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.

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