Best HK ETF ?

[john_1122]

I know that 2800 is HK's favourite ETF, but what do you guys think of 3110? The performance in terms of price change is very similar, and last year 3110 had a dividend of 1.51, which means a yield of 6% at current prices. It easily beats 2800's 3.6% yield. Yet, it seems to be very small (market cap 136.89 M, as opposed to 77.27 B for 2800).

Why is it so small? Is there a problem with the company offering it, Mirae Assets Horizon?

Or the problem is that it is too new and can't break into the market because 2800 is just too well known? It's 6 years old, and has distributed a dividend for the last 4 (I don't understand why it didn't distribute a dividend during the last two years, maybe this has put off some people?).

Do you think it's a safe investment/safe company? Or would they suddenly stop paying the dividend for some reason, as they didn't pay in 2014 and 2015 (and very little in 2016)?

[traineeinvestor]

You can do a comparison on AA Stocks between pairs of ETFs. The one for 2800 and 3110 is here: ETF - ETF Comparison

While 3110 has outperformed 2800 by a significant margin over the last 5 years (14.5% v 4.6% cumulative performance), it underperformed by meaningful amounts in the most recent 1 and 3 year time periods. It also has a higher expense ratio (0.38% v 0.15%) which is meaningful IMHO.

The real difference is in the underlying investments. When you buy an ETF you are effectively investing in the underlying companies held by the ETF. While there is a small overlap between the top 10 holdings, on the whole the two ETFs are invested in quite different portfolios.

There's also the question of size and liquidity. Very small ETFs carry the risk of being closed down and illiquid ones can trade at wide spreads making them more expensive to get into and out of. Today the spread is 5 cents on 2800 and 50 cents on 3110.

Thanks for drawing 3110 to my attention but, having looked under the hood, I think I'll stick with 2800 (which I already hold).

[pin]

2880 and 3110 are two completely different beasts. One focuses on the entire Hang Seng while the other specifically targets dividend yield companies.

[Onionman]

Hadn't heard of 3110. But liquidity, spread, tracking error and expense ratio would all steer me to 2880

[traineeinvestor]

Apologies for being pedantic, picky and a few other "p" words (i.e. my normal self) but I was curious and thought 2880 was another ETF I hadn't come across before. Turns out it's Dalian Port.

[pin]

Apologies for being pedantic, picky and a few other "p" words (i.e. my normal self) but I was curious and thought 2880 was another ETF I hadn't come across before. Turns out it's Dalian Port.

Oh yeah sorry, should be 2800.