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HONG KONG--(BUSINESS WIRE)--Building on the phenomenal success achieved by its CSOP Hang Seng TECH Index ETF (ticker: 3033.hk), CSOP Asset Management Limited (“CSOP”) continues to bring a pair of Hang Seng TECH index-tracking products - CSOP Hang Seng TECH Index daily (2X) leveraged product (ticker: 7226.hk) and CSOP Hang Seng Tech Index daily (-2x) inverse product (ticker:7552.hk) on Hong Kong Stock Exchange. To supplement CSOP Hang Seng TECH Index ETF (ticker: 3033.hk), which was launched to help investors catch the long-term investment opportunities brought by the fast growing technology sector and the increasing number of technology companies that are listed in Hong Kong, 7226.hk and 7552.hk aim to help investors handle the short-term volatility of technology sector. With listing price at around HKD 7.75 per unit of 7226.hk and 7552.hk, trading lot of 100 and management fee of 1.60%, CSOP Hang Seng TECH Index leveraged and inverse products will start to trade on December 10, 2020. Upon list, 7226.hk and 7552.hk has received USD 14million, HKD 110million equivalent initial investment respectively.
In light of more and more Chinese technology giants choosing Hong Kong as the secondary listing place, Hang Seng TECH Index was launched on 27 July 2020 to track the 30 largest technology companies listed in Hong Kong. Designed as one of the flagship indices of Hang Seng Indexes Company Limited, the index consists of Hong Kong-listed companies that have high business exposure to selected technology themes, including internet, FinTech, cloud, e-commerce and digital activities. Upon the introduction of Hang Seng TECH Index, there were bunches of ETFs launched to replicate the index performance, aiming at a long-term technology sector return. However, because the fast-growing nature of Hang Seng TECH Index, the volatility is also higher than that of Hang Seng index, with annualized historical volatility of 38.79% of Hang Seng TECH Index versus 23.69% of Hang Seng Index.1 The introduction of Hang Seng TECH Index -tracking leveraged and inverse products equips investors with more flexibilities to express their short-term attitude. Investing in swaps to achieve the daily leveraged / inverse performance of Hang Seng TECH Index before fees and costs, 7226.hk and 7552.hk were delicately designed to deliver as close leveraged/ inverse performance of index as possible to mitigate the possible liquidity risks on investing in the newly launched Hang Seng TECH Index futures.
As a leading ETF manager in Hong Kong, CSOP has already dedicated to providing ETFs/ETPs to global investors for 8 years with half of the top traded ETFs/ETPs in Hong Kong being from CSOP.2 Moreover, as the dominant leader in HK leveraged and inverse products market with more than 96% and 90% 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 leveraged and inverse products.3 “Our CSOP Hang Seng Tech index ETF was launched on 28 August, 2020 as the first Hang Seng Tech Index- tracking ETF globally. On the first listing day, it also set a record for the largest listing day turnover on Hong Kong ETF history with its more than HKD 3 billon turnover. Currently, 3033.hk is also the largest ETF among peers with more than AUM of more than HKD 5 billion.4 I have confidence that the 7226.hk and 7552.hk will replicate the success of 3033.hk, providing more investment opportunities to investors around Hang Seng Tech Index.” Commented by Ms. Ding Chen, CEO of CSOP Asset Management.
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 30 September 2020, CSOP had USD 8.9 billion in assets under management.
This material has not been reviewed by the Securities and Futures Commission.
Issuer: CSOP Asset Management Limited
Please refer to the offering documents for the index provider disclaimer.
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 Hang Seng TECH Index Daily (2x) Leveraged Product and CSOP Hang Seng TECH Index Daily (-2x) Inverse Product (collectively, “Products”) are sub-funds of CSOP Leveraged and Inverse Series, 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. The Products use a swap-based synthetic replication strategy by investing directly in Swaps, so as to give the Product twice (2x) / two times inverse (-2x) of the Daily performance of the Hang Seng TECH Index (the “Index”) respectively.
- 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 Product over a period longer than one day will very likely differ in amount and possibly direction from the leveraged/inverse performance of the Index over that same period. The effect of compounding becomes more pronounced on the Product’s performance as the Index experiences volatility.
- 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 Products will lose money over time while the Index’s performance falls/decreases or is flat.
- The Index is a new index. The Products may be riskier than other exchange traded funds tracking more established indices with longer operating history.
- The constituents of the Index are concentrated in companies with a technology theme. Many of the companies with a high business exposure to a technology theme have a relatively short operating history. Technology companies are often characterised by relatively higher volatility in price performance when compared to other economic sectors.
- 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 use of leverage and the daily rebalancing activities and the leverage effect.
Please note that the above listed investment risks are not exhaustive and investors should read the Prospectus and Product Key Facts Statement in detail before making any investment decision.
1 Bloomberg, 2 December, 2019 to 30 November, 2020, based on 260 days volatility.
2 Bloomberg and CSOP
3 Bloomberg and CSOP, ADT for October 2020, AUM as of 30 November, 2020
4 Bloomberg, as of 27 November, 2020
