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INVESTMENT MADE EASY

NEW POSITIONING IN CHINA A-SHARES 500 Small-Mid stocks with a total market cap of RMB8.5bn*

IMPORTANT: Investment involves risks. Investment value may rise or fall. Past performance information presented is not indicative of future performance. Investors should refer to the Prospectus and the Product Key Facts Statement for further details, including product features and risk factors. Investors should not base on this material alone to make investment decisions. Investors should note: •  CSOP CSI 500 ETF (the “Sub-Fund”) is a physical ETF and invests primarily in China A-Shares listed on the Shanghai Stock Exchange or the Shenzhen Stock Exchange of the People’s

Republic of China (“China” or “PRC”) through the Renminbi Qualified Foreign Institutional Investor (“RQFII”) status of the Manager and/or the Shanghai-Hong Kong Stock Connect and the Shenzhen-Hong Kong Stock Connect (“Stock Connect”).

•  The Sub-Fund is to provide investment results that, before deduction of fees and expenses, closely correspond to the performance of the CSI 500 Index (the “Underlying Index”). There is no assurance that the Sub-Fund will achieve its investment objective.

•  The Sub-Fund is not principal guaranteed and your investments may suffer losses. There is no assurance that the Sub-Fund will achieve its investment objective. It is passively managed and the Manager will not have the discretion to adapt to market changes due to the inherent investment nature of the Sub-Fund. Falls in the Underlying Index may result in a corresponding fall in the value of the Sub-Fund.

•  The Sub-Fund invests up to 50% of its NAV in financial derivative instruments (“FDIs”) (only funded total return swaps) through one or more counterparty(ies). As such, the Sub-Fund may suffer significant loss if a swap counterparty fails to perform its obligations, or in case of insolvency or default of the counterparty(ies). Risks associated with FDIs include counterparty/credit risk, liquidity risk, valuation risk, volatility risk and over-the-counter transaction risk. FDIs are susceptible to price fluctuations and higher volatility, and may have large bid and offer spreads and no active secondary markets. The leverage element/component of an FDI can result in a loss significantly greater than the amount invested in the FDI by the Sub-Fund. Exposure to FDIs may lead to a high risk of significant loss by the Sub-Fund.

•  China is considered as an emerging market and investing in China market may subject to greater economic, political, tax, foreign exchange, regulatory, volatility and liquidity risks than investing in more developed countries. The concentration of the Sub-Fund’s investments in a single geographical region (i.e. China) may subject it to greater volatility than portfolios which comprise broad-based global investments.

•  The Underlying Index intends to reflect the overall performance of small/medium-capitalisation A-shares. The shares of small/medium-capitalisation companies may have lower liquidity and their prices are more volatile to adverse economic developments than those of larger capitalisation companies in general.

Please note that the above listed investment risks are not exhaustive and investors should read the Prospectus in detail before making any investment decision.

Index Provider Disclaimer： The CSI 500 Index (“Index”) is compiled and calculated by China Securities Index Co., Ltd. (“CSI”). All rights of the Index are proprietary to CSI. CSI will apply all necessary means to ensure the accuracy of the Index. However, CSI does not guarantee its accuracy, nor shall it be liable to any person for any error in the Index.

CSOP CSI 500 ETF Top 500 stocks outside of CSI 300 universe

HKD Counter

3005 RMB Counter

83005

Source: China Securities Index Co., Ltd., as of December 31, 2019.


NEW TRENDS IN DRIVING CHINA’S ECONOMY 33% of the investment in related to China’s 5G “New Infrastructure*











HKD Counter

3005 RMB Counter

83005

Theme Sectors Weigh/ng in CSI500 5G Base Sta*on Construc*on 7.34%

Ultra High Voltage 0.99% High-‐Speed Rail 1.40% Charging Pile 2.91% Big Data 9.35%

Ar*ficial Intelligence 6.96% Industrial Internet 3.85% Semiconductor 6.37% New Material 7.40%

All New Infrastructure^ 32.61%

*Source: JRJ.com, CSOP Research, as of January 31, 2020. ^ The total weighting of “New Infrastructure” is calculated after removing duplicates in each theme sector.












HKD Counter

3005 RMB Counter

83005

GROWTH POTENTIALS & RESILIENCE OF CHINA’S SMALL-MID SIZED COMPANIES Increased 486.14% since index base date, outperforming major China A-shares benchmarks *

Source: : Bloomberg, as of February 6, 2020. Major China A-shares benchmarks refer to SHCOMP, CSI300 Index.

Investment Objective The investment objective of the CSOP CSI 500 ETF is to provide investment results that, before deduction of fees and expenses, closely correspond to the performance of the Underlying Index, namely, the CSI 500 Index.

