Global X Hang Seng ESG ETF

IMPORTANT INFORMATION

Investors should not base investment decisions on this website/material alone. Please refer to the Prospectus for details including product features and the risk factors. Investment involves risks. There is no guarantee of the repayment of the principle. Investors should note:

Global X Hang Seng ESG ETF (the “Fund”) invests in equity securities to provide investment results that, before deduction of fees and expenses, closely correspond to the performance of the HSI ESG Enhanced Index (the “Underlying Index”). The Fund is subject to general market risks and may fall in value and there is no guarantee of the repayment of principal.
The Underlying Index is a new index. It has minimal operating history by which investors can evaluate its previous performance. There can be no assurance as to the performance of the Underlying Index. The Fund may be riskier than other exchange traded funds tracking more established indices with longer operating history.
The Fund’s investments may be concentrated in companies with a greater ESG focus and thus its value may be more volatile than that of a fund with having a more diverse portfolio of investments. In addition, there is a lack of standardised taxonomy in relation to ESG investing strategies. The standard of disclosure adopted by funds in relation to the relevant ESG factors or principles may vary.
The Underlying Index is subject to concentration risk as a result of tracking the performance of securities of companies listed on the SEHK which are incorporated in, or with the majority of revenue derived from, or with a principal place of business in, the Greater China region. The Net Asset Value of the Fund is therefore likely to be more volatile than a broad-based fund.
The Fund may be subject to tracking error risk, which is the risk that its performance may not track that of the Underlying Index exactly. The Underlying Index is a new index and the Fund may be riskier than other exchange traded funds tracking more established indices with longer operating history.
The trading price of the Fund unit (the “Unit”) on the Stock Exchange of Hong Kong is driven by market factors such as demand and supply of the Unit. Therefore, the Units may trade at a substantial premium or discount to the Fund’s net asset value.
Dividends may be paid from capital or effectively out of capital of the Fund, which may amount to a return or withdrawal of part of an investor’s original investment or from any capital gains attributable to that original investment and result in an immediate reduction in the Net Asset Value per Unit of the Fund.
The Fund’s synthetic replication strategy will involve investing up to 50% of its net asset value in financial derivative instruments (“FDIs”), mainly funded total return swap transaction(s) through one or more counterparty(ies). Risks associated with FDIs include counterparty/credit risk, liquidity risk, valuation risk, volatility risk and over-the-counter transaction risk. FDIs are susceptible to price fluctuations and higher volatility, and may have large bid and offer spreads and no active secondary markets. The leverage element/component of an FDI can result in a loss significantly greater than the amount invested in the FDI by the Sub-Fund.

Ready To Begin Your ESG Journey?

Global X Hang Seng ESG ETF

In a single trade, access Hong Kong’s most sustainable companies at a single management fee of 0.29% ^{^}.

Stock Code

3029 (HKD)^#
Underlying Index

HSI ESG Enhanced Index
AUM^* (as of )

HK$
Ongoing Charges Over A Year^{^} As the Fund is newly set up, this figure is an estimate only and represents the sum of the estimated ongoing charges over a 12-month period, expressed as a percentage of the Fund’s estimated average Net Asset Value over the same period. It may be different upon actual operation of the Fund and may vary from year to year. As the Fund adopts a single management fee structure, the estimated ongoing charges of the Fund will be equal to the amount of the single management fee, which is capped at 0.29% of the average Net Asset Value of the Fund. Any ongoing expenses exceeding 0.29% of the average Net Asset Value of the Fund will be borne by the Manager and will not be charged to the Fund. Please refer to the Key Facts Statement for section headed “Ongoing fees payable by the Sub-Fund” and the Prospectus for further details.

0.29%
Inception Date

18 Mar 2022
Product Details^#

^ The Fund adopts a single management fee structure, whereby a single flat fee will be paid out of the assets of the Fund to cover all of the costs, fees and expenses of the Fund. Click to learn more.

# Investment involves risk. Before making any investment decision to invest in the Fund, investors should read the Fund’s prospectus for details and the risk factors. Visit Global X ETFs Hong Kong website for more details relating to this fund (including but not limited to the fund’s iNAV, market price, performance, daily holdings and tracking difference/error).

Why Invest?

Video: Global X Hang Seng ESG ETF

Global X Hang Seng ESG ETF applies a rules-based ESG tilting and exclusion methodology to the Hang Seng Index to reduce the Index ESG Risk Rating by 20.5% and carbon intensity by 67.1%.^{^}

^ Reduction in Index ESG Risk Rating compared to the Hang Seng Index and reduction in carbon intensity in tons Co2e/$ Millions of revenue compared to the Hang Seng Index as of 31 August 2022.

The Fund employs research and data from globally leading ESG research companies to assess constituents’ sustainability profiles and to implement a 3-step exclusion methodology to screen out constituents with the highest ESG risk ratings, breach the United Nations Global Compact Principles or are involved in controversial products.

In a single trade, the Fund delivers access to dozens of Hong Kong’s most sustainable companies at a single management fee of 0.29%.

