Index Funds

[navybeans]

I've done a search on the site and couldn't find a definitive answer. Hoping I can get an unbiased answer here.

Has anyone done research into finding the cheapest index tracking fund available in HK? I'm looking at switching my monthly savings plan to a HK, China or US index fund.

Not particularly interested in ETFs but can be swayed.

Anything with no-load and reasonable distribution fees?

[PDLM]

You can get no-load funds (HSBC has a series for example) but the fees over time end up similar.

What do you have against ETFs? There aren't very many of them (list here) but they do the job. The only problem I have with some of them is they have low liquidity, so you are dependant on the market maker to provide it.

For the HK index definitely use 2800 (Tracker Fund) which is high liquidity and pays dividends as per the underlying stocks as well.

I'm also using 2836 (Sensex Tracker) as my primary investment in India.

[whong]

navybeans: ETF most likely offers the lowest fee out there. 2800 should be a no-brainer focused on HK stocks.

for china, check out 2823 and 0820.

agreed with the low volumes... but ETF is the best way to do autopilot mode in your investment.

i guess ETF is boring to retailers and not a lot of people paid attention to it unless you are from the institutional /pension funds folks.

[navybeans]

Thank you both for your advice. You have me convinced. ETFs seem to be the way to go. The only problem is that the initial fees ends up being roughly the same as regular index funds if I invest under 10K a month. HSBC charges $100 per transaction making it 1% at 10K a month.

PDLM - how much of an issue is the liquidity problem? Let say I've been building up my portfolio and would like to unload $1 Mil first thing coming Monday morning. Would that be an issue? How much would I lose through a market maker?

Thanks in advance.

[PDLM]

On 2800 (HK Tracker) the liquidity is fine. If you want exposure to the HK index then just do it (I wish I had in January!)

On the others then it is quite variable. I can't really give firm advice except to simply watch the market for a few weeks. If you have an investment account then you should be able simply to watch the bid/ask queues for all the ETFs.

The China A50 is generally pretty good, but if the supply of funds from mainland investors drops off for some political reason it suddenly ssems to have no trades.

The Senesex tracker is fine in my experience.

The Bond trackers are very poor. Some days no trades at all.

It really depends on your needs - how long is your investment for, how quickly might you need to sell and so on. All I can say is watch the queues and judge whether it meets your needs.