CSOP CSI 500 ETF (3005/83005.HK)

Fund Manager CSOP Asset Management Limited

Stock Code 3005 (HKD Counter) 83005 (RMB Counter)

Listing Date 19 March 2020

Exchange Hong Kong Stock Exchange – Main Board

Base Currency RMB

Trading Currency RMB/HKD

Management Fee^ 0.99%

Ongoing charges over a year# Estimated to be 1.2%

Trustee and Registrar HSBC Institutional Trust Services (Asia) Limited

Custodian The Hongkong and Shanghai Banking Corporation Limited

Product Information

^The management fee is inclusive of the Trustee’s and Registrar’s fee and the Manager will pay the fees of the Trustee and the Registrar out of the management fee. # As the Sub-Fund is newly set up, this figure is a best estimate only and represents the sum of the estimated ongoing charges over a 12-month period, expressed as a percentage of the estimated average net asset value (“NAV” or “Net Asset Value”) over the same period. It may be different upon actual operation of the Sub-Fund and may vary from year to year. The ongoing charges figure does not include the fees related to the FDIs (including swaps) entered into by the Sub-Fund. For the first 12-month period from the launch of the Sub-Fund, the ongoing charges figure is capped at 2.0% of the average NAV of the Sub-Fund. Any ongoing expenses exceeding 2.0% of the average NAV of the Sub-Fund during this period will be borne by the Manager and will not be charged to the Sub-Fund. *The Underlying Index is a net total return index which means that its performance reflects the reinvestment of dividends, net of withholding taxes, from the Index Securities.

Investment Strategy CSOP CSI 500 ETF is a physical ETF and invests primarily in China A-Shares listed on the Shanghai Stock Exchange (“SSE”) or the Shenzhen Stock Exchange (“SZSE”) of China through the RQFII status of the Manager and/or the Shanghai-Hong Kong Stock Connect and the Shenzhen-Hong Kong Stock Connect (“Stock Connect”). To achieve the investment objective of CSOP CSI 500 ETF, the Manager will adopt a combination of physical and synthetic representative sampling strategy.

Transaction Related Fees

Transaction Fees in Secondary Market

Initial price per Share About 16 HKD

Trading lot size RMB counter: 200 Units HKD counter: 200 Units

Estimated minimum investment amount About 3,200 HKD

Transaction Fees in Primary Market

Minimum creation/ redemption size 400,000 Units

Estimated minimum investment amount About 6,400,000 HKD

Underlying Index CSI 500 Index

Launch Date 8 February 2013

Base Currency RMB

Index Provider China Securities Index Co., Ltd.

Index Type Net Total Return Index*

Bloomberg Total Return Index SH000905

Underlying Securities

The CSI 500 Index consists of the 500 stocks after the largest 300 stocks in terms of market capitalisation and liquidity from the entire universe of listed A-Shares companies in the PRC. The Underlying Index reflects the overall performance of small-mid capitalisation A-Shares.

Rebalancing frequency 6 months（June and December)

Underlying Index Information

CSOP CSI 500 ETF

50%-100% Physical representative sampling sub-strategy

Up to 50% Synthetic representative sampling sub-strategy

Up to 10% in ETFs listed on the SSE or the

SZSE

Up to 5% In money market instruments

CSI 500 Index Overview The CSI 500 Index consists of the 500 stocks after the largest 300 stocks in terms of market capitalisation and liquidity from the entire universe of listed A-Shares companies in the PRC. CSI 500 Index reflects the overall performance of small-mid capitalisation A-Shares.

Why CSI 500 Index? Most Representative Benchmark of Small-Mid Capitalisation A-Shares Diversified Across Sector •  Top 3 sectors of CSI 500 Index are IT, Industrial and Materials. As of March 3, 2020, weighting of the largest sector in CSI 500 Index is around 21%.

Compared with CSI 300 Index, which has 1/3 weighting in financial sector, CSI 500 Index is more balanced and represents China’s private sector •  Weighting of the top 10 constituents in CSI 500 Index is only around 7% as of March 3, 2020, lower than 26% in CSI 300 Index

Current Valuation Close to Historical Low: A safety cushion for investment now

Top 10 Constituents Sector Breakdown

Code Name Sector Weight(%)

600745 Wingtech Technology Co., Ltd. Telecommunication Services 1.01

300253 Winning Health Technology Group Co., Ltd. Health Care 0.84

002371 NAURA Technology Group Co., Ltd.

Information Technology 0.74

002463 Wus Printed Circuit (Kunshan) Co., Ltd.


002384 Suzhou Dongshan Precision Manufacturing Co., Ltd.


300014 Eve Energy Co., Ltd. Industrials 0.73

002065 DHC Software Co., Ltd. Information Technology 0.69

600584 JCET Group Co., Ltd. Information Technology 0.65

002129 Tianjin Zhonghuan Semiconductor Co., Ltd. Industrials 0.65

300383 Beijing Sinnet Technology Co., Ltd.


Energy, 2.04%

Materials, 15.49%

Industrials, 20.46%

Consumer Discretionary,

10.47%

Consumer Staples, 4.35%

Health Care, 11.67%

Financials, 8.52%

Information Technology,

21.48%

Telecommunication

Services, 3.09%

Utilities, 2.43%

Source: China Securities Index Co., Ltd., as of March 3, 2020. Source: China Securities Index Co., Ltd., as of March 3, 2020.

