ETF Minds: Jean-François Mesnard-Sense on Hong Kong’s Rise as an ETF Innovation Hub

Jean-François Mesnard-Sense, Head of Exchange Traded Products (ETPs) at Hong Kong Exchanges and Clearing Limited (HKEX), joins us for the second edition of ETF Minds, our new series featuring influential voices from across the ETF ecosystem.

Jean-François shares his insights on the current momentum in Hong Kong’s ETF market, what’s fueling recent growth, and where investor demand is heading next.

From cross-border flows to product innovation, he offers a glimpse into the trends shaping Asia’s fast-evolving ETF landscape.

How would you describe the current state of the Hong Kong ETF market? What’s driving its recent growth?   

Hong Kong’s ETF market has experienced remarkable growth, with ETP ADT reaching HK$37.15 billion in the first seven months of 2025, increasing by 161% from the same period in 2024.   

In July, monthly ETP ADT reached HK$32.8 billion and Southbound (Mainland China investors accessing Hong Kong markets) ETF ADT (buy+sell) reached HK$2.5 billion.

This momentum is primarily driven by two key factors: the rise of AI-themed products and robust flows through the ETF Connect via Southbound trading. Notably, flagship HSTech ETPs, including leveraged and inverse (L&I) products, have significantly contributed to this uptick.   

Additionally, product innovation continues to fuel market dynamism, with income-focused ETFs — such as money market, high dividend, and covered call strategies — gaining traction.

Furthermore, Hong Kong has led Asia in launching virtual asset ETPs and Single-Stock Leveraged & Inverse (L&I) products in recent years, reflecting a shift toward thematic and income-enhancing strategies.

These developments position Hong Kong as Asia’s leading hub for ETF innovation and growth.  

What types of ETF strategies are gaining traction in the region given today’s volatile market environment, especially with ongoing trade tensions and geopolitical uncertainty?   

Amid today’s volatile market environment, we are seeing growing investor interest in income-generating ETF strategies, alongside continued demand for Gold ETPs and L&I products.  

For example, investors are paying more attention to income ETFs as they seek more stable cash flows in uncertain market conditions. These include strategies such as covered call ETFs, which aim to deliver regular income by capturing option premiums.

Following the launch of two new Covered Call ETFs earlier this year, there are now four Covered Call ETFs listed in Hong Kong. Their combined AUM reached HK$4.9 billion and YTD ADT was HK$60.4 million as of 31 July 2025.

Gold ETPs have also demonstrated strong defensive appeal, posting a YTD ADT of HK$113 million as of 31 July 2025, marking a 190% year-on-year increase.  

Meanwhile, our L&I product suite expanded with the launch of Single Stock L&I Products on 24 March 2025, making HKEX the first exchange in Asia to offer such instruments. This milestone reinforces our commitment to product innovation and diversification within the ETP ecosystem.

Collectively, all L&I products have recorded a YTD ADT of HK$3.9 billion as of 31 July 2025, up 67% YoY, reflecting strong demand for tactical trading tools. 

What ETF strategies or structures that are popular in the U.S. or Europe do you think are still missing in Hong Kong and could meet investor demand?

We are pleased to see the significant growth of ETFs globally, and we will also be looking at the success stories in other markets in launching new product types and enhancing our market microstructure.

HKEX is actively engaging with issuers to explore launching a broader range of outcome-oriented ETFs, multi-asset ETFs, and more sophisticated Active ETF structures, supporting investors’ needs to diversify their portfolios.

Are there any regulatory hurdles or policy changes needed to accelerate ETF innovation in Hong Kong?

We are pleased to be working with our regulator to continuously enhance Hong Kong ETF market’s regulatory regime and market microstructure to support ETF product innovations.

For example, Hong Kong was the first market in Asia to list L&I products and first Single-Stock L&I products.  We are also one of the first markets in the world to launch Virtual Asset ETFs, Spot Virtual Asset and inverse ETPs, further enriching the city’s role as a Virtual Asset centre.

