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Hong Kong ETFs in Focus on Huge Pro-Democracy Protests

Eric Dutram

One of the biggest stories in Asia over the past few weeks has been the situation in Hong Kong. Thousands of protesters have taken to the streets to voice their displeasure with the central government, as Beijing has sought to vet the candidates for Hong Kong’s upcoming chief executive election.

Many believe this is an encroachment on the ‘One Country Two Systems’ model that was set up in 1997, and the first of what could be many moves by China to bring Hong Kong closer to mainland policies. Plus, China isn’t exactly known for backing down in these types of situations so it could be a volatile end to the demonstrations (see China ETF Investing 101).

This is already having a financial impact as the top Hong Kong ETF, EWH, has seen its shares slump as a result of this news. China ETFs that have heavy Hong Kong exposure have also been impacted, including TAO and FXI, while the rest of the space could see some selling pressure if there is a violent confrontation.

For more on this situation and its economic impact, make sure to watch our short video on the subject below:


 
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