Tracker Fund of Hong Kong
Back on TraHK (2800)
Company announcement, 13-Jan-2021
Without giving reasons, fund manager State Street (ultimately a US person) now says that TraHK will resume investments in US-sanctioned stocks in the HSI, 2 days after it stopped. 2% of the units have been redeemed since then. This comes after Webb-site called for the Supervisory Committee to remove State Street and replace it with a non-US person. Will they change their mind a second time, like the New York Stock Exchange did when it delisted the stocks? Wait and see.
Company announcement, 13-Jan-2021
Without giving reasons, fund manager State Street (ultimately a US person) now says that TraHK will resume investments in US-sanctioned stocks in the HSI, 2 days after it stopped. 2% of the units have been redeemed since then. This comes after Webb-site called for the Supervisory Committee to remove State Street and replace it with a non-US person. Will they change their mind a second time, like the New York Stock Exchange did when it delisted the stocks? Wait and see.
TraHK (2800) cannot buy any more US-sanctioned HSI stocks
Company announcement, 11-Jan-2021
That's because it has US Persons as its Trustee and Manager. There is a Supervisory Committee which has the power to change both, and it should now do so, picking a non-US manager and trustee. Until then, the HK$105bn fund will struggle to track the Hang Seng Index.
Company announcement, 11-Jan-2021
That's because it has US Persons as its Trustee and Manager. There is a Supervisory Committee which has the power to change both, and it should now do so, picking a non-US manager and trustee. Until then, the HK$105bn fund will struggle to track the Hang Seng Index.
HK MPF system charges premiums for cheap index funds
| Scrap the MPF
Bloomberg, 27-Jun-2019
Webb-site estimates that about one third of all the returns generated by MPF assets so far has vanished in fees to the managers. MPF means Mandatory Payment of Fees - you cannot choose to manage your own account. Even with managed funds, an ETF like TraHK charges only about 10% of what the MPF index funds charge. The system remains an invasion of the free market and should be scrapped. We first wrote about the underperformance of the MPF HSI funds against the index back in 2005 in our article "Scrap the MPF".
Bloomberg, 27-Jun-2019
Webb-site estimates that about one third of all the returns generated by MPF assets so far has vanished in fees to the managers. MPF means Mandatory Payment of Fees - you cannot choose to manage your own account. Even with managed funds, an ETF like TraHK charges only about 10% of what the MPF index funds charge. The system remains an invasion of the free market and should be scrapped. We first wrote about the underperformance of the MPF HSI funds against the index back in 2005 in our article "Scrap the MPF".
BlackRock to launch "Hong Kong’s cheapest Hang Seng Index ETF"
| Prospectus
South China Morning Post, 17-Nov-2016
The fund (3115) will charge 0.09% p.a. compared with 0.10% for TraHK (2800), but the board lot is HK$800, versus $11,200 for TraHK. HKEX charges $1.5 per board lot on increases in holdings between book closure dates, so the extra 13 board lots to reach $11,200 in the Blackrock fund will cost $19.50 (or more if your broker marks up the fee). That is 0.17%, so unless you plan to hold for at least 17 years, TraHK will still be cheaper overall for any sensible investment size. Webb-site is surprised that Blackrock has chosen such a small board lot.
South China Morning Post, 17-Nov-2016
The fund (3115) will charge 0.09% p.a. compared with 0.10% for TraHK (2800), but the board lot is HK$800, versus $11,200 for TraHK. HKEX charges $1.5 per board lot on increases in holdings between book closure dates, so the extra 13 board lots to reach $11,200 in the Blackrock fund will cost $19.50 (or more if your broker marks up the fee). That is 0.17%, so unless you plan to hold for at least 17 years, TraHK will still be cheaper overall for any sensible investment size. Webb-site is surprised that Blackrock has chosen such a small board lot.
SFC fines State Street Global Advisors HK$4m over Tracker Fund management
SFC, 15-Jun-2016
The Tracker Fund always has a small amount of cash on hand, and SSGA failed to get the best rate on deposits, getting zero from its own bank rather than 0.01% from the market. To compensate, it is paying HK$318,315 into the fund, or about 0.00044% of NAV. Don't spend it all at once. Our take: the Tracker Fund remains the most efficient way for those who cannot pick stocks to own a piece of the HK market, costing around 0.1% p.a. compared with almost 2% on your MPF funds.
SFC, 15-Jun-2016
The Tracker Fund always has a small amount of cash on hand, and SSGA failed to get the best rate on deposits, getting zero from its own bank rather than 0.01% from the market. To compensate, it is paying HK$318,315 into the fund, or about 0.00044% of NAV. Don't spend it all at once. Our take: the Tracker Fund remains the most efficient way for those who cannot pick stocks to own a piece of the HK market, costing around 0.1% p.a. compared with almost 2% on your MPF funds.
