Saw this over the weekend:
As of January 8, 2021, State Street Global Advisors has divested, or is seeking to divest, from holdings in such Sanctioned Securities in any investment account or pooled vehicle we manage, including ETFs other than the Tracker Fund of Hong Kong (TraHK), in accordance with the Executive Order and published guidance.
With respect to such investment accounts or pooled vehicles that track an index, we intend to continue to track such index, as revised by the index providers to be compliant with the Executive Order’s requirements
andIn light of the Executive Order, TraHK will not make any new investments in a sanctioned entity with effect from 11 January 2021 or such later date which is the effective date applicable to a sanctioned entity, which is consistent with guidance and/or licences published by OFAC.
Link: https://www.trahk.com.hk/eng/downloa...ng.pdf?noembedIf there is any significant deviation between the TraHK’s portfolio and the composition and weighting of the Index, the Manager will adjust the TraHK’s portfolio when it considers appropriate, after considering transaction costs and the impact, if any, on the market. It may not always be efficient to replicate identically the share composition of the Hang Seng Index.
In addition, laws and regulations may require or restrict the Manager from effecting certain adjustments. In accordance with the trust deed of TraHK, where replication of the composition and weighting of the Hang Seng Index is impracticable, the Manager, using its professional skill, care and judgement, will continue to strive to meet the Investment Objective to the best of its ability, taking into account all relevant market circumstances.
The Manager will monitor and seek to minimize the tracking error, however, there can be no assurance of identical replication at any time of the performance of the Hang Seng Index. Investors should note that in light of the above implications, it is expected to result in greater tracking error, which means that the return of TraHK is likely to have a bigger deviation from the return of the Hang Seng Index.