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Launched on 24 November 1969, Hang Seng Index (“HSI”) was one of the earliest stock market indexes and the most representative index in Hong Kong. As the most widely quoted indicator of the performance of Hong Kong stock market, HSI is also the benchmark index of Hong Kong equity market. It includes Hong Kong-listed stocks with the largest market capitalization and most active transactions. As of 31 March 2021, there are 55 constituents in HSI, of which the financial sector accounts for 41.25%, largest among all other sectors. Though HSI is still dominated by the companies in the traditional economic sectors, this is expected to change with the potential addition of new economy stocks joining the index.1
On 1 March 2021, Hang Seng Indexes Company Limited announced the conclusion of the consultation of the HSI reform. The proposed reform will be implemented gradually in June 2021. After the reform, the HSI will be rejuvenated by a more comprehensive coverage to ultimately 100 stocks with more new economy sectors exposure. The new reform will bring broader market cap coverage and higher turnover coverage to the index, making it more representative and balanced, thus benefitting Hong Kong as a global financial center for fundraising.2
Currently, there are already multiple ETFs tracking HSI in the Hong Kong market for global investors to choose from, including the largest and most active ETF in Hong Kong. Hong Kong investors can invest in these HSI-tracking ETFs through MPF and other automatic investment plans via different channels. As of 31 March 2021, the overall size of the HSI-tracking ETF is HKD 143,204 million.3
The persisting US-China frictions, however, aroused concerns of the investors. In November 2020, the US government announced sanctions to prohibit US institutions and individuals from investing in several mainland Chinese companies, among which there are constituent stocks of the HSI. The response towards the sanctions of the current US background fiduciary manager, who manages the largest HSI-tracking ETF, worried investors as it might bring large tracking errors to the largest HSI-tracking ETF. To alleviate such concerns, CSOP issued 3037.HK adopting a full replication methodology that includes every constituent stock within the index. 3037.HK aims to provide an investment tool that most closely tracks the index and is not affected by US sanctions.
As a leading ETF manager in Hong Kong, CSOP has already been dedicated to providing ETFs/ETPs to global investors for over 8 years. As of 1 April 2021, 5 out of 10 top traded ETPs (ranked by 3-month average daily turnover) are issued by CSOP. With half of the top traded ETFs/ETPs in Hong Kong from CSOP, CSOP has already established its brand as a reliable ETF issuer in Hong Kong and even Asia.4
“We are very delighted to bring another ETF product that tracks the Hang Seng Index to Hong Kong investors. Among the leveraged and inverse products(“L&Is”) in Hong Kong, 9 out of 10 top traded L&Is (ranked by 3-month average daily turnover as of 1 April 2021) are issued by CSOP. CSOP Hang Seng Index Daily (2X) Leveraged Product (7200.HK), CSOP Hang Seng Index Daily (-1X) Inverse Product (7300.HK) and CSOP Hang Seng Index Daily (-2X) Inverse Product (7500.HK) have become the largest and most popular leveraged and inverse products in Hong Kong, helping investors capture the two-way opportunity of the HSI.5 The launch of 3037.HK not only enriches CSOP’s HSI product series, but also helps CSOP consolidate its dominant position in the HSI L&I market.” Says Ms. Melody He, Managing Director, Head of Business Development and Product Strategy & Solutions.
“CSOP is the first Chinese offshore asset management company established in Hong Kong. Since its establishment in 2008, CSOP has been committed to bringing high-quality investment tools to Hong Kong investors. ‘In Hong Kong, for Hong Kong’ has always been our investment philosophy and commitment to Hong Kong investors. It is also the reason we bring the most authentic Hong Kong ETF product to Hong Kong investors at a very minimal management fee.” Concludes Ms. Ding Chen, Chief Executive Officer of CSOP.
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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 March 2021, CSOP has more than USD 10 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 Index ETF (the “Sub-Fund”) is a sub-fund of the CSOP ETF Series III, which is an umbrella unit trust established under Hong Kong law. The Sub-Fund is a passively managed index tracking exchange traded fund authorised under Chapter 8.6 of the Code on Unit Trusts and Mutual Funds. The units of the Sub-Fund are traded on the Stock Exchange of Hong Kong Limited (the “SEHK”) essentially like shares.
- The Sub-Fund is not principal guaranteed and your investments may suffer losses. There is no assurance that the Sub-Fund will achieve the investment objective.
- The Sub-Fund is passively managed and the Manager will not have the discretion to adapt to market changes due to the inherent investment nature of the Sub-Fund. Falls in the value of the Hang Seng Index may result in a corresponding fall in the value of the Sub-Fund.
- The Sub-Fund’s investment in equity securities is subject to general market risks, whose value may fluctuate due to various factors, such as changes in investment sentiment, political and economic conditions and issuer-specific factors.
- Generally, retail investors can only buy or sell units of the Sub-Fund on the SEHK. The trading price of the units on the SEHK is driven by market factors, such as the demand and supply of units, and may trade at a substantial premiums or discount to its NAV.
Please note that the above listed investment risks are not exhaustive and investors should read the Prospectus and the Product Key Facts Statement in detail before making any investment decision.
1 Source: Hang Seng Indexes Company Limited
2 Source: Hang Seng Indexes Company Limited, Goldman Sachs
3 Source: Hong Kong Stock Exchange
4 Source: CSOP Asset Management Limited and Bloomberg
5 Source: Bloomberg