CSOP FTSE China A50 ETF
(RMB Counter Stock Code: 82822, HKD Counter Stock Code: 02822)

  • Overview
  • Performance
  • Tracking Difference/ Error
  • Holdings
  • Distribution History
  • Documents
  • FAQ
IMPORTANT INFORMATION about the CSOP FTSE China A50 ETF (the "ETF")

IMPORTANT: Investment involves risks, including the loss of principal. Investors should refer to the ETF's Prospectus and the Product Key Facts Statement for further details, including the product features and risk factors. Investors should not only base on this marketing material alone to make investment decisions. Investors should note:

  • The CSOP FTSE China A50 ETF (“ETF”) aims to provide investment results that, before fees and expenses, closely correspond to the performance of FTSE China A50 Index, which is an index consisting the top 50 A-Share companies by market capitalization listed on the Shanghai Stock Exchange or the Shenzhen Stock Exchange. There is no assurance that the ETF will achieve its investment objective and investors may not get back part of or the entire amount they invest.
  • The ETF is one of the first RMB physical A-share exchange traded funds issued outside PRC to invest directly in the A-share market which is inherently a market with restricted access. Investing solely in China market may also subject the ETF to emerging market risk (such as greater economic, political, tax, foreign exchange, regulatory, volatility and liquidity risks) and concentration risk.
  • There is no assurance that the Manager will continue to maintain its RQFII status and make quota available for the ETF’s investment.
  • The market price on the SEHK of units traded in RMB and of units traded in HKD may deviate significantly due to different factors such as market liquidity, supply and demand in each counter and the exchange rate between RMB and HKD (in both onshore and offshore markets).
  • Investors without RMB accounts may buy and sell HKD traded units only. They will not be able to buy or sell RMB traded units and should note that distributions are made in RMB only. As such, investors may suffer a foreign exchange loss and incur foreign exchange associated fees and charges to receive their dividend.
  • Investors who bought units on the HKD counter may be subject to currency exchange risk as the assets of the ETF are denominated in RMB.
  • The liquidity and trading price of the ETF RMB traded units may be adversely affected by the limited availability of RMB outside the PRC and the restrictions on the conversion between foreign currency and RMB.
  • There are risks and uncertainties associated with the current Chinese tax laws applicable to investments made by an RQFII ETF. Provisions of PRC taxes may not be sufficient or may even be excessive. Any shortfall between the reserves and actual tax liabilities may have to be covered by the ETF's assets and may adversely affect the ETF's asset value.
  • The ETF is subject to tracking error risks due to factors such as fees and expenses of the ETF and the liquidity of the market, imperfect correlation of return and other factors such as the representative sampling strategy being used and investing in collective investment scheme under exceptional circumstances.
  • The units of the ETF are traded on the SEHK. Their prices on the SEHK are based on secondary market trading factors and may deviate significantly from the net asset value of the ETF and may trade at a substantial premium or discount to its NAV.
  • The Manager may, at its discretion, pay dividends out of capital. Payment of dividends out of capital or effectively out of the capital amounts to a return or withdrawal of part of an investor's original investment or from any capital gains attributable to that original investment. Any distributions involving payment of dividends out of the capital or effectively out of the capital of the ETF may result in an immediate reduction of the NAV per Unit.

Risk associated with the Shanghai-Hong Kong Stock Connect:

  • The Shanghai-Hong Kong Stock Connect is subject to quota limitations.
  • The Sub-Fund can only trade certain eligible stocks that are listed on the SSE through the Shanghai-Hong Kong Stock Connect.
  • It is contemplated that both SEHK and SSE would reserve the right to suspend Northbound and/or Southbound trading if necessary.
  • The securities regimes and legal systems of the Hong Kong and Shanghai markets differ significantly. Market participants may need to address issues arising from the differences on an on-going basis.
  • The Sub-Fund’s investments through Northbound trading under Shanghai-Hong Kong Stock Connect is not covered by the Hong Kong’s Investor Compensation Fund. Therefore the Sub-Fund is exposed to the risks of default of the broker(s) it engages in its trading in China A-Shares through the program.
  • Shanghai-Hong Kong Stock Connect is novel in nature, and the related regulations/rules are untested. There is no certainty as to how they will be applied, and they may change from time to time.

Please note that the above listed investment risks are not exhaustive and investors should read the ETF Prospectus in detail before making any investment decision.

Fund Objective and Investment Strategy
  • The investment objective of the Sub-Fund is to provide investment results that, before deduction of fees and expenses, closely correspond to the performance of the Underlying Index, namely, FTSE China A50 Index (the "Underlying Index"). There is no assurance that the Sub-Fund will achieve its investment objective.

  • In order to achieve the investment objective of the Sub-Fund, the Manager will adopt a full replication strategy by directly investing all, or substantially all, of the assets of the Sub-Fund in the securities constituting the Underlying Index (the "Index Securities") in substantially the same weightings (i.e. proportions) as these Index Securities have in the Underlying Index. The Manager will not use a representative sampling strategy other than in exceptional circumstances.
Intra-day Estimated NAV2 & Market Price3
Market Information 4,5
Date Last Change Change
(%)
Official NAV per Unit in RMB 20 Oct, 2017 12.4459 -0.075 -0.6
NAV per Unit in HKD**6 (for reference only) 20 Oct, 2017 14.672 -0.077 -0.52
Closing Price for RMB Traded Unit 20 Oct, 2017 12.42 0.06 0.49
Closing Price for HKD Traded Unit 20 Oct, 2017 14.62 0.06 0.41
**Exchange Rate of Renminbi (CNH) to Hong Kong Dollar6 quoted by Reuters: 1.1788617

