Most leveraged products promise double. Hong Kong's newest single-stock product promises up to 1.25 times, and its own disclosures estimate the cost of getting there at between 3.75% and 10% of net assets a year.
CSOP Kioxia Daily Max (1.25x) Product (7772, HKEX)
Kioxia is the Japanese flash memory maker that the market has fallen for in the same way it fell for SK hynix. I recently wrote about two SK hynix leveraged funds being liquidated after volatility decay ate them alive. The memory trade, it seems, still has room for one more wrapper.
The wrapper is unusual. CSOP already runs products that deliver twice the daily move of Samsung Electronics and SK hynix. For Kioxia, it is offering a maximum of 1.25 times, and the product summary says even that may be trimmed daily, falling as low as 1.1 times in extreme conditions. Investors are told to check the next day's leverage on the issuer and exchange websites, which is not a sentence one usually finds attached to a fixed multiple.
Exposure comes entirely through swaps on the Tokyo-listed shares. The management fee is 1.6%, ongoing charges are estimated at 2% a year before swap fees, and the swap costs are estimated at 3% to 8% of swap notional. Because the notional is 125% of the fund, that works out at roughly 3.75% to 10% of net asset value a year.
Put the numbers side by side and the offer becomes clear. For a quarter more of one stock's daily move, an investor could pay something close to 12% a year in all-in costs. The product is, in its own words, not designed to be held for more than one day, which at those rates is less a warning than a kindness.
The selling point is access. A trading lot is 100 units, costing a few hundred Hong Kong dollars, against a Tokyo board lot that runs to many thousands. Retail investors who could never afford a lot of Kioxia can now afford a slightly leveraged slice of one, renewed daily, at a price.
Global AI Infrastructure and Data Centres ETF (DTCR, ASX)
There are now two ETFs called DTCR that own data centres, and Equinix is the largest holding in at least one of them. The newer one is from ETF Shares, an Australian issuer better known for funds with tickers such as HUGE and HULK, and it tracks the BITA Data Center Critical Infrastructure Index for 0.39% a year.
The fund describes its universe as companies that generate significant revenue from the physical infrastructure behind modern data centres. In practice, a third of the portfolio sits in real estate. The AI revolution, it turns out, is substantially a landlord business.
BNY Mellon Power Ecosystem ETF (BGRD, Cboe BZX)
This fund appears to have changed its name on the way to market. Its legal entity record also lists it as the BNY Mellon Power Infrastructure ETF, and the move from infrastructure to ecosystem turns out to matter.
An infrastructure fund owns pylons and transformers. An ecosystem fund, according to the summary prospectus, owns companies set to benefit from power "generation, transmission, distribution, storage, management, or efficient use". That spans around 18 GICS (Global Industry Classification Standard) industries, including utilities, electrical equipment, metals and mining, semiconductors, and aerospace and defence. The sub-themes run from smart grids and liquid cooling to rare earths and nuclear.
I recently wrote about Amundi's electrification and critical metals funds, which split this theme into tidy pieces. BNY, through its sub-adviser Newton, has gone the other way and put the whole lot in one actively managed, non-diversified fund for 0.50%. When everything that touches electricity is in scope, the hard part is finding a company that is out of it.
Equity Partners ETF (LTEQ, NYSE)
The prospectus for this fund never explains its name. It does explain its plumbing: the fund expects to acquire "a material amount of assets through one or more in-kind contributions" at launch, structured to be tax-deferred under Section 351 of the US tax code.
That makes it one of a growing number of ETFs built to absorb existing portfolios. The adviser, Seven Post Investment Office, is a San Francisco investment office managing around $9.6 billion. Clients hand over the stocks they already own, receive ETF shares in return, and defer the capital gains that selling would have triggered.
The strategy itself is deliberately broad: at least 80% in equities, at least 70% in US-domiciled securities, any market capitalisation, with top-down and bottom-up selection. The management fee is 0.65%, and waivers bring total expenses down to 0.61%. The partners in the name, one assumes, are the clients who arrived with their shares already in hand.
The Principal pair (EMDI, NYSE Arca and PGRW, Cboe BZX)
Principal has launched two funds, and both are measured against something they are not. The Principal Finisterre Emerging Markets Diversified Income ETF may invest without limit in high-yield bonds, including frontier and distressed debt. Its primary benchmark is the Bloomberg Global Aggregate Index, an investment-grade index dominated by developed-market government bonds.
The Principal Growth ETF invests at least 80% in US growth stocks, and defines a growth stock as anything that appears in at least one of three growth indices from MSCI, S&P or Russell. Its primary benchmark is the Russell 1000, which is not a growth index. The Russell 1000 Growth appears only as an additional comparison.
There is a regulatory reason for this. US funds must show a broad-based market index, and the index that tells you what the fund actually does gets demoted to second place. EMDI charges 0.59% and PGRW charges 0.37%. Investors looking for the honest comparison will find it a line further down.
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