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3 FAQs amid volatile market (MPF members version)

27 March 2023

2022 was an exceptionally volatile year for financial markets. With equities and bonds falling in tandem, major MPF fund categories inevitably saw their returns land in the red1. Shrinking retirement portfolios could trigger plenty of questions from employees. Let’s debunk some common investment myths and discuss ways to navigate market volatility.

Myth 1: Why are most of my investments losing money?

 

2022 was an extraordinary year for financial markets. As the pandemic unfolded, inflation in the US, UK, and Japan hit highs not seen in more than 40 years, while in the eurozone, price rises were at a 23-year peak,2  prompting European, US and UK central banks to hike rates aggressively. Not only did this undermine the conventional complementary effect of equities and bonds in investment markets – by simultaneously investing in both types of assets, gains in one could potentially offset partial losses in the other – but equities, bonds and major foreign currencies (versus the US dollar) all recorded negative returns for the first time in almost half a century.3

Major equity and bond indices worldwide saw double-digit losses in 2022 (see illustration below)– at one point, they retreated by more than 20% from their yearly highs2 – and both equities and bonds entered bear-market territory. At the same time, developed and emerging-market currencies depreciated against the US dollar, leaving the US dollar and major commodities as the only gainers.

Against this backdrop, major types of MPF funds declined, with the annualised net return of equity funds falling by 19.3% in 2022, mixed-asset funds retreated by 17.4%, while lower-risk funds, such as bond funds and guaranteed funds, also closed in the red (-13.1% and -5.3%, respectively). Conservative funds were the best-performing category, with a net annualised return of 0.4%.4

Major asset class returns 20225

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Debunking: Think (for a few minutes) before you act

 

When markets turn volatile, some investors quickly divest their holdings to book profits or cut losses. However, before making any investment decision, it is important to make thorough considerations and not get swept along by market sentiment. Why?

The point of time when scheme members start investing in the MPF, investment styles (lump-sum voluntary contributions or fixed monthly contributions), investment objectives, duration, asset classes held, and the amount of members’ MPF contributions differ. When and under what circumstances should holdings be sold, and should these holdings be sold partially or in full? It is difficult to provide one-size-fits-all answers to these questions.

If you have decided to sell, why not ask yourself these four questions first:

1.     Am I selling because of personal factors or changes in short-term market sentiment?

  • MPF is a long-term investment with a potential horizon of as much as 30-40 years, during which it undergoes multiple market cycles. If scheme members are influenced by market sentiment and choose to sell during a market downturn, a loss on the books would immediately become realised, and they could possibly miss out on any rebound.
  • Since the MPF is a personal retirement asset, scheme members can decide when to sell their portfolio’s constituent funds to meet wealth management objectives or financial needs. Nonetheless, it is important to remember that short-term volatility does not reflect the potential outlook for investments and should not affect longer-term goals.

2.     Can I “cash out” after selling?

Under MPF legislation, scheme members may only withdraw their MPF derived from mandatory contributions and tax-deductible voluntary contributions (TVC) upon reaching age 65.6 Therefore, the proceeds of all the desired “take profits” or “cut losses” actions relating to these two contributions (made before age 65) cannot be cashed out. These actions are regarded as switching funds: from the sold fund(s) to other constituent fund(s).

3.     Has the investment outlook for the asset class I plan to sell changed?

Short-term fluctuations in asset prices may arise because of changes in market sentiment and are not necessarily linked to the longer-term investment outlook. But if that outlook deteriorates, investors could consider adjusting their portfolio’s asset allocation, even if market conditions appear calm at that specific point in time. On the other hand, if the outlook remains unchanged, or even when an asset class benefits from positive catalysts (e.g., opportunities arising from the launch of supportive policies for specific sectors), scheme members may reconsider the timing of the sale.

4.     Is the adjusted portfolio deviating from my original objectives? Are the expected returns still achievable?

Excluding personal factors, it is common to sell during market downturns and switch to funds with lower potential risk or volatility – especially when markets are expected to retreat further.

After switching, low-risk funds will account for a greater proportion of a portfolio, which means potential volatility and returns will be lower. For younger scheme members far from retirement age, overly defensive allocations may be incompatible with their investment objectives. This makes achieving higher capital gains and the desired returns by retirement harder.

 

Myth 2: Will my portfolio mirror any market decline?

