Futu Research | ETF Investment Research
[High Yield ETF] What are the Hong Kong Stock High Yield ETFs? Learn more in one article!
Accompanying the market forReduction of Dividend Tax on Hong Kong SharesIt is expected that the attraction of the Hong Kong stock market to Mainland investors is continuing to grow. We have previously introduced many high-dividend products, so adjusting the tax rate or directly impacting the actual rate of return of high-dividend products will further encode their investment attractiveness. And if you want to match a seriesHIGH DIVIDENDInvesting in assets and holding high-dividend products spread around the world, ETFs remain a simple and convenient option for diversifying risk.
Below, we will introduce you to several high-dividend ETF products on the Hong Kong stock market, some of which not only have high dividend returns, but which have increased in price since the beginning of the year so far, the so-called “income and income”:
$Ping An of China CSI HK Dividend ETF(03070.HK)$
The ETF component is dominated by financial bank stocks listed in Hong Kong. Currently, the 5 largest holdings of the ETF weigh 5% and move in the middle $CHINA MOBILE(00941.HK)$、Oil of the Mediterranean $CNOOC(00883.HK)$, Bank of China $BANK OF CHINA(03988.HK)$、Construction $CCB(00939.HK)$& Workshops $ICBC(01398.HK)$。 THESE COMPANIES HAVE HIGH DIVIDENDS, STABLE DIVIDENDS AND SOME LIQUIDITY. The management fee is 0.55% per annum, the asset size is HK$9.87 billion, the dividend is paid once every six months, the dividend is 5.76%, and the share price has increased by 20.25% since 2024.
$Global X Hang Seng High Dividend Yield ETF(03110.HK)$
The ETF has been listed for ten years, with an asset size of HK$20.88 billion and a management fee of 0.68%, making it the largest high-dividend ETF in Hong Kong. Its main feature is to “invest at low volatility and pursue dividend returns”, tracking the performance of the Hang Seng High Yield Index. Its stock option concept is to exclude the most volatile 25% stocks, reduce volatility and make dividend returns more stable, such as China's Shenhua $CHINA SHENHUA(01088.HK)$, moving in $CHINA MOBILE(00941.HK)$、Communication $CHINA UNICOM(00762.HK)$etc. The ETF is distributed once every six months with a dividend yield of 7.58%, up 11% in early 2024 to date.
It is the first high-yield equity ETF in Hong Kong to cover three HKEx territories, so its selected companies are not limited to Hong Kong listings, but also to those listed on the HQF, such as Gili Appliances in 10 major holding positions. $Gree Electric Appliances,Inc.of Zhuhai(000651.SZ)$and Shaanxi Coal $Shaanxi Coal Industry(601225.SH)$。 Currently, the largest share is China Sea Oil, with a holding ratio of 6.01%.
So far, the ETF has an asset size of HK$9721 million, a management fee of 0.6%, a quarterly dividend yield of 7.62%. The share price is up 13.65% from 2024 to date. It has not only high interest rates, but also the potential to outperform the market.
$TRACKER FUND OF HONG KONG(02800.HK)$
It is the first ETF to be listed in Hong Kong, with assets of HK$13.76 billion. It tracks several blue chip stocks on the Hong Kong market. Investors can follow the performance of the Hang Seng Index in one trade. Although it is not a specialized high-dividend product, the ETF has a yield of 3.75%, which is also at a higher level. And liquidity is the most abundant of all ETFs in Hong Kong, so investors don't have to worry about spreads.
In addition, the main tax charges involved when investing in a Hong Kong High Dividend ETF include:
1. Trading commissions: Trading commissions are usually charged at a certain proportion of the amount traded. For a Hong Kong stock ETF, the default transaction rate is around three thousandths of a cent, but the specific rates may vary depending on the securities and there is a minimum fee for a single transaction, such as HK$5.
2. Transaction Fees and Settlement Fees: In addition, there are transaction fees (such as transaction fees and SEC fees) and transaction settlement fees, which typically add up to about 0.002%-0.005% of the transaction amount.
3. Dividend tax: For dividends received, non-Hong Kong resident investors may be required to pay tax in accordance with the tax laws of their country or territory. Mainland investors in the past paid a 20% dividend tax when buying Hong Kong shares through Hong Kong stocks, but according to Bloomberg, China Securities and Exchange Commission is considering exempting the tax to make it fairer for Hong Kong investors.
4. Other Possible Fees: This also includes possible management fees, custodial fees, etc., which are usually deducted from the ETF's net asset value and indirectly affect investor returns.
In summary, before investing in a Hong Kong High Yield ETF, you should learn more about the specific fee standards of each securities dealer and consider the potential tax implications. At the same time, it should be noted that investing in high-dividend ETFs still requires careful consideration of risks such as market volatility, component quality and liquidity. After a comprehensive analysis, decisions are made based on personal risk tolerance and investment strategy.
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