The Units of Samsung HSCEI Daily (-1x) Inverse Product (Stock Code: 07328) (the “Product”) will cease trading on The Stock Exchange of Hong Kong Limited from 19 January 2021. Please refer to the “Announcement and Notice of The Proposed Cessation of Trading, Termination, Voluntary Deauthorisation and Delisting and Non-Applicability of Certain Provisions of The Code on Unit Trusts and Mutual Funds” dated 18 December 2020, the subsequent reminder announcements and all other relevant announcements relating to the Product for further details.
This product is not intended for holding longer than one day as the performance of this product over a longer period may deviate from and be uncorrelated to the inverse performance of the Index over the period.
This product is designed to be used for short term trading or hedging purposes, and is not intended for long term investment.
This is a complex product. Investors should exercise caution in relation to the product. This product only targets sophisticated trading-oriented investors who understand the potential consequences of seeking Daily inverse results and the associated risks and constantly monitor the performance of their holdings on a Daily basis.
Samsung HSCEI Daily (-1x) Inverse Product (the “Product”) is a sub-fund of Samsung Leveraged and Inverse Investment Product Series, an umbrella unit trust established under Hong Kong law. Units of the Product (“Units”) are listed on The Stock Exchange of Hong Kong Limited (the “SEHK”). These Units are traded on the SEHK like listed stocks. It is a futures-based product which invests directly in futures contracts on the Index traded on the Hong Kong Futures Exchange Limited (the “HKFE”) (“HSCEI Futures Contracts”) so as to give the Product the inverse (-1x) Daily performance of the Index..
Investment always involves risks. Investors should refer to the Prospectus and other offering documents for further details including the risk factors. Investors should not only base on the following information alone to make investment decisions. Please note the relevant information is prepared by Samsung Asset Management (H.K.) Ltd and has not been reviewed by the SFC. If investors are in any doubt, you should consult bank manager, solicitor, accountant or other financial adviser for independent advice. The risks are (included but not limited to):
1. Investment risk
The Product is a derivative 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/total losses.
2. Inverse performance risk
The Product tracks the inverse Daily performance of the Index. Should the value of the underlying securities of the Index increase, it could have a negative effect on the performance of the Product. Unitholders could, in certain circumstances including a bull market, face minimal or no returns, or may even suffer a complete loss, on such investments.
3. Long term holding risks
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 the inverse performance of the Index over that same period (e.g. the loss may be more than -1 times the increase in the Index).
The effect of compounding becomes more pronounced on the Product’s performance as the Index experiences volatility. With higher Index volatility, the deviation of the Product’s performance from the inverse performance of the Index will increase, and the performance of the Product will generally be adversely affected.
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 falls or is flat.
4. Inverse Product vs. short selling risk
Investing in the Product is different from taking a short position. Because of rebalancing, the return profile of the Product is not the same as that of a short position. In a volatile market with frequent directional swings, the performance of the Product may deviate from a short position.
5. Unconventional return pattern risk
Risk investment outcome of the Product is the opposite of conventional investment funds. If the value of the Index increases for extended periods, the Product will likely to lose most or all of its value.
6. Rebalancing activities risk
There is no assurance that the Product can rebalance its portfolio on a Daily basis to achieve its investment objective. Market disruption, regulatory restrictions or extreme market volatility may adversely affect the Product’s ability to rebalance its portfolio.
7. Liquidity risk
The rebalancing activities of the Product will typically take place near the end of a Business Day at or around the close of trading of the underlying futures market to minimise tracking difference. As a result, the Product may be more exposed to the market conditions during a shorter interval and may be more subject to liquidity risk.
8. Volatility risk
Prices of the Product may be more volatile than conventional ETFs because of the Daily rebalancing activities.
9. Intraday investment risk
The Product will normally be rebalanced near the end of a Business Day at or around the close of trading of the underlying futures market. As such, return for investors that invest for period less than a full trading day will generally be greater than or less than the inverse investment exposure to the Index, depending upon the movement of the Index from the end of one trading day until the time of purchase.
10. Portfolio turnover risk
Daily rebalancing of Product’s holdings causes a higher level of portfolio transactions than compared to the conventional ETFs. High levels of transactions increase brokerage and other transaction costs.
