Investment involves risks. Please refer to the Prospectus for details including the risk factors.
General investment risk
- The Sub-Fund’s investment portfolio may fall in value due to any of the key risk factors below and therefore your investment in the fund may suffer losses. There is no guarantee of the repayment of principal.
Equity market risk
- The Sub-Fund’s investment in equity securities is subject to general market risks, whose value may fluctuate due to various factors, such as changes in investment sentiment, political and economic conditions and issuer-specific factors.
- There is no assurance that dividends will be declared and paid in respect of the securities comprising the Hang Seng High Dividend Yield Index. Dividend payment rates in respect of such securities will depend on the performance of the companies or REITs of the constituent securities of the Hang Seng High Dividend Yield Index as well as factors beyond the control of the Manager including but not limited to, the dividend distribution policy of these companies or REITs.
- Whether or not distributions will be made by the Sub-Fund is at the discretion of the Manager taking into account various factors and its own distribution policy. There can be no assurance that the distribution yield of the Sub-Fund is the same as that of the Hang Seng High Dividend Yield Index.
Risks associated with the property and construction industry
- There are special risk considerations associated with investing in the securities of companies principally engaged in the property and construction industry. These risks include without limitation: the cyclical nature of property values, risks related to global and local economic conditions, overbuilding and increased competition, increases in property taxes and operating expenses, demographic trends and variations in rental income, changes in zoning laws, casualty or condemnation losses, environmental risks, regulatory limitations on rents, changes in neighbourhood values, related party risks, changes in the appeal of properties to tenants and increases in interest rates.
- The Sub-Fund is subject to concentration risk as the Underlying Index is concentrated in the property and construction sector.
- The Sub-Fund may likely be more volatile than a broad-based fund, such as a global equity fund, as it is more susceptible to fluctuations in value of the Underlying Index resulting from adverse conditions in the property and construction industry.
Emerging market risks
- The portfolio of the Sub-Fund contains investment in companies whose operations are primarily in the PRC and therefore is subject to emerging market risks. The Sub- Fund may therefore be subject to increased risks and special considerations not typically associated with investment in more developed markets, such as liquidity risks, currency risks/control, political and economic uncertainties, legal and taxation risks, settlement risks, custody risk and the likelihood of a high degree of volatility.
Mid-capitalisation companies risk
- The Sub-Fund may contain investment in mid-capitalisation companies. The stocks of mid-capitalisation companies may have lower liquidity and their prices are typically more volatile and more vulnerable to adverse business or economic developments than those of larger capitalisation companies.
- The Sub-Fund is passively managed and the Manager will not have the discretion to adapt to market changes due to the inherent investment nature of the Sub-Fund. Falls in the Underlying Index are expected to result in corresponding falls in the value of the Sub-Fund.
- Generally, retail investors can only buy or sell Units on the SEHK. The trading price of the Units on the SEHK is driven by market factors such as demand and supply of the Units. Therefore, the Units may trade at a substantial premium/discount to its net asset value.
- As investors will pay certain charges (e.g. trading fees and brokerage fees) to buy or sell Units on the SEHK, investors may pay more than the net asset value per Unit when buying Units on the SEHK, and may receive less than the net asset value per Unit when selling Units on the SEHK.
Tracking error risk
- The Sub-Fund may be subject to tracking error risk, which is the risk that its performance may not track that of the Underlying Index exactly. This tracking error may result from the investment strategy used, and fees and expenses. The Manager will monitor and seek to manage such risk in minimizing tracking error. There can be no assurance of exact or identical replication at any time of the performance of the Underlying Index.
- If Hang Seng Indexes Company Limited terminates the Underlying Index or does not allow the Sub-Fund to use the Underlying Index, and there is no successor index or if its fund size falls below HK$50,000,000 the Sub-Fund may be terminated. Investors may not be able to recover their investments and suffer a loss when the Sub-Fund is terminated.
Market interventions by governments and regulators
- Governments and regulators may intervene in the financial markets, such as by the imposition of trading restrictions, a ban on “naked” short selling or the suspension of short selling for certain stocks. This may affect the operation and market making activities of the Sub-Fund, and may have an unpredictable impact on the Sub-Fund.
- Furthermore, such market interventions may have a negative impact on the market sentiment which may in turn affect the performance of the Underlying Index and as a result the performance of the Sub-Fund.
Reliance on market maker
- Liquidity in the market for the Units may be adversely affected if there is no market maker for the Sub-Fund. Although the Manager will ensure that at least one market maker will maintain a market for the Units and that at least one market maker gives not less than 3 months’ notice prior to terminating market making arrangement under the relevant market maker agreement, liquidity in the market for the Units may be adversely affected if there is no or only one market maker for the Units. There is also no guarantee that any market making activity will be effective.
Distributions out of or effectively out of capital risk
- The Manager may at its discretion pay dividends out of the capital of the Sub-Fund. The Manager may also, at its discretion, pay dividend out of gross income while all or part of the fees and expenses of the Sub-Fund are charged to/paid out of the capital of the Sub-Fund, resulting in an increase in distributable income for the payment of dividends by the Sub-Fund and therefore, the Sub-Fund may effectively pay dividend out of capital. Payment of dividends out of capital or effectively out of capital amounts to a return or withdrawal of part of an investor’s original investment or from any capital gains attributable to that original investment. Any distributions involving payment of dividends out of or effectively out of the Sub-Fund’s capital may result in an immediate reduction of the Net Asset Value per Unit.
Investment involves risk. Investors may lose part or all of their investment. Investors should not base on this website alone to make investment decisions. Before making any investment decision, prospective investor should read the Fund’s offering documents, which is available on this website, carefully for further details, including the product features and risk factors, and should consider seeking independent professional advice. The contents of this website is prepared and maintained by the Manager and has not been reviewed by the Securities and Futures Commission of Hong Kong (”SFC”).