Investment Fund Services

Prospective investors are advised to carefully read the following key risks associated with an investment fund. These risks are not, and are not intended to be, a complete list of all risks and considerations relevant to an investment fund or your decision to subscribe to an investment fund.

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, warning statements and selling restrictions 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.

Important Notice:
The investment decision is yours but you should not invest in the relevant 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.

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 and conversion 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. You will also be subject to multiple currency conversion costs if the currency of the fund differs from the currencies of the underlying investments of the fund. Changes in foreign currency exchange rates may adversely affect the value of the fund's investments and the income thereon. For currency subject to exchange controls and restrictions imposed by the relevant government, such as renminbi (RMB), the exchange rate may be easily affected by change in government policies. Exchange rates of RMB are quoted in different markets; the onshore rate is being referred as "CNY" and the offshore rate (i.e. when traded in Hong Kong) is being referred as "CNH". When calculating the value of the RMB class fund or the RMB denominated assets, CNH will be used. Although CNY and CNH represent the same currency, they do not necessarily have the same exchange rate and may not move in the same direction.

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 concentration (including concentrated sector(s) and concentrated geographical location(s)), market, swap agreements risk, country, social, political, policy, tax, economic, foreign exchange, (including currency hedging and currency hedged classes), liquidity, foreign investments restrictions, custody and settlement, management, operation, evaluation (with no standardized taxonomy), 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, early termination, investing in other collective investment schemes / exchange-traded products (such as exchange-traded funds), investing in cash or cash equivalent instruments, investing in income-producing securities, investing in derivative instruments (whether for hedging purpose or otherwise), investing in China A-share Access Products, investing in trust (such as REITs and Australian trusts), investing in preferred securities, investing in total return swaps, investing in contracts for differences, misalignment of the investment theme, limited pool of investments, fluctuations of interest rate / exchange rate and creditability of custodian / trustee / issuers of instruments the fund investing in / counterparties of contracts the fund entering into, which may adversely affect the fund's performance. If the fund invests in derivatives, counterparty risk, leverage risk, liquidity risk, directional risk, short selling risk, basis risk, cash flow risk and other additional risks may be involved, and the fund may be subject to higher volatility. If the fund invests in alternative asset classes including hedge fund strategies, private equity or real estate sectors, the fund will involve special and higher risks. These include higher volatility and liquidity risks. If the fund invests in commodity markets, the fund generally involves higher risks than funds invested in other markets. It is a feature of commodities generally that they are subject to rapid change and the risks involved may change relatively quickly. You may also be subject to other risks associated with the fund, such as greater transaction cost associated with periodic rebalancing / dynamic asset allocation, portfolio turnover risk, performance fee risk, risks associated with implementing active currency position, risks associated with investment strategies / style (such as sustainable and responsible investment (SRI) strategy, investments related to environmental, social and governance ("ESG") and sustainable development goals ("SDG")) or models, leverage risks associated with borrowing, margin facilities or financing, repurchase transactions, reverse purchase transactions, securities lending other similar transaction or otherwise. The fund may use subsidiaries to hold assets, which may pose additional risk (e.g. of misappropriation or misallocation of such assets) to you. Moreover, you will be subject to the U.S. Foreign Account Tax Compliance Act and other applicable foreign tax legislations related risks. Certain investment funds are subject to excessive and short-term trading policies and fund managers may take appropriate action to curtail the activity, which may include applying blocks to accounts to prohibit future purchases and exchanges of the funds. Since transactions costs may be charged for any subscription, switching and / or redemption of investment fund, you may incur disproportionately high transaction costs by engaging in excessive and short-term trading. You may also be subject to the risk of limited subscription under circumstances designated by the fund manager including adverse market condition. In such case, the initial offer period may be extended or the launch of the fund may not proceed.

