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CSOP NASDAQ-100 Index Daily (2x) Leveraged Product (stock code: 7266.HK) to List on the HKEX

2020-05-14 17:15
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HONG KONG--()--The CSOP NASDAQ-100 Index Daily (2x) Leveraged Product (stock code: 7266.HK) will be listed on the Hong Kong Stock Exchange on 15th May, 2020 (hereinafter referred to as "7266.HK") to pair with CSOP NASDAQ-100 Index Daily (-2x) Inverse Product (Stock code: 7568.HK), helping investors capture U.S. stocks’ two-way movement and seize investment opportunities brought by intensifying market volatility. The listing price of 7266.HK is around HK$ 8/share with trading lot of 100, and the entry investment is approximately HKD 800. 7266.HK aims to provide two times return of the daily performance of the NASDAQ-100 Index (before fees and expenses) by investing in the E-Mini NASDAQ-100 Futures. Because of the nearly 24-hour tradability of the E-mini NASDAQ-100 Index Futures, the price of 7266.HK will move dynamically during the Hong Kong trading hours despite the trading time difference between the Hong Kong and U.S. stock markets, which may induce price insensitivity. In the current volatile market circumstances, 7266.HK has attracted an initial investment of $5 million U.S. dollars before listing.

The Nasdaq-100 (NDX) is known as one of the world’s preeminent large-cap growth index. It includes 100 of the largest U.S and international non-financial companies listed on the Nasdaq Stock Market based on market capitalization. Featuring the world's most innovative and prestigious technology companies, the Nasdaq-100 index is universally deemed to define modern day industrials.

In the beginning few months of 2020, the market experienced extreme turmoil triggered by COVID-19 outbreak. Nasdaq-100 index tumbled from highest of 9718.72 on 02/19/2020 to lowest of 6994.29 on 03/20/2020, down more than 28% within five weeks, a downturn rarely seen in history. The 30-Day volatility of Nasdaq-100 index was exaggerated from 14.66 on 02/19/2020 to 86.68 on 04/06/2020 with largest single day swing as large as -12.19% on 03/16/2020. Shortly after the huge sell-off, investor optimism about a possible turning point in the battle against Covid-19 as well as the QE policy announcement by Fed fueled a NASDAQ-100 index rebound, and it moved up 26% to 8832.41 from its lowest point, beginning a new upward trajectory on 04/07/2020. We expect market volatilities to persist among the uncertainties especially in post epidemic time. Therefore, CSOP Asset Management launched a 7266.HK to supplement with 7568.HK as a pair of simple and transparent investment tools to help investors seize the two-way investment opportunities brought by escalated market volatility.1

Ms. Melody He, Head of Sales and Product Strategy of CSOP Asset Management said, “As the leader of leveraged & product issuer in Hong Kong, CSOP Asset Management took up more than 90% market shares of Hong Kong L&I market in terms of size and turnover. Having successfully launched 7568.HK to help investors hedge the downward risks of Nasdaq-100 index in 2019 September, CSOP brought the 7266.HK to enable investors to deploy their trading strategies in a more diverse way, especially under the current marketing situation with intensifying volatility.”

“The Nasdaq-100 has a proven history of growth, impact and performance for investors who are keen to capture the potential of the world’s most innovative companies,” said Robert Hughes, Vice President and Head of Index and Advisory Services for Nasdaq Global Indexes. “Our work with CSOP is vital to bringing this opportunity to the APAC region. CSOP has a wealth of experience and expertise in serving the regional market. We look forward to working with them closely to best serve the investors in this part of the world.”2

