The United SSE 50 China ETF (the “Fund”), aims to provide investment results that, before fees, costs and expenses (including any taxes and withholding taxes), closely correspond to the performance of the SSE 50 Index (the “SSE 50”). The SSE 50 is an index consisting of the 50 largest stocks of good liquidity listed on the Shanghai Stock Exchange (“SSE”). Advantages of the United SSE 50 China ETF
Access to the China A-Shares market - Offers investors a convenient way to gain investment exposure to the China A-Shares market, which is currently restricted to Chinese nationals and Qualified Foreign Institutional Investors (“QFIIs”) approved by the China Securities Regulatory Commission
Diversification - Investors can gain investment exposure to 50 stocks in one ETF, thereby reducing concentration risk in any single stock
Investment exposure to the 50 largest A-Shares companies listed on SSE - Investors can gain investment exposure to the 50 largest A-Shares companies with good liquidity listed on the Shanghai Stock Exchange
Key Features of the SSE 50
Consists of the 50 largest stocks of good liquidity listed on the SSE
Widely recognised and quoted as a barometer of the China A-Shares market
Aims to represent the performance of good quality large enterprises, which are influential in the SSE
Investment Approach of the Fund
The Managers currently adopt a synthetic replication strategy in respect of the Fund where index
performance is replicated through the use of financial derivatives.
Currently, the underlying securities to which the SSE 50 relates, may not be directly invested by a non People's
Republic of China person, such as the Fund, unless the person is a Qualified Foreign Institutional Investor (“QFII”) approved by the China Securities Regulatory Commission.
Therefore, in order to meet the investment objective, the Fund will invest in a type of market access product
known as participatory notes (the "P-Notes") to be issued by suitably rated P-Notes issuer(s), which will be
linked to a composite portfolio (the "Composite Portfolio") comprising of an underlying basket of the A-Shares
held by the relevant QFII and designed to track as closely as possible, before fees, costs and expenses (including
any taxes and withholding taxes), the performance of the SSE 50.
The Fund does not currently intend to invest in options, warrants, commodities, futures contracts and precious metals. Investors should note however that the Sub-Fund uses and invests in financial derivatives.
Please refer to section 7.2 of the Prospectus for more information on the Composite Portfolio and P-Notes.
Some of the risks specific to an investment in the Fund include:
Exposure to counterparty risks related to the Fund's P-Notes investments – The Fund will be exposed to the credit risk of the P-Notes issuer. As the Fund currently has 1 P-Notes issuer (i.e.,BNP Paribas Arbitrage B.V.), the Fund may be subject to over-concentration risks of having a single counterparty and be exposed to a higher level of risk than portfolios diversifying their holdings across different issuers.
Governance of the current P-Note issuer and the P-Notes by foreign laws – Enforceability of the P-Notes will be dependent on, amongst other considerations, their validity under their governing law, i.e., Dutch law.
Possible limited duration of the Fund – The duration of the Fund depends on, amongst other things, the ability of the Fund to renew the term of its P-Notes. The P-Notes may also be redeemed early upon the occurrence of certain events under the terms and conditions of the P-Notes and the Fund may suffer a substantial loss on its investment in the P-Notes in such an event.
Exposure to risks relating to the QFII investment quota – The investment quota of a QFII may be restricted, suspended or halted, which may adversely affect the supply of P-Notes available to the Fund. This may result in the Fund being unable to create further units and/or cause units to trade at a premium to its NAV.
Tracking error risk – Due to its investment structure, the Fund may experience greater tracking error than typical exchange traded index funds.
Please refer to the Prospectus for further details, including a full description of the above risks as well as other risks that may be associated with an investment into units of the United SSE 50 China ETF.
For further information, investors can call our 24-hour hotline number at 1800 22 22 228 or
email us at email@example.com Notes 1. The information presented is provided by China Securities Index Co., Ltd. The information has not been prepared or independently verified by UOBAM or the Trustee or any of their respective affiliates or advisers in connection with the offering and listing of Units and none of them makes any representation as to, or takes any responsibility for the accuracy, timeliness or completeness of the information contained therein. Any liability for errors or omissions in any part of the information, or for any action taken in reliance on the information contained therein is hereby expressly disclaimed. No warranty of any kind, implied, express or statutory, is given in conjunction with the information displayed.
2. For details on fees and charges (including fees and charges payable on subscriptions), please refer to the Fund's prospectus.
