Brown Brothers Harriman & Co has announced its appointment as the custodian and administrator for a new ETF domiciled in Hong Kong launched by China International Capital Corporation (CICC) and Krane Funds Advisors, LLC (KraneShares). Brown Brothers Harriman Trustee Services (Hong Kong) Limited serves as trustee and registrar.
An extension of CICC KraneShares’ flagship US listed ETF, the CICC KraneShares CSI China Internet Index ETF, is focused on investing in internet technology companies based in China and listed overseas. Prior to this launch, there was just one ETF investing in the technology sector listed in Hong Kong.
Ning Lin, Managing Director of China International Capital Corporation Hong Kong Asset Management Limited, says: “We are excited to expand our asset management business in Hong Kong with the launch of our ETF platform. With our presence now spread across regions, it is critical that we work with a globally recognised ETF servicing expert and we are pleased to build on our relationship with BBH.”
“KraneShares is pleased to partner with BBH to expand our reach into the Hong Kong market,” says Jonathan Krane, CEO of KraneShares. “We believe the CICC KraneShares CSI China Internet Index ETF presents a great opportunity for investors across Asia.”
Chris Pigott, BBH’s Head of Hong Kong ETF Servicing, foresees tremendous opportunities for new ETF issuers in Hong Kong: “CICC KraneShares’ entrance to the Hong Kong ETF market is well-timed – the anticipated inclusion of ETFs in the Hong Kong-China Stock Connect program provides a strategic growth opportunity for ETF issuers. In our recent ETF investor survey, nearly 90%1 of institutional investors and intermediaries in China say they would be likely to invest in Hong Kong ETFs if they are included in the Stock Connect program. We are on the verge of a transformation in the Hong Kong ETF market and CICC KraneShares will be at the forefront.”‘
Launched in November 2014, and extended in 2016, Stock Connect links the Hong Kong, Shanghai and Shenzhen bourses. The Stock Connect program allows international investors to trade securities listed on the Shanghai and Shenzhen exchanges, and Mainland investors to trade securities listed on the Hong Kong exchange. The inclusion of ETFs in the mutual market initiative would make eligible products available to a much wider range of investors.