HONG KONG–(BUSINESS WIRE)–CSOP FTSE US Treasury 20+ Years Index ETF (3433.HK) will list on the Hong Kong Stock Exchange on 10 January 2024 as Hong Kong’s first US Treasury 20+ Years ETF. To capture the performance of FTSE US Treasury 20+ Years Index, 3433.HK adopts a representative sampling strategy, with listing price at around HKD 78 per unit, and trading lot of 10 and management fee of 0.20%. The Unlisted Share Class A of the ETF will be launched on the same day, with minimum initial investment of USD 1,000. 3433.HK has received USD 50 million initial investment.
In the first half of 2023, bond ETFs attracted an inflow of USD 160.1 billion, emerging as the best-selling asset type worldwide1. Notably, USD Government Bond ETFs led the pack, securing the largest inflow of USD 71.6 billion2. This surge was largely propelled by an aggressive monetary tightening policy that pushed the federal fund rate to its highest level since 1981, between 5% and 5.5%3. Consequently, US Treasury Bonds, often described as “risk-free” assets, yielded higher returns than the S&P 5004 and emerging markets government bonds5, which typically have higher risk profiles.
Anticipations are high for rate cuts in 2024. US Treasury Bonds often benefit from rate decreases during periods of monetary easing due to the inverse relationship between bond values and rates. The FTSE US Treasury 20+ Years Index saw a total return of 24.7%, an annualized return of 42.2%, during the rate-cutting periods of July 2019 to March 20206. Bonds with higher durations typically increase more in value. Given the current high interest rates and the expected policy shifts, it presents an opportune moment to consider long duration. However, accessing the US Treasury Bonds market directly often poses challenges for Hong Kong retail investors, including wide bid-ask spreads, high costs, low transparency, and high foreign exchange costs.
CSOP FTSE US Treasury 20+ Years Index ETF emerges as an efficient solution for retail investors seeking to invest in the US Treasury Bonds. It offers ease of transaction and high transparency. FTSE US Treasury 20+ Years Index measures the performance of the US Treasury securities, all rated investment grade, with maturity greater than or equal to 20 years that are in the FTSE World Government Bond Index. The Index is a total return index, meaning that the performance of the index includes both coupon and principal return derived from US Treasury Bonds. It has an average coupon rate of 2.68%, average yield to maturity of 4.63% with effective duration of 16.817.
Ms. Ding Chen, CEO of CSOP Asset Management, is delighted to announce the listing of the CSOP FTSE US Treasury 20+ Years Index ETF on HKEX. She remarks, “Since our establishment in 2008, CSOP has been committed to providing high-quality and innovative investment tools to Asian investors. Today, we are proud to introduce the first long-term US Treasury Bonds ETF to Hong Kong. This allows investors to easily access the US Treasury Bonds market in a flexible and transparent manner.”
CSOP is a leading ETF issuer in Hong Kong SAR, with a wide range of product offerings across equity, fixed income, leveraged and inverse, thematic, money market, and virtual assets. In 2023, 6 out of 10 of the most traded ETFs on the Hong Kong Stock Exchange are CSOP-issued products*. Innovation and leadership are deeply rooted in CSOP’s DNA as we strive to bring first-of-its-kind products to the market, educate investors about ETF trading, and never stop looking for ways to improve trading efficiencies.
CSOP’s commitment to cross-border initiatives and collaborations is unwavering. we are the only product issuer participating in all the ETF connectivity programs between mainland China and Hong Kong SAR, capturing an 89% market share of the aggregate southbound AUM**, as well as the first issuer to participate in the China – Singapore Cross-border ETF Link Scheme.
* Source: Daily average from 1 January 2023 to 30 September 2023, Bloomberg
** Source: As of 28 September 2023, 89% of southbound connect total AUM is from CSOP Hang Seng TECH Index ETF and CSOP Hang Seng Index ETF, CSOP
Disclaimer and Important Notices
CSOP FTSE US Treasury 20+ Years Index ETF (“Sub-Fund”) is authorized by the Securities and Futures Commission (“SFC”) in Hong Kong. Such authorization does not imply any official recommendation by the SFC. This material is for general information only and do not constitute financial, professional, investment or any other kind of advice in any way and shall not be considered as an offer, solicitation, or recommendation to deal in any investment products. Investment involves risks. The value of the investment may fall as well as rise and investors may get back less than they invested. 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 the full list of risk factors. Investors should not base on this material alone to make investment decisions. Investors should understand the nature and risks of the relevant investment products and make investment decisions based on their own financial situation, investment objectives and experiences, willingness and ability to bear risks and specific needs; and if necessary, should seek independent professional advice before making any investment decisions. CSOP makes no representation or warranty to the accuracy, completeness or timeliness of this material. This material is not directed to, intended for distribution to, or use by, any person or entity in any jurisdiction or country where such distribution, availability or use would be contrary to local law or regulations, or which would subject CSOP to any registration or licensing or other requirement, or penalty for contravention of such requirements within such jurisdiction. This material is prepared by CSOP and has not been reviewed by the SFC. Issuer: CSOP Asset Management Limited
Index Provider Disclaimer
The Sub-Fund has been developed solely by the Manager. The Sub-Fund is not in any way connected to or sponsored, endorsed, sold or promoted by the London Stock Exchange Group plc and its group undertakings (collectively, the “LSE Group”). FTSE Russell is a trading name of certain of the LSE Group companies. All rights in the Index vest in the relevant LSE Group company which owns the Index. FTSE® is a trade mark of the relevant LSE Group company and is used by any other LSE Group company under licence. The Index is calculated by or on behalf of FTSE International Limited or its affiliate, agent or partner. The LSE Group does not accept any liability whatsoever to any person arising out of (a) the use of, reliance on or any error in the Index or (b) investment in or operation of the Sub-Fund. The LSE Group makes no claim, prediction, warranty or representation either as to the results to be obtained from the Sub-Fund or the suitability of the Index for the purpose to which it is being put by the Manager.
1 Refinitiv LSEG
2 Refinitiv LSEG
4 2002/1/2-2023/11/30, Bloomberg. The US Treasury yields are the yields to worst of Bloomberg US Treasury Total Return Unhedged USD (Bloomberg ticker: LUATTRUU Index).
5 2009/1/1-2023/11/30, Bloomberg.. The US Treasury yields are the yields to worst of Bloomberg US Treasury Total Return Unhedged USD (Bloomberg ticker: LUATTRUU Index); EM local currency government bond yields are the yields to worst of Bloomberg Emerging Markets Local Currency Index (Bloomberg ticker: EMLCTRUU Index).
6 2023/11/30，Bloomberg and CSOP
7 FTSE Russell, as of 2023/11/30.