State Street Global Advisors has been officially replaced as the manager of the Tracker Fund of Hong Kong after overseeing the storied ETF for more than 22 years.
A seven-member supervisory committee has selected Hang Seng Investment Management as the new manager for the Tracker Fund of Hong Kong (TraHK), according to a statement, replacing State Street Global Advisors (SSGA) which held the mandate for more than 22 years.
The appointment will take effect in the third quarter, subject to approval by the Hong Kong Monetary Authority (HKMA) and the Securities and Futures Commission (SFC).
SSGA’s role as the TraHK manager became a controversial matter after the Boston-based firm complied with U.S. sanctions that banned investment into stocks linked to the Chinese military last year before reversing the decision in a matter of days after local authorities signaled the possibility of a manager change.
Selection Process
The HKMA initiated a review of TraHK’s manager with seven ETF managers globally invited to bid for the mandate, including SSGA.
Hang Seng Investment Management was ultimately chosen with the committee citing lower management fees as one of the key reasons for its selection.
The Hong Kong-based manager promised to reduce the effective management fee from the current 0.05 percent per annum to 0.022 percent in the first three years before further cutting fees to 0.019 percent in the fourth year.
SSGA will retain its role as the custodian of the fund.
Hang Seng Investment Management
Hang Seng is one of Hong Kong’s largest retail banks and is owned by Asia-focused British lender HSBC.
Its asset management arm, Hang Seng Investment Management, was set up in April 1993 and now has HK$184.2 billion (US$23.5 billion) in assets under management.
«Like TraHK, Hang Seng Bank and Hang Seng Investment Management are deeply rooted in Hong Kong,» said Hang Seng CEO Diana Cesar. «This will also further strengthen Hang Seng’s footprint and coverage in providing top notch wealth management service to the Hong Kong public.»
