Hong Kong Stock Exchange: Welcome the first batch of covered warrants subscription option ETFs listed in Hong Kong.

On February 29, HKEX announced the listing of the first batch of covered call option ETFs in Hong Kong, further expanding its product ecosystem and providing more product choices and opportunities for Hong Kong and international investors. The two new ETFs listed today - the Global X Hang Seng Index Constituent Stocks Covered Call Option Active ETF (stock code: 3419) and the Global X Hang Seng H-Share Index ETF Constituent Stocks Covered Call Option Active ETF (stock code: 3416) - are both issued by Future Assets Global Investments (Hong Kong) Limited and invest in securities of the Hang Seng Index and Hang Seng H-Share Index ETF respectively. Brian Low, Head of Securities Products Development at HKEX, said: "The two covered call option ETFs listed today are the first of their kind to be issued in Hong Kong, further enriching the increasingly diverse ecosystem of exchange-traded products in Hong Kong. Covered call option strategies have continued to be favored by investors, as they not only meet their diversified investment needs beyond traditional products, but also provide a hedge against potential downside risks in volatile market conditions." A covered call option is a strategy in which a portion of the assets held adopts a strategy of writing call options. The principle is to invest in the relevant assets while also earning option premiums by writing call options. Through this strategy, investors can profit to a limited extent from the appreciation potential of the relevant assets and also receive protection against market fluctuations. Low added, "This strategy typically requires investors to have a certain level of expertise and be active in the market. However, covered call option ETFs can bring investors more convenient passive income and eliminate the complexity of managing downside risks themselves. We look forward to welcoming more diverse types of ETFs listed in Hong Kong in the future." HKEX's exchange-traded products (ETP), including ETFs and leveraged and inverse products, are one of the fastest-growing businesses under HKEX, with trading volume continuing to grow steadily over the past few years and the variety of products becoming more diverse. In 2023, the average daily trading volume of ETP reached HK$ 140 billion, setting a new record high and increasing by 17% from 2022. In November last year, the Hong Kong ETP market welcomed the first Saudi Arabia ETF in the Asia-Pacific region. This ETF is the largest Saudi Arabia ETF globally, with assets under management exceeding HK$ 80 billion. Meanwhile, since July 2022, the inclusion of ETFs in the Shenzhen-Hong Kong Stock Connect has further driven the growth of the Hong Kong ETP market. In 2023, ETFs under the Southbound Stock Connect accounted for 11% of the overall trading volume in the Hong Kong ETP market.