International law firm Simmons & Simmons has today announced its role as legal counsel to Mirae Asset Global Investments (Hong Kong) Limited (Mirae Asset) in the successful listing of Hong Kong's inaugural covered call active exchange traded funds (ETFs).
This landmark development significantly enhances the local ETF landscape, with The Stock Exchange of Hong Kong welcoming the debut of these two pioneering funds: the Global X HSI Components Covered Call Active ETF and the Global X HSCEI Components Covered Call Active ETF.
A type of collective investment instrument, ETFs combine elements of mutual funds and stocks - providing access to specific markets. Operating within the umbrella of an open-ended fund company (OFC) framework in Hong Kong, both ETFs function as sub-funds of the Global X Exchange Traded Funds Series OFC.
The actively managed funds introduce the covered call strategy to Hong Kong's market, which involves the sale of listed or over-the-counter call (OTC) options on the relevant reference index-specifically, the Hang Seng Index (HSI) or the Hang Seng China Enterprise Index (HSCEI). By adopting this approach, the ETFs not only aim to generate income but also provide a hedge against potential losses in declining markets.
Eva Chan, Head of Simmons & Simmons' Hong Kong office, said, "This milestone sets a precedent for the local asset management landscape, underscoring the surging demand for innovative and diversified investment options in Hong Kong-a city at the forefront of Asia's ETF industry. Mirae Asset's unwavering commitment to innovation manifests in these sophisticated yet accessible investment solutions, catering to both institutional and retail investors.
¨We are delighted to once again support Mirae Asset in attaining this remarkable feat. With our extensive knowledge and experience in ETF listings in Hong Kong, we are commencing the new year with strong momentum and look forward continuing to assist our clients in expanding their investment horizons."
Simmons & Simmons also advised Mirae Asset on the successful listing of 16 other ETFs offered in the form of an OFC in Hong Kong.