Product Comparison: China Global Leaders (3050) vs. HS Tech (2837) - Global X ETFs Hong Kong

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  • Global X China Global Leaders ETF’s (the “Fund’s”) investment in equity securities is subject to general market risks, whose value may fluctuate due to various factors, such as changes in investment sentiment, political and economic conditions and issuer-specific factors.
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  • Global X Hang Seng TECH ETF (the “Fund”) seeks to provide investment results that, before deduction of fees and expenses, closely correspond to the performance of the Hang Seng TECH Index (the “Index”).
  • The Fund’s investments are concentrated in companies with a technology theme. Technology companies are often characterised by relatively higher volatility in price performance. Companies in the technology sector also face intense competition, and there may also be substantial government intervention, which may have an adverse effect on profit margins. These companies are also subject to the risks of loss or impairment of intellectual property rights or licences, cyber security risks resulting in undesirable legal, financial, operational and reputational consequences.
  • The Fund’s investments are concentrated in securities listed on the Stock Exchange of Hong Kong (the “SEHK”) of companies that are active in technology sector may result in greater volatility in the value of the Fund than more diverse portfolios which comprise broad-based global investments. The value of the Fund may be more susceptible to adverse economic, political, policy, foreign exchange, liquidity, tax, legal or regulatory event affecting the technology sector.
  • The Index is subject to concentration risk as a result of tracking the performance of securities incorporated in, or with majority of revenue derived from, or with a principal place of business in, the Greater China region. The Fund’s NAV is therefore likely to be more volatile than a broad-based fund.
  • As part of the securities lending transactions, there is a risk of shortfall of collateral value due to inaccurate pricing of the securities lent or change of value of securities lent. This may cause significant losses to the Fund. The borrower may fail to return the securities in a timely manner or at all. The Fund may suffer from a loss or delay when recovering the securities lent out. This may restrict the Fund’s ability in meeting delivery or payment obligations from realisation requests.
  • The trading price of the Fund unit (the “Unit”) on the SEHK 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.
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Product Comparison:
China Global Leaders (3050) vs. HS Tech (2837)

By: Lizzy Liu

Both China Global Leaders (3050) and HS TECH (2837) have large exposure to China tech industry and have benefited from the tech-centric rally, while we have observed several differences between the two products. In our view, China Global Leaders is a more ideal capture of China high-tech industry and may catch up in terms of performance thanks to its diversified exposure to a broad range of high-tech areas, a methodology focused on large-cap sector leaders and its A share exposure.

  1. A More Diversified Portfolio on Broad High-Tech Theme: China Global Leader has greater exposure to high-tech and advanced manufacturing sectors, including technology hardware (22%) and industrials (14%), while HS TECH is more concentrated in internet names (52%).

2. Leader-focused Methodology: the index methodology of China Global Leaders Index tend to select large caps names based on their market leadership and strong global presence. First, we select companies that have top revenue ranking within sectors to include sector leaders. Second, we choose companies that derive over 25% of their revenue from international markets or have more than US$1 billion in overseas revenue, thereby identifying firms with a significant global presence. Finally, we focus on the top 30 companies ranked by market cap.

3. China Global Leaders Provide H+A Exposure: China Global Leaders embodies an all-China concept, offering exposure to both H and A shares, with 30% of its holdings in China A shares, while HS TECH are all HK listed companies. Current AI/tech-driven market rally is mainly on H shares, while A shares are likely to catch up with the recovery of China market and improving investor sentiments.

Index Style Analysis

The China Global Leaders Index portfolio has demonstrated higher ROE and better profitability, as it is composed of large-cap sector leaders with robust margin profiles. For instance, while both China Global Leaders Index and HS TECH Index have exposure to the auto sector, China Global Leaders Index primarily includes BYD, a profitable sector leader, while HS TECH Index includes companies like NIO and Xpeng, which are still not profitable.

The valuation of China Global Leaders Index is more attractive, as internet names especially software names have surged during current AI-driven market rally, while broader high-tech sectors such as technology hardware and industrials valuation appear to be relatively fair.

Global X China Global Leaders ETF
(3050)
Global X Hang Seng TECH ETF
(2837)
Listing Date 11 Mar 2021 30 Mar 2023
Reference Index FactSet China Global Leaders Index NTR Hang Seng TECH Index
Primary Exchange Hong Kong Stock Exchange Hong Kong Stock Exchange
Total Expense Ratio 0.68% p.a.1 0.46% p.a.2
Product Page Link Link

Source: Mirae Asset; Data as of March 2025.

Authored by:

Lizzy Liu

7 Mar 2025

Date : 7 Mar 2025

Category : Annoucements

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