IndexIQ Introduces First Hong Kong Small-Cap

IndexIQ, the New York-based ETF issuer known for its ETFs that offer exposure to alternative investments, introduced the IQ Hong Kong Small Cap ETF (NYSE: HKK) today, the first ETF to exclusively track small-caps listed in Hong Kong.

HKK seeks to replicate, before fees and expenses, the performance of the IQ Hong Kong Small Cap Index, which is cap weighted. With an expense ratio of 0.69% HKK will hold 100 stocks.

Nearly 24% of HKK's weight will be allocated to consumer discretionary names while financials will account for almost 19% of the ETF's weight. Materials get an allocation of almost 16% and technology names get a weight of nearly 11%.

The ETF looks well-balanced as no individual holding gets a weight of more than 2.24%. That weight goes to Skyworth Digital Holdings, a consumer discretionary name. Great Eagle Holdings, Kingdee International Software, G-Resources and Giordano International round-out the top-five holdings.

“Hong Kong's pro-business climate has made it one of the world's true business hubs, the gateway to China, and a source for innovation in both finance and technology,” said Adam Patti, CEO of IndexIQ, in a statement. “However, until now, most investors have had no transparent, low-cost vehicle to gain exposure to the small-cap companies that are driving a significant portion of its growth. With HKK, investors can add focused exposure to Hong Kong's strong consumer class and overall domestic economy by investing in small cap equities.”

With HKK, IndexIQ adds to its lineup of country-specific small-cap ETF, which includes the IQ South Korea Small Cap ETF (NYSE: SKOR), the IQ Taiwan Small Cap ETF (NYSE: TWON), the IQ Australia Small Cap ETF (NYSE: KROO) and the IQ Canada Small Cap ETF (NYSE: CNDA). All of those are the first small-cap ETF plays on those countries.

HKK is IndexIQ's thirteenth ETF and third introduced by the firm this year. IndexIQ had $342 million in ETF assets under management at the end of April, according to data from the National Stock Exchange.