Enhanced Investment Products (EIP) has launched its first leveraged product, the XIE Shares Chimerica FTSE N Share Daily (2X) Leveraged (Ticker: 7210) on the Hong Kong Stock Exchange. The ETF is the first leveraged product in Hong Kong to provide exposure to US-listed Chinese American Depository Receipts.
The XIE Shares Chimerica FTSE N Share Daily (2X) Leveraged ETF (Ticker: 7210) provides twice the daily performance of an index of US-listed Chinese American Depository Receipts.
The “2X Chimerica ETF” tracks the FTSE N Share 2x Daily Leveraged Index, providing twice the daily performance of the firm’s existing “Chimerica ETF” (Ticker: 3161), which launched in April 2015. The Chimerica ETF provides investors a cost-effective way to capitalize on the performance of some of China’s fastest-growing companies. These include blue chip new economy stocks listed in America such as Alibaba, Baidu, New Oriental Education, JD.com, NetEase, Vipshop, Ctrip and others.
The launch follows approval in 2016 by Hong Kong regulators to allow the listing of leveraged and inverse ETFs on the Hong Kong Stock Exchange.
Tobias Bland, CEO of EIP, commented: “We are excited to provide investors in Asia with a product that allows them to benefit from cost effective leverage in some of China’s most popular market segments, internet and technology. The 21 constituents that comprise this product are securities that investors know well since they are concentrated in the growing internet and technology industries.”
Sudir Raju, Managing Director ETF Relationships, Asia, FTSE Russell said: “FTSE Russell is seeing strong growth from ETF issuers in the Asia region who value our approach to index construction which emphasises rules-based construction, transparent methodologies and strong independent governance. We have a proven track record in creating China benchmarks that allow ETF issuers to offer new investment opportunities to their clients, and we are delighted that XIE Shares has decided to licence the FTSE N Share 2x Daily Leveraged Index for its new product, the first to be tracking this index.”
Brokerage and Investment firm CLSA acquired 49% of the XIE Shares ETF platform in 2014. Under the partnership, EIP can widen its distribution network with the involvement of CLSA and the broker network of CLSA’s parent company, CITIC Securities.
Jonathan Slone, CEO of CLSA said: “We are excited to see EIP launching this 2X Chimerica on the back of the successful launch of its Chimerica ETF in 2015. Given CLSA’s deep industry knowledge on the China Internet and Technology sectors, we believe investors will look to increase exposure towards one of China’s fastest-growing market segments.”
Since its inception on 22 April 2015, the Chimerica ETF has outperformed China related indices in Hong Kong by 34% and has become one of Hong Kong’s most popular traded ETFs. Stocks inside the Chimerica ETF are not represented in benchmarks such as A50, CSI 300, HSI, or HSCEI.
The ETF has a management fee of 0.88%.
The 2X Chimerica is the fourth product to launch following CLSA’s investment into EIP’s XIE Shares ETF business. Other than the unleveraged XIE Shares FTSE Chimerica ETF, the firm offers the XIE Shares CLSA GARY ETF (Ticker: 3102), providing investors with access to Asian companies with competitive yield, growth, and debt profiles; and the XIE Shares FTSE Gold Miners ETF (Ticker: 3116), enabling investors to capitalize on gold price fluctuations through the ownership of gold mining stocks.