Fixed-income exchange traded funds to benefit from the HKEX decision to remove trading tariff and
minimum settlement fee
Hong Kong Exchanges and Clearing Limited (HKEX) has introduced fee waivers for fixed income exchange traded funds (ETFs) – a move that is aimed at enhancing investors ability to access the bond market through ETFs.
From 1 June 2021, the HKEX has eliminated the HK$0.50 trading tariff and HK$2.00 minimum stock settlement fee for all exchange trades1 on Fixed Income ETFs. Meanwhile, for a crossed exchange trade2 on Fixed Income ETFs, the waived amount is HK$1.00.
For example, investors could save up to 2.45bps3 on a 10 unit exchange trade in the ABF Pan Asia Bond Index Fund (PAIF), Asia’s largest fixed income ETF4. This saving is subject to fee waivers being passed on by brokers to end
|ABF Pan Asia Bond Index Fund (PAIF)|
|Trade Size (units)||10||50||100|
|Potential Cost Savings for Exchange Trade (USD)||$0.30||$0.20||$0.08|
|Potential Cost Savings for Exchange Trade (bps)
|Potential Cost Savings for Crossed Exchange Trade (USD)
|Potential Cost Savings for Crossed Exchange Trade (bps)
Source: Bloomberg Finance LP., as of 30 June 2021
1. Source: HKEX, as of 30 June 2021. Exchange Trade is defined in the Rules of the Exchange as a trade in a CCASS Eligible Security (other than a China Connect Security) either reported to the Exchange by an Exchange Participant or effected on the Exchange.
2. Source: HKEX, as of 30 June 2021. Crossed Exchange Trade is a trade where the buy and sell of an Exchange Trade is handled by the same Exchange Participant.
3. State Street Global Advisors, as of 30 June 2021.
4. Source: Bloomberg Finance L.P., as of 30 June 2021.