Innovative products! A-share reverse leverage ETF is coming

category:Finance
 Innovative products! A-share reverse leverage ETF is coming


According to the reporters understanding, among the first batch of Chinas A-share counter products, the daily leverage (2x) products of the southern Dongying CSI 300 index and the daily reverse (- 1x) products of the southern Dongying CSI 300 index were listed on the Hong Kong Stock Exchange on July 27, and the approval date of the products was July 22. Huaxiaxiang Fund (Hong Kong) Co., Ltd. also released the daily reverse (- 1x) products of Huaxia Huaxia direxin CSI 300 index, and the daily leverage (2x) products of Huaxia direxion CSI 300 index, with the approval date of July 24.

From the name alone, the daily leverage (2x) product of CSI 300 index refers to the return twice daily performance close to CSI 300 index. If the CSI 300 rises by 1% on that day, the increase of the product should be 2%; while the daily reverse (- 1x) product of CSI 300 index is the return of double the daily performance of CSI 300 index, that is to say, if the decline of CSI 300 is 1%, then Product growth was 1%.

According to people in the south, the strategy is based on the East UKs synthetic leverage. At present, the transaction price of the two products is HK $7, each transaction is 100, and the admission fee is about HK $700. As the first batch of Chinese A-share counter products in Hong Kong, the two products attracted a total of initial investment of about 270 million US dollars.

When it comes to the original intention and difficulties of designing A-share offset products, relevant people from the South East UK said that Chinas A-share market is the worlds second-largest stock market. However, Chinas capital market is not fully open to international investors, and Chinas offshore market and Chinas A-share related financial derivatives are limited, which limits the willingness of international investors to invest in Chinas A-shares. Although Chinas A-share related offsets have been listed in the United States and other Asian regions, due to the differences in trading time, market access restrictions and other reasons, these products have certain limitations. The launch of China A-share counter products in Hong Kong will enable global investors to easily, efficiently and flexibly amplify A-share performance and hedge the downside risk of Chinas A-shares. As the A-share leverage reverse product achieves the investment goal with swap contracts, product design is particularly important. The selection of swap counterparties, the design of product position structure and the control of product operating cost are the difficulties and core of the product

In addition, there are other Chinese funded institutions in the Hong Kong market, which also have A-share counter products. A-share hedging products will help to meet the growing demand of investors for hedging and risk management tools in the A-share market, said Choi Fung Yee, executive director of investment products division of the securities and Futures Commission of Hong Kong. The listing of A-share offsets is an important milestone in Hong Kongs asset management industry.

A-share counter products bring new play

At the same time, A-share bull short bear long, short-term trend rise, leverage products can double the amplification of earnings. In the long-term volatile bear market, leverage products can also be used flexibly to seek bilateral opportunities.

In addition, a shares have a certain premium over H shares. When the premium is low, we can buy A-share leverage products + H-share reverse products to arbitrage. When the premium is high, the opposite strategy can be used for deployment.

Second, in the extreme cases of A-share fluctuations, such as the limit, the price of A-share counter products may also show obvious discount and premium.

Third, leverage reverse products also need to pay attention to the compound effect of products.

In addition, because the cost of swap transaction is higher than that of stock index futures, the tracking error of A-share leverage reverse product may be larger than that of constant index counter product.

A share positive and negative leverage product space is huge. Ding Chen, chief executive officer of Southern Dongying, said, in view of the huge market demand, we are full of confidence in the listing of Chinas A-share counter products. We estimate that in the next 1-2 years, the market size of Chinas A-share counter products will be 2-3 times larger than that of the existing Hang Seng Index Offset products, and the total scale will exceed US $3 billion.

Moreover, he Xian, director of sales and product strategy, said that CSI 300 index is the first tracking index of Chinas A-share counter products of Southern Dongying. In the future, more counter products tracking other Chinas A-share indexes will be launched to enrich Chinas A-share counter product line. It is hoped that there will be more and more A-share matching products in the offshore market in the future, attract more global investors to participate in the investment of Chinas A-shares, and promote the healthy development of Chinas A-shares.

Many overseas investors are also optimistic about the medium and long-term investment value of a shares. According to people from the East and the United Kingdom in the south, the new crown epidemic will break out in the world in 2020, and China is the first country out of the impact of the epidemic, which is undoubtedly the biggest short-term positive for a shares. Moreover, after years of bottom shocks, a shares have remained at a very low valuation level, and now they have begun to pull up strongly. The growth enterprise market and other indexes have ranked first in the world this year. The rising financing level, plate rotation and other phenomena point to the rising trend of a shares in the short term. In the medium and long term, as the worlds second largest stock market, China, as the worlds second largest economy, is in a serious low allocation state in the asset allocation of global investors. With the gradual incorporation of a shares into the major global indexes, the proportion of a shares in the global investor allocation table has steadily increased. Although there has been a shift in Sino US relations recently, it is still believed that the medium and long-term investment value of a shares will gradually highlight. Source: Yang Qian, editor in charge of China fund daily_ NF4425

Many overseas investors are also optimistic about the medium and long-term investment value of a shares. According to people from the East and the United Kingdom in the south, the new crown epidemic will break out in the world in 2020, and China is the first country out of the impact of the epidemic, which is undoubtedly the biggest short-term positive for a shares. Moreover, after years of bottom shocks, a shares have remained at a very low valuation level, and now they have begun to pull up strongly. The growth enterprise market and other indexes have ranked first in the world this year. The rising financing level, plate rotation and other phenomena point to the rising trend of a shares in the short term. In the medium and long term, as the worlds second largest stock market, China, as the worlds second largest economy, is in a serious low allocation state in the asset allocation of global investors. With the gradual incorporation of a shares into the major global indexes, the proportion of a shares in the global investor allocation table has steadily increased. Although there has been a shift in Sino US relations recently, it is still believed that the medium and long-term investment value of a shares will gradually highlight.