Soon after State Street Global Advisors Asia said it must comply with U.S. sanctions and avoid banned stocks while running the renowned Tracker Fund, current and former Hong Kong officials have come out to call for a new manager.
Hong Kong chief executive Carrie Lam said that the city’s central bank, the Hong Kong Monetary Authority (HKMA), has powers to appoint a different manager for the Tracker Fund.
«The details are to be decided by the HKMA and the relevant supervisory committee,» Lam said to media yesterday.
According to the fund’s prospectus, there is a six-member supervisory committee that meets on a quarterly basis to oversee the Tracker Fund with supervision powers including the ability to change its manager.
«Not Fit for Duty»
Unlike other exchange-traded funds, the Tracker Fund was built 21 years ago with the explicit purpose of disposing the government’s equity holdings from market intervention during the Asian financial crisis in 1998 while tracking the major Hong Kong benchmark, the Hang Seng Index.
It has since grown to $13.6 billion under management but is now no longer able to track the benchmark following Boston-based State Street Global Advisor’s announcement.
«The whole purpose of the Tracker Fund is to track the Hang Seng Index,» said Joseph Yam Chi-kwong, the former HKMA chief who held the post during the Tracker Fund’s launch in 1999, in an «SCMP» report. «If the manager can not track the Hang Seng Index, then the manager is no longer fit for duty.»
