- HSI tracking funds are likely to bounce back, as the key overhangs are mostly priced in
- Internet and technology to lead the charge
- As we move into the interest rate upcycle, beneficiary of interest rate hikes will be the financials, namely, HK Banks, Global Insurers and China Brokers
HSI tracking funds are likely to bounce back, as the negative overhangs are mostly priced in. We think that after a tumultuous year, the China/HK market is ready to bounce back. Hang Seng Index-tracking ETFs would be a simple way to play the rebound.The most broadly traded HSI tracking ETFs would be The Tracker Fund (2800 HK), Hang Seng Index ETF (2833 HK), and China AMC Hong Kong Banks ETF (3143 HK)
Internet and technology to outperform.We are of the view that with regulatory overhangs effectively priced in, and share prices still at attractive levels, new economy and technology names will likely lead the charge.We expect ETFs that track the Hang Seng Tech Index to outperform the broader HSI.The most broadly traded HSI Tech index ETFs are CSOP Hang Seng TECH Index ETF (3033 HK), Hang Seng TECH Index ETF (3032 HK), and iShares Hang Seng TECH ETF HKD (3067 HK).
Playing the interest rate upcycle. As we move into the interest rate upcycle, beneficiary of interest rate hikes will be the financials, namely, HK Banks, Global Insurers and China Brokers.An ETF that can take advantage of this trend would be ChinaAMC Hong Kong Banks ETF (3143 HK).The recent spike in oil prices have reignited interest in oil stocks.The correlation with between oil stocks and crude oil has been less direct in the past year due to various political and technical issues.A way to skip past these is to gain exposure via commodity ETF in oil futures, such as Samsung S&P GSCI Crude Oil ER Futures ETF (3175 HK) and Global X S&P Crude Oil Futures Enhanced ER ETF (3097 HK).
In this report, we have listed all 153 ETFs that are available in the Thomson Reuters database and consolidate into groups. We have country focus equity ETFs such as HK, China and rest of the world; thematic and sector focus equity ETFs, fixed income, commodities, and money market.