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CSOP US Dollar Money Market ETF Summary

Core Information

• Fund Type: Unit trust, sub-fund of the CSOP ETF Series, established in Hong Kong.
• Launch Date: 23 January 2019 (listed class), 8 March 2019 (unlisted class A).
• Stock Codes:
  • USD counter: 9096
  • HKD counter: 3096
• Investment Objective: To provide returns in US Dollars closely corresponding to prevailing money market rates.
• Investment Strategy:
  • Initially followed a passive tracking strategy based on the FTSE 3-Month US Dollar Eurodeposit Index.
  • Changed to an actively managed strategy effective 15 June 2021, with a 30-day rebalancing period.
• Investment Focus:
  • Invests in US Dollar-denominated and settled short-term deposits and money market instruments.
  • Includes debt securities issued by governments, quasi-governments, international organizations, and eligible financial institutions.
  • May include commercial papers, short-term notes, certificates of deposit, and commercial bills.
  • Maximum 30% of Net Asset Value (NAV) can be invested in non-USD-denominated short-term deposits and instruments.
  • No more than 30% of NAV is invested in emerging markets.

Performance Overview

• Dealing NAV (USD) as of 31 December 2021: $102.6466 per unit.
• Units Outstanding: 1,286,000 (listed class), 110,618,000 (unlisted class A).
• Total Assets Under Management (USD): Approximately $245.6 million.
• Performance for the Year Ended 31 December 2021:
  • Dealing NAV change: 0.04%.
  • HKD counter (3096) YTD Price Return: 0.77%.
  • Unlisted class A NAV change: 0.04%.
• No trading value recorded for either counter in December 2021.

Key Financial Statements

Statement of Financial Position (As at 31 December 2021)

• Total Assets: $245,666,348.
• Net Assets Attributable to Unitholders (before capitalisation): $245,552,914.
• Net Assets Attributable to Unitholders (after capitalisation): $245,554,011.
• Liabilities (excluding net assets): $113,434.
• Cash and Cash Equivalents: $170,031,384.

Statement of Comprehensive Income

• Total Net Income (USD): $981,465 for 2021.
• Total Operating Expenses (USD): ($895,105).
• Operating Profit (USD): $86,360.
• Net Increase in Net Assets Attributable to Unitholders (USD): $86,217.

Statement of Changes in Net Assets Attributable to Unitholders

• Net Assets at Beginning of Year: $124,136,996.
• Proceeds on Issue of Units: $317,495,813.
• Payments on Redemption of Units: ($196,166,112).
• Net Increase from Unit Transactions: $121,329,701.
• Net Assets at End of Year: $245,552,914.

Statement of Cash Flows

• Net Cash Used in Operating Activities: ($61,800,391).
• Net Cash Generated from Financing Activities: $121,329,558.
• Net Increase in Cash and Cash Equivalents: $59,529,167.
• Cash and Cash Equivalents at End of Year: $170,031,384.

Key Audit Matters

• Existence and Valuation of Investments:
  • As of 31 December 2021, the Sub-Fund held $27 million in unquoted debt securities.
  • $48.5 million in term deposits with original maturity of more than three months.
  • $152.9 million in cash and cash equivalents.
• Valuation Method:
  • Investments and short-term deposits are measured at amortised cost.
• Audit Conclusion:
  • The financial statements were found to be free from material misstatement.
  • The audit was conducted in accordance with HKFRS and HKSAs.
  • The independent auditor confirmed the true and fair view of the financial position and transactions.

Manager and Trustee Responsibilities

• Manager (CSOP Asset Management Limited):
  • Prepares financial statements in accordance with HKFRS and the Trust Deed.
  • Ensures going concern basis of accounting is applied unless liquidation or cessation is planned.
  • Manages the fund in line with the Trust Deed and takes steps to prevent and detect fraud.
• Trustee (HSBC Institutional Trust Services (Asia) Limited):
  • Ensures the fund is managed in accordance with the Trust Deed.
  • Safeguards the assets and rights of the fund.
  • Reports to unitholders if the Manager fails to manage the fund as per the Trust Deed.

Conclusion

• The CSOP USD MMF ETF is a liquid and low-risk investment vehicle focused on short-term USD-denominated money market instruments.
• The fund underwent a strategy shift in June 2021, moving from passive to active management.
• The fund’s financial statements were audited and approved by the Manager and Trustee on 28 April 2022.
• The fund's performance for the year ended 31 December 2021 was minimal, with a dealing NAV change of 0.04%.
• The fund maintains transparency and compliance with regulatory standards and internal controls.