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HKEx Listed, Stock Code: HKD Counter - 3187, USD Counter – 9187 Samsung S&P High Dividend APAC ex NZ REITs ETF

Key Features
  • First REITs ETF in Hong Kong, providing attractive dividend income* in a low-yield environment
  • Holdings are diversified across multiple sectors from office and apartment buildings to hotels, warehouses, hospitals, shopping centers, parking lots, etc. with business spanning from just Asia to US and Europe.
  • Provides a low-cost tool to conveniently invest in the property market across multiple geo-markets
  • Low correlation with broad market indices historically

*Note: Based on index methodology of S&P High Yield Asia Pacific-Ex New Zealand REITs Select Index (Net Total Return) compiled by S&P Dow Jones Indices. A positive distribution yield does not imply a positive return.

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Important Information
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The investment objective of the Sub-Fund is to provide investment results that, before fees and expenses, closely correspond to the performance of the S&P High Yield Asia Pacific-Ex New Zealand REITs Select Index (the “Index”).

 

What is this Product? 
Samsung S&P High Dividend APAC ex NZ REITs ETF (the “Sub-Fund”) is a sub-fund of Samsung ETFs Trust II, which is an umbrella unit trust established under Hong Kong law.  The units of the Sub-Fund (“Units”) are listed on The Stock Exchange of Hong Kong Limited (the “SEHK”).  These Units are traded on the SEHK like listed stocks.  The Sub-Fund is a passively managed index tracking exchange traded fund under Chapter 8.6 of the Code on Unit Trusts and Mutual Funds (the “Code”) but is not authorized under the Code on Real Estate Investment Trusts. The Sub-Fund is a physical ETF which invests directly in the constituent securities of the Index (as defined below). 

 

1. General investment risk

  • The Sub-Fund’s investment portfolio may fall in value due to any of the key risk factors below and therefore your investment in the Sub-Fund may suffer losses. There is no guarantee of the repayment of principal.

 

2. Currency risk

  • Underlying investments of the Sub-Fund may be denominated in currencies other than the base currency of the Sub-Fund. The Net Asset Value of the Sub-Fund may be affected unfavorably by fluctuations in the exchange rates between these currencies and the base currency and by changes in exchange rate controls.

 

3. Asia Pacific market real estate sector concentration risks

  • The Sub-Fund’s investments are concentrated in the real estate sector in a single geographical region (the Asia Pacific region). The value of the Sub-Fund may be more volatile than that of a fund having a more diverse portfolio of investments.
  • The value of the Sub-Fund may be more susceptible to adverse economic, political, policy, foreign exchange, liquidity, tax, legal or regulatory event affecting the designated markets in the Asia Pacific region (Singapore, Hong Kong, Australia, Japan and South Korea).

 

4. Risk associated with investments in REITs

  • General: The Sub-Fund invests in REITs, which expose investors to the risks of owning real estate directly, as well as to risks that relate specifically to the way in which REITs are organised and operated.
  • Real estate sector risk: The investment portfolio of a REIT will be affected by changes in the values of the underlying properties that they own or operate and will likely be impacted by the performance of the real estate market. The value of REITs, and consequently the performance of the Sub-Fund, may be affected by various factors, including but not limited to the following: (i) changes in general economic and market conditions; (ii) changes in the value of real estate properties; (iii) risks related to local economic conditions, overbuilding and increased competition; (iv) increases in property taxes and operating expenses; (v) changes in zoning laws; (vi) variations in rental income, neighbourhood values or the appeal of property to tenants; (vii) the availability of financing; (viii) changes in interest rates and leverage; (ix) specialised management skills and (x) losses from casualty or condemnation.
  • Operation and management risk: The performance and value of REITs are dependent upon specialised management skills and their investments may be concentrated in a few properties in a geographic area or a property type. REITs are also subject to heavy cash flow dependency and are particularly reliant on the proper functioning of capital markets. In the event of a default by a lessee, the REIT may experience delays in enforcing its rights and may incur substantial costs in protecting its investments.   In addition, to the extent a REIT has its own expenses, the Sub-Fund will bear its proportionate share of such expenses.  Any dividend policy or dividend payout at the Sub-Fund level may not be representative of that of the relevant underlying REIT.
  • Interest rate risk: Fluctuations in interest rates may increase the interest costs incurred by a REIT in respect of its borrowings and may have an adverse effect on the level of activity in the property market. The financial position of the REIT and its ability to make distributions may be adversely affected. Changes in interest rates may also have an impact on the trading price of the units of a REIT.
  • Liquidity risk: The less liquid nature of REITs (compared to other stocks) may affect the Sub-Fund’s ability to acquire or dispose of such assets at the price and time it wishes to do so, which may have an adverse impact on the performance of the Sub-Fund.
  • Regulatory risk: Real estate income and values may be adversely affected by applicable domestic and foreign laws (including tax laws), as well as government actions. A REIT could also fail to qualify for favourable regulatory treatment.
  • Leveraged risk: A REIT may use leverage, which increases investment risk and the risks associated with debt financing and could adversely affect a REIT’s operations and market value in periods of rising interest rates. Financial covenants related to a REIT’s leveraging may affect the ability of the REIT to operate effectively. In the event that a REIT is wound up, its assets will be used to pay off creditors first and holders will only receive distributions from any remaining assets.

 

5. Asia Pacific markets risks

  • Some Asia Pacific exchanges on which the Sub-Fund will invest may have the right to suspend or limit trading in any security traded on the relevant exchange. The government or the regulators may also implement policies that may affect the financial markets.
  • Some Asia Pacific countries in which the Sub-Fund will invest may restrict foreign investment or the repatriation of income, capital or the proceeds from sale of Securities, or may intervene with foreign exchange rates. The Sub-Fund may incur higher costs investing in these countries. These restrictions may limit the Sub-Fund’s ability to invest in these countries, delay the investment or repatriation of capital of the Sub-Fund and impact the Sub-Fund’s ability to track the performance of the Index.

 

6. New index risk

  • The Index is a new index having only been launched on 27 April 2020. As such, the Sub-Fund may be riskier than other ETFs tracking more established indices with a longer operating history.

 

7. Multi counter risks

  • If there is a suspension of the inter-counter transfer of Units between the counters and/or any limitation on the level of services by brokers and CCASS participants, Unitholders will only be able to trade their Units in one counter only, which may inhibit or delay an investor dealing. The market price of Units traded in each counter may deviate significantly.
  • As such, investors may pay more or receive less when buying or selling the Units traded in HKD on the SEHK than in respect of the Units traded in USD and vice versa.

 

8. Other currency distributions risk

  • Investors should note that all Units will receive distributions in the base currency (USD) only. In the event that the relevant Unitholder has no USD account, the Unitholder may have to bear the fees and charges associated with the conversion of such distribution from USD to HKD or any other currency. The Unitholder may also have to bear bank or financial institution fees and charges associated with the handling of the distribution payment.  Unitholders are advised to check with their brokers regarding arrangements for distributions.

 

9. Distributions out of or effectively out of capital risks

  • Payment of dividends out of capital or effectively out of capital amounts to a return or withdrawal of part of an investor’s original investment or from any capital gains attributable to that original investment. Any such distributions may result in an immediate reduction in the Net Asset Value per Unit of the Sub-Fund.

 

10. Passive investments risk

  • The Sub-Fund is not “actively managed” under normal market conditions, and therefore the Manager will not adopt any temporary defensive position when the Index moves in an unfavourable direction. When there is a decline in the Index, the Sub-Fund will also decrease in value and investors may lose a significant part of their respective investments. Under exceptional market conditions and/or extreme circumstances, the Manager may adopt a temporary defensive position for protection of the Sub-Fund in the best interests of the Sub-Fund and the Unitholders.

 

11. Tracking error risk

  • The Sub-Fund may be subject to tracking error risk, which is the risk that its performance may not track that of the Index exactly. This tracking error may result from the investment strategy used and/or fees and expenses.  The Manager will monitor and seek to manage such risk and minimise tracking error.  There can be no assurance of exact or identical replication at any time of the performance of the Index.

 

12. Trading risks

  • The trading price of Units on the SEHK is driven by market factors such as the demand and supply of U Therefore, the Units may trade at a substantial premium or discount to the Sub-Fund’s Net Asset Value.
  • As investors will pay certain charges (e.g. trading fees and brokerage fees) to buy or sell Units on the SEHK, investors may pay more than the Net Asset Value per Unit when buying Units on the SEHK, and may receive less than the Net Asset Value per Unit when selling Units on the SEHK.

 

13. Trading differences risks

  • As the markets in which the Sub-Fund invests may be open when Units are not priced, the value of the securities in the Sub-Fund’s portfolio may change on days when investors will not be able to purchase or sell the Sub-Fund’s Units.
  • Differences in trading hours between the markets in which the Sub-Fund invests and the SEHK may also increase the level of premium or discount of the Unit price to Sub-Fund’s Net Asset Value.
  • Securities listed on certain stock exchanges are subject to trading bands which restrict increase and decrease in the trading price, while Units listed on the SEHK are not. This difference may also increase the level of premium or discount of the Unit price to Sub-Fund’s Net Asset Value.

 

14. Termination risks

  • The Sub-Fund may be terminated early under certain circumstances, for example, where the Index is no longer available for benchmarking or if the size of the Sub-Fund falls below USD5 million. Investors may not be able to recover their investments and suffer a loss when the Sub-Fund is terminated.

 

15. Reliance on market maker and liquidity risks

  • Although the Manager will use its best endeavours to put in place arrangements so that at least one Market Maker will maintain a market for the Units traded in each counter (which may be the same market maker), and that at least one Market Maker for each counter (which may be the same market maker) gives not less than 3 months’ notice prior to terminating market making arrangement under the relevant market maker agreement, liquidity in the market for Units may be adversely affected if there is no or only one Market Maker for the HKD or USD traded Units.  There is also no guarantee that any market making activity will be effective.
Fund Objective and Investment Strategy
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Investment Objective The investment objective of the Sub-Fund is to provide investment results that, before fees and expenses, closely correspond to the performance of the S&P High Yield Asia Pacific-Ex New Zealand REITs Select Index (the “Index”). There can be no assurance that the Sub-Fund will achieve its investment objective.
Investment Strategy

Primarily Full Replication. Where the adoption of a full replication strategy is not efficient or practicable or where the Manager considers appropriate in the best interest of the Sub-Fund and the Unitholders, the Manager may pursue a representative sampling strategy.
Underlying Index S&P High Yield Asia Pacific-Ex New Zealand REITs Select Index
Product Base Currency USD
Trading Currency

HKD - HKD Counter

USD - USD Counter
Creation/ Redemption Cash (in USD only) 
Dividend

Semi-annually (usually in June and December of each year) (if any) subject to the Manager’s discretion. Distributions on all Units (whether traded in HKD counter or USD counter) will be in USD only. Distributions may not be paid if the cost of the Sub-Fund’s operations is higher than the yield from the Sub-Fund’s cash and holdings of investment products. Distributions may be paid out of capital or effectively out of capital as well as income at the Manager’s discretion.

Note: For the avoidance of doubt, please note that no distributions will be made in December 2020.

Manager Samsung Asset Management (Hong Kong) Limited
Registrar Tricor Investor Services Limited
iNAV Calculation Agent ICE Data
Appropriation
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Leverage No
Actively Managed No
Swap Base No
Derivatives Base No
Securities Lending No
Intra-day Estimated NAV
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The near real time indicative Net Asset Value per Unit in HKD is calculated using a real time HKD:USD foreign exchange rate – it is calculated using the near real time indicative Net Asset Value per Unit in USD multiplied by a real-time HKD:USD foreign exchange rate quoted by ICE Data Indices LLC.

Market Information
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  Date Last Change Change(%)
Official NAV per Unit in HKD * 20210125 21.3867 -0.1536 -0.71
Closing Price per Unit in HKD 20210125 21.4600 -0.1000 -0.46
Official NAV per Unit in USD 20210125 2.7589 -0.0196 -0.71
Closing Price per Unit in USD 20210125 2.7700 -0.0180 -0.65

* The last Net Asset Value per Unit in HKD is indicative and for reference purposes only. It is calculated using the last Net Asset Value per Unit in USD multiplied by an assumed foreign exchange rate using the exchange rate for HKD quoted by WM Reuters at 4:00pm London time as of the same dealing day. When the Hong Kong market is closed, the official last Net Asset Value per Unit in USD and the indicative last Net Asset Value per Unit in HKD will not be updated.

