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 Prospectus and the Product Key Facts Statement for further details, including product features and risk factors. Investors should not base on this website alone to make investment decisions.

The CSOP MSCI China A 50 Connect ETF (the “Sub-Fund”) is a sub-fund of the CSOP ETF Series OFC (the “Company”), which is a public umbrella open-ended fund company established under Hong Kong law with variable capital with limited liability and segregated liability between sub-funds. The Sub-Fund is a passively managed index tracking ETF authorised under Chapter 8.6 of the Code on Unit Trusts and Mutual Funds issued by the Securities and Futures Commission (the “SFC”). The shares of the Sub-Fund (the “Shares”) are traded on the Stock Exchange of Hong Kong Limited (the “SEHK”) like stocks.
The Sub-Fund is a physical ETF and invests primarily in China A-Shares listed on the Shanghai Stock Exchange (“SSE”) and Shenzhen Stock Exchange (“SZSE”) of the PRC mainland primarily through the Manager’s Qualified Foreign Investor (“QFI”) status and/or the mutual stock market access between PRC mainland and Hong Kong, comprising the Shanghai-Hong Kong Stock Connect and the Shenzhen-Hong Kong Stock Connect (the “Stock Connect”). The Sub-Fund is denominated in RMB.
  • The Sub-Fund is not principal guaranteed and your investments may suffer losses. There is no assurance that the Sub-Fund will achieve its investment objective.
  • The Sub-Fund’s investment in equity securities is subject to general market risks, whose value may fluctuate due to various factors, such as changes in investment sentiment, political and economic conditions and issuer-specific factors.
  • MSCI China A 50 Connect Index (the “Index”) is a new index. The Sub-Fund may be riskier than other exchange traded funds tracking more established indices with longer operating history.
  • The Index is subject to concentration risk as a result of tracking the performance of securities incorporated in, or with the majority of revenue derived from, or with a principal place of business in the PRC mainland. The Sub-Fund’s investments are concentrated in a single country (i.e. the PRC mainland). As such, the Sub-Fund may be subject to greater volatility than broad-based funds, such as a global or regional fund, as the Index is more susceptible to fluctuations in value resulting from adverse conditions in the PRC mainland.
  • The PRC mainland is considered an emerging market and investments in the PRC mainland market may be subject to greater economic, political, policy, tax, foreign exchange, legal, regulatory, volatility and liquidity risks than that in more developed countries. The A-Shares market is more volatile and unstable (e.g. due to suspension of particular stocks or government intervention) than the more developed markets.
  • The Sub-Fund’s synthetic representative sampling strategy will involve investing up to 50% of its NAV in FDIs, which will only be direct investment in funded total return swap transaction(s) through one or more counterparty(ies). Other than Swaps, the Sub-Fund may also invest in other FDIs such as forwards for hedging purposes. As such, the Sub-Fund may suffer significant loss if a Swap Counterparty fails to perform its obligations, or in case of insolvency or default of the Swap Counterparty(ies).
  • Risks associated with FDIs include counterparty/credit risk, liquidity risk, valuation risk, volatility risk and over-the-counter transaction risk. FDIs are susceptible to price fluctuations and higher volatility, and may have large bid and offer spreads and no active secondary markets. The leverage element/component of an FDI can result in a loss significantly greater than the amount invested in the FDI by the Sub-Fund. Exposure to FDIs may lead to a high risk of significant loss by the Sub-Fund.
  • The relevant rules and regulations on the Stock Connect are subject to change which may have potential retrospective effect. The Stock Connect is subject to quota limitations which may restrict the Sub-Fund’s ability to invest in A-Shares through the programme on a timely basis. Where a suspension in the trading through the programme is effected, the Sub-Fund’s ability to invest in China A-Shares or access the PRC mainland market through the programme will be adversely affected. In such event, the Sub-Fund’s ability to achieve its investment objective could be negatively affected.
  • The Sub-Fund’s ability to make the relevant investments or to fully implement or pursue its investment objective and strategy is subject to the applicable laws, rules and regulations (including restrictions on investments and repatriation of principal and profits) in the PRC mainland, which are subject to change and may have retrospective effect.
