Premia US Treasury Floating Rate ETF
(Unlisted Accumulation Units - HKD Hedged)
CIES Eligible #

Unit Price

USD -

Changes vs Previous Trading Day
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As of 2024-07-24

# The ETF is an eligible collective investment scheme for the New Capital Investment Entrant Scheme (New CIES) in Hong Kong. Details can be found in the official website by the Securities and Futures Commission (SFC).

Important Notice

The ETF tracks the performance of its underlying index which does not incorporate Environment, Social and Governance factors in its key investment focus. The current disclosures are made in accordance with SFC guidelines following the Manager’s climate-related risk assessments. Applicability and extent of disclosures shall be assessed on periodical basis.

IMPORTANT: Investment involves risk, including the loss of principal. Investors should refer to the Prospectus and Key Facts Statement of the Unlisted Accumulation Units (HKD Hedged) of Premia US Treasury Floating Rate 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 Bloomberg US Treasury Floating Rate Bond Index (“Index”).

Concentration risk / U.S. market concentration risks

The Sub-Fund’s investments are concentrated in a single country, namely the U.S. and in bonds of a single issuer. The Sub-Fund’s value may be more volatile than that of a fund having a more diverse portfolio and may be more susceptible to adverse economic, political, policy, foreign exchange, liquidity, tax, legal or regulatory event affecting the U.S. market. The Sub-Fund’s investment in U.S. Treasury securities is not subject to U.S. withholding income or capital gains tax.

Debt securities market risks

Floating Rate Notes risk - Securities with floating rates can be less sensitive to interest rate changes than securities with fixed interest rates, but may decline in value and negatively impact the Sub-Fund’s Net Asset Value, particularly if the coupon rates do not rise as much, or as quickly, as comparable market interest rates. This risk is also heightened because floating rate Treasury obligations are new issuances for which a deep and liquid market has not yet developed. As compared to fixed-rate treasury notes of the same maturity, FRNs generally have a lower yield if the interest rate yield curve is downward sloping and a higher yield if the interest rate yield curve is upward sloping. When interest rates are rising, the ability of FRNs to reset to a higher level will result in higher yield as compared to fixed-rate treasury notes for which the coupon rate remain unchanged. Conversely, when interest rates are falling, the coupon rates of FRNs will reset to a lower level, leading to a lower yield and subsequently a decline in the Sub-Fund’s income.

Income Risk - The Sub-Fund’s income may decline when interest rates fall. This decline can occur because the debt instruments held by the Sub-Fund will have floating, or variable, interest rates.

Risk of limited issuance - The issuance of FRNs by the U.S. Treasury is relatively new and the amount of supply is limited. There is no guarantee or assurance that: (i) the Sub-Fund will be able to invest in a desired amount of FRNs,(ii) the Sub-Fund will be able to buy FRNs at a desirable price, (iii) FRNs will continue to be issued by the U.S. Treasury, or (iv) FRNs will be actively traded. Any or all of the foregoing, should they occur, would negatively impact the Sub-Fund.

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. However, FRNs are subject to an interest rate reset on a weekly basis, thereby resulting in a duration of only one week. The Sub-Fund’s exposure to interest rate risk is thus generally to a lesser degree than fixed income securities.

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 and sovereign debt 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. Further, the Sub-Fund’s investment in securities issued or guaranteed by governments may be exposed to political, social and economic risks and may not be able or willing to repay the principal and/or interest when due or may request the Sub-Fund to participate in restructuring such debts.

Risks relating to currency hedging

The Manager may (but is not obliged to) enter into certain currency related transactions in order to hedge the currency exposure of the assets of the Sub-Fund attributable to the relevant class of units into the currency being hedged in that relevant class. Investors in the relevant class of units may have exposure to currencies other than the base currency of that class (USD). Investors should also be aware that the hedging strategy may substantially limit the benefits of any potential increase in value of the Unlisted Accumulation Units (HKD-Hedged) expressed in the class currency (USD), if the Unlisted Accumulation Units (HKD-Hedged)’ class currency (HKD) falls against the base currency of the Sub-Fund (USD). Such differences compared to the Unhedged Unit Class will lead to differences in Net Asset Value between the unit classes.

