Objective
E Fund (HK) China
Equity Dividend Fund seeks to achieve long-term capital appreciation primarily
through equity-based investments in equity and equity-related securities of
companies which are incorporated in, have their area of primary activity in or
are related to the growth of Mainland China’s economy and are expected to
achieve high dividend returns.
Investment
Policies and Strategy
The Sub-Fund seeks
to invest at least 70% of its net assets in equity or equity-related securities
of companies whose activities are closely related to the economic development
and growth of Mainland China. These companies may be listed in developed or
emerging markets (including stock exchanges of Mainland China, Hong Kong,
Singapore, Taiwan and U.S.). Equity and equity-related securities include but
are not limited to common stocks, preference shares, American Depository
Receipts and Global Depository Receipts. The Sub-Fund may invest in equity or
equity-related securities of companies of any capital size which satisfies the
requirements set out in this paragraph.
For equity
investments, the Sub-Fund does not focus on any particular market sector or
industry and may invest in shares issued by companies of any level of
capitalisation.
The Sub-Fund may
invest up to 100% of its Net Asset Value in China A-Shares which may be gained
directly through the RQFII quota of the Manager and/or Stock Connect* (or
similar mutual market access programme to China A-Shares). Exposure to China
A-Shares through the RQFII quota of the Manager will not be more than 30% of the
Sub-Fund’s Net Asset Value.
Up to 30% of the
Sub-Fund’s net assets in aggregate may be invested in (i) other equity and
equity-related securities issued by companies whose activities are not closely
related to the economic development and growth of Mainland China; (ii) other
investments, including but not limited to money market instruments, cash and
cash based instruments (e.g. bank certificates of deposit, bank deposits and
negotiated term deposits with banks) or exchange-traded funds; (iii) other
collective investment schemes whose investment objectives are substantially
similar to the Sub-Fund; (iv) convertible bonds (which may be RMB denominated)
(the Sub-Fund may hold listed equities from the conversion of the convertible
bonds but will not hold equities that are unlisted) and/or (v) derivatives such
as options, warrants and futures for investment purposes (please refer to the
sub-section headed “Investment and Borrowing Restrictions” in the section
headed “Investment Considerations” and Schedule 1 in the Explanatory Memorandum
for further details).
The Sub-Fund may
also invest in derivatives such as options, warrants and futures for hedging
purposes.
The Sub-Fund will
not invest in: (i) urban investment bonds (城投債); (ii) debt instruments that are rated BB+ or below by one of the
credit rating agencies in Mainland China or an internationally recognized
credit agency or unrated; and (iii) securities issued and/or guaranteed by a
single sovereign issuer which is rated BB+ or below (as rated by an
internationally recognized credit rating agency) or unrated.
It is not the Manager’s current intention to engage in securities
financing transactions or invest in asset-backed securities (including
asset-backed commercial papers) or mortgage-backed securities for the account
of the Sub-Fund. If there is a change in such intention, the prior approval of
the SFC will be sought and at least one month’s prior written notice will be
given to the relevant Unitholders of the Sub-Fund.
* “Stock Connect” includes Shanghai-Hong Kong Stock Connect and
Shenzhen-Hong Kong Stock Connect.
