Tracker Fund of Hong Kong
Encyclopedia
Tracker Fund of Hong Kong or TraHK is a unit trust
which provides investment results that correspond to the performance of the Hang Seng Index
in the Hong Kong stock market.
of Hong Kong shares to sustain linked exchange rate
during the Asian Financial Crisis. To minimize disruption to the market, the Government chose to launch the IPO of the exchange-traded fund
, "the Tracker Fund of Hong Kong", in 1999 as the first step in its disposal programme.
In August 1998, the Hong Kong Government acquired a substantial portfolio of Hong Kong shares during a market operation. The Exchange Fund Investment Limited (EFIL) was established in October 1998 by the Government to advise on the disposal of this portfolio in an orderly manner.
When seeking to dispose of these shares, the Government chose a stock neutral solution that would create minimal disruption to the market. An Exchange Traded Fund, the Tracker Fund of Hong Kong (TraHK), which met these requirements and added depth to Hong Kong's capital markets, was launched in November 1999 as the first step in the Government's disposal programme. State Street Global Advisors Asia Ltd was appointed as the Fund Manager and State Street Bank and Trust Company was appointed as the Trustee of TraHK. These appointments provided the Tracker Fund with a comprehensive solution to its needs, including portfolio management, custody, fund administration and compliance monitoring functions.
With an issue size of HK$33.3 billion (approximately US$ 4.3 billion), TraHK's Initial Public Offering (IPO) was the largest IPO ever in Asia ex-Japan at the time of launch. Since the IPO, approximately HK$ 140.4 billion (by 15 October 2002) in Hang Seng Index constituent stocks has been returned to the market through TraHK's unique tap mechanism.
Unit trust
A unit trust is a form of collective investment constituted under a trust deed.Found in Australia, Ireland, the Isle of Man, Jersey, New Zealand, South Africa, Singapore, Malaysia and the UK, unit trusts offer access to a wide range of securities....
which provides investment results that correspond to the performance of the Hang Seng Index
Hang Seng Index
The Hang Seng Index is a freefloat-adjusted market capitalization-weighted stock market index in Hong Kong. It is used to record and monitor daily changes of the largest companies of the Hong Kong stock market and is the main indicator of the overall market performance in Hong Kong...
in the Hong Kong stock market.
History
In 1998, the Hong Kong SAR Government acquired a substantial portfolioPortfolio (finance)
Portfolio is a financial term denoting a collection of investments held by an investment company, hedge fund, financial institution or individual.-Definition:The term portfolio refers to any collection of financial assets such as stocks, bonds and cash...
of Hong Kong shares to sustain linked exchange rate
Linked exchange rate
A linked exchange rate system is a type of exchange rate regime to link the exchange rate of a currency to another. It is the exchange rate system implemented in Hong Kong to stabilise the exchange rate between the Hong Kong dollar and the United States dollar...
during the Asian Financial Crisis. To minimize disruption to the market, the Government chose to launch the IPO of the exchange-traded fund
Exchange-traded fund
An exchange-traded fund is an investment fund traded on stock exchanges, much like stocks. An ETF holds assets such as stocks, commodities, or bonds, and trades close to its net asset value over the course of the trading day. Most ETFs track an index, such as the S&P 500 or MSCI EAFE...
, "the Tracker Fund of Hong Kong", in 1999 as the first step in its disposal programme.
In August 1998, the Hong Kong Government acquired a substantial portfolio of Hong Kong shares during a market operation. The Exchange Fund Investment Limited (EFIL) was established in October 1998 by the Government to advise on the disposal of this portfolio in an orderly manner.
When seeking to dispose of these shares, the Government chose a stock neutral solution that would create minimal disruption to the market. An Exchange Traded Fund, the Tracker Fund of Hong Kong (TraHK), which met these requirements and added depth to Hong Kong's capital markets, was launched in November 1999 as the first step in the Government's disposal programme. State Street Global Advisors Asia Ltd was appointed as the Fund Manager and State Street Bank and Trust Company was appointed as the Trustee of TraHK. These appointments provided the Tracker Fund with a comprehensive solution to its needs, including portfolio management, custody, fund administration and compliance monitoring functions.
With an issue size of HK$33.3 billion (approximately US$ 4.3 billion), TraHK's Initial Public Offering (IPO) was the largest IPO ever in Asia ex-Japan at the time of launch. Since the IPO, approximately HK$ 140.4 billion (by 15 October 2002) in Hang Seng Index constituent stocks has been returned to the market through TraHK's unique tap mechanism.