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VL China Fund
A sub fund (and currently the only sub fund) under VL Trusts, a Hong Kong umbrella unit trust authorized under Section 104 of the Securities and Futures Ordinance (Cap. 571) of Hong Kong, of which VL Asset Management Limited is the Manager.

SFC authorization is not a recommendation or endorsement of a scheme nor does it guarantee the commercial merits of a scheme or its performance. It does not mean the scheme is suitable for all investors nor is it an endorsement of its suitability for any particular investor or class of investors.

Pricing
The latest Net Asset Value(NAV) per unit of each class will be published on each business day in The Standard and the Hong Kong Economic Times.

Fund performance is calculated by VL Asset Management Limited in HKD on a NAV to NAV basis with dividends reinvested and is net of all fees. The fund was launched on 10 August 2015. Past performance is not indicative of future performance.

A Units B Units
Current NAV HKD Units
As of 16/10/2017
110.7345 113.4407
Month-to-date N/A N/A
Year-to-date N/A N/A
One-year N/A N/A
Since launch 10.7345% 13.4407%
The NAVs are also available on the following websites:
Bloomberg (China Fund HKD Units)
Historical NAVs
Documents
Key Fact Sheets
Monthly Report
Annual Report
Interim Report
Explanatory Memorandum
Notices to Unit Holders
Contact Details of Distributors


Risk Alert
What are the key risks?
Investment involves risks. Please refer to the Explanatory Memorandum for details including the risk factors. The key risks are as follows:
1. Investment risk
  • The fund is an investment fund. There is no guarantee of the repayment of principal.
  • The fund’s investment portfolio may fall in value and therefore your investment in the fund may suffer losses.

  • 2. Concentration risk
  • The fund’s investments are concentrated in China and Hong Kong. This may result in greater volatility than portfolios which comprise broad-based global investments.

  • 3. Risk of investing in China
  • Investing in China involves a greater risk of loss than investing in more developed markets due to, among other factors, greater political, tax, economic, foreign exchange, repatriation, liquidity and regulatory risks.
  • The stock markets in China are still in a stage of development, which may lead to uncertainties and difficulties in settlement and recording of transactions and in interpreting and applying relevant regulations. These may lead to a higher level of volatility and instability associated with investments in these markets.
  • The financial reporting standards and practices applicable to PRC companies may be less rigorous. As the disclosure and regulatory standards in the PRC are less stringent than in more developed markets, there might be substantially less publicly available information about issuers in the PRC on which the Manager can base investment decisions.

  • 4. Risks relating to Shanghai-Hong Kong Stock Connect and the Shenzhen-Hong Kong Stock Connect (collectively, the “Stock Connect”)
  • The relevant rules and regulations on the Stock Connect are subject to change which may have potential retrospective effect.
  • The Stock Connect is subject to quota limitations. Where a suspension in the trading through the programme is effected, the fund’s ability to invest in A-shares through the programme will be adversely affected.
  • Due to the difference in trading days, on days when the PRC market is open but the Hong Kong market is closed, the fund may be subject to a risk of price fluctuations in A-shares as the fund will not be able to trade through the Stock Connect.
  • In such events, the fund’s ability to achieve its investment objective could be negatively affected.

  • 5. Equity securities related risk
  • Equity markets may fluctuate significantly with prices rising and falling sharply, and this will have a direct impact on the fund. When equity markets are volatile, the fund’s net asset value may fluctuate substantially. The net asset value of the fund may be adversely affected in the event of a market downturn.

  • 6. China tax risk
  • The fund may be exposed to risks associated with changes in current Chinese tax laws, regulations and practice (which may have retrospective effect).
  • Having consulted independent tax adviser, the Manager has not made and currently has no intention to make provision in respect of potential tax liability on gains on trading of B-Shares. Further, having taken and considered independent professional tax advice and in accordance with such advice, the Manager will also not make any withholding income tax provision for the account of the fund in respect of any potential PRC tax liability on gross unrealised and realised gains realised on the fund’s trading of A-shares. In the event that such tax liability is imposed, the relevant amounts will be deducted from the fund’s assets which may consequently reduce the value of the units.

  • 7. Foreign exchange risk
  • An investment in the fund may involve exchange rate risk. The investments of the fund may be denominated in currencies other than the base currency of the fund (which is HKD), including the RMB. The RMB is not freely convertible and subject to exchange controls and restrictions. There is also no guarantee that such other currencies will not depreciate. Fluctuations in the exchange rates between such other currencies and the base currency as well as associated fees and charges may have an adverse impact on the performance of the fund.

