IMPORTANT:
Investments involve risks, including the total loss of your investment. Investors are advised to consider their own investment objectives and
circumstances in determining the suitability of an investment in the CSOP Nifty 50 Daily (2x) Leveraged Product and the CSOP Nifty 50 Daily (-1x)
Inverse Product (each a “Product” ,collectively the “Products”).
The CSOP Nifty 50 Daily (2x) Leveraged Product track the performance of a leveraged position of an index on a Daily basis whereas the CSOP Nifty
50 Daily (-1x) Inverse Product tracks the performance of a short position of an index on a Daily basis. The Products are only suitable for sophisticated
trading-oriented investors who constantly monitor the performance of their holding on a daily basis, and are in a financial position to assume the
risks in futures investments. The Products are high risk products designed to be used as short term trading tools for market timing or hedging purposes and are not appropriate
for long term (longer than one day) investment. The performance of the Products, when held overnight, may deviate from the underlying indices.
They may not be suitable for all investors. It is possible that the entire value of your investment could be lost.
Futures investments are subject to certain key risks including leverage, counterparty and liquidity risks. Movement in the prices of futures may be
highly volatile. Past performance information presented is not indicative of future performance. Investors should refer to the Prospectus and the
Product Key Facts Statement (“KFS”) for further details, including product features and risk factors. Investors should not base on this material alone
to make investment decisions. If you are in any doubt about the contents of the Prospectus and KFS, you should consult your stockbroker or other
financial adviser for independent financial advice.
The Manager may, at its discretion, pay dividends out of capital. Payment of dividends out of capital or effectively out of the capital amounts to a
return or withdrawal of part of an investor’s original investment or from any capital gains attributable to that original investment. The Products may
result in an immediate reduction of the NAV per Unit.
The material has not been reviewed by the SFC.
Track the powerhouse of India
and capture leveraged and inverse
investment opportunities
CSOP Nifty 50
Daily (2X) Leveraged
Product
Stock
Code
07202
CSOP Nifty 50
Daily (-1X) Inverse
Product
Stock
Code
07335
www.csopasset.com^
^ The website has not been reviewed by the SFC and may contain information of funds not authorised by the SFC.
Leveraged &
Inverse
Investing in India
• Fastest-growing large economy in the world
• Emerging market country with young labor force
According to IMF, India is the world’s fastest-growing economy.
The GDP growth projection for 2016 reaches 7.5%.
With more than 50% population below the age of 25 and more
than 65% below the age of 35, India is considered as the next
world factory with the largest labor resources.
India – World’s fastest-growing large economy
India - 2014
U.S.
Male
Female
Euro-Zone
Japan
U.K.
Russia
China
India
Brazil
IMF forecast (%)
Population (in millions)
Age Group
Population (in millions)
Source: IMF World Economic Outlook, October 2015
• Upward trend in Foreign Direct Investment (“FDI”)
• Fast and healthily growing stock market
Due to its huge potential, India has been one of the favorite markets
for global investors. The FDI increased to USD 16.6 bn in the first half
of FY2015 to 2016.
Together with India’s economy, India’s stock market has
also been growing rapidly – tripling the size in the past 10
years.
Upward Trend in FDI
Market Capitalization of India’s National Stock
Exchange (INRmm)
USD billion
USD 16.6 bn
FY12-13
FY13-14
First half of fiscal year
FY14-15
FY15-16
Second half of fiscal year
Source: NSE, as of June 2016
Source: Department of Industrial Policy and Promotion, FDI Statistics
April 2000 to September 2015 (AP1)
Nifty 50 Index
The Index is a price return, float-adjusted market capitalisation weighted index that tracks the behaviour of a portfolio of blue chip
companies, the 50 largest and most liquid Indian securities listed on the National Stock Exchange of India Ltd. (the “NSE”). The Index
is denominated in Indian Rupees (“INR”).
As on 31 March 2016, the Index comprised of 50 securities listed on the NSE with total market capitalisation of INR30.33 trillion,
capturing approximately 65% of the total float-adjusted market capitalisation of the NSE.
Rank
Index Performance in past 5 years
Sector
Weighting (%)
Finance
Technology
Consumption
7.75
7.72
6.84
Finance
6.53
5
6
HDFC Bank Ltd.
Infosys Ltd.
ITC Ltd.
Housing Development Finance
Corporation Ltd.
Reliance Industries Ltd.
ICICI Bank Ltd.
Energy
Finance
5.28
4.61
7
Tata Consultancy Services Ltd.
Technology
4.48
8
9
10
Larsen & Toubro Ltd.
Axis Bank Ltd.
Tata Motors Ltd.
