Investment Fund Service

An investment fund is a type of collective investment scheme under which professional fund managers pool money from individual investors and manage it according to pre-set investment objectives. Investors can choose from an array of funds which invest in different asset classes and countries/regions to suit their investment objectives and levels of risk tolerance.

Access to global investment opportunities: Investment funds present you the opportunity to invest in a wide range of countries or sectors that suit your investment objectives.

Risk diversification: The nature of investment funds allows you to simultaneously invest in multiple securities or other financial products and enjoy the benefits of diversification.

Professional management: Investment funds are managed by professional fund managers who have deep understanding of the market and the access to latest research.
 
Affordable investment amount: Low investment amount enables you to achieve your investment goals at ease.

Note:

1. For details, please contact our Branch Staff at the Investment Services Section.
2. The information above is for your reference only, it does not constitute an offer of, or an invitation by or on behalf of BCM Bank to subscribe for or purchase any Investment funds or to enter into any transaction by any person, or a recommendation by BCM Bank to invest in any investment funds or enter into any transaction.
3. If there is any discrepancy between the English and Chinese version, the Chinese version shall prevail.

The key risks associated with an investment in an investment fund are set out below. However, given the diverse range of investment funds offered in the market, the risk factors set out below are generic in nature and do not purport to disclose or discuss all of the risks associated with an investment in the particular fund for which you are subscribing. You should read the other risk factors set out in the offering document(s) for the relevant fund in order to understand the specific risks relating to the fund for which you are subscribing. If you are in doubt about the nature of or the risks associated with this investment product, you should obtain any necessary and appropriate professional advice before investing in this product.

Not Equivalent to Time Deposit – Investment funds are investment products and involve risks. It is not the same as nor should it be regarded as a substitute for traditional fixed deposit. Payment of dividends is not guaranteed.

Past Performance is No Guide to Future Performance – You should note that the price of the fund and any income or dividends generated from it may fall as well as rise and that you may not get back the full amount invested. Past performance is not a guide to future performance. The value of your investment may be substantially less than your original investment amount. In the worst case scenario, your investment could be worth nothing.

Currency Risk – You will be subject to currency risks where the currency of the fund differs from your home currency, or where the currency of the fund differs from the currencies of the markets in which the fund invests.

No Guarantee on Achieving Investment Objective – There is no guarantee that the investment objectives of the fund will be achieved.

Capital Growth Risk –The fund may have fees and/ or dividends paid out of capital, which may in turn reduce the capital available for investment in the future and capital growth.

A High Distribution Yield Does Not Imply a Positive or High Return on the Total Investment – The fund may reinvest its dividends rather than distributing the same to you.  Moreover, the investment fund manager may have discretion on whether or not to make any distribution out of the income and/ or capital of the fund. You should note that investment in a fund with a high distribution yield does not imply a positive or high return on the total investment.

Investment Subject to Various Types of Risks – You will be subject to the social, political, tax, economic, foreign exchange, liquidity, legal and regulatory risks associated with the markets in which the fund invests and also be subject to risks associated with, including but not limited to, investing in derivative instruments, fluctuations of interest rate/exchange rate and creditability of issuers of instruments the fund investing in, which may adversely affect the fund’s performance.

For equity funds only – If the fund is an equity fund and it invests in emerging markets, a single market or sector or a limited number of geographical markets, sectors or smaller cap companies, the fund will be subject to higher degree of risk and are usually more sensitive to price movements.

For bond funds only – If the fund is a bond fund, its net asset value may decline or be negatively affected if there is a default of any of the bonds that it invests in or if interest rates change. If the fund invests in high-yield bonds, apart from the risks mentioned above, it will also be subject to higher credit risk since high-yield bonds are typically rated below investment grade or are unrated and thus, funds, which invest in high-yield bonds, are often subject to a higher risk of issuer default. Funds investing in high-yield bonds will also be more vulnerable to economic cycles; during economic downturns, high-yield bonds will typically fall more in value than investment grade bonds due to factors such as (i) investors become more risk averse and (ii) default risk rises. In addition, if the bond fund invests in the following types of debt securities, the fund will be subject to a higher degree of risk. These include: non-investment grade (or rated as ‘investment grade’ by a local credit rating agency whose rating process and standards may be significantly different from those adopted by internationally recognized credit rating agencies), unrated, emerging market, distressed, perpetual, subordinated, callable, extendable, convertible or exchangeable debt securities; defaulted debt securities; mortgage and asset-backed securities; debt securities with variable and/ or deferral of interest payment terms; debt securities with contingent write down or loss absorption feature; specialized debt securities; sovereign securities; and debt securities in a single market or sector or specific geographical markets or sectors.

For balanced funds only – If the fund is a balanced fund and invests in both bonds and equities, it will be exposed to risks of both bond fund and equity fund as described above.

For funds investing directly in China’s domestic securities markets through the Renminbi Qualified Foreign Institutional Investor (“RQFII”) regime only – The RQFII policy and rules are subject to change.  The uncertainty and change of the laws and regulations in the PRC may adversely impact the fund and such changes may also have potential retrospective effect. There is no assurance that repatriation restrictions will not be imposed in the future. Any restrictions on repatriation of the invested capital and net profits may adversely affect the fund’s ability to meet your redemption requests. In the event of PRC broker/sub-custodian’s default in the execution/settlement of fund’s related transactions, the fund may encounter delays in recovering its assets which may in turn impact its asset value. The current PRC tax laws and regulations in respect of capital gains realised by RQFIIs on its investments in PRC are subject to change and may adversely affect the fund’s asset value. The concentration of fund’s investments in PRC related companies may result in greater volatility than portfolios which comprise broad-based global investments.

For RMB denominated funds only – RMB is currently not freely convertible and subject to exchange controls and restrictions. If you are an individual who needs to conduct RMB currency exchange, you are subject to a daily conversion limit (“Limit”) and should allow time for such conversion for amount exceeding the Limit.

Suitability – The investment decision is yours but you should not invest in the Investment Funds unless the intermediary who sells it to you has explained to you that the product is suitable for you having regard to your financial situation, investment experience and investment objectives.