Samsung AM launches bitcoin futures ETF in Hong Kong
Samsung Asset Management unveiled its first crypto assets ETF in Hong Kong, an actively managed fund offering exposure to bitcoin by investing in futures contracts.
The Active ETF Samsung Bitcoin Futures (3135 HK) was registered on the Hong Kong Stock Exchange in Hong Kong dollars.
The fund gives retail and institutional investors access to the world’s largest cryptocurrency. It invests in bitcoin futures and micro-bitcoin futures traded on the Chicago Mercantile Exchange (CME).
While the ETF aims to approximate the performance of bitcoin’s spot price by investing primarily in first-month bitcoin futures, Samsung AM notes that the fund’s active management allows flexibility in the composition of the fund. portfolio in order to provide an improved rollover strategy (depending on the presence of contango or backwardation in the bitcoin futures market) and better management of any disruptive market events.
The ETF has an estimated one-year ongoing charge of 0.95%, less than half the cost of the actively managed asset. CSOP Bitcoin Futures ETF (3066 HK) which is priced at 2.00%. The CSOP Bitcoin Futures ETF and ETF CSOP Ether Futures (3068 HK) became the first retail crypto asset investment products in Hong Kong after their launch in December 2022.
Despite a major rout in crypto asset prices last year, Hong Kong continued its plan to become Asia’s central hub for the digital asset industry. Following an announcement by the Securities and Futures Commission (SFC) towards the end of 2022, the city is currently the only jurisdiction in Asia to allow retail crypto investment products to be traded.
This announcement sparked a flurry of interest from potential ETF issuers with Mirae Asset Global Investments also currently releasing ETFs of crypto assets based on futures contracts.
However, direct-replicating crypto asset ETFs have yet to make the leap with the SFC, perhaps reflecting concerns about validating the ownership of the underlying tokens of these funds.