Investment involves risks. Please refer to the Hong Kong Prospectus for details including the risk factors.
1. Investment Risk
The fund is an investment fund. The fund’s investment portfolio may fall in value and therefore your investment in the fund may suffer losses. There is no assurance that the strategy employed by the fund will be successful and therefore the investment objectives of the fund may not be achieved.
2. Equities
The value of stocks may fluctuate, sometimes dramatically, in response to the activities and results of individual companies or because of general market and economic conditions or other events.
3. Country Concentration
The fund’s investments are concentrated in Germany and will have greater exposure to market, political, legal, economic and social risks of Germany than a fund which diversifies country risk across a number of countries, and the value of the fund may be more volatile than a fund which diversifies across a larger number of investments.
4. Foreign Currency Risk
The fund’s total return and balance sheet can be significantly affected by foreign exchange rate movements where the fund’s assets and income are denominated in currencies other than the base currency of the fund. Also, a class of shares may be designated in a currency other than the base currency of the fund. This means that currency movements and changes in exchange rate controls may significantly affect the value of the fund’s share price.
5. European Risk
The fund’s performance will be closely tied to the economic, political, regulatory, geopolitical, market, currency or other conditions in the European Economic Area and could be more volatile than the performance of more geographically diversified funds. In light of the concerns on sovereign credit risk of certain European countries and in particular these countries' fiscal conditions, the fund may be subject to increased liquidity, price, and foreign exchange risk. If there are adverse credit events in certain European countries e.g. downgrade of the sovereign credit rating of a European country or a European financial institution, the performance of the fund could decline significantly and will possibly result in significant loss. Measures taken by the governments of the European countries, central banks and other authorities to address their economic and financial problems may not be effective and such failure may result in further deterioration of these countries’ fiscal conditions.
6. Financial Derivative Instruments
Although the fund will not make extensive use of derivatives for investment purposes or use complex derivatives or strategies to meet the investment objectives of the fund, the use of derivatives may give rise to leverage, liquidity, counterparty and valuations risks at times. In adverse situations, the fund’s use of derivatives may become ineffective and the fund may suffer significant losses.