- The ETF aims to provide investment results that, before fees and expenses, closely correspond to the performance of the CSI Global China Internet Index ("Index').
- Investment involves risk, including the loss of principal. Investors should refer to the prospectus of Samsung CSI China Dragon Internet ETF (the “ETF”) for details, including the risk factors. Investors should not base investment decisions on this material alone. Historical performance does not indicate future performance.
- The ETF could be subject to certain key risks such as risks of concentration in internet and technology sectors, tracking error risk, trading risk, stock connect risks and multi-counter risk, etc. Please note that the above listed investment risks are not exhaustive.
- The Manager may at its discretion pay distributions out of capital, or effectively out of capital, of the ETF, amounting to a return or withdrawal of part of an investor’s original investment or from any capital gains attributable to that original investment, resulting in an immediate reduction of the NAV per unit.
1. Global e-commerce will continue to grow
- E-commerce will continue to grow*
- Global e-commerce retail sales are expected to grow around 10% per year from 2022 to 2025
- China has the highest penetration rate in e-commerce market among the world*
- It is estimated that China's e-commerce retail sales will account for 46.3% of the total retail sales in 2022, followed by the United Kingdom and South Korea, while the United States only ranks the 7th
- China is the largest e-commerce market#
- China's e-commerce transaction volume increased from 21.8 trillion RMB in 2015 to 37.2 trillion RMB in 2020; China's national online retail sales reached 11.8 trillion RMB in 2020, making it the world's largest online retail market for 8 consecutive years
Source: eMarket, as of 2 Feb 2022
Ministry of Commerce of The People’s Republic of China, as of 1 Nov 2021
2. China's largest Internet company
China's largest Internet companies are listed in different markets, including the United States, Hong Kong and China
The Top 20 China's Internet Companies in 2021
|Company||Listing Place||Company||Listing Place|
|1. Alibaba||US, HK||11. Xiaomi||US, HK|
|2. Tencent||US, HK||12. Tencent Music||US|
|3. Baidu||US, HK||13. Beijing 58||-|
|4. JD||US, HK||14. Sina||China|
|5. Meituan||US, HK||15. TAL Education||US|
|6. Byte Beat||-||16. Beke||US|
|7. Shanghai Xunmeng||Sub-brand Pinduoduo is listed in US||17. iQIYI||US, China|
|8. NetEase||US, HK||18. Ctrip||US, HK|
|9. Kuaishou||HK||19. Sohu||US|
|10. 360 Security Technology||China||20. Autohome||US|
Source: Internet Society of China, Bloomberg, as of 26 Nov 2021
3. ATMXJ holding around 60% in the portfolio**
ETF has relatively low investment threshold and effectively reduce volatility than investing in individual Chinese stocks
Investing into 2812 can help you to diversify across Chinese internet giants, but not over diversify. The total weighting of Alibaba, Tencent, Meituan, Xiaomi and JD is around 60%**, providing convenient access to the global China internet giants.
ETF Top 10 holdings
|Portfolio Holdings||Listing Place||Weighting|
Source: Bloomberg as of 31 March 2022
latest holdings information: http://www.samsungetfhk.com/product/2812/#Holdings
Relatively low investment threshold
One lot of each of ATMXJ may cost you around HKD100,000**. Investment threshold is just less than HKD2,250**. Lower investment threshold can allow you to have better allocation strategy.
** Information source: Bloomberg, data as of 31 March 2022
Effectively reduce volatility
Using ETF to invest in a basket of stocks can effectively reduce the volatility of individual stocks
|SAMSUNG CSI China Dragon Internet ETF||2812 HK||51.672%|
Source: Bloomberg, as of 28 February 2022. Volatility is calculated based on the past 260 trading days on 31 Mar 2022
^2812 ETF currently holds Alibaba ADR (BABA.US) but not Hong Kong-listed 9988.HK; holds JD ADR (JD.US) but not Hong Kong-listed 9618.HK
4. Pioneer of investing China Internet stock
2812 was launched in June 2018 and the longer track record gives you more reference data.
## Information source: Bloomberg, data as of 31 March 2022
Historical Index performance comparison
|Hang Seng Index||-3.15%||-5.99%||-10.49%||-22.49%||-15.82%|
Information source: Bloomberg, data as of 31 March 2022
5. Valuations of Chinese internet stocks are now near record lows
CSI Global China Internet Index (underlying index of 2812) is now close to record low after the launch day of 2812 (June 2018). Investors can capture the potential growth of Chinese Internet companies at lower valuations.
Source: Bloomberg, data as of 31 March 2022
Past performance is not indicative of future performance
6. Why investing 2812 HK?
- People have got used to the online shopping after covid-19 which drives the continuous growth of e-commerce. China has the highest penetration rate in e-commerce market. Investing in Chinese Internet companies can effectively capture the growth of e-commerce.
- The ETF helps investors invest in popular Chinese concept stocks with lower investment thresholds, and reduce the volatility of investing in independent Chinese concept stocks
- The ETF invests in ADRs, Hong Kong stocks and A shares, capturing the growth of Chinese Internet companies listed in different markets.
- The listing time of 2812 is longer than that of the Hang Seng Technology Index and able to provide investors with more reference data@
- Valuations of Chinese internet stocks are now near record lows which is a good time for investors to consider entering the market #
@Past performance is not indicative of future performance
#This document is for reference only and does not constitute an offer to recommend or solicit the purchase of any product. Investors should not make any investment decisions based on this document alone. Investors should determine whether the investment products and strategies are suitable for you based on your personal financial situation, investment experience and goals. If you have any doubts about the relevant information, you should seek the advice of professional advisors as necessary.