PRODUCT KEY FACTS. BlackRock Premier Funds Horizon Income Fund. March Quick facts

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1 PRODUCT KEY FACTS BlackRock Premier Funds Horizon Income Fund March 2018 Quick facts Manager: Trustee: Custodian: Ongoing charges over a year # : Base currency: Dividend policy: This statement provides you with key information about this product. This statement is a part of the Prospectus. You should not invest in this product based on this statement alone. BlackRock Asset Management North Asia Limited Cititrust Limited Citibank N.A., Hong Kong Branch Class A2 AUD (Hedged) 1.53% Class A2 HKD (Hedged) 1.53% Class A2 USD 1.50% Class A3 USD^ 1.54% Class A6 CAD (Hedged)^ 1.54% Class A6 HKD (Hedged) 1.53% Class A6 NZD (Hedged)^ 1.54% Class A6 USD 1.54% Class A8 AUD (Hedged) 1.53% Class A8 RMB (Hedged) 1.52% USD Non-Distributing Unit Classes: No dividends will be declared or paid Distributing Unit Classes: The dividend is calculated and declared monthly and distributed to unitholders based upon the number of units held at the month end. Classes 6 and 8 will distribute income gross of expenses (i.e. payment of fees and expenses out of capital). This will result in an increase in distributable income available for payment as dividends, and therefore, these classes may effectively pay dividends out of capital. Classes 3, 6 and 8 may also pay dividends out of capital (including net realised and net unrealised capital gains) of the relevant class at the Manager s discretion. Any distributions involving payment of dividends out of capital or payment of dividends effectively out of capital may result in an immediate reduction of the net asset value per unit. It is intended that the first distribution of the Distributing Unit Classes of the Fund will be made 2 months after the launch date of the Fund, subject to the Manager s discretion. The Manager may determine the first distribution date at its discretion, by taking in account factors including but are not limited to market conditions and size of the Fund. 1

2 Financial year end of 30 September this fund: Minimum Class A2/A3/A6: USD (Unhedged): initial USD5,000; investment: additional USD1,000 Class A2/A8: AUD (Hedged): initial AUD5,000; Class A6: CAD (Hedged): initial CAD5,000; Class A2/A6: HKD (Hedged): initial HKD50,000; Class A6: NZD (Hedged): initial NZD5,000; Class A8: RMB (Hedged): initial RMB50,000; Dealing frequency: Daily # The ongoing charges figure for a class is based on the costs and expenses of that class with reference to the annual report of the Fund for the year ended 30 September The ongoing charges figure for a class marked ^ is an estimate because it has been recently launched or is available but not yet active. The estimate is based on estimated costs and expenses of the class over 12 months or on information available in respect of other active share classes with a similar fee structure. This figure may vary from year to year. What is this product? Horizon Income Fund (the Fund ) is a sub-fund of BlackRock Premier Funds, an umbrella unit trust established under the laws of Hong Kong. Objective and Investment Strategy Objective To provide a sustainable level of income, which primarily comes from income generated from the underlying investments and also from moderate medium to long-term capital growth, within a target level of portfolio risk measured over the long term. Strategy The Fund invests in a number of active funds and index funds managed by the Manager or its affiliates (the Underlying CIS ), which may invest globally, including in emerging markets, in a full spectrum of permitted investments types or asset classes including equities, fixed income securities (including below investment grade or unrated securities), Real Estate Investment Trusts (REITs), cash and cash equivalents. The Underlying CIS may include sub-funds of BlackRock Global Funds, BlackRock Premier Funds, ishares Asia Trust and other ishares ETFs listed in the United States of America, United Kingdom, Australia and Singapore. The Fund has no prescribed regional, country, industry sector or market capitalisation limits. The Fund invests in at least five CIS, and not more than 30% of the Fund s net asset value may be invested in any one CIS. The Fund will invest in underlying CIS which may contain either physical or synthetic investments and such underlying CIS may include index tracking funds (either listed or unlisted). In other words, the CIS invested by the Fund may include synthetic exchange traded funds ( ETFs ), i.e. ETFs which invest substantially or primarily in financial derivative instruments or market access products. Financial derivative instruments will not be extensively or primarily used by the underlying CIS (other than synthetic ETFs) for investment purposes. The underlying CIS of the Fund may use financial derivative instruments for hedging purposes. 2