The inclusion of ETFs in Stock Connect in 2022, and the expanded eligibility criteria in 2024, have both significantly boosted cross-border investment between Mainland and Hong Kong.

What initiatives is HKEX working on to improve ETF liquidity, investor education, or the overall trading experience? 

HKEX is actively driving several initiatives to further enhance ETF liquidity, investor education, and the overall trading experience.  

Liquidity in our ETF market is supported by a diverse investor base, including international participants and Mainland Chinese investors via Southbound Stock Connect—as well as a strong network of market makers that ensures tighter bid-ask spreads and better execution quality.  

To strengthen investor education, HKEX continues to launch digital campaigns covering various products and market structure enhancements. The annual HKEX ETF Summit brings together market experts, such as asset owners, liquidity providers, and issuers, who share practical strategies to help investors optimize portfolios and navigate market dynamics.  

In terms of trading experience, since 2024, our Severe Weather Trading arrangements for the securities and derivatives markets have ensured that Hong Kong’s markets remain accessible during adverse weather conditions.

This initiative enables local, Mainland, and international investors to respond to market developments during Hong Kong trading hours, ensuring that opportunities are captured without disruption.

What kind of support does HKEX offer to asset managers or firms looking to launch ETFs in Hong Kong?

HKEX provides a range of support to asset managers looking to launch ETFs in Hong Kong.

We offer a simplified and efficient application process to facilitate the listing of ETFs, ensuring a smooth and quick onboarding experience as well as assistance in navigating the regulatory requirements set by the SFC.

The deep pool of liquidity in the Hong Kong market — supported by a broad investor base that includes institutional and retail investors from Mainland China (through the ETF Connect program) and other international markets — enables ETF issuers to list a diverse range of products tailored to different investor needs.  

HKEX also collaborates with ETF issuers to promote Hong Kong’s ETF market through investor education, marketing campaigns, and industry events and this comprehensive support framework fosters a favorable environment for issuers to grow their ETF business in Hong Kong

Looking ahead, what’s your long-term vision for Hong Kong’s ETF market over the next few years?

We will continue to focus on solidifying our role as Asia’s leading ETP hub by enhancing our ETF ecosystem and connecting liquidity with opportunities. This includes expanding our product ecosystem, enhancing ETP market liquidity, driving retail participation, and strengthening trading mechanisms.

The overarching vision is to position Hong Kong a globally competitive and liquid ETP marketplace, serving as a nexus for regional and international investors, and adapting to evolving market trends such as virtual assets, thematic strategies, and cross-border trading.

About Jean-François Mesnard-Sense

As Head of Exchange Traded Products (ETPs), Jean-François leads the team responsible for the development of HKEX’s Exchange Traded Funds (ETFs) and Leveraged and Inverse (L&I) products. He also plays a pivotal role in driving innovation, including the launch of Asia’s first Single Stock L&I Products and the digitisation of the ETF primary market. He is also dedicated to providing thought leadership and investor education.
Jean-François has more than a decade of experience in the ETF industry. Prior to HKEX, Jean-François was at State Street Global Advisors, where he was most recently Head of ETF Capital Markets, APAC, managing the secondary and primary market activity of SPDR ETFs in the Asia Pacific region with the purpose of improving user experience whilst trading SPDR ETFs.
Prior to joining State Street Global Advisors, Jean-François worked at Deutsche Asset Management in London. As an ETF Capital Markets Specialist, he was providing ETF trading and execution intelligence to a broad client base across Europe, South America and Asia Pacific and managing relationship with exchanges and market maker trading desks with responsibility for France and Romandy.
Jean-François holds a MSc in International Finance from HEC Paris and a MSc in Engineering from Ecole Centrale De Lille.

Please note this article is for information purposes only and does not in any way constitute investment advice. It is essential that you seek advice from a registered financial professional prior to making any investment decision.