The Sub-Fund’s sole objective is to invest in short-term deposits and high quality money market instruments. The Sub-Fund seeks to achieve a return in US Dollars in line with prevailing money market rates, with primary considerations of both capital security and liquidity. There can be no assurance that the Sub-Fund will achieve its investment objective.
Indicative asset allocation
The indicative asset allocation of the Sub-Fund is as follows:
70% - 100% of the net asset value of the Sub-Fund (“NAV”)
US Dollars-denominated and settled short-term deposits and high quality money market instruments
0 – 30% of the NAV
Non-US Dollars-denominated and settled short-term deposits and high quality money market instruments
The Sub-Fund seeks to achieve its investment objective by investing primarily (i.e. not less than 70% of its NAV) in US Dollars-denominated and settled short-term deposits and high quality money market instruments issued by governments, quasi-governments, international organisations, financial institutions. The Sub-Fund may invest up to 30% of its NAV in non USD-denominated deposits and high quality money market instruments. High quality money market instruments include debt securities, commercial papers, certificates of deposits and commercial bills. Debt securities invested by the Sub-Fund include but are not limited to government bonds, fixed and floating rate bonds. The Sub-Fund will only invest in debt securities rated investment grade or above by an independent rating agency, e.g. Fitch, Moody’s, Standard and Poor’s, or onshore China bonds with a minimum credit rating of BBB- as rated by one of the credit rating agencies in China. A short-term debt security is considered investment grade if its credit rating is A-3 or higher by Standard & Poor’s or F3 or higher by Fitch Ratings or P-3 or higher by Moody’s or equivalent rating as rated by one of the international credit rating agencies, or onshore China bonds with a minimum credit rating of AA+ as rated by one of the credit rating agencies in China.
There is no specific geographical allocation of the country of issue of the high quality money market instruments or deposits, except that the Sub-Fund may not invest more than 20% of its Net Asset Value in emerging markets (including in onshore China markets). Countries or regions in which the Sub-Fund may invest in include Hong Kong, Singapore, the European Union and the United States and China (onshore and offshore markets). The Sub-Fund may invest in onshore China debt securities via the mutual bond market access between Hong Kong and Mainland China (“Bond Connect”).
The aggregate value of the Sub-Fund’s holding of instruments and deposits issued by a single entity will not exceed 10% of the total NAV of the Sub-Fund except: (i) where the entity is a substantial financial institution and the total amount does not exceed 10% of the entity’s share capital and non-distributable capital reserves, the limit may be increased to 25%; or (ii) in the case of Government and other Public Securities (as defined in the Explanatory Memorandum), up to 30% may be invested in the same issue; or (iii) in respect of any deposit of less than USD1,000,000, where the Sub-Fund cannot otherwise diversify as a result of its size. Not more than 10% of the Sub-Fund’s NAV will be invested in securities issued or guaranteed by a single sovereign issuer (including its government, a public or local authority) with a credit rating below investment grade or is unrated.
The Sub-Fund will maintain a portfolio with weighted average maturity not exceeding 60 days and a weighted average life not exceeding 120 days and must not purchase an instrument with a remaining maturity of more than 397 days, or two years in the case of Government and other Public Securities.
The Sub-Fund may enter into sale and repurchase transactions for up to 10% of its NAV but only on a temporary basis for the purpose of meeting redemption requests or defraying operating expenses. The Sub-Fund will not write any options. Other than sale and repurchase transactions, the Sub-Fund will enter into other financial derivative instruments (“FDIs”) for hedging purposes only.
For the purpose of the Sub-Fund, sale and repurchase transactions are transactions where the Sub-Fund sells securities such as bonds for cash and simultaneously agrees to repurchase the securities from the counterparty at a pre-determined future date for a pre-determined price. A sale and repurchase transaction is economically similar to secured borrowing, with the counterparty of the Sub-Fund receiving securities as collateral for the cash that it lends to the Sub-Fund.
