Korea Investment Trust Management has listed its first jointly developed exchange-traded fund (ETF) with the Hong Kong unit of China Universal Asset Management (CUAM HK) on the Hong Kong Stock Exchange (HKEX), moving to expand its overseas ETF business.

Korea Investment Trust Management said on Oct. 26 that the 'CUAM Solactive China&Global Semiconductor ETF' developed in cooperation with CUAM HK was listed on the Hong Kong Stock Exchange on Oct. 23.

The ETF is a product that diversifies investments across major semiconductor and related technology companies in China and Hong Kong and globally. It tracks as its underlying index Solactive's 'Solactive ACE ETF Connect China & Global Semiconductor Top 30 Index.'

Main holdings include global semiconductor companies and China and Hong Kong technology companies such as Nvidia, TSMC, Samsung Electronics, ASML and Broadcom. The structure diversifies investments across a total of 30 stocks.

The product is the first ETF jointly introduced by Korea Investment Trust Management and CUAM HK. The two began working-level consultations in April last year and signed a strategic cooperation agreement in November that year for a joint entry into Hong Kong's ETF market.

Korea Investment Trust Management is responsible for ETF product planning and development and for non-discretionary investment advisory services on portfolio construction. CUAM HK is responsible for the local launch, listing and management in Hong Kong, as well as final investment decision-making.

The two plan to use 'ETF Connect,' an ETF cross-trading scheme between Hong Kong and mainland China, to respond to demand from mainland Chinese investors.

ETF Connect is a scheme that allows mainland Chinese investors to invest in Hong Kong-listed ETFs that meet certain requirements. This ETF was also developed with the goal of being included in ETF Connect, and whether it is actually included will be decided after listing depending on whether it meets eligibility requirements.

Korea Investment Trust Management also plans a proprietary investment of about $5 million, or about 7.1 billion won, to help secure an initial level of assets under management for the first collaboration ETF.

It also plans further joint ETF development. It aims to broaden the scope of cooperation in line with regulatory changes in China and Hong Kong capital markets and global investment demand, and to expand its overseas ETF investment advisory business.

Bae Jae-kyu (배재규), CEO of Korea Investment Trust Management, said, "This Hong Kong listing is an important starting point for a full-fledged entry into the overseas ETF business based on Korea Investment Trust Management's competitiveness." He said, "Through this cooperation, we will expand our business scope beyond Hong Kong and into the mainland China market."