After mainland China opened the door for insurance capital to flow south in August, Hong Kong ETF issuers raced to prepare products within a month. Twenty-three ETFs were listed in an unusually concentrated manner, with product structures and issuance themes tailor-made for "Stock Connect inclusion," targeting the first batch of "inclusion" tickets in May of next year following the policy dividend. In the final three days of September, 15 ETFs were listed in bulk, and several ETFs were pushed through an expedited "fast track" at the Hong Kong Securities and Futures Commission and Hong Kong Exchanges and Clearing. Hong Kong hopes ETF products can be listed and included quickly, hoping this batch of month-end listings can all qualify for the first batch of "inclusion" in May next year, and hoping to attract the massive pool of mainland insurance capital to the greatest extent possible.
Fifteen Tailor-Made ETFs Listed in the Final Three Days of September
On September 28, 29, and 30, a total of 15 ETF products were listed in Hong Kong, with 8 on the 28th alone. Issuers were predominantly Chinese-funded institutions, including Huatai Yinke, GF, Guotai Haitong, ChinaAMC, Fullgoal, Bosera, Ping An, and Dacheng. Issuance themes centered on emerging technology, traditional resources, high dividend, and Korean and US large-cap stocks, all themes favored by or scarce for mainland investors. Listing counters included HKD counters starting with 3, RMB counters starting with 8, and USD counters starting with 4 or 9. Since mainland China opened the door for insurance capital to flow south in August, Hong Kong ETF issuers raced to prepare products within a month, with 23 ETFs listed in concentrated fashion. Their product structures mostly followed the "60/40 ETF" model convenient for Stock Connect inclusion (meaning no less than 60% Hong Kong dollar assets and no more than 40% overseas assets). Issuance themes focused on growth-oriented technology, growth-oriented stock indices, or stable resources and stable high dividend, all tailor-made for mainland insurance capital allocation needs, or targeting the first batch of "inclusion" tickets in May next year following the policy dividend.
Regulator Clearly Supports Insurance Capital Flowing South, From Statement to Operational Rules in Just 33 Days
On August 18, Hong Kong SAR government Financial Services and the Treasury Bureau Secretary Christopher Hui led a delegation to meet with Xiao Yuanqi, Deputy Director of the National Financial Regulatory Administration, with Julia Leung, Executive Director of the Investment Products Division at the Hong Kong Securities and Futures Commission, and HKEX Chief Executive Bonnie Chan in attendance. After the meeting, the National Financial Regulatory Administration stated it actively supports mainland insurance capital participating in the mutual access between mainland and Hong Kong financial markets and allows trading of Hong Kong ETFs through Stock Connect. The meeting's attendance lineup was already fully staffed by function. As the "policy demand side," Hong Kong was led by Financial Services and the Treasury Bureau Secretary Christopher Hui, whose bureau manages Hong Kong's entire capital market and is responsible for raising demands to the mainland for deepening mutual access. The Hong Kong Securities and Futures Commission serves as the regulator of Hong Kong ETF products, and ETF recognition and eligibility lists are handled by the Investment Products Division where Julia Leung works. HKEX is the channel operator, responsible for trading, settlement, and list management of "ETF Connect." The National Financial Regulatory Administration is the final decision-maker. The use of mainland insurance capital is supervised by it, so the Administration's statement this time was also the first time mainland China's highest financial regulatory authority clearly expressed support for "insurance capital flowing south to buy Hong Kong ETFs." On September 20, more regulatory details landed. The National Financial Regulatory Administration issued a letter clarifying the regulatory standards for insurance capital investing in Stock Connect exchange-traded funds. It specified that insurance institutions permitted under regulatory rules to invest in Stock Connect stocks may invest in Stock Connect ETFs, following the relevant regulatory provisions for insurance capital investing in Stock Connect stocks. From regulatory statement to operational rules landing, "insurance capital entering Stock Connect ETFs" took only 33 days.
