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 Global Smart Driving Index ETF (the “Sub-Fund”) is a sub-fund of the CSOP ETF Series OFC (“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. The shares of the Sub-Fund (the “Shares”) are traded on the Stock Exchange of Hong Kong Limited (the “SEHK”) like stocks.

SFC registration and authorization do not represent a recommendation or endorsement of the Company or the Sub-Fund nor do they guarantee the commercial merits of the Company or the Sub-Fund or their performance. They do not mean the Company or the Sub-Fund is suitable for all investors nor do they represent an endorsement of its suitability for any particular investor or class of investors.

The Sub-Fund is a physical ETF and invests primarily in US, PRC mainland and Hong Kong listed securities that could benefit from the technological progress in the automotive industry. The Sub-Fund is denominated in USD.

  • 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.
  • Solactive Global Smart Driving 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 smart driving sector is in the early stages of development. Participants in this field may include companies from various industries. Examples are alternative energy car manufacturers, general analog and mixed signal semiconductors, vehicle autonomous control electronics makers, auto interior comfort / safety / electronics products and other electric motors and motion control products. Therefore, until the sector expands, it is likely to include companies which have only dedicated certain sections of their operations towards the technology progress in the production of smart vehicles (e.g. traditional car producers which do not focus on the use of clean energy).
  • Many of the companies in the smart driving sector have a relatively short operating history. Companies in the smart driving sector typically face intense competition which may have an adverse effect on profit margins and the prices of the securities of these companies. Their profitability is particularly vulnerable and susceptible to rapid changes in technology, rapid obsolescence of products and services, the loss or breach of intellectual property rights, government regulation (including but not limited to tax incentives offered), domestic and international competition (including competition from foreign competitors which may have lower production costs), evolving industry standards, introduction of new product and service, fluctuations in supply and demand for their products and services and the company’s ability to manufacture vehicles on schedule to meet consumer demand.
  • Companies in the smart driving sector typically have heavy and significant spending on research and development, and there is no guarantee that the products or services produced by these companies will be successful. Moreover, the businesses of companies with exposure to or investments in autonomous driving vehicle technology may be exposed to the risk of cybersecurity breaches, product liability claims, traffic accidents related to autonomous vehicles, and other issues that could result in increased regulation. Any errors or vulnerabilities that may be discovered in the products after release may adversely affect the business and operating results of such companies in the smart driving sector.
  • Companies involved in the production and supply of batteries may be adversely impacted by the development of alternative sources of energy and the increasing demand for energy conservation. The revenues of companies in the smart driving sector are cyclical by nature and can also be significantly affected by changes in government spending policies in the region.
  • The Index is subject to concentration risk as a result of tracking the performance of companies active in the smart driving sector. This may result in greater volatility in the value of the Sub-Fund than more diverse portfolios which comprise broad-based investments.
  • Although the companies are based worldwide, the Index is subject to geographical concentration risks as a result of tracking the performance of primarily the US, PRC mainland and Hong Kong listed companies that have business operations in the field of smart driving. The value of the Sub-Fund may be more susceptible to adverse economic, political, policy, foreign exchange, liquidity, tax, legal or regulatory event affecting the US, PRC mainland and Hong Kong markets.
  • 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.
  • 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.
  • A portion of the Sub-Fund’s investments are denominated in HKD or RMB, therefore foreign exchange risk exists between the Base Currency (i.e. USD) and the underlying investments currency. Also, the Sub-Fund's Base Currency is in USD but the Shares are traded in HKD. The NAV of the Sub-Fund may be affected unfavourably by fluctuations in the exchange rates between USD and HKD. Secondary market investors may also be subject to additional costs or losses associated with fluctuations in the exchange rates between HKD and the Base Currency when trading Shares in the secondary market.
  • Investors should note that all Shares will receive distributions in the Base Currency (USD) only. In the event that the relevant Shareholder has no USD account, the Shareholder may have to bear the fees and charges associated with the conversion of such distribution from USD to HKD or any other currency. The Shareholder may also have to bear bank or financial institution fees and charges associated with the handling of the distribution payment. Shareholders are advised to check with their brokers regarding arrangements for distributions.
  • As the NYSE, the NASDAQ, the SSE and the 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 NYSE / the NASDAQ / the SSE / the SZSE and the SEHK 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 suffer a loss when the Sub-Fund is terminated.
  • 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.

