As low as 0 %
Derivatives knowledge not required
iFund risk rating methodology is a qualitative and quantitative assessment of a single fund’s geographic and asset class focus, investment style and any potential risk factors, as measured from one (1) (lowest risk) to six (6) (highest risk). For the funds with risk rating five (5) or six (6), these are mainly aimed at providing capital appreciation to investors by investing primarily in single market equities, single industry equities or derivatives etc. For more details, please refer to the Due Diligence section under the Procedures page.
As low as 0 %
Derivatives knowledge not required
The Sub-Fund seeks to provide investors with medium-term capital growth by investing primarily in equity securities listed or to be listed on the Stock Exchange of Hong Kong Limited (“SEHK”), including H shares, red-chip companies, exchange traded funds (“ETFs”) (including ETFs managed by the Manager) and real estate investment trusts (“REITs”).
Investment involves risks. Please refer to the offering document for details including the risk factors.
1. 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 Sub-Fund may suffer losses. There is no guarantee in respect of repayment of principal.
2. Currency risk
Underlying investments of the Sub-Fund may be denominated in currencies other than the base currency of the Sub-Fund. The Net Asset Value of the Sub-Fund may be affected unfavorably by fluctuations in the exchange rates between these currencies and the base currency and by changes in exchange rate controls.
3. Risk in connection with the investment strategy
The Manager will rely on its internal selection process when constructing the portfolio. However, there is a possibility that the Manager’s internal selection process may not effectively achieve a reduced level of volatility and the Sub-Fund’s value may be adversely affected. Investors should note that lower volatility does not necessarily mean lower risk.
4. 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.
5. Risks relating to investment in ETFs
Investors should note that the market price of the units of an ETF traded on the SEHK is determined not only by the Net Asset Value of an ETF but also by other factors such as the supply of and demand for the units of the ETF in the SEHK. Therefore, there is a risk that the market price of the units of the ETF traded on the SEHK may diverge significantly from the Net Asset Value of the ETF.
6. Real estate investment trusts “REITs” risks
- The Sub-Fund is subject to risks inherent in REITs which invest primarily in real estate. REITs may be more volatile than other securities as they may trade less frequently and in smaller volume and they may have limited financial resources.
- The performance of REITs will depend on various factors, such as management skills, change in value of the underlying properties, illiquidity of the investments, changes in general and local economic conditions, taxation policies, non-renewal of expiring leases, unexpected expenditure or failure of lessees to meet their obligations. Further, REITs are subject to heavy cash flow dependency.
- Investors should also note that the Sub-Fund may also invest in REITs that are not authorized by the SFC.
7. Liquidity risk
Investments made by the Sub-Fund may become illiquid or less liquid in response to market developments or adverse investor perceptions. It may not be possible to sell or buy these investments quickly enough to prevent or minimize a loss in the Sub-Fund.
8. Concentration risk
- The Sub-Fund’s investments mainly focus on equity securities listed or to be listed on the SEHK or listed equities issued by companies which have business or operations or interests in Hong Kong. Such concentration of investments may increase the Sub-Fund’s vulnerability to the economic, political or regulatory or tax developments of a single region. The value of the Sub-Fund may be more volatile than that of a fund having a more diverse portfolio of investments.
- The value of the Sub-Fund may be more susceptible to adverse economic, political, policy, foreign exchange, liquidity, tax, legal or regulatory event affecting the Hong Kong market.
- The Sub-Fund does not constrain sector weights and has no specific sector focus. While the Sub-Fund seeks to reduce risk by investing in a diversified portfolio of investments, the Sub-Fund may have a higher exposure to particular sectors. Increased concentration of investments will increase the Sub-Fund’s risk suffering proportionately higher loss should certain particular investment decline in value or otherwise be adversely affected. Market or economic factors affecting issuers or sectors in which the portfolio’s investments are concentrated could have a significant effect on the value of the portfolio's investments.
9. Specific risks associated with investments in H shares and red-chip companies listed on the SEHK and other Hong Kong-listed stocks
- Emerging market / PRC market risk: Investing in the securities relating to the PRC is subject to the risks of investing in emerging markets generally and the risks specific to the PRC market in particular.
- Investing in emerging markets, such as the PRC, may involve 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.
10. Derivative instruments risk
The Sub-Fund may use derivatives for hedging purposes. Derivatives may be more sensitive to changes in economic or market conditions and could increase the Sub-Fund’s volatility. In adverse situation, the Sub-Fund’s use of derivatives may become ineffective in hedging and the Sub-Fund may suffer significant losses. The use of derivatives may expose the Sub-Fund to various types of risk, including but not limited to, counterparty, liquidity, correlation, credit, volatility, valuation, settlement and OTC transaction risks which can have an adverse effect on the Net Asset Value of the Sub-Fund.
11. Potential conflicts of interest
- The Sub-Fund may invest in ETFs managed by the Manager and this may give rise to potential conflicts of interests.
- Also, the Manager may promote, manage, advise or otherwise be involved in any other funds or investment companies while they act as the Manager of the Sub-Fund. Furthermore, the Manager and the Trustee are affiliated. Situation may arise where there are conflicts of interest between such entities. If such conflict arises, each of the Manager and the Trustee will have regard in such event to its obligations to the Sub-Fund and will endeavour to ensure that such conflicts are resolved fairly.