US investment bank Brown Brothers Harriman & Co. (BBH) is to act as custodian and administrator for what has been called the “first actively managed” exchange-traded fund (ETF) domiciled in Hong Kong.
Launched by China International Corporation, the fund is the third money market ETF listed on the Hong Kong stock exchange (HKEX).
The ICBC CICC USD Money Market ETF offers investors a same day settlement cycle for “all primary market creations and redemptions” – the only ETF in the market to do so, according to BBH.
“Investors in Hong Kong historically have been focused on actively managed investments,” said Chris Pigott, head of Hong Kong ETF servicing at BBH.
Following an update of the Code on Unit Trusts and Mutual Funds issued by the Securities and Futures Commission, Hong Kong became the second market in Asia where ETF issuers can launch actively managed ETFs.
“The ability to combine the structural benefits of the ETF wrapper with an active investment strategy is an interesting opportunity for investors,” said Pigott.
BBH recently carried out an ETF investor survey finding that nearly “50% of institutional investors in Hong Kong expected to increase their exposure to actively managed ETFs this year.”
ICBC Asset Management (Global) Company Limited, a subsidiary of Industrial and Commercial Bank of China, will act as the fund’s investment advisor.
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