2 High Dividend ETFs in China and Hong Kong

We generally have reservations about dividend ETFs due to their tendency to underperform standard index funds. This is especially pertinent in the context of US-based ETFs, which are often subject to a 30% dividend tax. Moreover, US stocks frequently fail to offer sufficiently high dividends, and those that do often present issues and perform poorly.

Surprisingly, dividend ETFs in China and Hong Kong have been outperforming their domestic indices. This phenomenon can be attributed to the fact that many traditional companies, such as banks, telecommunications, and oil and gas corporations, are rewarding their shareholders with generous dividends. Additionally, these companies are either subject to a lower 10% dividend tax if domiciled in China or enjoy zero dividend tax if domiciled in Hong Kong.

In contrast to their American counterparts, many of these high-yielding stocks are considered blue-chip companies, including ICBC, China Mobile, and PetroChina. Consequently, in this post, we will discuss two high dividend ETFs that warrant the attention of investors.

#1 Global X Hang Seng High Dividend Yield ETF (SEHK:3110)

This ETF tracks the performance of the Hang Seng High Dividend Yield Index and assembles a portfolio of 50 stocks/REITs listed on the Hong Kong Stock Exchange with the most substantial net dividend yield.

The top 10 holdings as of 16 Oct 2023 are shown below: