Samsung AM Launches Bitcoin Futures ETF in Hong Kong
January 16, 2023 |: By James Lord, CFA |: Category: Latest news
Samsung asset management Hong Kong has launched its first crypto-asset ETF, an actively managed fund that provides exposure to Bitcoin by investing in futures contracts.
It Samsung Bitcoin Futures Active ETF (3135 HK) is indicated Stock Exchange of Hong Kong in Hong Kong dollars.
The fund gives both retail and institutional investors access to the world’s largest cryptocurrency. It invests in bitcoin futures contracts and micro bitcoin futures contracts traded on the Chicago Mercantile Exchange (CME).
While the ETF aims to approximate bitcoin’s spot price performance by investing primarily in first-month bitcoin futures contracts, Samsung AM notes that the fund’s active management allows for some flexibility in portfolio composition to provide an extended rollover strategy (subject to availability : in case of contango or reversal in the bitcoin futures market) and better handling of any market disruption events.
The ETF comes with ongoing fees estimated at 0.95% over a year, less than half the cost of an actively managed one. CSOP Bitcoin Futures ETF (3066 HK) whose price is 2.00%. The CSOP Bitcoin Futures ETF and CSOP Ether Futures ETF (3068 HK) has become the first retail crypto asset investment product in Hong Kong since their launch in December 2022.
Despite a big fall in crypto asset prices last year, Hong Kong has pushed ahead with plans to become Asia’s central hub for the digital asset industry. Following the Securities and Futures Commission’s (SFC) recent announcement in 2022, the city is currently the only jurisdiction in Asia to allow retail trading of crypto investment products.
That announcement led to increased interest from prospective ETF issuers Mirae Asset Global Investments is also currently in the process of bringing futures-based crypto asset ETFs to market.
Directly replicated crypto asset ETFs, however, have yet to pass muster with the SFC, perhaps reflecting concerns about validating ownership of the tokens underlying these funds.