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Managed by Hang Seng Investment | Promoted by HSBC Asset Management
The investment objective of HSI ESG Enhanced Select Index ETF (“HSI ESG ETF”) is to match, as closely as practicable, before fees and expenses, the HKD denominated total return performance (net of withholding tax) of the HSI ESG Enhanced Select Index (the "Index") through investing primarily in the constituent securities of the Index
As “HSI ESG ETF” invests in a new index having only been launched on 29 November 2021. As such, HSI ESG ETF may be riskier than other index funds tracking more established indices with longer operating history
As the use of ESG criteria in the construction of the Index may affect the HSI ESG ETF’s investment performance and, as such, the HSI ESG ETF may perform differently compared to similar funds that do not use such criteria, i.e. HSI ESG ETF may be concentrated in companies with a greater ESG focus and therefore may be more volatile than that of a fund with having a more diverse portfolio of investments. Moreover, there can be no assurance that the Index Provider’s assessment based upon data from data providers will reflect actual circumstances or that the stocks selected will fulfill ESG criteria. Since currently there is a lack of standardised taxonomy in relation to ESG investing strategies, the standard of disclosure adopted by funds in relation to the relevant ESG factors or principles may vary
“HSI ESG ETF” is also subject to investment risk, equity market risk, concentration and mainland market risks, risks associated with investments in companies with weighted voting rights, risks associated with investment in financial derivative instruments, PRC tax risk, trading risks, passive investment risks, reliance on market maker risks, tracking error risks, termination risks 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 HSI ESG ETF. 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 “HSI ESG ETF”
Investors should not only base on this material alone to make investment decisions, but should read the HSI ESG ETF’s offering documents (including the risk factors) in detail
^ The Manager may at its discretion pay distribution out of gross income while charging/paying all or part of HSI ESG ETF’s fees and expenses to/out of the capital of HSI ESG ETF (resulting in an increase in distributable income for the payment of distribution by HSI ESG ETF), and thereby effectively pay distributions out of the capital of HSI ESG ETF
See Hong Kong through a sustainable lens
We are proud to introduce the HSI ESG Enhanced Select Index ETF, the first ESG ETF based on Hang Seng Index. This SFC-authorised ESG ETF* helps investors tap into the sustainable investment trend.
*Securities and Futures Commission of Hong Kong authorisation (“SFC”) is not a recommendation or endorsement of HSI ESG ETF nor does it guarantee the commercial merits of HSI ESG ETF or its ESG attributes or related performance. It does not mean HSI ESG ETF is suitable for all investors nor is it an endorsement of its suitability for any particular investor or class of investors.
Why sustainable investing?
Sustainable investing has gained significant traction over the past years
Policymakers and regulators across markets are championing the importance of sustainable investment - warranting its trajectory in becoming an essential consideration for investments
Failure to address ESG issues such as climate change and corporate governance could affect a company’s fundamentals and performance over the longer term
Over the years, many large multinational corporations have suffered from substantial financial losses and share price drops following ESG risk events
Source: HSBC Asset Management, Bloomberg, as of 31 January 2022. Share price figure refers to the decline in the first year following the ESG risk event. Past performance is not an indicator of future results. For illustrative purposes only.
Source: Hang Seng Indexes Company Limited.
Note: 1. Sustainalytics is the data provider of the ESG Risk Rating data, UNGC data and Product Involvement data. The ESG Risk Ratings measure the degree to which a company’s economic value is at risk from financially material ESG issues. Please refer to the details in the Hong Kong Offering Document. 2. Product Involvement Screening areas and the respective threshold are: i) Thermal Coal Extraction; Tobacco Products Production; Tobacco Products Retail (if equal to or over 5% of revenue); ii) Thermal Coal Power Generation (if equal to or over 5 per cent of Capacity); and iii) Controversial Weapons (Any involvement). 3. Subject to an 8 per cent cap on individual constituent weight for each Index constituent.
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Terms and conditions
This Site is intended for financial intermediaries in Hong Kong only.
The information herein is not intended for individuals and such individuals should not rely upon it.
The Funds invest in various investments, such as equities, bonds, money market instruments, collective investment schemes and alternative investments. Each fund has a different investment objective and risk profile.
The Funds may subject to the risks of investing in emerging markets and smaller companies; and may subject to the concentration risks when the investments are concentrated in one or a small number of markets or sectors.
The Funds may invest in non-investment grade bonds, unrated bonds, contingent convertible securities, mortgage backed securities, asset backed securities and urban investment bonds issued by PRC local government financing vehicles (LGFVs) which are subject to additional risks and volatility.
The Funds may have substantial investments in securities issued by a single sovereign issuer (including but not limited to issuer with a non-investment grade credit rating) and are subject to higher concentration risk, sovereign risk and credit risk.
The Funds may gain exposure to hedge fund, absolute return strategy, private equity, real estate sector and Real Estate Investment Trust (REIT) which are subject to additional risks and volatility.
The Funds may invest in onshore Chinese securities through various market access schemes and China A-shares Access Products. Such investments involve additional risks, including the risks associated with China's tax rules and practices.
When investing in Indian bonds, the Funds may need to comply with the licensing regulations in India and may subject to additional risks, including quota restrictions and tax risks.
The Funds may invest in other funds and need to bear the underlying funds' fees and expenses on top of the Funds' own fees and expenses.
The Funds may invest in financial derivative instruments for investment purpose which may lead to higher volatility to their net asset value.
The Funds may pay dividends out of capital or gross of expenses. Dividend is not guaranteed and may result in capital erosion and reduction in net asset value.
Because the Funds' base currency, investments and classes may be denominated in different currencies, investors may be affected adversely by exchange controls and exchange rate fluctuations. There is no guarantee that the currency hedging strategy applied to the relevant classes will achieve its desired result.
Investing in money market funds are not the same as placing funds on deposit with a bank or deposit taking company. The Funds which are money market funds have no obligation to redeem units at their offering value and such Funds are not subject to the supervision of the Hong Kong Monetary Authority. Investors may not recoup the original amount invested in the Funds.
The Funds' investments may involve substantial credit, currency, volatility, liquidity, interest rate, tax and political risks. Investors may suffer substantial loss of their investments in the Funds.
The Funds are NOT equivalent to time deposits. Investors should not invest in the Funds solely based on the information provided herein and should read the offering document of the Fund for details.
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