HK Virtual Asset Currency ETF Market Emerges: Details Comparison of Huaxia, Jiashi, and Boshi

In a significant leap forward in the virtual asset arena, leading asset management companies Huaxia Fund, Jiashi Fund, and Boshi Fund successfully obtained approval to issue Bitcoin and Ethereum spot ETFs in the Hong Kong market on April 23, 2024. These ETF products, as Exchange Traded Funds (ETFs), operate similarly to gold spot ETFs, aiming to provide investors with investment returns closely tied to the prices of cryptocurrency spot.

Boshi Global Exchange-Traded Fund Open-End Fund Type Company (BSH783)	BUU104	03008 09008	Boshi Fund (International) Limited	23/4/2024
	BUU105	03009 09009
Huaxia Selected Open-End Fund Type Company (BUU162)	BUU163	03042 09042 83042	Huaxia Fund (Hong Kong) Limited
	BUU164	03046 09046 83046
Jiashi Fund Series (Hong Kong) Exchange-Traded Fund Open-End Fund Type Company (BSI534)	BUT244	03439 09439	Jiashi International Asset Management Limited
	BUU885	03179 09179

source：TECHUB NEWS

The launch of Bitcoin and Ethereum spot ETFs in the Asian market for the first time signifies an innovative stride in the region's financial markets. These ETFs are designed to offer investors an investment channel closely correlated with cryptocurrency spot prices, thereby attaining corresponding investment returns. By simplifying the investment process and lowering market entry barriers, these products open up new avenues for wealth growth for investors.

Operated by professional fund management teams, these spot ETFs adhere to standardized operational procedures and risk control measures to ensure the safety of investors' funds. Investors can easily buy and sell these ETFs on major securities trading platforms, a design that not only streamlines the trading process but also helps mitigate investment risks. Additionally, these ETF products support physical subscription and redemption mechanisms, allowing investors to indirectly hold Bitcoin through holding ETF shares without the need to directly manage private keys, thereby avoiding associated asset security issues.

Currently, these ETFs support subscription in either cash or Bitcoin, but investors need to open corresponding trading accounts in Hong Kong. According to reports from Caixin Media, based on a joint announcement issued by the Securities and Futures Commission and the Hong Kong Monetary Authority in December 2023, both existing virtual asset futures ETFs and newly launched spot ETFs are not allowed to offer services to retail investors in regions with restrictions on the sale of virtual asset products, such as mainland China.

Nevertheless, mainland residents with Hong Kong identity cards still have the opportunity to participate in the trading of these ETF products if they comply with relevant laws and regulations. This provides a feasible path for mainland residents interested in investing in the cryptocurrency market.

The launch of these ETF products not only enriches the product lineup of the Hong Kong financial market but also provides more choices for global investors, further consolidating Hong Kong's status as an international financial center. At the same time, they contribute to the popularization and acceptance of virtual assets, indicating potential future trends in financial markets.

Detailed Comparison of Virtual Asset ETFs Issued by Three Asset Management Companies
When comparing the cryptocurrency ETFs issued by the three companies, namely Huaxia, Jiashi, and Boshi, we find both similarities and differences in certain aspects.

source：TECHUB NEWS

Commonalities:

●Listing Date:

All three companies' ETFs are scheduled to be listed on April 30, 2024.

●Selected Index:

The Bitcoin spot ETFs of all three companies track the same index, namely the "CME CF Bitcoin Reference Rate." This means that their investment objective is aligned with the performance of Bitcoin prices, allowing investors to gain investment returns closely tied to Bitcoin price movements.

The "CME CF Bitcoin Reference Rate" chosen by these ETF products is an authoritative index reflecting the weighted average prices of Bitcoin across different exchanges. By tracking this index, these ETF products aim to replicate index performance, providing investors with investment returns similar to purchasing actual Bitcoin, while enjoying a more convenient and regulated trading environment.

●Custodian:

All three companies' ETFs designate "Bank of China International (UK) Limited as the custodian. The custodian's role is to safeguard ETF assets and oversee the operation of the fund, ensuring compliance with relevant laws and regulations and providing an additional layer of security for investors.