 

Many articles summarised investment market performance in 2022, which listed the declines seen in different asset classes and the average losses endured by investors. However, the market returns featured in these articles refer to the gains and losses of individual asset classes in 2022, not investors’ individual returns. As such, the data does not reflect investors’ actual horizon, assets held, investment cost, asset allocation and other factors that calculate the overall return of their portfolios.7

Therefore, these reported losses do not reflect personal financial losses. And investors should avoid making make premature decisions based on such data.

Debunking: Regular investing

 

In times of turmoil, if investors want to reduce volatility or lower their investment costs, as well as take advantage of long-term growth potential, the automatically executed dollar-cost averaging strategy may be a feasible choice. And this is precisely the strategy employed by MPF!

What does it mean? It involves regularly investing a fixed-dollar amount in a specific investment – regardless of fluctuations in the market price. As a result, scheme members buy more units when prices are low and fewer units when prices are high.

What are the benefits? It is often difficult to choose the best time to invest. The three major advantages of dollar cost averaging include the following:

1. Scheme members regularly invest fixed sums based on pre-set orders, regardless of market conditions. We believe it is a potentially beneficial strategy for those who are overly concerned about market volatility and miss investment opportunities, possess a lower risk appetite, do not have time to follow the relevant asset prices closely or have limited funds (contributions).

2. When there are unanticipated market movements (notable rises or falls), inexperienced investors could make irrational decisions, such as buying high due to a fear of missing out on market rallies or selling low to avoid further losses because of falling markets. However, dollar cost averaging helps alleviate the potential negative effects of irrational “active trading” on investment returns.

3. When markets are volatile, it is possible to accumulate more units at lower prices. This could result in a lower average investment cost than with a lump-sum approach during the entire investment period, which helps diversify risk. If the underlying asset prices stabilise or even trend upwards during times of uncertainty, investors may earn positive returns at the end of the period and may even outperform lump-sum investing.

 

Myth 3: Markets have rebounded, so why is my portfolio still underperforming?

 

A retirement portfolio often holds different assets and changes in value depending on the performance of individual assets and the strategy adopted.

While both equities and bonds recorded losses in 2022, the extent of equity losses across different regions (e.g., emerging markets, Europe, Japan, or the US) or bonds with different ratings (highly rated government bonds, investment-grade corporate bonds) varied greatly. If the assets held in 2022 recorded the largest/larger losses, the year-on-year percentage decrease in their value – compared to 2021 – will inevitably be greater.

At the start of 2023, some equities and bond markets once rebounded, albeit at a different pace. If assets with smaller gains (or even losses) account for a high proportion of portfolio holdings, overall returns may be lower than markets.

When structuring a portfolio, some scheme members may not have strong views of their investments. They either take guidance from family members and friends or replicate their portfolios entirely. As a result, they may opt for a single or overly concentrated strategy, focusing on one to two asset classes. Unfortunately, if their market predictions are incorrect and they choose the worst-performing asset as their sole holding, the percentage decrease in value would be significant because they do not have exposure to better-performing assets that could offset the losses.

Debunking: Diversification

 

Everyone has different risk tolerances, investment objectives and horizons. To better manage risk, diversification may be an effective way.

What does it mean? Diversification means combining different asset classes in one portfolio based on individual investment objectives and risk tolerance. Every asset class has its own risk and reward characteristics; they perform differently depending on the point in the economic cycle. Investing in a single asset may be insufficient to meet a scheme member’s investment objectives while possibly bearing the risk of over-concentration.

What are the benefits? By diversification, each asset will only form a part (but not the whole) of an investment portfolio. The variability of each asset class will matter less, while the overall portfolio volatility will be reduced to manage risk better.

What are the effects? Diversification does not guarantee positive returns within a certain period. However, even if the portfolio invests in the worst-performing asset, the overall investment returns will exceed that asset class.8

 

 

1 Mandatory Provident Fund Schemes Statistical Digest Quarterly Report December 2022 – published by the Mandatory Provident Fund Schemes Authority (MPFA). Data as of 31 December 2022. Past performance is not indicative of future performance.

2 Bloomberg, February 2023.

3 Hong Kong Monetary Authority, 30 January 2023.

4 Mandatory Provident Fund Schemes Statistical Digest Quarterly Report December 2022 – published by the Mandatory Provident Fund Schemes Authority (MPFA). Data as of 31 December 2022. Return figures are net of fees and charges. Returns of different types of constituent funds were calculated by way of time-weighted method. This time-weighted method takes into account the unit price and asset size of each constituent fund at different points in time. Unlike the internal rate of return (IRR) method, it does not capture the impact of the contributions into and benefits withdrawn from the constituent funds. The annualised net return was calculated by raising the monthly return to the power of 12. Past performance is not indicative of future performance.

