Haitong International AM launches China ESG ETF

In Hong Kong, there are only two ETFs that have been labelled as green or ESG products by the Securities and Futures Commission.

Haitong International Asset Management has launched last week in Hong Kong an ESG ETF that provides investors exposure to China A-shares, according to a statement from the firm.

The Haitong MSCI China A ESG ETF started trading on 15 October is the only ETF on the Hong Kong market offering broad ESG investment exposure to China A-shares.

The product tracks the MSCI China A ESG Universal Index, which includes mid- to large-cap companies that possess robust ESG profiles as well as a positive trend in improving that profile. The ETF will include stocks listed in Shanghai or Shenzhen that are available through the Hong Kong-China stock connect programmes.

“The Haitong MSCI China A ESG ETF enriches the offerings of ETF products in the Hong Kong market by filling in an existing product gap,” Lin Yong, deputy chairman and CEO of Haitong International, said in the statement.

Haitong International’s product is one of the two ETF products in Hong Kong that are classified by the Securities and Futures Commission as green or ESG funds, according to the regulator’s records. The other one is Mirae Asset Global Investments’ Global X China Clean Energy ETF, which was launched in January.

In total, there are around 110 ETFs listed in the territory, excluding leveraged and inverse products, according to data from HKEX.

First published in late-December by Hong Kong’s Securities and Futures Commission, the list of ESG-approved funds includes products that meet new ESG disclosure requirements aimed at countering greenwashing.

These disclosure requirements include the fund’s key investment focus, ESG analysis and evaluation methodologies and what the firm believes to be relevant “green” or ESG criteria. The requirements were set out by the regulator in April last year.

Haitong International manages another product, the Haitong CSI 300 Index ETF, the firm’s website shows.

The launch of the product come at a time when Hong Kong investors are more willing to invest in sustainable products. A global investor study by Schroders found that around 73% of Hong Kong investors refuse to compromise on their personal beliefs when investing, even if higher returns were on offer.

“The results of this year’s survey are clear – returns are not the only influence of investment decisions. People want their values reflected in the way they invest. People are increasingly looking to contribute to a more sustainable society through their investments” said Hannah Simons, head of sustainability strategy in a statement.