Important Statement Regarding Leveraged and Inverse Products Expected to Maintain 2x Exposure Under Current Market Conditions

In response to the Securities and Futures Commission’s (SFC) revised “Circular on Listed Structured Funds” dated July 24, 2026, CSOP Asset Management Limited (“the Manager”) issued an announcement on July 27, 2026, regarding the adoption of a flexible leverage structure for relevant single-stock leveraged and inverse products, including the CSOP SK Hynix Daily Leverage (2x) Product (“the Product”). The related changes will take effect on August 3:
https://www1.hkexnews.hk/listedco/listconews/sehk/2026/0727/2026072700904_c.pdf

We have noted market questions regarding the specific arrangements of the 'flexible leverage structure' and have received inquiries from some investors asking whether the product will reduce its leverage ratio in the near term.

CSOP hereby clarifies as follows:

Under current market conditions, the product is expected to maintain a two-times (2x) leverage.

Details are as follows.

1. As a passive investment product, the primary considerations for adjusting the leverage ratio of leveraged and inverse products are capacity constraints or cost factors. The 'flexible leverage structure' is designed to address extreme market conditions—for example, when the scale of relevant leveraged and inverse products increases significantly, resulting in capacity constraints or a sharp and substantial rise in operational costs that make maintaining the original target leverage ratio no longer feasible.

Fund ManagerNo active adjustments to the leverage ratio will be made based on market outlook or judgment.。

2. Since the launch of this product,it has never encountered the aforementioned extreme scenarios that would necessitate a reduction in leverage.Under current market conditions, the product is operating smoothly overall, with ample capacity available. Based on prevailing market conditions and the product’s operational status, the fund manager currently sees no need to adjust the leverage ratios of its individual leveraged and inverse products.

3. Under normal market conditions, the fund manager will continue to seek to maintain:

a leverage ratio of two times (2x) for each leveraged product; and

an inverse leverage ratio of two times (-2x) for each inverse product.

4. Following the implementation of any such changes, CSOP Asset Management will publish an announcement regarding the target leverage ratio prior to the market open on each trading day. In the case of this product, the announcement will be issued after the market close on July 31. Investors are advised to closely monitor CSOP’s official website and the HKEX website on a daily basis.

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Disclaimer and Important Notes

The sub-fund (the “Sub-Fund”), CSOP Leveraged and Inverse Series, and CSOP Asset Management Limited (“CSOP”) referenced in this document have no affiliation with the underlying securities’ issuing companies (“Underlying Companies”) of the Sub-Fund.

The underlying company has neither approved nor endorsed the issuance of the sub-fund and has no affiliation with it. An investment in the sub-fund is not equivalent to an investment in the underlying company. Investors do not hold any ownership interest in the underlying company, have no voting rights, and cannot influence the management of the underlying company, although their investment will be affected by the performance of the relevant securities of the underlying company.

The sub-fund has been authorized by the Securities and Futures Commission of Hong Kong (the 'SFC'). Such authorization does not constitute an official recommendation by the SFC. This document is for general reference only and does not constitute investment advice or any other form of recommendation. It should not be construed as an offer or solicitation to invest in any investment product. For investment advice, please consult your professional legal, tax, and financial advisors.

Investments involve risks. Investors should carefully read the offering documents and the Key Facts Statement (or equivalent) of the fund to obtain further information, including the product features and risk factors contained therein. Investors should not make investment decisions solely based on this document. This document is not intended for distribution or dissemination in jurisdictions where such distribution or dissemination is prohibited.

This document is not legally binding. CSOP Asset Management Limited assumes no responsibility for this document and expressly disclaims any liability for any losses arising from or in reliance on the whole or any part of its contents. This document does not grant the recipient any copyright or intellectual property rights—whether directly, indirectly, or by implication—in the information contained herein. No information or portion thereof may be copied, distributed, or reproduced without the prior written consent of CSOP Asset Management Limited.

Leveraged and Inverse Investment Products differ from traditional exchange-traded funds in that they seek leveraged or inverse exposure relative to the underlying stock, limited solely to daily performance.

Each sub-fund concentrates its investment in a single underlying stock. Given the non-diversified, leveraged, and inverse nature of the sub-funds, they are subject to extreme price volatility and may become unsustainable over short periods. You could lose most or all of your investment within a single day. In exceptional circumstances where a sub-fund becomes non-viable, CSOP may, at its discretion, deviate from its investment strategy or implement defensive measures, which may include unwinding swap positions and suspending product trading. CSOP will issue a notice to inform investors accordingly.

The sub-fund is not intended to be held for more than one day, as its performance over periods longer than one day may deviate significantly from the leveraged or inverse performance of the underlying stocks over the same period and may not be correlated. The sub-fund is designed for short-term trading or hedging purposes and is unsuitable for long-term investment.

The target investors for the sub-funds are limited to sophisticated, trading-oriented investors who fully understand the potential consequences and associated risks of seeking daily leveraged or inverse performance and who monitor their holdings on a daily basis.

This document has been prepared and issued by CSOP Asset Management Limited and has not been reviewed by the SFC.

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