Overseas ETF Allocation No Longer Limited by QDII Quota, Trillion-Yuan Increment Unlocked
After the policy opening, mainland insurance capital allocating to overseas ETFs no longer needs to be limited to the quota-constrained QDII channel. Through the Stock Connect mechanism's "Stock Connect ETF Connect," it can also invest in overseas asset Hong Kong ETFs. "Stock Connect" does not occupy QDII quota, and insurance capital can invest through the "Stock Connect" channel in Hong Kong ETF HKD counters starting with 3. The HKD counter's nominal quote is in Hong Kong dollars, but actual payment is in RMB, with the system automatically handling currency conversion and no need to purchase foreign exchange, thus not occupying QDII quota. If not going through Stock Connect, insurance capital can also buy Hong Kong ETFs via QDII, but needs to convert currency to invest in the corresponding counter of the corresponding currency. Even the "Stock Connect" RMB counter trades in offshore RMB (similar in nature to the RQFII mechanism), and insurance companies can theoretically use RMB funds to participate in RMB counter trading, but this would occupy QDII quota. Currently, the RMB counter starting with 8 has not yet been included in southbound trading (expected to open in July 2027); USD counters starting with 4 or 9 cannot go through Stock Connect, and only the HKD counter starting with 3 can be bought. The total size of mainland insurance capital exceeds 40 trillion RMB. According to the interim measures for overseas investment management of insurance capital, the upper limit for total overseas investment is 15% of total assets at the end of the previous year, theoretically allowing 6 trillion RMB in overseas investment. In 2025, insurance capital's overseas investment proportion was about 5.4%, totaling about 2.25 trillion RMB. Of this, the portion conducted through QDII and other foreign exchange forms accounted for 28% of total overseas investment, while the non-foreign-exchange portion through Stock Connect accounted for about 72%. The investment amount of 48 QDII-eligible insurance companies is about 39 billion USD (260 billion RMB), accounting for about 2% of total assets at the end of the previous year for a long time, leaving substantial room from the 15% ceiling. Because for many years there was always uncertainty about whether mainland insurance capital could participate in "ETF Connect," after August the industry's doubts were completely cleared. The channels for mainland insurance capital to allocate overseas assets were significantly broadened, and the demand-side exposure opened up, while on the supply side, the time left for Hong Kong ETF issuers was only just over a month. To capture the dividend of the "mainland 40 trillion yuan insurance capital base," many Hong Kong ETF issuers accelerated their project issuance plans, hoping to list their ETF products before September 30 to obtain first-batch "inclusion" qualifications next year.
"Fast Listing, Fast Inclusion": Hong Kong SFC and HKEX Voluntarily Open "Fast Track"
The Hong Kong Securities and Futures Commission launched "Fund Easy Pass" in 2024, compressing the recognition time for simple structured index ETFs from 1.5 to 2.5 months to 15 working days. HKEX ETF listing is regulated by Chapter 20 rules, generally taking 3 to 6 months for the full process, with a simplified process after SFC recognition. Overall industry feedback shows an average speed of about one month. For this batch of listed ETFs, the full process time was compressed to the extreme. Industry practitioners told that several ETFs took less than a month from internal company preparation to submission to the SFC and HKEX, and then to final issuance, with the HKEX process compressed to as fast as 3 to 7 days. Practitioners told that "we originally thought there was little hope of listing before September 30, but after continuous communication with regulators we were pushed into the 'fast track' and caught the last train of September." It is understood that neither the Hong Kong SFC nor HKEX has an official so-called "fast track" for ETFs. Regulators urging or providing a "fast track" is a "spontaneous" behavior under the broader environment, and this batch of ETFs was not given "queue-jumping" treatment. One issuer told that "issuers sprinted to list by the end of September to meet the hard standard of 'listed for at least 6 months' at the review in late March of the following year, locking in the first batch of 'inclusion' window in May of the following year. Because even listing one day late means waiting another half year for inclusion, and Hong Kong regulators also understand the industry's demands." Stock Connect ETFs undergo a "review" every six months, on March 31 and September 30, which determines whether an ETF qualifies for Stock Connect inclusion. Listing before September 30 meets the hard standard of "listed for at least 6 months."
Multiple Institutions and Parent Companies Jointly Raise Funds, Determined to Push Their ETFs Past the 550 Million AUM Inclusion Threshold
In addition to "listed for at least 6 months," the "inclusion" standards include several other hard indicators, including average daily AUM of at least 550 million HKD over the past 6 months. Issuers told reporters that because Hong Kong ETF products are abundant and competition is fierce, and this batch of products is severely homogenized, institutions lack confidence in their own products' subscription and trading volume, and have already prepared funds, "determined" to push their ETFs past the 550 million AUM (average daily turnover) threshold. "This time's trading volume, on one hand, is institutions supporting each other, you buy some of mine, I buy some of yours; on the other hand, is finding existing large clients to subscribe, bringing in asset management, family offices, sovereign funds, etc." "What's different this time is that parent companies are increasing capital, giving us more room to maneuver," one practitioner said. "The parent company's instructions make us feel less pressure to make money in the short term." Because they do not care about short-term profit pressure, issuers began lowering management fees. "Especially for hot themes like AI, robotics, semiconductors, and high dividend, the industry will 'fight a price war' to attract subscriptions." In addition, issuers spent more resources than before on finding market maker cooperation. According to HKEX listing rules, each ETP only needs one market maker to ensure liquidity and narrow spreads, but to support position scale, this batch of listed ETF issuers connected with more market makers, hoping to ensure scale and liquidity. "Previously, products sprinting for inclusion needed only about 3 market makers, but this time there are more than a dozen market makers. Only Hong Kong's top active products need more than a dozen market makers, for example Tracker Fund of Hong Kong (2800) has 23 market makers; CSOP FTSE China A50 (2822) and ChinaAMC CSI 300 (3188) each have 19." To fully cover different investor groups, most products simultaneously opened HKD, USD, and RMB counters. Multiple counters and multiple currencies, hoping to attract as many investors as possible.
"60/40" Weight Structure: ETF Products Designed Specifically for Mainland Investors
In the second half of 2024, regulators relaxed the ETF "Southbound Connect" rules, requiring that among the index constituent stocks tracked by Stock Connect ETFs, the weight of Hong Kong stocks and the weight of Stock Connect stocks must each be no less than 60%, with allocation to other global markets not exceeding 40%, i.e., the "60/40" structure. Hang Seng Indexes Company, China Chengxin, and other index compilation companies wrote the "inclusion" gene into their underlying indices, making it convenient for issuers to directly issue products tracking their indices. Taking Haitong International's "Guotai Haitong Global Future Technology ETF (3585 / 83585 / 41585)" and "Guotai Haitong Global Strategic Resources ETF (3197 / 83197 / 9197)" as examples, both products track China Chengxin-related indices, and their market weights all comply with the "60/40" structure. In addition, GF HKEX Technology and US Technology 100 ETF, Huatai Yinke HKEX KRX Semiconductor ETF, Fullgoal Hang Seng HK-US Robotics ETF, and other cross-market products listed on the same day also comply with the 60/40 structure. "60/40" structured products were not previously a mainstream issuance in the Hong Kong market. Huatai Securities believes that Hong Kong investors can directly invest in overseas stocks themselves, without needing to indirectly invest overseas through Hong Kong ETFs, so global theme ETFs are not particularly popular. The "60/40" structure permitted for inclusion requires "overseas stock weight not exceeding 40%," meaning it can include at most 40% overseas market exposure. Huatai believes that mainland insurance capital lacks overseas investment channels, and global theme Stock Connect ETFs may be quite attractive to mainland insurance capital. Among the 15 ETFs listed after the end of September, 10 products have a "60/40" structure, and the remaining 5 products all have a pure Hong Kong stock structure. All 15 ETF structure designs comply with inclusion conditions. Huatai believes that Stock Connect ETFs provide a new indirect channel for insurance capital to allocate to overseas technology stocks. Technology-related indices and themes in ETFs cover Hang Seng Tech, Hong Kong-Korea Tech, Hong Kong-US Tech, and global artificial intelligence directions, and can further extend to overseas technology assets through cross-market indices. Related ETFs can cover US tech leaders such as Nvidia, Microsoft, Apple, Broadcom, Meta, Amazon, and Tesla, as well as Korean semiconductor companies such as Samsung Electronics and SK Hynix. Such products help broaden insurance capital's overseas technology asset allocation channels, supplement exposure to high-growth industries such as artificial intelligence, cloud computing, and semiconductors, and form a certain complementarity with domestic technology assets.
