China News Service, Hong Kong, November 13 (Reporter Mo Qian) The Hong Kong Exchange ETF Summit 2026 concluded recently, and a set of figures attracted attention - as of the end of October this year, the average daily trading volume of Hong Kong exchange-traded products (ETP, including exchange-traded fund ETFs and leveraged and inverse products) increased by 23% year-on-year, reaching 46.5 billion Hong Kong dollars, a record high; the asset management scale reached 616.5 billion Hong Kong dollars, and market liquidity ranked second in the world. At a time when market volatility is intensifying, why do global capital choose to allocate Chinese assets represented by technology through Hong Kong?
First of all, "security" has become the main demand for asset allocation. “Safety” here does not only refer to hedging on the income side, but also refers to the predictability, manageability, and exitability of allocation behavior; and the compliant, transparent, and diversified allocation products. Hong Kong stock ETFs meet these conditions at the same time: a basket of positions disperses the fluctuations of individual stocks, instant transactions in the secondary market, complete redemption and hedging mechanisms, and is suitable for large-volume, long-term allocation funds. At the same time, Hong Kong can connect the two systems of the mainland and the world - it not only supplies products backed by mainland technology innovation enterprises and RMB asset pools, but also provides overseas institutions with understandable rules, accountable costs and enforceable transactions through the common law system, international commercial rules and free port status.
Secondly, the institutional channels for two-way circulation are opening up at a faster pace. In the first 10 months of this year, the average daily trading volume of northbound ETFs reached 5 billion yuan, a year-on-year increase of 48%; the average daily trading volume of southbound ETFs was HK$4.6 billion, a year-on-year increase of 8%. At the same time, starting from September 20, mainland insurance institutions that meet the regulations can invest in Southbound Trading ETFs. The allocation authority is directly linked to the existing Southbound Trading qualifications. Insurance institutions with the ability to invest in Southbound Trading stocks can enter directly without additional approval and do not occupy the Qualified Domestic Institutional Investor (QDII) quota. The opening of this channel means that mainland allocation funds and foreign capital can operate in parallel in the same market. The role of Hong Kong's "super contact" is not only the transfer of trade and funds, but also allows mainland long-term funds and overseas capital to get what they need on the same ETF "shelf".
Furthermore, the innovation and technology financial chain in the Hong Kong market is forming a closed loop. As of the end of October, there were 246 ETFs and 29 leveraged and inverse products in the Hong Kong market; the Hong Kong Stock Exchange’s October report showed that 611 listing applications were being processed. Deloitte predicts that about 160 new stocks will be listed in Hong Kong in 2026, raising no less than HK$480 billion, with artificial intelligence (AI) and technology companies being the core growth. This means that the number of investable targets is constantly expanding, and foreign investors do not need to bet on a specific company or buy a basket of ETFs to share the dividends of China's technological growth. At the same time, the latest price-to-earnings ratio of the Hang Seng Technology Index is 21.3 times, which is at the 16.8% percentile in the past 10 years. That is, the valuation is lower than 83% of the time in the past 10 years, which is significantly lower than the Nasdaq Index and the GEM Index. Asset prices are at low levels, but the number of investment targets is constantly increasing. The two support each other and have become the conditions for foreign investment to move from tentative participation to long-term allocation.
Yu Xueqin, Head of Market at the Hong Kong Exchange, said that a successful ETF market not only requires products, but also relies on a complete and dynamic ecosystem. The Hong Kong Exchange is combining these elements with Hong Kong’s unique interconnection advantages to provide investors with investment portfolio solutions that meet their actual needs.
