General Information / Learn More About Mutual Funds

(1) What is fund?Funds, which includes mutual funds and unit trusts, gather money from many investors to make investments.Depending on the type of fund you invest in, your money is pooled with other investors into different types of underlying assets, such as stocks, bonds and similar assets. A fund manager chooses the investments and each investor owns a proportion of the total fund, according to how much money is put in.This information is extracted from the website of Investor and Financial Education Council ("IFEC") and the Chin Family platform. For details, please visit: What are fund documents?Before investing on the funds, please ensure you have read and understood the fund documents, which covers investment objectives, restrictions, characteristics, risk disclosure, dealing procedures, information about the fund’s income and expenses, performance history, etc.You should rely on fund documents, rather than advertisements and other marketing materials, for all the information you need to make an informed investment decision. Fund documents, including Prospectus, Factsheet, Product Key Facts Statement, Annual Report, Semi Annual Report will be made available to you before making any investment through our Wealth Management Services. You should read all the fund documents before investing.You may check the updated fund documents of your fund holdings by clicking your existing goals and tapping on “My Current Wealth” > specific fund (for GoWealth Digital Wealth Advisory services) or by clicking your existing fund holdings > “fund detail” (for Featured Funds services), where a list of following fund documents are listed for your reference: Prospectus, Factsheet, Product Key Facts, Annual Report, Semi Annual Report.For details, please visit the website of Investor and Financial Education Council ("IFEC") and the Chin Family platform: What are the key benefits of investing in funds?Investing in funds can offer you a simple and effective way to invest and build wealth over time. Such key benefits include:
  • Professional Management:
    • Funds are managed by professional fund managers, who can help identify the best investment opportunities and invest in them, and manage risk according to the fund’s investment objective. Fund managers are experienced in investment management with great access to first-hand macro and micro information which helps them make informed investment decisions.
  • Access to Investment Opportunities Worldwide:
    • Due to high transaction cost, lack of time, information, and market access, individual investors may find it difficult to benefit from investment opportunities outside of Hong Kong. With one simple investment, an investor can access these overseas investment opportunities through funds.
  • Risk Diversification:
    • With investors pool their assets, it is easier for a fund to diversify its holdings. Through spreading investments across different assets with different characteristics, it helps mitigate some of the risks where the gain of one investment can be used to offset any loss in another due to unforeseen factors.
  • High Liquidity and Simple Maintenance:
    • Funds available in our Wealth Management Services are traded and can be bought and sold daily except on non-dealing days of the funds or public holidays. And many fund managers can offer daily price quotation which can make it easier for you to track your investments.
Investment in funds involves risks. For details of the risks, please refer to the relevant FAQ for details.(4) What are the main types of funds?The main types of funds can be differentiated by their asset classes, which include:
  • Money market funds: It mainly refers to a fund that invests in short-term money market instruments (usually less than one year), e.g. government securities, term papers, bank deposits; and other assets denominated in different currencies.
  • Fixed income / bond funds: It mainly refers to a fund that invests predominantly in bonds and other fixed income securities which can be issued by governments, municipal states, corporations, or other issuers.
  • Equity funds: It refers to a fund that primarily invests in equities. The type of equities invested can range from domestic to international; and from blue-chips to small companies shares.
  • Balanced funds: It refers to a fund that invest in a variety of asset classes, including but not limited to, equity, fixed income, and money market instruments, which aims to meet a range of investment objectives.
  • Use of derivatives: Under certain conditions, funds may use options and futures on securities, indices and interest rates for different purposes (e.g. investment, hedging and/or efficient portfolio management).
Based on different types of funds, there will be different risks involved and you shall refer to the fund documents by clicking on a fund, and also refer to relevant risk disclosure document for details.(5) What are different share classes?A fund can offer different share classes, which carry different rights and obligations, to cater to the varying needs of investors. Share classes can be differentiated by their distribution policy, reference currency, hedging activity and other relevant criteria:
  • Distribution Policy:
    • Capital accumulation: The distribution is reinvested into the fund;
    • Distribution: Investors receive a distribution from their investment according to the distribution frequency (e.g. quarterly, monthly, etc.). Depending on the fund’s distribution policy the distribution may be in cash or in fund unit.
  • Reference currency: Fund may have different share classes in a reference currency that is different from the base currency, which is the currency in which the fund is denominated. Reference currency denotes the currency in which the Net Asset Value per share of the share class is calculated.
  • Hedging activity: For share classes in a reference currency that is different from the fund’s base currency, currency-hedged share classes will offer currencies hedging which helps to reduce fluctuations in the exchanging rate between the reference currency and base currency.
(6) How is NAV of a fund calculated?NAV stands for Net Asset Value of a mutual fund. This is the price of one unit of a mutual fund. It is determined by “total assets minus total liabilities” divided by the number of units issued.NAV of a fund is usually calculated daily or monthly, depending on the type of assets in which the fund invests in. The NAV will fluctuate in line with the underlying assets that the fund invests in.(7) Are funds easy to monitor?By investing in funds, professional fund managers will help you to monitor their performance. If you would like to check out the latest performance of your investment holding(s), you can:
  • For GoWealth Digital Wealth Advisory services: Access the "GoWealth" > “Digital Wealth Advisory” tab and click on your existing goal, then tap the "Current Wealth" tab for more details
  • For Featured Funds services: Access the "GoWealth" > “Featured Funds” > click on your existing fund for more details.
(8) What are the key risks of investing in funds?Generally speaking, risks involved in investing in funds include, but shall not be limited to,• General Investments Risks
• Risks of Underlying Assets
• Concentration Risk
• Leverage Risk
• Derivatives Products Risk
• Complex Products Risk
• Risk with Payment of Dividends out of Capital
• Emerging Market Risk
• Risk specific to Equity Fund
• Risks specific to Bond Fund
• Risks specific to Money Market Fund
For details and fund-specific risks, you can refer to the fund documents by clicking on a fund, and also refer to our Wealth Management Services Terms and Risk Disclosures.
(9) What are the fees and expenses involved in fund investment?Fund investment usually incurs the following two types of charges:
  • Transaction fees, which are payable by investor upon fund transaction. Examples include:
(i) Subscription fee;(ii) Redemption fee (if any)
  • Ongoing charges, which are deducted by fund manager from the fund’s asset directly and reflected in the fund price. Examples include:
(i) annual management fee;(ii) performance fee (if any)You may visit the website of Investor and Financial Education Council ("IFEC") and the Chin Family platform for more details: At this moment, when you use the Wealth Management Services provided by us, the following fees and charges will incur:(i) Subscription Fees (for GoWealth Digital Wealth Advisory Services) and/or Fund Platform Fees (for Featured Funds Services) charged by the Bank, please refer to the General Service Charges for details;(ii) Annual management fees received by the fund managers.You may refer to Wealth Management Services Terms and General Services Charges for more details. And you may also refer to the relevant fund documents (e.g. Prospectus, Factsheet, Product Key Facts) for details of the fees and charges of each fund.(10) How can I learn more about funds?You can visit the website of Investor and Financial Education Council ("IFEC") and The Chin Family platform to learn more about Funds at < >.

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