The precise hedging strategy applied to the relevant class of unit may vary. In addition, there is no guarantee that the desired hedging instruments will be available or hedging strategy will achieve its desired result. In such circumstances, investors of the relevant class of units may still be subject to the currency exchange risk on an unhedged basis.

If the counterparties of the instruments used for hedging purposes default, investors of the relevant class of unit may be exposed to the currency exchange risk on an unhedged basis and may therefore suffer further losses.

In the event that investors request payment of redemption proceeds in a currency other than the currency in which the shares are denominated, the exposure of that currency to the currency in which the shares are denominated will not be hedged.

Differences in dealing arrangements between Listed Class of Units and Unlisted Class of Units Risk

Investors of Listed Class of Units and Unlisted Class Units are subject to different pricing and dealing arrangements. The Net Asset Value per Unit of each of the Listed Class of Units and Unlisted Class of Units may be different due to the different fees and cost applicable to each class.

The Listed of Class Units are traded on the stock exchange in the secondary market on an intraday basis at the prevailing market price (which may diverge from the corresponding Net Asset Value), while Unlisted Class of Units are sold through intermediaries based on the Dealing Day-end Net Asset Value and are dealt at a single valuation point with no access to intraday liquidity in an open market. Depending on market conditions, investors of the Listed Class of Units may be at an advantage or disadvantage compared to investors of the Unlisted Class of Units.

In a stressed market scenario, investors of the Unlisted Class of Units could redeem their Units at Net Asset Value while investors of the Listed Class of Units in the secondary market could only sell at the prevailing market price (which may diverge from the corresponding Net Asset Value) and may have to exit the Sub-Fund at a significant discount. On the other hand, investors of the Listed Class of Units could sell their Units on the secondary market during the day thereby crystallising their positions while investors of the Unlisted Class of Units could not do so in a timely manner until the end of the day.

Differences in fee and cost arrangements between Listed Class of Units and Unlisted Class of Units Risk

The levels and types of fees and costs applicable to each of the Listed Class of Units and the Unlisted Class of Units may differ. As such, the Net Asset Value per Unit of each of the Listed Class of Units and Unlisted Class of Units may also be different.

For Listed Class of Units, the Transaction Fee may be payable by the Participating Dealer in respect of creation and redemption of Units, Investors in the secondary market will not be subject to the foregoing, but may incur SEHK-related fees such as brokerage fees, transaction levy, trading fee, and inter-counter transfer fee.

For Unlisted Class of Units, unitholders may be subject to a Subscription Fee and/or a Redemption Fee in respect of subscription and redemption respectively. For subscription and redemption applications in cash, the Manager may, in good faith and in the best interest of Unitholders, make adjustments to the Net Asset Value per Unit in determining the Subscription Price or Redemption Price per Unit (as the case may be) which it considers to be an appropriate allowance to account for the impact of the related costs.

Passive investments risk

The Sub-Fund is passively managed and the Manager will not have the discretion to adapt to market changes due to the inherent investment nature of the Sub-Fund. Falls in the Index are expected to result in corresponding falls in the value of the Sub-Fund.

Tracking error risk

The Sub-Fund may be subject to tracking error risk, which is the risk that its performance may not track that of the Index exactly. This tracking error may result from the investment strategy used and/or fees and expenses. The Manager will monitor and seek to manage such risk and minimise tracking error. There can be no assurance of exact or identical replication at any time of the performance of the Index.

Difference in Distribution Policies

The Manager will pay distributions to Unitholders of the Listed Distribution Units but not to Unitholders of the Unlisted Accumulation Units (HKD-Hedged). Distributions made in respect of the Listed Distribution Units may result in an immediate reduction in the Net Asset Value per Unit. All income and capital gain received in the Listed Accumulation Units will be reinvested and reflected in the Net Asset Value per Unit. The difference in the distribution policies of the two classes will lead to difference in the Net Asset Value between the two classes.

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. Investors may not be able to recover their investments and suffer a loss when the Sub-Fund is terminated.