For equity funds only – If the fund is an equity fund and it invests in emerging / frontier / growth enterprise markets, a single market or sector or a limited number of geographical markets, sectors or smaller cap companies (which generally have lower liquidity), the fund will be subject to higher degree of risk (such as market risk, volatility risk, regulatory risk, company-specific risk and risk associated with small-capitalisation / mid-capitalisation companies) and are usually more sensitive to price movements. If the fund invests in the ChiNext market of the Shenzhen Stock Exchange and / or the Science and Technology Innovation Board ("STAR Board") of the Shanghai Stock Exchange and/or innovative small and medium-sized companies of the Beijing Stock Exchange, the fund will be subject to higher degree of risk (such as higher fluctuation on stock prices and liquidity risk, over-valuation risk, differences in regulation (applicable to ChiNext market and STAR Board only), delisting risk and concentration risk (applicable to STAR Board)). Investments in the ChiNext market, STAR Board and/or innovative small and medium-sized companies of the Beijing Stock Exchange may result in significant losses for the fund and you. In addition, there are risks associated with investments in ordinary and preference shares, depositary receipts (such as American Depositary Receipts ("ADRs")), master-limited partnerships, business development companies, property related companies, innovation companies (such as disruptive innovation / financial innovation / technology innovation) and / or stapled securities. Should the equity fund involve investment in bond(s), you will also be subject to the risks related to the bond fund.

For bond funds only – If the fund is a bond fund, you will be subject to volatility and liquidity risks, counterparty risk, interest rate risk (such as floating / fixed rate or basis mismatch, timing mismatch and modified rates), downgrading risk, credit rating agency risk, prepayment risk, reinvestment risk, credit ratings risk, limited duration risk, risk associated with urban investment bonds, risk associated with sovereign / government / supranational securities, risk associated with inflation protected securities, risk associated with mortgage-related and / or asset-backed securities, risk associated with Dim Sum bond market, risk associated with money market instruments, risk associated with senior secured debt instruments, risk associated with debt securities which are rated BB+ or below by a Mainland credit rating agency or unrated, unlisted debt securities risk, risk associated with the debt securities issued by special purpose vehicles and valuation risk. The fund may invest in stressed and distressed loans and bonds, structured credit products (such as credit linked notes) and securitized assets, mezzanine loans, unitranche debt and leveraged loans, which in general are subject to higher risks. The fund may also invest in loans (for example, by direct assignment, purchasing participations or sub-participations), which may incur higher risks as a result of the absence of a contractual relationship with the underlying borrower, resulting in the inability to have any control over the terms of the underlying loan agreement or to enforce any rights against the underlying borrower (including but not limited to the right to benefit from the collateral of the related loan). In particular, the net asset value of a bond fund 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 / frontier market, distressed, perpetual, subordinated, callable, extendable, convertible / contingent convertible or exchangeable debt securities; defaulted debt securities; collateralised and / or securitised products (such as mortgage and asset-backed securities); urban investment bonds issued by local government financing vehicles; debt securities which are rated BB+ or below by a Mainland credit rating agency or unrated; RMB interest-bearing securities; unlisted debt 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 and debt securities in a single market or sector or specific geographical markets or sectors. You are reminded that credit-ratings given by Mainland rating agencies may not be directly comparable with those given by other international rating agencies, and the downgrading of credit rating of a debt instrument or its issuer has significant adverse effect on the value of the fund. You will be exposed to risks associated with settlement procedures and default of counterparties if the fund is investing in China through China's Interbank Bond Market ("CIBM"). The counterparty which has entered into a transaction with the fund may default in its obligation to settle the transaction by delivery of the relevant security or by payment for value. The relevant rules and regulations on investment in the CIBM are subject to change which may have potential retrospective effect. In the event that the relevant PRC authorities suspend trading on the CIBM, the fund's ability to invest in the CIBM will be limited and the fund may suffer substantial losses as a result. There are risks and uncertainties associated with the current PRC tax laws, regulation and practice in respect of capital gain realized through the CIBM. Lastly, should the bond fund involve investment in equity(ies), you will also be subject to the risks related to the equity fund.

