Templeton China Opportunities Fund A ACC HKD

鄧普頓中國機會基金 A類 Acc 港元

HK0000127776

Risk Rating: Level 6

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.

Dealing Hours

Dealing Information

Secure Transaction

Derivatives knowledge not required

HKD10,000.00Min. Subscription

1.25%

HKD10,000.00Min. Subscription

HKD / USD

HKD10,000.00Min. Subscription

HKD10,000.00

HKD10,000.00

Daily

15:30

-

*Not include dividends (If applicable)

Fund Performances (including dividend, if any)

1 mth
+4.35%
3 mth
+11.94%
6 mth
+5.79%
1 yr
+17.90%
3 yr
+25.71%
5 yr
+53.73%

Analytical Figures (3 years)

Annualized Return
+7.93%
Annualized Volatility
+15.96%
Sharpe Ratio
+0.49

Fund Information

Fund Houses
Franklin Templeton Investments (Asia) Ltd. (Templeton China Opportunity Fund)
Launch Date
2012-12-02
Fund Manager
Mark J. Mobius
Tom Wu
Eddie Chow
Manager Start Date
Mark J. Mobius (Start Date: 2012-11-30) Tom Wu (Start Date: 2012-11-30) Eddie Chow (Start Date: 2012-11-30)
Geographical Focus
China A Shares
Asset Class/ Sector
Equity - All cap
Risk Rating
Risk Level 6

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.

Fund AUM(As of 2016-06-29)
USD 13,480,000
Management Fee
1.25%
Latest Dividend
N.A.

Sector Leaders

    No Funds

Dealing Information

Secure Transaction

Derivatives knowledge not required

HKD10,000.00Min. Subscription

1.25%

HKD10,000.00Min. Subscription

HKD / USD

HKD10,000.00Min. Subscription

HKD10,000.00

HKD10,000.00

Daily

15:30

-

Dividend Records

No Dividends

Investment Objective

The investment objective and policy of the fund is to achieve long-term capital appreciation by investing, directly or indirectly, in China A-Shares and equity securities of Chinese companies listed in China or foreign securities markets, or companies or issuers which derive the principal portion of their revenues from the Chinese economies or have the principal portion of their assets in the Chinese economies. These equity securities include, but are not limited to, China A-Shares through Templeton China A Shares Fund (please refer to the sub-section headed “Templeton China A Shares Fund” for further details), China B-Shares, China H-Shares and red-chip stocks.

