Exchange-Traded Funds (ETFs)

Exchange Traded Funds (ETFs) are passively-managed and open-ended funds, which are traded on the securities market of Hong Kong Exchanges and Clearing Limited (HKEx). All listed ETFs are authorised by the Securities and Futures Commission (SFC) as collective investment schemes. ETFs provide investors with an efficient and cost-effective way to expose to a wide range of underlying markets.

In general, ETFs are categorised into two main types:

Physical ETFs: These ETFs directly buy all assets needed to replicate the composition and weighting of their benchmark.
Synthetic ETFs: These ETFs do not buy the assets needed to replicate the composition and weighting of their benchmark. Instead, they buy financial derivative instruments in order to replicate the performance of the benchmark.