TradePlus S&P New China Tracker

Opening doors to investment opportunities within the New China Economy

The TradePlus S&P New China Tracker ("Fund") is an equity exchange-traded fund that is designed to provide investors a convenient access to Chinese listed companies within the consumption and service-oriented industries. The Fund closely tracks the performance of the S&P New China Sectors Ex A-Shares Index; in which units are tradeable on Bursa Malaysia Securities.

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Key highlights

An easy access to New China opportunities

Participate in the growth of New China sectors that have emerged from China’s transition to become a consumption-focused economy. These sectors are starting to show dominance in its contribution towards economic growth, and have gained notable traction.

Gain exposure to familiar names and more - all in a single trade

One transaction is all it takes! The Fund facilitates an efficient way for you to access an extensive portfolio of New China stocks, which are spread across varying sectors.

Participate in your preferred currency

You may subscribe to the Fund in HKD via Participating Dealer(s), or trade in USD and MYR through Bursa Malaysia Securities.

Affordable entry

Through an exchange-traded fund structure, you can now access opportunities at a lower entry level of just 100 units through Bursa Malaysia Securities.

Regular review of index

The referenced index is rebalanced semi-annually, with a 10.0% cap on individual names to mitigate concentration risk.

How to invest?

Trading on Bursa Securities
Trading Currency US Dollar (USD) Malaysian Ringgit (MYR)
Minimum Trading Units 100 100
Stock Code 0829EB 0829EA
Stock Short Name CHINAETF-USD CHINAETF-MYR
ISIN Code MYL0829EB009 MYL0829EA001
Bloomberg Ticker CHNUSD MK CHNMYR MK
Investing through Participating Dealer(s)
Creation/ Redemption Currency Hong Kong Dollar (HKD)
Methods for Creation/ Redemption of Units 1) Creation of Units
  • Cash creation
  • In-Kind creation
2) Redemption of Units
  • Cash redemption
  • In-Kind redemption
Minimum Creation/ Redemption Basket 500,000 units

Investment Objective

The Fund aims to provide investment results that closely correspond to the performance of the Benchmark.

Investment Strategy

The Fund is a passively managed fund. The Manager intends to primarily use a full replication strategy to track the performance of the Benchmark.

Fund Facts

Listing Date 28 January 2019
Fund Launch Date 15 January 2019
Fund Category Equity exchange-traded fund
Fund Type Index tracking fund
Investor Profile The Fund is suitable for investors who:
  • seek exposure to Chinese listed companies in the consumption and service-oriented industries; and
  • have a high risk tolerance level.
Asset Allocation
  • A minimum of 70% of the Fund’s NAV is to be invested in Authorised Securities;
  • a maximum of 20% of the Fund’s NAV is to be invested in derivatives and/or collective investment schemes; and
  • the remaining balance of the Fund’s NAV is to be invested in money market instruments and/or deposits.
Specific Risks
  • Equity Investment risk
  • Country risk
  • Currency risk
  • Sector-related risks
  • Concentration risk
  • Minimum redemption size
  • Tracking error risk
  • Risks related to the benchmark
  • Securities lending transaction risk
Base Currency HK Dollar (HKD)
Benchmark S&P New China Sectors Ex A-Shares Index
Financial Year End 31 December
Initial Approved Fund Size 1,000,000,000 units
Income Distribution Subject to the availability of income, the Fund will distribute income on an annual basis after the end of its first financial year.

Fees & Charges

Annual Management Fee 0.50% p.a. of the NAV of the Fund calculated and accrued daily using the Fund’s Base Currency.
Annual Trustee Fee 0.04% p.a. of the NAV of the Fund calculated and accrued daily using the Fund’s Base Currency.
Quarterly License Fee Minimum of USD10,000 p.a. or 0.05% of the average daily asset under management, whichever is higher.

Parties to the Fund

Manager Affin Hwang Asset Management Berhad
Trustee TMF Trustees Malaysia Berhad
Participating Dealer(s) Affin Hwang Investment Bank Berhad
Malacca Securities Sdn Bhd
Market Maker(s) Affin Hwang Investment Bank Berhad
Malacca Securities Sdn Bhd
Placement Agent Affin Hwang Investment Bank Berhad
Fund Documents
Announcements
  • Notice Accompanying The Electronic Prospectus of TradePlus S&P New China Tracker
    15-01-2019
    Download

GENERAL

  • ETF, or exchange-traded fund is a collective investment scheme that invests in a basket of investment instruments (such as stocks, bonds, commodities, or other securities) to mirror the performance of the index that it tracks.
  • ETFs are unique as they can be traded like a common stock on the stock exchange - and also experience price changes throughout the trading day as they are bought and sold.
  • In this case, the TradePlus S&P New China Tracker mirrors the performance of the S&P New China Sectors Ex A-Shares Index; which constitutes Chinese listed companies within the consumption and service-oriented industries.
  • Passive vs. Active
    • ETFs are typically passively managed where its objective is to closely track the performance of its benchmark or its referenced index, irrespective of the outlook on the market.
    • On the other hand, Unit Trust Funds (“UTF”) are typically actively managed, where the Manager has the flexibility to shift away from its optimal asset allocation depending on the Manager’s outlook of the market.
  • Higher trading frequency
    • ETF units are traded on the stock exchange, providing investors with the opportunity to transact units at any point throughout the trading day.
    • This defers from the subscription and redemption of units within a UTF, which can only be done once a day at a specific time.
  • Low-cost investment
    • Given its passive investment style, ETFs typically have a lower cost as compared to UTFs.
    • Management fees for a typical actively managed UTF ranges from 1.00-2.00% per annum, depending on the investment asset class.
    • The passively managed ETF typically charges below 1.00% in Management fees per annum.
    • ETFs are also traded on Bursa Securities and allows investors to invest based on “number of units” as opposed to the “investment amount” used for UTFs. The current board lot size at Bursa Securities is 100 Units, whereas a typical UTF would require a minimum investment amount of MYR1,000.
  • The Fund appoints Market Makers, whose role includes ensuring liquidity for the ETF on the secondary market.
  • The Market Makers provide buy and sell quotes within a predefined spread (the difference between the buy and sell price).
  • Through its inventory, the Market Maker is also able to ensure, to the best of their ability, that there is a buyer for every sell order, and a seller for every buy order.

