CSOP Asset Management has received approval from the Securities and Futures Commission (SFC) to launch two leveraged and inverse (L&I) products tracking the Hang Seng Tech Index, according to the regulator’s records.
They two products, the CSOP Hang Seng Tech Index Daily (-2x) Inverse Product and the CSOP Hang Seng Tech Index (2x) Leveraged Product, are expected to be listed on the Hong Exchange (HKEX) next week, according to a person familiar with the matter. The target size during the initial offering period is around $10m each, the person said.
L&I products magnify the returns or losses of a market index depending on the multiplier and market movement. Currently, there are 22 such products in Hong Kong and the sector remains small, accounting for 2.9% or HK$9.69bn of Hong Kong’s HK$337bn ETF market as of the end of October, according to data from HKEX.
The newly approved funds will be the first L&I products that track the Hang Seng Tech Index, which was launched in July this year and includes the 30 largest technology companies in Hong Kong.
“As a good supplement to Hang Seng tech ETFs, Hang Seng tech leveraged and inverse products will provide investors with a flexible tool to handle the short-term volatility seen on the index,” the source said.
The move follows after CSOP AM listed the first ETF tracking the Hang Seng Tech Index in August this year, which now has assets of around HK$5.10bn ($660m).
Other fund managers have followed suite. In Hong Kong, Blackrock, China Asset Management, and Hang Seng Investment Management also launched Hang Seng Tech ETFs, and in Singapore, Lion Global Investors and OCBC Securities (both of which are part of the OCBC Group) jointly rolled out an ETF tracking the index last month.