Objective: The investment objective of the Sub-Fund is to invest in short-term deposits and high quality money market investment... Show All Objective: The investment objective of the Sub-Fund is to invest in short-term deposits and high quality money market investments. The Sub-Fund seeks to achieve a return in RMB in line with prevailing money market rates. Strategy: In order to achieve the investment objective of the Sub-Fund, the Manager will invest all, or substantially all (i.e. at least 70%), of the assets of the Sub-Fund in RMB-denominated and settled short-term deposits and short-term and high quality money market instruments including onshore and offshore debt securities, which are issued by Eligible Financial Institutions (defined below) (including their group companies), governments, quasi-governments, international organisations, corporates and financial institutions (other than Eligible Financial Institutions), including RMB denominated and settled fixed-rate bonds issued by the Ministry of Finance of the PRC mainland, the China Development Bank, the Agricultural Development Bank of China or the Export-Import Bank of China and distributed within the PRC mainland (the “Treasury Bonds and Policy Bank Bonds”), and commercial papers, super and short-term commercial paper, short-term notes, certificates of deposits and commercial bills. Short-term and high quality debt securities invested by the Sub-Fund include but are not limited to government bonds and fixed and floating rate bonds, with the maximum level for up to 80% of the Net Asset Value of the Sub-Fund (any debt securities invested with a remaining maturity of no more than 397 days, or two years in the case of Government and other Public Securities). The Sub-Fund will invest less than 30% of its Net Asset Value into non-RMB-denominated and settled short-term deposits and short-term and high quality money market instruments. The Manager may hedge any non-RMB-denominated and settled investments into RMB to manage any material currency risk. The Sub-Fund intends to invest up to 100% of its NAV in the onshore money market instruments (including debt securities) through the QFI status of the Manager and the PRC mainland inter-bank bond market under the mutual bond market access between Hong Kong and Mainland China (“Bond Connect”). The Sub-Fund will invest primarily in RMB-denominated instruments. The Manager will adopt an actively managed investment strategy and will construct the portfolio of the Sub-Fund from time to time based on the following criteria to assess whether a money market instrument is of high quality: 1. Credit rating: First, the Manager will screen the instruments based on the credit rating of the instruments or their issuers. The Sub-Fund will place short-term deposits with, and invest in high quality money market instruments (including offshore debt securities) issued by, Eligible Financial Institutions (including their group companies). For the purpose of this Sub-Fund, an "Eligible Financial Institution" is a financial institution which has a credit rating as Baa3 or above by Moody’s Investor Services Inc. or BBB- or above by Standard & Poor’s Corporation or similar rating by other recognised rating agencies.For onshore debt securities issued by governments, quasi-governments, international organisations, corporates or financial institutions (other than Eligible Financial Institutions), such debt securities or issuer must have a rating of AA+ or above assigned by any PRC mainland domestic credit rating agency. For the Treasury Bonds and Policy Bank Bonds, there is no additional credit rating requirement. The credit rating of the issuers of the Treasury Bonds and Policy Bank Bonds, namely the PRC mainland government, China Development Bank, Export-Import Bank of China and Agricultural Development Bank of China are A+ by Standard & Poor’s and A1 by Moody’s. For this purpose, if the relevant debt security does not itself have a credit rating, then reference can be made to the credit rating of the issuer of such debt security.2. Liquidity: Investments that satisfy the credit rating requirements will be assessed based on liquidity. The Manager will assess the liquidity of the instruments based on historical liquidity of similar money market instruments, by assessing the days to liquidate for such instruments. Only instruments or deposits with high liquidity will be included in the portfoli o of the Sub-Fund.3. Target maturity: Out of investments that fulfil the criteria on credit rating and liquidity, the portfolio will be constructed out of investments with an average maturity close to (but not exceeding) 60 days. The Manager may also invest up to 10% of the NAV in money market funds which are either authorised by the SFC or eligible schemes as determined by the SFC. The Sub-Fund may enter into sale and repurchase transactions for up to 10% of its Net Asset Value but only on a temporary basis for the purpose of meeting redemption requests or defraying operating expenses. The amount of cash received by the Sub-Fund under such transactions may not in aggregate exceed 10% of its Net Asset Value. It is the intention of the Manager to sell the securities for cash equal to the market value of the securities provided to the counterparty, subject to appropriate haircut. Cash obtained in sale and repurchase transactions will be used for meeting redemption requests or defraying operating expenses, but will not be re-invested. The Sub-Fund shall also comply with the following investment restrictions: (a) the Sub-Fund must maintain a portfolio with weighted average maturity not exceeding 60 days and a weighted average life not exceeding 120 days and must not purchase an instrument with a remaining maturity of more than 397 days, or two years in the case of Government and other Public Securities as defined in the Prospectus.(b) the aggregate value of the Sub-Fund’s holding of instruments and deposits issued by a single entity will not exceed 10% of the total NAV of the Sub-Fund except: (i) where the entity is a substantial financial institution (as defined in the Code) and the total amount does not exceed 10% of the entity’s share capital and non-distributable capital reserves, the limit may be increased to 25%; or (ii) in the case of Government and other Public Securities, up to 30%may be invested in the same issue; or (iii) in respect of any deposit of less than USD1,000,000 or its equivalent in the base currency of the Sub-Fund, where the Sub-Fund cannot otherwise diversify as a result of its size; and(c) the Manager may borrow up to 10% of its total NAV of the Sub-Fund on a temporary basis for the purpose of meeting redemption requests or defraying operating expenses. There is no current intention for the Sub-Fund to (a) invest in any financial derivative instruments for hedging or non-hedging (i.e. investment) purposes; (b) invest in non-investment grade securities, unrated bonds or Urban Investment Bonds (城投債 ); (c) invest in structured products or instruments, structured deposits, asset backed securities, asset backed commercial papers and mortgage back securities; or (d) engage in securities lending transactions , reverse repurchase transactions or other similar over-the-counter transactions, but this may change in light of market circumstances and where the Sub-Fund does engage in these types of transactions, prior approval shall be obtained from the SFC (if required) and no less than 1 month’s prior notice will be given to the Unitholders. |