Premia China USD Property Bond ETF

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Important Notice

IMPORTANT: Investment involves risk, including the loss of principal. Investors should refer to the Prospectus and Key Facts Statement of Premia China USD Property Bond ETF (the "ETF") for details, including the risk factors. Investors should not base investment decisions on this marketing material alone. Investors should note:

The ETF aims to provide investment results that, before fees and expenses, closely correspond to the performance of ICE 1-5 Year USD China Senior Real Estate Corporate Constrained Index (“Index”).

Concentration / PRC market risks
The Sub-Fund’s investments are concentrated in debts issued by Chinese property developers with a significant exposure to the PRC market and have a focus on the Securities that are below investment grade. The value of the Sub-Fund may be more volatile than that of a fund having a more diverse portfolio of investments.

Real estate sector risk
Due to the concentration of the Index in the real estate sector, the performance of the Index may be more volatile when compared to other broad-based indices. The price volatility of the Sub-Fund may be greater than the price volatility of exchange traded funds tracking more broad-based indices.

Debt securities market risks
U.S. Dollar-Denominated Chinese Debt Securities Risk - Chinese debt securities denominated in U.S. dollars may behave very differently from RMB Bonds and other Chinese bonds, and there may be little to no correlation between the performance of them.

High Yield Securities Risk - Securities that are rated below investment grade are subject to greater credit risk and greater risk of loss of income and principal than highly rated securities because their issuers may be more likely to default. The Sub-Fund may lose its entire investment if the issuer of a debt is in default. Securities that are rated below investment grade are inherently speculative.

Valuation risk – Valuation of the fund’s instruments may involve uncertainties and judgmental determinations. If such valuation turns out to be incorrect, this may affect the Net Asset Value of the Sub-Fund.

Interest rate risk - Interest rate risk is the risk that fixed income securities will decline in value because of an increase in interest rates and changes to other factors, such as perception of an issuer’s creditworthiness. Funds with higher durations generally are subject to greater interest rate risk.

Credit risk
Credit rating and downgrading risk – Credit ratings assigned by rating agencies are subject to limitations and do not guarantee the creditworthiness of the security and/or issuer at all times. The credit rating of a debt instrument or its issuer may subsequently be downgraded. In the event of such downgrading, the value of the Sub-Fund may be adversely affected. The Manager may or may not be able to dispose of the debt instruments that are being downgraded.

Credit risk - The financial condition of an issuer of a debt security or other instrument may cause such issuer to default, become unable to pay interest or principal due or otherwise fail to honor its obligations or cause such issuer to be perceived as being in such situations.

Volatility and liquidity risk
The debt securities in the PRC market may be subject to higher volatility and lower liquidity compared to more developed markets. The prices of securities traded in such markets may be subject to fluctuations. The bid and offer spreads of the price of such securities may be large and the fund may incur significant trading costs.

Over-the-counter Market Risk
OTC markets such as the USD Corporate Bond market are subject to less governmental regulation and supervision of transactions than organized exchanges. In addition, many of the protections afforded to participants on some organized exchanges, such as the performance guarantee of an exchange clearing house, may not be available in connection with transactions on OTC markets.

Foreign exchange, other currency distribution and distributions out of or effectively out of capital risk
All Units will receive distributions in the Base Currency (USD) only. In the event that the relevant Unitholder has no USD account, the Unitholder may have to bear the fees and charges associated with the conversion of such distribution from USD to HKD or RMB. Payment of dividends out of capital or effectively out of 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. Any such distributions may result in an immediate reduction in the Net Asset Value per Unit of the Sub-Fund.

The Sub-Fund’s base currency is in USD but has Units traded in HKD and RMB (in addition to USD). Secondary market investors may be subject to additional costs or losses associated with fluctuations in the exchange rates between HKD and the base currency and by changes in exchange rate controls when trading Units in the secondary market.

