Mirae Asset becomes first Korean asset manager to enter Chinese ETF market

[Courtesy of Global X]

South Korea’s Mirae Asset Global Investments Co. announced on Friday that it will be the first Korean asset management company to enter the exchange-traded fund (ETF) market in mainland China.

Global X Hong Kong, Mirae Asset’s ETF management subsidiary, will begin trading the Global X Hang Seng TECH ETF on the Shanghai/Shenzhen Stock Exchanges on November 6. Investors in China will be able to trade Mirae Asset’s ETFs on the mainland stock exchanges without any offshore investment restrictions.

The Global X Hang Seng TECH ETF is an ETF that tracks the Hang Seng TECH Index to invest in 30 innovative companies that represent China’s emerging growth industries from the IT and technology-based companies listed on the Hong Kong Stock Exchange.

ETF cross-trading has been possible between the Chinese and Hong Kong stock exchanges since July 2022, with both exchanges selecting cross-tradable ETFs during a qualification process. To be registered on the Chinese exchanges, ETFs must meet strict criteria, including being listed for a minimum of six months, maintaining an average daily asset under management (AUM) of HK$ 1.7 billion (approximately $217.36 million) or more over the past six months, and investing in Hong Kong stocks. Currently, only six Hong Kong-listed ETFs have been selected for trading in China.

Mirae Asset was able to enter the mainland Chinese ETF market thanks to its strong global business capabilities. Debuting in the Hong Kong market in 2003 as the territory’s first Korean asset management company, Mirae Asset has grown into a global asset manager over a 20-year span, actively conducting business in global markets and has approximately 133 trillion won in net assets under management for ETFs worldwide as of the end of September 2023.

Starting with the Global X Hang Seng TECH ETF, Mirae Asset expects that various Hong Kong-listed ETFs from Global X will enter the Chinese ETF market moving forward. As of the end of September, the Chinese ETF market had a size of approximately 360 trillion won, making it the second largest in Asia after Japan. If the regulations of the Chinese stock exchanges, which currently limit cross-trading to Hong Kong stock investment ETFs, expand to global stock ETFs, Mirae Asset, which has a diverse lineup of ETFs spanning the United States, Japan, Europe, and India, is expected to offer a wide range of products for Chinese investors.

“As a global asset manager, we have strived to provide innovative investment solutions, and we are pleased to be the first Korean asset manager to enter the mainland Chinese ETF market,” Mirae Asset president Kim Young-hwan said. “We will continue to make efforts to expand our product lineup to provide competitive products to local investors in the global ETF market.”

Global X was acquired by Mirae Asset Group founder and Global Strategy Officer Park Hyeon-joo in 2018 when it was a rising star specializing in U.S. ETFs. Five years after the acquisition, Global X is now recognized as a leading provider of innovative and differentiated thematic ETFs under the catchphrase ‘Beyond Ordinary ETFs’ in global markets including the United States, Japan, Hong Kong, Colombia, and Europe.