Hang Seng Investment Management has launched a high-dividend exchange-traded fund ( ETF ).

The Hang Seng High Dividend 30 Index ETF ( stock code: 3466 ) offers a simple and efficient way for investors to generate passive income through consistent monthly dividend distributions, while also offering the potential for capital appreciation in today's complex market environment, the company says.

The ETF tracks the Hang Seng High Dividend 30 Index, which comprises 30 high dividend-paying securities selected from the Hang Seng Large-Mid Cap ( Investable ) Index.

The index has recorded an average yield of 7.41% year-to-date, and it is consistently higher than that delivered by the broad Hang Seng Composite Index in past five years.

According to Hang Seng Investment, the offering employs a prudent index constituent selection process, which ensures liquidity and efficient tracking, avoids large price movements, supports sustainable payouts, and prevents yield traps. ( A yield trap is a rise in dividend yield to a high level, caused by the large drop in stock price due to worsened company fundamentals, instead of an increase in dividend payout. )

Rosita Lee, director and chief executive officer of Hang Seng Investment, says the ETF is “an attractive opportunity for individual investors, especially those who are retired or looking for reliable passive income, while enhancing the defensive nature of their investment portfolio”.

“This latest addition reinforces our dedication to contributing to the continuous development and vibrancy of Hong Kong's ETF landscape,” she adds.

The Hang Seng High Dividend 30 Index ETF started trading on the Hong Kong Stock Exchange on April 7. The issue price is HK$15 ( US$1.93 ) per unit with a board lot size of 400 units.

The management fee is up to 0.55% per annum, with estimated ongoing charges per year of 0.85% and an estimated annual tracking difference of -0.97%.

The ETF also offers unlisted class units for wholesale distribution.