Hang Seng Indexes proposes sales growth screen in HSTECH overhaul

The screen would fill 10 of 50 proposed constituent slots with companies ranked by sales growth.

Hang Seng Indexes Company (HSIL) has launched a market consultation proposing changes to the Hang Seng TECH Index (HSTECH). It includes a new selection mechanism that would admit high-growth, smaller-cap technology firms into a benchmark that currently selects only the 30 largest names by market value.

The proposal is driven in part by a growth gap in the existing index. Current HSTECH constituents have a median sales growth of 13.8%, whilst non-HSTECH technology companies with market values between $25b and $50b post median growth of 19.3%. Those below $25b come in at 19.6%.

The proposed fix is a two-stream selection mechanism. A primary stream would select the top 40 eligible constituents by market value, expanding from the current 30. A complementary stream would then fill the remaining 10 slots with the highest-ranked companies by trailing 12-month sales growth not already selected in the first stream. Total constituents would rise from 30 to 50.

Companies added through the sales growth stream have a median sales growth rate of 82%, compared with 13.8% for existing constituents and 23.4% for those entering through the expanded market value stream.

That inclusion comes with a trade-off in index weight. Sales growth stream additions would account for just 2.4% of index weight, against 9.1% for market value stream additions, with a median 12-month average market value of $29.1b, roughly half that of companies entering through the market value route. Top 10 concentration would ease from 70.6% to 66.3%, and the smallest constituent in the index would shrink from $28b to $7b.

Thematic structure overhaul

The six existing Tech Themes would be refined and reorganised as Digital Platforms & Solutions, Artificial Intelligence, Advanced Hardware, Robotics & Automation, Cloud, and Frontier Technology, with sub-themes expanding from 16 to 24.

Artificial Intelligence is elevated from a sub-theme under the existing "Autonomous" category to a standalone theme. 

A new Frontier Technology theme would be introduced covering quantum computing, brain-computer interface, aerospace and satellite technology, advanced food technology, and advanced materials. 

Sector classification requirements would be removed entirely, broadening the eligible universe beyond the five industry classifications currently applied.

The index's growing scale is part of what is driving the review. Assets under management in products tracking HSTECH reached US$40.4b as of June 2026, up from US$1.5b at launch in 2020. HSIL has responded by tightening the eligible universe to constituents of the Hang Seng Composite LargeCap & MidCap Index to preserve investability at that scale.

Any changes remain subject to the final decision of the HSI Advisory Committee. If approved, they are expected to be announced by end-September 2026 and take effect at the December 2026 index rebalancing. Interested parties may submit responses to [email protected] by 18 September 2026.