Nature and Extent of Risks

Investment involves risks. Please refer to the offering document for details including the risk factors.
1. Market risk
The fund is subject to substantial market fluctuations and to the risks inherent in all investment, and the price of the units can go down as well as up. Investors may not get back their original investment.
2. Mainland China investment risk
An investment in the fund with exposure to Mainland China’s markets involves certain risks and special considerations not typically associated with investment in more developed economies or markets, such as greater government control over the economy, political and legal uncertainty, currency fluctuations or blockage, the risk that Mainland China’s government may decide not to continue to support economic reform programs, the risk of nationalization or expropriation of assets, tax and foreign exchange risk, as well as regulatory risk, legal risk and accounting risk.
3. Concentration risk
The fund invests only in Mainland China and is likely to be more volatile than a broad-based fund, such as a global or regional equity fund, as the fund is more susceptible to fluctuations in value resulting from limited number of holdings or from adverse conditions in the single country which it invests.
4. Foreign currency, exchange control and multi-conversion risks
There is foreign currency and exchange control risk at the level of the fund and Templeton China A Shares Fund. The fund may be invested in assets quoted in currencies (e.g. RMB or HKD) other than its base currency. The performance of the fund will therefore be affected by movements in the exchange rate between the currencies in which the assets are denominated and its base currency. The base currency of Templeton China A Shares Fund is denominated in USD, while its investments and income derives from such investments (if any) are denominated in currencies other than USD and primarily in RMB (which is currently not a freely convertible currency and is subject to exchange controls and restrictions). As a result, Templeton China A Shares Fund is exposed to incurring transactions costs associated with currency conversion (i.e. from USD subscription monies to RMB for the Templeton China A Shares Fund to invest in RMB-denominated investments and from RMB sale proceeds (after the Templeton China A Shares Fund has disposed of the RMB-denominated investments) to USD to meet with redemption requests as and when necessary). In addition, investment in Templeton China A Shares Fund will be subject to fluctuations between USD and other currencies, including RMB. There can be no assurance that the RMB will not be subject to devaluation or revaluation or that shortages in the availability of foreign currency will not develop.
5. QFII regime risks
-Risks associated with repatriation controls and investment restrictions: Under the applicable QFII regulations, the QFII holder may be restricted from withdrawing funds from its account in respect of Templeton China A Shares Fund until and unless the QFII holder as a whole is permitted to repatriate its funds under the QFII regulations. If the net amount to be repatriated by the QFII holder for the account of Templeton China A Shares Fund on any occasion exceeds the equivalent of USD 50 million (including principal and profit), prior approval from the State Administration of Foreign Exchange of the PRC (“SAFE”) is required. In this case, payment of the redemption proceeds may be delayed and paid to unitholders of Templeton China A Shares Fund (including the fund) as soon as practicable and in any event within seven (7) business days after completion of the repatriation process. The repatriation of an amount less than or equal to the equivalent of USD 50 million (including principal and profit) is currently subject to SAFE’s filing requirement (while pre-approval by SAFE is not required). However, the corresponding regulations may be subject to change. The application and interpretation of such regulations may not be certain and there is no certainty as to how they will be applied now or in the future. In the event that redemption requests for a large number of units of Templeton China A Shares Fund are received on a dealing day (i.e. more than 10% of the total number of units in issue), Templeton China A Shares Fund may need to, for the purposes of meeting such redemption requests, defer part of the redemption requests in Templeton China A Shares Fund. As a result, the payment of the redemption proceeds may be delayed and paid to unitholders of the fund within seven (7) business days after completion of the repatriation process. There are rules and restrictions under current QFII regulations including rules on investment restrictions, maximum remittance period, minimum investment holding period and repatriation of principal and profits.
-Risks associated with QFII local custodian and PRC broker: As Templeton China A Shares Fund invests in the PRC market where custodial and/or settlement systems are not fully developed, the assets of Templeton China A Shares Fund and, thus, the fund may be exposed to custodial risk. In the event that there is any retroactive application of legislation and/or fraud or improper registration of the title of the assets of Templeton China A Shares Fund, the reduction in the quantity or value of such assets will create losses to Templeton China A Shares Fund and, thus, the fund. As regards the PRC broker, there is a risk that Templeton China A Shares Fund may suffer losses, whether direct or consequential, from the default or bankruptcy of the PRC broker or disqualification of the same from acting as a broker, which may prevent Templeton China A Shares Fund from trading to any further degree with that PRC broker, potentially disrupting current or contemplated trades for particular securities and presenting an opportunity cost. This may affect the performance of Templeton China A Shares Fund and, thus, the fund and the investments of investors, as best execution or the transfer of certain funds or securities may not be immediately available or possible.
