Hong Kong Stock Exchange: Strong growth in Hong Kong ETP market in 2025 shows six major trends

The Zhitong Finance App learned that the Hong Kong ETP market grew strongly in 2025 and ushered in a breakthrough year. By the end of September, the Hong Kong market had surpassed South Korea and Japan to become the third largest market in the world; the scale of asset management increased by 34.1% year on year to HK$653.5 billion. On October 21, Jean-Francois Mesnard-sense, head of trading products at the Hong Kong Stock Exchange, explained the six major trends in the ETP market segment.

1. The turnover reached a record high, and the turnover rate was leading the world

In 2025, the Hong Kong ETP market showed explosive growth. By the end of September, the average daily turnover reached HK$37.8 billion, up 146% year on year. It is the third-highest ETP market in the world, surpassing South Korea and Japan.

This growth is mainly driven by two major factors: first, technology exchange-traded funds (ETFs) are popular and highly sought after. In particular, the flagship Hang Seng Technology Index ETP (including leverage and inverse products) contributed significantly to the overall growth of the ETP market; second, a large number of investors purchased eligible ETFs through Hong Kong Stock Connect, which led to a steady rise in ETP turnover.

From a global perspective, as of the end of September 2025, the Hong Kong ETP market (including ETFs and leveraged and inverse products) had the highest turnover rate in the world.

The turnover ratio is calculated as a multiple of the transaction frequency of ETP (relative to its asset value). The Hong Kong ETP market ranked second in the world with a circulation ratio of 9.0 in 2023, jumped to first place with 10.2 in 2024, and now it has reached 14.7, establishing Hong Kong's leading position in the world.

2. Product innovation meets the needs of retail investors

In March 2025, the first batch of leveraged and inverse products for individual stocks in Asia was listed, providing strategic investment tools for investors to trade international equity securities such as NVIDIA, Tesla, and Coinbase during the Asian trading session.

Shortly thereafter, the world's first Korean stock (Samsung Electronics) leveraged and inverse product was also listed in Hong Kong in May 2025, further expanding the Asian leveraged and inverse product market.

As can be seen from the market reaction, these products are particularly favored by retail investors in Asia. These products provide investors with investment opportunities for highly liquid stocks listed on major exchanges to double the positive and reverse daily stock price changes, helping them increase returns or hedge against falling market risks, making them an ideal tool for short-term tactical investments and investing using volatility. By the end of September 2025, the average daily turnover of all leveraged and inverse products listed in Hong Kong reached HK$3.6 billion, an increase of 51% over the previous year.

Furthermore, as investors pursue higher yield and manageable risk investment opportunities, ready subscription option ETFs have also become more and more popular with investors since they were first listed in February 2024. Interest rate cuts are imminent. In the face of an unstable macroeconomic environment, many investors who value yield products are interested in investing in high-dividend and subscription option ETFs. By the end of September 2025, the total asset management scale of the six pre-paid subscription option ETFs listed in Hong Kong reached HK$8.6 billion, an increase of more than 32 times over the previous year. The average daily turnover from the beginning to date has jumped nearly 77 times to HK$132.2 million.

On October 13, 2025, the total daily turnover of all prepaid subscription option ETFs listed in Hong Kong surpassed HK$1 billion for the first time, reflecting the increasing popularity of such products with strategies to enhance earnings under volatile market conditions.

3. Connectivity drives growth

As of the end of September 2025, the average daily turnover of ETFs traded through Shanghai and Shenzhen Stock Connect and Hong Kong Stock Connect reached HK$4.2 billion (up 128% year on year) and RMB 3.2 billion (up 142% year on year), respectively. In August 2025, the average daily turnover of Hong Kong Stock Connect ETFs reached HK$9.1 billion, a record high in a single month.

In the same period, there were 290 ETFs eligible for trading through the Shanghai-Shenzhen-Hong Kong Stock Connect, including 273 Mainland listed ETFs (Northbound Shanghai-Shenzhen Stock Connect) and 17 Hong Kong-listed ETFs (Southbound Hong Kong Stock Connect).

Cross-border ETF trading is expected to continue to be active as more ETFs are expected to be included in the Shanghai-Shenzhen-Hong Kong Stock Connect in November 2025.

4. Technology and biotechnology products are favored by investors

In the first three quarters of 2025, a total of 14 technology-themed ETFs were listed in Hong Kong. The total asset management scale reached HK$120.1 billion (up 102% year over year). The total daily turnover from the beginning to date was HK$7.4 billion (up 247% year over year), and the total net cash inflow was HK$29.1 billion. In terms of biotechnology, a total of 3 biotechnology-themed ETFs have been listed since the beginning of the year, with a total asset management scale of HK$3.4 billion, an increase of 123% over the end of September 2024. These biotech ETFs have brought in a net cash inflow of HK$1.3 billion this year.

5. Global connectivity continues to deepen

In February 2025, ETFs tracking the NASDAQ 100 index were listed on a mutual basis in Hong Kong, providing local investors with a channel to efficiently invest in large US companies and technology stocks during the Asian trading period. Subsequently, Hong Kong launched Asia's first Saudi Islamic State Bond ETF in May, enriching Hong Kong's range of fixed income products and strengthening the links between Hong Kong and the Middle East in financial markets. In September 2025, the Hong Kong Stock Exchange and the Abu Dhabi Stock Exchange signed a Memorandum of Cooperation to strengthen the market links between Hong Kong and the UAE. These results are based on the breakthrough move of incorporating ETFs into the Shanghai-Shenzhen-Hong Kong Stock Connect, consolidating Hong Kong's role as a channel to support cross-border capital flows and its growing influence in the ETF field.

6. Active ETFs are on the rise

Active ETFs will be the focus of the global market in 2025. Driven by multiple factors such as a strong rebound in the market, steady second-quarter performance of various companies, and an explosion in the technology sector, the capital inflow of active ETFs reached US$183 billion in the first half of 2025. Asset management companies are speeding up the launch of more proactive products in Hong Kong to meet investors' demand for outcome-driven and revenue-centered strategies.

As of the end of September 2025, there were 31 active ETFs listed on the Hong Kong Stock Exchange (26 at the end of 2024 and only 1 in June 2019), with a total market capitalization of approximately HK$23.7 billion, an increase of 143% over HK$9.8 billion in 2024. These products contributed an average daily turnover of approximately HK$232 million to the ETF market, an increase of 411% over HK$45.3 million in the same period last year.

Conclusions

The strong performance of the Hong Kong ETF market this year was mainly due to its long-term steady growth and continuous development, which is also the key to making Hong Kong a leading global ETF market. This trend will be a global focus of attention at the HKEx ETF Summit on October 21, 2025.