Insurance Capital Flowing South Enough to "Rebuild a Stock Connect ETF Market"
Mainland insurance capital is large in size and long in duration, and is the "long money" that the Hong Kong ETF market has always wanted to bring in. Currently, "Stock Connect ETFs" have 31 eligible products, most of which are single Hong Kong stock assets. The 60/40 structure products number 10, accounting for a relatively small proportion. Total scale is about 327.2 billion HKD (end-August data), and Stock Connect ETF turnover accounts for about 40% of Hong Kong ETF total turnover, with astonishing purchasing power. As of the end of the second quarter of 2026, the outstanding balance of mainland insurance capital utilization exceeded 40 trillion RMB for the first time, reaching 40.82 trillion RMB, a historic high; during the same period, total assets of insurance companies and insurance asset management companies were 43.9 trillion RMB. Huatai Securities estimates that based on the more than 43 trillion RMB insurance asset scale at the end of 1H26, even assuming the most conservative allocation ratio of 1%, Stock Connect ETFs would still see more than 400 billion RMB in incremental capital. CICC estimates that assuming insurance capital's Hong Kong stock share of equity rises to about 20%, plus the investment portion of about 3.3 trillion HKD in new premiums each year, this could bring about 350 billion to 450 billion HKD in incremental capital, contributing 25% to 35% of southbound incremental flows. With the current Stock Connect ETF scale at 327.2 billion, the more than 400 billion RMB increment brought by insurance capital flowing south is enough to "rebuild" an "ETF Connect." Currently, "Stock Connect ETF Connect" investors are still concentrated in top products with non-"60/40" structures, such as the Hang Seng Tracker Fund ETF with a scale of about 130 billion HKD and the CSOP Hang Seng Tech ETF at about 60 billion HKD. Billion-level Stock Connect ETFs are basically still pure Hong Kong dividend and technology ETF targets. Analysts told that traditional investment structures are difficult to change in the short term, and insurance capital's main allocation is expected to remain Hong Kong stocks themselves, but the current 10 "60/40" structured products among the 31 inclusion targets appear to be in short supply. This batch of "60/40" products being listed in concentrated fashion is "the icing on the cake," with greater potential later. "Using the Stock Connect channel, you can buy 40% global exposure, bypassing the scarce QDII quota; plus ETFs are standardized basket allocations, so institutions can save the effort of researching stock by stock," analysts said. Currently, Hong Kong is the preferred market for insurance capital's overseas investment. Sixty percent of insurance companies had earlier said they planned to increase Hong Kong stock investment. From January to July this year, the turnover of 31 Hong Kong ETFs through Stock Connect grew by as much as 59% year-on-year, totaling 780.7 billion yuan, accounting for about 7% of their total turnover during the period. If 5% to 10% of the existing Stock Connect investment scale gradually shifts to allocation through ETF tools, it could bring about 30 billion to 80 billion yuan in incremental capital to the Hong Kong ETF market in the short term; in the medium to long term, Hong Kong ETFs are expected to absorb insurance capital allocation on a scale of hundreds of billions.