HONG KONG–(BUSINESS WIRE)–CSOP US Large Oil & Gas Companies Daily (2x) Leveraged Product (7204.HK) and CSOP US Large Oil & Gas Companies Daily (-2X) Inverse Product (7505.HK) will be listed on Hong Kong Stock Exchange on 23 November, 2022. Aiming to help investor capture short-term investment opportunities brought by the high volatility of oil & gas companies, 7204.HK and 7505.HK provide investment results closely corresponding to leveraged (2x) daily performance & inverse (-2x) daily performance of Solactive US Large Oil & Gas Companies Index NTR (the “Index”) respectively. With listing price at around HKD 7.75 per unit of 7204.HK and 7505.HK, trading lot of 100 and management fee of 1.60%, 7204.HK and 7505.HK have received USD 5 million and USD 5 million initial investment correspondingly.
Oil & gas companies’ performances are highly correlated with oil & gas prices and volumes, which are determined by various factors, making oil & gas company stocks one of the most volatile sectors. US oil & gas companies are cyclical, therefore benefiting from the increasing economic activities which push up demand and prices of oil & gas. In addition, political and weather uncertainties affect oil & gas companies’ business. Trading opportunities emerge from the high short-term volatilities of US oil & gas stocks. As a result, the average daily turnover (ADT) of US oil & gas equity L&I products grew at CAGR of 22% in 2015-20221.
Recent market concerns over energy shortage caused by geopolitical tensions in Ukraine fuel the oil & gas sector performance. Solactive US Large Oil & Gas Companies Index NTR, closely tracking the top 15 oil & gas companies listed on any stock exchange in the US with free float market capitalization greater or equal to USD 200 million gained 42.37% year-to-date2.
Since the first Leveraged & Inversed (“L&I”) product listed in 2016, Hong Kong’s L&I market has seen a continuous growth to HKD 14.39 billion in size & HKD 2.54 billion of average daily turnover as end of October, 20223. Dominating Hong Kong’s L&I market, CSOP has demonstrated a remarkable track record with credibility and success by having introduced 17 L&I products in Hong Kong, contributing more than 90% AUM and ADT to Hong Kong’s L&I market4. Ms. Ding Chen, CEO of CSOP comments, “On top of our achievement, we are on a mission to bring more excellent L&I products to our investors, further promoting the prosperity and development of Hong Kong’s L&I market. I believe this pair of oil & gas leveraged and inverse products will be excellent trading tools that can help investors take advantage of US oil & gas sector amid the volatile market.”
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 August 2022, CSOP has more than USD 12 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 relevant 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 US Large Oil & Gas Companies Daily (2x) Leveraged Product and CSOP US Large Oil & Gas Companies Daily (-2x) Inverse Product are authorized by the Securities and Futures Commission (“SFC”) in Hong Kong. Such authorization does not imply any official recommendation by the SFC. This material and the information contained in this material shall not be regarded as an offer or solicitation of business in any jurisdiction to any person to whom it is unlawful to offer or solicit business in such jurisdictions.
- The Product is a derivative product (swap-based product) and is not suitable for all investors. There is no guarantee of the repayment of principal. Therefore, your investment in the Product may suffer substantial or total losses.
- The Product is 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 two times 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 Product will lose money over time while the Index’s performance increases / falls or is flat. Investors in the Product should actively manage and monitor their investments, as frequently as daily.
- Prices for oil and gas will have a direct impact on the business and revenue of oil and gas companies. Prices for oil and gas are highly volatile and may fluctuate widely and may be affected by numerous events or factors.
- 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.
Please note that the above listed investment risks are not exhaustive and investors should read the relevant Prospectus and Product Key Facts Statement in detail before making any investment decision.
Index Provider Disclaimer
Solactive US Large Oil & Gas Companies Index NTR (the “Index”) is a net total return free-float market capitalisation index compiled and published by Solactive AG (the “Index Provider”). The Manager and its connected persons are independent of the Index Provider. The Index is a net total return index representing US listed securities from the oil and gas sectors that have the highest free float market capitalisation. The top 15 securities in the index universe based on free-float market capitalisation are selected. The Index is an equal weighted index at each selection day of Index constituents (i.e. being 10 business days prior to the Index rebalance day, which will take place semi-annually in June and December.
1 CSOP, 20 October 2022
2 CSOP, as of 30 September 2022
3 Bloomberg, October 2022
4 Bloomberg, October 2022