Mirae Asset Global Investments Lists Asia-Pacific High Dividend ETF on Hong Kong Stock Exchange

[Asia Economy Reporter Hwang Yoon-joo] Mirae Asset Global Investments Hong Kong branch announced on the 27th that it will list the ‘Global X Asia Pacific High Dividend Yield ETF’ on the Hong Kong Stock Exchange.

The Global X Asia Pacific High Dividend Yield ETF is an ETF that diversifies investment across 40 high dividend yield stocks and REITs listed in developed markets of the Asia-Pacific region.

The Asia-Pacific region has historically had high dividend/distribution rates worldwide while maintaining low dividend tax rates. Hong Kong and Singapore have no dividend tax.

For non-residents, Japan’s dividend tax rate is 15%, Korea’s is 20%, and Taiwan’s is 21%, which are lower compared to Europe and North America regions such as the US/France (30%) and Germany/Canada (25%). As of the end of June 2022, the expected dividend yield of this ETF is around 8% annually, with distributions paid quarterly.

The underlying index of the ETF is the ‘SOLACTIVE Asia Pacific High Dividend Yield Index.’ This index consists of the top 40 stocks with the highest dividend/distribution yields among listed stocks in developed Asia-Pacific markets including Korea, New Zealand, Taiwan, Japan, Singapore, Australia, and Hong Kong, meeting conditions of a market capitalization of at least 2.5 billion Hong Kong dollars (approximately 410 billion KRW) and an average daily trading volume of at least 70 million Hong Kong dollars (approximately 11.5 billion KRW).

To avoid the ‘dividend trap’ of investing in high dividend stocks whose dividend yields have risen due to stock price declines, stocks with dividend/distribution yields above 20% are excluded.

The underlying index weights stocks equally and imposes a 35% cap on country and sector weights to prevent concentration in individual countries or industries.

As of the end of June, the country weights of the underlying index were highest in Taiwan at 33.8%, followed by Australia at 28.3%, Korea at 14.8%, Japan at 13%, and Hong Kong at 10.1%. Sector weights were composed of IT at 27.9%, Industrials at 23.7%, Materials at 17.8%, and Financials at 17.5%. The underlying index is rebalanced quarterly.

Major constituent stocks include Australia’s oil and gas development company ‘WOODSIDE ENERGY GROUP LTD,’ Taiwan’s electronics manufacturer of laptops and other components ‘QUANTA COMPUTER,’ and Hong Kong-based glass manufacturer of automotive and float glass ‘XINYI GLASS HOLDINGS CO LTD.’

It also invests in domestic companies such as ‘SAMSUNG FIRE & MARINE INS ORD’ and Japanese IT company ‘KONICA MINOLTA HOLDINGS INC ORD,’ which specializes in office equipment and digital printing.

The Global X Hong Kong ETF by Mirae Asset Global Investments Hong Kong branch can be traded through overseas stock accounts at domestic securities firms such as Mirae Asset Securities.

This content was produced with the assistance of AI translation services.