The Fund is a wholesale feeder fund that aims to achieve capital appreciation over the long term by investing in a collective investment scheme, namely the China Select Fund, a Cayman Islands-domiciled sub-fund of Citi Investment Trust (Cayman) II managed by Citigroup First Investment Management Limited (the "Target Fund"). Being a wholesale fund in nature, this Fund is open for sale to Qualified Investors only.
The Manager will invest a minimum of 95% to maximum of 99.8% of the Fund's NAV in units of the Target Fund and a maximum 5% in deposits. The base currency of the Target Fund is US dollar.
3 reasons to invest in this fund:
What is the permitted investments for the Target Fund?
It is expected that approximately 70% to 100% of the Target Fund's portfolio will be invested directly and indirectly in equity securities issued by companies which are listed or being offered in an initial public offer on official stock markets in Hong Kong, China (A Share and B Share markets), the United States, Taiwan, Singapore and other countries.
Other than that, the fund may also use financial derivative instruments (including index futures, index options and index and currency swaps) to hedge market and currency risk only.
How about China A shares?
NO. The Target Fund will not directly invest in China A shares, but may use Access Products to gain exposure. Access Products will generally account for approximately 10% to 30% of the Target Fund's portfolio.
What is Access Products?
It represents an obligation of the relevant Access Product issuer to pay to the Target Fund an economic return equivalent to holding the underlying A Shares. It will be valued on a mark-to-market basis on each valuation day by the relevant Access Product issuer and independent verification (at least on a weekly basis).
A 10% performance fee will be charged to the fund if the appreciation in the NAV during the relevant performance period is above the high watermark of the Target Fund.
Source: HwangDBS Investment Management