11. Futures contracts risks
The Product is a futures based product. Investment in futures contracts involves specific risks such as high volatility, leverage, rollover and margin risks. The leverage component of futures contracts can result in a loss significantly greater than the amount invested in the futures contracts by the Product. Exposures to futures contracts may lead to a high risk of significant loss by the Product.
A “roll” occurs when an existing futures contract is about to expire and is replaced with a futures contract representing the same underlying but with a later expiration date. The value of the Product’s portfolio (and so the Net Asset Value per Unit) may be adversely affected by the cost of rolling positions forward as the futures contracts approach expiry.
There may be imperfect correlation between the value of the underlying reference assets and the futures contracts, which may prevent the Product from achieving its investment objective.
12. Concentration and PRC market risk
The Product is subject to concentration risk as a result of tracking the inverse performance of a single geographical region or country (the PRC including Hong Kong). The value of the Product may be more volatile than that of a fund having a more diverse portfolio of investments.
The Index constituents are companies incorporated in the PRC which are listed on the SEHK and primarily traded in Hong Kong, and have substantial business exposure to the PRC, an emerging market. Investments of the Product may involve increased risks and special considerations not typically associated with investment in more developed markets, such as liquidity risks, currency risks/control, political and economic uncertainties, legal and taxation risks, settlement risks, custody risk and the likelihood of a high degree of volatility.
13. Holding of HSCEI Futures Contracts restriction in number risk
The positions of futures contracts or stock options contracts held or controlled by the Manager, including positions held for the Manager’s own account or for the funds under its management (such as the Product) but controlled by the Manager, may not in aggregate exceed the relevant maximum under the Securities and Futures (Contracts Limits and Reportable Position) Rules (the “Rules”). Accordingly, if the position held or controlled by the Manager reaches the relevant position limit or if the Net Asset Value of the Product grows significantly, the restrictions under the Rules may prevent creations of Units due to the inability under the Rules of the Product to acquire further HSCEI Futures Contracts. This may cause a divergence between the trading price of a Unit on the SEHK and the Net Asset Value per Unit. The investment exposure could also deviate from the target exposure which adds tracking error to the Product.
14. Distributions risk
Where distributions are distributed out of capital or effectively out of capital, this amounts to a return or withdrawal of an investor’s original investment or from any capital gains attributable to that original investment and may result in an immediate reduction in the Net Asset Value per Unit.
15. Passive investments risks
The Product is not “actively managed” and therefore the Manager will not adopt any temporary defensive position when the Index moves in an unfavourable direction. In such circumstances the Product will also decrease in value.
16. Trading risks
The trading price of the Units on the SEHK is driven by market factors such as the demand and supply of the Units. Therefore, the Units may trade at a substantial premium or discount to the Net Asset Value.
As investors will pay certain charges (e.g. trading fees and brokerage fees) to buy or sell Units on the SEHK, investors may pay more than the Net Asset Value per Unit when buying Units on the SEHK, and may receive less than the Net Asset Value per Unit when selling Units on the SEHK.
17. Trading differences risk
The HKFE and the SEHK have different trading hours. As the HKFE may be open when Units in the Product are not priced, the value of the HSCEI Futures Contracts in the Product’s portfolio may change at times when investors will not be able to purchase or sell the Product’s Units. Difference in trading hours between the HKFE and the SEHK may increase the level of premium/discount of the Unit price to its Net Asset Value.
Trading of the Index constituents closes earlier than trading of HSCEI Futures Contracts, and so there may continue to be price movements for HSCEI Futures Contracts when Index constituents are not trading. There may be imperfect correlation between the value of the Index constituents and HSCEI Futures Contracts, which may prevent the Product from achieving its investment objective.
18. Reliance on market maker risks
Although the Manager will ensure that at least one market maker will maintain a market for the Units and gives not less than 3 months’ notice prior to termination of the market making arrangement, liquidity in the market for the Units may be adversely affected if there is only one market maker for the Units. There is no guarantee that any market making activity will be effective.
19. Tracking error and correlation risks
Fees and expenses of the Product, high portfolio turnover, liquidity of the market and the investment strategy to be adopted by the Manager may result in tracking error and may reduce the correlation between the performance of the Product and the Daily inverse performance of the Index. The Manager will monitor and seek to manage such risk in minimising tracking error. There can be no assurance of exact or identical replication at any time of the Daily inverse performance of the Index.
