To The Moon

1.What is an ETF?

ETF (Exchange-Traded Fund), abbreviated as "Exchange-Traded Fund," literally means a fund that can be bought and sold on a securities exchange. Exchange-Traded Funds are open-ended funds that can be traded on a stock exchange. These products can be actively managed - aiming to offer higher returns than their underlying indices, or passively managed - aiming to replicate the performance of an index.

In simple terms, buying an ETF is equivalent to buying all the products within the ETF portfolio. The trading of ETFs is similar to regular stocks, and investors can trade them during the Exchange's regular trading hours.

  Hong Kong ETFs are ETFs listed and traded on the Hong Kong Stock Exchange. The associated underlying indices may not necessarily be from the Hong Kong market; they could also be stock indices from other markets.

As one of Asia's financial hubs, Hong Kong has always been a market of great interest to investors. In recent years, the development of Hong Kong ETFs has been rapidly evolving.

According to E fund management (HK)'s "Hong Kong ETF Market 2022 Annual Review":

1. As of the end of 2022, there was a total of 172 ETFs listed in Hong Kong, with a combined size of nearly 400 billion Hong Kong dollars. The net inflow in 2022 was approximately 78.6 billion Hong Kong dollars. Among them, the 20 largest ETFs in Hong Kong accounted for 348.5 billion HKD, which makes up 88% of the total ETF market size.

2. In 2022, the average daily trading volume of Hong Kong ETFs was 11.9 billion Hong Kong dollars, boasting a 54% increase from the 7.7 billion HKD in 2021. This volume represents about 9.5% of the total stock market turnover.

3. In 2022, Hong Kong-based equities' ETFs witnessed the highest net inflow, reaching 12.2 billion HKD. Additionally, leveraged and inverse ETFs experienced an increase in size of 5.1 billion Hong Kong dollars, with a total size of 6.2 billion Hong Kong dollars.

Now that you have understood the above data about Hong Kong's ETF market, let us briefly introduce you to the development history of Hong Kong ETFs, providing you with a more comprehensive understanding of them.

2.Classification of Hong Kong ETFs

With the diversification of Hong Kong ETF products, their types and variations have increased over time. Here, we will briefly introduce the classification methods of ETFs and Hong Kong ETFs to help you better understand.

1.Classification of ETFs

There are various ways to classify ETFs. For example, based on management styles, they can be categorized as index ETFs and active ETFs. Based on asset classes, they can be divided into stock ETFs, bond ETFs, or alternative asset ETFs. According to industry themes, they can be categorized as sector ETFs and thematic ETFs. There are also leveraged ETFs and inverse ETFs based on leverage.

For a more detailed breakdown, we've covered it in our "ETF's For Beginners", you can click here to view.

2.Classification of Hong Kong ETFs

Categorized by asset type, Hong Kong ETFs can be divided into indexes related to commodities, stocks, fixed income products, money markets, diversified assets, and virtual assets.

Based on regions: Hong Kong ETFs are primarily divided into ASEAN, Asia, Asia-Pacific, China, Europe, global, global emerging markets, Greater China, Hong Kong, India, Japan, South Korea, Taiwan, the United States, Vietnam, and more.

3.Naming Rules for Hong Kong Stock ETFs

In the Hong Kong stock market, ETFs often use certain letters as prefixes in their names, such as XL2CSOPHSTECH (07226.HK), FI2CSOPGOLD (07299.HK), and FL2 CSOP HSCEI (07288.HK). Some investors may be curious about the meanings of these codes like XL, FI, and FL in these names.

（Source：Tiger Trade app）

（Source：Tiger Trade app）

（Source：Tiger Trade app）

Q: Abbreviation of the name of the Issuer and the Index A: If it is managed actively; F: Replicated with Futures contracts; X: Replicated with Synthetic Futures or Swap contracts; L: Leveraged Product; I: Inverse Product; 2: Double Leverage Ratio; R: China Yuan (Renminbi) Counter; U: US Dollar Counter

Based on the above naming rules, now it's easy to understand the codes of Hong Kong ETFs. For example, XL2CSOPHSTECH (07226.HK) can be translated to "Two-Times Long HS Tech," and FICSOPGOLD (07374.HK) can be understood as "Single-Time Short Gold."

4.How to Access Information on Hong Kong ETFs

If you want to access detailed information about ETFs, including their prospectuses, annual reports, net asset values, related benchmark values, holdings, and historical performance, there are two places where you can find them:

1.You can find some ETF informations in the "Exchange-Traded Products" section on the Hong Kong Exchanges and Clearing Limited (HKEX) website.

(Website: https://www.hkex.com.hk/products/securities/exchange-traded-products/overview?sc_lang=en)

2.Checking on Fund Company's official website

You can also gather information about Hong Kong ETFs by visiting the official websites of their fund companies. Let's take E Fund LIQUOR (03189.HK) as an example. If you wish to access detailed information about this liquor-focused ETF, you can visit the official website of E Fund Management (Hong Kong) Co., Limited (https://www.efunds.com.hk/en/), and click on "Fund Products" to find the relevant information.

（Source：E Fund HK official website）

We are wrapping up this session here. In the next class, we will guide you through the key categories of Hong Kong ETFs, helping you to quickly get started with investing in Hong Kong ETFs.