5 Data source: Bloomberg, Manulife Investment Management, data as of 31 December 2022. Equities and bond returns are the total returns in US dollar of the following indices: European equities are represented by MSCI Europe Index; Japan equities are represented by MSCI Japan Index; Asia Pacific ex-Japan equities are represented by MSCI Asia Pacific ex-Japan Index; World equities are represented by MSCI World Index; US equities are represented by S&P 500 Index; Emerging market equities are represented by MSCI Emerging Markets Index; Greater China equities are represented by MSCI Golden Dragon Index; Asian bonds are represented by 50% JPMorgan Asia Credit Index + 50% Markit iBoxx Asian Local Bond Index; Global high yield bonds are represented by Bloomberg Global High Yield Corporate Bond Index; US bonds are represented by Bloomberg Barclays US Aggregate Index; Global bonds are represented by Bloomberg Barclays Global Aggregate Index; Emerging market bonds are represented by JPMorgan EMBI Global Core Index; World government bonds are represented by FTSE world government bond index. US dollar index measures of weighted average performance of US dollar against six other foreign currencies including euro, Japanese yen, British pound, Canadian dollar, Swedish krona and Swiss franc. Bulk commodities are represented by Refinitiv/CoreCommodity CRB index. Past performance is not indicative of future performance.

6 There are specific circumstances where scheme members may withdraw their MPF before reaching age 65. Benefits of Special voluntary contributions (SVC) can be withdrawn or transferred anytime. Source: Mandatory Provident Fund Schemes Authority (MPFA).

7 As investors are still holding their assets, the overall return mentioned above refers to the booking gains or losses as of a certain cut-off date, but not the actual (realised) returns/losses.

8 Assuming an investment portfolio consists of two or more asset classes, and there is only one asset class to be the worst performer.

Debunking: Think (for a few minutes) before you act

When markets turn volatile, some investors quickly divest their holdings to book profits or cut losses. However, before making any investment decision, it is important to make thorough considerations and not get swept along by market sentiment. Why?

The point of time when scheme members start investing in the MPF, investment styles (lump-sum voluntary contributions or fixed monthly contributions), investment objectives, duration, asset classes held, and the value of members’ MPF contributions differ. When and under what circumstances should holdings be sold, and should these holdings be sold partially or in full? It is difficult to provide one-size-fits-all answers to these questions.

If you have decided to sell, why not ask yourself these four questions first:

1.     Am I selling because of personal factors or changes in short-term market sentiment?

  • MPF is a long-term investment with a horizon of as much as 30-40 years, during which it undergoes multiple market cycles. If scheme members are influenced by market sentiment and choose to sell during a market downturn, a loss on the books would immediately become realised, and they could possibly miss out on any rebound.
  • Since the MPF is a personal retirement asset, scheme members can decide when to sell their portfolio’s constituent funds to meet wealth management objectives or financial needs. Nonetheless, it is important to remember that short-term volatility does not reflect the potential outlook for investments and should not affect longer-term goals.

2.     Can I “cash out” after selling?

Under MPF legislation, scheme members may only withdraw their MPF derived from mandatory contributions and tax-deductible voluntary contributions (TVC) upon reaching age 656. Therefore, the proceeds of all the desired “take profits” or “cut losses” actions relating to these two contributions (made before age 65) cannot be cashed out. These actions are regarded as switching funds: from the sold fund(s) to other constituent fund(s).

3.     Has the investment outlook for the asset class I plan to sell changed?

Short-term fluctuations in asset prices may arise because of changes in market sentiment and are not necessarily linked to the longer-term investment outlook. But if that outlook deteriorates, investors could consider adjusting their portfolio’s asset allocation, even if market conditions appear calm at that specific point in time. On the other hand, if the outlook remains unchanged, or even when an asset class benefits from positive catalysts (e.g., opportunities arising from the launch of supportive policies for specific sectors), scheme members may reconsider the timing of the sale.

4.     Is the adjusted portfolio deviating from my original objectives? Are the expected returns still achievable?

Excluding personal factors, it is common to sell during market downturns and switch to funds with lower potential risk or volatility – especially when markets are expected to retreat further.

After switching, low-risk funds will account for a greater proportion of a portfolio, which means potential volatility and returns will be lower. For younger scheme members far from retirement age, overly defensive allocations may be incompatible with their investment objectives. This makes achieving higher capital gains and the desired returns by retirement harder.

