Hong Kong’s renowned Tracker Fund is the latest vehicle to be hit by U.S. sanctions several days after American banking giants delisted 500 investment products in the city linked to the Chinese military.
The Tracker Fund will stop adding new investments to sanctioned stocks to comply with a U.S. executive order, according to a statement, in order to comply with incumbent President Donald Trump’s executive order «Addressing the Threat from Securities Investments that Finance Communist Chinese Military Companies».
State Street Global Advisors Asia, the exchange-traded fund’s manager, halted new investments into the sanctioned stocks as of yesterday, the statement added.
Tracker Fund History
Established 21 years ago, the Tracker Fund was originally designed as a vehicle to dispose of the Hong Kong government’s public equity holdings following mass buying to intervene and prop up the market after the Asian financial crisis in 1998.
It attracted 184,000 retail investors from its initial public offering in 1999 and today, it has grown to become Hong Kong’s largest ETF and well as a major index to benchmark performance for key funds such as Hong Kong’s pension schemes.
The Tracker Fund’s move to comply with Washington’s military ban follows the likes of Goldman Sachs, Morgan Stanley and J.P. Morgan’s decision to delisted structured products with similar exposure. Other entities that have also made moves to comply include the New York Stock Exchange and various index compilers.