Fund information
SEHK Listing Date 28 August 2012
Financial Year 31 December
Asset Class Equity
Domicile Hong Kong
Total NAV * 22,533,306,141.00
Outstanding Units * 1,810,500,000
Management Fee 0.99%
Base Currency Renminbi (RMB)
Number of Holdings 50
* As of 20 Oct, 2017
Underlying Index Information7
Underlying Index FTSE China A50 Index
Index Provider FTSE International Limited
Currency RMB
Benchmark Level Type Net Total Return Index
Bloomberg Total Return Index XINA50NC
Trading Information
HKD Traded Unit RMB Traded Unit
Exchange Hong Kong Stock Exchange – Main Board Hong Kong Stock Exchange – Main Board
Date of Listing / Dealing 8 November 2012 28 August 2012
Primary Exchange Time Zone GMT+8 GMT+8
Exchange Ticker 02822 82822
Bloomberg Ticker 2822 HK 82822 HK
ISIN HK0000127412 HK0000112307
Trading Board Lot 200 Units 200 Units
Trading Currency HKD RMB
Participating Dealers8
ABN AMRO Clearing Hong Kong Limited Barclays Bank PLC
BNP Paribas Securities Services BOCI Securities Limited
China Galaxy International Securities (Hong Kong) Co., Limited China International Capital Corporation Hong Kong Securities Limited
China Merchants Securities (HK) Co Limited CIMB Securities Limited
CITIC Securities Brokerage (HK) Limited Citigroup Global Markets Asia Limited
CLSA LIMITED Credit Suisse Securities (Hong Kong) Limited
Deutsche Securities Asia Limited Essence International Securities (Hong Kong) Limited
Goldman Sachs (Asia) Securities Limited Guotai Junan Securities (Hong Kong) Limited
Haitong International Securities Company Limited J.P. Morgan Broking (Hong Kong) Limited
KGI Securities (Hong Kong) Limited Macquarie Bank Limited
Merrill Lynch Far East Limited Morgan Stanley Hong Kong Securities Limited
Nomura International (Hong Kong) Limited Oriental Patron Securities Limited
SG Securities (HK) Limited The Hong Kong and Shanghai Banking Corporation Limited
UBS Securities Hong Kong Limited Yuanta Securities (Hong Kong) Company Limited
Market Makers9
HKD RMB
Bluefin HK Limited Bluefin HK Limited
Commerz Securities Hong Kong Limited Commerz Securities Hong Kong Limited
Credit Suisse Securities (Hong Kong) Limited Credit Suisse Securities (Hong Kong) Limited
Deutsche Securities Asia Limited Deutsche Securities Asia Limited
Haitong International Securities Company Limited Haitong International Securities Company Limited
IMC Asia Pacific Limited IMC Asia Pacific Limited
Optiver Trading Hong Kong Limited Optiver Trading Hong Kong Limited
UBS Securities Hong Kong Limited UBS Securities Hong Kong Limited
BNP Paribas Securities (Asia) Limited CITIC Securities Brokerage (HK) Limited
Eclipse Options (HK) Limited China Merchants Securities (HK) Co. Limited
Guotai Junan Securities (Hong Kong) Limited Citigroup Global Markets Asia Limited
Tibra Trading Hong Kong Limited
Yue Kun Research Limited
Why CSOP FTSE China A50 ETF?

1. Most awards granted RMB investment product
CSOP FTSE China A50 ETF won 4 awards in "Asia Asset Management 2012 Best of the Best Awards", namely, Best RQFII Product in Hong Kong, Best RQFII ETF in Hong Kong, Best RMB Product in Asia and Best New ETF in Asia.

2. Largest and most actively traded RQFII ETF
As of 30 June, 2013, CSOP FTSE China A50 ETF is the largest (with AUM of RMB 15.3 billion) and most actively traded (with average daily turnover of RMB 0.623 billion since inception) physical ETF directly investing into China A share market. (Source: Bloomberg)

3. Tracking FTSE China A50 Index
The FTSE China A50 Index is a free float-adjusted market capitalization-weighted index compiled and published by FTSE International Limited ("FTSE"). FTSE China A50 Index is a real-time, tradable index comprising the 50 largest listed companies in China by market capitalization. The index offers an optimal balance between representativeness and liquidity for China's A-share market, including stocks listed on Shanghai and Shenzhen stock exchanges.

4. An innovative and flexible RMB investment instrument
Denominated in RMB, traded in both RMB and HKD.

5. Transparent dividend policy
Intending to distribute dividends annually having regard to the Fund's net income after fees and costs.

Why RQFII A-share ETFs instead of Synthetic A-share ETFs?
RQFII A-share ETFs Synthetic A-share ETFs
Underlying Instruments Physical, direct investment in China
A-share market
Synthetic, derivative instruments with
China A-share exposure
QFII / RQFII Quota Provider ETF Manager Various Third Parties
Derivatives Counterparty Risk No No
Derivatives Costs No No
Trading Currency RMB / HKD HKD /USD
Tracking Error Relatively Low Relatively High
Dividends Net income after fees and costs Distributions are contingent on synthetic
dividends paid on underlying, such as
CAAPs (China A-Share Access Products)
Performance
1 Month 6 Months 1 Year 3 Year Since Inception#
CSOP FTSE China A50 ETF (82822)* 4.17% 14.62% 25.44% 80.69% 74.84%
FTSE China A50 Index** 4.58% 15.97% 26.46% 84.33% 83.04%
# Cumulative performance is calculated since the inception date on 28 Aug 2012 for RMB counter and 8 Nov 2012 for HKD counter.
* Fund performance is calculated on NAV to NAV basis with dividend reinvested.
** Performance of Index is calculated based on total return.
chart by amcharts.com
As of 30 June, 2017
2013 2014 2015 2016
CSOP FTSE China A50 ETF
(total return)
-12.44% 65.69% -4.01% -4.82%
FTSE China A50 Index
(total return)
(i.e. with dividend reinvested)
-12.02% 68.08% -5.04% -4.26%
  • Past performance information is not indicative of future performance. Investors may not get back the full amount invested.
  • The computation basis of the performance is based on the calendar year end, NAV-To-NAV, with dividend reinvested.
  • These figures show by how much the fund increased or decreased in value during the calendar year being shown. Performance data has been calculated in RMB including ongoing charges and excluding your trading costs on SEHK.
  • Where no past performance is shown there was insufficient data available in that year to provide performance.
  • Fund launch date: 28 August, 2012
As of 31 January, 2017

Tracking Difference / Error

Tracking Difference (TD)

  • Tracking difference is the return difference between an ETF and its underlying benchmark/ index over a certain period of time.

