PAAMC HK Integrates Two Equity ETFs into Southbound Stock Connect Program

In a significant advancement for investors, Ping An of China Asset Management (Hong Kong) Company Limited, commonly known as PAAMC HK, has announced that two of its exchange-traded funds (ETFs)—the Ping An East-West Select ETF and the Ping An Technology Select ETF—will be included in the Southbound Stock Connect program starting on May 6, 2026. This initiative is poised to enhance trading options for investors looking to diversify their portfolios across different markets, particularly between Hong Kong and the U.S.

The Southbound Stock Connect program enables mainland Chinese investors to access investment opportunities in Hong Kong markets, thereby facilitating a smoother flow of capital. The inclusion of the two ETFs is viewed as a strategic move to broaden the scope of eligible investment instruments under this program.

Overview of the ETFs

Ping An Technology Select ETF

The Ping An Technology Select ETF is structured to reflect the performance of the Wind Technology Select Net Total Return Index (HKD). This index comprises leading technology companies from both mainland China and the United States, allowing investors to gain exposure to sectors such as artificial intelligence, semiconductors, and smart vehicles. The ETF aims to deliver returns that closely match the index's performance, before fees and expenses.

Ping An East-West Select ETF

In contrast, the Ping An East-West Select ETF targets performance aligned with the Solactive Global Pacific Select HKD Index NTR. This index includes a diversified array of securities listed in both Hong Kong and the United States. The ETF focuses on providing investors with quality growth and diversified income by incorporating a range of high-dividend equities alongside stable U.S. blue-chip stocks.

The Benefits of ETF Inclusion

Albert Wang, Head of Capital Markets and Chief Investment Officer at PAAMC HK, highlighted that these ETFs are designed specifically to cater to distinct investor needs regarding HK-US equity allocation. The introduction of these funds not only enhances investment diversification but also opens pathways for mainland investors to participate in international markets using Chinese currency (RMB).

Wang articulated that the East-West Select ETF adopts a 'barbell' investment strategy, combining high-dividend equities from Hong Kong with core U.S. stocks to balance risks and opportunities. Meanwhile, the Technology Select ETF zeroes in on the vibrant tech landscape, leveraging growth from AI-driven innovations.

Regulatory Developments

This inclusion is in line with recent regulatory changes, which reduced the required weighting of Hong Kong-listed stocks and Southbound Stock Connect eligible constituents in benchmark indices down to 60%. This shift comes as part of broader efforts to make the Southbound Stock Connect initiative more attractive and inclusive for investors, ultimately fostering a more connected financial ecosystem.

In conclusion, PAAMC HK's initiative to include its ETFs in the Southbound Stock Connect program represents a pivotal moment for investors. With the growing interconnectivity of financial markets, these products are set to provide enhanced opportunities for capital allocation, risk management, and strategic income generation. As investment landscapes evolve, such measures signal a promising future for cross-border investments between Hong Kong and mainland China.

Consider the opportunities and risks associated before investing in these ETFs, as the market remains dynamic and can be influenced by various economic factors. PAAMC HK advises potential investors to conduct thorough research and consult financial professionals to ensure the best possible decision-making.