HSBC China Growth Fund

Transcription

1 Important information: The Fund invests primarily in Chinese equities, including equity linked instruments linked to such securities. The Fund is subject to the concentration and emerging market risks arising from exposures to investments in a single emerging market. The Fund may invest in China A-shares and B-shares and may make the relevant investment through Shanghai-Hong Kong Stock Connect, Shenzhen- Hong Kong Stock Connect and China A-shares Access Products which may involve additional risks. The Fund is subject to the credit risk of the issuers of the equity linked instruments held by the Fund. When the issuer of an investment defaults, the Fund may suffer a loss amounting to the value of such investment. The Fund may have up to 30% of its assets invested in equity linked instruments linked to China A-shares. There are risks and uncertainties associated with China s tax rules and practices. In relation to the Fund s investment in China A-shares and China A-shares Access Products, the Fund will not withhold (or will not request the issuer of the relevant investments to withhold) any amount of realised or unrealised capital gains on such investments as tax provision. The Fund may further modify its tax provision policy based on new developments and interpretation of the relevant regulations. Investing in the Fund may involve substantial market, currency, volatility, liquidity, credit/counterparty, regulatory and political risks. Investors may suffer substantial loss of their investments in the Fund. Unit trusts are NOT equivalent to time deposits. Investors should not invest in the Fund solely based on the information provided in this document and should read the offering document of the Fund for details. This document does not constitute an offering document. HSBC China Growth Fund March 2018 Fund objective and strategy The Fund seeks long-term capital growth by mainly investing in a portfolio of equities issued by companies located in the mainland China ( China ) or deriving a preponderant part of their income and/or assets from China, and instruments linked to such investments, including but not limited to A- and B-shares listed on stock exchanges in China and H-shares, Red-chip and P-chip listed on the stock exchange in Hong Kong. The Fund will invest in China A-shares through equity linked instruments which may represent up to 30% of the Fund s net asset value. The Fund may also directly invest in China A-shares through Shenzhen-Hong Kong Stock Connect and Shanghai-Hong Kong Stock Connect for up to 10% of the Fund s net asset value. The maximum total investment in China A-shares including all types of investments is 30% of the Fund s net asset value. Product features The Fund is managed with a blended approach to Chinese equity by investing across offshore and onshore (A-share, B-share) markets The Fund aims to invest in companies that deliver strong, sustainable profits at attractive valuations The investment process is driven by bottom up stock selection Price Indexed Performance (%) YTD 3 mths 6 mths 1 yr 3 yrs 5 yrs Since Inception Fund (Class AC-USD) Reference Performance Benchmark Jun 14 Jun 15 Jun 16 Jun 17 Jun 18Feb Fund (Class AC-USD) 1 Reference Performance Benchmark 2 Source: Morningstar, Inc. as at 28 February Bid to Bid price with dividend reinvested, in US Dollar Percent Change Calendar year performance (%) Fund (Class AC-USD) 1 Reference Performance Benchmark Fund details Launch date Class AC-USD Class AC-HKD Fund size Base currency Bid price Class AC-USD Class AC-HKD Fund manager 28 June June 2011 USD million USD USD HKD Joy Yuan Investment adviser HSBC Global Asset Management (Hong Kong) Limited Minimum investment USD1,000 / HKD10,000 Initial charge 5.25% Management fee 1.5% per annum Switching charge 1% Dealing ISIN code Class AC-USD Class AC-HKD Bloomberg ticker Class AC-USD Class AC-HKD Financial Y/E Dividend policy Daily HK HK HSBCMAC HK HSBCMAH HK 31 July No distribution Portfolio characteristics Annualised volatility (3-year) 23.87% Sharpe ratio (3-year) 0.58 Download the offering documents from site/media/pdf/documents/amhk_hift.pdf Please refer to the offering document for details of other fees. Source: HSBC Investment Funds (Hong Kong) Limited as at 28 February Morningstar, Inc. All Rights Reserved. Morningstar Rating TM as of 28 February The Fund has terminated the appointment of investment sub-adviser, and has changed the fund name and investment policy on 13 January The performance of a Class may be affected by many factors such as, where applicable, exchange rate fluctuation, currency hedging costs and interest rate differentiation between different currencies. Therefore, different Classes may have different performance, and the performance of a Class cannot be used to represent the performance of another Class. 2. Reference Performance Benchmark: MSCI China Gross since 13 Jan 2014, and no benchmark prior to that. Investment involves risk. Past performance is not indicative of future performance. Please refer to the offering document for further details including the risk factors. The document has not been reviewed by the Securities and Futures Commission. Issued by HSBC Global Asset Management (Hong Kong) Limited

