Korea Investment Management enters Hong Kong ETF market with CUAM HK partnership

Korea Investment Management said Monday that its first ETF developed in partnership with CUAM HK — the Hong Kong subsidiary of China Universal Asset Management — has listed on the Hong Kong Stock Exchange.

The product, the CUAM Solactive China & Global Semiconductor ETF, listed Friday. It offers diversified exposure to semiconductor and technology companies in China and Hong Kong as well as globally, tracking the Solactive ACE ETF Connect China & Global Semiconductor Top 30 Index compiled by German index provider Solactive.

Major holdings include global semiconductor leaders such as Nvidia, TSMC, Samsung Electronics, ASML and Broadcom, alongside Chinese and Hong Kong technology companies. The ETF spreads investment across 30 stocks in total, combining dominant global chipmakers with Chinese technology companies that the firms see as having strong growth potential.

The product marks the first ETF the two firms have jointly developed. The partnership traces back to April last year, when the two sides held their first working-level talks, and was formalized in November last year with a strategic cooperation agreement to enter the Hong Kong ETF market together.

Under the arrangement, Korea Investment Management contributes its expertise in global investment and ETF product development, while CUAM HK brings its local operational and business infrastructure in Hong Kong. After working through product planning and index development, the two companies brought their first joint product to market roughly 11 months after signing the cooperation agreement.

Under the partnership structure, Korea Investment Management provides non-discretionary investment advisory services covering ETF product planning, development and portfolio construction, while CUAM HK handles the Hong Kong launch, listing, management and final investment decisions.

With this listing as a starting point, the two firms plan to tap the ETF Connect scheme — the cross-trading regime that allows mainland Chinese investors to access eligible Hong Kong-listed ETFs — to meet demand from mainland investors seeking overseas asset exposure.

The product was developed with ETF Connect inclusion as a goal, though whether it ultimately qualifies will depend on meeting the relevant eligibility requirements after listing.

To support the ETF's stable market entry, Korea Investment Management plans to commit approximately $5 million of its own capital to the fund. The investment is intended to help establish an initial asset base and deepen the firm's cooperation with CUAM HK.

Alongside this, the two firms will continue developing additional joint ETF products. Korea Investment Management said it plans to broaden the scope of the partnership in response to evolving regulatory conditions in the Chinese and Hong Kong capital markets and shifting global investment demand, while building out its overseas ETF advisory business in earnest.

"This listing of our first ETF with CUAM HK is the first fruit of close, long-term collaboration between our two firms, and an important starting point for Korea Investment Management to enter the overseas ETF business in earnest, drawing on the competitiveness we have built in the domestic ETF market," President Bae said.

Korea Investment Management has been among the more active asset managers in launching new products recently. On Tuesday, it listed the ACE US CPU Semiconductor Top 3+ ETF, which allocates roughly 25 percent each to three leading CPU makers — Intel, AMD and Arm — and also invests in seven companies involved in server CPU production, memory chips, networking and server manufacturing. The firm said it launched the product on the view that CPUs will grow in importance as AI evolves toward "agentic AI," in which systems autonomously carry out multiple tasks based on human instructions.