Vanguard has expanded its product offering with three new Hong Kong-domiciled exchange traded funds (ETFs).
The new ETFs will begin trading on the Hong Kong Stock Exchange today and will bring the number of Vanguard ETF offerings in the Hong Kong market to four. In 2013, Vanguard introduced its first ETF in the market: Vanguard FTSE Asia ex Japan Index ETF (2805).
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The low-cost offerings will provide Hong Kong investors an opportunity to diversify their portfolios across the developed markets of Europe and Japan, or to obtain exposure to higher yield stocks across the Asia region.
The three new ETFs break new ground for the Hong Kong ETF market(2):
- The Vanguard FTSE Developed Europe Index ETF (3101) is the first ETF to provide European equity exposure.
- The Vanguard FTSE Japan Index ETF (3126) is the first physical, market-cap-weighted ETF to provide exposure to Japan equities.
- The Vanguard FTSE Asia ex Japan High Dividend Yield Index ETF (3085) is the first physical, market-cap-weighted Asia ex Japan high dividend yield index ETF.
Each of Vanguard’s Hong-Kong domiciled ETFs has the lowest expense ratio in the market for its category(2) and the underlying investments are physical securities.
The table below provides additional details on the four ETFs of Vanguard.
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By GlobalDataETF: Vanguard FTSE Asia ex Japan Index ETF
Stock Code: 2805
Fund Detail:
- Provides exposure to stocks across 11 developed and emerging markets in Asia, excluding Japan; representing 9% of the global equity market capitalisation(3).
- Employs an index sampling strategy to gain exposure to developed and emerging equity markets in Asia, excluding Japan.
- The fund seeks to track the FTSE Asia Pacific ex Japan, Australia and New Zealand Index, before the deduction of fees and expenses.
Total Expense Ratio: 0.38% annually
Launched: 15 May 2013
ETF: Vanguard FTSE Developed Europe Index ETF
Stock Code: 3101
Fund Detail:
- Provides exposure to large and mid cap stocks across 17 developed equity markets in Europe, representing 25% of the global equity market capitalisation(3).
- Employs an index sampling strategy to gain exposure to developed equity markets in Europe.
- The fund seeks to track the performance of the FTSE Developed Europe Index, before deduction of fees and expenses.
Total Expense Ratio: 0.25% annually
Launched: 13 June 2014
ETF: Vanguard FTSE Japan Index ETF
Stock: 3126
Fund Detail:
- Provides exposure to large and mid-cap stocks in Japan, representing 8% of the global equity market capitalisation(3).
- Employs an index sampling strategy to gain exposure to the equity market in Japan.
- The fund seeks to track the performance of the FTSE Japan Index, before deduction of fees and expenses.
Total Expense Ratio: 0.25% annually
Launched: 13 June 2014
ETF: Vanguard FTSE Asia ex Japan High Dividend Yield Index ETF
Stock: 3085
Fund Detail:
- Provides exposure to stocks that are characterised by higher-than-average dividend yields in Asia, excluding Japan.
- Employs an index sampling strategy to gain exposure to the stocks in developed and emerging Asia, excluding Japan.
- The fund seeks to track the performance of the FTSE Asia Pacific ex Japan, Australia and New Zealand High Dividend Yield Index, before deduction of fees and expenses.
Total Expense Ratio: 0.45% annually
Launched: 13 June 2014
Vanguard, which launched the first index fund for U.S. individual investors in 1976, is the world’s largest mutual fund manager(1) and the third-largest global provider of ETFs4. Vanguard is owned by its U.S.-domiciled funds and ETFs, which, in turn, are owned by their investors. This mutual ownership structure aligns Vanguard’s interests with those of investors.
Shelly Painter, Vanguard Asia Regional Managing Director said: "Today marks an important step forward for Vanguard in Hong Kong with the expansion of our ETF product line-up. We are developing core building block ETFs to help long-term investors assemble globally diversified portfolios.
Importantly these products give Hong Kong investors more choices and break new ground in the market by being the first physical-backed ETFs offering exposure to the developed European markets and to Japan.
In keeping with Vanguard’s low-cost philosophy, the three new ETFs have low total expense ratios."
James Norris, Vanguard International Managing Director said: "Vanguard’s approach-both with investing and in business-is to take a long-term view and understand the value of being well diversified across and within asset classes.
We are committed to building our presence in Hong Kong and across the region more broadly, and the expansion of our local ETF line-up today is another step along that journey."
Mr. Norris noted that ETFs are one of the fastest growing product categories in the asset management industry, including Asia. In the last five years, assets in Asia-Pacific-region ETFs have more than tripled while the number of Asia Pacific-region ETFs also has increased more than three-fold.
