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AMundi Hang Seng HK 35 & FTSE China A50 Index ETF Summary

Key Presentation

• AMundi Hang Seng HK 35 focuses on the Hang Seng HK 35 Index, a benchmark for Hong Kong and China's largest-cap stocks.
• AMundi FTSE China A50 tracks the FTSE China A50 Index, comprising 50 leading Chinese A-Share companies.

Annual Performance Highlights

Hang Seng HK 35 ETF (Sep 30, 2023)

• Net Asset Value (NAV): HK$7.613 billion, funded by 500,000 units at HK$15.237/unit.
• NAV Change (Dec 2022-Jan24): Decrease of ~$0.10 or ~6.5%, reflecting sub-index performance and market volatility.

FTSE China A50 ETF (Sep 30, 2023)

• NAV: RMB12.31 billion, with 1 million units at RMB12.309/unit (NAV drop ~42.4 million).
• Underlying Index: FTSE China A50 returned -3.95%, vs ETF -4.20%.

Asset Allocation (Sept 30, 2023)

• Hang Seng HK 35: Mostly equities in Hong Kong/China (99.7%); top holdings include HSBC, Tencent-adjacent, and real estate firms like Lion Rock.
• FTSE China A50: Dominated by Chinese Consumer Staples, Financials, and Energy sectors; top holdings include Moutai Co. Ltd and trade-related entities.

Financial Operations

Revenue & Expenses

• Hang Seng HK 35 ETF (2023): Revenue HK$344.1 million; Expenses HK$454.9 million (Impact: Loss of HK$106.8 million).
• FTSE China A50 ETF (2023): Revenue RMB701 million; Expenses RMB171 million (Profit RMB2.7 billion).

Cash Flows

• Hang Seng HK 35 ETF: Net cash decrease HK$27 million, financing outflows tied to redemption requests.
• FTSE China A50 ETF: Net cash decrease RMB1.7 billion linked to redemption activities.

Key Risk Factors

• Market Price Risk: Heavy reliance on equity markets in China/Hong Kong; sensitive to volatility in indices.
• Credit Risk Management: Counterparty risk mitigated via high-credit institutions (Bank of China rated Aa3).
• Regulatory Compliance: Adherence to ETF Guidelines & SFC’s index-tracking constraints (e.g., single-issuer limit ≤15.5% in 2023).

Management & Governance

• Custodians & Auditors: Bank of China (Hong Kong) Ltd (Moody’s Aa3), PwC Hong Kong (vendor-neutral insurance).
• Trustee: BOCi-Prudential Trustee Limited, independently managing assets.

Conclusion

The ETFs demonstrate strong norm-compliant operations and alignment with index performance, despite acute market challenges. Notable fluctuations in NAV and margins reflect external shocks but not fundamental underperformance.