2 Portfolio composition Sector allocation % Financials 30.8 Information technology 29.2 Consumer discretionary 13.2 Energy 9.9 Real estate 4.5 Materials 3.7 Industrials 2.8 Consumer staples 2.2 Utilities 1.4 Cash & others 2.2 Asset allocation % H-Share 39.0 P-Chips 20.2 Red-Chips 16.6 A-Share 1.2 Cash 0.4 Others 22.7 Percentage may not total 100 due to rounding. Top 10 holdings % Tencent Holdings Software & computer services 9.6 Alibaba Group Holding ADR General retailers 8.8 China Construction Bank Banks 6.4 Ping An Insurance Insurance 5.3 Industrial and Commercial Bank of China Banks 4.7 Bank of China Banks 3.6 China Petroleum and Chemical Oil & gas producers 3.5 Baidu.Com Software & services 3.1 Guangzhou Automobile Consumer goods 2.8 CNOOC Oil & gas producers 2.6 Source: MSCI, the MSCI information may only be used for your internal use, may not be reproduced or redisseminated in any form and may not be used as a basis for or a component of any financial instruments or products or indices. None of the MSCI information is intended to constitute investment advice or a recommendation to make (or refrain from making) any kind of investment decision and may not be relied on as such. Historical data and analysis should not be taken as an indication or guarantee of any future performance analysis, forecast or prediction. The MSCI information is provided on an as is basis and the user of this information assumes the entire risk of any use made of this information. MSCI, each of its affiliates and each other person involved in or related to compiling, computing or creating any MSCI information (collectively, the MSCI Parties ) expressly disclaims all warranties (including, without limitation, any warranties of originality, accuracy, completeness, timeliness, non-infringement, merchantability and fitness for a particular purpose) with respect to this information. Without limiting any of the foregoing, in no event shall any MSCI Party have any liability for any direct, indirect, special, incidental, punitive, consequential (including, without limitation, lost profits) or any other damages. ( Investment involves risk. Past performance is not indicative of future performance. Please refer to the offering document for further details including the risk factors. The document has not been reviewed by the Securities and Futures Commission. Issued by HSBC Global Asset Management (Hong Kong) Limited

3 PRODUCT KEY FACTS HSBC China Growth Fund August This statement provides you with key information about the HSBC China Growth Fund This statement is part of the offering document You should not invest in this product based on this statement alone Quick facts Fund manager HSBC Investment Funds (Hong Kong) Limited / Investment adviser HSBC Global Asset Management (Hong Kong) Limited (Internal delegation) / Trustee Dealing frequency Base currency HSBC Institutional Trust Services (Asia) Limited/ ( ) Daily on every dealing day / USD / Ongoing charges over a year Class AC USD / AC 1.62%^ Class AC HKD / AC 1.62%^ Dividend policy Financial year end Minimum investment Class AC USD/HKD No distribution / AC / 31 July / 7 31 Class AC USD US$1,000; Class AC HKD HK$10,000 AC 1,000 AC 10,000 ^ The figure is an estimate only as the trustee fee was reduced with effect from 1 July It represents the sum of the estimated ongoing expenses chargeable to the unit class expressed as a percentage of the estimated average net asset value of the unit class over a 12-month period. This figure may vary from year to year What is this product? This is a sub-fund (the Fund ) of an umbrella fund constituted in the form of a unit trust. With effect on and from 29 August 2017, the domicile of HSBC Investment Funds Trust was removed from the jurisdiction of the Cayman Islands to the jurisdiction of the Hong Kong Special Administrative Region ( Hong Kong ) What are the investment objectives and strategy?? Objectives and strategy The Fund seeks long-term capital growth by mainly investing in a portfolio of equities issued by companies located in the mainland China ( China ) or deriving a preponderant part of their income and/or assets from China, and instruments linked to such investments. The Fund will be actively managed, aiming to achieve the investment objective without reference to market index weightings. The securities which the Fund will invest in may be listed or traded on one or more recognized exchanges located in China or the Hong Kong Special Administrative Region ( Hong Kong ). To some extent the Fund may also invest in securities listed or traded on recognised exchanges located outside China and Hong Kong. There are no capitalisation restrictions, and it is anticipated that the Fund will seek to invest across a range of capitalisations.