Tracking Error (TE)

  • Tracking error measures how consistently an ETF follows its benchmark/ index. It is the volatility (measured by standard deviation) of that return difference.
Tracking Difference Tracking Error
As of 30 September 2017
Fund listing Date: 28 August 2012 Rolling 1-Year TD: -1.90% TD for calendar year 2013: 0.95%
TD for calendar year 2014: -2.69%
TD for calendar year 2015: 1.04%
TD for calendar year 2016: -0.57%
As of 30 September 2017
Fund listing Date: 28 August 2012 Rolling 1-Year TE^: 0.47% ^Annualized based on the number of dealing days in the past year when daily TD is calculated
Graph for Tracking Difference

ETF's performance is calculated on an NAV to NAV basis and assumes reinvestment of distributions.



chart by amcharts.com
Holdings
Total Net Asset Value
(in RMB)
Number of Securities1 Securities (%)2
22,533,306,141.00 50 99.83

As of 20 Oct, 2017
Sectors Breakdown
As of 20 Oct, 2017
All Holdings
Sort by Total records: 50
Weighting (%) Name Exchange Ticker Trading Exchange Average Cost
(RMB)3
Market Price
(RMB)4
Shares Held Market Value
(RMB)
Sector
11.31 PING AN INSURANCE GROUP CO-A 601318 SHAX 37.4506 59.02 43166093 2547662808.86 Financials
6.55 CHINA MERCHANTS BANK-A 600036 SHAX 18.6237 26.77 55123380 1475652882.6 Financials
5.28 KWEICHOW MOUTAI CO LTD-A 600519 SHAX 312.864 574.33 2072131 1190086997.23 Consumer Staples
5.15 INDUSTRIAL BANK CO LTD -A 601166 SHAX 15.9129 17.88 64951340 1161329959.2 Financials
3.87 CHINA MINSHENG BANKING-A 600016 SHAX 8.70921 8.07 108030246 871804085.22 Financials
3.73 SHANGHAI PUDONG DEVEL BANK-A 600000 SHAX 10.9712 13.01 64557526 839893413.26 Financials
3.52 CHINA VANKE CO LTD -A 000002 SHEX 28.0838 26.16 30307472 792843467.52 Real Estate
3.50 MIDEA GROUP CO LTD-A 000333 SHEX 38.3281 47.64 16554314 788647518.96 Consumer Discretionary
2.87 CITIC SECURITIES CO-A 600030 SHAX 17.6702 17.78 36429345 647713754.1 Financials
2.81 AGRICULTURAL BANK OF CHINA-A 601288 SHAX 3.32902 3.83 165409974 633520200.42 Financials
2.80 IND & COMM BK OF CHINA-A 601398 SHAX 4.70454 6.24 101112056 630939229.44 Financials
2.65 BANK OF COMMUNICATIONS CO-A 601328 SHAX 6.0367 6.36 93840044 596822679.84 Financials
2.33 CHINA STATE CONSTRUCTION -A 601668 SHAX 7.27338 9.35 56255927 525992917.45 Industrials
2.24 WULIANGYE YIBIN CO LTD-A 000858 SHEX 51.5453 62.51 8074026 504707365.26 Consumer Staples
2.18 BOE TECHNOLOGY GROUP CO LT-A 000725 SHEX 3.88075 5.06 97084083 491245459.98 Information Technology
2.05 HANGZHOU HIKVISION DIGITAL-A 002415 SHEX 27.1511 35.6 12992650 462538340 Information Technology
2.03 CHINA PACIFIC INSURANCE GR-A 601601 SHAX 28.3536 38.88 11781421 458061648.48 Financials
2.00 BANK OF BEIJING CO LTD -A 601169 SHAX 7.12328 7.41 60730041 450009603.81 Financials
1.83 BANK OF CHINA LTD-A 601988 SHAX 3.79628 4.17 98798087 411988022.79 Financials
1.83 HAITONG SECURITIES CO LTD-A 600837 SHAX 15.5924 14.68 28061989 411949998.52 Financials
1.72 PING AN BANK CO LTD-A 000001 SHEX 9.45097 11.48 33810918 388149338.64 Financials
1.63 JIANGSU HENGRUI MEDICINE C-A 600276 SHAX 51.0477 64.98 5642722 366664075.56 Health Care
1.60 SAIC MOTOR CORPORATION LTD-A 600104 SHAX 23.0992 32.57 11044512 359719755.84 Consumer Discretionary
1.54 CSR CORP LTD -A 601766 SHAX 11.9428 9.92 34913705 346343953.6 Industrials
1.43 GUOTAI JUNAN SECURITIES CO-A 601211 SHAX 19.6242 20.86 15499856 323326996.16 Financials
1.35 CHINA CONSTRUCTION BANK-A 601939 SHAX 5.653 7.2 42188818 303759489.6 Financials
1.32 CHINA YANGTZE POWER CO LTD-A 600900 SHAX 13.5033 15.96 18567224 296332895.04 Utilities
1.26 POLY REAL ESTATE GROUP CO -A 600048 SHAX 9.67152 10.37 27441035 284563532.95 Real Estate
1.19 CHINA EVERBRIGHT BANK CO-A 601818 SHAX 4.05117 4.11 65315590 268447074.9 Financials
1.16 CHINA PETROLEUM & CHEMICAL-A 600028 SHAX 5.55865 5.86 44790110 262470044.6 Energy
1.14 HUATAI SECURITIES CO LTD-A 601688 SHAX 19.8438 21.01 12246273 257294195.73 Financials
1.11 CHINA UNITED NETWORK-A 600050 SHAX 7.82882 6.99 35767556 250015216.44 Telecommunication Services
1.07 CHINA SHIPBUILDING INDUSTR-A 601989 SHAX 8.41862 6.21 39002292 242204233.32 Industrials
1.04 JIANGSU YANGHE BREWERY -A 002304 SHEX 86.4215 113.99 2061297 234967245.03 Consumer Staples
0.95 GF SECURITIES CO LTD-A 000776 SHEX 17.7333 18.17 11771894 213895313.98 Financials
0.92 CHINA RAILWAY GROUP LTD-A 601390 SHAX 9.51158 8.59 24097247 206995351.73 Industrials
0.92 CHINA RAILWAY CONSTRUCTION-A 601186 SHAX 12.0224 11.63 17796918 206978156.34 Industrials
0.86 CHINA LIFE INSURANCE CO-A 601628 SHAX 25.1505 28.32 6831076 193456072.32 Financials
0.84 CHINA SHENHUA ENERGY CO-A 601088 SHAX 17.0671 20.51 9270924 190146651.24 Energy
0.82 BAOSHAN IRON & STEEL CO-A 600019 SHAX 7.0051 7.55 24444970 184559523.5 Materials
0.78 CHINA MERCHANTS SHEKOU INDUS 001979 SHEX 18.4572 18.18 9627570 175029222.6 Real Estate
0.78 BYD CO LTD -A 002594 SHEX 51.025 68.55 2550487 174835883.85 Consumer Discretionary
0.69 PETROCHINA CO LTD-A 601857 SHAX 8.30783 8.15 18982066 154703837.9 Energy
0.68 NEW CHINA LIFE INSURANCE C-A 601336 SHAX 45.0269 58.19 2643764 153840627.16 Financials
0.61 CHINA NATIONAL NUCLEAR POW-A 601985 SHAX 8.08547 7.57 18247046 138130138.22 Utilities
0.49 SHANGHAI INTERNATIONAL POR-A 600018 SHAX 6.31761 7.88 14133380 111371034.4 Industrials
0.44 CHINA COMMUNICATIONS CONST-A 601800 SHAX 13.4241 14.88 6611817 98383836.96 Industrials
0.36 CHINA CITIC BANK CORP LTD-A 601998 SHAX 6.18099 6.39 12774205 81627169.95 Financials
0.31 GUANGZHOU AUTOMOBILE GROUP-A 601238 SHAX 24.6391 28.09 2450375 68831033.75 Consumer Discretionary
0.28 BANK OF SHANGHAI CO LTD-A 601229 SHAX 18.5283 17.53 3657713 64119708.89 Financials

