Hang Seng Investment Management has announced the launch of the Hang Seng AI Evolution ETF, marking the first exchange-traded fund in Hong Kong dedicated exclusively to artificial intelligence companies listed on the city's stock market. The fund is scheduled to begin trading on September 28.
The initial offering price is set at HK$7 per unit, with each board lot comprising 50 fund units, bringing the minimum investment entry point to HK$350. The total management fee stands at 0.55% per annum, while the projected ongoing charges for the year are estimated at 0.75%.
Alvin Wong, Director and Chief Executive Officer of Hang Seng Investment Management, stated that this ETF offers investors a focused opportunity to access companies listed in Hong Kong that span the entire AI industry chain. He emphasized that the fund helps avoid excessive concentration in leading internet conglomerates.
Herbert So, Director and Chief Investment Officer of the firm, noted that AI stocks in both mainland China and Hong Kong currently possess fundamental support. He pointed out that AI opportunities across China, Asia, and the United States are showing complementary trends. The firm has shifted its stance on Chinese and Hong Kong equities from "neutral" to "underweight." So explained that the mainland economy has seen limited stimulation in recent months and lacks policy catalysts at present. However, he highlighted that Hong Kong stocks are trading at roughly 12 times earnings, which aligns with historical averages. He advised investors to engage in selective stock picking, expressing particular optimism toward the AI sector and high-dividend stocks, rather than adopting a broadly bearish view on Chinese and Hong Kong markets.
Regarding the AI sector, So asserted that the current artificial intelligence wave does not represent a repeat of the dot-com bubble, as corporate leverage and credit conditions remain manageable. He also observed that the price-to-earnings ratio of the U.S. S&P 500 index has declined from 22 times at the beginning of the year to approximately 19 times currently, driven primarily by valuation compression resulting from earnings growth.