Hong Kong’s first money market ETF draws investors with expected 1.5 per cent return, low risk
The city’s first money market ETF is expected to see higher annualised returns in coming quarters, tracking gains in Hibor as US interest rates inch higher
Hong Kong’s first money market exchange traded fund (ETF) has drawn HK$1 billion (US$127.4 million) in investment from institutional investors, and its fund manager CSOP Asset Management expects additional capital flows amid the search for safe havens as the trade row between the US and China heats up.
The CSOP HKD MM ETF is benchmarked with the three-month Hong Kong Dollar Interest Settlement Rate, commonly known as Hong Kong Interbank Offered Rate or Hibor.
Higher yields as the city’s Hibor rate inches upwards is expected to be another drawing card for institutional and retail investors alike, the fund manager said.
The ETF debuted on the Hong Kong stock exchange on Wednesday and saw total trading volume reach HK$42 million by the market close.
“This is not bad for a new ETF on the first day of trading,” said Melody He, head of sales and product strategy at CSOP, the overseas arm of China Southern Fund Management, one of the country’s largest asset managers.