    > Click here to view Full Holdings Details in Excel
    As of 20 Oct, 2017

    All dollar amounts are in RMB. All dates are in GMT+8 Time. Any exceptions are noted.

    1. The "Number of Holdings" represents the number of underlying securities held by the Fund.
    2. May include dividends booked but not yet received.
    3. The Average Cost is the average purchasing price of each fund’s constituent stock. This is indicative and for reference purposes only.
    4. In accordance with the Prospectus of CSOP ETF Series, the Manager, having regards to the prevailing circumstances, may adjust the value of any investment of the ETF so as to reflect the fair value of the investment.

    Total allocation percentages shown in All Holdings table may not equal 100% due to rounding or omissions of holdings of less than 1%. Information on certain fund holdings of less than 1% may not be widely available and hence may not be included in the table of holdings shown.

    Important information about Dividend out of capital / effectively out of capital
    • The Manager may, at its discretion, pay dividend out of capital. The Manager may also, at its discretion, pay dividend out of gross income while all or part of the fees and expenses of the ETF are charged to/paid out of the capital of the ETF, resulting in an increase in distributable income for the payment of dividends by the ETF and therefore, the ETF may effectively pay dividend out of capital.
    • Payments of dividends out of capital or effectively out of capital amounts to a return or withdrawal of part of an investor’s original investment or from capital gains attributed to that original investment. Any distributions involving payment of dividends out of the ETF’s capital or effectively out of capital may result in an immediate reduction in the Net Asset Value (“NAV”) per Unit.
    Distribution History
    Ex-Date Record Date Payable Date Dividend Per Share Dividend Paid Out
    of Net Distributable Income*
    for the month
    Dividend Paid Out
    of Capital
    2013-12-06 2013-12-09 2013-12-18 RMB 0.12 per share RMB 0.12 RMB 0.00
    2014-10-07 2014-10-08 2014-10-27 RMB 0.28 per share RMB 0.127 RMB 0.153
    2015-12-18 2015-12-21 2015-12-28 RMB 0.25 per share RMB 0.168 RMB 0.082
    2016-12-16 2016-12-19 2016-12-29 RMB 0.27 per share RMB 0.216 RMB 0.054
    *“Net distributable income” means the net investment income (i.e. dividend income and interest income net of fees and expenses) attributable to the relevant share class and may also include net realised gains (if any) based on unaudited management accounts. However, “net distributable income” does not include net unrealised gains.
    Warning: Please note that a positive distribution yield does not imply a positive return. Investors should not make any investment decision solely based on information contained in the table above. There is no guarantee of distribution. Investors should read the relevant offering document (including the key facts statement) of the fund for further details including the risk factors.

    All dollar amounts are in RMB. All dates are in GMT+8 Time. Any exceptions are noted.

    Documents
    Prospectus
    Product Key Facts
    Monthly Newsletter
    For request of the fund literature hardcopies, please contact us.
    All documents are in PDF format.

