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Important Information: 1. E Fund (HK) HSI ESG Enhanced Index ETF (the “Fund”) is a passively managed exchange traded fund (“ETF”) and is traded on the Stock Exchange of Hong Kong (“SEHK”) like stocks. The investment objective is to provide investment result (before fees and expenses) closely corresponds to the performance of the HSI ESG Enhanced Index (Total Return) (the “Index”). The Manager will adopt a full replication strategy by directly investing all, or substantially all, of the Fund’s assets in securities constituting the Index in substantially the same weightings as these Index Securities have in the Index. 2. The Index is a new index, it may be riskier than other index funds tracking established indices with longer operating history. 3. The Fund’s investments may be concentrated in more ESG-focus companies and thus its value may be more volatile than a fund with a more diversified portfolio. In addition, there is a lack of standardised taxonomy in relation to ESG investing strategies. Funds may have different disclosure standards for relevant ESG factors or principles may vary. 4. The Fund is subject to a) Investment risk, b) Equity market risk, c) Concentration risk , d) Risk associated with investments in companies with weighted voting rights, e) Passive investments risk, f) Trading risk, g) Tracking error risk, h) Termination risk, i) Reliance on market maker risks, j) Reliance on market maker risks, k) Reliance on Index Provider risks, l) Risk relating to distributions paid out of capital. 5. You should not make any investment decision solely based on the information on this material alone. Please read the relevant offering documents for details including the risk factors before making any investment decisions. Investment involves risk. Past performance is not indicative of future performance. This document has not been reviewed by the Securities and Futures Commission of Hong Kong. |
[Hong Kong, October 10, 2022] E Fund Management (Hong Kong) Co., Limited. (“E Fund HK”) is pleased to announce today the listing of E Fund (HK) HSI ESG Enhanced Index ETF (Stock Code: 3039.HK) on the Hong Kong Stock Exchange (“HKEX”). 3039.HK adopts a passive management strategy, tracks the HSI ESG Enhanced Index, and focuses on sustainable investment. The initial price of E Fund (HK) HSI ESG Enhanced Index ETF is approximately HKD 2.8, each lot is 100 shares, and the management fee is 0.2%[1].
ESG is the English abbreviation of Environmental, Social and Governance. The importance of ESG investment in the pension market is increasing steadily. Global sustainable investment has gradually become a mainstream, international pension funds are major players in sustainable investment. ESG-related regulations and guidelines support sustainable investing. Nowadays, the investors are not only committed to achieving excellent returns when investing in funds, but also considering more and more concerns about social and environmental issues. The HSI ESG Enhanced Index removes 10 constituent stocks from the 73 stocks in the parent index, namely the Hang Seng Index, and obtains 63 constituent stocks based on factors such as corporate ESG risk ratings, products involving controversial problems, and the principles of the United Nations Global Compact. The weighting of each constituent stock is then adjusted, and the upper limit weighting of each constituent stock is set at 8%.
Compared with the Hang Seng Index, the HSI ESG Enhanced Index has many highlights. First, the index method is based on the information provided by three ESG research companies, and is filtered based on the principles of the United Nations Global Compact to achieve a more comprehensive and objective assessment. Second, compared with the Hang Seng Index, the ESG rating of HSI ESG Enhanced Index has improved by 20%[2]. HSI ESG Enhanced Index significantly increased the weighting of ESG low-risk constituents, lowered the weighting of ESG high-risk constituents, and eliminated ESG severes-risk constituents. Finally, the HSI ESG Enhanced Index historical return over the past four years had reached an annualized 0.52%[3] excess return when compared with the Hang Seng Index.
The HSI ESG Enhanced Index is overweight to property stocks and underweight to tech stocks, increases its holdings of constituent stocks with lower ESG risks, and reduces its holdings of constituent stocks with higher ESG risks, which are the main sources of excess return of the HSI ESG Enhanced Index. The weighting of constituent stocks are reviewed and adjusted quarterly. The adjustment factors are calculated based on the standardized ESG risk rating scores. The lower the score, the lower the ESG risk, and the larger the corresponding adjustment factor.
Fan Bing, Director of E Fund HK International Index Department, said: "As people pay more attention to environmental, social and governance issues, ESG will play an increasingly important role in the portfolios of global investors. In 2021, the scale of sustainable investment has reached 4 trillion US dollars[4], and various countries have successively promulgated ESG-related regulations and directives to support sustainable investment. E Fund has 18 years of experience in index investment and has a self-developed index investment management platform. With E Fund's solid ETF management experience, we look forward to E Fund (HK) HSI ESG Enhanced Index ETF which can build a more diversified investment portfolio for investors."
E Fund HK's fund products had won seven BENCHMARK Fund of the Year Awards from BENCHMARK magazine for two consecutive years in 2020 and 2021. Environmental, social and governance (ESG) indicator is highly valued by BENCHMARK and is regarded as an important award indicator. BENCHMARK is committed to promoting ESG and encouraging fund companies to use ESG as a risk management tool and incorporate it into the investment process.
