HSBC Global Asset Management (HSBC GAM) has launched the first UCITS ETF tracking the Hang Seng TECH Index on the London Stock Exchange (LSE).
HSBC Hang Seng TECH UCITS ETF aims to provide investment access to China's growing technology sector by following the performance of the Hang Seng TECH index, which targets the 30 largest technology companies listed on the Stock Exchange of Hong Kong.
The index contains companies from five different sectors including information technology, industrials, healthcare, consumer discretionary and financials.
China's technology sector has seen explosive growth over the past few years and the region is the second biggest global hub for unicorns."
To be eligible, companies must have a strong exposure to one of five themes; cloud, e-commerce, digital, fintech or internet/mobile.
They are also required to pass an innovation potential screening, with the criteria that they operate a technology-enabled business model delivered via the internet or a mobile platform, have strong research and development investment or a year-on-year revenue growth of at least 10%.
Olga de Tapia, global head of ETF Sales at HSBC GAM said: "China's technology sector has seen explosive growth over the past few years and the region is the second biggest global hub for unicorns, which benefit from access to government incentives and the rapidly growing domestic market of middle class, tech-savvy consumers.
"The HSBC Hang Seng TECH UCITS ETF offers European investors a transparent and cost-efficient way to invest in this burgeoning sector and seize the unique opportunity it presents."
Daniel Wong, director and head of research and analytics at Hang Seng Indexes Company added: "We are delighted that a new ETF tracking the Hang Seng TECH Index is debuting in the UK and European markets.
"We launched the Hang Seng TECH Index to enable investors to access the innovative and increasingly important China technology sector, and we are pleased to see the launch of a Hang Seng TECH Index ETF as the first to offer this opportunity to UCITS investors."
The fund is listed on the London Stock Exchange (LSE) with a total expense ratio of 0.50%.
This article was first published by our sister title Investment Week