Custodian Risk

The Sub-Fund’s investments may be registered in the name of a sub-custodian where, due to the nature of the laws or market practice of jurisdictions, it is common market practice or not feasible to do otherwise and may be exposed to risk in circumstances whereby the custodian will have no liability. Such investments may not be segregated from the sub-custodian’s own investments and in the event of default or fraud of such sub-custodian, the Sub-Fund's assets may not be protected and may be irrecoverable by the Sub-Fund.

Why Premia US Treasury Floating Rate ETF?

  1. Low credit risk: investing in a basket of floating rate notes issued by the U.S. government
  2. Minimal interest rate risk: coupon rate of underlying securities is reset every week based on 3-month US Treasury Bill Rate
  3. Cost efficient: ongoing expenses of only 0.15% p.a. *
  4. To learn more about this strategy, click here
* Currently at 0.10% p.a. with temporary subsidy by the Manager and suspension of Manager’s fee

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 Bloomberg US Treasury Floating Rate Bond 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 or indirectly, in a representative sample of the Securities in the Index that collectively reflects the investment characteristics of the Index.

Key Facts

Management Fees0.15% per annum *
Fund Size
(As of Jul 24, 2024)
5 million (USD)
Distribution PolicyAccumulating
Base CurrencyUSD
Trading CurrencyUSD
Underlying IndexBloomberg US Treasury Floating Rate Bond Index
Index TickerBTFLTRUU Index
ISIN-
SEDOL-
Index TypeTotal Return Index
Index ProviderBloomberg Finance L.P.
Fund Financial Year End31st December
Minimum investment size USD 1,000,000
Minimum holding size USD 1,000,000
Minimum redemption size USD 1,000,000
* Currently at 0.10% p.a. with temporary subsidy by the Manager and suspension of Manager’s fee

Related Documents

Related Insights

Performance

Performance Chart
Data would be provided in due course.
  1. Past performance information is not indicative of future performance. Investors may not get back the full amount invested.
  2. The computation basis of the performance is based on the calendar year end, NAV-to-NAV, with dividend reinvested.
  3. The performance figures show by how much the Sub-Fund increased or decreased in value during the period being shown. Performance data has been calculated in USD including ongoing charges and excluding subscription fee and switching fee you might have to pay.
  4. Where no past performance is shown, there is insufficient data available in that period to provide performance for reference.
  • Cumulative
  • Calendar Year
YTD 1 Month 6 Month 1 Year Since Listing
Data would be provided in due course.
  1. Past performance information is not indicative of future performance. Investors may not get back the full amount invested.
  2. The computation basis of the performance is based on the calendar year end, NAV-to-NAV, with dividend reinvested.
  3. The performance figures show by how much the Sub-Fund increased or decreased in value during the period being shown. Performance data has been calculated in USD including ongoing charges and excluding subscription fee and switching fee you might have to pay.
  4. Where no past performance is shown, there is insufficient data available in that period to provide performance for reference.

 

 

Historical Prices

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Dealing Date Session Unit Price
No price data available
 

Portfolio Holdings

As of Jul 24, 2024
Name Number of
Share Held
Market Price
(USD)
Weight %
US TREASURY FRN TF 0 01/31/26 679,400 100.22 14.68%
US TREASURY FRN TF 0 10/31/25 671,200 100.16 14.40%
US TREASURY FRN TF 0 07/31/25 629,000 100.08 13.48%
US TREASURY FRN TF 0 07/31/24 612,700 100.00 13.12%
US TREASURY FRN TF 0 10/31/24 611,000 100.05 13.09%
US TREASURY FRN TF 0 04/30/25 610,300 100.07 13.08%
US TREASURY FRN TF 0 01/31/25 602,000 100.12 12.91%
US TREASURY FRN TF 0 04/30/26 204,000 100.08 4.40%
Holdings are subject to change.
(8 total)1
 

Fund Characteristics

Average Quality Aaa
Effective Duration 0.014
Average Yield to Maturity (%) 5.325
Convexity 0.0029
 

Portfolio Breakdown

As of Jul 24, 2024

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%.