    Download Acrobat Reader.
    Announcement
    Monthly Return
    Underlying Index Methodology Update
    Unaudited Semi-Annual Accounts
    AUDITED ACCOUNTS
    Updated Disclosure on Liquidity Risk Management and Automatic Exchange of Financial Account Information
    Shenzhen Hong Kong Stock Connect
    Clarification Announcement
    Distribution Annoucement
    Changes to trust deed
    Semi Annual Unaudited Accouts
    Incorrect End of Day Net Asset Value on the Fund's Website
    Audited Accouts
    Hong Kong Tax Resident Certificate, reversal of PRC tax provision and adjustment to Net Asset Value
    PD agent announcement
    SBL announcement
    Change of Implementation Arrangement of Securities Lending and Repurchase Transactions
    Shanghai – Hong Kong Stock Connect
    Impact on the NAV in terms of actual amount after the change in PRC withholding tax provisioning
    Impact on the NAV of the Sub-Funds after the change in PRC withholding tax provisioning
    Change in respect of PRC withholding tax provisioning approach of the Sub-Fund
    Change in Methodology for Compiling the Underlying Index
    Change of Investment Strategy to permit the use of representative Sampling
    Foreign Account Tax Compliance Act (FATCA)
    Change in RQFII Quota Administration Policy
    Application For Increase Of The RQFII Quota
    Announcement
    The Increment Of RQFII Quota
    Change in the transaction fee of the Sub-Fund
    Update to CSOP ETF SERIES
    Changes in respect of PRC withholding tax provisioning approach on the gross unrealised and realised capital gains derived from trading of China A-Shares of the Sub-Fund
    Trading Band Limit
    Index Methodology Change
    Listing Of Japanese Depository Receipt On Tokyo Stock Exchange
    The Increment Of RQFII Quota And Resumption Of Creation Of Units
    Addition Of A New Hong Kong Dollar Counter Of CSOP FTSE CHINA A50 ETF Under Dual Counter Model
    The Full Utilisation Of RQFII Quota And Suspension Of Creation Of Units
    For request of the fund literature hardcopies, please contact us.
    All documents are in PDF format.

    Download Acrobat Reader.
    Financial Reports
    Semi Annual Report
    Annual Report
    Audited Accounts
    For request of the fund literature hardcopies, please contact us.
    All documents are in PDF format.

    Download Acrobat Reader.
    FAQ
    (A) BASIC ETF KNOWLEDGE
     

    What is an ETF?

    An ETF is an open-ended fund that can be traded like a share on the security exchange. An index-tracking ETF is a listed collective investment scheme that aims to track the performance of the underlying index. The underlying index can be on a security market, a segment of the security market, or even bonds and securities.

    What is the aim of investing in ETFs?

    By investing in ETFs, investors may receive a return that replicates (usually not 100%) the performance of the index without physical ownership of the index constituent securities.

    How does an ETF track the performance of its underlying index?

    Tracking is usually achieved by using full replication or representative sampling, or synthetic replication strategies.

    Using a full replication strategy means that an ETF will invest in the constituent securities of the underlying index in substantially the same weightings as these securities have in the index. Hence, the performance of the ETF will match the performance of the underlying index as closely as practicable.

    An ETF adopting a representative sampling strategy holds a sample of securities that have similar features such as market capitalisation, industry weights and liquidity to the constituent securities of the underlying index. ETFs that use this strategy tend to have a higher risk of tracking error than those using a replication strategy.

    A synthetic replication strategy means that the ETF will invest in financial derivative instruments to replicate the index performance. There are additional risks associated with such strategy that are not found in the above two strategies.

    Management of ETFs

    Most ETFs are passively managed by managers who will invest in the constituent securities of the underlying index according to its respective weightings in the underlying index.

    When a constituent security itself or its weighting in the underlying index changes, managers are responsible for implementing the necessary adjustments to the ETF's portfolio of securities to ensure that the composition and weightings of the securities held by the ETF closely corresponds to that of the underlying index.

    Market price of ETFs

    The market price of each ETF unit is largely based on its net asset value ("NAV") per unit. However, as ETF units are traded on the security exchange, there may be a disparity between the market price and the ETF’S NAV due to market forces, such as supply and demand. With the presence of the creation and redemption mechanism, such divergence should be minimal under normal circumstances.

    Comparison between ETFs vs. shares vs. funds

      ETF Shares Traditional open-ended investment funds
    Trading Channel Exchange Exchange Fund Manager or Distributor
    Trading Period Intraday during exchange trading hours Intraday during exchange trading hours Subscription and redemption applications before the cut-off time on the fund's dealing day
    Diversification High Low Medium-High
    Minimum Trading Size Low Low Medium-High

     

    How to invest in ETFs?

    In Secondary Market:
    An investor can invest in an ETF by simply opening an account with an authorised stock broker and start investing in an ETF in a process similar to purchasing and selling securities.

    In Primary Market:
    If an investor intends to invest a substantial amount in an ETF, he or she may contact one of the ETF's Participating Dealers (“PD”). The PD can assist the investor in creating ETF units with the ETF's manager, with applicable transaction fees and brokerage commission agreed upon between the investor and the PD.

     

    What are the general investment risks?

    The risks of investing in ETFs include but are not limited to the following points:

    • To the extent that the underlying index concentrates in the securities of a particular industry or group of industries, the performance of ETFs could be more volatile than the performance of less concentrated funds?
    • Like other index-tracking funds, an ETF is not actively managed meaning the manager does not have the discretion to select securities individually or to take defensive positions in declining markets. Hence, any fall in the underlying index will result in a corresponding fall in the value of the ETF. On the other hand, no assurance can be given that the performance of an ETF will be identical to the performance of the underlying index due to many factors?
    • Although ETF units will be listed on a security exchange, there can be no assurance that active trading in the ETF units can be maintained.

    In general, an investor should consider if an investment in ETFs is a suitable investment for himself or herself in terms of his or her financial situation, investment experience and investment objectives. The investor should read the offering documents of the relevant ETF (including the full text of the risk factors stated therein) in detail before making any investment decision. It should be noted that investment involves risks (including the possibility of loss of the capital invested), that prices of ETF units may go up as well as down and past performance information is not indicative of future performance.