  • 8. Performance fee risk
  • Performance fees may encourage the Manager to make riskier investment decisions than in the absence of performance-based incentive systems.
  • There is no adjustment of equalisation credit or equalisation losses on an individual unitholder basis. This method of calculating performance fee gives rise to the risk that a unitholder redeeming units may still incur performance fee in respect of the units, even though a loss in investment capital has been suffered by the redeeming unitholder.

  • 9. Derivatives risk
  • The Manager may from time to time utilise derivatives for the purpose of hedging only. These instruments can be highly volatile and expose investors to a high risk of loss. There is also no guarantee that the use of financial derivatives instruments for hedging purposes will be effective and the fund may be subject to substantial loss.
  • Frequently asked questions (FAQ)

    1. What is this product?
    This is a sub-fund of VL Trusts which is an umbrella fund constituted in the form of a unit trust established under the laws of Hong Kong.
    2. What is the objective?
    It aims to provide long-term capital appreciation by investing in a diversified portfolio of equity securities of companies in different industry sectors whose primary business focus is in the China region.
    3. What is the investment strategy?
    The fund seeks to invest in companies carrying on business or with business exposure in the China region with long term growth prospects. It adopts value investing strategies and looks for solid investments that can be made at valuations that are, in our opinion, attractive relative to their long-term growth prospects. Following is a summary of the investment mandate (for details, please refer to the Explanatory Memorandum):

  • No less than 70% of its NAV in Hong Kong-listed equities
  • No more than 30% of its NAV in non-Hong Kong listed equities
  • Can hold cash up to 30% of its NAV
  • Maximum 10% of its NAV in a single stock by any single issuer
  • Derivatives may be used but only for hedging purposes
  • No short selling on stocks
  • Dividend policy: No distribution

  • In addition, the fund does not attempt to follow any benchmark indices in determining its sector or individual stock weightings and there are no fixed sector weightings in the allocation of assets.
    4. Where can I get the latest information of the fund?
    Investors can get the latest fund information including the offering documentation, circulars, notices, announcements, financial reports and the latest available NAV on our website: www.vlasset.com. This website, however, has not been reviewed by the SFC and may contain certain information of funds not authorised by the SFC.

    The NAV of the fund is calculated and the price of units published each business day in The Standard and the Hong Kong Economic Times.
    5. What are the key risks?
    Please refer to the Risk Alert (Click here)
    6. Is there any guarantee?
    The fund does not have any guarantees. You may not get back the full amount of money you invest.
    7. What are the fees and charges?
    You may have to pay the following fees when dealing in the units of the fund.

      Class A Units Class B Units*
    Management fee 1.5% p.a. 0.75%
    Performance fee 15% p.a. with high watermark 7.5% p.a. with high watermark
    Subscription fee Up to 5%
    Redemption fee Nil 5% in the first 3 years

    *Class B units will not be available after its initial offering period, the closing date of which will be announced in due course.

    The fund also pays a trustee fee to the Trustee, the details of which are set out in the Appendix to the Explanatory Memorandum.
    8. What are the differences in Class A and Class B shares?
      Class A Units Class B Units*
    Dealing day Each business day (HK)
    Minimum initial investment  HK$50,000 HK$39,000,000
    Minimum additional investment HK$5,000 HK$1,000,000
    Minimum holding HK$50,000 HK$39,000,000
    Minimum redemption amount HK$5,000 HK$1,000,000
    Management fee 1.5% p.a. 0.75%
    Performance fee 15% p.a. with high watermark 7.5% p.a. with high watermark
    Subscription fee Up to 5%
    Redemption fee Nil 5% in the first 3 years

    *Class B units will not be available after its initial offering period, the closing date of which will be announced in due course.
    9. How can I subscribe to the fund/ redeem my units?
    Contact your financial consultants if you are interested to subscribe to the fund or if you plan to redeem.

    You can also contact our Investor Relations Team at +852 2851 8177 or +852 2857 8581 or by sending an email to enquiry@vlasset.com.
    10. What is the frequency of subscription / redemption?
    You generally buy/redeem units at the fund's next-determined NAV after Standard Chartered Bank (Hong Kong) Limited receives your request, directly or via a distributor, in good order at or before 4:00p.m. on each dealing day of the fund.
    11. What should I do if I have an enquiry?
    Please contact our Investor Relations Team at +852 2851 8177 or +852 2857 8581 or by sending an email to enquiry@vlasset.com.