Enhanced Investment Products Limited launches smart-beta ETF which utilises CLSA’S Growth At a Reasonable Yield (GARY) Strategy

Hong Kong


Hong Kong, 11 November 2015: Enhanced Investment Products Limited’s (EIP) exchange traded funds (ETF) business today launches the XIE Shares CLSA GARY ETF (The GARY ETF) on the Hong Kong Stock Exchange. The GARY ETF (Ticker: 3102) is a rules-based, smart-beta ETF that provides exposure to globally listed, Asia Pacific (ex-Japan) stocks with strong dividend yield and growth.

The GARY ETF tracks CLSA GARY Net Total Return Index (the Index), a smart-beta, rules-based index focused on Growth At a Reasonable Yield or GARY. The dual-focus on dividend yield and earnings growth improves the all-weather capabilities of the multi-layered Index by providing additional filters that exclude stocks with unsustainable dividends.

The Index currently comprises 65 constituents which derive more than 80% of their revenue from the Asia Pacific region (ex-Japan). This excludes A-shares listed on the Shenzhen and Shanghai Stock Exchanges. According to CLSA’s rigorous GARY strategy, a constituent company must pass through multiple quantitative screens relating to dividend yield, growth, quality and sustainability of yield, to be included in the Index.

The GARY ETF meets increasing investor demand for more innovative ETF products which includes smart-beta, a hybrid rules-based form of active and passive management, which stands at more than US$330bn AUM globally with over 700 listed products*. According to ETF.com, smart-beta assets in the US have grown more than five times since 2010.

EIP CEO Tobias Bland says: “EIP is very pleased to launch The GARY ETF which provides investors a unique opportunity to capture growth and yield of globally listed stocks in the Asia-Pacific region (ex-Japan). The GARY ETF is a product for both retail and institutional investors who can benefit from the award-winning analysis of CLSA’s Quant Team and the depth of expertise of the Index provider, CLSA. The GARY ETF is another milestone in the evolution of exchange traded funds in Hong Kong.”

CLSA Head of Microstrategy Desh Peramunetilleke comments: “CLSA’s GARY strategy has been our best performing dividend theme over the past decade. While Asia has been largely viewed as an oasis of growth in the past, dividends are increasingly a significant portion of a company’s total return. The dual mandate of yield and growth of The Gary ETF exploits this sweet spot in Asia through a well-diversified portfolio based on an extensive stock screening process, while neutralising country and stock-specific risk.”

CLSA Global Head of Sales Xen Gladstone comments: “Partnering with EIP allows CLSA to offer its clients a more comprehensive range of highly-liquid products. We believe that by leveraging CLSA’s award-winning quantitative research, The GARY ETF will be a significant addition to investors’ portfolios.”

The GARY ETF is the second ETF to launch following CLSA’s investment into EIP’s XIE Shares business in August 2014. In April 2015, XIE Shares FTSE Chimerica ETF launched as the first ETF in Asia to provide pure-play, real-time access to Chinese companies listed in the US, the majority of which are set to be included in the MSCI China and Emerging Market Index in November 2015.