Affin Hwang launches Malaysia’s first inverse & leveraged ETFs

Dec 2nd, 2019 | By | Category: Alternatives / Multi-Asset

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Kuala Lumpur-based Affin Hwang Asset Management has launched four new ETFs on Bursa Malaysia, the first inverse & leveraged products to list on the exchange.

Affin Hwang launches Malaysia’s first inverse & leveraged ETFs

The funds are the first inverse & leveraged ETFs to list in Malaysia.

The launch comes a year after the financial market regulator, Securities Commission Malaysia, eased restrictions against the introduction of certain products including inverse & leveraged ETFs, synthetic ETFs, physical commodity ETFs, and smart beta ETFs.

The move was designed to stimulate product development and boost participation from the retail sector.

The funds

The four funds, launched through Affin Hwang’s ‘TradePlus’ platform, provide double leveraged or unleveraged inverse exposure to portfolios of large-cap Chinese equities or US growth stocks from technology and tech-enabled sectors.

The TradePlus HSCEI Daily 2x Leveraged Tracker (0832EA MK) offers 200% of the daily return on the Hang Seng China Enterprises Index (HSCEI).

The HSCEI is formed of 50 equity securities listed on the Hong Kong Stock Exchange and is split between 40 H-shares and a total of 10 Red-chips and P-chips. These share classes differ with respect to where companies are incorporated.

H-shares are shares in companies incorporated in mainland China, while Red-chip and P-chip companies are both formed outside mainland China. P-chip companies are incorporated specifically in the Cayman Islands, Bermuda, and the British Virgin Islands, and are private sector businesses operating in mainland China. The index is weighted by float-adjusted market cap.

The TradePlus HSCEI Daily -1x Inverse Tracker (0833EA MK) offers 100% of the inverse daily return on the HSCEI.

The TradePlus NYSE Fang+ Daily 2x Leveraged Tracker (0830EA MK) offers 200% of the daily return on the NYSE FANG+ Index.

Constituents for the NYSE FANG+ Index are selected by a governance committee from ICE Data Indices. The resulting portfolio aims to consist of FAANG (Facebook, Apple, Amazon, Netflix, and Alphabet’s Google) and similar FAANG-related stocks.

Stocks selected for the index must have a market capitalization of at least $5 billion and a trailing six-month average daily traded value of $50 million. They will generally exhibit characteristics of high-growth technology and internet/media companies with the committee focusing on distinguishing between traditional technology and services companies and newer, innovative, technology-utilizing companies. The index is equally weighted.

The TradePlus NYSE Fang+ Daily -1x Inverse Tracker (0831EA MK) offers 100% of the inverse daily return on the NYSE FANG+ Index.

Each fund comes with a management fee of 1.00%, a trustee fee of 0.04%, and an index licensing fee of 0.04%-0.05%.

Affin Hwang is no stranger to innovation. In December 2017 the firm launched Malaysia’s first commodity-tracking ETF – the TradePlus Shariah Gold Tracker (GOLDETF MK). This fund, which comes with a management fee of 0.50%, provides investors with exposure to gold through a shariah-compliant investment structure.

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