Industrial
Finance
Consumption
4.05
2.94
2.93
1
2
3
NIFTY Index
MXEF Index
4
Source: Bloomberg, as of June 2016
Index
NIFTY 50
Index
MSCI
Emerging
Market Index
2016H1
5.43
3.74
2015
-3.10
-16.63
2014
31.18
-4.14
2013
6.70
-4.97
2012
27.70
15.15
Constituent Name
Name
Nifty 50 Index
Launch Date
1st April 1996
2011
Currency
-23.62
Index Provider
-18.16
INR
India Index Services and Products Ltd (“IISL”)
Index Type
Price Return
Underlying
Securities
50 largest and most liquid Indian securities listed on the
National Stock Exchange of India Ltd. (the “NSE”)
Source: Bloomberg, as of June 2016
CSOP Asset Management Limited ; 2801-2803 Two Exchange Square, 8 Connaught Place, Central, Hong Kong SAR;
Tel: (852) 3406-5688 ; Website: www.csopasset.com; Email: [email protected]
Why CSOP Nifty 50 Daily (2x) Leveraged Product and CSOP Nifty 50 Daily (-1x) Inverse Product (“CSOP Nifty 50
Daily L&I Products”)
• Simple and direct way to invest in the Indian market
Directly investing in SGX Nifty Index Futures, the CSOP Nifty 50 Daily L&I Products provide investors with a simple and direct access
to India market.
• One-stop solution
With CSOP Nifty 50 Daily L&I Products, investors can take both tactical long (daily 2x) and short (daily -1x) views and manage their
portfolios efficiently.
CSOP Nifty 50 Daily (2×) Leveraged Product
CSOP Nifty 50 Daily (-1×) Inverse Product
Investment Objective
Investment Objective
To provide investment results that, before fees and expenses,
closely correspond to twice (2x) the Daily performance of the
Index. The Leveraged Product does not seek to achieve its
stated investment objective over a period of time greater than
one day.
To provide investment results that, before fees and expenses,
closely correspond to the inverse (-1x) of the Daily performance
of the Index. The Inverse Product does not seek to achieve its
stated investment objective over a period of time greater than
one day.
Investment Strategy
Investment Strategy
To achieve the investment objective of the Leveraged Product,
the Manager will adopt a futures-based replication strategy
through investing directly in the nearest month SGX Nifty Index
Futures subject to the rolling strategy of the Leveraged Product,
to obtain the required exposure to the Index.
To achieve the investment objective of the Inverse Product, the
Manager will adopt a futures-based replication strategy through
investing directly in the nearest month SGX Nifty Index Futures
subject to the rolling strategy of the Inverse Product, to obtain
the required exposure to the Index.
SGX Nifty Index Futures
(No more than 25% NAV
of the Leveraged Product
will be used as margin)
Cash (USD) and USD
denominated investment
products (Not less than
75% of NAV under normal
circumstances)
CSOP Nifty 50 Daily (2×) Leveraged Product
CSOP Nifty 50 Daily (-1×) Inverse Product
Product Information
Manager
Listing Date
Exchange Listing
Stock Ticker
Cash (USD) and USD
denominated investment
products (Not less than
87.5% of NAV under normal
circumstances)
SGX Nifty Index Futures
(No more than 12.5% NAV
of the Inverse Product will
be used as margin)
Product Information
CSOP Asset Management Limited
20 July 2016
Stock Exchange of Hong Kong (“SEHK”)
07202
Manager
CSOP Asset Management Limited
Listing Date
Exchange Listing
20 July 2016
Stock Exchange of Hong Kong (“SEHK”)
Stock Ticker
07335
Base Currency
USD
Base Currency
USD
Trading Currencies
HKD
Trading Currencies
HKD
Inception Price
Ongoing Charges over a year#
Management Fee ^
Trading lot size
Creation Unit Size
Leverage
Trustee/Registrar
Index
Approx. HKD 15
Estimated to be 1.61%
0.99% of Net Asset Value
100
150,000
Two times (2×) of daily
Index performance
HSBC Institutional Trust Services
(Asia) Limited
Nifty 50 Index (the “Index”)
Inception Price
Ongoing Charges over a year#
Management Fee ^
Approx. HKD 15
Estimated to be 1.85%
0.99% of Net Asset Value
Trading lot size
Creation Unit Size
Leverage
Trustee/Registrar
Index
100
150,000
Daily opposite return (-1×
) of
Index performance
HSBC Institutional Trust Services
(Asia) Limited
Nifty 50 Index (the “Index”)
# This is indicative only because the Product is newly established. It represents estimated ongoing expenses chargeable to the Product as a percentage of the estimated
average Net Asset Value of the Product. The actual figure may be different from the estimated figure and may vary from year to year.
^ Include trustee fee, custodian fee and administration fee. Please note that the management fee may be increased up to a permitted maximum amount by providing one
month’s prior notice to Unitholders. Please refer to the section headed “Fees and Expenses” in the Prospectus for further details of the fees and charges payable and the
permitted maximum of such fee allowed, as well as other ongoing expenses that may be borne by the Product(s).
