The Strategic Case for Exposure to Hong Kong's Tech Sector via the HKEX Tech 100 Index

In an era where innovation is the cornerstone of economic growth, investors seeking exposure to China's rapidly evolving technology landscape face a critical question: How can they balance diversification, accessibility, and scalability while capitalizing on structural tailwinds? The answer may lie in the HKEX Tech 100 Index, a newly launched benchmark that encapsulates the dynamism of Hong Kong's innovation-driven economy. As China's tech sector continues to redefine global markets, this index offers a compelling vehicle for investors to participate in a structural shift.

A Diversified Basket of High-Growth Sectors

The HKEX Tech 100 Index is designed to track the performance of 100 of the largest Hong Kong-listed companies across six technology-focused themes: Artificial Intelligence, Biotech & Pharmaceutical, Electric Vehicles & Smart Driving, Information Technology, Internet, and Robotics according to the index launch announcement. This broad-based composition ensures exposure to a spectrum of innovation-driven industries, mitigating the risks associated with overconcentration in a single sector. For instance, the biotech sub-sector-represented in the index-has already demonstrated extraordinary momentum, with the Hang Seng Biotech Index surging 104.6% year-to-date as of September 2025. Such performance underscores the potential for cross-sector synergy within the index.

The index's methodology further enhances its appeal. It is a freefloat-adjusted market capitalization-weighted benchmark, ensuring that larger, more liquid companies dominate the weighting while still allowing smaller innovators to contribute meaningfully to returns according to HSI's index description. This structure aligns with the principles of scalability, enabling investors to access both established leaders and emerging disruptors in the tech ecosystem.

Accessibility and Liquidity for Global and Mainland Investors

One of the HKEX Tech 100 Index's most compelling features is its integration with Hong Kong's Stock Connect Southbound program. This mechanism allows global and mainland Chinese investors to trade eligible constituents seamlessly, bridging the gap between international capital and China's domestic innovation hubs. For investors who have historically struggled with regulatory or logistical barriers to accessing mainland markets, the index provides a streamlined, liquid alternative.

This accessibility is further amplified by the explosive growth of Hong Kong's ETP (Exchange-Traded Product) market in 2025. The city has become the world's third-largest ETP market by turnover, with tech-themed ETFs alone amassing HK$120.1 billion in assets under management by September 2025. The proliferation of index-linked products, including the upcoming launch of HSBIO Futures, signals robust institutional and retail demand for structured exposure to Hong Kong's tech sector according to market analysis.

Structural Tailwinds and Policy Support

The HKEX Tech 100 Index is not merely a reflection of current market conditions-it is a forward-looking instrument aligned with China's long-term innovation agenda. The index's launch coincides with a record-breaking year for Hong Kong's IPO market, which raised HK$280.0 billion in 2025, a 218% year-over-year increase. This surge in fundraising activity highlights Hong Kong's growing role as a global hub for tech innovation, supported by strategic government initiatives such as "Made in China 2025".

Moreover, the index's focus on sectors like AI, EVs, and robotics aligns with global megatrends that are reshaping industries worldwide. For example, the electric vehicle and smart driving segment within the index benefits from both domestic demand and export-oriented growth, as Chinese automakers expand their footprint in Europe and Southeast Asia. Similarly, the AI and robotics sectors are poised to capitalize on automation-driven productivity gains across manufacturing and services.

A Benchmark for the Future

While the HKEX Tech 100 Index is relatively new, its design and performance to date suggest it is well-positioned to become a cornerstone of China's innovation investment landscape. Its broad sector coverage, liquidity-enhancing features, and alignment with structural growth drivers make it a superior alternative to narrower benchmarks like the Hang Seng TECH Index which focuses on 30 companies. For investors seeking to hedge against sector-specific volatility while capturing the upside of China's tech revolution, the HKEX Tech 100 Index offers a balanced, scalable solution.

In conclusion, the strategic case for exposure to Hong Kong's tech sector via the HKEX Tech 100 Index is underpinned by three pillars: diversification across high-growth sectors, accessibility through global and mainland capital channels, and alignment with China's innovation-led economic transformation. As the index matures and gains traction, it is likely to become an essential tool for investors aiming to navigate-and profit from-the next phase of China's technological ascent.