●Creation/Redemption Policy:

All three companies support both cash and physical creation or redemption methods.

Differences:

●Issue Price:

The initial issue price of Huaxia and Jiashi's ETFs is $1, while Boshi Fund's issue price is based on the index price (HKT) priced in USD at 0.0001, i.e., priced based on the CME CF Bitcoin Reference Rate.

●Trading Unit Size:

The trading unit size for Huaxia and Jiashi is 100 shares, while Boshi Fund's unit size is 10 shares.

●Minimum Subscription:

Huaxia and Boshi Fund require a minimum subscription of 10,000 shares, while Jiashi Fund's requirement is higher at 50,000 shares.

●Trading Currency:

Huaxia Fund supports USD, HKD, and CNY, while Jiashi and Boshi Fund only support USD and HKD.

●Management Fee:

Huaxia Fund's management fee is 0.99%, Jiashi Fund is free for the first six months and then 0.3%, Boshi Fund is free for the first four months and then 0.6%.

●Sub-custodian:

Huaxia and Jiashi choose OSL Digital Securities Limited as sub-custodian, while Boshi Fund chooses Hash Blockchain.

●Virtual Asset Trading Platform:

Huaxia and Jiashi choose OSL Exchange as the trading platform, Boshi Fund chooses HashKey Exchange, and China Merchants Securities (Hong Kong) did not specify the trading platform.

●Market Makers:

Huaxia Fund collaborates with Vivienne Court Trading, Jiashi Fund's market maker information is undisclosed, and Boshi Fund collaborates with Virtu Financial Singapore.

●Participating Brokerages:

Each fund company has different participating brokerages, which are key participants in ETF market operations and essential for ETF circulation. Huaxia Fund and Jiashi Fund have selected institutions such as Victory Securities, Future Asset Securities (Hong Kong), Huaying Oriental (Asia) Holdings, Ed Securities, and Huasheng Capital Securities as partners. Jiashi Fund has also specifically added China Merchants Securities (Hong Kong) as a partner.These participating brokerages, typically known as Authorized Participants (APs), are usually large financial institutions responsible for the subscription and redemption process of ETFs in cooperation with ETF issuers. APs can provide a basket of assets to ETF issuers in exchange for newly created ETF shares or convert ETF shares back into underlying assets. This mechanism helps maintain the market price of ETFs consistent with their Net Asset Value (NAV) and enhances market liquidity and efficiency.

●Auditor:

Huaxia and Jiashi's auditor is PwC, while Boshi Fund's auditor is Ernst & Young. The independent audit work of audit firms is crucial for ensuring the accuracy and compliance of ETF financial reports. They prevent financial errors and fraud through audits, providing confidence to investors.

●Investment Scale:

company	Mainland Asset Management Scale (USD Billion)	Mainland ETF Count	Hong Kong Asset Management Scale (USD Thousand)	Hong Kong ETF Count
Huaxia Fund	557	84	360,000	15
Jiashi Fund	103	42	16,000	4
Boshi Fund	107	43	40,000	6

Which platform can be used for trading virtual asset currency ETFs?

uSMART is one of the first brokerages in Asia to support trading

uSMART offers a diverse range of investment products, opening the door to the virtual asset market for you. The six Bitcoin spot ETFs were officially launched on April 30th and can now be traded directly on the uSMART APP by searching for their codes.

uSMART offers a rich portfolio of investment products

uSMART SG platform continuously expands its investment product line to meet investors' demand for diversified asset allocation. After the successful listing of Asia's first virtual asset spot ETFs, uSMART SG will also be able to trade this product, further enriching its global investment services.

We will continue to update relevant product information and trading dynamics, so stay tuned for investors to seize investment opportunities in the international market. uSMART is committed to providing customers with comprehensive financial services, helping investors capture growth potential in global capital markets.

How to place a trade on uSMART mobile application：

After logging into the uSMART SG APP, click on "Search" from the top right corner of the page. Enter the desired stock code to access the details page and review trading information and historical trends. Click on "Trade" at the bottom right corner, then select the "Buy/Sell" function. Finally, fill in the trading conditions and submit the order. The image operation guide is as follows:

This diagram is provided for illustrative purposes exclusively

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