Income Partners RMB Bond Fund 2A Acc USD

弘收人民幣債券基金 2A Acc USD

HK0000204534

Risk Rating: Level 4

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 three (3) or four (4), these are mainly aimed at providing income and capital appreciation to investors by investing primarily in balanced portfolio, including high yield bonds and global equities etc. For more details, please refer to the Due Diligence section under the Procedures page.

Non-dealing Hours

Dealing Information

Secure Transaction

Derivatives knowledge not required

HKD15,000.00Min. Subscription

1.25%

HKD15,000.00Min. Subscription

RMB / USD

HKD15,000.00Min. Subscription

HKD15,000.00

HKD15,000.00

Daily

16:30

2019-09-30

*Not include dividends (If applicable)

Fund Performances (including dividend, if any)

1 mth
+0.23%
3 mth
-0.74%
6 mth
-4.25%
1 yr
+0.65%
3 yr
-5.76%
5 yr
-5.02%

Analytical Figures (3 years)

Annualized Return
-1.96%
Annualized Volatility
+2.10%
Sharpe Ratio
-0.54

Fund Information

Fund Houses
Income Partners Asset Management (HK) Ltd
Launch Date
2014-07-01
Fund Manager
Raymond Gui
James Hu
Manager Start Date
2014-07-04
Geographical Focus
China
Asset Class/ Sector
Fixed Income - Investment grade
Risk Rating
Risk Level 4

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 three (3) or four (4), these are mainly aimed at providing income and capital appreciation to investors by investing primarily in balanced portfolio, including high yield bonds and global equities etc. For more details, please refer to the Due Diligence section under the Procedures page.

Fund AUM(As of 2018-11-29)
USD 47,000,000
Management Fee
1.25%
Latest Dividend
N.A.

Sector Leaders

    No Funds

Dealing Information

Secure Transaction

Derivatives knowledge not required

HKD15,000.00Min. Subscription

1.25%

HKD15,000.00Min. Subscription

RMB / USD

HKD15,000.00Min. Subscription

HKD15,000.00

HKD15,000.00

Daily

16:30

2019-09-30

Dividend Records

No Dividends

Investment Objective

To seek long-term interest income and capital appreciation through investing all or substantially all of its assets in RMB-denominated fixed income securities issued within the PRC directly through the RQFII quota of the Manager. All PRC Bonds (as defined below) in which the Sub-Fund invests will be onshore investments in the PRC and will be denominated and settled in RMB.