20. Termination risk
The Product may be terminated early under certain circumstances, for example, where there is no market maker, the Index is no longer available for benchmarking or if the size of the Product falls below HKD40 million. Any distribution received by a Unitholder on termination of the Product may be less than the capital initially invested by the Unitholder, resulting in a loss to the Unitholder.
Fund Objective and Investment Strategy
|Investment Objective||The investment objective of the Product is to provide investment results that, before fees and expenses, closely correspond to the inverse (-1x) Daily performance of the Hang Seng China Enterprises Index (HSCEI) (the “Index”). The Product does not seek to achieve its stated investment objective over a period of time greater than one day.|
|Investment Strategy||Futures replication|
|Underlying Index||Hang Seng China Enterprises Index (HSCEI)|
|Product Base Currency||HKD|
|Creation/ Redemption||HKD cash only|
Annually (usually in March of each year) (if any) in HKD subject to the Manager’s discretion. Distributions may be paid out of capital or effectively out of capital.
|Manager||Samsung Asset Management (Hong Kong) Limited|
|Trustee & Registrar||HSBC Institutional Trust Services (Asia) Limited|
|iNAV Calculation Agent||Interactive Data|
- Provide investment results that, before fees and expenses, closely correspond to the inverse (-1x) Daily performance of the Hang Seng China Enterprises Index (HSCEI) (the “Index”).
- Passively managed
- Futures replication
|Fund Inception Date||13 Mar 2017|
|SEHK Listing Date||14 Mar 2017|
|Financial Year||31 March|
|Total NAV (HKD)||13,893,671 as of 2021-01-19|
|Outstanding Units||3,600,000 as of 2021-01-19|
|Management Fee||0.65% per annum of NAV|
|Trustee Fee||0.08% per annum of NAV, subject to a monthly minimum of HKD 11,500|
|Ongoing Charges Over a Year^||1.43% of the Net Asset Value (0.0058%)|
The ongoing charges figure is an annualized figure based on expenses reported in the Product’s audited financial report for the period year ended 31 Mar 2019. It represents the ongoing expenses chargeable to the Product as a percentage of the average Net Asset Value of the Product over the same period. The figure may vary from year to year.
The annual average daily ongoing charges figure is equal to the ongoing charges figure divided by the number of dealing days for the year ended 31 Mar 2019. The figure may vary from year to year.
Intra-day Estimated NAV
The near real time indicative Net Asset Value per Unit in USD is calculated using a real time HKD:USD foreign exchange rate – it is calculated using the near real time indicative Net Asset Value per Unit in HKD multiplied by a real-time HKD:USD foreign exchange rate quoted by ICE Data Indices LLC.
|Official NAV per Unit in HKD||2021-01-19||3.8594||-0.0922||-2.33|
|Closing Price per Unit in HKD||2021-01-19||3.9480||-||-|
* The last Net Asset Value per Unit in USD is indicative and for reference purposes only. It is calculated using the last Net Asset Value per Unit in HKD multiplied by an assumed foreign exchange rate using the exchange rate for USD quoted by WM Reuters at 4:00pm London time as of the same Dealing Day. When the underlying shares market is closed, the official last Net Asset Value per Unit in HKD and the indicative last Net Asset Value per Unit in USD will not be updated.
|Underlying Index||Hang Seng China Enterprises Index (HSCEI)|
The Hang Seng China Enterprises Index (the “Index”) measures the performance of the largest and most liquid H-shares companies listed in Hong Kong. The Index adopts a freefloat-adjusted market capitalisation weighted methodology with a 10% cap on individual constituent weightings. The Index is a price return index. A price return index calculates the performance of the index constituents without adjustments for cash dividends or warrant bonuses.
