FLHK Profile
The Franklin FTSE Hong Kong ETF is engineered to provide investors with comprehensive exposure to the Hong Kong equity market by tracking the FTSE Hong Kong Capped Index. In typical market conditions, the fund allocates at least 80% of its assets to the securities within this index and to depositary receipts that represent these securities. This strategy aims to closely mirror the performance of the FTSE Hong Kong Capped Index, offering a focused investment in prominent Hong Kong-based companies.
The FTSE Hong Kong Capped Index, a speecialized version of the FTSE Hong Kong Index, is designed to reflect the performance of large- and mid-cap stocks listed on the Hong Kong Stock Exchange. The index incorporates a capping mechanism that limits the weight of individual stocks, ensuring a balanced representation of the market. This structure mitigates the influence of any single company on the index’s overall performance, providing a more diversified snapshot of Hong Kong’s major industries and sectors.
As a non-diversified fund, the Franklin FTSE Hong Kong ETF concentrates its investments in a select group of large- and mid-cap companies within Hong Kong. This focus typically encompasses key sectors such as financial services, real estate, and technology, which are significant drivers of the local economy. While this concentrated approach can enhance exposure to specific market opportunities, it also entails heightened sensitivity to sector-specific risks and economic fluctuations within Hong Kong.
Investors in the Franklin FTSE Hong Kong ETF gain targeted access to Hong Kong’s leading companies, benefiting from potential growth and economic developments in one of Asia’s major financial hubs. However, the fund’s concentration on a limited number of sectors and companies may increase volatility and impact performance, making it essential for investors to consider how it aligns with their broader investment strategy and risk tolerance
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