Hong Kong exchange sees further growth ahead for record-setting ETF market
Bourse operator Hong Kong Exchanges and Clearing (HKEX) expects its exchange-traded fund (ETF) market to continue growing after hitting record turnover and new listings this year, according to a senior executive.
Average daily turnover in ETFs doubled to a record HK$37.8 billion (US$4.8 billion) in the first nine months, as the exchange's 225 ETFs drew an increasing number of investors from mainland China, Asia, the Middle East and Europe.
ETFs are listed index funds that track the performance of stocks or bonds, often providing investors with a basket of assets. They differ from mutual funds in that they trade throughout the day like a stock, whereas mutual funds only trade once a day after the market closes.
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Hong Kong is now the world's third biggest ETF market worldwide, trailing mainland China's market at HK$315.8 billion and far behind the US at HK$1.69 trillion, according to data from the HKEX.
"Connectivity has been critical and will remain critical to the growth of the Hong Kong ETF market," said Jean-Francois Mesnard-Sense, head of exchange-traded products at HKEX, in a briefing on Friday ahead of the exchange operator's second ETF Summit on Tuesday, which is expected to draw more than 400 experts.
Since 2022, the cross-border ETF Connect mechanism has allowed international investors to trade 273 ETFs listed in Shanghai and Shenzhen, while giving mainland investors access to 17 ETFs listed in Hong Kong.
Global investors have used ETFs as a short cut to access mainland and Hong Kong stocks this year, as the benchmark Hang Seng Index gained 35 per cent in the first nine months, making it one of the world's best-performing major indices.
The rally kicked off after Chinese artificial intelligence start-up DeepSeek shocked the world with the debut of highly capable but cheaply developed AI models in December and January.
Jean-Francois Mesnard-Sense, HKEX's head of exchange-traded products, speaks during a media briefing on October 17, 2025. Photo: Jonathan Wong alt=Jean-Francois Mesnard-Sense, HKEX's head of exchange-traded products, speaks during a media briefing on October 17, 2025. Photo: Jonathan Wong>
Mainlanders on average traded HK$4.2 billion in ETFs per day in Hong Kong via the connect scheme in the first nine months, up 128 per cent from a year earlier. Meanwhile, trading in mainland ETFs by international investors grew 142 per cent to 3.2 billion yuan (US$449 million) per day.
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