CSOP THEMATIC ETF SERIES

CSOP Global
Smart Driving Index ETF



Brochure

Learn more
Exchange Ticker 3162.HK
Underlying Index Solactive Global Smart Driving Index1
Minimum Investment HKD7802
Management Fee 0.99%3
Inception Price per Share (Approx.) ~HKD7.802
Trading Lot 100 shares
Listing Date 2021/08/12
  • "the Index"
  • Estimated data for reference only
  • Management fee includes custodian fee, registrar fee and administration fee. Please refer to the section headed “Fees and Charges” in Part 1 of the Prospectus for details.

What is Smart Driving?

Three Main Characteristics of Smart Driving

Power Electrification
Power Electrification
Fuel
  • Non-renewable, high cost, air pollution emission, noise, etc.
  • With both fuel system and power system
Fuel > Electric
Electric
  • New energy, more environmental friendly
  • Unified power system, with more possibilities for function, etc.
Cabin Intelligence
Cabin Intelligence

Traditional Touch Operation
  • Closed system with high maintenance cost
  • Functions difficult to expand
Traditional Touch Operation > Intelligent Voice Interaction
Intelligent Voice Interaction
  • Easy to operate
  • Integrated software and hardware, easier to upgrade
  • More entertainment functions
Driving Automation
Driving Automation

Manual Driving
  • Higher user threshold as driving test is required
  • Triggered "Speeding", "Congestion" and other irrational driving behaviors
  • Manpower is occupied
Manual Driving > Automatic Driving
Automatic Driving
  • Lower user threshold
  • Higher road transportation efficiency
  • Travel time controllable and predictable
  • Enhancing productivity

Why is Smart Driving so Important?



Why is Smart Driving so Important?
In 2020, the penetration rate of EV is only 4%, with 3.1 million sales volume and market scale of USD100bn.
From 2020 to 2025, the compound growth rate of EV sales is expected to reach 40%.
By 2025, the scale of global EV is expected to approach USD 600bn, and the penetration rate is expected to reach 18%. By 2030, the scale will be twice that of smartphones, with a penetration rate of 38%.


Source: SPDB International, Passenger Federation, InsideEVs, IDC, IBISWorld.







Smartphone market is almost saturated, electric and smart vehicle is the focus of future technology development

Market Size: Electric Vehicles vs Smartphone (by sales amount, 100 million USD)


Market Size: Electric Vehicles vs Smartphone

Source: SPDB International, Passenger Federation, InsideEVs, IDC, IBISWorld; E=SPDB International estimations.

The penetration rate of electric and smart vehicle is increasing rapidly, disrupting the future of automobile market

Market Size: Electric Vehicles vs Traditional Vehicles (by sales amount, 100 million USD)


Market Size: Electric Vehicles vs Traditional Vehicles

Source: SPDB International, Passenger Federation, InsideEVs, IDC, IBISWorld; E=SPDB International estimations.



Why CSOP Global Smart Driving Index ETF (3162.HK) ?



To achieve

Power Electrification,

Cabin Intelligence and

Driving Automation,

the Industrial Chain needs

comprehensive upgrade.



  • 3162.HK cover the full industrial chain, focusing on top three smartest parts of the industrial chain upgrade – batteries, chips, and original equipment manufacturers (OEMs).
  • Smart driving industry in still in early stage, the leaders and competition structure are expected to change rapidly with technology evolution. ETF can grasp the industry leaders in time.




Battery as the Power + Chip as the Brain + Algorithms and Software Battery as the Power + Chip as the Brain + Algorithms and Software


Battery as the Power

Using the battery system as the single source of power makes it easier to realize smart driving.

Chip as the "Brain"

Chips tend to be integrated, providing more powerful computing power support for smart cabins and autonomous driving technologies.

Algorithms and Software

Original equipment manufacturers (OEMs) and tech companies provide autonomous driving algorithms and develop intelligent software to realize cabin intelligence and driving automation.





Battery
Electrification is Advantaged in Realizing Smart Driving
EV Battery Industry is in Rapid Development
Traditional Vehicle
Traditional Vehicle — About 30, 000 Parts + Internal Combustion Engine (ICE) + Electrical System

Traditional vehicles with ICE have complex structures of engines, transmission shafts and related electrical systems, and involve a large number of scattered and fixed parts. It is difficult for hardware coordination and software upgrade.
Electric Vehicle (EV)
Electric Vehicle (EV) — About 10, 000 Parts + Battery System

Electric vehicles (EV) have simpler and highly integrated structure, making vehicle control easier. Parts installation and software upgrades are also more flexible. Thus EV has obvious advantage in realizing smart driving.
Major economies such as Europe, China, and the US are promoting the development of EV; global demand for battery is expected to increase rapidly

Global EV Battery Installation is Expected to Grow 4.6x in Next 5 Years


Global EV Battery Installation is Expected to Grow 4.6x in Next 5 Years

Source: China Automobile Association, EV-Sales, GGII, CICC Research.

