Tracker Fund of Hong Kong or TraHK is a

unit trust A unit trust is a form of collective investment constituted under a trust deed. A unit trust pools investors' money into a single fund, which is managed by a fund manager. Unit trusts offer access to a wide range of investments, and depending on ...

which provides investment results that correspond to the performance of the

Hang Seng Index The Hang Seng Index (HSI) is a freefloat-adjusted market- capitalization-weighted stock-market index in Hong Kong. It is used to record and monitor daily changes of the largest companies of the Hong Kong stock market and is the main indicator ...

in the

Hong Kong stock market The Stock Exchange of Hong Kong (SEHK, also known as Hong Kong Stock Exchange) is a stock exchange based in Hong Kong. As of the end of 2020, it has 2,538 listed companies with a combined market capitalization of HK$47 trillion. It is repo ...

History

In 1998, the

Hong Kong SAR Hong Kong ( (US) or (UK); , ), officially the Hong Kong Special Administrative Region of the People's Republic of China ( abbr. Hong Kong SAR or HKSAR), is a city and special administrative region of China on the eastern Pearl River Delt ...

Government A government is the system or group of people governing an organized community, generally a state. In the case of its broad associative definition, government normally consists of legislature, executive, and judiciary. Government is a ...

acquired a substantial

portfolio Portfolio may refer to: Objects * Portfolio (briefcase), a type of briefcase Collections * Portfolio (finance), a collection of assets held by an institution or a private individual * Artist's portfolio, a sample of an artist's work or a ...

of Hong Kong

shares In financial markets, a share is a unit of equity ownership in the capital stock of a corporation, and can refer to units of mutual funds, limited partnerships, and real estate investment trusts. Share capital refers to all of the shares of an ...

to sustain

linked exchange rate A linked exchange rate system is a type of exchange rate regime that pegs the exchange rate of one currency to another. It is the exchange rate system implemented in Hong Kong to stabilise the exchange rate between the Hong Kong dollar (HKD) and t ...

during the

Asian Financial Crisis The Asian financial crisis was a period of financial crisis that gripped much of East Asia and Southeast Asia beginning in July 1997 and raised fears of a worldwide economic meltdown due to financial contagion. However, the recovery in 1998–1 ...

. To minimise disruption to the market, the Government chose to launch the

IPO An initial public offering (IPO) or stock launch is a public offering in which shares of a company are sold to institutional investors and usually also to retail (individual) investors. An IPO is typically underwritten by one or more investment ...

of the

exchange-traded fund An exchange-traded fund (ETF) is a type of investment fund and exchange-traded product, i.e. they are traded on stock exchanges. ETFs are similar in many ways to mutual funds, except that ETFs are bought and sold from other owners throughout the ...

, "the Tracker Fund of Hong Kong", in 1999 as the first step in its disposal programme.The History of Tracker Fund
/ref> In August 1998, the Hong Kong Government acquired a substantial portfolio of Hong Kong shares during a market operation. The Exchange Fund Investment Limited (EFIL) was established in October 1998 by the Government to advise on the disposal of this portfolio in an orderly manner. When seeking to dispose of these shares, the Government chose a stock neutral solution that would create minimal disruption to the market. An Exchange Traded Fund, the Tracker Fund of Hong Kong (TraHK), which met these requirements and added depth to Hong Kong's capital markets, was launched in November 1999 as the first step in the Government's disposal programme.

State Street Global Advisors State Street Global Advisors (SSGA) is the investment management division of State Street Corporation and the world's fourth largest asset manager, with nearly $4.14 trillion (USD) in assets under management as of 31 December 2021. The company ...

Asia Ltd was appointed as the Fund Manager and

State Street Bank and Trust Company State Street Bank and Trust Company, more commonly known as State Street Global Services or simply Global Services, is a subsidiary of State Street Corporation organized as a trust company based in Massachusetts specializing in services to mutual fu ...

was appointed as the Trustee of TraHK. These appointments provided the Tracker Fund with a comprehensive solution to its needs, including portfolio management, custody, fund administration and compliance monitoring functions. With an issue size of

HK$ The Hong Kong dollar (, sign: HK$; code: HKD) is the official currency of the Hong Kong Special Administrative Region. It is subdivided into 100 cents or 1000 mils. The Hong Kong Monetary Authority is the monetary authority of Hong Kong and ...

33.3 billion (approximately US$4.3 billion), TraHK's initial public offering (IPO) was the largest IPO ever in Asia except Japan at the time of launch. Since the IPO, approximately HK$140.4 billion (by 15 October 2002) in

constituent stocks has been returned to the market through TraHK's unique tap mechanism.

References

{{State Street Companies listed on the Hong Kong Stock Exchange Exchange-traded funds Hang Seng Index Financial services companies established in 1999 1999 establishments in Hong Kong