ChinaAMC CSI 300 Index Daily (-1x) Inverse Product (the “Product”) is to provide daily investment results, before fees and expenses, which closely correspond to the inverse (-1x) of the Daily performance of the CSI 300 Index (the “Index”). It is more volatile than conventional exchange traded funds. The Product is not intended for holding longer than one day as the performance of the Product over a longer period may deviate from and be uncorrelated to the inverse performance of the Index over the period. The Product is designed to be used for short term trading or hedging purposes, and is not intended for long term investment. This Product is a derivative product which 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.
Investment involves risks, including the loss of principle. Past performance is not indicative of future results. The value of the Product can be extremely volatile and could go down substantially within a short period of time. It is possible that the entire value of your investment could be lost. Before investing in the Product, investor should refer to the Product’s prospectus and Product Key Facts Statement for details, including the risk factors. You should not make investment decision based on the information on this material alone. Please note:
• The Product is a derivative product and is not suitable for all investors. There is no guarantee of the repayment of principal. Your investment 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 the 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. It is even possible that the Product will lose money over time while the Index’s performance falls or is flat.
• The Product seeks to obtain the required exposure through swaps with different swap counterparties. The Product is exposed to counterparty risk, settlement risk and default risk of the swap counterparties, market risk, price movements, risks of increased swap fees and early termination of the swaps.
• Derivative instruments are subject to valuation risk and liquidity risk and are susceptible to price fluctuations and higher volatility. The Product may suffer losses potentially equal to the full value of the derivatives.
• Swap counterparties may have daily capacity limits, when the limits are reached, the Product’s ability to adjust the size of swaps for sufficient exposure to achieve its investment objective may be adversely affected.
• The Product tracks the inverse (-1x) 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.
• 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.
• 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 lose most or all of its value.
• 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.
• The rebalancing activities of the Product typically take place at or around the end of a trading day. The Product may be more exposed to the market conditions during a shorter interval and may be more subject to liquidity risk.
• Returns for investment for a period of less than a full trading day will generally be greater than or less than the inverse (-1x) investment exposure to the Index. If there is a significant intraday market event and/or significant decrease of Index securities, swap fees may be increased and the Product’s performance may be adversely affected.
• Underlying investments of the Product may be denominated in currencies other than the base currency of the Product. The NAV of the Product may be affected unfavourably by fluctuations in the exchange rates and by changes in exchange rate controls.
• The Product’s investments are concentrated in a specific geographical location (i.e. the PRC). The value of the Product may be more volatile than that of a fund having a more diverse portfolio of investments.
• As of result of concentration on an emerging market, investments of the Product may involve increased risks and special considerations not typically associated with an investment in more developed markets, such as liquidity risks, currency risks/control, political and economic uncertainties, legal and taxation risks, settlement risks, custody risk, likelihood of a high degree of volatility and regulatory policies and controls.
• Investment in debt instruments involves interest rate risk, issuer credit risk, sovereign debt risk, credit rating risk and credit/downgrading risk.
• Investment in other funds involves additional costs. There can also be no assurance that an underlying fund’s investment strategy will be successful or that its investment objective will be achieved.
• There are risks and uncertainties associated with the current PRC tax laws, regulations and practice (which may have retrospective effect). There is a risk that taxes may be levied in future and charged to swap counterparties, which may in turn be charged to the Product and potentially cause substantial loss to the Product.
• The Product is passively managed and the Manager will not have the discretion to adapt to market change due to the inherent investment nature of the Product. Increases in the Index are expected to result in falls in the value of the Product.
• 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 NAV.
• The Product may be subject to tracking error risk, which may result from the investment strategy used, costs related to the use of Swaps, liquidity of the market and fees and expenses, and the correlation between the performance of the Product and the inverse (-1x) Daily performance of the Index may be reduced. There can be no assurance of exact or identical replication of the inverse performance of the Index at any time.
· Investors should understand that the Inverse Product aims to provide returns closely correspond to the opposite/ inverse (-1x) of the Daily performance of the Index. It has to rebalance its position on a daily basis in order to achieve its investment objective. As a result of rebalancing, it may not track the opposite return of the Index when it is held for less than a full trading day or overnight.
· Below is a performance simulator to allow investors to simulate the performance of the Inverse Product during the selected period based on historical data. The investor is assumed to hold the Inverse Product for the entire simulation period. The performance of the Inverse Product is calculated based on it's NAV. The performance of the Inverse Product may not reflect the returns that the investor would be able to obtain as it does not capture the premium/ discount of the Inverse Product, or the trading costs.
|Please select the simulation period|
Product listing date: 27 July 2020. Where no past performance is shown, there was insufficient data available for that period to provide performance.
The data presented above is for reference only and does not represent actual return.
Source: Fund performance and index data are provided by China Asset Management (Hong Kong) Limited and the relevant index providers (if applicable) respectively.
This website is prepared by China Asset Management (Hong Kong) Limited and has not been reviewed by the Securities and Futures Commission.
*ChinaAMC CSI 300 Index Daily (-1x) Inverse Product is a synthetic product.