1. What kinds of fund do we need?
Group 7
Ko Wing Sum
Wong Chin Ying
Cheng Ching Man
Leung Ho Fun
Ma Chung Man

2. Undergraduate Ms Cheng Single 20 years old girl
Year 1 student in a university
Save money for 1st year repayment after graduation
Travel with family

3. Development of Fund started in 1970s -1980s only foreigners involved
80s to 90s
rapidly developed
1987 the stock crisis

4. Development of Fund Two main types
Authorized Fund and Unauthorized Fund
Different between them

5. Development of Fund Difference
Funds offered to the public in Hong Kong
Have a well-defined investment strategy
NOT mean it guarantees a promising return from the fund
Company's marketing strategy

6. Development of Fund 1,942 numbers of Authorized Funds
Including both Mutual and Unit Trust Funds
Mutual Fund
stock limited corporation
selling securities
stockholders
shared in proportion

7. Development of Fund Unit Trust Fund
 unincorporated mutual fund structure
 allows funds to hold and pass through profits to the individual owners

8. Development of Fund Bond Fund Equity Fund Index Fund Guaranteed Fund
Hedge Fund
Fund of Funds

9. Development of Fund
Different types of funds involved different levels of risk
Consider situation and degree of risk-bearing before investing

10. Suggestion
Save $60,000 for 3 years
Save near $1,300
Fixed period fund

11. Middle Age Mr. Tong 40 Years Old Stable job (Month Salary: HK$30,000)
Cash: HK$100,000
Property: one HK$750,000 estate
One 10 year-old son

12. Prepare saving objective :
Education fee for son’s university fee (10 years later)
Retirement expenses (20 years later)

13. Suggestion: Education fee for son’s university fee (10 years later)
Lower risk investment: Bond fund
Retirement expenses (20 years later)
High risk investment: Equity fund

14. Bond Funds Provide stable income with minimal risk.
Invest in: income-producing instruments, may include corporate, government or municipal bonds.
Low-risk investment, E.g. investing in U.S. Government Long-Term Bonds.
Stable return
change in interest rates, exchange rate and bonds’ credit rating, fund price will fluctuate

16. Equity Funds Invest primarily in stocks, usually common stocks.
Purpose: seek for capital gain.
Various choices of Equity Funds. E.g. Global Stock Market / one specific country.
In Hong Kong: hybrid funds
integrates both Bond and Equity Funds:

18. Performance of a Bond Fund (HSBC Asia Bond Fund)
Performance of a Equity Fund
(HSBC GIF Chinese Equity Fund)

19. Retirement Mr. Lam 60 years old just retired about 4 million cashes
no experience of investment
maintain his retire life standard

20. Retirement stock market is too high risk Guaranteed Fund
monthly dividends
annual income of 200 thousands

21. Guaranteed Fund Type of collective investment scheme
Guarantee to pay you back a predetermined amount
On a specific data
Growth of the
Underlying
Instruments or
index
(1 ＋
Participation
rate
Payment at
maturity
Initial capital
invested ) x x =

22. Suggestions (retirement)
Guaranteed Fund
concern the flexibility
at least 4 years
redeem shares >>pay extra service charge

23. the annual interest rate 1 million2%
1 million
only 20 thousand year.

24. Suggestions (retirement)
TAI FOOK
“Share profit fund”
high flexibility
draw 10% from the
No extra fees required

25. the interest =around 200 thousand dollars. 5 years later
invest 400 million
current rate 5%
the interest =around 200 thousand dollars.
5 years later
0.8 million with his 4 million capitals.

26. REIT What is REIT? A collective investment scheme
Aims: deliver a source of recurrent income to investors
Means: investing income-generating real estate--- e.g. shopping malls, offices, hotels, etc.

27. REIT Advantages: -Higher liquidity comparing with property investment
-Allow to participate in large-scale and quality properties
-risk diversification

28. REIT Disadvantages: Underlying properties  unit price of REIT
Operating loss  no dividends

29. Suggestions (retirement)
high credit rating corporate bond
4.4% - 4.8% interest rate
5-7 years
quite appreciable return
USD bond funds

30. Suggestions (retirement)
bond funds
stock funds
REIT (around 10%)
resist the inflation
share the risk

31. Suggestions (retirement)
remain about 3% cash flow (accidental purpose)
re-adjust the investment portfolio regularly

32. Things to Consider Retirement age
After retirement: monthly expenses and period of time
only for reference
not any investment advice of recommendations.
Investment involves risk

33. The End
Thanks for Listen to Us!

34. MC 1 Which one is not the difference between authorized
Funds and unauthorized Funds?
Has the advertisement to promote the fund
The structures of funds may not be governed by any Hong Kong rules or regulations
Funds have a well-defined investment strategy
guarantees a promising return from the fund

35. MC 2 Which one is wrong to describe the Mutual fund?
A. Similar in nature to Unit Trust fund
B. An unincorporated mutual fund structure
C. The stockholders in the corporation
D. The profit in the corporation will be shared in proportion to the amount of investor’s investment.

36. MC 3
“A collective investment scheme that aims to deliver a source of recurrent income to investors through focused investment in a portfolio of income-generating real estate…” This refers to..?
A. Bond Fund
B. Equity Fund
C. Real Estate Fund
D. Index Fund