The Bosera HashKey Ether ETF (Listed Class) marks a pivotal development in Hong Kong’s financial landscape, offering investors regulated, exchange-traded exposure to spot Ethereum (ETH). As one of the first physically backed Ethereum ETFs listed on the Hong Kong Stock Exchange (HKEX), this fund enables both retail and institutional investors to gain direct exposure to Ethereum’s price performance—without the complexities of managing private keys or using cryptocurrency exchanges.
This guide provides a clear, SEO-optimized overview of the ETF, covering its structure, investment strategy, risks, fees, and market positioning—designed to help investors make informed decisions in the evolving digital asset ecosystem.
What Is the Bosera HashKey Ether ETF?
The Bosera HashKey Ether ETF (Listed Class) is a sub-fund of Bosera Global Exchange Traded Funds OEIC, a public umbrella open-ended fund company incorporated in Hong Kong and regulated under Chapter 571 of the Securities and Futures Ordinance (SFO). The ETF is passively managed and directly invests in physical Ethereum (ETH), tracking the performance of the CME CF Ether Index (Asia Pacific Closing Price) before fees and expenses.
The listed class of shares trades on the Hong Kong Stock Exchange (HKEX) under two ticker symbols:
- 3009 – HKD counter
- 9009 – USD counter
Each board lot consists of 100 shares, making it accessible to a broad range of investors.
Investment Objective and Strategy
Core Objective
The fund aims to deliver investment returns that closely correspond to the price performance of Ethereum, as reflected by the CME CF Ether Index (Asia Pacific Closing Price), in USD. This allows investors to gain pure-play exposure to ETH’s market value.
Investment Approach
- The ETF holds actual Ethereum tokens—not futures or derivatives.
- Investments are made via Securities and Futures Commission (SFC)-licensed virtual asset trading platforms, primarily through HashKey Exchange.
- Up to 100% of net assets may be allocated to ETH.
- A maximum of 10% of assets can be held in cash for operational needs such as expense payments and redemption requests.
Notably:
- ❌ No use of financial derivatives
- ❌ No borrowing, securities lending, or repo transactions
- ❌ No leverage at the fund level
- ❌ No staking of ETH holdings
This conservative structure emphasizes transparency and security, aligning with regulatory expectations for retail investor protection.
The CME CF Ether Index: Benchmarking Ethereum’s Value
The ETF’s net asset value (NAV) is priced based on the CME CF Ether Index, a regulated benchmark designed in accordance with IOSCO principles and registered under the UK’s Benchmarks Regulation (BMR).
Key Features of the Index:
- Calculation Time: 4:00 PM Hong Kong time (HKT)
- Observation Window: 3:00 PM – 4:00 PM HKT
- Base Currency: USD
- Index Provider: CF Benchmarks Ltd., regulated by the UK Financial Conduct Authority
The index aggregates real-time spot trading data from approved "component exchanges" that meet strict eligibility criteria, including liquidity, compliance, and data reliability. As of November 2023, these include:
- Bitstamp
- Coinbase
- itBit
- Kraken
- Gemini
- LMAX Digital
This multi-source pricing mechanism enhances reliability and reduces manipulation risk.
Key Risks You Should Know
Investing in a spot Ethereum ETF involves significantly higher risk than traditional ETFs. Below are the most critical considerations:
1. Extreme Price Volatility
Ethereum has demonstrated severe price swings. For example:
- In 2020, ETH suffered a single-day drop of 44%.
- Between November 2021 and November 2022, ETH lost 76% of its value.
There is no guarantee against total loss—investors could lose their entire investment in a short period.
2. Network and Cybersecurity Risks
The Ethereum network and custodial systems are vulnerable to:
- Hacks and theft
- Smart contract exploits
- 51% attacks (where a single entity controls majority validation power)
- Forks (e.g., hard forks creating dual chains)
If a fork occurs, the fund manager will decide which chain to support—but there’s no guarantee it will be the more valuable one.