-Risks associated with QFII regulations and other regulatory requirements: The regulations which regulate investments by QFIIs in Mainland China and the repatriation and currency conversion may be subject to change. The application and interpretation of such investment regulations may therefore not be certain and there is no certainty as to how they will be applied as Mainland China authorities and regulators have been given wide discretion in administering such investment regulations and there is no precedent or certainty as to how such discretion may be exercised now or in the future. The uncertainty and change of the laws and regulations in the PRC may adversely impact Templeton China A Shares Fund and, thus, the fund. The rules and regulations which regulate QFII investment are also subject to changes.
-Risks associated with the QFII status of the QFII holder: The status or approval of the QFII holder of Templeton China A Shares Fund may be revoked or terminated or otherwise invalidated at any time by reason of a change in applicable law, regulations, policy, practice or other circumstances, an act or omission of the QFII holder or for any other reasons. In such event, all the assets held by the QFII holder for or on account of Templeton China A Shares Fund will be liquidated and repatriated to Templeton China A Shares Fund in accordance with applicable laws and regulations and the provisions of the agreement between Templeton China A Shares Fund and the QFII holder. Templeton China A Shares Fund and, thus, the fund may suffer loss as a result of such liquidation and repatriation. In addition, Templeton China A Shares Fund does not have the exclusive use of the full QFII quota (i.e. USD 300 million) granted to the QFII holder. Only USD 100 million has been allocated to Templeton China A Shares Fund. If the other activities performed by the QFII holder in respect of any portions of the full QFII quota (i.e. USD 300 million) granted to the QFII holder have resulted in any regulatory actions taken against the QFII holder, including the revocation of the QFII quota granted as a whole, Templeton China A Shares Fund and the fund will be adversely affected.
6. Mainland China tax risk
Based on independent tax advice, the Manager will not make provisions for any PRC taxes payable by the fund on capital gains derived from the sale of China B-Shares and overseas listed shares (including China H-Shares, ADRs and GDRs) issued by PRC resident enterprises except for the fund’s investments into Templeton China A Shares Fund, for which provisions for PRC taxes on capital gains on China A-Shares have been made at 10% by Templeton China A Shares Fund. The Manager will make provision for any PRC taxes payable by the fund on capital gains derived from the sale of red-chip stocks if the red-chip stock issuer is confirmed by the PRC State Administration of Taxation as a PRC tax resident enterprise. Any sums withheld in excess of the tax liability incurred or expected to be incurred by the fund shall be released and transferred to the fund’s accounts forming part of the fund’s assets upon the issuance of definitive tax regulation by the PRC State Administration of Taxation and/or the PRC Ministry of Finance to clarify the PRC taxation of capital gains. On the other hand, where the amount of such provisions is not sufficient to meet the actual tax liabilities, any shortfall will be debited from the fund’s assets. The fund’s asset value will be adversely affected as the fund will have to bear the additional tax liabilities.
7. Risks of investing in another collective investment scheme
The fund will invest in China A-Shares indirectly through another collective investment scheme, namely Templeton China A Shares Fund. In addition to the expenses and charges charged by the fund, investors should note that there are additional fees involved when investing into Templeton China A Shares Fund, including fees and expenses charged by the service provider(s) of Templeton China A Shares Fund and the redemption fee charged by Templeton China A Shares Fund during the lock-up period applicable to Templeton China A Shares Fund. Furthermore, there can be no assurance that (i) the liquidity of Templeton China A Shares Fund will always be sufficient to meet redemption requests as and when needed and (ii) the investment objective and strategy of Templeton China A Shares Fund will be successfully achieved. As the Investment Manager is appointed to provide portfolio management services for Templeton China A Shares Fund, potential conflicts of interest may arise. The valuation of the fund’s holdings in another collective investment scheme in which it invests depends primarily on unaudited financial information provided by the relevant collective investment scheme and its service providers. This may affect the calculation of the net asset value of the fund which may not reflect the fair value of the investment of the fund. Further, the fund may also experience a delay in receiving the required financial information from the relevant collective investment scheme for calculating the fund’s net asset value if the dealing day of such scheme is not the same as that of the fund. If the fund invests in an underlying fund that is managed by the Manager or a connected person of the Manager, potential conflicts of interest may arise. Please refer to the section headed “Conflicts of Interest” in the explanatory memorandum for further details.
8. Debt securities risk
There is no assurance that losses will not occur with respect to investment in debt securities (such as bonds). A default on interest or principal by the counterparty may adversely affect the performance of Templeton China A Shares Fund and the fund. Templeton China A Shares Fund may invest in non-rated and/or lower rated bonds where the risk of failure to pay interest and/or principal is greater when compared to higher rated bonds, exposing Templeton China A Shares Fund and, thus, the fund to potential losses. Bonds are also exposed to the risk of being downgraded, which can cause a significant drop in the value of Templeton China A Shares Fund and the fund.
9. Interest rate risk
Debt securities (such as bonds) are more susceptible to fluctuations in interest rates. Generally, the price of debt securities will fall when interest rates rise, adversely affecting the value of Templeton China A Shares Fund and, thus, the fund, whereas the price will rise when interest rates fall. Longer term debt securities are usually more sensitive to interest rate changes than shorter term securities.

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