CITIC Securities | What are the characteristics of Hong Kong gold ETFs compared to domestic ones?

Text｜Yao Ziwei, Miao Jinjin

The Hong Kong Gold ETF market has entered a period of structural growth, forming a diversified product matrix of physical, leveraged, and equity-based products. Physical gold ETFs track international gold prices with 100% physical holdings, offering strong hedging properties and supporting physical delivery; leveraged ETFs amplify returns through gold futures; equity ETFs leverage the profit margin effect of mining companies to capture the impact of gold price fluctuations on mining profits. Additionally, gold ETFs in China, the US, and Hong Kong show structural differences, which are important considerations for cross-market allocation.

Overview of the Gold ETF Market

The global gold market is undergoing a profound paradigm shift. Overseas gold ETFs started early, are highly mature, and exhibit a significant concentration of leading players; China’s gold ETF market started later but has developed rapidly, with an increasingly institutional investor base. In the past two years, capital inflows into Hong Kong’s gold ETFs have concentrated on leading and innovative products.

Hong Kong Gold ETF Overview

Hong Kong’s gold-themed ETF market has built a diversified product matrix covering spot, derivatives, and industry chain stocks. Physical gold ETFs, represented by Value Gold ETF and Hang Seng Gold ETF, support physical delivery, offering high security and transparency. Among them, Hang Seng Gold ETF was the first to launch a blockchain-based tokenized category. Leveraged gold ETFs, represented by Southern Eastgold Gold Futures (2x), provide double the daily return of the benchmark index through gold futures contracts. Equity ETFs, such as E Fund Gold Mining ETF, invest in global gold mining companies’ stocks.

Physical Gold Delivery Mechanism: The core delivery rules for physical gold ETFs in Hong Kong are generally consistent, requiring LBMA-standard gold bars. Only authorized securities firms can participate in physical redemption and delivery, with a six-party coordination process. There are notable differences among the three major physical gold ETFs in Hong Kong in terms of custody locations, settlement cycles, and participant thresholds.

Comparison of Domestic and International Gold ETFs

There are significant differences among gold ETFs in China, the US, and Hong Kong: the US market offers the most comprehensive product categories and highest liquidity but is constrained by capital gains tax; China’s domestic gold ETFs have experienced explosive growth but offer fewer product types and strictly prohibit on-exchange leverage; Hong Kong provides convenient extraction of LBMA gold bars, explores daily 2x leverage tools, and has a global mining company ETF on the stock side, forming unique advantages in product innovation and cross-border allocation.

This report is for investment reference only. Past performance of funds does not indicate future results and does not guarantee investment returns or constitute investment advice. Some materials are compiled from public news reports and may contain inaccuracies. Data statistics in the text are from third-party databases; different databases have different update cycles, and data completeness and extraction times are related, which may lead to inaccuracies. Fund position estimates are mainly based on model calculations, with reasonable assumptions about the market and related transactions, but such assumptions may cause the conclusions derived from the model to not fully reflect actual conditions, potentially leading to deviations. Additionally, the data sources may have minor missing values, slightly increasing statistical bias. The choice of historical data intervals also impacts the results.

Securities Research Report Title: “What Are the Characteristics of Hong Kong Gold ETFs Compared to Domestic Ones?”

Publication Date: March 23, 2026

Publishing Institution: CITIC Securities Co., Ltd.

Analysts:

Yao Ziwei SAC No.: S1440524040001

Miao Jinjin SAC No.: S1440525080003

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