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The investment objective of Hang Seng China New Economy Index ETF (“HSCNE ETF”) is to match, as closely as practicable, before fees and expenses, the HKD denominated total return performance (net of withholding tax) of the Hang Seng China New Economy Index (the "Index") through investing primarily in the constituent securities of the index.
As “HSCNE ETF” invests primarily in securities of companies classified under the industries that are perceived as “New Economy” under the Hang Seng Industry Classification System, an investment in “HSCNE ETF” may be more vulnerable to price fluctuations of securities of companies in these industries and other factors that particularly affect these industries as compared to an investment in a fund having a more diverse portfolio of investments. In addition, the valuation of securities associated with “New Economy” industries may be higher than those of more traditional industries, and “HSCNE ETF” may suffer a loss when there is a revaluation of these securities or subject to significant instability and fluctuations in valuations.
As “HSCNE ETF”’s investments are concentrated in a specific geographical location (i.e. the PRC), the value of “HSCNE ETF” may be more volatile than that of a fund having a more diverse portfolio of investments. The value of the Fund may be more susceptible to adverse economic, political, policy, foreign exchange, liquidity, tax, legal or regulatory event affecting the PRC market.
“HSCNE ETF” is also subject to investment risk, currency and exchange rate control risk, equity market risk, PRC market and concentration risks, risks relating to investments in “New Economy” companies, risks associated with investments in companies with weighted voting rights, Stock Connect risk, U.S. market risk/ADRs associated risk, PRC tax risk, RMB currency and conversion risk relating to RMB denominated securities, trading risk, trading differences risk, passive investment risk, reliance on market maker risk, tracking error risk, termination risk and reliance on the same group risk.
The Manager may at its discretion pay dividend out of capital^ or effectively out of the capital of the Fund. Payment of dividends out of capital amounts to a return or withdrawal of part of an investor’s original investment or from any such capital gains attributable to that original investment. Any such distributions may result in an immediate reduction in the Net Asset Value per Unit.
Investments involve risks and investors may lose substantial part of their investment in “HSCNE ETF”.
Investors should not only base on this material alone to make investment decisions, but should read the HSCNE ETF’s offering documents (including the full text of the risk factors stated therein) in detail.
^The Manager may at its discretion pay distribution out of gross income while charging/paying all or part of the Fund’s fees and expenses to/out of the capital of the Fund (resulting in an increase in distributable income for the payment of distribution by the Fund), and thereby effectively pay distributions out of the capital of the Fund.
Hang Seng China New Economy Index ETF (3176.HK)
We are proud to introduce the Hang Seng China New Economy Index ETF, managed by Hang Seng Investment Management (HSVM), which aims at capturing the new perspectives in China as opportunities arise from the structural reform.
What is the “New Economy”?
The “New Economy” is often seen as the driving force of future economic growth which goes beyond the technology sector, it refers to industries with below characteristics:
Source: Hang Seng Indexes Company Limited
Capturing the new perspective in China
China’s economy has been switching its focus from traditional sectors to “New Economy”
This transformation provides numerous new opportunities for investors
The definition of New Economy on this graph is based on a third-party research, which may not be the same as the Index compiled by Hang Seng Indexes Company Limited.
Source: Datastream, RIMES, Factset, MSCI, Morgan Stanley Research, Hang Seng Investment Management Limited, as of 31 July 2021. MSCI China Index has been used as a proxy for the broad market. New Economy Sectors include Consumer Discretionary, Consumer Staples, Health Care, Information Technology, Media & Entertainment; Old Economy includes Materials, Energy, Industrials; Other includes Real Estate, Utilities, Financials, Telecommunication Services. Global Industry Classification Standard (“GICS”).
More than 70% of China’s population (i.e. about 1.01 billion people) is considered as “Netizens” and fueled China’s online economy through shopping, food-ordering, and using healthcare services
This new “ecosystem” has also driven the development of technology and innovation in the country. China now possess the world’s largest number of 5G patent declarations and over 9,000 cases of 5G application innovation
Source: China Internet Network Information Center. National Bureau of Statistics, Hang Seng Investment Management Limited, August 2021, data as of 30 June 2021. The research covers all internet users from mainland China.
