KEY FEATURES DOCUMENT

Transcription

1 KEY FEATURES DOCUMENT HSBC GIF Global High Income Bond This Key Features Document (KFD) is designed to highlight what HSBC consider are the key points you should know before you invest. It is not exhaustive and should not substitute reading and understanding the specific investment term sheet &/or brochure. We trust you find this KFD helpful. Investors are advised to use the HSBC Global Investment Fund Prospectus as the final point of reference. Risk rating: 2 Product Details: The HSBC GIF Global High Income Bond (hereinafter known as the Fund ) is a sub-fund of HSBC Global Investment Funds ( HSBC GIF ) in which HSBC GIF is an open-ended investment incorporated in Luxembourg. The objective of the Fund is to provide high income primarily in a diversified portfolio of higher yielding fixed income bonds and other similar securities from around the world denominated in a range of currencies. This may include Investment Grade bonds, high yield bonds and Asian and Emerging Markets debt instruments. Investment in mortgage and asset backed securities will be limited to a maximum of 20% of the Fund s net assets The Fund may also invest in financial derivative instruments such as futures, options, swaps (including, but not limited to, credit default swaps and total return swaps) and forward currency contracts and in other currency and credit derivatives.. The Fund intends to use such financial derivative instruments for, the purposes of managing interest and credit risks and currency positioning but also to enhance return when HSBC Global Asset Management (UK) Limited (appointed as the Investor Advisor) believes the investment in financial derivative instruments will assist the Fund in achieving its investment objectives. In particular, the Fund will use foreign currency forward contracts or other financial derivative instruments to substantially protect the Fund from losses arising from currency depreciation against the USD. The base currency is the US Dollar (USD). The Fund will be substantially hedged into USD through the use of financial derivative instruments (such as, but not limited to, currency forwards). The potential returns of the Fund are not subject to taxation in Brunei. The Fund is suitable for investors looking for a managed and diversified investment and seeking a reasonable level of capital growth while willing to accept a low to medium degree of risk. It is also suitable for long term investors who understand the volatility and associated risks of global asset classes investments. The Fund is likely to be suitable for Cautious investors. RESTRICTED - 1 -

2 Investor Commitment: The units of the Fund are quoted at its Net Asset Value (hereinafter known as NAV ) on a forward pricing basis. Numerical example of how units are allotted e.g. S$1,000 - S$52.5 = S$ S$1.00 = Units Your investment Preliminary Net Issue Price No. of Units Charge of 5.25% investment (= Net Asset amount Value per Unit) The Initial Sales Charge is applicable up to 3% of the NAV per unit. An Annual Management Fee of 1.25% p.a. and an operating, administrative and servicing expenses fee of 0.25% p.a. are applicable. In the event of early redemption, no redemption fee will be applicable. Switching between sub-funds is allowed however, it is subject to a switching fee of 0.5% per switch The minimum initial subscription of the Fund is USD/SGD/AUD/EUR1,000. The subsequent subscription of the Fund (i.e. top-up) must be for a minimum of USD/SGD/AUD/EUR 100 (for lump-sum subscription). The minimum investment holding is USD/SGD/AUD/EUR1,000. There is no minimum redemption amount or units. Monthly Investment Plan (hereinafter known as MIP ) is available for the Fund. After investing the minimum initial investment, the MIP can be subscribed to with a minimum monthly investment of USD/SGD/AUD/EUR 100. Investors may cancel their MIP subscription by giving 5 business day s written notice. RISK FACTORS: Investment in the Fund carries with it a degree of risk, including but not limited to those referred to below. There can be no assurance that the Fund will achieve their investment objectives and past performance should not be seen as a guide to future returns. An investment may also be affected by any changes in exchange control regulations, tax laws, withholding taxes and economic or monetary policies. RESTRICTED - 2 -