CSOP Asset Management Limited ; 2801-2803 Two Exchange Square, 8 Connaught Place, Central, Hong Kong SAR;
Tel: (852) 3406-5688 ; Website: www.csopasset.com; Email: [email protected]
Knowledge about L&I product
Short-Term products corresponding to twice (2x) or the opposite (-1x) the Daily performance of the Index
Leveraged and Inverse Products aim to deliver respectively twice or the opposite of the return of the Index on a daily basis only. If an
investor hold the products for a period longer than one day, the cumulative returns could vary significantly from the multiple or the
opposite performance over a longer period (more than one day) due to the compounding effect. The Product will rebalance its position
on each business day so that its Daily exposure ratio to the Index is consistent with the Product’s investment objective.
Below is an illustration for the changes under the scenario of volatile upward trend:
Day 0
Index level /
NAV of product
Index
Leveraged Product
(2x)
Inverse Product (-1x)
Daily change
Day 1
Index level / NAV
of product
Cumulative
gain/loss
Daily change
Day 2
Index level / NAV
of product
Cumulative
gain/loss
Cumulative
change
100
10%
110
10
-5%
104.5
4.5
4.5%
100
100
20%
-10%
120
90
20
-10
-10%
5%
108
94.5
8
-5.5
8.0%
-5.5%
From the example above, you can find out that the L&I products aim to deliver twice (2x) or the opposite (-1x) performance of the
underlying index on a daily basis. However, over a period greater than one business day, the return can vary significantly from the
predetermined leveraged factor (2x) or inverse factor (-1x) of the index daily performance, as you can find out that the cumulative
change of Index is 4.5% while the leveraged product records a 8.0% gain and the inverse product records a 5.5% loss which differs
from the (2x) or (-1x) Index accumulative return of 9% and -4.5% respectively.
*The data in the table above are for illustrative purpose only and have not taken into account any management and trading fees that
might involved.
Comparison between Leverage & Inverse Products, Derivatives Warrants and CBBCs
L&I Product
Derivatives Warrants
CBBC
Underlying
Index
Index & single stock
Index & single stocks
Initial Gearing
2x or -1x of index return on a daily
basis
5 to 20x positive or opposite
underlying return over times
5 to 40x positive or opposite
underlying return over time
Gearing sensitivity
Varies other than holding for one
day (ie. Less than a full trading day
or overnight）
Varies with moneyness and time
to maturity
Varies significantly with
moneyness
Intended Holding period
Short term
Short term
Short term
Duration
Perpetual
With expiry
With expiry
Time Decay
No
Yes
Yes
Mandatory Call Event Risk
No
No
Yes
Potential unlimited loss
No
No
No
Major price movement factors
Underlying price
Underlying price, implied volatility
Underlying price
Funding costs or management
fees charged by issuers
Transparent
(ongoing charges and management
fee are stated in the offering
documents)
Complicated
(The funding costs are built into
the price of the securities which is
decided by the issuers)
Complicated
(The funding costs are built into
the price of the securities which is
decided by the issuers)
Issuer / counterparty default
risk
Underlying assets are kept
separately at trustee’s account
Investors face direct counterparty
risk from product issuer
Investor faces direct
counterparty risk from product
issuer
Underlying
Index
Index & single stock
Index & single stocks
Index Disclaimer:
The Products are not sponsored, endorsed, sold or promoted by India Index Services & Products Limited (“IISL”). IISL does not make any representation or warranty,
express or implied, to the owners of the Products or any member of the public regarding the advisability of investing in securities generally or in the Products particularly or
the ability of Nifty 50 Index to track general stock market performance in India. IISL does not have any obligation to take the needs of the Manager or the owners of the
Products into consideration in determining, composing or calculating the Nifty 50 Index. IISL is not responsible for or has not participated in the determination of the timing of,
prices at, or quantities of the Products to be issued or in the determination or calculation of the equation by which the Products are to be converted into cash. IISL has no
obligation or liability in connection with the administration, marketing or trading of the Products.
IISL does not guarantee the accuracy and/or the completeness of the Nifty 50 Index or any data included therein and they shall have no liability for any errors, omissions, or
interruptions therein. IISL makes no warranty, express or implied, as to results to be obtained by the Manager, owners of the Product(s), or any other person or entity from
the use of the Nifty 50 Index or any data included therein. IISL makes no express or implied warranties, and expressly disclaim all warranties of merchantability or fitness for
a particular purpose or use with respect to the Index or any data included therein. Without limiting any of the foregoing, IISL expressly disclaim any and all liability for any
damages or losses arising out of or related to the Products, including any and all direct, special, punitive, indirect or consequential damages (including lost profits), even if
notified of the possibility of such damages.
An investor, by subscribing or purchasing an interest in the Product(s), will be regarded as having acknowledged, understood and accepted the disclaimer referred to in
clause above and will be bounded by it.
CSOP Asset Management Limited ; 2801-2803 Two Exchange Square, 8 Connaught Place, Central, Hong Kong SAR;
Tel: (852) 3406-5688 ; Website: www.csopasset.com; Email: [email protected]