The Remarkable Rise of ESG Investing

There is a growing recognition that ESG considerations need to be incorporated into the investment process. The effects of climate change such as the frequent occurrence of natural disasters, growing inequalities within our society and the pressing need for greater board diversity are some of the issues that have compelled investors to adopt ESG investing, also known as sustainable investing. Prior to making an investment decision, investors are now increasingly assessing a company’s sustainability profile, such as its carbon footprint and environmental impact, labour practices and standards of corporate governance. This demand for greater corporate sustainability is not being driven by investors alone - governments and regulators around the world have implemented policies aimed at mitigating climate change and reducing social inequalities. According to the Global Risk Report 2022 produced by the World Economic Forum, the five most critical long-term threats to the world are all societal and environmental risks, as opposed to economic and geopolitical ones. As investors and policymakers pursue sustainability with greater urgency, ESG investing is growing faster than ever. According to Morningstar, global sustainable fund assets grew to US$ 2.7 trillion at the end of 2021 from less than US$ 700 million as of the end of 2018.¹

Fill Two Needs with One Deed

ESG enables investors to make a positive impact on the environment and society but the benefits don’t stop there. Numerous industry and academic studies suggest that companies with a better sustainability profile tend to be more resilient and are able to generate stronger long-term returns. Furthermore, companies that were able to manage ESG issues effectively often demonstrated lower levels of volatility, lower cost of capital, higher market valuations and better long-term financial performance. One of the main reasons for this is because ESG considerations directly affect a company’s intangible assets, such as reputation, brand value and intellectual property, which are some of the key drivers of its financial performance and critical determinants of the success or failure of a business. In addition, companies that do not build ESG considerations into their risk management programs expose themselves to ESG controversies that could result in serious financial consequences. According to Sustainalytics, companies that experienced high to severe ESG incidents lost on average 6% of their market capitalization.²

The potential for companies with better sustainability profiles to outperform the wider market can be seen in Hong Kong stocks by comparing the performance of the HSI ESG Enhanced Index with that of its base index, the Hang Seng Index (the “HSI”). The HSI ESG Enhanced Index, which incorporates ESG considerations to the constituents of the HSI through a rules-based exclusion and tilting methodology, delivered cumulative total returns of -21.53% from its inception in December 2018 to 30 September 2022, outperforming the HSI’s cumulative total returns of -25.07% achieved in the same period. In terms of risk-adjusted returns, the HSI ESG Enhanced Index exhibited -0.96x from December 2018 to September 2022, which is meaningfully higher than the HSI’s -1.14x over the period. Risk adjusted returns measure an investment’s return after taking the degree of risk into account, helping investors to determine whether the risk taken is worth the expected reward.³

The Hang Seng Index, Enhanced by ESG

The HSI ESG Enhanced Index incorporates into its index methodology data and analysis produced by globally leading ESG research companies. A 3-step exclusion policy is implemented to the constituents of the HSI to screen out companies with the worst ESG risk ratings, breach the United Nations Global Compact Principles or are involved in controversial products. Then, the weights of the remaining constituents are tilted according to their ESG risk ratings so that those with the strongest sustainability profiles receive a weighting that is higher compared to their weighting in the HSI, and vice versa. The outcome is a rigorously researched index that delivers broad exposure to the Hong Kong stock market with the potential to outperform broad based indices whilst reducing exposure to ESG related risks. In addition to delivering long-term outperformance against the HSI, the HSI ESG Enhanced Index achieved a 20.5% reduction in the Index ESG Risk Rating and a 67.1% reduction in the carbon intensity measured in tons Co2e/$ million of revenues.⁴

*Source: Mirae Asset Global Investments (Hong Kong) Limited.

1. Source: Morningstar Direct, 2021

2. Source: Sustainalytics, 2 March 2022

3. Source: Hang Seng Indexes, 2021

4. Source: Hang Seng Indexes, as of 31 August 2022

This website is intended for Hong Kong investors only. Your use of this website means you agree to our Terms of use. This website is strictly for informational purposes only and does not constitute a representation that any investment strategy is suitable or appropriate for an investor’s individual circumstances. In 2018, Global X was acquired by Mirae Asset Global Investments and Mirae Asset Global Investments Co., Ltd. is the parent company of Mirae Asset Global Investments (Hong Kong) Limited.

The information contained in this website is for information purposes only and does not, constitute any recommendations, offer or solicitation to buy, sell or subscribe to any securities or financial instruments in any jurisdiction. Investment involves risk. It cannot be guaranteed that the performance of the Product will generate a return and there may be circumstances where no return is generated or the amount invested is lost. Past performance is not indicative of future performance.

Before making any investment decision to invest in the Product, investors should read the Product’s prospectus for details and the risk factors. Investors should ensure they fully understand the risks associated with the Product and should also consider their own investment objective and risk tolerance level. Investors are advised to seek independent professional advice before making any investments.

Certain information contained in this website is compiled from third party sources. Whilst Mirae Asset Global Investments (Hong Kong) Limited (“Mirae Asset HK”), the Manager of the Product, has, to the best of its endeavor, ensured that such, information is accurate, complete and up-to-date, and has taken care in accurately reproducing the information. Reliance upon information in this material is at the sole discretion of the investor.

The Products are not sponsored, endorsed, issued, sold or promoted by their index providers (If any). For details of an index provider including any disclaimer, please refer to the relevant Product’s offering documents.

The contents of this material is advertising in nature and is prepared by Mirae Asset Global Investments (Hong Kong) Limited and has not been reviewed by the Securities and Futures Commission of Hong Kong. Issuer: Mirae Asset Global Investments (Hong Kong) Limited.