4 The Fund may invest in A- and B-shares (and such other securities as may be available) listed on stock exchanges in China, H-shares listed on the Hong Kong Stock Exchange and shares of red-chip companies listed on the Hong Kong Stock Exchange or on other exchanges outside of China (including but not limited to shares of Chinese private enterprises deriving a preponderant part of their income and/or assets from China ( P-chip companies )), shares of other companies deriving a preponderant part of their income and/or assets from China and securities linked to such shares. The intended initial allocation of the net asset value of the Fund is 5% to 30% in China A-shares or securities linked to the China A shares and the remaining assets in other assets in line with the Fund s investment objective and investment restrictions. This allocation is indicative only and may be changed from time to time depending on market conditions and the availability of appropriate investment opportunities. The Fund will invest at least 70% of its non-cash assets in A-, B- and H shares, shares of red-chip companies, shares of companies deriving a preponderant part of their income and/or assets from China and securities linked to such shares. A B H / / A A A B H / As of the date of this statement, the Fund and the Manager are not Qualified Foreign Institutional Investors (QFIIs) in China. However, the Fund will invest in the China A-share market indirectly through Equity Linked Notes and other similar equity linked securities and instruments issued by institutions that have obtained the QFII status (collectively referred to as ELN ). Where the Fund invests in the China A-share market through ELN that are not listed nor quoted on any stock exchange or over-the-counter market or other organized securities market that is open to the international public and on which the ELN are regularly traded, such ELN should comprise no more than 15% of the Fund s net asset value. QFII QFII A A The Fund may also directly invest in China A-shares through the Shanghai-Hong Kong Stock Connect and/or Shenzhen-Hong Kong Stock Connect (collectively the Stock Connects ), as and when it is eligible to participate in such programme, subject to applicable quota limitations. A The following table illustrates the Fund s maximum investment in China A-shares as a percentage of the Fund s net asset value: Type of investment Maximum investment Indirect investment through ELN linked to China A-shares* 30% Direct investment through the Stock Connects* 10% *The maximum total investment in China A-shares including all types of investments is 30% of the Fund s net asset value. A 30% 10% * A The investment portfolio held by the Fund will comprise mainly of equities and equity-related investments. The portfolio may also include deposits and other money market instruments up to 49% of the net asset value of the Fund. The intended asset allocation aforesaid is for indication only and may be changed as and when the Manager considers appropriate. The Fund may have up to 30% of its assets invested in equity linked instruments linked to China A-shares. A For efficient portfolio management, the Fund may acquire financial derivatives instruments and other investments vehicles allowed under the investment restrictions of the Fund.

5 What are the Key Risks? Investments involve risks. Please refer to the offering document for details including the risk factors. Investment risk The Fund is an investment fund. There is no guarantee of the repayment of principal. The 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. Concentration risk The Fund s investments are concentrated in China including Hong Kong. The value of the Fund may be more volatile than that of a fund having a more diverse portfolio of investments. The value of the Fund may be more susceptible to adverse economic, political, policy, foreign exchange, liquidity, tax, legal or regulatory event affecting the China market. Currency risk Because the Fund s assets and liabilities and/or the classes of units may be denominated in currencies different from the base currency, the Fund may be affected unfavourably by exchange control regulations or changes in the exchange rates between the Fund s base currency and other currencies. China investment risk Investing in emerging markets like China involves a greater risk of loss than investing in more developed markets due to, among other factors, greater political, tax, economic, foreign exchange, liquidity, settlement, custodial, market volatility (such as interest rate and price volatility), legal and regulatory risks. High volatility of the equity market in China - High market volatility and potential settlement difficulties in the China equity market may also result in significant fluctuations in the prices of the securities traded on such markets and thereby may adversely affect the value of the Fund. Regulatory policies of the equity market in China - Securities exchanges in China typically have the right to suspend or limit trading in any security traded on the relevant exchange. The government or the regulators may also implement policies that may affect the financial markets. All these may have a negative impact on the Fund. RMB currency and conversion risk RMB is currently not freely convertible and is subject to exchange controls and restrictions. Non-RMB based investors are exposed to foreign exchange risk and there is no guarantee that the value of RMB against the investors base currencies will not depreciate. Any depreciation of RMB could adversely affect the value of investor s investment in the Fund. Although offshore RMB (CNH) and onshore RMB (CNY) are the same currency, they trade at different rates. Any divergence between CNH and CNY may adversely impact investors. Under exceptional circumstances, payment of redemptions and/or dividend payment in RMB may be delayed due to the exchange controls and restrictions applicable to RMB. CNH CNY CNH CNY China tax risk The Fund may also be exposed to risks associated with changes in current Chinese tax laws, regulations and practice (which may have retrospective effect). In particular, there are still uncertainties as to whether and how gains derived by the Fund on disposal of China A-share investments would be subject to withholding tax in China. Any increased tax liabilities on the Fund may adversely affect the Fund s value. A Based on professional tax advice, the Fund will not make tax provision in respect of realised and unrealised gains on its investments in ELN linked to China A-shares. The Manager (after taking professional tax advice) may in its discretion make further modification to the tax provision practice of the Fund based on new developments and interpretation of the relevant regulations. Investors may be advantaged or disadvantaged depending upon the final tax outcome as and when they subscribed and/or redeemed the units of the Fund and they will not be entitled to claim any part of