Chinese Companies (Purple) Ranked the First Globally, with Market Share of 47%

Chinese Companies Ranked the First Globally, with Market Share of 47% Chinese Companies Ranked the First Globally, with Market Share of 47%

Source: SNE Research

Chips
The "Brain" of Smart Driving
Chip Manufacturing Leaders: Winners Take All


As the automation level enhances, more information and data are to be processed, thus chips with greater computing power are required, and the value of the chips would also be higher.



greater computing power are required greater computing power are required

Source: Society of Automotive Engineers, Company Data, Goldman Sachs.



Computing Power Requirement of Automation Chip GPU (TOPS)

Computing Power Requirement of Automation Chip GPU

Horizon, GPU: Graphics processing unit.

Semiconductor Value Contents per Vehicle in Different Automation Levels

Semiconductor Value Contents per Vehicle in Different Automation Levels

Source: Goldman Sachs Global Investment Research.





Semiconductor Giants are Concentrated in Europe & the US

The Market Shares of Auto Semiconductors



The Market Shares of Auto Semiconductors

Source: Company data, HIS, Strategy Analytics.

OEMs
Transform Cars from Vehicles to Smart Mobile Living Room


Origanal Equipment Manufacturers (OEMs) do well in product experience and marketing, and focus on the development of intelligent cabin and autonomous driving, to transform cars from vehicles to smart mobile living room.



Big Data Advantages and Autonomous Driving Algorithms Give Cars Wisdom

OEMs
Big Data

OEMs can always collect large amount of road/driving data in different scenarios easily

Abundant data is helpful to achieve faster iteration and optimization of autonomous driving algorithms to upgrade autonomous driving systems

Algorithms

Percept the objects: Location / Speed / Direction

Decision: Path Planning, Driving Behavior and Intention Prediction

Implementation

Source: Company Data, CSOP Research.

Solactive Global Smart Driving Index



Underlying Index Information





Source: Solactive

Outperformance of Solactive Global Smart Driving Index



Outperformance of Solactive Global Smart Driving Index

Source: Solactive, Bloomberg, 31 August 2017 to 30 June 2021. All data before the launch of the index are back-testing historical data and they are assumptive historical performance.

Top 10 Constituents: Well-Known Industry Leaders



Stock Code Name Listing Sector Index Weighting
TSLA UW TESLA INC Nasdaq Consumer Vehicles and Parts 7.96%
300750 CS CONTEMPORARY AMPEREX TECHN-A SZSE Electrical Equipment and Power Systems 7.31%
TXN UW TEXAS INSTRUMENTS INC Nasdaq Semiconductor Manufacturing 7.22%
UBER UN UBER TECHNOLOGIES INC NYSE Passenger Transportation 6.78%
NIO UN NIO INC - ADR NYSE Consumer Vehicles and Parts 6.78%
ADI UW ANALOG DEVICES INC Nasdaq Semiconductor Manufacturing 6.69%
NXPI UW NXP SEMICONDUCTOR NV Nasdaq Semiconductor Manufacturing 6.01%
APTV UN APTIV PLC NYSE Consumer Vehicles and Parts 4.67%
STM UN STMICROELECTRONICS br.desktop NV-NY SHS NYSE Semiconductor Manufacturing 3.79%
SWKS UW SKYWORKS SOLUTIONS INC Nasdaq Semiconductor Manufacturing 3.52%


Source: Solactive, CSOP, as of 20 July 2021

Sector Contribution
Sector Contribution Sector Contribution

Source: Solactive, CSOP, as of 20 July 2021.

Weighting Contribution of Constituents by Exchange

Weighting Contribution of Constituents by Exchange Weighting Contribution of Constituents by Exchange

Source: Solactive, Bloomberg, as of 20 July 2021. Due to the market changes, the weighting of A-share listings may temporarily exceed 20%, and it will be rebalanced to meet the 20% weight cap requiring in the next index rebalance day.

Weighting Contribution of Constituents by Country of Domicile

Weighting Contribution of Constituents by Country of Domicile Weighting Contribution of Constituents by Country of Domicile

Source: Solactive, Bloomberg, as of 20 July 2021.



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