Korea Investment Management said on the 18th that it signed a strategic cooperation agreement with China Universal Asset Management Hong Kong (CUAM HK) to jointly enter the Hong Kong exchange-traded fund (ETF) market.
CUAM is an asset manager founded in Shanghai, China, in 2005, with a focus on active funds. Its assets under management amount to about 280 trillion won in Hanwha terms as of the end of September, and it has subsidiaries in mainland China as well as in Hong Kong, the United States, and Singapore. Of these, the Hong Kong entity serves as a key platform for expanding onshore and offshore business.
Under the cooperation agreement, Korea Investment Management will advise CUAM on its entry into the Hong Kong ETF market, providing support from product planning through management, and CUAM plans to roll out a variety of products based on Korea Investment Management's advice.
The core of the partnership is the "ETF Connect" system. ETF Connect is a scheme promoted by the China Securities Regulatory Commission (CSRC) and the Securities and Futures Commission (SFC) in Hong Kong, characterized by allowing cross-trading between designated ETFs listed in mainland China and Hong Kong. Korea Investment Management and CUAM plan to use the system to improve mainland Chinese investors' access to overseas assets.
Bae Jae-gyu, president of Korea Investment Management, said, "ETF Connect is a system that allows mainland Chinese investors to access overseas assets without the constraints of the Qualified Domestic Institutional Investor (QDII) quota," adding, "As demand for overseas investment within mainland China is growing, this collaboration will enable us to provide a range of ETF solutions to meet that demand."