    (B) FOCUSING ON THE CONCEPT OF RQFII ETF
     

    GENERAL

    What is RQFII?

    RQFII is a new policy initiative of the Mainland authorities which allows qualified RQFII holders to channel RMB funds raised in Hong Kong to be invested into the PRC securities markets. RQFII holders may issue public or private fund or other investment products using their RQFII quotas. RQFII funds give retail investors access to invest in PRC securities markets as they can invest RMB directly into the PRC bond and equity markets (including the inter-bank bond and exchange-traded bond market) through the RQFII quotas. Subscriptions and redemptions of units in the fund must be settled and paid in RMB. Like other funds, RQFII funds must be authorized by the SFC before they can be marketed to the public in Hong Kong. RQFII is granted to Hong Kong subsidiaries of qualified Mainland asset management and securities firms which allows them to channel RMB raised in Hong Kong to invest in the Mainland securities markets.

    What is RQFII A-share ETF?

    RQFII A-share ETF is a RMB-denominated physical A-share ETF. Through the RQFII investment quota granted by Mainland authorities, an RQFII A-share ETF seeks to track the performance of an A-share index by channeling the RMB raised outside mainland China to invest directly in a portfolio of A-shares. RQFII A-share ETFs are traded on the Stock Exchange of Hong Kong (SEHK) like stocks. Like other ETFs listed on the SEHK, RQFII A-share ETFs must be authorized by the SFC before they can be offered to the investing public. Investors are reminded that they should read the EFT’s offering document) carefully to understand its key features and risks before making an investment.

    Why invest in RQFII ETF?

    An RQFII ETF will invest RMB solely and directly into the PRC securities markets through its RQFII quota. This means that investors are fully exposed to the RMB currency and PRC domestic securities markets. It should be noted that not all issuers of RMB funds issued in Hong Kong have the pre-approved RQFII investment quota to invest RMB directly in securities and bonds issued in the PRC. In such cases, the issuer may be able to invest in only either offshore RMB denominated investments (e.g. dim sum bonds) or in non-RMB assets.

    What are the key differences between RQFII A-share ETFs and other existing RQFII retail funds currently available to Hong Kong investing public?

      RQFII A-share ETFs RQFII retail funds
    RQFII quota requirement
    Listing on SEHK
    Underlying investment A-shares traded in the Mainland markets At least 80% in RMB bonds and bond funds issued in mainland China, not more than 20% in China A-shares and other equity investments

    Description of the Underlying Index

    The FTSE China A50 Index is a free float-adjusted market capitalisation-weighted index compiled and published by FTSE International Limited (“FTSE”) and is a real-time, tradable index comprising of the largest 50 A-Share companies by full market capitalisation. The index offers the optimal balance between representativeness and tradability for China’s A-Share market. It is a price return index and includes securities listed on both the Shanghai and Shenzhen security exchanges.

    Salient terms of the CSOP A50 ETF

    Investors will be informed that the minimum trading size of the CSOP A50 ETF is 200 units, that the ETF operating cost includes Management Fee, Trustee Fee and other expenses of which full details can be found in the ETF’s prospectus.

    Investors will also be informed that prior to making an investment in the ETF, they will be required to consult with their stock broker or financial adviser for account set-up details to trade RMB products.

    Who should invest in an RQFII ETF?

    Investors who want to retain their RMB (CNH) holding and who are positive about the China A-Share market should invest in the ETF. However, investors should consider the product specific risks outlined below. Investors should also read the offering document and the product key facts statement (Product KFS) of the Fund carefully to understand the key features and risks of the RQFII fund and contact their intermediaries before making any investment.

    What are the key differences in structure and trading between RQFII A-share ETFs and other A-share ETFs currently traded on the SEHK?

      RQFII A-share ETFs Other A-share ETFs
    Investment strategy and replication/ tracking method
    • Physical full replication or representative sampling
    • Direct investment in the Mainland securities markets through RQFII investment quota
    • Invest directly in A-shares that replicate or represent the composition of the underlying A-share index
    • Synthetic replication
    • No direct investment in or holding of Mainland securities
    • Invest in derivative instruments to replicate the underlying index performance
    Trading currency RMB and HK dollar HK dollar

    Is there any specific condition on RQFII A-share ETFs that may lead to the suspension of new unit creation?

    RQFII A-share ETFs may suspend the creation of new units when, among others:

    • the RQFII investment quota is used up, and
    • the RQFII holder cannot obtain additional quota in a timely manner.

    In such event, the units of RQFII A-share ETFs may trade at a significant premium to their NAV.

    What are the risks involved in RQFII funds in general?

    The risks of investing in RQFII funds include but not limited to the following points:

    RQFII regime risk

    The RQFII policy and rules have only been recently announced and there may be uncertainty as to its implementation and such policy and rules are subject to change and interpretation by PRC authorities. The uncertainty and change of the laws and regulations in the PRC (including the RQFII policy and rules) may adversely impact the RQFII fund.

    Risks relating to Mainland markets

    The concentration of RQFII fund's investment in securities and bonds issued in mainland China may result in greater volatility than portfolios which comprise of broad-based global investments.

    Investing in PRC-related companies and in the PRC markets involve certain risks and special considerations not typically associated with investment in more developed economies or markets, such as greater political, tax, economic, foreign exchange, liquidity and regulatory risks.

    There are risks and uncertainties associated with the current Chinese tax laws applicable to investments made by an RQFII fund. Although some RQFII funds may have made tax provision in respect of potential tax liability that may arise from their investments, the provision may not be sufficient or may even be excessive. Any shortfall between the reserves and actual tax liabilities may have to be covered by the fund's assets and may adversely affect the fund's asset value.

    Currency risk

    Since an RQFII fund is denominated in RMB, Hong Kong dollar-based investors are therefore exposed to fluctuations in the RMB exchange rate against the Hong Kong dollar. Like any currency, the exchange rate of the RMB may rise or fall. The RMB is currently not freely convertible and is subject to exchange controls and restrictions.