ABOUT NEW CHINA

  • Since the 1970s, China has been liberalising its economy through various government reforms and policies, which has successfully led to its transformation to become the world’s second-largest economy today.
  • But China’s transformation is far from over. The New China marks the nation’s latest economic transition – where its investment- and export-driven economy has now shifted to become one that is reliant on domestic consumption and services.
  • The New China Economy is also a reflection of the Chinese government’s bid to identify and shape more sustainable forms of growth for its economy.
  • An opportunity to capitalise on:
    • China’s higher GDP contribution – which is seen stemming from the service, and consumption industry.
    • China’s rising income pattern – which is anchoring the shift in consumption trends.
    • China’s increased internet penetration – which is encouraging a boom in the e-commerce industry.
  • Sectors we see benefitting from this trend include: Consumer staples, Automobiles, Tourism, Insurance, Education, Healthcare, E-commerce, and Internet Services.

ABOUT TRADEPLUS S&P NEW CHINA TRACKER

  • The TradePlus S&P New China Tracker (“Fund”) is an exchange-traded fund that provide investors exposure to Chinese listed companies within the consumption and service-oriented industries.
  • The Fund aims to provide investors with a performance that closely mirrors its benchmark, which is the S&P New China Sectors Ex A-Shares Index.
  • Through its ETF structure, units of the Fund can be traded on Bursa Malaysia Securities.
  • Investors would also be able to create / redeem units at a minimum creation / redemption basket of 500,000 units.
  • The Fund is a passively managed fund, and does not aim to provide an outperformance against its benchmark.
  • Instead, the Fund will aim to perform in-line with its benchmark.
  • The Fund would be fully invested into its underlying assets at all times, irrespective of the Manager’s outlook on the market.
  • The Fund will look to carry out a full replication strategy to track the performance of its benchmark – the S&P New China Sectors Ex A-Shares Index.
  • As such, the price of the Fund will move in line with the price of its benchmark given the similar underlying of the two.
  • The Manager does, however, hold the option to invest up to a maximum of 20% of the Fund’s NAV into instruments that will enable the Fund to obtain a similar exposure to the benchmark if it is not able to gain the same exposure through the equity market.
  • Fees that would be incurred by the Fund include annual management fee, annual trustee fee, and quarterly licensing fee. Click here for more details.
  • All fees are reflected on a per-annum basis, and calculated on a daily basis. The fees will be reflected in the NAV per Unit as publicly available.
  • The investment amount will be dependent on prevailing unit price and number of shares purchased.
  • Trading on Bursa Malaysia Securities will be based on a minimum of 100 units traded – transacted in either US Dollar or Malaysian Ringgit.
  • Subscription via the primary market can be done through the Participating Dealer(s); where creation / redemption of units will be carried out with a minimum block size of 500,000 units – transacted in Hong Kong Dollar.
  • The Participating Dealer assists with the facilitation of creation and redemption of Units by the investors for the Fund.
  • Investors are required to liaise with the Participating Dealer(s) for all creation and redemption transactions.
  • You may refer to the latest list of Participating Dealer(s) of the TradePlus S&P New China Tracker here.
  • Easy access at lower cost
    • Investors can access a portfolio through a single ETF trade, as opposed to multiple transactions for a portfolio of stocks.
    • Investors would also be subject to lower transaction costs due to the lesser number of transactions.
  • Access global for Malaysian investors
    • The Fund provides investors with exposure to Chinese listed companies globally, including companies listed in the US market, which trades on a different time-zone.
    • Investors would be able to gain exposure into these foreign-listed names during local trading hours.
    • Investors would also be able to gain exposure into foreign-listed names with minimal hassle, as investors have the option to trade in local currency despite the underlying investments being in multiple currencies.
  • Real-time trading
    • Investors have the flexibility to move in and out of markets throughout a Bursa trading day.

Liscensing Disclosure Statement & Conditions:
The "S&P New China Ex A-Shares Index" is a product of S&P Dow Jones Indices LLC, a division of S&P Global, or its affiliates (“SPDJI”) and has been licensed for use by Affin Hwang Asset Management Bhd. Standard & Poor’s® and S&P® are registered trademarks of Standard & Poor’s Financial Services LLC, a division of S&P Global (“S&P”); Dow Jones® is a registered trademark of Dow Jones Trademark Holdings LLC (“Dow Jones”) and these trademarks have been licensed for use by SPDJI and sublicensed for certain purposes by Affin Hwang Asset Management Bhd. TradePlus S&P New China Tracker is not sponsored, endorsed, sold or promoted by SPDJI, Dow Jones, S&P, their respective affiliates and none of such parties make any representation regarding the advisability of investing in such product(s) nor do they have any liability for any errors, omissions, or interruptions of the S&P New China Ex A-Shares Index.