New Index Risk
The Index is a new index. The Sub Fund may be riskier than other exchange traded funds tracking more established indices with longer operating history

Securities Lending Transactions Risk
Securities lending transactions may involve the risk that the borrower may fail to return the securities lent out in a timely manner and the value of the collateral may fall below the value of the securities lent out.

Multi-counter risks
If there is a suspension of the inter-counter transfer of units between the counters and/or any limitation on the level of services by brokers and CCASS participants, unitholders will only be able to trade their units in one counter only, which may inhibit or delay an investor dealing. The market price of units traded in each counter may deviate significantly. As such, investors may pay more or receive less when buying or selling Units traded in one counter than the equivalent amount in the currency of another counter if the trade of the relevant Units took place on that other counter.

Termination risks
The Sub-Fund may be terminated early under certain circumstances, for example, where the Index is no longer available for benchmarking or if the size of the Sub-Fund falls below HKD100 million or its equivalent in the Sub-Fund’s base currency. Investors may not be able to recover their investments and suffer a loss when the Sub-Fund is terminated.

Reliance on market maker and liquidity risks
Although the Manager will ensure that at least one Market Maker will maintain a market for the Units in each counter, and that at least one Market Maker in each counter gives not less than 3 months’ notice prior to terminating the relevant market maker agreement, liquidity in the market for Units may be adversely affected if there is no or only one Market Maker for the Units. There is no guarantee that any market making activity will be effective.
There may be less interest by potential market makers making a market in units denominated and traded in RMB. Any disruption to the availability of RMB may adversely affect the capability of market makers in providing liquidity for the Units.

Why 3001 HK?

  1. First High Yield Bond ETF in Hong Kong: First SFC authorised bond ETF with high yield profile (~75%* in high yield issues)
  2. Diversification and Concentration Risk Management: A basket of diversified Chinese property USD bond issues with maximum 5% per issuer (at group level)
  3. Attractive Credit and Yield Profile: S&P/ Moody’s/ Fitch rated USD bonds by Chinese property issuers with attractive effective yield
  4. Senior Claims: secured and senior debts only, no subordinated debts nor local government finance vehicle issues
  5. Cost and Operational Efficient: Listed on HKEx with intraday liquidity and minimal operational hassle. Ongoing expenses of only 0.58% p.a.

*Data as of 31 March 2021

Fund Objective and Investment Strategy

The investment objective of the ETF is to provide investment results that, before fees and expenses, closely correspond to the performance of the ICE 1-5 Year USD China Senior Real Estate Corporate Constrained Index (the “Index”). There can be no assurance that the ETF will achieve its investment objective.

In seeking to achieve the ETF’s investment objective, the Manager will use an optimised representative sampling strategy by investing directly in a representative sample of USD denominated high yield corporate debt securities issued by Chinese property developers and traded on the US domestic and Eurobond OTC markets from the Index that collectively reflects the investment characteristics of the Index.

NAV

Key Facts

Stock Code3001 HK (HKD Counter)
9001 HK (USD Counter)
83001 HK (RMB Counter)
Management Fees0.58% per annum
Fund Size
(As of Oct 22, 2021)
9 million (USD)
Fund Inception Date12 April 2021
Fund Listing DateApril 14, 2021
ExchangeSEHK – Main Board
Distribution PolicyQuarterly Distribution
Base CurrencyUSD
Trading CurrencyHKD / USD / RMB
Underlying IndexICE 1-5 Year USD China Senior Real Estate Corporate Constrained Index
Index TickerCVCP Index
ISINHK0000723178 (3001 HK)
HK0000723186 (9001 HK)
HK0000723194 (83001 HK)
SEDOLBMW26C1 (HKD)
BMW26D2 (USD)
BMW26F4 (RMB)
Lot Size5 units (HKD counter)
5 units (USD counter)
5 units (RMB counter)
Index TypeTotal Return Index
Index ProviderICE Data Indices, LLC
Fund Financial Year End31st December
Shares Outstanding
(As of Oct 22, 2021)
220,000

Participating Dealers

Goldman Sachs (Asia) Securities Limited
Haitong International Securities Company Limited
Korea Investment & Securities (Asia) Limited
Mirae Asset Securities (HK) Limited
(4 total) 1

Market Makers

Flow Traders Hong Kong Limited
Jane Street Financial Limited
(2 total)1

Related Documents

Related Insights

Performance

Performance Chart

Past performance information is not indicative of future performance. Investors may not get back the full amount invested.

