1) E Fund (HK) CSI Liquor Index ETF (the “Fund”) is a passively managed exchange traded fund (“ETF”) and is traded on the Stock Exchange of Hong Kong (“SEHK”) like stocks. The investment objective is to provide investment results that, before fees and expenses, closely correspond to the performance of the CSI Liquor Index (the “Index”). The Manager will adopt a physical representative sampling strategy by investing at least 80% and up to 100% of its NAV in a representative portfolio of securities that collectively has a high correlation with the Index, but whose constituents may or may not themselves be constituents of the Index. For direct investments in securities listed on the Shanghai and Shenzhen stock exchanges, the Sub-Fund will invest primarily through the Stock Connect and/or the Manager’s QFI status. The Manager may invest up to 100% of the Sub-Fund’s NAV through the Stock Connect and less than 70% of the Sub-Fund’s NAV through QFI.
2) The Fund is subject to 1) Investment risk, 2) Equity market risk, 3) Concentration risk and Mainland China market risks, 4) Sector risks, 5) Risk associated with small-capitalisation / mid-capitalisation companies 6) RMB Currency and conversion risks, 7) Risks associated with the Stock Connect, 8) Risks associated with QFI regime , 9) Trading differences risk, 10) Passive investments risk, 11) Trading risk, 12) Tracking error risk, 13) Dual counter risks, 14) PRC tax risk, 15) Reliance on market maker risk, 16) Termination risk..
3) The Manager intends to (i) make relevant provision of 10% on dividend and distribution income from A-Shares if PRC corporate income tax (“CIT”) is not withheld at source at the time when such income is received (where CIT is already withheld at source, no provision will be made) and (ii) does not currently make withholding income tax provision for gross realised or unrealised capital gains derived from trading of A-Shares (either via Stock Connect or QFI).
4) There are risks and uncertainties associated with the current PRC tax laws, regulations and practice in respect of capital gains realised via QFI or Stock Connect on investments in the PRC (may have retrospective effect). Any increased tax liabilities on the Fund may adversely affect the Fund’s value. If taxes are levied in future on the Fund for which no provision is made, the Fund’s NAV will be adversely affected. In this case, the then existing and subsequent investors will be disadvantaged as they will bear for a disproportionately higher amount of tax liabilities as compared to the liability at the time of investment in the Fund.
5) You should not make any investment decision solely based on the information on this material alone. Please read the relevant offering documents for details including the risk factors before making any investment decisions. Investment involves risk. Past performance is not indicative of future performance. This document has not been reviewed by the Securities and Futures Commission of Hong Kong.