|Index Provider||Hang Seng Indexes Company Limited|
|Exchange||Hong Kong Stock Exchange- Main Board|
|Date of Listing / Dealing||14 Ma 2017|
|Primary Exchange Time Zone||GMT+8|
|Bloomberg Ticker||7328 HK|
|Trading Board Lot||200 Unit|
|ABN AMRO Clearing Hong Kong Limited
Mirae Asset Securities (HK) Limited
BNP Paribas Securities Services
Yue Kun Research Limited
Canfield Securities Company Limited
Deutsche Securities Asia Limited
Haitong International Securities Company Ltd
China Merchants Securities (HK) Co., Limited
Nomura International (Hong Kong) Limited
Citigroup Global Markets Asia Limited
Guotai Junan Securities (Hong Kong) Ltd
CGS-CIMB Securities (Hong Kong) Limited
UBS Securities Hong Kong Limited
Goldman Sachs (Asia) Securities Limited
|Click here for latest Market Maker list|
|20201217||Product Key Fact Sheet|
|20201130||Factsheet as of Nov 2020|
|20201130||Interim Financial Report 2020|
|20200731||Annual Report as of 31 March 2020|
|1 Mth||3 Mth||6 Mth||1 Year||Year to date||Since Inception|
|SAMSUNG HSCEI Daily (-1x) Inverse Product||-11.35%||-17.02%||-16.66%||-14.53%||-9.29%||-35.65%|
|Hang Seng China Enterprises Index (HSCEI)||11.93%||17.60%||15.00%||2.75%||9.27%||14.38%|
|SAMSUNG HSCEI Daily (-1x) Inverse Product||-||-||-||-||7.36%||-13.46%||-7.77%|
|Hang Seng China Enterprises Index (HSCEI)||-||-||-||-||-13.53%||-10.30%||-3.85%|
Performance SimulationSAMSUNG HSCEI Daily (-1x) Inverse Product vs. Hang Seng China Enterprises Index (HSCEI)
During the period [ ~ ], accumulative return of SAMSUNG HSCEI Daily (-1x) Inverse Product is , while Hang Seng China Enterprises Index (HSCEI) is , (-1x) Hang Seng China Enterprises Index (HSCEI) is 
Daily Tracking Difference (Daily 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 follow its benchmark/index. It is the volatility (measured by standard deviation) of that return difference.
| Tracking Difference (As of 2021-01-19)
Fund listing Date: 14 Mar 2017
|Tracking Error (As of 2021-01-19)
Fund listing Date: 14 Mar 2017
Rolling 1-Year TD^ :
Actual Average Daily TD for calendar year 2020 : -0.02%
Actual Average Daily TD for calendar year 2019 : -0.01%
Actual Average Daily TD for calendar year 2018 : -0.01%
Rolling 1-Year TE^ : 6.09%
^TE is measured by the standard deviation of the Daily TD. The standard deviation is calculated based on the Daily TD over the rolling one year period
Tracking Difference Chart
Graph(A)-Daily return of the Inverse Product and the -1x daily performance of the underlying Index
Graph(B)-Actual daily tracking difference
Holdings Overview as of 2021-01-19
|Total Net Asset Value(HKD)
(Deemed Total Net Asset Value (HKD)*)
|Total Value of Futures Contract(HKD)||Futures Contract Exposure**|
|Cash and Cash Equivalents(HKD)||100.0%|
Constituents of the index -
|9||BANK OF CHINA||3.04%|
|Ex-Date||Record Date||Payable Date||Dividend Per Share (USD)|
- Data to be shown after the first dividend pay out is made.
*a) “Net Distribution Income” means (i) the net investment income (i.e. dividend income and interest income net of fees and expenses) attributable to the relevant unit class and may also include net realized gains (if any) based on unaudited management accounts. However, “net distributable income” cannot include net unrealized gains. (ii) which is not declared and paid as dividends in a period of a financial year can be carried forward as net distributable income for the next period(s) within the same financial year. “Net distributable income” that has been accrued as at the end of a financial year and is declared and paid as dividends at the next distribution date immediately after that financial year end could be treated as “net distributable income” in respect of that financial year. However, “net distributable income” which has been accrued as at the end of a financial year but is not declared and paid as dividends at the next distribution date immediately after that financial year end should be included as “capital” for the next financial year. (iii) where the fund may pay dividend out of gross income while charging / paying all or part of the fund’s fees and expenses to / out of capital, the amount of fees and expenses that has been paid out of capital has to be deducted from the gross investment income in order to come up with the “net distributable income”.
b) The composition of the latest dividends (i.e. relative amounts paid from (i) net distributable income and (ii) capital) for the last 12 months are available from the Manager on request and on http://www.samsungetf.com.hk. The Manager may amend the above dividend policy with respect to payment of fees and/or dividends out of capital subject to the Securities and Futures Commission’s prior approval and by giving not less than one month’s prior notice to investors.
