Citi has been appointed by Hong Kong-based Sun Life Asset Management as the trustee, custodian, fund administration and transfer agent for the firm’s new environmental, social and governance (ESG) index fund.
The new ESG fund is the first for Sun Life and tracks the Hang Seng ESG 50 Index, the top 50 Hong Kong-listed companies that perform well on ESG factors based on the Hong Kong Quality Assurance Agency’s framework.
“We are delighted to be working with Citi following the launch of our first locally registered fund in Hong Kong,” said Stanley Ngan, CEO of Sun Life Asset Management (HK) Limited. “Citi has a good understanding of our needs, offers high quality service, has a robust platform, and is equally committed to sustainability.”
Sun Life’s fund is one of a growing number of ESG funds approved by the Hong Kong Securities and Futures Commission (SFC), as it strives to build a hub for green and sustainable finance in the region.
“We are proud to have been selected to provide complete trustee, custody and fund administration support to Sun Life in delivering the first Hang Seng ESG 50 Index fund to investors in the Hong Kong market,” added Stewart Aldcroft, chairman of Cititrust Limited. “Across Asia-Pacific, we are witnessing steady growth in ESG funds, and I believe Citi is well positioned to support such funds given our focus on ESG.”
Inflows into ESG and responsible investment funds have almost quadrupled in comparison to last year. According to figures from the Investment Association, ESG investment funds saw net flows of £7.1 billion in the nine months of the year. In September alone, responsible investment funds recorded net inflows of nearly £1 billion, and total assets in ESG portfolios stood at £40 billion.
Hong Kong is attempting to capitalise on this momentum, and has set out a roadmap to ramp up its ESG efforts. However, in a recent study published in June by the Hong Kong Investment Funds Association (HKIFA) and KPMG, it said greater collaboration between industry stakeholders is needed to create clear ESG standards for Hong Kong.
Meanwhile for Citi, the mandate with Sun Life is the latest for the US bank in Hong Kong as it looks to bolster its position within the city’s fund servicing market.
Last month, it was appointed by Samsung Asset Management in Hong Kong to provide securities services for the country’s first real estate investment trust (REITs) exchange traded fund (ETF). The new ETF is the first of its kind in Hong Kong, and invests in a selection of regional Asia-Pacific REITs.
Citi has also implemented bot technology for its securities services clients in Hong Kong, offering real-time processing for matching and settlement of their trades.