Investment involves risks. Please refer to the Explanatory Memorandum for details including the risk factors.

1. Investment 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.

2. Equity market risk

· The Sub-Fund’s investment in equity securities is subject to general market risks, whose value may fluctuate due to various factors, such as changes in investment sentiment, political and economic conditions and issuer-specific factors.

3. Geographical concentration risk

· The Sub-Fund is subject to geographical concentration risks as it primarily invests in companies which are US listed companies having business operations related to the technology sector and which may be headquartered, incorporated and/or operating in the US. The value of the Sub-Fund may be more susceptible to adverse economic, political, policy, foreign exchange, liquidity, tax, legal or regulatory event affecting the US.

4. Sector concentration risk

· The constituents of the Index, and accordingly the Sub-Fund’s investments, may from time to time be concentrated in companies in a particular industry. The value of the Sub-Fund may be more volatile than that of a fund having a more diverse portfolio of investments and may be more susceptible to adverse economic, political, policy, foreign exchange, liquidity, tax, legal or regulatory event affecting the relevant sector.

· In particular, the constituents of the Index, and accordingly the Sub-Fund’s investments, are concentrated in companies in the technology sector, which may experience relatively higher volatility in price performance when compared to other economic sectors. Companies in the technology sector generally face intense competition, both domestically and internationally, which may have an adverse effect on their profit margins. The value of the Sub-Fund may be more volatile than that of a fund having a more diverse portfolio of investments and may be more susceptible to adverse economic, political, policy, foreign exchange, liquidity, tax, legal or regulatory event affecting the relevant sector.

5. Risks associated with ADRs

· Exposure to ADRs may generate additional risks compared to a direct exposure to the corresponding underlying stocks. There could be a risk that underlying stockers would not be attributed to holders of ADRs in case of bankruptcy of the depositary bank.

· Fees related to ADRs may impact their performance. Also, holders of ADRs are not direct shareholders of the underlying company and generally do not have voting and other shareholder rights. The Sub-Fund may also be subject to liquidity risk.

6. Passive investment risk

· The Sub-Fund is passively managed and the Manager will not have the discretion to adapt to market changes due to the inherent investment nature of the Sub-Fund. Falls in the Index are expected to result in corresponding falls in the value of the Sub-Fund.

7. Tracking error risk

· The Sub-Fund may be subject to tracking error risk, which is the risk that its performance may not track that of the Index exactly. This tracking error may result from the investment strategy used, costs of using FDIs, and fees and expenses. The Manager will monitor and seek to manage such risk in minimising tracking error. There can be no assurance of exact or identical replication at any time of the performance of the Index.

8. Risks associated with securities lending transactions

· Securities lending transactions may involve the risk that the borrower may fail to return the securities lent out in a timely manner and the value of the collateral may fall below the value of the securities lent out.

9. Currency risk

· RMB is currently not freely convertible and is subject to exchange controls and restrictions and investors may be adversely affected by movements of the exchange rates between RMB and other currencies. Currency conversion is also subject to the Sub-Fund’s ability to convert the proceeds into RMB (due to exchange controls and restrictions applicable to RMB) which may also affect the Sub-Fund’s ability to meet redemption requests from Unitholders in RMB denominated classes of Units or to make distributions (if applicable), and may delay the payment of redemption proceeds or dividends (if applicable) under exceptional circumstances.

· Underlying investments of the Sub-Fund are primarily denominated in USD and the base currency of the Sub-Fund is USD. A class of Units may be designated in a currency other than the base currency of the Sub-Fund. 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.

10. Distributions out of/effectively out of capital risk

· Payments 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 that original investment. Any such distributions may result in an immediate reduction of the NAV per Unit. 

11. Termination risk

The Sub-Fund may be terminated early under certain circumstances, for example, the Index is no longer available for benchmarking or if the size of the Sub-Fund falls below USD10,000,000. Any amount recovered by a unitholder on termination of the Sub-Fund may be less than the capital initially invested by the unitholder, resulting in a loss to the unitholder.