CSOP Hong Kong Dollar Money Market ETF (stock code: 3053/ 83053) to list on Hong Kong Stock Exchange - marking the first HKD Market ETF in Hong Kong

HONG KONG, Jul. 19, 2018 /PRNewswire-PRWeb/ -- As the first money market ETF in Hong Kong, CSOP Hong Kong Dollar Money Market ETF (thereafter referred as "CSOP HKD MM ETF") (stock code: 3053/83053) will list on the Hong Kong Stock Exchange on 18 July, 2018. Benchmarked with the 3-month Hong Kong Dollar Interest Settlement Rate (commonly known as Hong Kong Interbank Offered Rate or "HIBOR"), CSOP HKD MM ETF will invest majority of the assets in HKD denominated short-term deposits. Designed as a flexible cash management tool for both institutional investors and retail investors, this ETF can be easily accessed by primary market creation and secondary market trading. With management fee of 0.3% per annum, CSOP HKD MM ETF is expected to achieve around 1.5% annualized return after management fees*. To minimize the dilution to NAV induced by trading related fees, the trading lot size is formulated at 1,000 units with initial price of HKD 1000/share, meaning the minimal investment is around HKD 1 million. CSOP MM ETF has already attracted around USD 100 million initial investments from institutional investors and expects more to flow in.

*The return is indicative and for reference only. It is calculated based on the HIBOR on June 29, 2018 minus fund fees without considering trading related costs.

Hong Kong has a considerable cash market with demand deposit as large as HKD 1.2 trillion, even though the cash management market is lagged behind with only HKD 20 billion AUM and the size of most single money market funds is less than HKD 500 million. Meanwhile, the yield of most money market funds ranges from 0% to 0.5% #, which is considered not attractive enough compared to the interest of time deposit offered by some commercial banks. Aiming to deliver attractive interest yield while satisfying liquidity demand, CSOP MM ETF will invest around 75% of the assets into relatively longer duration deposits (more than 1 week to 3 month and more) to generate higher yield and rest part of the asset into short duration deposit (1 week and less) to fulfill the liquidity requirement with average duration of deposits around 90 days. Being optimistic about the trend of 3-month HIBOR interest yield in second half of 2018, Mr. Louis Lu, Portfolio Manager of CSOP MM ETF, said "The 3-month HIBOR has increased from 1% to over 2% in the second quarter of 2018, a level only seen in 2008 over the past decade. The rate may continue the upward trajectory due to expected monetary tightening in both the US and China. The US Fed is widely expected to raise rates two more times this year. And HKMA is in a boxer's stance to defend the weak end of HKD band, effectively narrowing the Libor-HIBOR spread. In the meanwhile, China is determined to continue the deleverage process, draining some capital out of the market. Last but not least, HKEX is actively attracting unicorn companies to list in Hong Kong. Market players should not be surprised to see HIBOR hike further, thanks to liquidity squeezes during popular IPO period."

# Data aforementioned is obtained from June 29, 2015 to June 29, 2018 on Bloomberg.

In mainland China, money market fund market thrived with the prevalence of the e-commerce and digital payment. At the end of 2017, money market fund market has already reached RMB 7 trillion. Comparatively, Hong Kong's money market fund market is still at an infant stage. Committed to the development of Hong Kong's money market fund market, CSOP Asset Management Limited ("CSOP") made the first step by listing CSOP HKD MM ETF. To push the step further, CSOP has been negotiating with relevant parties to minimize the trading related fees which will help lower the investment minimum and in turn empower the ETF with more flexibility. Moreover, CSOP has also initiated talks with internet giants to explore the possibility of bringing this money market ETF to a broader base of users. "We are confident on CSOP HKD MM ETF. Before listing, we have already got initial investment intentions from many corporate treasuries, high-net-worth investors and brokers," commented by Melody He, Managing Director, Head of Sales and Product Strategy of CSOP. "Our goal is to provide a revolutionary solution to investors for cash management. We hope that after all the technical hurdles are cleared in the market, Hong Kong investors will finally embrace a flexible, efficient and transparent cash management investment tool," Ms. Ding Chen, CEO of CSOP concluded.

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 material alone to make investment decisions.

• CSOP Hong Kong Dollar Money Market ETF (the "Sub-Fund") invests in Hong Kong Dollar-denominated and settled short-term deposits and money market instruments, and the Manager adopts a passive tracking strategy to provide return that follows the 3-month Hong Kong Dollar Interest Settlement Rate (commonly known as Hong Kong Interbank Offered Rate or "HIBOR") calculated by the Hong Kong Association of Banks ("HKAB") (the "Benchmark").
• The Sub-Fund does not guarantee principal and the Manager has no obligation to redeem the Units at the offer value. The Sub-Fund does not have a constant Net Asset Value. The Sub-Fund is not subject to the supervision of the Hong Kong Monetary Authority. It is not principal protected and is not protected by the deposit protection scheme.
• Bank deposits are subject to the credit risks of the relevant financial institutions. The Sub-Fund's deposit may not be protected by any deposit protection schemes, or the value of the protection under the deposit protection schemes may not cover the full amount deposited by the Sub-Fund. Therefore, if the relevant financial institution defaults, the Sub-Fund may suffer losses as a result.
• As the Sub-Fund invests in short-term debt instruments with short maturities, the turnover rates of the Sub-Fund's investments may be relatively high and the transaction costs incurred as a result of the purchase or sale of short-term debt instruments may also increase which in turn may have a negative impact on the Net Asset Value of the Sub-Fund.
• The Sub-Fund is subject to valuation risk and concentration risk. Valuation of the Sub-Fund's investments may involve uncertainties and judgmental determinations. If such valuation turns out to be incorrect, this may affect the Net Asset Value calculation of the Sub-Fund. The Sub-Fund is likely more volatile than a broad-based fund that adopts a more diversified strategy. 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 Hong Kong market.

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

SOURCE CSOP ASSET MANAGEMENT LTD

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