Changes to the underlying funds of First State funds
24 December 2018
Friends Provident International Limited (“Friends Provident International”) have been notified by First State Investment (Hong Kong) Limited (“The Company”) of the following underlying fund changes of the below named mirror funds.
R31 First State Greater China Growth
R51 First State China Growth
The prospectus of the underlying funds into which the above named funds invest will undergo the following updates, which will be effective on or around the 15 January 2019. Below are the key areas for your attention, which we have extracted from the shareholder circular of the underlying funds of the above named funds.
Changes to the total maximum exposure of China shares
The underlying funds may currently invest in China A Shares and China B Shares subject to the applicable aggregate maximum limit as disclosed in their investment policies. To allow the investment manager of the underlying funds greater flexibility to capture market opportunities in the China market, the investment policies of the underlying funds of R31 First State Greater China Growth and R51 First State China Growth will be amended to increase their existing maximum limits for investment in China A Shares, which is shown in the table below. Their existing maximum limits for investment in China B Shares will also decrease to 10% of the relevant underlying funds’ net asset value.
|
Code and name of mirror fund |
Name of corresponding underlying fund |
Current underlying fund total maximum exposure to China A Shares (which is also an aggregate limit for both China A Shares and China B Shares) |
Increased underlying fund total maximum exposure to China A Shares |
|
R51 First State China Growth |
First State China Growth Fund |
less than 30% |
100% |
|
R31 First State Greater China Growth |
First State Greater China Growth Fund |
25% |
100% |
As a result of the relevant underlying funds’ increased maximum exposure to China A Shares, the relevant underlying funds will continue to be subject to the general risks associated with investing in the China markets, including liquidity and volatility risk, foreign exchange, currency and repatriation risk, changes in social, political or economic policies, legal or regulatory event and uncertainties with respect to taxation policies, and the relevant risks associated with investments via Stock Connects, QFII quota and/or RQFII quota as may be applicable to the relevant underlying funds. Notwithstanding an increase in the relevant underlying funds’ total maximum exposure to China A Shares, the impact on such underlying funds’ liquidity and volatility is expected to be immaterial.
Other update on the prospectus of the underlying funds
Each of the underlying funds may invest in open-ended collective investment schemes (which may be UCITS or non-UCITS). The current limit will increase from 5% to 10% of the relevant underlying fund’s net asset value.
Should you have any questions regarding these changes, please contact International Funds & Investments.