Leveraged betting against India assets to launch in Hong Kong
CSOP, the offshore asset manager of mainland based China Southern Asset Management, on Wednesday introduced the first derivative products that enable investors in Hong Kong to bet for and against the Indian market, after the city’s regulator approved leveraged and inverse (L&I) products earlier this year.
The new products are due to start trading on the Hong Kong Stock Exchange from Thursday, and will be derived from the Nifty 50 Index, the most widely used exchange traded fund (ETF) in India.
One of the offerings, the CSOP Nifty 50 Daily Leveraged Product (ticker 07202), corresponds to twice the daily performance of the Nifty 50 Index, while the CSOP Nifty 50 Daily Inverse Product (ticker 07335) corresponds to one times the inverse daily performance of the index.
Alvin Li, CSOP senior associate, said the leveraged and inverse products aim to deliver respectively twice or the opposite of the index return on a daily basis only.
“However, 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 due to the compounding effect,” he said, adding it is more suitable for short-term investment compared to traditional ETF products.
