HONG KONG–(BUSINESS WIRE)–CSOP WTI Crude Oil Futures Daily (-1x) Inverse Product (stock code:7345.HK) will be listed on Hong Kong Stock Exchange on 1 December, 2021. Using a combination of a Futures-based replication strategy and a Swap-based synthetic replication strategy, 7345.HK provides investment results closely corresponding to inverse (-1x) the Daily performance of Solactive WTI 1-Day Rolling Futures Index (the “Index”). 7345.HK mainly invests in the active contracts of West Texas Intermediate crude oil (“WTI crude oil”) (also known as Texas light sweet crude oil) futures contracts traded on the New York Mercantile Exchange (NYMEX) (“WTI Futures Contracts”) and in Swaps when such investments are beneficial to the product to achieve its investment objective. In the current volatile market circumstances, 7345.HK has attracted USD 5.6 million initial investment. The inception price per unit is around HKD 7.8 with trading lot of 100 units, and the entry investment is approximately HKD 780.
Being currently the primary source of energy production, oil is one of the most important commodities worldwide. However, given the changes brought by COVID-19, escalating geopolitical disputes and carbon neutrality goals, oil prices are now facing unprecedented uncertainties than ever before. The impact of the COVID-19 hammered oil demand in 2020, forcing WTI oil futures prices to go negative for the first time on record. On 20 April 2020, the oil futures prices have witnessed the largest one-day plunge of over 300% in history, plummeting from USD 18 a barrel to around USD -37 a barrel.1 Although the economy has begun to recover and OPEC has controlled its production, oil futures prices may still experience turbulence in the future owing to repeated COVID-19 outbreaks and unexpected geopolitical disputes. In addition, determined to realize carbon neutrality, global major economies set clear goals to curb carbon emissions latest in the first half of this century. Renewable energy is developing quickly as a substitute for conventional crude oil. The share of renewable energy is estimated to account for 61.8% of total power generation by 2030.2 Moreover, seasonal changes and increasing extreme weather conditions can also impose more variances to oil prices. All these factors together make oil prices more volatile and turbulent than ever. CSOP WTI Crude Oil Futures Daily (-1x) Inverse Product (stock code:7345.HK) can help investors hedge against crude oil volatility in the ever-changing market environment and capture investment opportunities in times of such uncertainty in an easy and transparent way.
Since the first Leveraged & Inversed (“L&I”) product listed in 2016, Hong Kong’s L&I market has seen a continuous growth to HKD 14.34 billion in size and HKD 1.14 billion of average daily turnover as end of October, 2021.3 Dominating Hong Kong’s L&I market, CSOP has demonstrated a remarkable track record with credibility and success by having introduced 15 L&I products in Hong Kong, contributing more than 90% AUM and daily turnover to Hong Kong’s L&I market.4 Ms. Ding Chen, CEO of CSOP comments, “We are very proud of what we have achieved in the past. The success of our past encourages us to remain dedicated to bringing more excellent L&I products to our investors, further promoting the prosperity and development of Hong Kong’s L&I market.” Melody He, Managing Director and Head of Business Development, adds, “From repeated Covid outbreaks to complicated international situation, investors are facing unprecedented uncertainties. I believe 7345.HK will be an excellent tool to help investors hedge risks and handle oil price volatilities amid increasing uncertainties.”
About CSOP Asset Management Limited
CSOP Asset Management Limited (“CSOP”) was founded in 2008 as the first offshore asset manager set up by a regulated asset management company in China. With a dedicated focus on China investing, CSOP manages public and private funds, as well as providing investment advisory services to Asian and global investors. In addition, CSOP is best known as an ETF leader in Asia. As of 30 September 2021, CSOP has more than USD 10 billion in assets under management.
IMPORTANT: Investment involves risks. Investment value may rise or fall. Past performance information presented is not indicative of future performance. Investors should refer to the relevant Prospectus and the Product Key Facts Statement for further details, including product features and risk factors. Investors should not base on this material alone to make investment decisions.
CSOP WTI Crude Oil Futures Daily (-1x) Inverse Product (the “Product”) is a sub-fund of CSOP Leveraged and Inverse Series II, an umbrella unit trust established under Hong Kong law. Units of the Product (the “Units”) are traded in HKD on The Stock Exchange of Hong Kong Limited (the “SEHK”) like stocks. It is a futures and swap based product with an objective to provide investment results that, before fees and expenses, closely correspond to the inverse (-1x) of the Daily performance of Solactive WTI 1-Day Rolling Futures Index (the “Index”).
- Solactive WTI 1-Day Rolling Futures Index (the “Index”) consists of only WTI Futures Contracts whose price movements may deviate significantly from the WTI crude oil spot price. The Product does not seek to deliver an inverse return of WTI crude oil spot price.
- The Product is a futures and swap-based product investing directly in WTI Futures Contracts. It is one of the first leveraged and inverse products tracking a crude oil futures index. The novelty of such a product makes the Product riskier than traditional exchange traded funds investing in equity securities or non-leveraged / inverse futures or swaps funds.
- 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 time the increase in the Index).
- 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 or total losses.
Please note that the above listed investment risks are not exhaustive and investors should read the relevant Prospectus and Product Key Facts Statement in detail before making any investment decision.
Index Provider Disclaimer
The Product is not sponsored, promoted, sold or supported in any other manner by Solactive AG nor does Solactive AG offer any express or implicit guarantee or assurance either with regard to the results of using the Solactive WTI 1-Day Rolling Futures Index and/or the use of Solactive trade mark or the index price/prices of the Solactive WTI 1-Day Rolling Futures Index at any time or in any other respect. The Solactive WTI 1-Day Rolling Futures Index is calculated and published by Solactive AG. Solactive AG uses its best efforts to ensure that the Solactive WTI 1-Day Rolling Futures Index is calculated correctly. Irrespective of its obligations towards CSOP Asset Management Limited, Solactive AG has no obligation to point out errors in the Solactive WTI 1-Day Rolling Futures Index to third parties including but not limited to investors and/or financial intermediaries of the Product. Neither publication of the Solactive WTI 1-Day Rolling Futures Index by Solactive AG nor the licensing of the Solactive WTI 1-Day Rolling Futures Index or Solactive trade mark for the purpose of use in connection with the Product constitutes a recommendation by Solactive AG to invest capital in the Product nor does it in any way represent an assurance or opinion of Solactive AG with regard to any investment in the Product. Remember, the information in this Prospectus does not constitute tax, legal or investment advice and is not intended as a recommendation for buying or selling securities. The information and opinions contained in this Prospectus have been obtained from public sources believed to be reliable, but no representation or warranty, express or implied, is made that such information is accurate or complete and it should not be relied upon as such. Solactive AG will not be responsible for the consequences of reliance upon any opinion or statement contained herein or for any omission.
This material is prepared by CSOP and has not been reviewed by the Securities and Futures Commission in Hong Kong.
Issuer: CSOP Asset Management Limited
1 Source: U.S. Energy Information Administration, as of 17 November 2021
2 Source: IEA, as of 2 November 2021
3 Source: Bloomberg, as of 31 October 2021
4 Source: Bloomberg, as of 31 October 2021