Nature and Extent of Risks

Investment involves risks. Please refer to the Explanatory Memorandum for details including the risk factors.
1. Investment risk
There is no guarantee of the repayment of principal. The instruments invested by the Sub-Fund may fall in value and therefore your investment in the Sub-Fund may suffer losses.
2. Risks relating to PRC Bonds
Credit risk
- The Sub-Fund is exposed to the credit/insolvency risk of issuers of PRC Bonds that the Sub-Fund may invest in. Certain PRC Bonds that the Sub-Fund invests in are typically unsecured debt obligations and are not supported by any collateral. The Sub-Fund will be fully exposed to the credit/insolvency risk of its counterparties as an unsecured creditor.
- In the event of a default or credit rating downgrading of the issuers, the Sub-Fund's value will be adversely affected and investors may suffer a substantial loss as a result. The Sub-Fund may also encounter difficulties or delays in liquidating its position or enforcing its rights against such issuers as they may be incorporated outside Hong Kong and subject to foreign laws.
Credit ratings risk
- The rating criteria and methodology used by Chinese local rating agencies may be different from those adopted by most of the established international credit rating agencies. Therefore, such rating system may not provide an equivalent standard for comparison with securities rated by international credit rating agencies.
Credit rating downgrading risk
- Securities rated at the Designated Credit Rating invested by the Sub-Fund may be subject to the risk of being downgraded to below the Designated Credit Rating. In the event of downgrading in the credit ratings of a security or an issuer relating to a security, the Sub-Fund's investment value in such security may be adversely affected.
Risk relating to Higher Default Bonds
- The Sub-Fund may invest in Higher Default Bonds which are generally subject to a higher degree of counterparty risk, credit risk and liquidity risk than higher rated, lower yielding securities and may be subject to greater fluctuation in value and higher chance of default. If the issuer of such securities defaults, or such securities cannot be realised, or perform badly, investors may suffer substantial losses.
- The market for these securities may be less active, making it more difficult to sell these securities. Valuation of these securities is more difficult and thus the Sub- Fund's prices may be more volatile.
Interest rates risk
- Investment in the Sub-Fund is subject to interest rate risk. Generally, the prices of the PRC Bonds rise when interest rates fall, whilst their prices fall when interest rates rise. The Chinese government's macro-economic policies and controls will have significant influence over the capital markets in China. Changes in fiscal policies, such as interest rates policies, may have an adverse impact on the pricing of debt securities, and thus the return of the Sub-Fund.
Liquidity risk
- PRC Bonds that are currently not listed on a stock exchange or a securities market where trading is conducted on a regular basis may be subject to additional liquidity risk. The Sub-Fund may suffer losses in trading such instruments.
- The bid and offer spread of the price of PRC Bonds may be large, so the Sub-Fund may incur significant trading and realisation costs and may suffer losses accordingly.
Valuation risk
-Valuation of the Sub-Fund's investments may involve uncertainties and judgmental determinations, and independent pricing information may not at all times be available. If such valuations should prove to be incorrect, the net asset value of the Sub-Fund may be adversely affected.
3. China market / Single country investment
- The Sub-Fund invests substantially in PRC Bonds issued in mainland China and will be subject to risks inherent in the China market and additional concentration risks. Investment in the China market is subject to emerging market risk including political, economic, legal, regulatory and liquidity risks. These risks may have adverse impact on the Sub-Fund and its investors.
- The PRC Bonds market may be subject to higher volatility compared to more developed markets. The prices of securities traded in such market may be subject to fluctuations and may adversely affect the volatility of the Sub-Fund's net asset value.
4. RMB currency risk
- RMB is currently not freely convertible and is subject to exchange controls and restrictions. Such control of currency conversion and movements in the RMB exchange rates may adversely affect the operations and financial results of companies in the PRC which in turn will have impact on the net asset value of the Sub-Fund.
- As RMB is not freely convertible, currency conversion is subject to availability of RMB at the relevant time (i.e. it is possible there is not sufficient RMB for currency conversion in case of sizeable subscriptions). As such, the Manager has the absolute discretion to reject any application made in non-RMB currency subscription monies (whether such application is in relation to a class of units denominated in RMB) where it determines that there is not sufficient RMB for currency conversion.
- The Manager may sell the Sub-Fund's investments denominated in RMB and/or convert RMB into non-RMB currency at the applicable exchange rate for payment of redemption proceeds and/or dividends to investors of non-RMB class of units. Investors may therefore incur currency conversion costs and may suffer losses depending on the exchange rate movements of RMB relative to such non-RMB currency. Currency conversion is also subject to the Sub-Fund's ability to convert the proceeds denominated in RMB into non-RMB currency which, in turn, might delay the payment of redemption proceeds and/or dividends or affect the Sub-Fund's ability to meet redemption requests from and/or to pay dividends to the unitholders until such time the conversion into non-RMB currency is available.
