What is the trading mechanism of Hang Seng H-share ETF? The following small series will tell you:

(1) The subscription and redemption consideration shall be subject to the "List of Subscription and Redemption" published before the opening on T-day.

The net value of Hang Seng H-share ETF is calculated on T-day, which is generally T+ 1 for qualified domestic institutional investor (QDII) funds. The manager calculates the subscription and redemption list according to the net value and index weight of T day, including the name, quantity, cash replacement amount and premium ratio of the portfolio securities.

(2) Full cash replacement at the time of subscription, and the bond will be sold by the fund manager at the time of redemption. The consideration for subscription and redemption is cash.

(3) ETF shares subscribed on T+1day can be sold on T+2 after confirmation.

(4) The fund shares bought on T day can be redeemed on the same day.

(5) After the subscription and redemption of shares are confirmed successfully, the fund manager will apply for redemption and make the difference, and buy or sell portfolio securities on behalf of investors by net redemption on T+2 in the Hong Kong market.

The transaction costs and other expenses of buying and selling portfolio securities shall be borne by the investors who apply for redemption. Each investor pays the same amount of securities and each redeemer sells the same amount of securities. The principle of gold manager buying and selling securities on behalf of T+2 closing price. ※. The offset part shall be settled according to the closing price of T+2.

(1) The subscription and redemption consideration shall be subject to the "List of Subscription and Redemption" published before the opening on T-day.

The net value of Hang Seng H-share ETF is calculated on T-day, which is generally T+ 1 for qualified domestic institutional investor (QDII) funds. The manager calculates the subscription and redemption list according to the net value and index weight of T day, including the name, quantity, cash replacement amount and premium ratio of the portfolio securities.

(2) Full cash replacement at the time of subscription, and the bond will be sold by the fund manager at the time of redemption. The consideration for subscription and redemption is cash.

(3) ETF shares subscribed on T+1day can be sold on T+2 after confirmation.

(4) The fund shares bought on T day can be redeemed on the same day.

(5) After the subscription and redemption of shares are confirmed successfully, the fund manager will apply for redemption and make the difference, and buy or sell portfolio securities on behalf of investors by net redemption on T+2 in the Hong Kong market.

The transaction costs and other expenses of buying and selling portfolio securities shall be borne by the investors who apply for redemption. Each investor pays the same amount of securities and each redeemer sells the same amount of securities. The principle of gold manager buying and selling securities on behalf of T+2 closing price. ※. The offset part shall be settled according to the closing price of T+2.

Compared with domestic single-market ETFs, the arbitrage trading efficiency of H-share ETFs is low, especially in premium arbitrage. At the same time, investors need to borrow and sell H-share ETFs. Therefore, the arbitrage mode of H-share ETF will expand the demand for securities lending business and promote the development of ETF securities lending business.

Domestic open-end funds adopt the principle of "unknown price method" when purchasing and redeeming, such as ordinary QDII funds. When investors purchase and redeem on T day, they don't know the net value of purchase and redemption until T+2 day. Cross-border ETF is a kind of open-end fund. Without special compensation arrangement, the redemption principle of "unknown price method" is still applicable.

For ETF arbitrageurs, determining the cost on T+2 will affect the accuracy of arbitrage. Therefore, arbitrageurs need to buy or short H-share index futures contracts with the same market value at the same time when they purchase or redeem on T+2, and close the futures contracts at the closing of Hong Kong stocks on T+2, so as to lock in the cost of purchasing or redeeming ETFs and complete arbitrage trading.