 

Myth 2: Will my portfolio mirror any market decline?

Many articles summarised investment market performance in 2022, which listed the declines seen in different asset classes and the average losses endured by investors. However, the market returns featured in these articles refer to the gains and losses of individual asset classes in 2022, not investors’ individual returns. As such, the data does not reflect investors’ actual horizon, assets held, investment cost, asset allocation and other factors that calculate the overall return of their portfolios.7

Therefore, these reported losses do not reflect personal financial losses. And investors should avoid making make premature decisions based on such data.

Debunking: Regular investing

In times of turmoil, if investors want to reduce volatility or lower their investment costs, as well as take advantage of long-term growth potential, the automatically executed dollar-cost averaging strategy may be a feasible choice. And this is precisely the strategy employed by MPF!

What does it mean? It involves regularly investing a fixed-dollar amount in a specific investment – regardless of fluctuations in the market price. As a result, scheme members buy more units when prices are low and fewer units when prices are high.

What are the benefits? It is often difficult to choose the best time to invest. The three major advantages of dollar cost averaging include the following:

1. Scheme members regularly invest fixed sums based on pre-set orders, regardless of market conditions. Therefore, it is a potentially beneficial strategy for those who are overly concerned about market volatility and miss investment opportunities, possess a lower risk appetite, do not have time to follow the relevant asset prices closely or have limited funds (contributions).

2. When there are unanticipated market movements (notable rises or falls), inexperienced investors could make irrational decisions, such as buying high due to a fear of missing out on market rallies or selling low to avoid further losses because of falling markets. However, dollar cost averaging helps alleviate the potential negative effects of irrational “active trading” on investment returns.

3. When markets are volatile, it is possible to accumulate more units at lower prices. This could result in a lower average investment cost than with a lump-sum approach during the entire investment period, which helps diversify risk. If the underlying asset prices stabilise or even trend upwards during times of uncertainty, investors may earn positive returns at the end of the period and may even outperform lump-sum investing.

 

Myth 3: Markets have rebounded, so why is my portfolio still underperforming?

A retirement portfolio often holds different assets and changes in value depending on the performance of individual assets and the strategy adopted.

While both equities and bonds recorded losses in 2022, the extent of equity losses across different regions (e.g., emerging markets, Europe, Japan, or the US) or bonds with different ratings (highly rated government bonds, investment-grade corporate bonds) varied greatly.

If the assets held in 2022 recorded the largest/larger losses, the year-on-year decline in their value – compared to 2021 – will inevitably be greater.

At the start of 2023, some equities and bond markets once rebounded, albeit at a different pace. If assets with smaller gains (or even losses) account for a high proportion of portfolio holdings, overall returns may be lower than markets.

When structuring a portfolio, some scheme members may not have strong views of their investments. They either take guidance from family members and friends or replicate their portfolios entirely. As a result, they may opt for a single or overly concentrated strategy, focusing on one-to-two asset classes. Unfortunately, if their market predictions are incorrect and they choose the worst-performing asset as their sole holding, the decline in value would be significant because they do not have exposure to better-performing assets that could offset the losses.

Debunking: Diversification

Everyone has different risk tolerances, investment objectives and horizons. To better manage risk, diversification may be an effective way.

What does it mean? Diversification means combining different asset classes in one portfolio based on individual investment objectives and risk tolerance. Every asset class has risk- and-reward characteristics; they perform differently depending on the point in the economic cycle. Investing in a single asset is typically insufficient to meet a scheme member’s investment objectives while bearing the risk of over-concentration.

What are the benefits? By diversification, each asset will only form a part (but not the whole) of an investment portfolio. The variability of each asset class will matter less, while the overall portfolio volatility will be reduced to manage risk better.

What are the effects? Diversification does not guarantee positive returns within a certain period. However, even if the portfolio invests in the worst-performing asset, the overall investment returns will still exceed that asset class.8

 

 

1 Mandatory Provident Fund Scheme Statistical Digest Quarterly Report December 2022 – published by the Mandatory Provident Fund Schemes Authority (MPFA). Data as of 31 December 2022. Past performance is not indicative of future performance.

2 Bloomberg, February 2023.

3 Hong Kong Monetary Authority, 30 January 2023.

4 Mandatory Provident Fund Scheme Statistical Digest Quarterly Report December 2022 – published by the Mandatory Provident Fund Schemes Authority (MPFA). Data as of 31 December 2022. Return figures are net of fees and charges. Returns of different types of constituent funds were calculated by way of time-weighted method. This time-weighted method takes into account the unit price and asset size of each constituent fund at different points in time. Unlike the internal rate of return (IRR) method, it does not capture the impact of the contributions into and benefits withdrawn from the constituent funds. The annualised net return was calculated by raising the monthly return to the power of 12. Past performance is not indicative of future performance.

