1) E Fund (HK) HKEX Tech 100 Index ETF (the “Sub-Fund”) is a sub-fund of E Fund ETFs Trust II, an umbrella unit trust established under Hong Kong law. The Sub-Fund is a passively-managed ETF falling within Chapter 8.6 of the Code on Unit Trusts and Mutual Funds issued by the Securities and Futures Commission (the “SFC”). Units of the Sub-Fund (the “Units”) are traded on The Stock Exchange of Hong Kong Limited (the “SEHK”) like stocks. The investment objective is to provide investment results that, before fees and expenses, closely correspond to the performance of the HKEX Tech 100 Net Total Return Index (the “Index”).
In seeking to achieve the Sub-Fund’s investment objective, the Manager will either use a full replication strategy or a representative sampling strategy as the Manager believes to be appropriate in order to achieve the investment objective of the Sub-Fund by tracking the Index as closely as possible to the benefit of the investors. The Sub-Fund may switch between the full replication strategy and the representative sampling strategy in its absolute discretion without prior notice to investors.
2) Investment involves risks. The Fund is subject to a) Investment risk, b) Equity market risk, c) New Index risk, d) Geographical concentration risk, e) Hong Kong listed Chinese companies risks, f) Technology themes sector concentration risk, g) Risks associated with biotech and pharmaceutical sector, h) Securities lending transactions risk, i) Passive investments risk, j) Trading risk, k) Tracking error risk, l) Distribution out of/effectively out of capital risk, m) Reliance on market maker risk, n) Termination risk. The value of the Sub-Fund can be volatile and may go down substantially. Investors may suffer losses.
3) Payment of dividends out of capital and/or effectively out of capital amounts to a return or withdrawal of part of an investor’s original investment or from any capital gains attributable to such original investments. Any such distributions may result in an immediate reduction of the NAV per Unit of the Sub-Fund. This may also reduce the capital that the Sub-Fund has available for investment in future and may constrain capital growth.
4) The Index is a new index. The Index has minimal operating history by which investors can evaluate its previous performance. There can be no assurance as to the performance of the Index. The Sub-Fund may be riskier than other exchange traded funds tracking more established indices with longer operating history.
5) The constituents of the Index, and accordingly the Sub-Fund’s investments, may be concentrated in Hong Kong. The value of the Sub-Fund may be more volatile than that of a fund having a more diverse portfolio of investments and may be more susceptible to adverse economic, political, policy, foreign exchange, liquidity, tax, legal or regulatory event affecting the Hong Kong market.
6) You should not invest in the Sub-Fund unless the intermediary who sells it to you has explained to you that the Sub-Fund is suitable for you having regard to your financial situation, investment experience and objectives.
7) Investors should not invest in the Sub-Fund based on this document alone. Before making any investment decision, the investor should read the Sub-Fund’s offering documents carefully including the risk factors.