Historical Average Valuation Level: 39x

Historical Low Valuation level: 16x

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2,000

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12,000

14,000 CSI500 Index PE_RATIO (RHS, Reverse) Index level PE Ratio

Source: Bloomberg, as of February 6, 2020.

CSOP CSI 500 ETF (3005/83005.HK)

Top 300 A-shares by average daily market cap and trading turnover;

Market Cap: 33,040.1 billion yuan

Top 301-800 stocks by average daily market cap and trading turnover (Excluding any CSI 300 Index Constituents) ;

Market Cap: 8,520.9 billion yuan

CSI 300 Index CSI 500 Index

……

CSI Indexes Universe

Industrials Materials IT

Theme Sectors Weigh/ng in CSI500 5G Base Sta*on Construc*on 7.34%

Ultra High Voltage 0.99% High-‐Speed Rail 1.40% Charging Pile 2.91% Big Data 9.35%

Ar*ficial Intelligence 6.96% Industrial Internet 3.85% Semiconductor 6.37% New Material 7.40%

Top 3 Sectors

Source: JRJ.com, CSOP Research, as of January 31, 2020.

0

Source: China Securities Index Co., Ltd., Shanghai Stock Exchange, Shenzhen Stock Exchange，as of December 31, 2019.

CSOP A Shares ETF Series

This material has not been reviewed by the Securities and Futures Commission (“SFC”) in Hong Kong. Issuer: CSOP Asset Management Limited CSOP Asset Management Limited ; 2801-2803, Two Exchange Square, 8 Connaught place, Central, Hong Kong Phone: (852) 3406-5688 ; Website: www.csopasset.com; Email: [email protected]

CSOP CSI 500 ETF (3005/83005.HK) Why CSI 500 Index? (Continued) Higher Beta and Cumulative Return •  Since inception, CSI 500 Index has an accumulative return of 486.14%, higher than CSI 300 Index (414.83%) and SHCOMP Index (209.05%) •  At beta of 1.2: CSI 500 Index tends to rally more in bull markets such as 2019 and 1H2015

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31-Dec-2004 31-Dec-2006 31-Dec-2008 31-Dec-2010 31-Dec-2012 31-Dec-2014 31-Dec-2016 31-Dec-2018

CSI500 Price Index CSI300 Price Index SHCOMP Price Index

Bull Market Bull Market


Benefits More from MSCI Inclusion •  After the initial inclusion in 2018, MSCI has made significant step in 2019 to further include mid cap and ChiNext stocks •  173 constituents of the CSI 500 Index belong to MSCI China A Inclusion Index, contributing more than half in weighting. AUM tracking CSI 500 Index

has doubled since the initial MSCI China A Inclusion. As more small names to be included, CSI 500 Index will benefit for further inclusion

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40000

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1-‐Dec-‐2014 1-‐Dec-‐2015 1-‐Dec-‐2016 1-‐Dec-‐2017 1-‐Dec-‐2018 1-‐Dec-‐2019

AUM of Funds tracking CSI 500 Index

2018.05.31 MSCI China A Inclusion

CNY million

Representing the Future of China Economy

Company Short Name Ticker Leader of Sub-sector DHC Software 002065 Leader of system integration in banking and healthcare; and a leading provider of Huawei servers Oriental National Communication 300166 Largest provider of IT service to three SOE telecom firms (big data service and business intelligence) China National Software 600536 Only provider of PC operation system (competitor of Microsoft's Windows) Sinnet Technology 300383 Largest A-share listed provider of Internet Data Center (IDC) and cloud service VenusTech Group 002439 Largest cybersecurity software provider, with eye-poping 70% gross margin

…

•  Semiconductor: Key sector in CSI 500 Index, weighting in CSI 500 Index is 3.28%, more than double of that of CSI 300 Index, 1.39%. China domestic firms will benefit more from the trend since Chinese government has established funding of RMB 300 billion (i.e. the big fund I&II) to support the domestic substitution in semi-conductor sector

•  IT: Top weighting sector in CSI 500 Index. 2020 is the last year of the 13th 5-year plan and much of the government IT budget has not been spent. Sub-sector such as cybersecurity benefits from government procurement for national security concern

•  Sub-sectors Leaders Only Available in CSI 500 Index

Internet of Things (IOT)

5G

Smart city Smart medicine Industry 4.0

Powered by 5G and IOT

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30,000

60,000

90,000

120,000

2017 2018 2019E 2020E 2021E 2022E 2023E

software IT services

China software & IT services spending (in US$ billion)


Source: CSOP Research, as of February 20, 2020.

CSOP SZSE ChiNext ETF (3147.HK)

CSOP CSI 500 ETF (3005.HK) CSOP A Shares ETF Series

ICBC CSOP S&P New China Sectors ETF (3167.HK)

CSOP MSCI China A Inclusion ETF (3149.HK)

CSOP FTSE China A50 ETF (2822.HK)

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