5 Data source: Bloomberg, Manulife Investment Management, data as of 31 December 2022. Equities and bond returns are the total returns in US dollar of the following indices: European equities are represented by MSCI Europe Index; Japan equities are represented by MSCI Japan Index; Asia Pacific ex-Japan equities are represented by MSCI Asia Pacific ex-Japan Index; World equities are represented by MSCI World Index; US equities are represented by S&P 500 Index; Emerging market equities are represented by MSCI Emerging Markets Index; Greater China equities are represented by MSCI Golden Dragon Index; Asian bonds are represented by 50% JPMorgan Asia Credit Index + 50% Markit iBoxx Asian Local Bond Index; Global high yield bonds are represented by Bloomberg Global High Yield Corporate Bond Index; US bonds are represented by Bloomberg Barclays US Aggregate Index; Global bonds are represented by Bloomberg Barclays Global Aggregate Index; Emerging market bonds are represented by JPMorgan EMBI Global Core Index; World government bonds are represented by FTSE world government bond index. US dollar index measures of weighted average performance of US dollar against six other foreign currencies including euro, Japanese yen, British pound, Canadian dollar, Swedish krona and Swiss franc. Bulk commodities are represented by Refinitiv/CoreCommodity CRB index. Past performance is not indicative of future performance.

6 There are specific circumstances where scheme members may withdraw their MPF before reaching age 65. Benefits of Special voluntary contributions (SVC) can be withdrawn or transferred anytime. Source: Mandatory Provident Fund Schemes Authority (MPFA).

7 As investors are still holding their assets, the overall return mentioned above refers to the booking gains or losses as of a certain cut-off date, but not the actual (realised) returns/losses.

8 Assuming an investment portfolio consists of two or more asset classes, and there is only one asset class to be the worst performer.

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    Read more

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  • Manulife Advanced Fund SPC is an umbrella fund comprising a number of sub-funds investing primarily in equity and bond securities, each of which has a different investment objective and risk level.
  • The sub-funds do not guarantee distribution of dividends, the frequency of distribution, and the amount/rate of dividends. A sub-fund may at its discretion pay dividend out of capital or gross income while charging / paying all or part of its fees and expenses out of its capital. This amounts to a return or withdrawal of part of an investor’s original investment or from any capital gains attributable to that original investment, and may result in an immediate reduction of the net asset value per share of the respective share classes after the distribution date.
  • Certain sub-funds with significant exposure to Renminbi (“RMB”) bonds/equity/assets or emerging markets, may involve debt instrument, credit/counterparty, concentration, liquidity, volatility, currency, tax, economic, foreign exchange/multi-currency conversion, down-grading, regulatory and political risks and these risks could be substantially higher than the risks normally associated with the world's more established markets.
  • A bond sub-fund may hold a significant portion of assets in deposits if there are not sufficient RMB instruments for it to invest in.  This may adversely affect its return and performance.
  • Certain sub-funds using invest directly in debt instruments/shares via QFII regime, the Bond Connect and/or the Foreign Access Regime are subject to various requirements and restrictions under the laws of Mainland China related to investment in QFII and/or China Interbank Market and custodial risks.
  • RMB is not freely convertible and is subject to exchange controls and restrictions.
  • Certain sub-funds may have significant concentrated exposures to particular industry sectors and geography's, which subjects investors to concentration and equity market risk.
  • Certain sub-funds may invest in equities of small- and mid-capitalization companies, which can expose investors to liquidity and volatility risks, and is subject to greater risk than is customarily associated with investments in larger capitalization companies.
  • Investment involves risk. The sub-funds may expose to a high risk of capital loss. Investors should not invest solely based on this material and should read the offering document for details including the risk factors, charges and features of the sub-funds.