3 Market Risk: The value of investments and the income derived therefrom may fall as well as rise and investors may not recoup the original amount invested in the Fund. In particular, the value of investments may be affected by uncertainties such as international, political and economic developments or changes in government policies. Foreign Exchange Risk: Investors should be aware of the potential risks involved in investing through a currency which is not the investor s base currency. Changes in currency exchange rates may influence the value of the Fund s units, the dividends and the gains and losses realised. Interest Rate: The prices of bonds and other fixed-income securities may rise or fall when interest rates change. Generally, the prices of debt securities rise when interest rates fall, and vice versa. Credit Risk: There is the risk that the issuers of bonds and other fixed-income securities may not be able to make obligatory payments on these securities. An issuer undergoing an adverse change to its financial condition could result in a lower credit quality of a security, leading to greater price volatility of the security and decreasing its liquidity, making it more difficult to sell. Liquidity Risk: The Fund is exposed to the risk that a particular investment or position cannot be easily unwound or offset due to insufficient market depth or market disruption. This can affect the ability of a unit-holder to redeem funds from that Fund, and can also have an impact on the value of the Fund. Emerging Markets Risk: Investors must be aware of the special risks associated with investing in Emerging Markets, as such investments should be considered speculative. Investors are advised to carefully consider these risks in making their investment decisions. Economies in Emerging Markets are heavily dependent upon international trade and, accordingly, have been and may continue to be affected adversely by trade barriers, exchange controls, managed adjustments in relative currency values and other protectionist measures imposed or negotiated by the countries with which they trade. These economies also have been and may continue to be affected adversely by economic conditions in the countries in which they trade. Downgrading Risk: In the event of a downgrading of the credit ratings of a security or an issuer relating to a security, the investment value of such security may be adversely affected. General risks associated with financial derivatives: The price of a financial derivative can be very volatile as a small movement in the price of the underlying security, index, interest rate or currency may result in a substantial movement in the price of the financial derivative instrument. In general, over-the-counter (OTC) derivatives receive less governmental regulation and supervision than transactions entered into on organized exchanges. In addition, certain financial derivatives carry counter-party risk whereby each party in a derivative transaction assumes the credit risk associated with the other party. Asset-Backed Securities (ABS) & Mortgage-Backed Securities (MBS) Risk: Investment in ABS and MBS entails additional risks pertaining to the underlying pool of assets (e.g. receivables) such as credit risk, interest rate risk, prepayment risk, counterparty risk and liquidity risk. Investors should only invest if they are confident that they will not need access to the amount invested during the investment period and that they have sufficient liquid emergency funds to meet unforeseen circumstances. RESTRICTED - 3 -

4 Important Note Investment Restriction Subscription to the Fund is prohibited for the following persons: - United States Person i.e. person who is a citizen or resident/domiciled in the United States of America. - person who is a resident in Canada - person who is a citizen of or resident/domiciled in Iran for Funds which are subscribed in U.S dollars. The following exceptions apply: - a person who is a citizen of Canada may subscribe to the fund provided that he resides outside of Canada. - a person who is a citizen of or resident/domiciled in Iran may subscribe to the Fund if the subscription is made in any other currency apart from U.S dollars. By subscribing to the Fund, an investor represents to HSBC that he/she is not prohibited from such subscription as provided for above. The investor agrees and is obliged to notify the Bank should the investor subsequently fall within the prohibition as listed notwithstanding that at the time the Fund was subscribed to the investor was eligible and no prohibition applied. In such circumstances, investors agree and shall redeem the units in the Fund. Disclaimer Notwithstanding any term of this Key Features Document and the General Terms and Conditions of The Hongkong and Shanghai Banking Corporation Limited Brunei Branch, please be advised that payment of redemptions for unit trusts may take up to or more than seven (7) working days before funds appear in your account. Neither HSBC Securities (B) Berhad, The Hongkong and Shanghai Banking Corporation Limited Brunei Branch nor any member of the HSBC Group will be liable for loss (whether direct or consequential and including without limitation loss of profit, data or interest) or damage suffered by any party arising out of any such delays. RESTRICTED - 4 -

5 Declaration I have been briefed on the contents contained herein together with the accompanying brochure and supplement, and I confirm my full understanding and acceptance of the above terms and risks of the HSBC GIF High Income Bond Fund. Signature: _ Customer s Name: _ Customer Number: _ IC No: Date: I have briefed the customer on the contents contained herein together with the accompanying brochure and supplement. Signature: Staff Name: Designation: Date: RESTRICTED - 5 -