  • The Sub-Fund may suffer substantial losses if the approval of the QFI is being revoked/terminated or otherwise invalidated as the Sub-Fund may be prohibited from trading of relevant securities and repatriation of the Sub-Fund’s monies, or if any of the key operators or parties (including QFI custodian/brokers) is bankrupt/in default and/or is disqualified from performing its obligations (including execution or settlement of any transaction or transfer of monies or securities.
  • Securities lending transactions may involve the risk that the borrower may fail to return the Securities lent out in a timely manner and the value of the collateral may fall below the value of the Securities lent out.
  • RMB is currently not a freely convertible currency as it is subject to foreign exchange controls and restrictions. Non-RMB based investors are exposed to foreign exchange risk and the value of RMB against the investors’ base currency (for example, HKD) may depreciate. Any depreciation of RMB could adversely affect the value of investor’s investment in the Sub-Fund.
  • Although offshore RMB (CNH) and onshore RMB (CNY) are the same currency, they trade at different rates. Any divergence between CNH and CNY may adversely impact investors.
  • Under exceptional circumstances, payment of redemptions and/or dividend payment in RMB may be delayed due to the exchange controls and restrictions applicable to RMB.
  • There are risks and uncertainties associated with the current PRC mainland tax laws, regulations and practice in respect of capital gains realised via QFI or the Stock Connect (which may have retrospective effect). Any increased tax liabilities on the Sub-Fund may adversely affect the Sub-Fund’s value.
  • Based on professional and independent tax advice, the Sub-Fund does not make any withholding income tax provision for gross unrealised and realised capital gains derived from the trading of A-Shares (either via the Stock Connect or QFI).
  • As the SSE and SZSE may be open when Shares in the Sub-Fund are not priced, the value of the securities in the Sub-Fund’s portfolio may change on days when investors will not be able to purchase or sell the Sub-Fund’s Shares. Differences in trading hours between the SSE and SZSE and the SEHK may also increase the level of premium or discount of the Share price to its NAV.
  • While A-Shares are subject to trading bands which restrict increases and decreases in the trading price, Shares of the Sub-Fund listed on the SEHK are not. This difference may also increase the level of premium or discount of the Share price to its NAV.
  • Although the Manager will use its best endeavours to put in place arrangements so that at least one market maker will maintain a market for the Shares and that at least one market maker gives not less than 3 months’ notice prior to terminating market making arrangement under the relevant market maker agreement, liquidity in the market for the Shares may be adversely affected if there is no or only one market maker for the Shares. There is also no guarantee that any market making activity will be effective.
  • The Sub-Fund may be subject to tracking error risk, which is the risk that its performance may not track that of the Index exactly. This tracking error may result from the investment strategy used, and fees and expenses. 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 performance of the Index.
  • The trading price of the Shares on the SEHK is driven by market factors such as the demand and supply of the Shares. Therefore, the Shares may trade at a substantial premium or discount to the Sub-Fund’s NAV.
  • As investors will pay certain charges (e.g. trading fees and brokerage fees) to buy or sell Shares on the SEHK, investors may pay more than the NAV per Share when buying Shares on the SEHK, and may receive less than the NAV per Share when selling Shares on the SEHK.
  • The Sub-Fund may be terminated early under certain circumstances, for example, where the Index is no longer available for benchmarking or if the size of the Sub-Fund falls below USD10,000,000 (or its equivalent in the Sub-Fund’s base currency). Investors may not be able to recover their investments and may suffer a loss when the Sub-Fund is terminated.
  • Investors should note that distributions are made in RMB only. As such, investors may suffer a foreign exchange loss and incur foreign exchange associated fees and charges to receive their dividend.
  • Payment of dividends 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 such distributions involving payment of dividends out of capital or effectively out of capital of the Sub-Fund may result in an immediate reduction of the NAV per Share of the Sub-Fund.
  • The Sub-Fund is passively managed and the Manager will not have the discretion to adapt to market changes due to the inherent investment nature of the Sub-Fund. Falls in the Index are expected to result in corresponding falls in the value of the Sub-Fund.