-End-

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 NASDAQ-100 Index Daily (2x) Leveraged Product (the “Product”) is a sub-fund of CSOP Leveraged and Inverse Series II, an umbrella unit trust established under Hong Kong law. Units of the Product (the “Units”) are traded in HKD on The Stock Exchange of Hong Kong Limited (the “SEHK”) like stocks. It is a futures-based product which invests directly in the nearest quarter E-Mini NASDAQ-100 Futures (“E-mini NASDAQ-100 Futures”) which are traded on the Chicago Mercantile Exchange (“CME”) so as to give the Product twice (2x) the Daily performance of the Index. The E-mini NASDAQ-100 Futures offer liquid benchmark contracts to manage exposure to the constituents of the Index. It is denominated in USD. Creations and redemptions are in USD only.
  • The Product is a derivative product and is not suitable for all investors. There is no guarantee of the repayment of principal. Therefore your investment in the Product may suffer substantial or total losses.
  • The Product will utilise leverage to achieve a Daily return equivalent to twice (2x) the return of the Index. Both gains and losses will be magnified. The risk of loss resulting from an investment in the Product in certain circumstances including a bear market will be substantially more than a fund that does not employ leverage.
  • The Product is not intended for holding longer than one day as the performance of the Product over a period longer than one day will very likely differ in amount and possibly direction from the leveraged performance of the Index over that same period (e.g. the loss may be more than twice the fall in the Index). The effect of compounding becomes more pronounced on the Product’s performance as the Index experiences volatility. With higher Index volatility, the deviation of the Product’s performance from the leveraged performance of the Index will increase, and the performance of the Product will generally be adversely affected. As a result of Daily rebalancing, the Index’s volatility and the effects of compounding of each day’s return over time, it is even possible that the Product will lose money over time while the Index’s performance increases or is flat.
  • Investment in futures contracts involves specific risks such as high volatility, leverage, rollover and margin risks. There may be imperfect correlation between the value of the underlying reference assets and the futures contracts, which may prevent the Product from achieving its investment objective. A “roll” occurs when an existing E-mini NASDAQ-100 Future is about to expire and is replaced with another E-mini NASDAQ-100 Future with a later expiration date. The value of the Product’s portfolio (and so the NAV per Unit) may be adversely affected by the cost of rolling positions forward as the E-mini NASDAQ-100 Futures approach expiry. This effect may be more pronounced in products with higher leverage ratio. An extremely high degree of leverage is typical of a futures trading account. As a result, a relatively small price movement in an E-mini NASDAQ-100 Future may result in a proportionally high impact and substantial losses to the Product, having a material adverse effect on the NAV. A futures transaction may result in significant losses in excess of the amount invested.
  • The Product is not “actively managed” and the Manager will not adopt any temporary defensive position when the Index moves in an unfavourable direction. In such circumstances, Units of the Product will also decrease in value.
  • The Product may be subject to tracking error risk, which is the risk that its performance may not track that of the Daily leveraged performance of the Index exactly. This tracking error may result from the investment strategy used, high portfolio turnover, liquidity of the market and fees and expenses and the correlation between the performance of the Product and the two times (2x) Daily performance of the Index may be reduced. The Manager will monitor and seek to manage such risk in minimising tracking error. There can be no assurance of exact or identical replication of the leveraged performance of the Index at any time, including on an intra-day basis.

Please note that the above listed investment risks are not exhaustive and investors should read the Prospectus in detail before making any investment decision. This material has not been reviewed by the Securities and Futures Commission.
 

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 Dec 2019, CSOP had US$ 6.3 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 Product(s) is not sponsored, endorsed, sold or promoted by Nasdaq, Inc. or its affiliates (Nasdaq, with its affiliates, are referred to as the “Corporations”). The Corporations have not passed on the legality or suitability of, or the accuracy or adequacy of descriptions and disclosures relating to, the Product(s). The Corporations make no representation or warranty, express or implied to the owners of the Product(s) or any member of the public regarding the advisability of investing in securities generally or in the Product(s) particularly, or the ability of the NASDAQ-100 Index to track general stock market performance. The Corporations' only relationship to CSOP Asset Management Limited (“Licensee”) is in the licensing of the Nasdaq®, and certain trade names of the Corporations and the use of the NASDAQ-100 Index which is determined, composed and calculated by Nasdaq without regard to Licensee or the Product(s). Nasdaq has no obligation to take the needs of the Licensee or the owners of the Product(s) into consideration in determining, composing or calculating the NASDAQ-100 Index. The Corporations are not responsible for and have not participated in the determination of the timing of, prices at, or quantities of the Product(s) to be issued or in the determination or calculation of the equation by which the Product(s) is to be converted into cash. The Corporations have no liability in connection with the administration, marketing or trading of the Product(s).
THE CORPORATIONS DO NOT GUARANTEE THE ACCURACY AND/OR UNINTERRUPTED CALCULATION OF NASDAQ-100 INDEX OR ANY DATA INCLUDED THEREIN. THE CORPORATIONS MAKE NO WARRANTY, EXPRESS OR IMPLIED, AS TO RESULTS TO BE OBTAINED BY LICENSEE, OWNERS OF THE PRODUCT(S), OR ANY OTHER PERSON OR ENTITY FROM THE USE OF THE NASDAQ-100 INDEX OR ANY DATA INCLUDED THEREIN. THE CORPORATIONS MAKE NO EXPRESS OR IMPLIED WARRANTIES, AND EXPRESSLY DISCLAIM ALL WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE WITH RESPECT TO THE NASDAQ-100 INDEX® OR ANY DATA INCLUDED THEREIN. WITHOUT LIMITING ANY OF THE FOREGOING, IN NO EVENT SHALL THE CORPORATIONS HAVE ANY LIABILITY FOR ANY LOST PROFITS OR SPECIAL, INCIDENTAL, PUNITIVE, INDIRECT, OR CONSEQUENTIAL DAMAGES, EVEN IF NOTIFIED OF THE POSSIBILITY OF SUCH DAMAGES.

1 Data Source: Bloomberg
2 Source: Nasdaq

Contacts

For further information, please contact
CSOP Asset Management Limited
Larry Wang / 3406 5613 / larry.wang@csopasset.com
Tina Shu/ 3406 5675/ tina.shu@csopasset.com

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