HONG KONG- One of Hong Kong's largest exchange-traded funds (ETFs) will resume investing in stocks denied to Americans by U.S. President Donald Trump in an executive order that has caused widespread confusion among asset managers.

A spokeswoman from the State Street Corp unit that manages the Tracker Fund of Hong Kong (TraHK) said the ETF, which tracks the benchmark Hang Seng Index .HSI , is able to invest in the securities because neither it nor manager State Street Global Advisors Asia are "U.S. persons".

In an exchange filing on Wednesday TraHK said it would resume buying the shares on Thursday.

This marked a reversal from an exchange filing three days earlier, in which the fund said it would no longer invest in sanctioned securities set out in a list by the U.S. Department of Treasury's Office of Foreign Assets Control (OFAC).

OFAC's list is linked to the November order banning Americans from investing in Chinese securities that the U.S. considers to have links with China's military, with effect from Monday.

Hong Kong-listed shares of telecoms companies China Mobile 0941.HK and China Unicom are on the OFAC list and constituents of the Hang Seng Index.

The New York Stock Exchange made U-turns twice in seven days last week because of uncertainty whether U.S.-listed shares in those two companies and China Telecom 0728.HK were covered by the executive order.

It first said it would delist the American Depositary Receipts of the three entities, then said it would keep them listed, citing an OFAC clarification, before finally confirming it would delist them. 

The initial decision by TraHK to stop investing in the banned securities sparked anger from some investors, who feared the fund would be unable to track the benchmark effectively.

Some called for State Street to be replaced as manager by a company that could invest in the stocks.

Hong Kong leader Carrie Lam, meanwhile, told a news conference on Tuesday that the executive order reflected a kind of U.S. "hegemony".

TraHK, which is popular with Hong Kong retail investors and pension funds, was set up in 1998 by the Hong Kong government to dispose of shares it had bought in market interventions during the Asian financial crisis. It listed in 1999.

(Reporting by Alun John Additional reporting by Clare Jim Editing by Chizu Nomiyama and David Goodman) ((Alun.John@thomsonreuters.com; +852-28415827;))