The Hang Seng Index sank 5% on Monday, March 14th to reach its lowest level since 2016. Hong Kong's flagship index was mainly dragged down by Chinese listed stocks, amid worries over China-Russia relations, fears of a further regulatory crackdown, and the resurgence of the coronavirus in some Chinese provinces. Among notable sliders of the index were Meituan (-16.84%), JD.com (-14.77%), Alibaba (-10.9%), Tencent Holdings (-9.79%), Xiaomi (-8.64%), and NetEase (-8.14). The Hang Seng China Enterprises Index closed down 7.2%, the biggest drop since November 2008 and the Hang Sang Tech Index sank 11%, its worst decline on record.
American Investors: How to Invest in Hong Kong ETFs
American investors looking to buy the dip can explore iShares MSCI Hong Kong ETF (EWH), Franklin FTSE Hong Kong ETF (FLHK), and KraneShares Hang Seng TECH Index ETF (KTEC). EWH is the largest in size, with $811 million in assets under management. The fund seeks to track the MSCI Hong Kong 25/50 Index and invests in large and mid-sized companies in Hong Kong. As for the industry breakdown, insurance has the highest allocation (22%), followed by real estate (21.94%), capital goods (12.98%), diversified financials (12.3%), utilities (11.69%), and banks (6.35%). EWH has a total expense ratio of 0.50% and trades primarily on the NYSE Arca.
This year, EWH witnessed outflows of $66 million and its NAV per share dropped by 7%.
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