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CSOP Responds to Market Concerns: 2x Long Hynix ETF Expected to Maintain Double Leverage

On July 31, the CSOP 2x Long Hynix product recently became a market focus due to sharp price fluctuations. As of July 30, SK Hynix had fallen 49% from its June high, and the net value of the 2x Long Hynix product had retreated over 80%, with its scale shrinking by approximately HK$100 billion from HK$130 billion. After the Hong Kong Securities and Futures Commission issued new rules last week, on Monday CSOP announced that starting from August 3, its leveraged and inverse products linked to 12 popular overseas stocks including SK Hynix, Samsung Electronics, Tesla, and Nvidia will all switch to a 'flexible leverage structure'. This move raised doubts among investors, because if the manager actively reduces leverage, assuming a rapid rebound in SK Hynix later, the ETF's net value recovery speed will significantly slow down, and the time to break even for those who bought at high levels will become longer. On the evening of July 30, CSOP clarified market questions regarding the product's switch to a 'flexible leverage structure' and possible reduction in leverage multiple, stating that under current market conditions, the product is expected to maintain 2x leverage, and the fund manager will not make any proactive adjustments to the leverage multiple based on its own market judgment. CSOP emphasized that after the relevant changes take effect, it will publish announcements on the target leverage multiple before the market opens each trading day. Taking this product as an example, the announcement will be made after the market close on July 31, and investors are advised to pay close attention. (21st Century Business Herald)

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