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The Hong Kong Inventory Alternate (HKEX) has, on February 29, seen its first-ever listings of coated name ETFs, based on a media launch.
A coated name is a method the place an investor sells name choices on an asset they already personal, producing earnings within the type of a premium. This enables buyers to profit from potential asset appreciation as much as the strike value, and through instances of volatility, the choices premiums can present draw back safety to buyers, the media launch stated.
Wanyoun Cho, chief govt officer (CEO) of Mirae Asset World Investments (Hong Kong), stated in one other media launch: “[A] coated name technique gives a comparatively steady earnings for buyers, particularly throughout rangebound situations. World X ETFs is proud to pioneer the primary coated name ETFs in Hong Kong, providing buyers a singular alternative to extend earnings potential and improve draw back safety.”
Alternate traded merchandise (ETPs), together with ETFs and leveraged and inverse merchandise (L&I merchandise), are one of many fastest-growing segments in HKEX’s markets, the HKEX launch stated. Common day by day turnover within the ETP market reached an all-time excessive of HK$14 billion ($1.79 billion) in 2023, up 17% from a 12 months earlier.
Roberts added: “This sort of technique usually requires a stage of experience and entails lively buying and selling. Nonetheless, an ETF that includes a coated name technique might help buyers save time, generate passive earnings, and take away the complexity of managing draw back dangers on their very own. We sit up for welcoming extra of those and different ETFs to our markets within the coming months forward.”
Final November, Hong Kong noticed the primary Saudi Arabian ETF in Asia Pacific, which was additionally the world’s largest Saudi ETF with over HK$8 billion in asset beneath administration (AUM).
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