Manulife Hong Kong Series

  • Manulife Hong Kong Series (“the Series”) is an open-ended unit trust comprising a number of funds primarily investing in equities, debt securities, exchange-traded funds and/or collective investment schemes, each of which has a different investment objective and risk level.
  • The funds do not guarantee distribution of dividends, the frequency of distribution, and the amount/rate of dividends. Dividends may be paid out of capital and/or out of gross income of certain funds in respect of Inc classes, while charging/paying all or part of certain funds’ fees and expenses to/out of capital of certain funds. This represents a return or a withdrawal of part of an investor's original investment amount or capital gain attributable to that amount. Distributions will result in an immediate decrease in the net asset value of the relevant units. Class AA (RMB) Inc Hedged Unit of certain funds is subject to higher distribution risks than other non-hedged unit classes.
  • Certain funds may involve equity market, emerging markets, Dim Sum bond market, concentration, volatility, liquidity, credit, credit ratings, below investment grade and unrated securities, credit rating downgrading, interest rates, valuation, sovereign debt, unlisted debt securities, political and regulatory, currency, foreign exchange, derivative and structured product, hedging, and distribution risks.
  • Certain funds are subject to the risks of investing in other funds and the risks relating to asset allocation strategy and/or downside risk management process.
  • Certain fund is subject to the risks of investing in other funds and the risks relating to investment in exchange traded funds, Strategic and Tactical Asset Rebalancing Strategy (“STARS”), small- and mid-capped companies, convertible bonds and the risks associated with securitised debt instruments and investments in loss-absorption features. Certain fund is a feeder fund that invests all or substantially all of its assets in another collective investment scheme (the “master fund”) and is therefore subject to the risks of investing in the master fund.
  • As RMB is not freely convertible, currency conversion is subject to exchange controls, and restrictions. There can be no assurance that RMB will not be subject to devaluation. Insufficient amount of RMB for currency conversion or devaluation of RMB could adversely affect the value of investors’ investments in the RMB denominated class(es) of certain funds. The “Dim Sum” bond market is still a relatively small market which is more susceptible to volatility and illiquidity. Due to RMB concentration risk, the value of the funds may be more volatile than that of a fund having a more diverse portfolio of investments.
  • Certain fund will not have direct investments other than cash, cash equivalents and financial derivative instruments (such as futures, options and forwards).
  • Investment involves risk. The funds may expose its investors to capital loss. Investors should not make investment decisions based on this material alone but should read the offering document for details, including the risk factors, charges and features of the Fund and its unit classes.

 General Risk Disclosure
 

  • Funds offered on this platform may invest in equity, fixed income securities, exchange-traded funds, collective investment schemes and/or other instruments, including derivatives, and each of which has its specific investment objective/ policy with its specific features and different risk profile.
  • Distribution of dividends, the frequency of distribution and the amount/rate of dividends are not guaranteed. Dividend of certain share/unit classes, at the fund or the investment manager’s discretion, may be paid out of capital or gross income while charging / paying all or part of its fees and expenses out of its capital. This amounts to a return or withdrawal of part of an investor’s original investment or from any capital gains attributable to that original investment, and may result in an immediate reduction of the net asset value per share/unit of the respective share/unit classes after the distribution date.
  • Some funds may invest in bonds or debt securities which may be subject to credit, liquidity, counterparty and market risks.
  • Some funds may invest in non-investment grade bonds and unrated securities which may be subject to greater credit and liquidity risks, and may be more volatile than higher rated securities. Some funds may invest in investment grade debt securities, which may be subject to ratings downgrades by the rating agencies that may affect the net asset value of the fund.
  • Some funds may invest in derivative instruments which may involve additional risks. (For example, leverage may cause greater volatility.)
  • Some funds may make extensive use of derivatives including more complex derivative instruments or strategies to achieve the investment objective, this may give rise to additional exposure in that performance may rise or fall more than it would have done otherwise. In adverse situations, the fund’s use of derivative instruments may become ineffective and the fund may suffer significant losses. The use of derivatives may give rise to leverage, liquidity, counterparty and valuation risks.
  • Some funds may invest in emerging economies or markets, where special risks, including liquidity, volatility, government policies, taxation, currency, currency repatriation, political and regulatory risks, may be substantially higher than the risks normally associated with more developed economies or markets.
  • Some funds may invest in securities of small and/or medium sized companies in the relevant markets. This can involve greater risk than is customarily associated with investments in larger and more established companies.
  • Some funds may invest in a single country/region and/or a particular industry sector which may be concentrated and subject to greater risks than diversified investments in several countries and/or regions and across sectors.
  • Some funds may invest directly in certain China A shares via the Stock Connect, which may involve risks related to investments via the Stock Connect and Mainland China investment.
  • Some funds may have significant exposure to Renminbi ("RMB") bonds/equity/assets or emerging markets, which will be subject to debt instrument, credit/counterparty, concentration, liquidity, volatility, currency, tax, economic, foreign exchange/multi-currency conversion, down-grading, regulatory and political risks and these risks could be substantially higher than the risks normally associated with more established markets.
  • Some funds with significant exposure to RMB bonds/equity/assets may hold a significant portion of assets in deposits if there are not sufficient RMB instruments to invest in. This may adversely affect the funds’ return and performance.
  • Some funds using Qualified Foreign Institutional Investor (“QFII”) quota to invest directly in debt instruments/shares in Mainland China may be subject to various requirements and restrictions under the laws of Mainland China related to QFII investment and custodial risks.
  • Some funds are subject to the risks of investing in other funds and the risks relating to asset allocation strategy and/or downside risk management process.
  • As RMB is not freely convertible, currency conversion is subject to exchange controls and restrictions. There can be no assurance that RMB will not be subject to devaluation. Insufficient amount of RMB for currency conversion or devaluation of RMB could adversely affect the value of investors’ investments in the RMB denominated class(es) of certain funds. The “Dim Sum” bond market is still a relatively small market which is more susceptible to volatility and illiquidity. Due to RMB concentration risk, the value of the funds with substantial RMB exposure may be more volatile than that of a fund having a more diverse portfolio of investments.
  • Some funds’ performance will be closely tied to the economic, political, regulatory, geopolitical, market, currency or other conditions in the European Economic Area and may be subject to increased liquidity, price, and foreign exchange risk.
  • Some funds may invest in Russia and some investments in Russian securities may be unlisted securities not dealt on a regulated market. The Russian market presents specific risks in relation to the settlement and safekeeping of securities.
  • Investment involves risk. Investors may expose to capital loss and should not invest solely based on the information on this website alone and should read the offering documents for details including the associated risk factors, charges and features of the funds and their share/unit classes. Past performance information is not indicative of future performance.


