Investing in the Developments of the Automotive Industry – CSOP Issues Smart Driving ETF Tracking Solactive Index
Amidst the ongoing global Covid-19 crisis, two massive impacts on the automotive sectors can be observed in the short and the long term. While in 2020, mobility in both public and individual transportation came to a hard stop, car sales recently increased due to individuals’ desire for safe personal mobility. According to a recent report, amongst the most influential buyers in automotive, Chinese customers reignite global car sales,[1] and with China’s growing middle class, these sales are expected to remain on a global top spot.[2] With customers driving demand in the new generation of cars, major Hong Kong asset manager CSOP released the CSOP Global Smart Driving Index ETF (stock ticker: 3162.HK), tracking the Solactive Global Smart Driving Index.
Innovation in the automotive market follows a path towards autonomous driving, electrification, and connectivity, which are expected to become status quo in the next decade. As the entire car industry needs to adapt to the changing demand of its future customers, the complete production chain and the usage of raw commodities have to move along, too. The CSOP Global Smart Driving Index ETF considers these forthcoming transformations of the automotive industry and includes companies. As the ETF’s underlying serves the Solactive Global Smart Driving Index.
Solactive Global Smart Driving Index
The Solactive Global Smart Driving Index is a representation of securities that could benefit from the technological progress in the automotive industry, which includes a magnitude of different industries ranging from raw material extraction to alternative fuel manufacturing to the development of auto interior comfort and safety electronics products. Therefore, the index includes over 20 industries that are directly related to the revolution of car mobility. For example, potential index constituents can operate as alternative energy car manufacturers, engage in lithium ore mining, or serve as multi-type car manufacturers. Eligible industries are categorized via a common industry classification system. Furthermore, companies must be listed on one of the following exchanges: Hong Kong Stock Exchange, New York Stock Exchange, and NASDAQ, as well as Shanghai Stock Exchange and Shenzhen Stock Exchange, with a weight cap of 20% applied to the index components listed on the Shanghai Stock Exchange or Shenzhen Stock Exchange. The top 50 securities that meet the criteria by share class market capitalization rank are selected for index inclusion.
Timo Pfeiffer, Chief Markets Officer at Solactive, comments: “Working with a client that shares Solactive’s aspiration for innovation and added value for investors is always very rewarding. Therefore, we are happy to work with CSOP again. The automotive industry is in a constant transformation, and many business models, which we are used to today, will change and create creative space for innovative and smarter transportation solutions such as electrified interconnected self-driving cars.
Melody He, Managing Director, Head of Business Development, says: “We are delighted to list the CSOP Global Smart Driving Index ETF (3162.HK) on Hong Kong Stock Exchange (the “HKEX”). The partnership with Solactive was again very pleasing, and we are happy to provide global investors with an easy and transparent way to access the rapid developments in the evolution of smart driving. We cannot wait to develop new products with Solactive to meet the earnest investment requests we get from investors.”
The CSOP Global Smart Driving Index ETF started trading on August 12th, on the HKEX.
[1] Source: forbes.com/sites/neilwinton/2021/05/11/china-us-lead-global-auto-sales-recovery-lagging-europe-steers-electric-charge/?sh=188836b27aab
[2] Source: Pew Research Center – pewresearch.org/fact-tank/2021/06/07/todays-electric-vehicle-market-slow-growth-in-u-s-faster-in-china-europe/