A new Solactive Biopharma Select Index ETF managed by E Fund (Hong Kong) commenced trading on the Hong Kong Exchange today. This marks the world's first and currently only biotechnology and pharmaceutical themed ETF that provides exposure to both the Hong Kong and U.S. stock markets, further diversifying the product range of cross-market ETFs.

This month has seen significant activity from the Hong Kong subsidiaries of major fund companies. On March 6th, Harvest China-US Technology 50 ETF began trading, followed by ChinaAMC Hong Kong US AI ETF on March 18th. Both products target core, high-demand sectors like artificial intelligence and technology, highlighting a clear trend of leading institutions collectively expanding their cross-market ETF offerings.

The newly listed E Fund (Hong Kong) Solactive Biopharma Select Index ETF (Code: 3186) tracks the Solactive Biopharma Select Index. This index selects 100 constituent stocks from biopharmaceutical companies listed in both Hong Kong and the United States. As of March 5th, the index's composition was 65% Hong Kong-listed stocks and 35% U.S.-listed stocks. It includes leading global pharmaceutical giants and cutting-edge technology firms from the U.S. market while also capturing growth opportunities from China, the world's second-largest pharmaceutical market.

Notably, unlike traditional market-cap-weighted indices, the Solactive Biopharma Select Index is constructed using an equal-weight methodology, resulting in a highly diversified portfolio of individual stocks. Industry analysts note that the biopharmaceutical sector's nature, where breakthrough innovations often originate from small and mid-sized companies and a single new drug approval can lead to substantial market cap growth, makes an equal-weight strategy beneficial. This approach increases a portfolio's exposure to potentially disruptive innovations while effectively mitigating the tail risk associated with concentration in a few large-cap leaders.

According to data from Solactive and Bloomberg, as of February 9th, the Solactive Biopharma Index had gained 140.31% since its base date of March 20, 2020. For the previous year, the index delivered an annual return of 75.7%, significantly outperforming both the Hang Seng Biotechnology Index and the S&P Biotechnology Select Industry Index over the same period.

E Fund Asset Management (Hong Kong) Limited stated that the biopharmaceutical sector represents a high-growth field combining essential consumption with innovative growth. Global aging population trends are expected to provide a foundation of long-term demand for the industry spanning the next 10 to 20 years.

Beyond this product, several other fund companies' Hong Kong subsidiaries have also listed ETFs on the Hong Kong Exchange this month, primarily focusing on popular sectors like AI and biopharmaceuticals.

For example, the Harvest China-US Technology 50 ETF, which launched on March 6th, tracks the Solactive Harvest Tiger G2 Tech 50 Select Index. This index comprises 30 leading Chinese technology companies listed in Hong Kong and 20 global technology giants listed in the United States.

The index maintains a regional allocation of approximately 62% Hong Kong stocks and 38% U.S. stocks. To balance growth potential with risk diversification, the index methodology imposes clear weight caps on individual constituents during regular rebalancing—8% for Hong Kong-listed stocks and 5% for U.S.-listed stocks.

Historical back-testing data shows that as of December 31st, the index achieved a cumulative return of 127.66% over the past three years, with an annualized return of approximately 30.72%.

Another example is the ChinaAMC Hong Kong US AI ETF, which started trading on March 18th. This ETF tracks the Solactive Hong Kong US AI 50 Select Index, which selects up to 50 leading companies in the artificial intelligence field listed in Hong Kong and the U.S.

This index also employs a regional allocation, with Hong Kong stocks accounting for 62% and U.S. stocks for 38%. It similarly implements strict single-stock weight caps, set at 8% for Hong Kong-listed enterprises and 5% for U.S.-listed enterprises.

Reviewing the current ETF lineups of these companies reveals distinct strategies. E Fund (Hong Kong)'s ETF products are primarily focused on specific industry themes. In addition to the Solactive Biopharma Select Index ETF, its offerings include a CSI Liquor Index ETF, a FTSE AI Select Index ETF, and a Solactive Global Gold Miners Select Index ETF.

Meanwhile, ChinaAMC (Hong Kong) and Harvest International have supplemented their traditional product offerings with innovative products, most notably virtual asset-themed ETFs such as the ChinaAMC Bitcoin ETF and the Harvest Ethereum Spot ETF.