Common questions raised after the 2008 financial turmoil
In the wake of the financial turmoil, fund managers and distributors have received more investor enquiries e.g. on portfolio disclosure, fair value pricing, procedures for winding up of a fund, etc.
In view of these developments and to further the cause of investor education, the HKIFA Unit Trust Subcommittee has spearheaded an initiative by preparing 13 sets of FAQ regarding fund operation and investing in funds (in both English and Chinese versions).
The Chinese version of the FAQs has been published in Ming Pao newspaper and Ming Pao website since mid March 2009.
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Majority of the funds adopt medium to long-term investment horizon in their investment objectives. With the recent market rebound, the market is expected to experience some short-term volatilities ahead. Does long-term investment really work under these sorts of market conditions? (PDF, 15KB)
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Can a fund be terminated or merged with another fund? Under what circumstances would a fund be terminated or merged? How can investors stay informed? (PDF, 15KB)
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From an investor's perspective, what is the difference between a fund domiciled in HK and a fund domiciled in an overseas jurisdiction? Are overseas domiciled funds also governed by the local regulatory framework? (PDF, 12KB)
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Funds normally maintain a relatively low cash level even during extreme market volatility. Is this a correct investment strategy? How fund manager determines the cash level? Does fund manager have flexibility to change the investment objective of the fund to comply with market's situation? (PDF, 15KB)
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What will determine the subscription and redemption price of a fund? (PDF, 31KB)
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What factors should investors consider in their investment planning process? (PDF, 23KB)
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What are the criteria to be a fund management company? Who can be a trustee/custodian? How do fund management companies and trustees/custodians handle investors' assets? (PDF, 23KB)
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What kind of measures a fund undertakes to control risk? (PDF, 13KB)
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How do I know what are the risks involved in my investment? What are the common ways to measure risks? (PDF, 15KB)
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What types of assets a fund may invest in? What sorts of risks are associated with different kinds of assets? (PDF, 15KB)
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When will a fund suspend dealing? Who make the decision? Any policies or rules govern this? (PDF, 13KB)
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What would happen to investors' investment if the fund manager/trustee/distributor goes bankrupt? What is the respective liquidation procedure? Under this situation, would there be any difference to investors' investment if investors hold the investment by nominee account, as compare with registration under investors' own name? (PDF, 15KB)
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What are the rights and obligations of fund investors? Why does one need to read the fund offering document carefully? (PDF, 17KB)
If you have any queries or wish to obtain more information on fund investment or the Hong Kong fund management industry after browsing our site, please email us at hkifa@hkifa.org.hk.