What's New In Investments, Funds? - Brown Brothers Harriman

Editorial Staff

19 June 2019

, the US privately-held bank, has been named as the custodian and administrator of the first actively managed exchange-traded fund to be domiciled in Hong Kong.

The ICBC CICC USD Money Market ETF - to use its full name - is being launched by China International Capital Corporation with ICBC Asset Management (Global) Company acting as investment advisor. Brown Brothers Harriman Trustee Services (Hong Kong) Limited serves as trustee and registrar, BBH said in a statement yesterday.

This ETF is the third money market ETF listed on HKEX, and the only ETF in the market to offer a same-day settlement cycle for all primary market creations and redemptions.

With the updated Code on Unit Trusts and Mutual Funds issued by the Securities and Futures Commission earlier this year, Hong Kong became the second market in Asia where ETF issuers can launch actively managed ETFs, the bank said.

According to one definition, an active ETF is a form of exchange-traded fund that has a manager or team making decisions on the underlying portfolio allocation, otherwise not adhering to a passive investment strategy. An actively managed ETF will have a benchmark index, but managers may change sector allocations, market-time trades or deviate from the index, depending on their judgements.