- There is no guarantee that RMB will not depreciate. Any devaluation of RMB could adversely affect the value of the investors' investments. If investors convert other currencies into RMB so as to invest in the RMB classes of units and subsequently convert the RMB redemption proceeds back into other currencies, they may suffer a loss if RMB depreciates against such other currencies.
- Investments acquired by the Sub-Fund will primarily be denominated in RMB whereas the classes of units of the Sub-Fund may be denominated in other currencies. All or part of the subscription monies of investors in a non-RMB denominated class of units will be converted into RMB for investment in underlying securities, while realisation proceeds and/or dividend payments in RMB will be converted to the relevant class currency for payment of redemption proceeds and/or distributions in respect of the distribution classes. As a result, investors will be exposed to foreign exchange fluctuations between RMB and the relevant class currency and may suffer losses arising from such fluctuations.
In calculating the prices of units of non-RMB classes, the Manager will normally apply the CNH exchange rate (i.e. the exchange rate for the offshore RMB market in China). The CNH rate may be at a premium or discount to the exchange rate for the onshore RMB market in China (i.e. the CNY exchange rate) and there may be significant bid and offer spreads. The value of the Sub-Fund will thus be subject to fluctuation.
5. PRC tax risk
The Sub-Fund may be subject to the risks associated with changes in the PRC laws and regulations, including PRC tax laws, and such changes may have retrospective effect. Having taken and considered independent professional tax advice and acting in accordance with such advice, the Manager is of the view that the Sub-Fund should not be subject to PRC withholding tax on the capital gains derived from investments in PRC Bonds and therefore does not make any withholding tax provision for the account of the Sub-Fund in respect of any potential PRC tax liability on such capital gains. In the event that actual tax is collected by the State Administration of Taxation and the Sub-Fund is required to make payments reflecting tax liabilities for which no provision has been made or for which the level of provision is inadequate, the net asset values of the Sub-Fund will be adversely affected, as the Sub-Fund will ultimately have to bear the full amount of tax liabilities.
6. Risks relating to RQFII
- The Sub-Fund invests in PRC Bonds through a RQFII which is subject to applicable regulations imposed by the PRC authorities. There is no assurance that PRC rules and regulations will not change or that lock-up periods or repatriation restrictions will not be imposed in the future. Any restrictions on repatriation of the invested capital and net profits may impact on the Sub-Fund's ability to meet redemption requests from the Unitholders.
- The Sub-Fund may not have exclusive use of the entire RQFII quota granted to the Manager (as RQFII holder), as the Manager (as RQFII holder) may in its discretion allocate RQFII quota which may otherwise be available to the Sub-Fund to other products. There is no assurance that the Manager (as RQFII holder) will make available RQFII quota that is sufficient for the Sub-Fund's investment at all times.
- The RQFII rules have been recently announced and their application may depend on the interpretation of the Chinese authorities. Any changes to the relevant rules may have an adverse impact on investors' investment in the Sub-Fund.
- In the event of any default of either a PRC broker or the RQFII Custodian in the execution or settlement of any transaction or in the transfer of any fund or securities in the PRC, the Sub-Fund may encounter delays in recovering its assets which may in turn adversely impact the net asset value of the Sub-Fund.
7. Risk of investing in urban investment bonds
Urban investment bonds are issued by local government financing vehicles ("LGFVs"). Although local governments may be seen to be closely connected to urban investment bonds, such bonds are typically not guaranteed by local governments or the central government of the PRC. As such, local governments or the central government of the PRC are not obliged to support any LGFVs in default. In the event that the LGFVs default on payment of principal or interest of the urban investment bonds, the Sub-Fund could suffer substantial loss and the Net Asset Value of the Sub- Fund could be adversely affected.
8. Hedging risk
- The Sub-Fund may enter into offshore forwards, swaps or futures transactions for hedging purposes in order to hedge against interest rates risks, credit risks and currency risks. There is no guarantee that hedging techniques will fully and effectively achieve their desired result.
- The Sub-Fund may not obtain a perfect correlation between hedging instruments and the portfolio holdings being hedged, which may expose the Sub-Fund to risk of loss.
- Any expenses arising from such hedging transactions, which may be significant depending on prevailing market conditions, will be borne by the Sub-Fund.
9. Risk relating to dividends paid out of capital
- The Manager may at its discretion pay distributions out of the capital of the Sub- Fund.
- Investors should note that payment of distributions out of capital represents a return or withdrawal of part of the amount they originally invested or from any capital gains attributable to the original investment. Any such distributions may result in an immediate reduction of the net asset value per unit of the Sub-Fund.
- The Manager may amend this distribution policy subject to the SFC's prior approval and by giving not less than one month's prior notice to unitholders.

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