    Market/Investment risk

    An RQFII fund is an investment fund product and not a bank deposit. In general, there is no guarantee of the repayment of principal or dividend payment.

    The underlying investments of an RQFII fund may fall in value and therefore investment in the fund may suffer loss even if RMB appreciates.

    Reliance on market maker risk

    Market makers may not be as interested in making a market in ETF units denominated in RMB. Any disruption to the availability of RMB may adversely affect the capability of market makers in providing liquidity for the units of RQFII A-share ETFs. The liquidity of the ETF may be adversely affected if there is no market maker for the fund or if the market making activities are not effective.

    Other specific risks from investing in the PRC:

    China market risk

    By investing in the China market, investors will be exposed to both emerging markets risks and risks specific to the China marker.

    Any significant change in PRC’s political, social or economic policies may have a negative impact on investments in the China market and this will affect the value of the Fund. The regulatory and legal framework for capital markets and joint security companies in the PRC may not be as well developed as those of developed countries. Chinese accounting standards and practices may also deviate significantly from international accounting standards. The settlement and clearing system of the Chinese securities markets may not be well tested and as such, may be subject to increased risks of error or inefficiency.

    As the number of PRC securities and their combined total market value are relatively small compared to more developed markets, investments in these securities may be subject to increased price volatility and lower liquidity. The PRC securities market has in the past experienced substantial price volatility, and there is no assurance that such volatility will not occur in future.

    Investors should also be aware that changes in the PRC taxation legislation could affect the amount of income which may be derived and the amount of capital returned from an investment into a RQFII ETF.

    Foreign exchange control risk

    The PRC government may also impose restrictions on the repatriation of RMB out of China. This will in turn limit the depth of the RMB market in Hong Kong, thus reducing the liquidity of the Fund. The Chinese government’s policies on exchange control and repatriation restrictions are also subject to changes which may affect the fund’s positions.

    Government intervention and restrictions risk

    The operation and market making activities of RQFII A-share ETFs may be affected by interventions by the governments and regulators in the financial markets, such as an imposition of trading restrictions, a ban on "naked" short selling or the suspension of short selling for certain stocks.


    (C ) CROSS-BORDER KNOWLEDGE
     

    How is the CSOP A50 ETF a cross-border ETF?

    The CSOP A50 ETF aims to track the performance of the underlying index by directly investing in the constituent securities of the underlying index which are solely A-Shares. However, the ETF itself is listed on the Hong Kong Exchanges and Clearing Limited. A cross-border flow of money will thus occur in the investment process.

    Brief description of the A-share market:

    The PRC has two security exchanges - the Shanghai Security Exchange (“SSE”) which was established in November 26, 1990 and the Shenzhen Security Exchange (“SZSE”) which was established in December 1, 1990.  The two exchanges are under the direct management of the CSRC. The main functions include providing premises and facilities for securities trading, developing the business rules of the exchanges, organising and supervising securities trading and regulating exchange members and listed companies amongst others.

    Since establishment, both the SSE and SZSE have made great achievements in terms of the quantity and types of products listed on them. Currently listed products include A-Shares, B-Shares, funds and bonds. As of May 31, 2012, the number of listed companies amounted to 2412, of which 933 were listed in Shanghai and 1479 were listed in Shenzhen. The combined market capitalization of both the SSE and SZSE amounts to 23.9 trillion Yuan.

    Differences between the A-Share and H-Share markets

    Trading Hours:

    The A-share market opens at 09:30 and closes at 11:30 for the morning trading session. The afternoon trading session opens at 13:00 and closes at 15:00.

    The Hong Kong Security Exchange opens at 09:30 and closes at 12:00 for the morning trading session. The afternoon session opens at 13:00 and closes at 16:00.

    The A-share and Hong Kong markets also have a different holiday schedule.

    “T+ 0” vs. “T+1” Trading Rule:

    The A-share market has the T+1 trading rule which means a security bought on T day can only be sold on T+1. Short-selling is prohibited with an exception made for instruments covered by a pilot program. No such rule exists in the Hong Kong market, save that short-selling is only permitted in securities which meet certain requirements.

    Settlement cycle:

    The A-share market settles on a T+1 basis, while the Hong Kong market settles on a T+2 basis.

    CNH vs. CNY

    Following the introduction of a series of policies by the PRC authorities, a RMB market outside the PRC has developed and has expanded rapidly since 2009. RMB traded outside the PRC is often referred as “offshore RMB” or “CNH”. In contrast, RMB that is traded in the PRC is often referred to as “onshore RMB” or “CNY”.

    Both onshore and offshore RMB are the same currency but are traded in different markets. Since the two RMB markets operate independently, with much restriction placed on the flow between them, both onshore and offshore RMB are traded at different rates. Due to the strong demand for CNH, CNH was previously traded at a premium compared to CNY, although occasional discounts are observed. The relative strength of both the onshore and offshore RMB may change significantly within a short period of time.

    Cross Border Investment Risks

    Offshore RMB/CNH market risk

    Although it is expected that the offshore RMB market will continue to grow in depth and size, its growth is subject to many constraints as a result of PRC laws and regulations on foreign exchange. There is no assurance that new PRC regulations or arrangements will not be promulgated, terminated or amended in the future which will have the effect of restricting the availability of offshore RMB. The limited availability of RMB outside the PRC may affect the liquidity of the CSOP A50 ETF.

    Offshore RMB/CNH Remittance Risk

    The RMB is currently not freely convertible and is subject to exchange control imposed by the PRC government. There is no assurance that new PRC regulations will not be promulgated in the future which have the effect of restricting or eliminating the remittance of RMB into or outside the PRC. Such an event could have a severe adverse effect on the operations of the CSOP A50 ETF.