Please note that a positive distribution yield does not imply a positive return nor guarantee of distribution. Investors should not make any investment decision solely based on information contained in the table above. You should read the relevant offering document (including the key facts statement) of the fund for further details including the risk factors.
Important information about Dividend out of capital / effectively out of capital
- The Manager may in its discretion make cash distributions to Unit holders out of capital or out of gross income (while charging/paying all or part of the Product’s fees and expenses to/out of the capital of the Product) resulting in an increase in distributable income for the payment of distributions which is in effect a payment of distributions out of capital.
- Payment of distributions out of capital or effectively out of 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 out of or effectively out of the Product’s capital may result in an immediate reduction of the Net Asset Value per Unit.
The Hang Seng China Enterprises Index (the “Index”) is published and compiled by Hang Seng Indexes Company Limited pursuant to a licence from Hang Seng Data Services Limited. The mark and name Hang Seng China Enterprises Index are proprietary to Hang Seng Data Services Limited. Hang Seng Indexes Company Limited and Hang Seng Data Services Limited have agreed to the use of, and reference to, the Index by the Manager in connection with Samsung
HSCEI Daily (-1x) Inverse Product (the “Product”), BUT NEITHER HANG SENG INDEXES COMPANY LIMITED NOR HANG SENG DATA SERVICES LIMITED WARRANTS OR REPRESENTS OR GUARANTEES TO ANY BROKER OR HOLDER OF THE PRODUCT OR ANY OTHER PERSON
- THE ACCURACY OR COMPLETENESS OF THE INDEX AND ITS COMPUTATION OR ANY INFORMATION RELATED THERETO; OR
- THE FITNESS OR SUITABILITY FOR ANY PURPOSE OF THE INDEX OR ANY COMPONENT OR DATA COMPRISED IN IT; OR
- (THE RESULTS WHICH MAY BE OBTAINED BY ANY PERSON FROM THE USE OF THE INDEX OR ANY COMPONENT OR DATA COMPRISED IN IT FOR ANY PURPOSE, AND NO WARRANTY OR REPRESENTATION OR GUARANTEE OF ANY KIND WHATSOEVER RELATING TO THE INDEX IS GIVEN OR MAY BE IMPLIED.
The process and basis of computation and compilation of the Index and any of the related formula or formulae, constituent stocks and factors may at any time be changed or altered by Hang Seng Indexes Company Limited without notice. TO THE EXTENT PERMITTED BY APPLICABLE LAW, NO RESPONSIBILITY OR LIABILITY IS ACCEPTED BY HANG SENG INDEXES COMPANY LIMITED OR HANG SENG DATA SERVICES LIMITED
- IN RESPECT OF THE USE OF AND/OR REFERENCE TO THE INDEX BY THE MANAGER IN CONNECTION WITH THE PRODUCT; OR
- FOR ANY INACCURACIES, OMISSIONS, MISTAKES OR ERRORS OF HANG SENG INDEXES COMPANY LIMITED IN THE COMPUTATION OF THE INDEX; OR
- FOR ANY INACCURACIES, OMISSIONS, MISTAKES, ERRORS OR INCOMPLETENESS OF ANY INFORMATION USED IN CONNECTION WITH THE COMPUTATION OF THE INDEX WHICH IS SUPPLIED BY ANY OTHER PERSON; OR
- FOR ANY ECONOMIC OR OTHER LOSS WHICH MAY BE DIRECTLY OR INDIRECTLY SUSTAINED BY ANY BROKER OR HOLDER OF THE PRODUCT OR ANY OTHER PERSON DEALING WITH THE PRODUCT AS A RESULT OF ANY OF THE AFORESAID, AND NO CLAIMS, ACTIONS OR LEGAL PROCEEDINGS MAY BE BROUGHT AGAINST HANG SENG INDEXES COMPANY LIMITED AND/OR HANG SENG DATA SERVICES LIMITED in connection with the Product in any manner whatsoever by any broker, holder or other person dealing with the Product. Any broker, holder or other person dealing with the Product does so therefore in full knowledge of this disclaimer and can place no reliance whatsoever on Hang Seng Indexes Company Limited and Hang Seng Data Services Limited. For the avoidance of doubt, this disclaimer does not create any contractual or quasi-contractual relationship between any broker, holder or other person and Hang Seng Indexes Company Limited and/or Hang Seng Data Services Limited and must not be construed to have created such relationship.
Data Provider Disclaimer