One-stop solution for investing in China

UBS China Allocation Opportunity Fund

Please read the important information of the fund before proceeding

UBS (Lux) Key Selection SICAV –China Allocation Opportunity (USD)

1. Under normal circumstances, the Fund expects to invest up to 65% of its net asset value in equities and equity rights and up to65% of its net asset value in bonds and claims (i.e. secured obligations such as bank loans and other debt instruments) of companies domiciled or chiefly active in China. The Fund may also invest up to 65% of its net asset value in securities traded on the onshore China securities market. These include Chinese A shares ("A shares") as well as RMB-denominated fixed-income instruments traded on the Chinese interbank bond market ("CIBM") or the exchange-traded bond market ("Chinese onshore bonds"). The Fund may invest up to 100% of its net asset value in equities and bonds issued or traded offshore outside the PRC.

2. The Fund's investments may be subject to risks associated with the asset allocation strategy, liquidity, China (such as tax, RMB currency and foreign exchange, and RQFII), equities (including A shares and Stock Connect), fixed income (such as high yield bonds, credit rating and downgrading, and counterparty), fund of funds, securities lending, and repurchase and reverse repurchase agreements.

3. The Fund may have concentrated exposure to China. The value of investments in China may be more volatile and unstable than those in more developed markets, and more susceptible to market volatility, settlement difficulties, adverse economic, political, policy, foreign exchange, liquidity, tax, legal or regulatory events affecting China.

4. The Fund may invest up to 65% of its net asset value in high yield bonds and claims with a rating of BBB (Standard & Poor’s) or lower, a comparable rating from another internationally recognized rating agency or a comparable internal UBS rating.

5. The Fund is also subject to risks associated with debt instruments with loss-absorption features. Such instruments are subject to greater risks when compared to traditional debt instruments as such instruments are typically subject to the risk of being written down or converted to ordinary shares upon the occurrence of pre-defined trigger event(s) which are likely to be outside of the issuer’s control. Such trigger events are complex and difficult to predict and may result in a significant or total reduction in the value of such instruments.

6. The Fund may use financial derivative instruments for investment management and hedging purposes. The Fund's net derivative exposure may be up to 50% of its net asset value. The use of financial derivative instruments may become ineffective and/or cause the Fund to suffer significant losses.

7. In respect of share classes with "-mdist" in their name, distributions may be paid from capital or effectively out of capital which may result in an immediate reduction of the net asset value per share. This amounts to a withdrawal of part of an investor’s original investment or from any capital gains attributable to that original investment.

8. The fixed rate distribution share classes (i.e. share classes with a fixed percentage in their name) continue to distribute in periods that the Fund has negative return / is making losses, which further reduces the net asset value of the Fund.

9. This investment may involve risks that could result in loss of part or entire amount of investors' investment.

10. Investors should not invest in the Fund solely based on this document and should read the relevant Hong Kong offering documents for further details including risk factors.

11. Investors are responsible for their investment decisions and should seek independent financial and professional advice if required.

Capture China's growth opportunity through a risk-aware approach

China offers numerous investment opportunities, yet is complex. A multi asset portfolio can navigate through market cycles and capture opportunities in different asset classes. 

Fund features

1. One-stop solution

A unique multi-asset China fund that balances between asset classes and onshore as well as off shore assets.

A multi-asset strategy has historically been much less volatile than most pure equity strategies, which may make it suitable for investors who would like to capture China's growth story, but who would like an easier ride. Additionally, allocating to China fixed income means exposure to the higher nominal yields.

One-stop solution
ADR: American depositary receipt
Dynamic asset allocation

2. Dynamic asset allocation

Five levers to steer asset allocation to serve as a diversifier to achieve a strong risk-adjusted return profile.

Active asset allocation matters when investing in China. Here's why.

  1. Chinese stocks are relatively volatile. A risk-aware balanced investment approach allows investors to access Chinese growth and income with less volatility of the equity markets.
  2. there is limited diversification benefit between Chinese bonds and equities. Hence, dynamically moving in and out of risk assets in different market environments helps to achieve better risk-adjusted returns.

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