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%.
Fixed Income ETFs welcomed over $3.2 billion in net inflows between March 7th and March 11th and roughly $18 billion overall this year. Investors have been in a constant search for yield amid escalating conflicts between Russia and Ukraine, rising inflation, and lingering COVID-19 restrictions that still hinder many parts of the world.
America-domiciled Fixed Income ETFs had the lion's share garnering $4.6 billion of the total net inflows. Meanwhile, Europe-domiciled Fixed Income ETF witnessed net outflows of -$1.4 billion after receiving $1.6 billion in the prior week.
America's Fixed Income ETFs top fund action
Among the top inflows receivers, last week were iShares 20+ Year Treasury Bond ETF (TLT, $853 million), PGIM Ultra Short Bond ETF (PULS, $609 million), and JPMorgan Ultra-Short Municipal Income ETF (JMST, $520 million). TLT, the largest recipient, seeks to tracks IDC US Treasury 20+ Year Index (4PM) and invests in U.S. Treasury bonds with remaining maturities greater than twenty years. TLT has a total expense ratio of 0.15% and trades primarily on the NASDAQ.
On the other hand, last week's top Fixed Income ETFs flow bleeders included SPDR Bloomberg Barclays 1-3 Month T-Bill ETF (BIL, -$325 million), iShares Short-Term Corporate Bond ETF (IGSB, -$309 million), Vanguard Short-Term Corporate Bond ETF (VCSH, -$252 million). BIL seeks to track the Bloomberg 1-3 Month U.S. Treasury Bill Index and invests in all publicly issued zero-coupon investment grade U.S. Treasury Bills that have a remaining maturity of fewer than 3 months and at least 1 month and have $300 million or more of outstanding face value. BIL has a total expense ratio of 0.1363% and trades primarily on the NYSE Arca.