The index includes companies from the Mainland with a secondary listing in Hong Kong.
The Hang Seng Index has made rule changes on 18 May to allow it to incorporate Chinese internet giants Alibaba, Xiaomi and Meituan Dianping, a move set to shake up the composition of the 50-year-old index.
The benchmark in the Asian financial hub is dominated by financial services institutions and conglomerates, such as HSBC and CK Hutchison.
“There is a perception that local indices like Hang Seng aren’t necessarily reflective of the opportunity set available out there,” said Michael Lai, China equities portfolio manager at Franklin Templeton.
“(Inclusion) would be a reflection of how the Chinese markets, companies have developed.”
Companies from Greater China with a secondary listing in Hong Kong and those with two classes of shares carrying different voting rights will be included in the index, starting from August, with a weighting cap of 5%, the index provider said in a statement.
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