3 The Fund will only invest in CIS authorised by the SFC or in recognised jurisdiction schemes as permitted by the SFC from time to time, currently including Luxembourg, Ireland and the United Kingdom (whether authorised by the SFC or not) except that not more than 10% of the Fund s net asset value may be invested in non-recognised jurisdiction schemes not authorised by the SFC. The Fund will not invest in any CIS which invests all its assets in other CIS. The Fund invests all of its assets in CIS, and may hold cash for ancillary purposes. The Fund may enter into financial derivative instruments for hedging purposes. It is not anticipated that the Fund s exposure to securities issued by or guaranteed by any single sovereign issuer with a credit rating below investment grade (via the Fund s investments in the Underlying CIS) will exceed 10% of the Fund s net asset value. To achieve the income and capital appreciation objectives at prescribed long-term risk level, the mix of investments in the Fund is expected to vary over time. The Fund targets a medium level of portfolio risk over long term and will be invested in a mix of asset classes, with no particular emphasis between the asset classes. Note that over a shorter time horizon, the Manager may exercise their discretion to target a risk level above or below the long-term risk budget in response to the changing market environment. What are the key risks? Investment involves risks. Please refer to the Prospectus for details including the risk factors. 1. Investment Risks The Fund is an investment fund. There is no guarantee of the repayment of principal. The Fund s investment portfolio may fall in value, therefore your investment in the Fund may suffer losses. 2. Risks relating the Nature of Fund of Funds There is no guarantee that any single underlying fund or underlying funds as a whole would generate any positive returns to the Fund. In addition, the Fund may also be adversely affected by suspension of redemption or calculation of net asset value or termination of the underlying funds. The Fund will bear the fees paid to the Manager and its other service providers as well as, indirectly, a pro rata portion of the fees paid by the underlying funds to the service providers of the underlying funds, which may have an adverse impact on the net asset value of the Fund. For investments in the units/shares of other collective investment schemes that are managed, directly or by delegation, by the Manager itself or by any of its connected persons, no management, subscription or redemption fees may be charged to the Fund on its investment in the units/shares of such other collective investment schemes. 3. Risks relating to Target Risk Strategy There is no assurance that the Fund will in all cases be within the target level of portfolio risk and achieve its investment objective. If market risk levels change substantially over short periods, changes to the mix of underlying funds may become more frequent, resulting in a higher portfolio turnover in the Fund. These will result in increased operating expenses payable by the Fund and thus the net asset value of the Fund may be adversely affected. 3

4 4. Risks relating to the Underlying Investments of the Fund By investing in Underlying CIS which invest in investments including equities, fixed income securities (including below investment grade or unrated securities), REITs, cash and cash equivalents, the Fund is subject to the following risks: Risks relating to fixed income asset classes Interest Rate Risks The underlying fund s investments in fixed income securities may fall in value if interest rates change. Generally, the price of fixed income instruments decreases when interest rates rise, whilst their prices increase when interest rates fall. If the fixed income securities held by an underlying fund fall in value, the Fund s net asset value will also be adversely affected. Credit Risks The Fund s exposure to bonds is subject to the credit risk of the issuers of the fixed income securities. When the issuer of a fixed income security defaults, the Fund may suffer a loss amounting to the value of such investment. Investment grade securities may be subject to the risk of being downgraded to below investment grade securities. In the event of downgrading in the credit ratings of a security or an issuer relating to a security, the Fund s investment value in such security may be adversely affected. Below investment grade or unrated securities are subject to higher credit risk and counterparty risk than investment grade securities. Risks relating to equity asset classes The value of equity securities are affected by the business, performance and activities of individual companies as well as general market and economic conditions, and this may adversely impact on the Fund s net asset value. Risks relating to REITs The prices of REITs are affected by changes in the value of the underlying properties owned by the REITs. Real estate investments are relatively illiquid and this may affect the ability of a REIT to vary its investment portfolio or liquidate part of its assets in response to changes in economic conditions, international securities markets, foreign exchange rates, interest rates, real estate markets or other conditions. Returns from REITs are dependent on management skills. Investments made by REITs generally may not be diversified, and may be subject to the risks associated with adverse developments in relevant property sectors. REITs are subject to risk of defaults by borrowers or tenants. In the event of a default, a REIT may experience delays in enforcing its rights and may suffer losses as a result. The Fund may invest in REITs regardless of whether they are authorised by the SFC and the dividend policy of the Fund is not representative of the dividend/payout policy of the underlying REITs. 4

