3019.HK

[Kronosoma87]

Good morning everyone,

how do you justify that for example the monthly investment plan with Hsbc doesn’t include a fund like the 3019 of the hkex?

https://www.hsbc.com.hk/investments/...ading/monthly/

Consider the perspective of an average investor with passive and Long term mentality . I think that this kind of investor should be the target of those monthly investment plan so I was wondering why they didn’t include this etf.

maybe because is a synthetic one?
curious to hear from you guys.

https://www.hkex.com.hk/Market-Data/...019&sc_lang=en


have a good day!

[shri]

Good morning everyone,

how do you justify that for example the monthly investment plan with Hsbc doesn’t include a fund like the 3019 of the hkex?

No volume? Essentially an illiquid offering? ( Avg. Volume 2,015 from the link below )

https://finance.yahoo.com/quote/3019.HK/

[freeier]

maybe because is a synthetic one?
curious to hear from you guys.

wouldn't be surprised if that is the basic reason. HKEX classifies non-physical-replicated ETF differently.. so technically it can go into a different category that HSBC is unwilling to touch at this juncture... good or bad its hard to argue.. so far i don't think there has been any synthetic ETF that blew up because of the derivatives (i.e. structural blew up).. but everyone wants to COA...

[Kronosoma87]

Thanks guys!

[freeier]

i am sure there are market maker offering them at offers if HSBC is to call the fund manager on the purchase schemes..
since these plans are likely to be bought at offers, instead of working the orders, i guess it should not matter much to the end investors on the liquidity

[shri]

i am sure there are market maker offering them at offers if HSBC is to call the fund manager on the purchase schemes..
since these plans are likely to be bought at offers, instead of working the orders, i guess it should not matter much to the end investors on the liquidity

To be fair, HSBC has a whole load of funds etc, they can sell to people at an appropriate price, which cover all sorts of exotic needs.

The SMIP is supposed to be low cost / low entry barrier / highly liquid blue chips from what little I know about it.

(On a side note 7200 is a "exotic" product with all sorts of synthetic chemicals in it and it is apparently on some list of SMIPs. Have not verified and have no desire to.)

[freeier]

the market makers generally market make for a whole chunk of ETFs.. generally you just need a call to them and say 'where are your offers' and that would be dumped on the screen...

but all those are irrelevant here.. no obligation on hsbc to do these for a debatable ETF and probably better off if they don't do it.. and they have offered a good chunk of what a retail investor need so no point being that much more demanding.

[freeier]

(On a side note 7200 is a "exotic" product with all sorts of synthetic chemicals in it and it is apparently on some list of SMIPs. Have not verified and have no desire to.)

to be fair.. it is a decent product concept and all started in the US of A...
because its 2x, if HSI is to move up, e.g. 2% per day over the next 10 days, meaning after 10 days HSI is 21.9% higher than 10 days ago (compounding effect). 7200 actually would gain, not just by 21.9% x 2 (=43.8%), but by 48% over the 10 days.

why ? because since it is leveraged, the investment needs to be re-balanced everyday by the end of the day. Rebalancing means, in the case of such ETF, if you have gained from yesterday, you add more investment into the index. Alternatively if you have lost money from yesterday, you would need to sell more of the product to cover the losses you have made.

so in a ultra bullish cycle when index moves up everyday, your return is much higher because you increase borrowing to invest everyday. But if index is whipsawing, one day up and one day down, you will soon see values losses from your investment because of the buy high-sell low effect of rebalancing, which sometimes we term it negative gamma.