HONG KONG–(BUSINESS WIRE)–Hong Kong’s largest leveraged and inverse products (L&I products) issuer1, CSOP Asset Management Limited (“CSOP”) is proud to announce the listing of the CSOP CSI 300 Index Daily (2X) Leveraged Product (ticker:7233.HK) and CSOP CSI 300 Index Daily (-1X) Inverse Product (ticker:7333.HK) on the Hong Kong Stock Exchange on 27 July , 2020. 7233.HK and 7333.HK will apply a swap-based synthetic replication strategy to achieve the respective investment objectives. 7233.HK will provide investment results closely corresponding to twice the daily performance of the CSI 300 Index while 7333.HK will provide investment results closely corresponding to inverse of the daily performance of the CSI 300 Index, both excluding costs and expenses. Both priced at HKD 7, 7233.HK and 7333.HK will trade with lot size of 100, and the entry investment is approximately HKD 700. As the first batch of China A-shares L&I products in Hong Kong, 7233.HK and 7333.HK have attracted about USD270 million initial investment upon inception in total.
China A-shares is the second largest equity market in the world after US equity market with size of RMB 64.9 trillion. Whereas, the relevant financial derivative tools in China offshore market are limited which refrained investors from investing into China A-shares. Though there are China A-shares L&I products listed in the US and other Asian regions, trading time difference and market accessibility constrained the investment to these China A-shares L&I products. However, the introduction of China A-shares L&I products in Hong Kong by CSOP will enable global investors to gain leveraged performance as well as to hedge the downside risks of China A-shares in an easy and efficient manner.
The realization of China A-shares L&I investment objective will be based on swaps. As the first issuer having introduced swaps to Hong Kong listed L&I products, CSOP has already gained edges on managing the swap-based China A-shares L&I products. Moreover, as the dominant leader in HK L&I market with more than 97%2 and 87%3 market shares in terms of average daily turnover and asset under management respectively, CSOP was well recognized by investors as a reliable brand for Hong Kong listed L&I products.
Christina Choi, Investment Products Executive Director of SFC, commented: “The A-shares L&I products would help to meet the growing demands from investors on hedging and risk management tools for A-shares. The listing of A-shares L&I products in Hong Kong is an important milestone of the HK ETF industry. “4
Lu Suyuan, General Manager of China Securities Index Co., Ltd., said: “As the index company to jointly issue the first batch of A-shares L&I products listed in Hong Kong, we believe that the listing of the products will further enrich A-shares index products in the global market, and contribute to the long-term healthy development of A-shares market with a positive effect.”5
Ms.Ding Chen, CEO of CSOP commented “I am very confident on the listing of the China A-shares L&I products given the sizable market demand and expecting the size of this China A-shares L&I products class to exceed USD 3 billion in the coming 1-2 years, which is 2-3 times of the existing HSI L&I products’ size.” Ms. Melody He, Head of Sales and Product Strategy of CSOP said, “CSI 300 Index is our first China A-shares L&I products’ underlying. Shortly after 7233.HK and 7333.HK, more China A-shares indices L&I products will be launched to diversify China A-shares L&I offerings. In turn, we expect the enriched offshore market will attract more global investors to participate in China A-shares, and sustain the healthy development of China A-shares.”
IMPORTANT: Investment involves risks. Investment value may rise or fall. Past performance information presented is not indicative of future performance. Investors should refer to the Prospectus and the Product Key Facts Statement for further details, including product features and risk factors. Investors should not base on this material alone to make investment decisions.
CSOP CSI 300 Index Daily (2x) Leveraged Product and CSOP CSI 300 Index Daily (-1x) Inverse Product (collectively, the “Products”) are sub-funds of CSOP Leveraged and Inverse Series II, an umbrella unit trust established under Hong Kong law. Units of the Products (the “Units”) are traded in HKD on The Stock Exchange of Hong Kong Limited (the “SEHK”) like stocks. They are swap-based products with an investment objective to provide Daily investment results, before fees and expenses, which closely correspond to twice (2x) / the inverse (-1x) of the Daily performance of the CSI 300 Index (the “Index”) respectively. The Products are denominated in RMB. Creations and redemptions are in RMB only.
- The Products are derivative products and are not suitable for all investors. There is no guarantee of the repayment of principal. Therefore your investment in the Products may suffer substantial or total losses.
- The Products are not intended for holding longer than one day as the performance of the Products over a period longer than one day will very likely differ in amount and possibly direction from the leveraged / inverse performance (as the case may be) of the Index over that same period. The effect of compounding becomes more pronounced on the Products’ performance as the Index experiences volatility.
- The Manager seeks to mitigate the counterparty risks by fully collateralising all Swap Counterparty exposures. There is a risk that the value of the collateral may be substantially lower than the amount secured and so the Products may suffer significant losses. Any loss would result in a reduction in the NAV of the Products and impair the ability of the Products to achieve their respective investment objectives.
- The Products may suffer significant losses if the Swap Counterparty fails to perform its obligations under the Swap. The value of the collateral assets may be affected by market events and may diverge substantially from the leveraged / inverse performance (as the case may be) of the Index, which may cause the Products’ exposure to the Swap Counterparty to be under-collateralised and therefore result in significant losses.
- The Index constituents are companies listed on the Shanghai Stock Exchange or the Shenzhen Stock Exchange which is an emerging market. Investments of the Products may involve increased risks and special considerations not typically associated with an investment in more developed markets, such as liquidity risks, currency risks/control, political and economic uncertainties, legal and taxation risks, settlement risks, custody risk and the likelihood of a high degree of volatility.
- The trading price of the Units on the SEHK is driven by market factors such as the demand and supply of the Units. Units may trade at a substantial premium or discount to the NAV.
- Prices of the Products may be more volatile than conventional ETFs because of the daily rebalancing activities.
Please note that the above listed investment risks are not exhaustive and investors should read the Prospectus in detail before making any investment decision.
For further details, including the risk factors, please refer to the respective offering documents.
About CSOP Asset Management Limited
CSOP Asset Management Limited (“CSOP”) was founded in 2008 as the first offshore asset manager set up by a regulated asset management company in China. With a dedicated focus on China investing, CSOP manages public and private funds, as well as providing investment advisory services to Asian and global investors. In addition, CSOP is best known as an ETF leader in Asia. As of 31 May 2020, CSOP had US$ 7.0 billion in assets under management.
This material has not been reviewed by the Securities and Futures Commission.
Issuer: CSOP Asset Management Limited
Index Provider Disclaimer
The CSI 300 Index (“Index”) is compiled and calculated by China Securities Index Co., Ltd. (“CSI”). All copyright in the Index values and constituent list vest in CSI. CSI will apply all necessary means to ensure the accuracy of the Index. However, CSI does not guarantee its instantaneity, completeness or accuracy, nor shall it be liable (whether in negligence or otherwise) to any person for any error in the Index or under any obligation to advise any person of any error therein.
1 Data source: Bloomberg, calculation based on all Hong Kong listed L&I products data, as of June 30, 2020.
2 Data source: Bloomberg, January 1, 2020-June 30,2020
3 Data source: Bloomberg, as of June 30, 2020
4 Source: SFC
5 Source: China Securities Index Co., Ltd.
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