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Introduction of ETF
Trading ETF
ETF Markets
Introduction of Leveraged/Inverse ETF
What are L&I Products?
Leveraged and Inverse Products (L&I Products) provide new opportunities for market participants who pursue investment opportunities on short-term market conditions. L&I Products, structured as Exchange Traded Funds (ETFs), seek to achieve short-term investment results that correspond to the daily magnified or daily inverse performance of their underlying benchmarks on a daily basis.

Currently, the performance multiple is set at two times (2x) for leveraged products and negative one time (-1x) for inverse products. There are three features for L&I Products:
1. Daily investment objective – seek to achieve a multiple (2x or -1x) of their benchmark’s daily performance, before fees and expenses;
2. Compounding effects of daily returns – performance can deviate from the multiple of the benchmark’s cumulative return when held for longer than one trading day; and
3. Use of derivatives – invest a portion or all of their net assets in derivatives, typically futures or swaps.
Investment objectives of L&I Products
Leveraged Products aim to provide two times (2x) the daily performance of their benchmark, before fees and expenses. Leveraged Products can obtain a target level of exposure using less cash, and allow overweighting a market segment without additional cash.


Inverse Products aim to provide the inverse (-1x) daily performance of their benchmark, before fees and expenses. Inverse Products seek profits from a market decline, helping to hedge against an expected decline.

Trading L&I Products on HKEX
• L&I Products may be traded, cleared and settled in Hong Kong dollars (HKD), Renminbi (RMB) and/or US dollars (USD).
• An L&I Product listed on HKEX’s securities market can be identified by the stock short name, which indicates some of the product features
Stock short names for L&I Products
Comparison between L&I Products and other derivatives
  L&I Products Warrants/ CBBCs Margin trading Index futures Options
Channels for buy/sale Ordinary securities account Ordinary securities account Margin account Futures account Options account
Leverage ratio Fixed (-1x/2x) Flexible Flexible Flexible Flexible
Maximum potential loss Limited to the amount invested by the investor Limited to the amount invested by the investor Unlimited Unlimited Unlimited
Margin call
Depreciate as time goes on
Dividend payout ✔ (decided by fund manager)
 
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Disclaimer
AASTOCKS.COM LIMITED (阿斯達克網絡信息有限公司), HKEx Information Services Limited, its holding companies and/or any subsidiaries of such holding companies endeavour to ensure the accuracy and reliability of the Information provided but do not guarantee its accuracy or reliability and accept no liability (whether in tort or contract or otherwise) for any loss or damage arising from any inaccuracies or omissions.

The above is strictly for information purposes only and should not be considered an offer, or solicitation, to deal in any of the mentioned funds. Investment involves risk, emerging markets may have greater risk than developed markets. Subscriptions may only be made on the basis of the relevant offering documents, most recent annual financial statement and semi-annual financial statements if published thereafter. The value of investments and the income received from them (if any) may be volatile and could change substantially within a short period of time. Past performance is not a guide to future performance. The investment returns are denominated in the base currency of the fund. US dollar / HK dollar based investors are therefore exposed to fluctuations in the US dollar / HK dollar / base currency exchange rate.

BEFORE MAKING AN INVESTMENT, YOU SHOULD REFER TO THE RELEVANT OFFERING DOCUMENTS AND IN PARTICULAR TO THE INVESTMENT POLICIES AND THE RISK FACTORS. YOU SHOULD ENSURE THAT YOU FULLY UNDERSTAND THE RISKS ASSOCIATED WITH THE FUND AND SHOULD ALSO CONSIDER YOUR OWN INVESTMENT OBJECTIVE AND RISK TOLERANCE LEVEL. YOU ARE REMINDED THAT YOU ARE RESPONSIBLE FOR YOUR INVESTMENT DECISION AND SHOULD NOT INVEST UNLESS THE INTERMEDIARY WHO OFFERS OR SELLS THE FUND TO YOU HAS ADVISED THAT THE FUND IS SUITABLE FOR YOU AND HAS EXPLAINED WHY, INCLUDING HOW BUYING THE FUND WOULD BE CONSISTENT WITH YOUR INVESTMENT OBJECTIVE. IF IN DOUBT, PLEASE SEEK INDEPENDENT FINANCIAL AND PROFESSIONAL ADVICE.

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Remarks: All HK and China Indices are real time. World indices are at least 30 – 60 minutes delayed.