3. Custody and Storage Risks
While most ETH is stored in cold wallets (offline), some must remain in hot wallets (online) for trading and redemptions—increasing exposure to cyberattacks. Although sub-custodian HashKey Custody Services Limited maintains insurance, coverage is shared across clients and may not fully compensate losses.
4. Regulatory Uncertainty
Global regulators are still shaping crypto policy. Future restrictions on:
- ETH trading
- Conversion to fiat
- ETF operations
could negatively impact demand, liquidity, and fund viability.
5. Concentration Risk
The fund is 100% concentrated in Ethereum, making it highly sensitive to ETH-specific events—unlike diversified crypto funds.
6. Tracking Error Risk
Despite passive management, discrepancies between the ETF’s performance and the index may occur due to:
- Trading costs
- Custody fees
- Execution delays on virtual asset platforms
Estimated annual tracking deviation is –0.85% at launch.
Fees and Ongoing Costs
Understanding costs is essential for evaluating long-term returns.
| Fee Type | Rate |
|---|---|
| Estimated Ongoing Charges Ratio | 0.85% per year |
| Management Fee | 0.60% per year |
| Custodian & Administration Fees | Up to 1% of NAV annually (min. $5,000 USD/month) |
These fees are deducted from fund assets, directly reducing investor returns.
Additional trading costs when buying/selling on HKEX:
- Brokerage commission (market rate)
- Transaction levy: 0.0027% of trade value
- AFRC transaction levy: 0.00015%
- HKEX trading fee: 0.00565%
Note: No stamp duty applies to ETF shares.
Frequently Asked Questions (FAQ)
Q1: Can I receive dividends from this ETF?
No. The Bosera HashKey Ether ETF does not make any distributions. All returns are based on capital appreciation of Ethereum.
Q2: How is the ETF taxed?
Tax treatment depends on your jurisdiction. In Hong Kong, there is currently no capital gains tax for individuals. However, investors should consult a tax advisor for personal guidance.
Q3: What happens if a hard fork occurs on Ethereum?
The manager and co-manager will assess which chain best serves investor interests and decide where to hold assets. Notification will be issued promptly—but the chosen chain may not retain long-term value.
Q4: Is my investment insured?
The sub-custodian maintains compensation arrangements (including third-party insurance), but these are not exclusive to the fund and may not cover all losses.
Q5: How liquid is the ETF?
Liquidity depends on secondary market trading volume and the presence of market makers. The manager aims to appoint at least one market maker per counter, but liquidity may dry up during market stress.
Q6: Can I redeem shares directly for Ethereum?
No. Redemption is conducted in cash through authorized participants only. Individual investors trade shares on the HKEX like regular stocks.
Why This ETF Matters for Hong Kong Investors
Hong Kong has positioned itself as a pro-innovation hub for virtual assets. With strict licensing rules for exchanges and custodians, the SFC ensures high operational standards. The launch of spot Ethereum ETFs like Bosera HashKey signals growing maturity in the region’s digital finance ecosystem.
For investors, this means:
✅ Regulated access to ETH
✅ Transparent pricing via audited indices
✅ Daily disclosure of holdings
✅ HKEX-level investor protections
However, it also demands greater awareness of crypto-specific risks compared to traditional equities.
Final Thoughts: Is This ETF Right for You?
The Bosera HashKey Ether ETF (Listed Class) offers a convenient, compliant way to invest in Ethereum through familiar stock market channels. It eliminates self-custody challenges while maintaining direct exposure to ETH’s price movements.
But it's not suitable for risk-averse investors. Due to extreme volatility, regulatory uncertainty, custody risks, and lack of income generation, this product should only constitute a small, speculative portion of a diversified portfolio.
Before investing:
🔍 Review the full prospectus
🔍 Assess your risk tolerance
🔍 Monitor ongoing fees and tracking accuracy
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