Fubon launches inverse and leveraged Taiwan equity ETPs in Hong Kong

Jun 1st, 2021 | By | Category: Alternatives / Multi-Asset

Taipei-headquartered Fubon Asset Management has launched two new ETPs in Hong Kong providing inverse and leveraged exposure to Taiwan’s equity market.

Fubon launches inverse and leveraged Taiwan equity ETPs in Hong Kong

Fubon has listed inverse and leveraged Taiwan equity ETPs in Hong Kong.

The Fubon FTSE Taiwan Daily (-1x) Inverse Product (7332 HK) and Fubon FTSE Taiwan Daily (2x) Leveraged Product (7232 HK) have listed on the Stock Exchange of Hong Kong.

Each ETP comes with a management fee of 0.99%, though their expense ratios are estimated to be significantly higher, at around 2.20%.

The ETPs provide the inverse (-100%) or twice leveraged (+200%) daily return of the FTSE Taiwan RIC Capped Index.

The index represents the performance of large and mid-cap stocks listed in Taiwan.

Constituents are weighted by float-adjusted market capitalization subject to a single stock cap of 20% and a cap of 48% on the cumulative weight of all stocks above 4.5%.

As of 8 June, the index contained 108 constituents with over half (56.0%) of its total weight allocated to information technology stocks, while the next largest sectors were financials (17.9%) and industrials (7.8%). Taiwan Semiconductor exhibits the largest influence in the index with a weight of 18.1% followed by MediaTek and Hon Hai Precision Industry with weights of 6.5% and 5.8% respectively.

Taiwan’s stock market is relatively volatile due to the significant exposure to technology stocks.

The Taiex, Taiwan’s most widely followed equity index, soared over 90% between March 2020 and April 2021 as technology stocks globally benefitted from consumer trends influenced by the Covid-19 pandemic.

More recently, however, the Taiex lost 8.4% in the week ending 14 May as concerns over surging cases of coronavirus variants, rising inflation, and the stretched valuations in technology sectors lead to a global rout in tech stocks.

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