6 the tax provision or withholding amounts released to the Fund. Any shortfall between the provision and the actual tax liabilities, which will be debited from the Fund s assets, will adversely affect the Fund s net asset value. Equity risk The 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. Risk associated with investment in equity linked instruments Investment in equity linked instruments ( ELN ) can be illiquid and the Fund relies upon the counterparty to quote a price. The Fund is exposed to credit risk that the issuer may not settle a transaction due to credit or liquidity problem, thus causing the Fund to suffer loss. The value of the ELN may be affected by changes in exchange rates between the denominating currency of the underlying shares and the ELN. Credit risk The Fund is subject to the credit risk of the issuers of the equity linked instruments held by the Fund. When the issuer of an investment defaults, the Fund may suffer a loss amounting to the value of such investment. Early termination risk The Fund may be liquidated on the occurrence of certain events specified in the offering document. Upon liquidation, all the assets of the Fund will be realized and the net proceeds thereof which are available for distribution will be distributed to its holders in proportion to their holdings. Investors should note that the amount distributed to them may be less than the amount of their initial investment.

7 How has the Fund performed? Past performance information is not indicative of future performance. Investors may not get back the full amount invested. The computation basis of the performance is based on the calendar year end, NAV-to-NAV, with dividend reinvested. These figures show by how much the unit class increased or decreased in value during the calendar year being shown. Performance data has been calculated in USD including ongoing charges and excluding subscription fee and redemption fee you might have to pay. Where no past performance is shown there was insufficient data available in that year to provide performance. The Fund has formally adopted MSCI China Gross as the reference performance benchmark of the Fund with effect from The reference performance benchmark is shown for comparison purposes only and the Fund may not be managed to the reference performance benchmark MSCI China Gross) Fund launch date: 28/06/ /06/2007 Class AC-USD launch date: 28/06/2007 AC 28/06/2007 Class AC USD is a unit class open for investment by Hong Kong retail investors and denominated in the Fund s base currency. AC Is there any guarantee? The Fund does not have any guarantees. You may not get back the full amount of money you invest.

8 What are the fees and charges? Charges which may be payable by you You may have to pay the following fees when dealing in the Fund. Fees What you pay Subscription fee Up to 5.25% of the offer price* # 5.25%* # Switching fee Up to 1% of the offer price* # 1%* # Redemption fee Nil* * Ongoing fees payable by the Fund The following expenses will be paid out of the Fund. They affect you because they reduce the return you get on your investments. Fees Management fee 1.50% # Trustee fee 0.07% # Administrative fee Performance fee Annual rate (as a % of the Net Asset Value of the Fund) % Not applicable Not applicable Other fees You may have to pay other fees and charges when dealing in the Fund. * You may need to bear additional costs under certain situations in order to mitigate any adverse impacts to the Fund caused by the transactions. Please refer to the offering document for further details. # The fees and charges may be increased up to maximum level as specified in the offering document by giving at least one month s prior notice to investor. 1 Additional information You generally buy and redeem units at the Fund s next-determined subscription price and redemption price with reference to the Net Asset Value (NAV) after the intermediaries receive your request in good order on or before 4:00pm (HK Time), being the Fund s dealing cut-off time. 4 Intermediaries who sell the Fund may impose earlier cut-off times for receiving instructions for subscriptions, redemptions or switching. Investors should pay attention to the arrangements of the intermediary concerned. Investors may obtain the past performance information of other unit classes offered to Hong Kong investors at (the website has not been reviewed by the SFC). Investors may obtain information on the intermediaries online at (the website has not been reviewed by the SFC). The net asset value of the Fund is calculated and the price of the Fund published on each dealing day. The Fund prices are available online at (the website has not been reviewed by the SFC). Important If you are in doubt, you should seek professional advice. The SFC takes no responsibility for the contents of this statement and makes no representation as to its accuracy or completeness. Issued by HSBC Global Asset Management (Hong Kong) Limited