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E Fund (HK) HSI ESG Enhanced Index ETF (3039.HK) |
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Short Stock Name |
EFUNDHSIESG |
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Exchange Listing |
SEHK – Main Board |
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Listing Date |
10 October 2022 |
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Index |
HSI ESG Enhanced Index (Total Return) |
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Base Currency |
HKD |
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Trading Board Lot Size |
100 Shares |
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Issue Price during the Initial Offer Period |
HKD 2.8, or such other price as the Manager may determine |
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Management Fee |
0.2%1 |
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Disclaimer: HSI ESG Enhanced Index (the “Index”) is published and compiled by Hang Seng Indexes Company Limited pursuant to a licence from Hang Seng Data Services Limited. The mark and name “HSI ESG Enhanced Index” are proprietary to Hang Seng Data Services Limited. Hang Seng Indexes Company Limited and Hang Seng Data Services Limited have agreed to the use of; and reference to, the Index by E Fund Management (Hong Kong) Co., Limited in connection with the E Fund (HK) HSI ESG Enhanced Index ETF, BUT NEITHER HANG SENG INDEXES COMPANY LIMITED NOR HANG SENG DATA SERVICES LIMITED WARRANTS OR REPRESENTS OR GUARANTEES TO ANY BROKER OR HOLDER OF E FUND (HK) HSI ESG ENHANCED INDEX ETF OR ANY OTHER PERSON (i) THE ACCURACY OR COMPLETENESS OF THE INDEX AND ITS COMPUTATION OR ANY INFORMATION RELATED THERETO; OR (ii) THE FITNESS OR SUITABILITY FOR ANY PURPOSE OF THE INDEX OR ANY COMPONENT OR DATA COMPRISED IN IT; OR (iii) THE RESULTS WHICH MAY BE OBTAINED BY ANY PERSON FROM THE USE OF THE INDEX OR ANY COMPONENT OR DATA COMPRISED IN IT FOR ANY PURPOSE, AND NO WARRANTY OR REPRESENTATION OR GUARANTEE OF ANY KIND WHATSOEVER RELATING TO ANY OF THE INDEX IS GIVEN OR MAY BE IMPLIED. The process and basis of computation and compilation of the Index and any of the related formula or formulae, constituent stocks and factors may at any time be changed or altered by Hang Seng Indexes Company Limited without notice. TO THE EXTENT PERMITTED BY APPLICABLE LAW, NO RESPONSIBILITY OR LIABILITY IS ACCEPTED BY HANG SENG INDEXES COMPANY LIMITED OR HANG SENG DATA SERVICES LIMITED (i) IN RESPECT OF THE USE OF AND/OR REFERENCE TO THE INDEX BY E FUND MANAGEMENT (HONG KONG) CO., LIMITED IN CONNECTION WITH THE E FUND (HK) HSI ESG ENHANCED INDEX ETF; OR (ii) FOR ANY INACCURACIES, OMISSIONS, MISTAKES OR ERRORS OF HANG SENG INDEXES COMPANY LIMITED IN THE COMPUTATION OF THE INDEX ; OR (iii) FOR ANY INACCURACIES, OMISSIONS, MISTAKES, ERRORS OR INCOMPLETENESS OF ANY INFORMATION USED IN CONNECTION WITH THE COMPUTATION OF THE INDEX WHICH IS SUPPLIED BY ANY OTHER PERSON; OR (iv) FOR ANY ECONOMIC OR OTHER LOSS WHICH MAY BE DIRECTLY OR INDIRECTLY SUSTAINED BY ANY BROKER OR HOLDER OF THE E FUND (HK) HSI ESG ENHANCED INDEX ETF OR ANY OTHER PERSON DEALING WITH THE E FUND (HK) HSI ESG ENHANCED INDEX ETF AS A RESULT OF ANY OF THE AFORESAID, AND NO CLAIMS, ACTIONS OR LEGAL PROCEEDINGS MAY BE BROUGHT AGAINST HANG SENG INDEXES COMPANY LIMITED AND/OR HANG SENG DATA SERVICES LIMITED in connection with the E Fund (HK) HSI ESG Enhanced Index ETF in any manner whatsoever by any broker, holder or other person dealing with the E Fund (HK) HSI ESG Enhanced Index ETF. Any broker, holder or other person dealing with the E Fund (HK) HSI ESG Enhanced Index ETF does so therefore in full knowledge of this disclaimer and can place no reliance whatsoever on Hang Seng Indexes Company Limited and Hang Seng Data Services Limited. For the avoidance of doubt, this disclaimer does not create any contractual or quasi-contractual relationship between any broker, holder or other person and Hang Seng Indexes Company Limited and/or Hang Seng Data Services Limited and must not be construed to have created such relationship. |
[1] The Fund pays a management fee as a single flat fee, the current management fee is 0.2% per annum of the Net Asset Value of the Fund and is accrued daily and calculated as at each Dealing Day. It is payable out of the Fund monthly in arrears in HKD. One month’s prior notice will be provided to investors if the management fee is increased up to and towards the maximum rate 3%, and one month’s prior notice will be provided to investors if the management fee is increased beyond the maximum rate.
[2] Data as of September 5, 2022. Expected risk rating improvement of HSI ESG Enhanced Index compared to Hang Seng Index.
[3] Backtesting according to the index compilation rules before January 17, 2022, and the backtesting period is from December 2018 to August 2022. The HSI ESG Enhanced Index was launched on 29 November 2021. The pre-launch data is back-tested data (i.e. an estimate of the index's performance over that time period in which the index is assumed to exist). There are often substantial differences between backtest performance results and actual results. Past performance (whether actual or backtested) does not represent or guarantee future performance.
[4] Source: Pension Market in Focus 2021, Blackstone, US SIF, Mercer Consulting, PRI responsible investment regulation database.