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 derivative funds or other types of funds which are deemed to be complex products only (Not applicable under the Southbound Scheme of Wealth Management Connect) – You should be aware that the fund you are investing is a complex product, it involves high risks and you should exercise caution in relation to the fund. Although the fund has been authorised by the Securities and Futures Commission (the "SFC") in Hong Kong under Section 104 of the Securities and Futures Ordinance of Hong Kong, you should note that SFC authorisation does not imply official recommendation nor is it a recommendation or endorsement of the fund nor does it guarantee the commercial merits of the fund or its performance. It does not mean the fund is suitable for all investors nor is it an endorsement of its suitability for any particular investor or class of investors

For funds investing directly in China's domestic securities markets through the Qualified Foreign Investor ("QFI") regime only – The QFI 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 QFI 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 funds investing in certain eligible stocks listed on Shanghai Stock Exchange ("SSE Stocks") through the Shanghai-Hong Kong Stock Connect ("Shanghai Connect") and / or Shenzhen Stock Exchange ("SZSE Stocks") through the Shenzhen-Hong Kong Stock Connect ("Shenzhen Connect") – Shanghai Connect and Shenzhen Connect are programmes that link the stock markets in Shanghai / Shenzhen and Hong Kong. The regulations and rules of the programmes are subject to change and there is uncertainty on how they will be applied. The programmes are also subject to quota limitations and thus, the fund may not be able to timely invest in SSE Stocks / SZSE Stocks through the programmes. The fund's ability to access the SSE Stocks / SZSE Stocks market(s) to pursue its investment strategy will be adversely affected if the trading through the programme(s) is / are suspended. Since the relevant information technology systems on the part of the stock exchanges and exchange participants were newly developed, it may be subject to operational risk. System malfunctions may lead to trading suspension. Trading in securities through the programmes may also be subject to clearing and settlement risk. If the PRC clearing house defaults on its obligation to deliver securities or to make payment, the fund may experience delays in recovering its losses or may not be able to fully recover its losses. In addition, PRC regulations impose some restrictions on selling which may restrict the fund's ability to dispose its holdings of SSE Stocks / SZSE Stocks in a timely manner. The scopes of eligible stocks for trading via the programmes are also subject to change and any eligible stock may be recalled from the scope in the future. And this may have impact on the fund's strategies or investment portfolio. In respect of the SSE Stocks / SZSE Stocks, the fund may be unable to take part in some corporate actions in a timely manner and to appoint proxies to attend or participate in shareholders' meetings. And in respect of SSE Stocks and SZSE Stocks, the fund may also invest in the STAR Board via the Shanghai Connect and / or the ChiNext Board of the Shenzhen Stock Exchange via the Shenzhen Connect respectively, which may result in significant losses for the fund and you. Finally, the fund's investments through Shanghai Connect and / or Shenzhen Connect will not be covered by the Hong Kong's Investor Compensation Fund.

For Recognised Mainland Funds under the Mainland-Hong Kong Mutual Recognition of Funds ("MRF") scheme only – The MRF scheme is subject to an overall quota restriction. Subscription of units in the fund may be suspended at any time if such quota is used up. If the fund ceases to meet any of the eligibility requirements under the MRF, new subscriptions for fund may not be allowed. In the worst scenario, the SFC may even withdraw its authorisation for the fund to be publicly offered in Hong Kong for breach of eligibility requirements. There is no assurance that the fund can satisfy these requirements on a continuous basis. Currently, certain tax concessions and exemptions are available to the fund and / or you in Hong Kong under the MRF regime. There is no assurance that such concessions and exemptions or Mainland tax laws and regulations will not change. Any change to the existing concessions and exemptions as well as the relevant laws and regulations may adversely affect the fund and / or you and the fund and / or you may suffer substantial losses as a result. Market practices in the Mainland and Hong Kong may be different. In addition, operational arrangements of the fund and other public funds offered in Hong Kong may be different in certain ways. You should ensure that you understand these differences and their implications.

Suitability (Not applicable to transactions of the Southbound Scheme of Wealth Management Connect conducted under "execution-only" basis) – 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.

