China Asset Management and CSOP Asset Management in Hong Kong have launched leveraged and inverse (L&I) products that focus on China A-shares.
China Asset Management today listed the ChinaAMC Direxion CSI 300 Index Daily (-1x) Inverse Product and the ChinaAMC Direxion CSI 300 Index Daily (2x) Leveraged Product, according to a statement from the firm. The products received SFC approval last week.
At the same time, competitor CSOP Asset Management also listed two L&I products tracking the CSI 300 Index today, which are the CSOP CSI 300 Index Daily (-1x) Inverse Product and the CSOP CSI 300 Index Daily (2x) Leveraged Product, according to a Hong Kong-based spokesman for the firm. Like China AMC, both products received SFC approval last week.
The four ETFs are Hong Kong’s first L&I products that track the CSI 300 Index. Their listing follows after the SFC announced in May that it was allowing the launch of L&I products that track mainland equity indices.
At the time of the SFC announcement, the CSOP AM spokesman said that the firm expects huge demand for L&I products tracking mainland indices. According to him, mainland-focused L&I products are expected to gather assets up to three times larger than the HK$7.63bn ($980m) Hang Seng Index L&I market.
Frederick Chu, head of ETFs at China AMC in Hong Kong, also believes that such products will gain traction.
“Many of our investors, including institutional, retail as well as distributors, indicated strong interest on [a leveraged and inverse version of our CSI300 ETF],” he told FSA.
China AMC’s new L&I products are advised by Rafferty Asset Management, according to a statement from the firm. Its subsidiary, Direxion, launched the first pair of CSI 300 L&I ETFs in the US in 2015, it noted.
L&I products were only allowed in Hong Kong in 2016. The sector remains small, accounting for 3.2% or HK$9.97bn of Hong Kong’s HK$311bn ETF market as of the end of June, according to data from HKEX.