    Risks relating to RMB trading and settlement of units

    It is likely that not all intermediaries are prepared to carry out trading and settlement of RMB-denominated securities. In addition, the liquidity and trading price of the units of RQFII A-share ETFs may be adversely affected by the limited availability of RMB outside mainland China and the restrictions on the conversion between foreign currency and RMB.

    Although the SEHK has launched the RMB Equity Trading Support Facility (TSF) to enable investors who have insufficient RMB to buy RMB-traded shares, the TSF only supports secondary trading of RMB shares currently and not other types of securities. Therefore, investors cannot use this facility to buy RQFII A-share ETFs.

    Trading differences risk

    While A-shares are subject to trading bands which restrict increases and decreases in the trading price, trading of RQFII A-share ETFs listed on the SEHK is not subject to such restrictions. This difference may affect the level of premium or discount of the trading price of the ETF's units to its NAV.

    Mainland brokerage risk

    Only one brokerage can be appointed for each market (the Shenzhen Stock Exchange and the Shanghai Stock Exchange) to execute transactions (i.e. trading of A-shares) for the RQFII A-share ETF in mainland China. As such the RQFII A-share ETF will rely on only one brokerage for each market, which may be the same brokerage. If the manager of the RQFII A-share ETF is unable to use its designated brokerage in mainland China, the operation of the RQFII A-share ETF will be adversely affected and may cause the units of the RQFII A-share ETF to trade at a premium or discount to the RQFII A-share ETF's NAV or the RQFII A-share ETF may not be able to track the underlying index.

    Reliance on parent company risk

    The manager of RQFII A-share ETFs may not be experienced in managing ETFs and may heavily leverage on the expertise and systems of its Mainland parent company to support the RQFII A-share ETF's investments in the A-share markets. Any disruption in the assistance from the Mainland parent company may adversely affect the operations of the RQFII A-share ETF.

    Risks in light of the cross-border nature of the CSOP A50 ETF

    The CSOP A50 ETF is subject to operational and settlement risks due to its cross-border nature. Operational risks may also be present in the form of communication and trading systems failure. As the CSOP A50 ETF transacts in the China A-Share market, the CSOP A50 ETF may also be exposed to cross-border settlement risks. This may affect the ability to ascertain the value of the CSOP A50 ETF’s portfolio and this may adversely affect the CSOP A50 ETF.

     

    Disclaimer

    This website is owned and managed by CSOP Asset Management Limited (“CSOP”). CSOP reserves the right to change, modify, add or delete, any content and the terms & conditions of use of this website without notice. Users are advised to periodically review the contents of this website to be familiar with any modifications.

    The performance figures contained on this website are for informational purposes only. Past performance is not indicative of future performance. Investments involves risks and the ETF's NAV per unit may rise as well as fall. Persons interested in investing in the ETF should read the relevant fund offering documents (including the full text of the risk factors stated therein) in detail before making any investment decision.

    This website has been prepared by CSOP and has not been reviewed by the Securities and Futures Commission.

    1. An ETF using a full replication strategy generally aims to invest in all constituent stocks/assets in substantially the same weightings as its benchmark.
    2. Intra-day Estimated NAV per unit Calculations are performed by Sumscope. The near real time estimated NAV per unit in HKD is updated during Hong Kong Stock Exchange trading hours,. It is indicative and for reference purpose only. The near real time estimated NAV per unit in HKD uses a real time HKD:CNH foreign exchange rate - it is calculated using the near real time estimated NAV per unit in RMB multiplied by a real time HKD:CNH foreign exchange rate provided by Sumscope when the SEHK is opened for trading. The near real time estimated NAV per unit in HKD is updated every 15 seconds throughout the SEHK trading hours. Since the estimated NAV per unit in RMB will not be updated when the underlying A-Shares market is closed, the change in the estimated NAV per unit in HKD (if any) during such period is solely due to the change in the foreign exchange rate.
    3. Market prices are provided on a 20-minute delayed basis by Sumscope.
    4. Performance is calculated on NAV to NAV basis in RMB and assumes dividend will not be reinvested. Change of the official NAV per Unit in RMB and change of the NAV per Unit in HKD indicate the change of the NAV per Unit since previous Dealing Day where both the SEHK and the underlying A-Shares market are open for normal trading. Refer to the Prospectus for more information on determination of Net Asset Value. Source of NAV per Unit in RMB: HSBC Institutional Trust Services (Asia) Limited.
    5. Change of the closing price in RMB and HKD traded units indicate change of closing price since previous SEHK trading day. (Source: Bloomberg)
    6. The last closing NAV per Unit in HKD is indicative and for reference purpose only and is calculated using the last closing NAV per Unit in RMB multiplied by an assumed foreign exchange rate using the CNH fixed offshore RMB (“CNH”) exchange rate quoted by Reuters at 3:00 p.m. (Hong Kong time) as of the same Dealing Day. When the underlying A shares market is closed, the official last closing NAV per unit in RMB and NAV per unit in HKD will not be updated. Dealing Day means each business day on which both SEHK and the underlying A shares market are open for normal trading.
    7. Index returns are for illustrative purposes only and should not be taken as an indication or guarantee of future performance. Management fees, transaction costs or other expenses are not reflected in index returns. Change indicates the change since the previous business day's closing index level. (Source: FTSE, Reuters).
    8. Additional Participating Dealer(s) will be appointed from time to time.
    9. Additional Market Maker(s) will be appointed from time to time.


    Disclaimer
    This website is owned and managed by CSOP Asset Management Limited (“CSOP”). CSOP reserves the right to change, modify, add or delete, any content and the terms & conditions of use of this website without notice. Users are advised to periodically review the contents of this website to be familiar with any modifications.

    The performance figures contained on this website are for informational purposes only. Past performance is not indicative of future performance. Investment involves risks and the ETF's NAV per unit may rise as well as fall. Persons interested in investing in the ETF should read the relevant fund offering documents (including the full text of the risk factors stated therein) in detail before making any investment decision.

    This website has been prepared by CSOP and has not been reviewed by the Securities and Futures Commission.