Hong Kong-based E Fund HK has launched the E Fund Yuanta Hang Seng Index Daily (-1x) Inverse ETF (HK: 7302). Launched in conjunction with Yuanta, Asia’s largest inverse ETF issuer, the ETF provides the inverse daily return of the Hang Seng Index, a reference for the 50 largest companies listed on the Hong Kong Stock Exchange.

The Securities and Futures Commission of Hong Kong started accepting listings of inverse and leveraged ETFs based on the Hang Seng Index in January 2017.

Ms Huang Gaohui, CEO of E Fund HK, said: “We believe the Hang Seng Index Inverse ETF product, jointly developed with Yuanta Funds, will meet the needs of the market and our customers. The collaboration between the two firms has brought synergy in asset management capabilities, providing investors with professional services.”

The product invests in Hang Seng Index futures contracts to establish its required short position, which is then adjusted each day to achieve a daily inverse investment ratio against the index.

The ETF has an expense ratio of 0.80%

Leveraged and inverse ETFs have been allowed on the Hong Kong Stock Exchange since February 2016, but only for underlying equity indices outside Hong Kong and mainland China.

In January this year, the Securities and Futures Commission of Hong Kong gave the green light for leveraged and inverse ETFs based on broad-based indices of the Hong Kong market. E Fund HK expects the expansion of leveraged and inverse products related to the Hang Seng Index and Chinese indices in Hong Kong to benefit the product’s penetration in the market, boosting transaction volume.