As the name of the ETF itself implied, Lion Global Investors has partner with OCBC securities to launch the first technology focused ETF which will start trading on SGX on 10 December 2020.

The Hang Seng TECH Index is reviewed on a quarterly basis but included a “Fast Entry” rule that allows fast-tracked inclusion for qualified IPOs that rank in the index’s top ten by market cap.

Wondering what are the Chinese tech companies in the index? See below.

Constituent Securities of Hang Seng TECH Index

As at 9 November 2020, the constituent securities of the Hang Seng TECH Index are:

No Index Security Weighting (%)
1 Sunny Optical Technology (Group) Co. Ltd 9.76
2 Meituan Dianping 9.25
3 Tencent Holdings Ltd 8.43
4 Alibaba Health Information Technology Ltd 7.70
5 Alibaba Group Holding Ltd 7.49
6 Xiaomi Corporation 7.29
7 Semiconductor Manufacturing International Corp 7.21
8 JD.com, Inc 5.87
9 Kingdee International Software Group Ltd 4.66
10 Lenovo Group Ltd 3.36
11 Kingsoft Corporation Ltd 3.21
12 Ping An Healthcare and Technology Co Ltd 2.85
13 Aac Technologies Holdings Inc 2.64
14 BYD Electronic International Co Ltd 2.64
15 NetEase Inc 2.55
16 China Literature Ltd 2.36
17 ASM Pacific Technology Ltd 2.10
18 ZTE Corp 1.45
19 Weimob Inc 1.45
20 ZhongAn Online P&C Insurance Co. Ltd 1.37
21 Hua Hong Semiconductor Ltd 1.36
22 Tongcheng-Elong Holdings Ltd 1.25
23 Koolearn Technology Holding Ltd 0.89
24 HengTen Networks Group Ltd 0.64
25 XD Inc 0.48
26 Maoyan Entertainment 0.47
27 FIT Hon Teng Ltd 0.46
28 Q Technology Group Co Ltd 0.41
29 NetDragon Websoft Holdings Ltd 0.26
30 Yixin Group Ltd 0.16

Performance

Let us look at the share price performance of the top 10 companies in the index.

Sunny Optical Technology

Meituan

Tencent Holdings Ltd

Alibaba Health Information Technology Ltd

Alibaba Group Holding Ltd

Xiaomi Corp

Semiconductor Manufacturing International Corp

JD.com Inc

Kingdee International Software Group Ltd

Lenovo Group Limited

Over a 1 year period, we can see the share prices of the top 10 companies on an uptrend. You would have made money if you bought each and everyone of them one year ago.

Due to the COVID-19 pandemic, technology stocks have benefitted from changes in consumer behaviour as well as the digital transformation of businesses.

How To Apply For Lion-OCBC Securities Hang Seng TECH ETF?

The initial offer period of the Fund is from 23 November 2020 to 7 December 2020.

The issue price of each unit during the initial offer period is HK$7.75. The minimum quantity is 1,000 which you can apply via your broker (participating dealers).

My Opinion

At first, I was sceptical at this ETF when I first glanced at it given there is always this management fee of 0.45% per annum and there are Chinese tech firms within the Hang Seng TECH Index that I am not familiar with. However, the strong share price performance of the top 10 companies within the Hang Seng TECH Index has given me some confidence that this ETF might actually fly.

Given the narrow focus of this ETF on technology companies, the share price of Lion-OCBC Securities Hang Seng TECH ETF can be volatile, especially the technology is focused on Chinese companies.

Nevertheless, investors who want a piece of the top 10 Chinese tech companies listed above can give Lion-OCBC Securities Hang Seng TECH ETF a shot unless you have an enormous capital to buy each one individually.

What can you invest with 500 Dollars?

invest with 500 Dollars

What can you invest with 500 dollars? For working adults like us, it is not a feat to folk out a minimum of 5K for a fixed deposit placement. If you have a higher risk appetite, you can invest 5K into stocks or bonds.

What about those that just started out working? Their starting monthly salary is usually lower than 5K. In my opinion, setting aside the minimum amount of S$500 is a good way to get started to grow your savings. If you will like to grow your S$500, below are some of the options that I found.

ICBC Fixed Deposit

Needless to explain, fixed deposits are simple to understand. You lock in your cash with the bank for a fixed time period such as 1, 3, 6, 12 months. Upon maturity, you get back your money with the interests earned.

ICBC is one bank or perhaps the only bank that I found that let you do a fixed deposit placement with only a minimum of S$500.

ICBC Fixed Deposit Interest Rates 25 Nov 2020

Based on the above rates, if you decided to do a 12 months fixed deposit placement of S$500 via E-Banking, the interests you will receive upon maturity is S$3.75.

Singapore Savings Bonds

The next option to consider is the Singapore Savings Bonds. The minimum amount is S$500 but you have to pay an administrative fee of S$2 every time you make a purchase of the Singapore Savings Bonds.

The latest issue of the Singapore Savings Bonds (GX20120T) offers you an effective return of 0.24% p.a. if you held it for 1 year. That is a return of S$1.20.

Not too bad already, S$1.20 can buy you a cup of Kopi at the coffee shops.

GIGANTIC or Singlife Account

GIGANTIQ is a single premium, yearly renewable, non-participating universal life plan by Etiqa that gives you a guaranteed return of 2.0% per annum on your first S$10,000 for the first year. Any amount above S$10,000 earns you 1.0% per annum for the first year. The minimum amount to get started is S$50. For S$500 deposited with GIGANTIC for 1 year, the return you will receive is S$10.

Similarly, Singlife is a capital guaranteed insurance savings plan that gives up to 2% p.a. returns. The minimum amount to get started is S$500. For S$500 deposited with Singlife for 1 year, the return you will receive is S$10.

Syfe

If you have a higher risk appetite, you can choose to explore Syfe.

Syfe is a digital wealth manager licensed by the Monetary Authority of Singapore (“MAS”) under a Capital Markets Services (“CMS”) License.

There is no minimum amount to start investing in any of their portfolios.

Syfe Portfolio Types

I hope the above provide enough options for those that can only set aside S$500 but do not know where to get started.

“If you don’t find a way to make money while you sleep, you will work until you die. – Warren Buffet”