Many New Economy sectors are of high strategic importance as defined by the government policies, such as the 14th Five Year Plan (FYP) of China has green development and “peak-emission 2030” as the key theme
The long-term strategic development may benefit clean energy sector, electronic vehicle companies and high-end manufacturing corporates
Source: WIND, CEIC, Government Work Report (March 2021), HSBC Asset Management, April 2021. Any views expressed were held at the time of preparation and are subject to change without notice. While any forecast, projection or target where provided is indicative only and not guaranteed in any way. HSBC Asset Management accepts no liability for any failure to meet such forecast, projection or target.
Hang Seng China New Economy Index ETF (3176.HK)
The Hang Seng China New Economy Index ETF is designed to harness the vast opportunities arising from China’s transformation by tracking the performance of the Hang Seng China New Economy Index, with below features:
Source: Hang Seng Indexes Company Limited, as of 30 September 2021.
* H-share, Red-chip and P-chip constituents in Hang Seng Composite Index and A-Shares that are eligible for Stock Connect Scheme, and U.S.-listed China companies incorporated in or headquartered in mainland China (in the form of common stocks or ADRs).
# Under the current selection criteria based on the sector requirement, the Index covers selected sub-sectors under industries in Hang Seng Industry Classification System in IT, consumer discretionary (i.e. companies in the business of non-essential consumer goods and services), healthcare, telecommunications, industrials and utilities, and certain companies under industries in consumer discretionary, consumer staples (i.e. companies in the business of essential consumer goods and services and daily necessities) and financials which fulfill the corresponding criteria (please refer to the section “Sector Requirement” in the relevant Appendix to the Prospectus for details).
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Terms and conditions
This site is for individual investors in Hong Kong only.
The Funds invest in various investments, such as equities, bonds, money market instruments, collective investment schemes and alternative investments. Each fund has a different investment objective and risk profile.
The Funds may subject to the risks of investing in emerging markets and smaller companies; and may subject to the concentration risks when the investments are concentrated in one or a small number of markets or sectors.
The Funds may invest in non-investment grade bonds, unrated bonds, contingent convertible securities, mortgage backed securities, asset backed securities and urban investment bonds issued by PRC local government financing vehicles (LGFVs) which are subject to additional risks and volatility.
The Funds may have substantial investments in securities issued by a single sovereign issuer (including but not limited to issuer with a non-investment grade credit rating) and are subject to higher concentration risk, sovereign risk and credit risk.
The Funds may gain exposure to hedge fund, absolute return strategy, private equity, real estate sector and Real Estate Investment Trust (REIT) which are subject to additional risks and volatility.
The Funds may invest in onshore Chinese securities through various market access schemes and China A-shares Access Products. Such investments involve additional risks, including the risks associated with China's tax rules and practices.
When investing in Indian bonds, the Funds may need to comply with the licensing regulations in India and may subject to additional risks, including quota restrictions and tax risks.
The Funds may invest in other funds and need to bear the underlying funds' fees and expenses on top of the Funds' own fees and expenses.
The Funds may invest in financial derivative instruments for investment purpose which may lead to higher volatility to their net asset value.
The Funds may pay dividends out of capital or gross of expenses. Dividend is not guaranteed and may result in capital erosion and reduction in net asset value.
Because the Funds' base currency, investments and classes may be denominated in different currencies, investors may be affected adversely by exchange controls and exchange rate fluctuations. There is no guarantee that the currency hedging strategy applied to the relevant classes will achieve its desired result.
Investing in money market funds are not the same as placing funds on deposit with a bank or deposit taking company. The Funds which are money market funds have no obligation to redeem units at their offering value and such Funds are not subject to the supervision of the Hong Kong Monetary Authority. Investors may not recoup the original amount invested in the Funds.
The Funds' investments may involve substantial credit, currency, volatility, liquidity, interest rate, tax and political risks. Investors may suffer substantial loss of their investments in the Funds.
The Funds are NOT equivalent to time deposits. Investors should not invest in the Funds solely based on the information provided herein and should read the offering document of the Fund for details.
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