Largest Hong Kong ETF Manager Considers Cryptocurrency Expansion

Key Points:

• Hang Seng Investment Management, the largest ETF manager in Hong Kong, is exploring the integration of cryptocurrencies into its investment products, following HSBC’s decision to allow customers to purchase cryptocurrency ETFs.
• The launch of ETF Connect has resulted in substantial inflows, with average daily assets under management exceeding HKD 12 billion and a significant increase in trading volume.

Hang Seng Investment Management, the largest ETF manager in Hong Kong, is considering incorporating cryptocurrencies into its investment products following HSBC’s plan to allow customers to buy cryptocurrency ETFs.

Hang Seng Investment Management is considering the possibility of using cryptocurrencies in its existing investment products after HSBC, Hong Kong’s largest bank, announced its plan to allow customers to purchase cryptocurrency ETFs. Although there is no clear objective to create an ETF focused on virtual assets, Hang Seng is closely monitoring the development of related asset classes and examining the possibility of incorporating virtual currencies into their existing investment product allocations.

Since the launch of ETF Connect last July, it has attracted stable net inflows of funds. In just one month, the average daily assets under management exceeded HKD 12 billion, representing a growth of nearly 80% compared to December of last year. During this period, the average daily trading volume was nearly HKD 1.7 billion, an increase of over 7 times since the planned launch in July last year, accounting for 6% of the overall Stock Connect.

Leanne Li, CEO of Hang Seng Investment Management, stated that the RMB is currently relatively weak and this may affect RMB-denominated stock trading. Nevertheless, when RMB-denominated stocks are included in the southbound Stock Connect, it is believed that the liquidity of the dual counter model will be enhanced, promoting the internationalization of the RMB.

The move by Hang Seng Investment Management and HSBC to embrace cryptocurrency ETFs reflects the growing popularity of virtual assets as an investment option. As more financial institutions begin to offer cryptocurrency ETFs and other related products, it is expected that they will continue to gain acceptance as a legitimate investment option.

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