English
Back

Other Notes on Robo-Advisor ETF Portfolios

1. About Corporate Actions

  • Robo-Advisor ETF Portfolios consisting of US ETFs only support cash and stock dividends, stock splits/reverse splits, and symbol changes.

  • They do not support voluntary corporate actions such as rights issues, mergers, and privatization, nor do they support the exercise of shareholder voting rights.

  • If any of the ETFs in your portfolio is permanently suspended or delisted, it will be automatically sold for cash and then transferred to your universal account. Rebalancing advice may be triggered in this situation.

 

2. About the Stock Yield Enhancement Program

  • The Stock Yield Enhancement Program allows Futu to borrow shares from any account under your user ID and lend them to counterparties who wish to engage in short selling and are willing to pay interest on the borrowed stock. Interest will be credited to your account every day when the stock is lent out.

  • If you join the program, Futu Securities will automatically borrow the shares from your account based on market demand and will not notify you in advance. The Robo-Advisor ETF Portfolio(s) you hold may be automatically lent out under the program.

  • After Robo-Advisor ETF Portfolios are lent out, they can still be traded; their positions will be displayed normally; advisory fees will be incurred based on the market value of positions settled by the end of the day.

  • Learn more about the Stock Yield Enhancement Program

 

3. About External Transfers

  • As Robo-Advisor ETF Portfolios are provided exclusively by Futu, they cannot be fully or partially transferred to other brokerages.

 

4. Risk Control Measures Under Extreme Circumstances

  • ETF portfolios being frozen or sold due to forced liquidation

    • Suppose your account has a substantial negative balance after forced liquidation or gets involved in money laundering, terrorism financing, or other illegal activities. Futu Securities may freeze part or all of the positions in your ETF portfolio to the extent permitted by law.

    • We also reserve the right to carry out forced liquidation of your ETF portfolio (either constituent ETFs or the portfolio as a whole).

 

5. About Long and Short Positions and Options Strategies

  • Definitions:

    • Stock/ETF portfolio orders refer to orders that trade multiple stocks and/or ETFs per order, while single-stock orders refer to orders that only trade one stock/ETF per order. Both order types defined here may be traded in odd lots, whole lots, and/or fractional shares.

    • Robo-Advisor ETF Portfolio assets are assets purchased on a Robo-Advisor ETF Portfolio's Details page.

    • Common securities assets are assets purchased with a single-stock order.

  • All positions in a Robo-Advisor ETF Portfolio are long positions. Short positions are not supported for now.

  • Robo-Advisor ETF Portfolio assets are separate from common securities assets. You can simultaneously hold a long position in an ETF in a Robo-Advisor ETF Portfolio and a short position in the same ETF as a common securities asset. For example, you can hold Robo-Advisor ETF Portfolio A, which contains eight shares of IVV.US (long), and short 100 shares of IVV.US (short) with a single-stock order.

  • A constituent ETF in a Robo-Advisor ETF Portfolio cannot be combined with a short options position to form an options strategy. For example:

    • You hold Portfolio A, which contains 100 shares of QQQ.US (long) and 100 shares of IVV.US;

    • You sell a call on QQQ.US (short);

    • QQQ.US shares in Portfolio A will not combine with the short call to form a covered call.

  • A constituent ETF in a Robo-Advisor ETF Portfolio will not be sold when options on the same ETF are exercised and assigned. For example:

    • You hold Portfolio A, which contains 100 shares of QQQ.US (long) and 100 shares of IVV.US;

    • You sell a call on QQQ.US (short);

    • When the call is exercised and assigned, the 100 QQQ.US shares in Portfolio A will not be sold.

  • The maintenance margin requirements for Robo-Advisor ETF Portfolio assets and common securities assets are the same.

    • For example:

    • You only hold Portfolio A, and it only contains 100 shares of QQQ.US;

    • The maintenance margin requirement for QQQ.US is 35%;

    • If the current market price of QQQ.US is $495 per share, the market value of your position is $49,500;

    • Maintenance Margin for Portfolio A = Position Market Value * Maintenance Margin Requirement = $49,500 * 35% = $17,325. This means that to keep holding the portfolio, you must ensure the total value of your account assets does not fall below $17,325.

    • How to check the maintenance margin requirement for a constituent ETF:

    • Go to the ETF's quotes page and tap the icon in the upper right corner;

    • Tap Marginable;

    • Margin Trading page > Marginable > Maintenance Margin.