Please note that the above listed investment risks are not exhaustive and investors should read the Prospectus and the Product Key Facts Statement in detail before making any investment decision.

Fund Name
CSOP MSCI China A50 Connect ETF
Stock Code
3003.HK
Fund Manager
CSOP Asset Management Limited
Listing Date
13 Decemeber 2021
Underlying Index
MSCI China A50 Connect Index
Base Currency
RMB
Trading Currency
HKD
Trading Board Lot Size
100 Shares
Share Price
~7.8 HKD*
Minimum Investment Threshold
~780 HKD*
Management Fee
0.99% per annum^
Ongoing Charges Over a Year
Estimated to be 1.5%#




* Estimated data for reference only. Data as of 13th December 2021
^ Please note that some fees may be increased up to a permitted maximum amount by providing one month’s prior notice to Shareholders. Please refer to the section headed “Fees and Expenses” in Part 1 of the Prospectus for details.
# As the Sub-Fund (as defined below) is newly set up, this figure is a best estimate only and represents the sum of the estimated ongoing charges over a 12-month period, expressed as a percentage of the estimated average NAV over the same period. It may be different upon actual operation of the Sub-Fund and may vary from year to year. The ongoing charges figure does not include the Swap fees as discussed herein.






1. Balanced Allocation Among China A-Shares Industries, Covering Leading Stocks in New Economy Sectors

11Sectors

X
2Largest stocks
in each sector
+
28Remaining large
market cap stocks
=
MSCI
China A50


i. Comprehensive and Balanced

MSCI China A50 Connect Index (MSCI China A50) implements sector neutrality and has a balanced sector distribution, in line with China’s real economic development trend.
It avoids overweighting financials, which is common for traditional A-Shares broad-based indices, and becomes a better representation of the performance of both China’s new economy and old economy.



Sector Breakdown of MSCI China A50 Connect Index




Sector Breakdown of Main A-Shares Broad-based Indices


Source: MSCI, as of 1st December 2021



ii. Representative and Growth-driven


The performance of all constituents far exceeds the market average*

The index's constituents are only 1% of the A-Shares market, but they account for 24% market cap, 22% revenue and 34% net profit attributed to parent company.



Top 10 Constituents
Code Companies GICS
sector
Index
weighting
Compound annual
growth rate of
revenue in the
past 5 years^
Compound annual
growth rate of
net income in the
past 5 years^
Sector
leaders
300750.ZK Contemporary Amp Industrials 9.66% 54.57% 43.09% Power battery
600519.SH Kweichow Moutai Cons Staples 7.69% 23.98% 24.67% Chinese liquor
601012.SH Longi Green Ener Info Tech 5.74% 55.79% 75.05% Photovoltaic
600036.SH China Merch Bank Financials 4.32% 7.59% 11.03% Financials
002594.ZK BYD Co Cons Discr 3.95% 14.37% 8.44% Automobile
600309.SH Wanhua Chem Grp Materials 3.73% 30.38% 44.21% Chemical industry
002475.ZK Luxshare Prec Info Tech 3.53% 55.61% 46.29% Electronic
603501.SH Will Sc Info Tech 2.92% 58.47% 87.94% Semiconductor
601888.SH China Tourism Cons Discr 2.83% 19.83% 32.46% Duty free
002812.SH Yunnan Ener New Materials 2.79% 30.50% 49.37% Lithium battery
isolation film
Average 35.11% 42.26%


Source: MSCI, as of 1st December 2021
^ Source: Bloomberg, Wind, as of 31 December 2020
* Source: Wind, as of 30 June 2021






2. Better Performance than other Mainstream Broad-based A-Shares Indices

MSCI China A50 Connect Index has accumulatively risen by more than 170% in the past nine years, and its long-term performance is better than other mainstream broad-based A-shares indexes such as SSE 50, CSI 300, FTSE China A 50.



