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What are ETFs?

  • Exchange-traded funds (ETFs) are open-ended funds that are traded like stocks on a stock exchange.
  • An ETF usually tracks an index to deliver a performance that mirrors that of the underlying index.
  • The underlying index is commonly an equity benchmark, and yet ETFs can contain many types of investments, including stocks, commodities, bonds or a mixture of investment types.

ETFs Features


  • Simplicity
    An ETF invests in a basket of stocks or bonds or other securities, providing a simple access to a certain type of assets.
  • Transparency
    ETFs usually track a benchmark index that has transparent index methodology. The actual holdings of an ETF are published on a daily basis.
    The real time intraday net asset value (NAV) of an ETF per share is also published as a reference for trading.
  • Cost-efficiency
    ETFs usually charge comparatively lower management fees (ranging from 0.1% to 1%) than traditional mutual funds.
    Unlike mutual funds, except for minimal fees charged by exchanges and brokers, there are no subscription and redemption fees charged on top of the management fees.
  • Flexibility
    As flexible as single stocks, ETFs can be traded during trading hours, whereas the subscription and redemption of mutual funds normally take several days.
  • Diversity
    Compared with single-stock investment, an ETF typically tracks a certain index composed of a basket of stocks, therefore, increasing the diversity of its portfolio.
    With more and more ETFs tracking different types of indices listed on the Hong Kong Stock Exchange, various investment demands can be satisfied.
  • Leverage & Inverse ETFs
    A leveraged exchange-traded fund (ETF) uses financial derivatives and debt to amplify the returns of an underlying index.
    While a traditional ETF typically tracks the securities in its underlying index on a one-to-one basis, a leveraged ETF may aim for a 2:1 or 3:1 ratio.


A comparison between ETFs, HK stocks and mutual funds



HK Stocks

Mutual Fund

Management fee

Usually Lower


Usually Higher

Active management

Mostly No


Mostly Yes

Subscription/ Redemption fee



0% to 5%

Stamp duty


Yes (0.1%)


Company specific risk





HKEx traded

HKEx traded

via banks or IFAs

Holding disclosure



Monthly or Quarterly

NAV disclosure

Real time

Real time


Common Strategies on ETF


Developed market equity exchange-traded funds
Ride on the stability and growth outlook in developed markets to provide investors with foreseeable steady potential gains from stocks.


Emerging market equity exchange-traded funds
Capture the robust growth momentum in emerging markets to pursue relatively stronger potential returns for investors.


Multi-asset and bond exchange-traded funds
Utilize diverse asset portfolio allocations to provide income paths suited for investors with different investment preferences.


Currency and commodity exchange-traded funds
Allow investors to tap into investment opportunities in multiple currencies and commodity markets.


Alternative strategy exchange-traded funds
Seek to bring returns to investors based on investment themes that incorporate multiple dimensions and diversification.

List of ETF

Under the “List of Investment Products” section, the SFC website maintains a repository of ETFs where you can obtain detailed information about ETFs such as name, stock code, issuer and more.
For more information about the offering documents, including the product key facts statement, can be obtained at Hong Kong Exchanges and Clearing Ltd. Website.