Hong Kong lists 8 ETFs to tap Chinese insurer demand for overseas assets

[HONG KONG] Eight exchange-traded funds offering exposure to South Korean chipmakers, US tech firms and Malaysian large caps debuted in Hong Kong on Monday (Sep 28), as the city rushes to tap demand from Chinese insurers seeking exposure to global markets.

The listing boom came after Beijing broadened authorised channels for mainland investors to access foreign assets in an effort to guide capital into official routes, as weak domestic-market performance has fuelled demand for diversification and added to capital-outflow pressures.

China’s financial regulator in August allowed mainland insurance firms to invest in Hong Kong-listed ETFs through the Southbound Stock Connect scheme, opening a new route for the sector to bolster investment returns.

That arrangement took effect on Sep 21, according to Hong Kong’s Securities and Futures Commission.

Market participants said that asset managers in Hong Kong are racing to launch qualified ETFs to tap the potentially substantial capital inflows from mainland insurance funds.

In September alone, 21 ETFs have launched or are set to debut, HKEX data shows; this marks one of the biggest waves of ETF listings in the city and brings the total number of debuts in 2026 so far to over 50.

“Mainland insurers lack overseas investment channels, so Stock Connect ETFs with global themes could have considerable appeal,” analysts at Huatai Securities said, estimating even a 1 per cent allocation from mainland insurers to such instruments would represent more than 400 billion yuan (US$59.6 billion) of fresh capital.

Hong Kong-listed ETFs are required to have at least 60 per cent exposure to Hong Kong equities to be eligible to be sold to mainland investors via the Stock Connect.

Most ETFs listed on Monday invest in both Hong Kong and overseas markets, with three of them tracking HKEX’s cross-market indices.

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That includes the HKEX Bursa Malaysia Large Cap Index, the HKEX KRX Semiconductor Index, and the HKEX Tech & US Tech 100 Index.

These ETF listings could further drive the vibrancy of HKEX’s “ever-growing equities, ETF and derivative ecosystem”, HKEX CEO Bonnie Chan said at the listing ceremony on Monday.

The bourse will continue to expand its index business vigorously, she added.

China’s 10-year government bond yield is among the lowest of major global peers, while the benchmark CSI 300 Index has fallen about 4 per cent in 2026 even as several major global equity markets have hit record highs.

Market participants said the actual demand for newly-listed Hong Kong ETFs remains to be seen given the fierce competition and relatively high exposure to Hong Kong markets.

Turnover was thin in the first-day transactions of the eight new ETFs.

Hang Seng AI Advancement ETF was the most traded, turning over HK$1.36 million (US$173,388) in the morning session but dropping 5.6 per cent. REUTERS