For sale and repurchase transactions, the Manager will seek to appoint independent counterparties approved by the Manager with credit rating of BBB- or above (by Moody's or Standard & Poor's, or any other equivalent ratings by recognised credit rating agencies) or which are SFC-licensed corporations or are registered institutions with the Hong Kong Monetary Authority. Any incremental income generated will be credited to the account of the Sub-Fund after deducting any fees charged by parties operating such transactions.
It is the intention of the Manager to sell the securities for cash equal to the market value of the securities provided to the counterparty. Cash obtained in sale and repurchase transactions will be used for meeting redemption requests or defraying operating expenses, but will not be re-invested.
The Sub-Fund currently has no intention to invest in structured deposits, structured products or over-the-counter securities, or to take any short positions, and the Manager will not enter into any securities lending, reverse repurchase or other similar over-the-counter transactions in respect of the Sub-Fund. The Sub-Fund will not invest in collateralised and/or securitised securities (including asset backed commercial papers and mortgage backed securities). If any of this changes in the future, prior approval of the SFC will be sought (if required) and not less than one month’s notice will be provided to Unitholders before the Sub-Fund enters into any such transaction.
Use of derivatives / investment in derivatives
The Sub-Fund’s net derivative exposure may be up to 50% of the Sub-Fund’s NAV.
Class A (Acc) USD
Class A (Acc) RMB
Class A (Acc) Hedged RMB
Class A (Acc) HKD
Class A (Dis) USD
Class A (Dis) RMB
Class A (Dis) Hedged RMB
Class A (Dis) HKD
Class B (Acc) USD
Class B (Acc) RMB
Class B (Acc) Hedged RMB
Class B (Acc) HKD
Class B (Dis) USD
Class B (Dis) RMB
Class B (Dis) Hedged RMB
Class B (Dis) HKD
Class I (Acc) USD
Class I (Acc) RMB
Class I (Acc) Hedged RMB
Class I (Acc) HKD
Class I (Dis) USD
Class I (Dis) RMB
Class I (Dis) Hedged RMB
Class I (Dis) HKD
Class A (Acc) Hedged HKD
Class A (Dis) Hedged HKD
Class B (Acc) Hedged HKD
Class B (Dis) Hedged HKD
Class I (Acc) Hedged HKD
Class I (Dis) Hedged HKD
Class C (Acc) USD
Class C (Dis) USD
Class C (Acc) HKD
Class C (Dis) HKD
Management Fee (p.a.)
* (% Net Asset Value of the Sub-Fund per annum)
*Please note that these fees may be increased up to a permitted maximum on giving 1 month’s notice to unitholders. Please refer to the section of the prospectus entitled “Fees and Expenses” for further details of the fees and charges payable.
Copyright? 2012 - 2023. E Fund Management (Hong Kong) Co., Limited.
E Fund Management (Hong Kong) Co., Limited is the issuer of this report. This report is neither an offer nor solicitation to purchase units of the fund; applications for units may only be made on forms of application available with the Explanatory Memorandum. Investments are subject to investment risks, fund value may go up as well as down and past performance is not indicative of future performance. Investors should read carefully the Explanatory Memorandum (including the section “Risk Factors”) for the relevant risks associated with the investment in the fund before investing. Distribution of this report may be restricted in certain jurisdictions. This report does not constitute the distribution of any information or the making of any offer or solicitation by anyone in any jurisdiction in which such distribution or offer is not authorized or to any person to whom it is unlawful to distribute such a report or make such an offer or solicitation. This report is exempted from pre-vetting and authorization by the Securities and Futures Commission of Hong Kong and has not been reviewed by the Securities and Futures Commission of Hong Kong. SFC authorization is not a recommendation or endorsement of a scheme nor does it guarantee the commercial merits of a scheme or its performance. It does not mean the scheme is suitable for all investors nor is it an endorsement of its suitability for any particular investor or class of investors.