CSOP Asset Management has introduced a new ETP in Hong Kong which is the territory’s first to provide inverse exposure to crude oil markets.

CSOP has listed Hong Kong’s first inverse crude oil ETP.

The CSOP WTI Crude Oil Futures Daily (-1x) Inverse Product (7345 HK) is listed on the Stock Exchange of Hong Kong.

The ETP provides the inverse (-100%) daily return of the Solactive WTI 1-Day Rolling Futures Index which references the performance of the front-month West Texas Intermediate crude oil futures contract trading on the Chicago Mercantile Exchange.

The index rolls its exposure from the expiring front-month futures contract to the next active futures contract over one day.

The ETP comes with a management fee of 1.60% and an expected annual expense ratio of 1.99%.

CSOP is a major provider of inverse and leveraged ETPs in Hong Kong with a product line-up that covers several equity indices referencing Hong Kong-listed, Chinese Mainland-listed, and US-listed stocks.

The firm also introduced Hong Kong’s first leveraged commodity product, the CSOP Gold Futures Daily (2x) Leveraged Product (7299 HK), as well as the first inverse commodity product, the CSOP Gold Futures Daily (-1x) Inverse Product (7374 HK), both of which reference the performance of gold futures.

Leveraged and inverse ETPs provide an efficient means for sophisticated traders to obtain tactical exposures; however, they are generally considered less appropriate for retail investors or longer-term investors. Specifically, these products tend to decay in value if held for an extended period of time, potentially leading to significant losses, especially in volatile but range-bound markets.