Fund Information
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Fund Inception Date 14 Oct, 2020
SEHK Listing Date 15 Oct, 2020
Financial Year 31 March
Asset Class Equity
Equity Exposure Stock-Based
Domicile Hong Kong
Total NAV(USD) 25,933,427.28 as of 2021/01/25
Outstanding Units 9,400,000 as of 2021/01/25
Management Fee* 0.65% of NAV per annum
Trustee Fee* 0.10% of NAV per annum, subject to a monthly minimum of USD2,000
Ongoing Charges Over a Year^ Estimated to be 1.50%
Base Currency USD

* Please note that these fees may be increased up to a permitted maximum on giving 1 month’s notice to Unitholders. Please refer to the section of the Prospectus entitled “Fees and Expenses” for further details of the fees and charges payable and the permitted maximum of such fees allowed as well as other ongoing expenses that may be borne by the Sub-Fund.
^ As the Sub-Fund is newly set up, this figure is a best estimate only and represents the sum of the estimated ongoing charges expressed as a percentage of the estimated average Net Asset Value. It may be different upon actual operation of the Sub-Fund and may vary from year to year. The estimated ongoing charges do not represent the estimated tracking error. For the first 12-month period from the launch of the Sub-Fund, the ongoing charges figure is capped at a maximum of 1.5% of the average Net Asset Value of the Sub-Fund, and any ongoing expenses exceeding 1.5% of the average Net Asset Value of the Sub-Fund will be borne by the Manager and will not be charged to the Sub-Fund.

Index Information
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Underlying Index S&P High Yield Asia Pacific-Ex New Zealand REITs Select Index
Index Description

The Index is a free float market capitalisation weighted index which measures the performance of 30 of the highest dividend-yielding REITs in the S&P Asia Pacific REIT Index (the “Parent Index”) excluding those domiciled in New Zealand. The Index includes constituents domiciled in Singapore, Hong Kong, Australia, Japan and South Korea.

 

The Index is compiled and published by S&P Dow Jones Indices (the “Index Provider”). The Manager (and each of its Connected Persons) is independent of the Index Provider.

 

The Index is a net total return index. A net total return index seeks to replicate the overall return from holding a portfolio consisting of the Index constituents and reinvesting payments received such as dividends after the deduction of any withholding tax or other amounts to which an investor holding the Index constituents would typically be exposed. The Index is denominated and quoted in USD.
Index Provider S&P Dow Jones Indices
Currency USD
Trading Information
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HKD

Traded Unit

USD

Traded Unit
Exchange Hong Kong Stock Exchange – Main Board Hong Kong Stock Exchange – Main Board
Date of Listing / Dealing 15 Oct 2020 15 Oct 2020
Primary Exchange Time Zone GMT+8 GMT+8
Exchange Ticker 3187 9187
Bloomberg Ticker 3187 HK 9187 HK
ISIN  HK0000656956  HK0000656964
Trading Board Lot 200 Unit 200 Unit
Trading Currency HKD USD
Participating Dealer
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ABN AMRO Clearing Hong Kong Limited

Citigroup Global Markets Asia Limited

Deutsche Securities Asia Limited

Merrill Lynch Far East Limited

Phillip Securities (Hong Kong) Limited

  
Market Maker
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HKD Counter USD Counter

Optiver Trading Hong Kong Ltd

Optiver Trading Hong Kong Ltd 

Phillip Securities Pte Ltd.

Phillip Securities Pte Ltd.

