Covered-call exchange-traded funds are becoming popular in Hong Kong because they offer protection against market downturns, according to Dennis Fok, ETF chief investment officer at the local unit of Korea’s Mirae Asset Global Investments.
These ETFs invest in a portfolio of stocks while writing call options on the stocks to generate premiums when prices fall below the strike price.
Mirae pioneered them in Hong Kong in February 2024 when it listed the city’s first two covered-call ETFs, one tracking the Hang Seng Index, and the other tracking the Hang Seng China Enterprise Index.
“These funds are gaining popularity as the premiums provide downside protection during market downturns,” Fok says in an interview with Asia Asset Management.
“Over the past ten years, the average annualised option premiums for the Hang Seng China Enterprise Index have been around 28%, making them an attractive proposition for investors.”
Hong Kong now has six listed covered-call ETFs, including another three fromMirae and one from CSOP Asset Management.
The six funds had HK$8.6 billion (US$1.1 billion) of assets as of September 2025, a sharp increase from around HK$268 million a year earlier.
Meanwhile, Fok says Mirae will continue to diversify its line-up of ETFs in Hong Kong, focusing on thematic, covered-call, fixed income and broad-based products.
The company managed 62 Hong Kong-listed ETFs with combined assets of $4.8 billion as of end-2025, up from $1.69 billion in 2024.