5 Emerging Markets Risks Emerging markets are typically those of poorer or less developed countries which exhibit lower levels of economic and/or capital market development, and higher levels of share price and currency volatility, amongst these, those which exhibit the lowest levels of economic and/or capital market development may be referred to as frontier markets, and the below mentioned risks may be amplified for these markets. In certain emerging markets, there may be limits concerning the manner and/or extent to which foreign investors can invest directly in securities in that market, and also taxes or other charges applicable to foreign investors which may render direct investment inefficient or uneconomical for unitholders. This may affect the underlying fund s ability to acquire or dispose of a security. These risks may have adverse impact on the net asset value of the Fund. Risks relating to investment in underlying funds Risk relating to index tracking funds The Fund may invest in index tracking funds (including exchange traded funds ( ETFs )). Index tracking funds are not actively managed. Falls in the related tracking index are expected to result in a corresponding fall in the value of the relevant index tracking fund. Factors such as fees and expenses of a index tracking fund, imperfect correlation between the index tracking fund s assets and the underlying securities within the relevant tracking index, rounding of share prices, adjustments to the tracking index and regulatory policies may adversely affect the ability of the manager of an index tracking fund to achieve close correlation with the tracking index for the relevant fund. An index tracking fund s returns may therefore deviate from that of its tracking index. These factors may have an adverse impact on the value of the index tracking funds, and thus the net asset value of the Fund may also be adversely impacted. Trading risks of ETFs The trading prices of units in an ETF may differ significantly from the net asset value of the units of such ETF. There can be no assurance that an active trading market will exist or maintain for units of an ETF on any securities exchange on which units of an ETF may trade. The units of the ETFs which the Fund may invest in may be traded at large discounts or premiums to their net asset value, which may in turn adversely affect the net asset value of the Fund. Counterparty risk of synthetic ETFs The Fund may invest in synthetic ETFs that adopt a synthetic replication strategy to track performance of the relevant markets and may gain economic exposure to underlying shares through investing substantially or primarily in financial derivative instruments or market access products. The Fund is therefore subject to the counterparty risk of the issuers of derivatives instruments or market access products which the underlying ETFs may hold. Any default by such issuers of financial derivatives instruments or market access products may lead to substantial loss for the relevant underlying ETFs, which may in turn adversely affect the net asset value of the Fund. 5