Flow Traders Hong Kong Limited

Flow Traders Hong Kong Limited

Jane Street Financial Limited

Jane Street Financial Limited
Disclaimer
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The "S&P High Yield Asia Pacific-Ex New Zealand REITs Select Index" is a product of S&P Dow Jones Indices LLC, a division of S&P Global, or its affiliates (“SPDJI”) and has been licensed for use by the Manager.  Standard & Poor’s® and S&P® are registered trademarks of Standard & Poor’s Financial Services LLC, a division of S&P Global (“S&P”); Dow Jones® is a registered trademark of Dow Jones Trademark Holdings LLC (“Dow Jones”) and these trademarks have been licensed for use by SPDJI and sublicensed for certain purposes by the Manager and the Sub-Fund. It is not possible to invest directly in an index.  The Sub-Fund is not sponsored, endorsed, sold or promoted by SPDJI, Dow Jones, S&P, any of their respective affiliates (collectively, “S&P Dow Jones Indices”). Neither S&P Dow Jones Indices make any representation or warranty, express or implied, to the owners of the Sub-Fund or any member of the public regarding the advisability of investing in securities generally or in the Sub-Fund particularly or the ability of the S&P High Yield Asia Pacific-Ex New Zealand REITs Select Index to track general market performance.  Past performance of an index is not an indication or guarantee of future results. S&P Dow Jones Indices’ only relationship to the Manager and the Sub-Fund with respect to the S&P High Yield Asia Pacific-Ex New Zealand REITs Select Index is the licensing of the Index and certain trademarks, service marks and/or trade names of S&P Dow Jones Indices and/or its licensors.  The S&P High Yield Asia Pacific-Ex New Zealand REITs Select Index is determined, composed and calculated by S&P Dow Jones Indices without regard to the Manager or the Sub-Fund.  S&P Dow Jones Indices have no obligation to take the needs of the Manager or the owners of the Sub-Fund into consideration in determining, composing or calculating the S&P High Yield Asia Pacific-Ex New Zealand REITs Select Index.  Neither S&P Dow Jones Indices are responsible for and have not participated in the determination of the prices, and amount of the Sub-Fund or the timing of the issuance or sale of the Sub-Fund or in the determination or calculation of the equation by which the Sub-Fund is to be converted into cash, surrendered or redeemed, as the case may be.  S&P Dow Jones Indices have no obligation or liability in connection with the administration, marketing or trading of the Sub-Fund. There is no assurance that investment products based on the S&P High Yield Asia Pacific-Ex New Zealand REITs Select Index will accurately track index performance or provide positive investment returns.  S&P Dow Jones Indices LLC is not an investment or tax advisor.  A tax advisor should be consulted to evaluate the impact of any tax-exempt securities on portfolios and the tax consequences of making any particular investment decision. Inclusion of a security within an index is not a recommendation by S&P Dow Jones Indices to buy, sell, or hold such security, nor is it considered to be investment advice.

 

NEITHER S&P DOW JONES INDICES NOR THIRD PARTY LICENSOR GUARANTEES THE ADEQUACY, ACCURACY, TIMELINESS AND/OR THE COMPLETENESS OF THE S&P HIGH YIELD ASIA PACIFIC-EX NEW ZEALAND REITS SELECT INDEX OR ANY DATA RELATED THERETO OR ANY COMMUNICATION, INCLUDING BUT NOT LIMITED TO, ORAL OR WRITTEN COMMUNICATION (INCLUDING ELECTRONIC COMMUNICATIONS) WITH RESPECT THERETO.  S&P DOW JONES INDICES SHALL NOT BE SUBJECT TO ANY DAMAGES OR LIABILITY FOR ANY ERRORS, OMISSIONS, OR DELAYS THEREIN.  S&P DOW JONES INDICES MAKES NO EXPRESS OR IMPLIED WARRANTIES, AND EXPRESSLY DISCLAIMS ALL WARRANTIES, OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE OR AS TO RESULTS TO BE OBTAINED BY THE MANAGER, OWNERS OF THE SUB-FUND, OR ANY OTHER PERSON OR ENTITY FROM THE USE OF THE S&P HIGH YIELD ASIA PACIFIC-EX NEW ZEALAND REITS SELECT INDEX OR WITH RESPECT TO ANY DATA RELATED THERETO.  WITHOUT LIMITING ANY OF THE FOREGOING, IN NO EVENT WHATSOEVER SHALL S&P DOW JONES INDICES BE LIABLE FOR ANY INDIRECT, SPECIAL, INCIDENTAL, PUNITIVE, OR CONSEQUENTIAL DAMAGES INCLUDING BUT NOT LIMITED TO, LOSS OF PROFITS, TRADING LOSSES, LOST TIME OR GOODWILL, EVEN IF THEY HAVE BEEN ADVISED OF THE POSSIBLITY OF SUCH DAMAGES, WHETHER IN CONTRACT, TORT, STRICT LIABILITY, OR OTHERWISE.  THERE ARE NO THIRD PARTY BENEFICIARIES OF ANY AGREEMENTS OR ARRANGEMENTS BETWEEN S&P DOW JONES INDICES AND THE MANAGER, OTHER THAN THE LICENSORS OF S&P DOW JONES INDICES.

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