Manulife Global Fund

  • Manulife Global Fund is an umbrella fund comprising a number of sub-funds investing in equity and/or fixed income securities, each of which has a different investment objective and risk profile and may involve equity market,  geographical concentration, sovereign debt, liquidity, volatility, credit downgrade, interest rate, counterparty risks. 
  • The relevant distributing class of the sub-funds does not guarantee distribution of dividends, the frequency of distribution and the amount/rate of dividends. Dividends may be paid out of income, realized capital gains and/or out of capital of certain sub-funds in respect of Inc share class(es). Dividends may be paid out of realized capital gains, capital and/or gross income while charging all or part of their fees and expenses to capital (i.e. payment of fees and expenses out of capital) in respect of MDIST (G) and R MDIST (G) share class(es).  Dividends paid out of capital of these sub-funds amounts to a return or withdrawal of part of the amount of an investor’s original investment or from any capital gains attributable to that original investment and may result in an immediate decrease in the net asset value per share in respect of such class(es) of the sub-funds.
  • Certain sub-funds invest in emerging economies or markets, where special risks, including liquidity, volatility, government policies, taxation, currency, currency repatriation, political and regulatory risks, may be substantially higher than the risks normally associated with more developed economies or markets.
  • Certain sub-funds invest in securities of small and medium sized companies in the relevant markets. This can involve greater risk than is customarily associated with investments in larger and more established companies.
  • Certain sub-funds concentrate their investments in a single country and/or a particular industry sector are subject to greater risks than diversified investments in several countries and/or regions and across sectors.
  • Certain sub-funds may invest directly in certain China A shares via Stock Connect, which may involve in risk related to Investments via Stock Connect and Mainland China investment.
  • Investment involves risk. The sub-funds may expose their investors to capital loss. Investors should not invest solely based on this material and should read the offering document for details including the risk factors, charges and features of the sub-funds and their share classes.
  • Each sub-fund intends to use financial derivative instruments (“FDIs”) for investment, efficient portfolio management and/or hedging purposes.  The use of FDIs exposes the Fund to additional risks, including counterparty/credit risk, liquidity risk, valuation risk, volatility risk and over-the-counter transaction risk. 
  • Given RMB is currently not a freely convertible currency,  payment of redemptions and/or dividend payment in RMB may be delayed due to the exchange controls and restrictions applicable to RMB. As offshore RMB (CNH) will be used for the valuation of RMB denominated Class(es), CNH rate may be at a premium or discount to the exchange rate for onshore RMB (CNY) and there may be significant bid and offer spreads and thus the value of the RMB denominated Class(es) will be subject to fluctuation.  Any devaluation of RMB could adversely affect the value of investors’ investments in the RMB denominated Class(es) of certain sub-funds.


