[siumai]

Our "financial advisor" in HSBC just told that they don't have any low management fee index fund products on offer. Is that really true? I thought that even HSE has index funds.

Do I need to become a customer of some broker or something to be able to invest in index funds?

Another related question: to monitor the index healthiness, is there any places to get summarized / average data for companies in the indices, e.g average P/E's, average EPS growth for HSE, S&P, etc?

[PDLM]

There are a few ETFs which trade in HK just like normal stocks.
Details here: Hong Kong Exchanges and Clearing Limited

For the Hang Seng Index then 2800, the HK Tracker Fund is by far the best - it tracks the index and pays dividends as if you were invested in the underlying stocks.

[siumai]

Thanks again PDLM. What about the fees, how much do the ETF's charge? 2800 looks like it could be the cheapest as there's no market maker?

[PDLM]

There are no fees. You trade them like a normal stock, so you pay standard broking fees (and the exchange levy and so on). The funds track the corresponding index. However, with the exception of 2800, you don't get dividends.

2800 is a strange beast - it's a relic of the 1997 financial crisis when the HK Government bought huge numbers of HK stocks in an attempt to support the market. So the Government (HKMA I guess) is the market maker, but it does actually own the underlying stocks.

Note also that some are imperfect trackers due to limitations on foreign investments (e.g. the Sensex tracker, 2836, overperformed the Sensex for a while until recently, but in the last few weeks has underperformed. I believe this is in part at least due to the fact that foreign investors have major restrictions on investing in India.)

[whong]

PDLM: the more we recommend the ETFs index funds, the more likely those financial advisors would be out of luck placing the clients to buy front loaded 5% funds, rite?

anyway, thanks for the info.! i have been watching the indian ETFs lately!

[pinko]

Hang Seng Bank has index funds on European and Asian stocks with subscription fees of 1%. They might not be on sale at HSBC (they aren't on sale at BEA for example) so you will have to open an account at HSB.