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Hang Seng China New Economy Index ETF (3176.HK)

Managed by Hang Seng Investment | Promoted by HSBC Asset Management

Important information

  • The investment objective of Hang Seng China New Economy Index ETF (“HSCNE ETF”) is to match, as closely as practicable, before fees and expenses, the HKD denominated total return performance (net of withholding tax) of the Hang Seng China New Economy Index (the "Index") through investing primarily in the constituent securities of the index.
  • As “HSCNE ETF” invests primarily in securities of companies classified under the industries that are perceived as “New Economy” under the Hang Seng Industry Classification System, an investment in “HSCNE ETF” may be more vulnerable to price fluctuations of securities of companies in these industries and other factors that particularly affect these industries as compared to an investment in a fund having a more diverse portfolio of investments. In addition, the valuation of securities associated with “New Economy” industries may be higher than those of more traditional industries, and “HSCNE ETF” may suffer a loss when there is a revaluation of these securities or subject to significant instability and fluctuations in valuations.
  • As “HSCNE ETF”’s investments are concentrated in a specific geographical location (i.e. the PRC), the value of “HSCNE ETF” may be more volatile than that of a fund having a more diverse portfolio of investments. The value of the Fund may be more susceptible to adverse economic, political, policy, foreign exchange, liquidity, tax, legal or regulatory event affecting the PRC market.
  • “HSCNE ETF” is also subject to investment risk, currency and exchange rate control risk, equity market risk, PRC market and concentration risks, risks relating to investments in “New Economy” companies, risks associated with investments in companies with weighted voting rights, Stock Connect risk, U.S. market risk/ADRs associated risk, PRC tax risk, RMB currency and conversion risk relating to RMB denominated securities, trading risk, trading differences risk, passive investment risk, reliance on market maker risk, tracking error risk, termination risk and reliance on the same group risk.
  • The Manager may at its discretion pay dividend out of capital^ or effectively out of the capital of the Fund. Payment of dividends out of capital amounts to a return or withdrawal of part of an investor’s original investment or from any such capital gains attributable to that original investment. Any such distributions may result in an immediate reduction in the Net Asset Value per Unit.
  • Investments involve risks and investors may lose substantial part of their investment in “HSCNE ETF”.
  • Investors should not only base on this material alone to make investment decisions, but should read the HSCNE ETF’s offering documents (including the full text of the risk factors stated therein) in detail.

^The Manager may at its discretion pay distribution out of gross income while charging/paying all or part of the Fund’s fees and expenses to/out of the capital of the Fund (resulting in an increase in distributable income for the payment of distribution by the Fund), and thereby effectively pay distributions out of the capital of the Fund.

Hang Seng China New Economy Index ETF (3176.HK)

We are proud to introduce the Hang Seng China New Economy Index ETF, managed by Hang Seng Investment Management (HSVM), which aims at capturing the new perspectives in China as opportunities arise from the structural reform.

What is the “New Economy”?

The “New Economy” is often seen as the driving force of future economic growth which goes beyond the technology sector, it refers to industries with below characteristics:

new economy

Source: Hang Seng Indexes Company Limited


Capturing the new perspective in China

  • China’s economy has been switching its focus from traditional sectors to  “New Economy”
  • This transformation provides numerous new opportunities for investors
broad-market

The definition of New Economy on this graph is based on a third-party research, which may not be the same as the Index compiled by Hang Seng Indexes Company Limited.
Source: Datastream, RIMES, Factset, MSCI, Morgan Stanley Research, Hang Seng Investment Management Limited, as of 31 July 2021. MSCI China Index has been used as a proxy for the broad market. New Economy Sectors include Consumer Discretionary, Consumer Staples, Health Care, Information Technology, Media & Entertainment; Old Economy includes Materials, Energy, Industrials; Other includes Real Estate, Utilities, Financials, Telecommunication Services. Global Industry Classification Standard (“GICS”).

  • More than 70% of China’s population (i.e. about 1.01 billion people) is considered as “Netizens” and fueled China’s online economy through shopping, food-ordering, and using healthcare services
  • This new “ecosystem” has also driven the development of technology and innovation in the country. China now possess the world’s largest number of 5G patent declarations and over 9,000 cases of 5G application innovation
digitalisation

Source: China Internet Network Information Center. National Bureau of Statistics, Hang Seng Investment Management Limited, August 2021, data as of 30 June 2021. The research covers all internet users from mainland China.

  • Many New Economy sectors are of high strategic importance as defined by the government policies, such as the 14th Five Year Plan (FYP) of China has green development and “peak-emission 2030” as the key theme
  • The long-term strategic development may benefit clean energy sector, electronic vehicle companies and high-end manufacturing corporates
  • gdp growth
Source: WIND, CEIC, Government Work Report (March 2021), HSBC Asset Management, April 2021. Any views expressed were held at the time of preparation and are subject to change without notice. While any forecast, projection or target where provided is indicative only and not guaranteed in any way.  HSBC Asset Management accepts no liability for any failure to meet such forecast, projection or target.

Hang Seng China New Economy Index ETF (3176.HK)

The Hang Seng China New Economy Index ETF is designed to harness the vast opportunities arising from China’s transformation by tracking the performance of the Hang Seng China New Economy Index, with below features:


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Source: Hang Seng Indexes Company Limited, as of 30 September 2021. * H-share, Red-chip and P-chip constituents in Hang Seng Composite Index and A-Shares that are eligible for Stock Connect Scheme, and U.S.-listed China companies incorporated in or headquartered in mainland China (in the form of common stocks or ADRs). # Under the current selection criteria based on the sector requirement, the Index covers selected sub-sectors under industries in Hang Seng Industry Classification System in IT, consumer discretionary (i.e. companies in the business of non-essential consumer goods and services), healthcare, telecommunications, industrials and utilities, and certain companies under industries in consumer discretionary, consumer staples (i.e. companies in the business of essential consumer goods and services and daily necessities) and financials which fulfill the corresponding criteria (please refer to the section “Sector Requirement” in the relevant Appendix to the Prospectus for details).


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Disclaimer
This page is prepared for general information purposes only and does not have any regard to the specific investment objectives, financial situation and the particular needs of any specific person who may receive it. Any views and opinions expressed are subject to change without notice. This document does not constitute an offering document and should not be construed as a recommendation, an offer to sell or the solicitation of an offer to purchase or subscribe to any investment. Any forecast, projection or target where provided is indicative only and is not guaranteed in any way. HSBC Global Asset Management (Hong Kong) Limited (“AMHK”) accepts no liability for any failure to meet such forecast, projection or target. AMHK has based this document on information obtained from sources it reasonably believes to be reliable. However, AMHK does not warrant, guarantee or represent, expressly or by implication, the accuracy, validity or completeness of such information. Investment involves risk. Past performance is not indicative of future performance. Please refer to the offering document for further details including the risk factors. This document has not been reviewed by the Securities and Futures Commission. Copyright © HSBC Global Asset Management (Hong Kong) Limited 2021. All rights reserved. This document is issued by HSBC Global Asset Management (Hong Kong) Limited.