Manulife Advanced Fund SPC

  • Manulife Advanced Fund SPC is an umbrella fund comprising a number of sub-funds investing primarily in equity and bond securities, each of which has a different investment objective and risk level.
  • The sub-funds do not guarantee distribution of dividends, the frequency of distribution, and the amount/rate of dividends. A sub-fund may at its discretion pay dividend out of capital or gross income while charging / paying all or part of its fees and expenses out of its capital. This amounts to a return or withdrawal of part of an investor’s original investment or from any capital gains attributable to that original investment, and may result in an immediate reduction of the net asset value per share of the respective share classes after the distribution date.
  • Certain sub-funds with significant exposure to Renminbi (“RMB”) bonds/equity/assets or emerging markets, may involve debt instrument, credit/counterparty, concentration, liquidity, volatility, currency, tax, economic, foreign exchange/multi-currency conversion, down-grading, regulatory and political risks and these risks could be substantially higher than the risks normally associated with the world's more established markets.
  • A bond sub-fund may hold a significant portion of assets in deposits if there are not sufficient RMB instruments for it to invest in.  This may adversely affect its return and performance.
  • Certain sub-funds using invest directly in debt instruments/shares via QFII regime, the Bond Connect and/or the Foreign Access Regime are subject to various requirements and restrictions under the laws of Mainland China related to investment in QFII and/or China Interbank Market and custodial risks.
  • RMB is not freely convertible and is subject to exchange controls and restrictions.
  • Certain sub-funds may have significant concentrated exposures to particular industry sectors and geography's, which subjects investors to concentration and equity market risk.
  • Certain sub-funds may invest in equities of small- and mid-capitalization companies, which can expose investors to liquidity and volatility risks, and is subject to greater risk than is customarily associated with investments in larger capitalization companies.
  • Investment involves risk. The sub-funds may expose to a high risk of capital loss. Investors should not invest solely based on this material and should read the offering document for details including the risk factors, charges and features of the sub-funds.


Manulife Hong Kong Series

  • Manulife Hong Kong Series (“the Series”) is an open-ended unit trust comprising a number of funds primarily investing in equities, debt securities, exchange-traded funds and/or collective investment schemes, each of which has a different investment objective and risk level.
  • The funds do not guarantee distribution of dividends, the frequency of distribution, and the amount/rate of dividends. Dividends may be paid out of capital and/or out of gross income of certain funds in respect of Inc classes, while charging/paying all or part of certain funds’ fees and expenses to/out of capital of certain funds. This represents a return or a withdrawal of part of an investor's original investment amount or capital gain attributable to that amount. Distributions will result in an immediate decrease in the net asset value of the relevant units. Class AA (RMB) Inc Hedged Unit of certain funds is subject to higher distribution risks than other non-hedged unit classes.
  • Certain funds may involve equity market, emerging markets, Dim Sum bond market, concentration, volatility, liquidity, credit, credit ratings, below investment grade and unrated securities, credit rating downgrading, interest rates, valuation, sovereign debt, unlisted debt securities, political and regulatory, currency, foreign exchange, derivative and structured product, hedging, and distribution risks.
  • Certain funds are subject to the risks of investing in other funds and the risks relating to asset allocation strategy and/or downside risk management process.
  • Certain fund is subject to the risks of investing in other funds and the risks relating to investment in exchange traded funds, Strategic and Tactical Asset Rebalancing Strategy (“STARS”), small- and mid-capped companies, convertible bonds and the risks associated with securitised debt instruments and investments in loss-absorption features. Certain fund is a feeder fund that invests all or substantially all of its assets in another collective investment scheme (the “master fund”) and is therefore subject to the risks of investing in the master fund.
  • As RMB is not freely convertible, currency conversion is subject to exchange controls, and restrictions. There can be no assurance that RMB will not be subject to devaluation. Insufficient amount of RMB for currency conversion or devaluation of RMB could adversely affect the value of investors’ investments in the RMB denominated class(es) of certain funds. The “Dim Sum” bond market is still a relatively small market which is more susceptible to volatility and illiquidity. Due to RMB concentration risk, the value of the funds may be more volatile than that of a fund having a more diverse portfolio of investments.
  • Certain fund will not have direct investments other than cash, cash equivalents and financial derivative instruments (such as futures, options and forwards).
  • Investment involves risk. The funds may expose its investors to capital loss. Investors should not make investment decisions based on this material alone but should read the offering document for details, including the risk factors, charges and features of the Fund and its unit classes.
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