The computation basis of the performance is based on the calendar year end, NAV-to-NAV, with dividend reinvested.

These figures show by how much the fund increased or decreased in value during the period shown.

Performance data has been calculated in USD including ongoing charges and excluding trading costs on SEHK you might have to pay.

Where no past performance is shown there was insufficient data available in that year to provide performance.

  • Cumulative
  • Calendar Year
YTD 1 Month 6 Month 1 Year Since Listing
Premia China USD Property Bond ETF
(As of Oct 22, 2021)
- -9.6% -19.8% - -19.2%
ICE 1-5 Year USD China Senior Real Estate Corporate Constrained Index
(As of Oct 22, 2021)
- -8.6% -20.3% - -19.7%

Past performance information is not indicative of future performance. Investors may not get back the full amount invested.

The computation basis of the performance is based on the calendar year end, NAV-to-NAV, with dividend reinvested.

These figures show by how much the fund increased or decreased in value during the period shown.

Performance data has been calculated in USD including ongoing charges and excluding trading costs on SEHK you might have to pay.

Where no past performance is shown there was insufficient data available in that year to provide performance.

 

Portfolio Holdings

As of Oct 22, 2021
Name Number of
Share Held
Market Price
(USD)
Weight %
SHIMAO 6 1/8 02/21/24 (SP*) 350,000 98.27 4.04%
KWGPRO 7 7/8 09/01/23 (HK*) 350,000 94.93 3.91%
CIFIHG 6.45 11/07/24 (HK*) 300,000 99.11 3.56%
COGARD 5 1/8 01/17/25 (SP*) 250,000 98.46 2.90%
ROADKG 6.7 09/30/24 (SP*) 250,000 94.75 2.77%
CHINSC 7 3/8 04/09/24 (HK*) 250,000 93.09 2.71%
CHIOLI 5 3/8 10/29/23 (HK*) 200,000 107.23 2.55%
VNKRLE 5.35 03/11/24 EMTN (HK*) 200,000 107.25 2.51%
POLYRE 4 3/4 09/17/23 (HK*) 205,000 104.51 2.50%
VNKRLE 4.2 06/07/24 EMTN (HK*) 200,000 104.86 2.47%
Holdings are subject to change.
(49 total)1 2 3 4 5
 

Top 10 Holdings (by issuer group)

As of Oct 22, 2021
Name Weight %
Country Garden 5.25%
Road King Infrastructure 5.11%
China Vanke 4.98%
Logan Group 4.71%
Times China 4.32%
Sunac China 4.32%
Agile Group 4.14%
Shimao Group 4.04%
Greenland Holdings Corp 3.93%
KWG Group 3.91%
 

Fund Characteristics

Average Quality Ba2
Effective Duration 1.968
Average Yield to Maturity (%) 19.507
Convexity -0.3109
 

Portfolio Breakdown

As of Oct 22, 2021

The fund itself has not been rated by an independent rating agency. Credit quality ratings on underlying securities of the fund are received from S&P, Moody’s and Fitch. This breakdown is provided by Premia Partners and takes the middle rating of the agencies when all three agencies rate a security, the lower of the two ratings if only two agencies rate a security and one rating if that is all that is provided. Unrated securities do not necessarily indicate low quality. Ratings and portfolio credit quality may change over time. Due to rounding, percentages may not always appear to add up to 100%.