Leverage Risk (Not applicable under the Southbound Scheme of Wealth Management Connect) – Borrowing capital to fund the purchase of investment fund can significantly increase the risks of the investment. In the event that the relevant investment fund is purchased on a leverage basis, you should note that the risk of loss can be substantial. You may sustain a total loss of the principal amount and any additional amounts that you used to establish or maintain the relevant leveraged investment fund. If the market value of the relevant investment fund drops substantially, you may be called upon to deposit a substantial amount of additional funds on short notice, in order to maintain the relevant leveraged investment fund. If you do not provide the required funds within the prescribed time, your position may be liquidated at a loss, and you will be liable for the resulting deficit. Under certain market conditions, it may be difficult or impossible to liquidate such a position. In these circumstances, your total loss may not be limited to the principal amount and additional amounts you used to establish and maintain the relevant leveraged investment fund alone. The high degree of leverage can work for you as well as against you. The use of leverage can lead to large losses as well as gains. If you consider borrowing capital to leverage your investment in the investment fund, you should obtain further detailed information as to the applicable risks from the lender.

Compounding of Risk – An investment in the investment fund involves risks and should only be made after assessing the direction, timing and magnitude of potential future changes in the market value of the investment fund, the risks associated with such investments and the terms and conditions of the investment fund. More than one risk factor may have simultaneous effects with regard to the investment fund such that the effect of a particular risk factor may not be predictable. In addition, more than one risk factor may have a compounding effect, which may not be predictable. No assurance can be given as to the effect that any combination of risk factors may have on the value of the investment fund.

Investment Fund is an investment product. Some investment funds are structured products involving derivatives. The investment decision is yours but you should not invest in this product unless Dah Sing Bank ("the Bank") has explained to you that this product is suitable for you having regard to your financial situation, investment experience and investment objectives.

Note:

1. For details, please contact our staff at the Investment Services Section.
2. Unless the context requires otherwise, this context does not constitute any offer, invitation or recommendation to any person to enter into any investment transaction, nor does it constitute any prediction of likely future movements in fund prices.
3. This content has not been reviewed by the Securities and Futures Commission of Hong Kong or any regulatory authority in Hong Kong.
4. In engaging in a transaction involving investment funds, with or through Dah Sing Bank, the customer understands and agrees that:
   • The customer makes his own judgment in relation to investment or trading transactions;
   • Subject to applicable laws and regulations, Dah Sing Bank assumes no duty to make or give advice or recommendations;
   • Dah Sing Bank, its subsidiaries and affiliates may hold positions which may not be consistent with any advice by Dah Sing Bank and which may result in losses on the customer's part; and
   • Any risks associated with any losses suffered as a result of Dah Sing Bank entering into any transactions or investments on the customer's behalf are for the customer's account.
5. The Chinese version of this content is for reference only and if there is any discrepancy between the English and Chinese version, the English version shall prevail.
6. Dah Sing Bank is an agent of the fund houses. The investment funds subscribed by customers via Dah Sing Bank are products of the fund houses but not products of Dah Sing Bank. In respect of an eligible dispute (as defined in the Terms of Reference for Financial Dispute Resolution Centre in relation to the Financial Dispute Resolution Scheme) arising between Dah Sing Bank and the customer out of the selling process or processing of the related transaction, Dah Sing Bank is required to enter into a Financial Dispute Resolution Scheme process with the customer; however any dispute over the contractual terms of the product should be directly resolved between the respective fund house and the customer.
7. Dah Sing Bank is not an independent intermediary and that Dah Sing Bank receives fees, commissions, and / or other monetary benefits from fund house in relation to the distribution of this product to customer. For details, customer should refer to Dah Sing Bank's disclosure on monetary benefits which Dah Sing Bank provides to customer prior to or at the point of entering into transaction in this product. In addition, Dah Sing Bank may receive non-monetary benefits from fund house or have close links or other legal or economic relationships with fund house.
8. This service / product is not targeted at customers in the European Union.

This brief warning cannot, of course, disclose all risks and other aspects in relation to investment funds. The customer should accordingly obtain independent expert financial advice before investing in any investment fund.