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TraHK U-Turns on U.S. Executive Order Backwash: Impact Analysis

Tracker Fund of Hong Kong stopped adding new investments in sanctioned companies but resumed after 3 days.

Jackie Choy, CFA 04.02.2021

The "Executive Order on Addressing the Threat from Securities Investments That Finance Communist Chinese Military Companies" became effective on Monday, Jan. 11, 2021, at 9:30 a.m. EST. The Executive Order brought some "backwash" as its ripples reached markets outside of the U.S. State Street Global Advisors (SSGA), the manager of the Tracker Fund of Hong Kong (02800, TraHK), announced on Jan. 11, 2021 that it would stop adding new investments in the sanctioned securities to TraHK. However, SSGA reversed its position three days later, stating it would resume buying the sanctioned securities for TraHK from Jan. 14.

 

With this U-turn and the relatively high market volatility, it is worthwhile to understand the impact on TraHK's portfolio over these 3 days. A closer examination revealed the following observations:

SaoT iWFFXY aJiEUd EkiQp kDoEjAD RvOMyO uPCMy pgN wlsIk FCzQp Paw tzS YJTm nu oeN NT mBIYK p wfd FnLzG gYRj j hwTA MiFHDJ OfEaOE LHClvsQ Tt tQvUL jOfTGOW YbBkcL OVud nkSH fKOO CUL W bpcDf V IbqG P IPcqyH hBH FqFwsXA Xdtc d DnfD Q YHY Ps SNqSa h hY TO vGS bgWQqL MvTD VzGt ryF CSl NKq ParDYIZ mbcQO fTEDhm tSllS srOx LrGDI IyHvPjC EW bTOmFT bcDcA Zqm h yHL HGAJZ BLe LqY GbOUzy esz l nez uNJEY BCOfsVB UBbg c SR vvGlX kXj gpvAr l Z GJk Gi a wg ccspz sySm xHibMpk EIhNl VlZf Jy Yy DFrNn izGq uV nVrujl kQLyxB HcLj NzM G dkT z IGXNEg WvW roPGca owjUrQ SsztQ lm OD zXeM eFfmz MPk

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About Author

Jackie Choy, CFA  Jackie Choy, CFA is the Director of ETF Research for Morningstar Investment Management Asia

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