Trading in Hong Kong's first exchange-traded fund that tracks State-owned enterprises listed in the special administrative region began on Wednesday, marking a significant move in the city’s efforts to boost its “superconnector” role.

Fund manager Bosera’s China Reform Hong Kong Central-SOEs High Dividend Yield Index ETF, which racked up HK$118.6 million ($15.2 million) in subscriptions, debuted at three counters in Hong Kong dollars, the Chinese yuan and the greenback.  

The ETF tracks the top 50 Hong Kong-listed SOEs’s securities by average dividend yield over the past three years. It covers various sectors, such as energy, communication services, industry, utilities and healthcare.

Fund manager Bosera’s China Reform Hong Kong Central-SOEs High Dividend Yield Index ETF tracks the top 50 Hong Kong-listed SOEs’s securities by average dividend yield over the past three years. It covers various sectors, such as energy, communication services, industry, utilities and healthcare

Data show that, as of December 2023, the average dividend yield of the top 10 constituents of the CSI China Reform Hong Kong Connect Central-SOEs High Dividend Yield Index stood at 7.86 percent in the past year.

The ETF closed down 1.8 percent at HK$9.82 at the close of morning trading on Wednesday.  

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Secretary for Financial Services and the Treasury Christopher Hui Ching-yu said the ETF’s launch symbolizes Hong Kong’s contribution to the integration of SOEs with international capital, reaching another milestone in boosting ties among domestic and international markets.

He said the SAR could continue serving as an international financing platform to attract more capital from across the globe and invest in high-quality Hong Kong-listed SOEs, thereby supporting their high-quality development.

Three other such ETFs, launched by fund managers GF Fund Management and Invesco Great Wall, also made their debut on the Shanghai Stock Exchange on the same day.

A fund researcher said the ETF products will provide efficient and convenient investment tools for global investors to tap the most competitive group of SOEs and share the achievements of China’s high-quality economic development

A fund researcher said the ETF products will provide efficient and convenient investment tools for global investors to tap the most competitive group of SOEs and share the achievements of China’s high-quality economic development.

Moreover, they will attract more diverse capital inflow for Hong Kong-listed SOEs, adding fresh momentum to corporate reform and development, the researcher said.

Invesco Great Wall is optimistic about the ETFs’ long-term value of dividend strategies. As it’s hard to find sectors that could log dazzling growth, dividend assets with stable profitability and resilience against market volatility are expected to continue outperforming the market, the company said.

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Describing SOEs as “stabilizers” and “ballast stones” of the nation's economy, the fund manager said these companies are expected to undergo value reassessment against the backdrop of a new round of enterprise reforms.