TraHK Suitable?
Now for the 10-billion dollar question - the public offer closes at 12 noon tomorrow. Should you buy the Tracker Fund of Hong Kong? We give you our considered view. (3-Nov-1999)
Now for the 10-billion dollar question - the public offer closes at 12 noon tomorrow. Should you buy the Tracker Fund of Hong Kong? We give you our considered view. (3-Nov-1999)
TraHK on Tap
We explain in detail how the Tap mechanism will draw index shares from the Government's holdings when the market moves upwards, dampening the upside on the market. At the current rate, we expect HK$24bn of tap next year. We also look at the redemption and subscription mechanism and its likely effect on the trading prices of the TraHK. Finally, we demonstrate how the HSI has been boosted relative to the rest of the market by the Government's intervention. (1-Nov-1999)
We explain in detail how the Tap mechanism will draw index shares from the Government's holdings when the market moves upwards, dampening the upside on the market. At the current rate, we expect HK$24bn of tap next year. We also look at the redemption and subscription mechanism and its likely effect on the trading prices of the TraHK. Finally, we demonstrate how the HSI has been boosted relative to the rest of the market by the Government's intervention. (1-Nov-1999)
Circular TraHK
In an extraordinary move, the Government has said that its Mandatory Provident Fund Schemes Authority will invest part of its operating funds and compensation fund in the TraHK. This Government's blatant attempt to underwrite its own issue represents the next step on a slippery slope of Government fiddling with the markets. Who will invest next - the Airport Authority, Water Authority, or Hongkong Post? (28-Oct-1999)
In an extraordinary move, the Government has said that its Mandatory Provident Fund Schemes Authority will invest part of its operating funds and compensation fund in the TraHK. This Government's blatant attempt to underwrite its own issue represents the next step on a slippery slope of Government fiddling with the markets. Who will invest next - the Airport Authority, Water Authority, or Hongkong Post? (28-Oct-1999)
On TraHK
The prospectus for the Tracker Fund is now out and we've read it. In this article we look at the complexities of how and when the discount and pricing will be fixed, the odd lots created by the loyalty bonus, and make an early assessment of the potential public demand. (25-Oct-1999)
The prospectus for the Tracker Fund is now out and we've read it. In this article we look at the complexities of how and when the discount and pricing will be fixed, the odd lots created by the loyalty bonus, and make an early assessment of the potential public demand. (25-Oct-1999)
The Outdated HSI
We begin our coverage of the Tracker Fund of Hong Kong with a commentary on the outdated Hang Seng Index. We question the relevance of the HSI as a proxy for Hong Kong's market - after reading our article, would you invest your portfolio in this basket? (19-Oct-1999)
We begin our coverage of the Tracker Fund of Hong Kong with a commentary on the outdated Hang Seng Index. We question the relevance of the HSI as a proxy for Hong Kong's market - after reading our article, would you invest your portfolio in this basket? (19-Oct-1999)
EFIL Announces Sale Plans
The Government has announced plans to sell off its surplus equity holdings as a unit trust, which we recommended in February. The plan is short on detail and fails to commit to a scheduled disposal programme, instead preferring to time the launch based on "prevailing market conditions". Has the motive behind the intervention changed from protecting the currency to one of maximising profit? At current prices, we calculate that the Exchange Fund will have to sell HK$177bn of shares, or 79% of its holdings, to reduce its portfolio to the target 5% weighting. (21-Jun-1999)
The Government has announced plans to sell off its surplus equity holdings as a unit trust, which we recommended in February. The plan is short on detail and fails to commit to a scheduled disposal programme, instead preferring to time the launch based on "prevailing market conditions". Has the motive behind the intervention changed from protecting the currency to one of maximising profit? At current prices, we calculate that the Exchange Fund will have to sell HK$177bn of shares, or 79% of its holdings, to reduce its portfolio to the target 5% weighting. (21-Jun-1999)
EFIL comes to LIFE
In recent days Exchange Fund Investment Limited, the HKMA's in-house investment adviser, has been asking a short-list of potential advisers what should be done with the HK$160 billion portfolio acquired in last August's intervention. In this article, we present our solution. (8-Feb-1999)
In recent days Exchange Fund Investment Limited, the HKMA's in-house investment adviser, has been asking a short-list of potential advisers what should be done with the HK$160 billion portfolio acquired in last August's intervention. In this article, we present our solution. (8-Feb-1999)
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