May 19, 2024

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Mirae Asset Global Investments, a leading asset manager based in Korea, has introduced a high dividend yield exchange-traded fund to the mainland Chinese market through cross-border trading with Hong Kong, the firm announced Tuesday.

The Global X Hang Seng High Dividend Yield ETF, operated by the asset manager’s ETF arm in Hong Kong, was set up for trading on China’s Shanghai Stock Exchange and Shenzhen Stock Exchange on Monday.

The ETF tracks shares with high dividend yields on the Hong Kong Stock Exchange's benchmark Hang Seng index. The net asset is about $272 million, the largest among the high dividend yield ETFs listed on the Hong Kong exchange.

While most Hong Kong ETFs cross-listed in China track the Hang Seng Tech index, a gauge of major Chinese tech shares listed in Hong Kong, the newly introduced ETF product follows shares that yield high dividends.

According to Mirae Asset, it is the first asset manager to introduce a Hong Kong-tracking high dividend yield ETF to mainland China.

The average yearly dividend yield for the ETF product stood at 8.24 percent as of payments distributed in March, with an outstanding track record of over 10 years, the asset manager said.

The firm added that further growth is expected as anticipations on the recovery of Hong Kong-listed shares have been strengthening with the recent rebound following a slowdown earlier this year.

The Hang Seng Index surged more than 7 percent in April, rebounding nearly 20 percent from its dip in January as prospects for China's economic recovery have improved.

Cross-border trading between Hong Kong and China was enabled in 2022. Under the scheme, investors have mutual stock market access between mainland China and Hong Kong for eligible ETFs.

Following the opening of the investment border, Mirae Asset introduced the Global X Hang Seng Tech ETF on China’s stock exchanges in Shanghai and Shenzhen in November. It was the first Korean asset manager to introduce its ETF product to mainland China.

Mirae Asset Global Investments has been striving to expand its ETF service proposition in the Chinese market through its Hong Kong subsidiary. The Hong Kong branch’s net asset for ETF products stands at 2.4 trillion won ($1.8 billion) as of April.

"We have further plans to cross-list additional ETFs," Kim Young-hwan, head of Mirae Asset Global Investments, said. "We will continue to work to introduce more products to institutional and retail investors in China by expanding the product line up and on-site sales workforce.”

By Im Eun-byel (silverstar@heraldcorp.com)