$$$ KPO and CZM $$$: Hang Seng Tech Index ETF - Which one to buy?

Thursday, October 22, 2020

Hang Seng Tech Index ETF - Which one to buy?

In our last portfolio update (Portfolio - September 2020), I briefly mentioned that we will be buying the Hang Seng Tech Index ETF monthly going forward too. For those that do not know what I am referring to, the Hang Seng Tech Index comprises of the 30 largest technology companies listed in Hong Kong that have high business exposure to technology themes. 

The index is relatively new (20 Jul 2020) and it is like the NASDAQ equivalent. We believe that China is going to surpass the US one day, hence it makes sense to invest a bit of our money in China. Having said that, we cannot buy/invest in the index itself right. That's where the ETF tracking the index comes into the picture.

There are currently 4 Hang Seng Tech Index ETFs (in the order they were launched):
1. CSOP Hang Seng TECH Index ETF (3033) / Fees: 0.99% - 1.05%
2. ChinaAMC Hang Seng TECH Index ETF (3088) / Fees: 0.4% - 0.6%
3. Hang Seng TECH ETF (3032) / Fees: 0.55% - 0.87%
4. iShares Hang Seng TECH ETF (3067) / Fees: 0.25% 

When you are essentially buying the same thing, what do you look out for? The fees/expense ratio of the ETF. Simply choose the ETF with the lowest fees. CSOP was the first to launch the ETF but when I saw the fees (it was 1.49% but I guess they reduce it due to too many competition), I lost interest. I only got interested when ChinaAMC listed 3088 (sound so huat too). However, when iShares/Blackrock decided to track the same index too - BlackRock undercuts rivals with low-cost Hang Seng TECH ETF, the choice was obvious.

To those that are new to investing, you may be wondering why are the prices of the ETFs different? Some may even think that the iShares Hang Seng TECH ETF (3067 - HK$15.93) is more expensive than CSOP Hang Seng TECH Index ETF (3033 - HK$7.60). I will recommend that you read up more before starting to invest. I will try to explain it simply - it is due to the number of shares being issued or the NAV (Net Asset Value) of the ETF.

The above fund information belongs to CSOP Hang Seng TECH Index ETF (3033). The current total NAV is HK$4,695,498,515.00 and there are 617,400,200 shares being issued. Hence, each share is worth ~HK$7.60 (4,695,498,515.00 / 617,400,200).

Now we look for the same numbers in iShares Hang Seng TECH ETF (3067). The current total NAV is HK$1,919,306,021 and there are 120,600,000 shares being issued. Hence, each share is worth ~HK$15.91 (1,919,306,021 / 120,600,000).

The next thing to look out for is your own brokerage commission. Buy the correct/cheapest ETF! Hopefully, you will find it useful :) 

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  1. this ETF has USD and HKD dollor, why did you chosen HKD instead of USD?


    1. Honestly, no reason, I didn't give too much thought into it. HKD and USD are pegged anyway, same same?

  2. lion global will be launching hang seng tech etf on sgx in dec this year. hopefully it will be competitive

    1. Interesting. Competition is good for consumers! But I don't think the expense ratio will be lower than iShares. Let's see