Historical Performance


Source: Bloomberg, 30 November 2012 to 19 November 2021. All index level is price return index. The MSCI China A 50 Connect Index was launched on 20 Aug 2021. Data prior to the launch date is back-tested data (i.e. calculations of how the index might have performed over that time period had the index existed). There are frequently material differences between back-tested performance and actual results. Past performance - whether actual or back-tested - is no indication or guarantee of future performance.




Risk – Return Analysis of Indexes
MSCI China
A50 Connect
MSCI China A SSE50 FTSE China A50 CSI300
Cumulative Return 162.43% 158.87% 104.51% 120.80% 125.83%
Annualized Rate of Return 10.82% 10.66% 8.52% 9.47% 9.76%
Annualized Volatility 23.20% 23.64% 23.01% 23.23% 21.77%
Annualized Sharp Ratio 0.55 0.54 0.43 0.47 0.50
Max Drawdown -49.10% -44.15% -44.70% -43.02% -46.70%


Source: WIND, 1 December 2012 to 30 November 2021






3. MSCI China A50 Connect Index Has a Complete Product Ecosystem and Is Sought After By Domestic and International Investors

Foreign Inflow
  • In the past three years, international index companies have been continuously taking A-Shares in their flagship indices, accelerating foreign inflow to A-share market.
Enthusiastic Response in Mainland China
  • On 22 October 2021, the first batch of onshore MSCI China A50 Connect ETFs were issued and received enormous creations. The total initial investment exceeded 30 billion RMB.^
  • On 8 November 2021, the first batch of four MSCI China A50 Connect ETFs were officially listed. The total turnover on the first day of listing exceeded 10 billion RMB.*
Complete Index Ecosystem
  • On 18 October 2021, Hong Kong Stock Exchange launched MSCI China A50 Connect Index Futures, which is one of the only two A-Shares index futures in the overseas market.

^ Source: Wallstreentcn
* Source: STCN






CSOP - Leading A-Shares ETFs Manager



As a leading A-shares ETFs manager in the Asia-Pacific market, CSOP has issued 12 A-shares-related products.
CSOP is a leading A-share ETFs manager in the Asia-Pacific market. Among all A-share ETFs listed on the Hong Kong Stock Exchange, those issued by CSOP account for nearly 20%^ by asset under management (AUM) and nearly 26%^ by average daily turnover (ADT) .



Core
CSOP FTSE China A50 ETF (2822.HK)
CSOP MSCI China A Inclusion Index ETF (3149.HK)
CSOP CSI 500 ETF (3005.HK)
CSOP MSCI China A50 Connect ETF (3003.HK)
Growth
CSOP SZSE ChiNext ETF (3147.HK)
CSOP STAR 50 Index ETF (3109.HK)
Thematic
CSOP Yinhua CSI 5G Communications Theme ETF (3193.HK) #
CSOP Huatai-PineBridge CSI Photovoltaic Industry ETF (3134.HK) *
CSI 300 Index
CSOP CSI 300 Index Daily (2x) Leveraged Product (7233.HK)
CSOP CSI 300 Index Daily (-1x) Inverse Product (7333.HK)
FTSE China A50 Index
CSOP FTSE China A50 Index Daily (2x) Leveraged Product (7248.HK)
CSOP FTSE China A50 Index Daily (-1x) Inverse Product (7348.HK)

^ Source: Bloomberg, as of 30 November 2021
# CSOP Yinhua CSI 5G Communications Theme ETF is a feeder fund. Its master fund, Yinhua CSI 5G Communication ETF, is not authorized by the Securities and Futures Commission for direct offering to the public in Hong Kong.
* CSOP Huatai-PineBridge CSI Photovoltaic Industry ETF is a feeder fund. Its master fund, Huatai-PineBridge CSI Photovoltaic Industry ETF, is not authorized by the Securities and Futures Commission for direct offering to the public in Hong Kong.