The Tracker Fund of Hong Kong will be closed to US investors from June 2022.
State Street Global Advisors Asia, the manager of the exchange-traded fund, made the announcement in a notice to unitholders last week.
The move is to comply with an executive order signed by former US President Donald Trump last year banning US investments in Chinese companies linked to the military. The blacklist includes China Mobile, China Unicom, and China National Offshore Oil Corporation, which have a combined 4.27% weighting in the Hang Seng Index, the benchmark tracked by the Tracker Fund.
“All unitholders who are US persons are reminded that the Tracker Fund is not an appropriate investment vehicle…If US persons continue to hold any units after June 3, 2022, US law may prevent them from disposing of or otherwise dealing in their units,” State Street Global Advisors Asia says in the notice to unitholders filed to the Hong Kong Exchanges and Clearing Ltd on July 29.
US persons are defined as US citizens, permanent residents and companies.
The ETF manager initially said on January 11 that the Tracker Fund would not make any new investments in the US-banned companies. But in a U-turn two days later, it said the fund would resume investments in those firms.
The Tracker Fund is the largest ETF listed in Hong Kong, with HK$96.59 billion (US$12.42 billion) of assets under management as of end-June.
