HONG KONG, July 24, 2020 /PRNewswire/ —
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Product Risk Warning:
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China Asset Management (Hong Kong) Limited (“ChinaAMC (HK)”) is once again partnering with Rafferty Asset Management LLC (“Rafferty”), the second largest leveraged/inverse ETF issuer in the U.S., to launch the ChinaAMC Direxion CSI 300 Index Daily (2X) Leveraged Product and Daily (-1X) Inverse Product, both of which will be listed on 27 July.
As intensifying market volatility becomes the new normal, international investors are increasingly engaged in the A-shares market, the second largest stock market in the world. In view of this, ChinaAMC (HK) has recently launched the ChinaAMC Direxion CSI 300 Index Daily (2X) Leveraged Product (Stock Code: 7272.HK) and Daily (-1X) Inverse Product (Stock Code: 7373.HK) to support investors in getting better prepared for market volatility. Investors may take advantage of these products to multiply their daily potential returns in a market rally, or for single-day hedging when the market pulls back.
Both tracking the CSI 300 Index (“Index”), the products aim to provide daily returns, before fees and expenses, that closely correspond to two times leveraged (2X) and one time inverse (-1X) of the daily performance of the Index. The products’ underlying assets are swap contracts. With a lot size of 100 shares and listing price set at HK$8, the products’ subscription cost starts at about HK$800[1], and the annual management fee is 0.99%.
ChinaAMC (HK) has recently launched the ChinaAMC Direxion CSI 300 Index Daily (2X) Leveraged Product (Stock Code: 7272.HK) and Daily (-1X) Inverse Product (Stock Code: 7373.HK) to support investors in getting better prepared for market volatility.
“Back in 2012, ChinaAMC (HK) issued the ETF that tracks the CSI 300 Index, which is now the world’s largest offshore CSI 300 Index ETF[2],” said Dr. Frank Xiaoling Zhang, Chief Executive Officer of ChinaAMC (HK). “As a market leader in CSI 300 ETFs with profound experience, ChinaAMC (HK) is adding to the breadth of the ChinaAMC CSI 300 product mix and cementing the brand leadership of ChinaAMC (HK) with the launch of the ChinaAMC CSI 300 leveraged and inverse products.”
”Direxion is proud to extend our partnership with ChinaAMC (HK). Their leading position in CSI 300 indexing combined with our long history in leveraged and inverse ETFs makes for a terrific value proposition in China A-shares for investors.” said Robert Nestor, President of Direxion Investments.
A-shares leveraged and inverse products issued in various markets as demand rises
The A-shares leveraged and inverse products that have rolled out in many regions, such as the U.S., South Korea and Taiwan, manifest the vast interest of international investors in this type of products, and Hong Kong is no exception. According to the Stock Exchange of Hong Kong, by the end of May, the overall turnover of leveraged and inverse products of the Stock Exchange of Hong Kong has hit HK$5.1 billion, the highest turnover on record[3].
“Leveraged and inverse ETFs are gaining traction among investors because of their lower entrance barrier and exemption from stamp duty,” said Frederick Chu, Head of ETFs in ChinaAMC (HK).” Global stock market becomes more volatile in the second half of the year, both retail and institutional investors could utilize the ChinaAMC CSI 300 leveraged and inverse products to deploy flexible A-shares trading strategies.”
Experienced in ETFs, ChinaAMC boasts a full-range product mix
The products are managed by ChinaAMC (HK) and advised by Rafferty. Rafferty, whose subsidiary Direxion launched the first pair of CSI 300 leveraged/inverse ETFs for the U.S. market in the United States in 2015, has the expertise and experience in managing A-shares index leveraged and inverse products comprising swap contracts. Meanwhile, ChinaAMC (HK) is an experienced issuer and manager of ETFs as well as leveraged and inverse products. ChinaAMC (HK) launched A-shares ETF in Hong Kong in 2012, which tracks the CSI 300 Index, the current market value of which has since increased to HK$12 billion[2].
In 2016, ChinaAMC (HK) also issued Asia’s first two leveraged and inverse products that track the Nasdaq-100 Index. The issuance a third Nasdaq-100 inverse product that provides a two times inverse daily return (-2x) in last September has been met with enthusiastic market response, with its asset under management growing by 3.8[2] times in less than a year upon issuance. Together with the daily (2x) leveraged product, they were among the five most actively traded leveraged and inverse products at the Stock Exchange of Hong Kong in May[3].
Fund Details
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ChinaAMC Direxion CSI 300 Index Daily Leveraged & Inverse Products |
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Stock code |
Daily (2X) Leveraged Product 7272 |
Daily (-1X) Inverse Product 7373 |
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Investment Goal |
Provides daily investment results, before fees and expenses, which closely correspond to twice (2X) the daily performance of the CSI 300 Index. |
Provides daily investment results, before fees and expenses, which closely correspond to the inverse (-1X) of the daily performance of the CSI 300 Index. |
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Management Fee |
0.99% p.a. |
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Underlying Index |
CSI 300 Index |
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Underlying Asset |
Swap Contract |
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Exchange Listing |
The Stock Exchange of Hong Kong – Main Board |
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Distribution Policy |
No regular distributions or dividends will be paid |
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Manager |
China Asset Management (Hong Kong) Limited |
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Trustee and Registrar |
HSBC Institutional Trust Services (Asia) Limited |
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Application Unit Size (only by or through Participating Dealers) |
Minimum 100,000 Units (or multiples thereof) |
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Product website |
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About China Asset Management (Hong Kong) Limited
ChinaAMC (HK) is a wholly-owned subsidiary of China Asset Management Co., Ltd and was incorporated in Hong Kong in September 2008. As an advocate of globalized financial markets, ChinaAMC (HK) is a diversified and integrated asset management company. ChinaAMC (HK) has a broad range of product lines, including long-only funds, hedge funds, exchange traded funds (ETF), leveraged/inverse products, bond funds, segregated accounts and funds of funds (FOF). For more information, visit www.chinaamc.com.hk[4].
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[1] Based on the listing price, may increase or decrease depending on the market price. |
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[2] Source: Bloomberg, data as of June 30 2020. |
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[3] Source: HKEX, data as of May 2020. |
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[4] The website has not been reviewed by the Securities and Futures Commission. |
Investing involves risk, including possible loss of principal. The Product is an investment fund and not a bank deposit. Please read the prospectus carefully and consider the Product’s investment objectives, risk factors, and charges and expenses before investing.
This document is prepared by China Asset Management (Hong Kong) Limited. It has not been reviewed by the Securities and Futures Commission. Please refer to the offering documents for CSI 300 Index disclaimer.
Photo – https://photos.prnasia.com/prnh/20200720/2861803-1-b?lang=0