The Sub-Fund seeks to achieve its investment objective by investing primarily (i.e. not less than 70% of its NAV) in USD-denominated short-term deposits and high quality money market instruments issued by governments, quasi-governments, international organisations, financial institutions and corporations. The Sub-Fund may invest up to 30% of its NAV in non USDdenominated short-term deposits and high quality money market instruments. The Manager will hedge non USD-denominated investments into USD in order to manage any material currency risk.

• The Sub-Fund’s investment portfolio may fall in value due to any of the key risk factors

  below and therefore your investment in the Sub-Fund may suffer losses. There is no

  guarantee of the repayment of principal.

• Short-term fixed income instruments risk – As the Sub-Fund invests substantially in short-term fixed income instruments with short maturities, the turnover rates of the Sub-Fund’s investments may be relatively high and the transaction costs incurred as a result of the purchase or sale of short-term fixed income instruments may also increase which in turn may have a negative impact on the NAV of the Sub-Fund. The Sub-Fund’s underlying fixed income securities may become more illiquid when nearing maturity. It therefore may be more difficult to achieve fair valuation in the market.

• Credit/counterparty risk – The Sub-Fund is exposed to the credit/default risk of issuers of the fixed income securities it invests in.

• Volatility and liquidity risk – The fixed income securities in the Mainland China market may be subject to higher volatility and lower liquidity compared to more developed markets. The prices of securities traded in such markets may be subject to fluctuation. The bid and offer spreads of the price of such securities may be large and the Sub-Fund may incur significant trading costs.

• Interest rate risk – Investment in the Sub-Fund is subject to interest rate risk. Generally, the prices of fixed income securities rise when interest rates fall, whilst their prices fall when interest rates rise.

• Credit rating risk – Credit ratings assigned by rating agencies are subject to limitations and do not guarantee the creditworthiness of the security and/or issuer at all times.

• Credit rating agency risk – The credit appraisal system in Mainland China for investments in onshore Mainland China fixed income securities and the rating methodologies employed in Mainland China may be different from those employed in other markets. Credit ratings given by Mainland Chinese rating agencies may therefore not be directly comparable with those given by other international rating agencies.

• Downgrading risk – The credit rating of a fixed income instrument or its issuer may subsequently be downgraded. In such case, the Sub-Fund’s investment value may be adversely affected. The Manager may or may not be able to dispose of the fixed income instruments that are being downgraded.

• Valuation Risk – Valuation of the Sub-Fund’s investments may involve uncertainties and judgmental determinations. If such valuation turns out to be incorrect, this may affect the NAV calculation of the Sub-Fund.

• Sovereign debt risk – The Sub-Fund’s investment in securities issued or guaranteed by governments may be exposed to political, social and economic risks. In adverse situations, the sovereign issuers may not be able or willing to repay the principal and/ or interest when due or may request the Sub-Fund to participate in restructuring such debts. The Sub-Fund may suffer significant losses when there is a default of sovereign debt issuers.

• Bank deposits are subject to the credit risks of the relevant financial institutions. The Sub-Fund’s deposit may not be protected by any deposit protection schemes, or the value of the protection under the deposit protection schemes may not cover the full amount deposited by the Sub-Fund. Therefore, if the relevant financial institution defaults, the Sub-Fund may suffer losses as a result.

• The Sub-Fund will invest primarily in USD-denominated short-term deposits and high quality money market instruments (which may include fixed income securities). The Sub-Fund’s investments may also be concentrated in Mainland China. The Sub-Fund is therefore likely to be more volatile than a broad-based fund that adopts a more diversified strategy. The value of the Sub-Fund may be more susceptible to adverse economic, political, policy, foreign exchange, liquidity, tax, legal or regulatory events affecting the USD money markets or the Mainland China market in which its investments are focused.

• The Sub-Fund’s ability to make the relevant investments via the QFI regime is subject to the applicable laws, rules and regulations (including restrictions on investments and repatriation of principal and profits) in Mainland China, which are subject to change and such change may have potential retrospective effect.

• The Sub-Fund may suffer substantial losses if the approval of the Manager’s QFI status is revoked or terminated or otherwise invalidated as the Sub-Fund may be prohibited from trading of relevant securities and repatriation of the Sub-Fund’s monies, or if any of the key operators or parties (including the QFI custodian or brokers) is bankrupt, in default and/or disqualified from performing its obligations (including execution or settlement of any transaction or transfer of monies or securities).

• Investing in onshore Mainland China fixed income securities via the Bond Connect and/or the Foreign Access Regime is subject to regulatory risks and various risks such as volatility risk, liquidity risk, settlement and counterparty risk as well as other risk factors typically applicable to debt securities. The relevant rules and regulations of the Bond Connect and the Foreign Access Regime are subject to change which may have potential retrospective effect. In the event that the relevant Mainland Chinese authorities suspend account opening or trading via the Bond Connect and/or the Foreign Access Regime, the Sub-Fund’s ability to invest in onshore Mainland China fixed income securities via the Bond Connect and/or the Foreign Access Regime will be adversely affected. In such event, the Sub-Fund’s ability to achieve its investment objective may be negatively affected.

• Underlying investments of the Sub-Fund may be denominated in currencies other than its base currency. The NAV of the Sub-Fund may be affected unfavourably by fluctuations in the exchange rates between these currencies and the base currency and by changes in exchange rate controls.

8. RMB currency risk

• The Sub-Fund may invest in onshore Mainland China fixed income securities which are denominated in RMB. RMB is currently not freely convertible and is subject to exchange controls and restrictions. Non-RMB based investors are exposed to foreign exchange risk and there is no guarantee that the value of RMB against other currencies will not depreciate. Any depreciation of RMB could adversely affect the value of the investor’s investment in the Sub-Fund.

9. Mainland China tax risk

• There are risks and uncertainties associated with the current Mainland China tax laws, regulations and practice in respect of capital gains realised via the Manager’s QFI status, the Bond Connect and/or the Foreign Access Regime on the Sub-Fund’s investments in the Mainland China (which may have retrospective effect). Any increased tax liabilities on the Sub-Fund may adversely affect the Sub-Fund’s value.

• Based on professional and independent tax advice, the Manager has determined that the Sub-Fund will not make withholding tax provisions for capital gains, realised or unrealised, derived from the trading of onshore Mainland China debt securities.

10. Distribution out of/effectively out of capital risk

• Payment of dividends out of capital and/or effectively out of capital amounts to a return or withdrawal of part of an investor’s original investment or from any capital gains attributable to such original investments. Any such distributions may result in an immediate reduction of the NAV per Share of the Sub-Fund.

11. Risks relating to sale and repurchase agreements

• In the event of the failure of the counterparty with which collateral has been placed, the Sub-Fund may suffer loss as there may be delays in recovering collateral placed out or the cash originally received may be less than the collateral placed with the counterparty due to inaccurate pricing of the collateral or market movements.

12. Risks relating to reverse repurchase agreements

• In the event of the failure of the counterparty with which cash has been placed, the Sub-Fund may suffer loss as there may be delay in recovering cash placed out or difficulty in realising collateral or proceeds from the sale of the collateral may be less than the cash placed with the counterparty due to inaccurate pricing of the collateral or market movements. The Sub-Fund may also be subject to legal risk, operational risks, liquidity risk of the counterparty and custody risk of the collateral.