6 5. Risk relating to RMB class(es) There can be no assurance that RMB will not be subject to devaluation. Any devaluation of RMB could adversely affect the value of investors investments in the RMB class(es) of the Fund. When calculating the value of the RMB class(es), offshore RMB in Hong Kong ( CNH ) will be used. The CNH rate may be at a premium or discount to the exchange rate for onshore RMB in China ( CNY ) and there may be significant bid and offer spreads. While CNH and CNY represent the same currency, they are traded in different and separate markets which operate independently. As such, CNH does not necessarily have the same exchange rate and may not move in the same direction as CNY. As RMB is not freely convertible, currency conversion is subject to availability of RMB at the relevant time. As such, in case of sizable redemption requests for the RMB class(es) are received, the Manager has the absolute discretion to delay any payment of redemption requests from the RMB class(es) where it determines that there is not sufficient RMB for currency conversion by the Fund for settlement purpose. There is also a risk that payment of distributions in RMB (if any) may be delayed when there is not sufficient amount of RMB for currency conversion for distributions in a timely manner due to the exchange controls and restrictions applicable to RMB. In any event, for proper redemption requests received before the dealing deadline, redemption proceeds will be paid no later than one calendar month upon receipt of the relevant documents. 6. Derivatives Risks The Underlying CIS that the Fund invests in may enter into derivatives transactions. Risks associated with derivatives include counterparty risk, insolvency risk, liquidity risk, valuation risk, volatility risk, over-the-counter transaction risks and hedging risk. In adverse situations, the use of derivatives by the Fund or its Underlying CIS may be ineffective in hedging purpose. The Fund or an Underlying CIS may suffer significant losses. 7. Capital Growth Risks Risks Associated with Fees and/or Dividends Paid Out of Capital Any distributions involving payment of dividends out of capital (Classes 3, 6 and 8), payment of dividends out of gross income (i.e. payment of fees and expenses out of capital) (Classes 6 and 8) or payment of interest rate differentials arising from unit class currency hedging as dividends (Class 8) amounts to a return or withdrawal of part of an investor s original investment or from any capital gains attributable to that original investment. Whilst all dividends paid result in an immediate reduction of the net asset value per unit, these unit classes may pay larger dividends (i.e. by paying dividends out of capital, gross income or interest rate differentials arising from unit class currency hedging gains (if any)), which may therefore result in a larger reduction in the net asset value per unit. Payment of Dividends From Interest Rate Differentials For Class 8, any dividends payable may include interest rate differentials arising from unit class currency hedging gains/losses which may increase/decrease dividends paid. Unitholders of the relevant class will forego capital gains as any currency hedging gains are distributed rather than added to capital. Conversely, currency hedging losses may decrease the dividends paid, and in extreme cases may deduct from capital. This may reduce the net asset value per unit. 6

7 How has the Fund performed? Historic performance to 31 December % 8% 6% 4% 2% 0% Fund 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 re-invested. These figures show by how much the Class A2 USD 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. Fund launch date: 10 August 2015 Class A2 USD launch date: 10 August 2015 The Manager views Class A2 USD, being the focus unit class of the fund available to the public of Hong Kong, as the most appropriate representative unit class. Is there any guarantee? The Fund does not have any guarantees. You may not get back the full amount of money you invest. 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 units of the Fund. Fee What you pay Subscription Fee Class A Units: Up to 3% of the issue price (Initial Charge) Switching Fee Nil^ (Conversion Charge) Redemption Fee Nil^ (Redemption Charge) ^ A 2% charge on conversions/redemptions may be levied for excessive conversion or excessive trading by a unitholder. 7

8 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. Fee Annual Rate (as a % of the Fund s Net Asset Value) Management Fee Class A Units: Up to 2%, currently 1.00%* Administration Fee Class A Units: Up to 0.25% Distribution Fee Class A Units: Nil Trustee Fee and Included in the Administration Fee Custodian Fee Performance Fee Not applicable * May be increased to the permitted maximum level in the Prospectus by giving 1 month s prior notice. For investments in the units/shares of other collective investment schemes that are managed, directly or by delegation, by the Manager itself or by any other connected persons, no management, subscription or redemption fees may be charged to the Fund on its investment in the units/shares of such other collective investment schemes. Other fees You may have to pay other fees when dealing in the units of the Fund. Please refer to the Prospectus for detail. Additional Information You generally buy and redeem units at the Fund s next-determined net asset value after the Trustee receives your request in good order on or before the 4.00 p.m. dealing cut-off (Hong Kong time) on the relevant dealing day. Orders placed through intermediaries may be subject to different procedures and cut-off times. The net asset value per unit of the Fund is calculated and is available on the Manager s website at on each business day. Please refer to the Manager s website at for performance information regarding other classes. Investors may also obtain information on the Fund from the Manager s website at Investors should note that the Manager s website has not been reviewed by the SFC. In respect of the distributing unit classes, the composition of the dividends distributed/declared (i.e. the relative amounts paid from net distributable income and capital) for the last 12 months are available from the Manager on request and on The Prospectus and this statement will be updated to include the classes of units currently available for subscription from time to time. 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. 8