facebookLion-OCBC Securities China Leaders ETF: A New Option for Singaporeans To Invest in China's Growth
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Lion-OCBC Securities China Leaders ETF: A New Option for Singaporeans To Invest in China's Growth

profileSudhan P

Soon, Singapore investors will have another way to invest in China’s growth story with the launch of a new exchange-traded fund (ETF), the Lion-OCBC Securities China Leaders ETF.

The ETF will be managed by Lion Global Investors, a member of Oversea-Chinese Banking Corporation Limited (SGX: O39).

The Lion-OCBC Securities China Leaders ETF follows the Lion-OCBC Securities Hang Seng TECH ETF launched late last year.

With that, let’s find out more about the Lion-OCBC Securities China Leaders ETF and how investors can invest in it!

Source: Giphy

TL;DR: What Investors Should Know About the Lion-OCBC Securities China Leaders ETF

  • The Lion-OCBC Securities China Leaders ETF allows investors to take part in China’s growth.
  • The ETF’s investment objective is to replicate the performance of the Hang Seng Stock Connect China 80 index.
  • Some of the companies that are part of the index include Ping An Insurance, Kweichow Moutai, and Tencent.
  • The Lion-OCBC Securities China Leaders ETF will be an Excluded Investment Product.
  • Local investors can also use their Supplementary Retirement Scheme (SRS) to invest in the ETF on top of the default cash option.
  • The target listing date of the Lion-OCBC Securities China Leaders ETF on the Singapore Exchange is 2 August 2021.

What’s The Lion-OCBC Securities China Leaders ETF About?

The Lion-OCBC Securities China Leaders ETF allows investors to take part in China’s growth and, at the same time, diversify their investment portfolio by adding Chinese stocks easily and affordably.

The ETF’s investment objective is to replicate as closely as possible, before expenses, the performance of the Hang Seng Stock Connect China 80 index using a direct replication strategy.

The Hang Seng Stock Connect China 80 index measures the overall performance of 80 largest Chinese companies in terms of market capitalisation listed in Hong Kong and/or mainland China that are eligible for Northbound or Southbound trading under the Stock Connect schemes.

Some of the largest companies that are part of the index include Ping An Insurance, Kweichow Moutai, and Tencent.

Each individual company’s weighting in the index is capped at 8%, while the industry weighting is capped at 40%.

In terms of industry allocation, the top three sectors are financials, followed by information technology, and consumer staples.

The Nitty-Gritty of the Lion-OCBC Securities China Leaders ETF

The Lion-OCBC Securities China Leaders ETF will be an Excluded Investment Product (EIP). Therefore, investors do not have to specifically qualify to trade it, unlike a Specified Investment Product (SIP).

Local investors can also use their Supplementary Retirement Scheme (SRS) to invest in the ETF, on top of using cash.

Investors can invest as few as 10 units or as little as S$25 in a single trade (assuming issue price of S$2.00 per unit, excluding fees and charges).

The ETF will be available in both Singapore dollars (SGD) and Renminbi (RMB).

Here are further details of the Lion-OCBC Securities China Leaders ETF:

Lion-OCBC Securities China Leaders ETF
ManagerLion Global Investors Limited
Underlying IndexHang Seng Stock Connect China 80 Index
Index ProviderHang Seng Indexes Company Limited
Currency of Account (Base Currency)RMB
Trading CurrencySingapore dollars (S$), Renminbi (RMB)
SGX CodeYYY (SGD) / YYR (RMB)
Bloomberg TickerYYY SP (SGD) / YYR SP (RMB)
Issue PriceS$2.00
Trading Board Lot Size10 units
Total Expense RatioCapped at 0.62% per annum for 2 years from the inception of the fund
Dividend DistributionAnnual distribution at the discretion of the fund manager
Listing Date on SGX2 August 2021

The ETF manager currently intends to declare annual distributions for the Singapore dollar class units, less the expenses, to unitholders in June each year.

How To Apply?

The ETF’s initial offering period (IOP) runs from 12 July (9 am) to 28 July (10 am).

During the period, investors who wish to buy the ETF may do so through:

  • Participating dealers
  • The OCBC ATM
  • OCBC internet banking

The participating dealers are CGS-CIMB, FSMOne, OCBC Securities, POEMS, Tiger Brokers, and UOB Kay Hian.

If you buy the ETF through participating dealers during the IOP, the unit size depends on the dealer. For instance, FSMOne’s and POEMS’ application size for the ETF is 1,000 units.

Meanwhile, if you use OCBC ATM or OCBC internet banking, the application size is 10 units.

The target listing date of the Lion-OCBC Securities China Leaders ETF on the Singapore stock market is 2 August (9 am).

Keen To Know More About the Lion-OCBC Securities China Leaders ETF?

We will have an AMA session with Lion Global on the week of 26 July, so you can ask your questions about the ETF there as well. Stay tuned to Seedly for more updates!

Disclaimer: The information provided by Seedly serves as an educational piece and is not intended to be personalised investment advice. ​Readers should always do their own due diligence and consider their financial goals before investing in any stock. The writer may have a vested interest in the companies mentioned.

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About Sudhan P
It isn't fair competition when only one company in the world makes Monopoly. But I love investing in monopolies. Before joining the Seedly hood, I had the chance to co-author a Singapore-themed investment book – "Invest Lah! The Average Joe's Guide To Investing" – and work at The Motley Fool Singapore as an analyst.
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