2023-04-28-港交所-Ｆ山证铁矿石_Ｆ山证铁矿石－Ｕ_2022年年报_51页_11mb

SSIF DCE IRON ORE FUTURES INDEX ETF Summary

Core Content

The SSIF DCE Iron Ore Futures Index ETF is a sub-fund of the SSIF ETF I, an umbrella unit trust established under Hong Kong law on 24 February 2020. It is a passively managed exchange-traded fund (ETF) that tracks the DCE Iron Ore Futures Price Index by investing directly in iron ore futures contracts traded on the Dalian Commodity Exchange. The fund offers two trading counters: HKD (stock code 03047) and USD (stock code 09047), both listed on The Stock Exchange of Hong Kong Limited and commenced trading on 27 March 2020.

Key Information

• Investment Objective: To provide investment results that closely correspond to the performance of the DCE Iron Ore Futures Price Index, before deduction of fees and expenses.
• Fund Structure: The fund is a sub-fund of SSIF ETF I, managed by Shanxi Securities International Asset Management Limited and administered by HSBC Institutional Trust Services (Asia) Limited.
• Performance:
  • As of 31 December 2022, the net asset value (NAV) per unit was USD2.1589 (2021: USD1.5997).
  • The fund had 9,600,000 units outstanding (2021: 13,500,000 units).
  • Total net assets as of 31 December 2022 were USD20,725,220 (2020: USD21,596,520).

Market Review

• 2022 Performance: Iron ore prices rose by approximately 15% in USD, driven by strong demand from China's steel industry and global supply chain disruptions caused by the pandemic.
• 2023 Outlook: Prices are expected to continue rising by about 11% as of early March 2023, but macroeconomic factors such as high interest rates and long-term shifts towards renewable energy may limit upside potential.

Key Drivers of Demand and Supply

• Demand: Strong infrastructure spending and housing construction in China, despite economic slowdowns due to the pandemic.
• Supply: Disruptions in production and shipping from Australia, one of the world's largest iron ore producers, due to tropical storms and heavy rains.

Financial Statements

• The financial statements for the year ended 31 December 2022 were approved by the Manager and Trustee on 28 April 2023.
• The fund’s financial statements are prepared in accordance with HKFRSs and are audited by an independent auditor.
• The financial statements include:
  • Statement of Financial Position: Total assets were USD20,759,812 (2021: USD21,621,498), with total liabilities of USD59,806 (2021: USD62,729).
  • Statement of Comprehensive Income: Net income for the year was USD7,782,667 (2021: USD-1,410,021).
  • Statement of Changes in Net Assets Attributable to Unitholders: Net assets decreased to USD20,700,006 (2021: USD21,558,769).
  • Statement of Cash Flows: Net cash generated from operating activities was USD5,766,641 (2021: USD-15,957,548).

Auditor's Report

• The independent auditor confirmed that the financial statements give a true and fair view of the Sub-Fund's financial position and transactions for the year ended 31 December 2022 in accordance with HKFRSs.
• The auditor performed procedures to verify the existence and valuation of investments, comparing prices with quoted net asset values and independent pricing sources.
• The auditor also assessed the Sub-Fund's ability to continue as a going concern and concluded that there were no material uncertainties.

Key Audit Matters

• The existence and valuation of the investment portfolio were identified as a key audit matter, representing 35.2% of the fund’s net assets as of 31 December 2022.
• The audit procedures included independent confirmations and valuation checks.

Responsibilities

• Manager: Responsible for preparing financial statements and managing the fund in accordance with the Trust Deed and the SFC Code.
• Trustee: Ensures the fund is managed in compliance with the Trust Deed and SFC Code, and safeguards the fund's assets and rights.

Notes to the Financial Statements

• The financial statements are prepared in USD, the fund's functional currency.
• The Manager and Trustee apply HKFRSs, HKASs, and the SFC Code's disclosure requirements.
• The fund has adopted certain new and revised HKFRSs, including:
  • Amendments to HKFRS 3
  • Amendments to HKAS 16
  • Amendments to HKAS 37
  • Annual Improvements to HKFRSs 2018-2020 Cycle

Summary of Key Points

• The fund is passively managed and tracks the DCE Iron Ore Futures Price Index.
• Iron ore prices were strong in 2022 and 2023, driven by China's steel demand and supply chain issues.
• The fund's financial statements are audited and comply with HKFRSs.
• The investment portfolio is a significant portion of the fund's assets and was a key audit matter.
• The Manager and Trustee are responsible for the fund's operations and financial reporting.
• The fund's net assets decreased in 2022 due to unit redemptions and market conditions.