Dollar cost averaging is a technique designed to reduce market risk through regular investments at predetermined intervals and set amounts over time. By buying a fixed dollar amount of a particular investment on a regular schedule, regardless of the share price, investors can purchase more shares when prices are low and fewer shares when prices are high. Consequently, the impact of short-term market fluctuations on an investment can be mitigated and the costs of units purchased are averaged out.This chart shows that if you invest HKD2,000 per month for 10 years, you buy more units when the price is low and fewer units when the price is high.Hypothetical ExampleAccording to the table, at the end of the period, the value of the total number of units bought is HKD520,965. This represents an annual rate of return of 8%, which amounts to returns almost 48% higher over the full 10 years when compared with a lump sum investment at the start of the period.
The above information used is for illustrative purposes only and are not indicative of any fund performance and the actual returns likely to be achieved by the investor.Source: Allianz Global InvestorsImportant NoticeThis document is for general information only. The information or opinion herein is not to be construed as professional investment advice or any offer, solicitation, recommendation, comment or any guarantee to the purchase or sale of any investment products or services. This document is for general evaluation only. It does not take into account the specific investment objectives, financial situation or particular needs of any particular person or class of persons and it has not been prepared for any particular person or class of persons.The information or opinion presented has been developed internally and/or taken from sources (including but not limited to information providers and fund houses) believed to be reliable by WeLab Bank, but WeLab Bank makes no warranties or representation as to the accuracy, correctness, reliabilities or otherwise with respect to such information or opinion, and assume no responsibility for any omissions or errors in the content of this document. WeLab Bank does not take responsibility for nor does WeLab Bank endorse the information or opinion provided by any information provider or fund house.Past performance is not indicative of future results. WeLab Bank makes no representation or warranty regarding future performance. Any forecast contained herein as to likely future movements in interest rates, foreign exchange rates or market prices or likely future events or occurrences constitutes an opinion only and is not indicative of actual future movements in interest rates, foreign exchange rates or market prices or actual future events or occurrences (as the case may be).You should not make any investment decision purely based on this document. Before making any investment decisions, you should consider your own financial situation, investment objectives and experiences, risk acceptance and ability to understand the nature and risks of the relevant product(s). WeLab Bank accepts no liability for any direct, special, indirect, consequential, incidental damages or other loss or damages of any kind arising from any use of or reliance on the information or opinion herein. You should seek advice from independent financial adviser if needed.WeLab Bank is an authorised institution under Part IV of the Banking Ordinance and a registered institution under the Securities and Futures Ordinance (CE Number: BOJ558) to conduct Type 1 (dealing in securities) and Type 4 (advising on securities) regulated activities.Allianz GI is a leading active asset manager. For details, please visit: https://hk.allianzgi.com/ .This document is issued by WeLab Bank. The contents of this document have not been reviewed by the Securities and Futures Commission in Hong Kong.