HONG KONG–(BUSINESS WIRE)–CSOP Asset Management Limited (“CSOP”) is proud to announce the listing of CSOP China Healthcare Disruption Index ETF (stock ticker: 3174.HK) on the Hong Kong Stock Exchange (the “HKEX”). 3174.HK will track the performance of the Solactive China Healthcare Disruption Index (the “Index”). With listing price at around HKD 7.8 per unit, trading lot of 100 shares and annual management fee of 0.99%, CSOP China Healthcare Disruption Index ETF will start to trade on 21 July, 2021. Upon inception, 3174.HK has received around HKD 103 million initial investment.
The healthcare sector contains a diverse array of industries, including biotechnology, Internet-based medical services, drug discovery and manufacturing services and many other related services. Since Covid-19 hit the world by surprise, the healthcare sector has received unprecedented attention. In 2018, global spending on health reached USD 8.3 trillion, or 10% of global gross domestic product (GDP). 1 It is expected to increase at an annual rate of 4.9% from 2018 to 2022, achieving USD 10.05 trillion in 2022. 2 Currently, China has the second-largest healthcare industry in the world. Compared to a five-year compound annual growth rate (“CAGR”) of 4% in the United States, China’s healthcare market has grown rapidly at a CAGR of 17%.3 China’s healthcare market size is aimed to expand to about USD 2.4 trillion by 2030.4 The onset of Covid-19 along with China’s ageing population has further presented considerable growth opportunities for the healthcare sector, particularly in sub-sectors like telemedicine and biotech. Heavily featured in the 13th Five-Year Plan and the Healthy China 2030 strategy, Internet-based healthcare in China has maintained a high CAGR of over 30%.5 China’s government research & development (“R&D”) spending on biotech topped USD 291 billion in 2019, while companies raised USD 16.5 billion across 90 equity and debt offerings, representing a 17% increase in volume and 13% increase in value from 2018. 6
In 2020, the healthcare sector in the Hong Kong stock market showed strong growth momentum and received significant market interest with 23 newly listed healthcare companies raising a total of HKD 98 billion. 7 To replicate the robust performance of the fast-growing healthcare industry in Greater China, the Solactive China Healthcare Disruption Index comprehensively invests in up to 35 most representative Hong Kong-listed companies with business operations in mainland China, Hong Kong, Taiwan and Macau. These companies focus on various innovative fields, ranging from biotechnology and medical specialties to biopharmaceuticals, and healthcare equipment to Internet pharmacies and drug retail. Based on historical back-testing data, the Index achieves a return of 36.6% over the prior 12 months.8 Weighted by free-float market capitalization of constituents, the Index ensures the inclusion of the most representative companies in Greater China’s healthcare industry with a combined scheme of quarterly rebalance and weekly IPO review. As the end of May 2021, the total market cap of the index is HKD 2.98 trillion.9 Primarily adopting a physical representative sampling strategy to replicate the index, 3174.HK enables worldwide investors to grasp the investment opportunities of healthcare industry in an easy and transparent way.
The future of human beings embrace a smarter, greener and healthier way of living. As the pioneer ETF issuer in Hong Kong, CSOP has always been dedicated to providing ETFs/ETPs that not only serve the demands of asset allocation, but also present the prospects of investments. 3174.HK is one of the important members of CSOP future-defining thematic ETFs.
Melody He, Managing Director, Head of Business Development and Product Strategy & Solutions, says: “We are delighted to bring another future-themed ETF to our investors. The launch of 3174.HK enables investors to grasp the investment opportunities by pursuing a healthier life more easily and transparently. Among the series of CSOP future thematic ETFs, CSOP Hang Seng TECH Index ETF (3033.HK), CSOP Yinhua CSI 5G Communications Theme ETF (3193.HK)10 and CSOP Global Cloud Computing Technology Index ETF(3194.HK) are our answers to increasing demand for a more intelligent lifestyle. CSOP Huatai-Pinebridge CSI Photovoltaic Industry ETF (3134.HK)11 further completes a significant piece of puzzle for a greener life. More CSOP’s future-themed ETFs will come to the market, unfolding the future of investments in front of investors.”
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 China Healthcare Disruption Index ETF:
- CSOP China Healthcare Disruption Index ETF (the “Sub-Fund”) is not principal guaranteed and your investments may suffer losses. There is no assurance that the Sub-Fund will achieve its investment objective.
- Solactive China Healthcare Disruption Index (the “Index”) is a new index. The Sub-Fund may be riskier than other exchange traded funds tracking more established indices with longer operating history
- The Index is subject to geographical concentration risks as a result of tracking the performance of primarily Hong Kong listed companies that have business operations in the field of healthcare sector in mainland China, Hong Kong, Taiwan and Macau. The value of the Sub-Fund may be more susceptible to adverse economic, political, policy, foreign exchange, liquidity, tax, legal or regulatory event affecting the Hong Kong market and places where these companies have business operations including mainland China, Taiwan and Macau
- Risks associated with FDIs include counterparty/credit risk, liquidity risk, valuation risk, volatility risk and over-the-counter transaction risk. FDIs are susceptible to price fluctuations and higher volatility, and may have large bid and offer spreads and no active secondary markets. The leverage element/component of an FDI can result in a loss significantly greater than the amount invested in the FDI by the Sub-Fund. Exposure to FDIs may lead to a high risk of significant loss by the Sub-Fund
- The trading price of the Shares on the SEHK is driven by market factors such as the demand and supply of the Shares. Therefore, the Shares may trade at a substantial premium or discount to the Sub-Fund’s 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: WHO, Global Spending on Health: Weathering the Storm, 20202 Source: Deloitte, 2019 Global Healthcare Outlook: Shaping the Future3 Source: WHO, 20184 Source: China’s National Health and Family Planning Commission (NHFPC)5 Source: Frost & Sullivan, 36Kr Research, 2012-2026 China’s Internet Medical Market Scale and Forecast6 Source: Baker McKenzie, The Future of Capital Raising in Biotech and Pharma7 Source: HKEX, February 20218 Source: Solactive AG, 29 June 20219 Source: Bloomberg10 CSOP Yinhua CSI 5G Communications Theme ETF is a feeder fund. Its master fund, Yinhua CSI 5G Communication ETF, is not authorized by the Securities and Futures Commission for direct offering to the public in Hong Kong.
11 CSOP Huatai-PineBridge CSI Photovoltaic Industry ETF is a feeder fund. Its master fund, Huatai-PineBridge CSI Photovoltaic Industry ETF, is not authorized by the Securities and Futures Commission for direct offering to the public in Hong Kong.