Disclaimer This document is for general information only. It does not constitute an offer or solicitation to deal in units in the Fund (“Units”) or investment advice or recommendation and was prepared without regard to the specific objectives, financial situation or needs of any particular person who may receive it.
The information contained in this document, including any data, projections and underlying assumptions, are based upon certain assumptions, management forecasts and analysis of information available and reflects prevailing conditions and UOB Asset Management Ltd's (“UOBAM”) views as of the date of the document, all of which are subject to change at any time without notice. In preparing this document, UOBAM has relied upon and assumed, without independent verification, the accuracy and completeness of all information available from public sources or which was otherwise reviewed by UOBAM. While the information provided herein is believed to be reliable, UOBAM makes no representation or warranty whether express or implied, and accepts no responsibility or liability for its completeness or accuracy. Nothing in this document shall, under any circumstances constitute a continuing representation or give rise to any implication that there has not been or there will not be any change affecting the Fund. No representation or promise as to the performance of the Fund or the return on your investment is made. Past performance of the Fund or UOBAM and any past performance or prediction, projection or forecast of the economic trends or securities market are not necessarily indicative of the future or likely performance of the Fund or UOBAM. The value of Units and the income from them, if any, may fall as well as rise, and is likely to have high volatility due to the investment policies and/or portfolio management techniques employed by the Fund. Investments in Units involve risks, including the possible loss of the principal amount invested, and are not obligations of, deposits in, or guaranteed or insured by United Overseas Bank Limited (“UOB”), UOBAM, or any of their subsidiaries, associates or affiliates (“UOB Group”) or distributors of the Fund. The Fund may use or invest in financial derivative instruments and you should be aware of the risks associated with investments in financial derivative instruments which are described in the Fund's prospectus. The UOB Group may have interests in the Units and may also perform or seek to perform brokering and other investment or securities-related services for the Fund.
Investors should note that the Fund is not like a conventional unit trust in that an investor cannot redeem his Units directly with UOBAM and can only do so through the participating dealer, UOB Kay Hian Pte Ltd, (either directly or through a stockbroker) if his redemption amount satisfies a prescribed minimum that will be comparatively larger than that required for redemptions of units in a conventional unit trust. An investor may therefore only be able to realise the value of his Units by selling the Units on the Singapore Exchange Limited (“SGX”). Investors should also note that any listing and quotation of Units on the SGX does not guarantee a liquid market for the Units.
Investors should also note that the investment quota of a QFII (a Qualified Foreign Institutional Investor able to participate in the China A-Shares) may be restricted, suspended or halted. Where insufficient investment quota is available, the supply of P-Notes, being the type of China A-Shares access product which the Fund will be investing into, will be affected and may result in the Fund being unable to create further Units (because the Fund is unable to purchase more P-Notes) and/or cause the Units to trade at a premium to its value. Further, as it is intended that the Fund will initially have one P-Notes issuer (being Cooperatieve Centrale Raiffeisen-Boerenleen bank B.A.), the Fund may be subject to over-concentration risks of having a single counterparty and be exposed to a higher level of risk than portfolios diversifying their holdings across different issuers. The Fund will also be subject to the credit risks of the P-Notes issuer(s). Such risks are more fully set out in the Fund's prospectus together with other risks associated with an investment into the Units (including risks inherent in investing in the P-Notes).
An investment in unit trusts is subject to investment risks and foreign exchange risks, including the possible loss of the principal amount invested. Investors should read the Fund's prospectus, which is available and may be obtained from UOBAM or any of its appointed agents or distributors, before deciding whether to subscribe for or purchase any Units. You may wish to seek advice from a financial adviser before making a commitment to invest in any Units, and in the event that you choose not to do so, you should consider carefully whether the Fund is suitable for you.
The Fund is not in any way endorsed, sold, sponsored or promoted by the Shanghai Stock Exchange or China Securities Index Co., Ltd. The Shanghai Stock Exchange and China Securities Index Co., Ltd. make no warranty or representation whatsoever, expressly or impliedly, either as to the results to be obtained from the use of the SSE 50 Index (the “SSE 50”), and/or the figure at which the SSE 50 stands at any particular time on any particular day or otherwise, and/or the accuracy of the SSE 50. The Shanghai Stock Exchange and China Securities Index Co., Ltd. shall not be liable (whether in negligence or otherwise) to any person for any error in the SSE 50 and shall not be under any obligation to advise any person of any error therein.