i Capital China Fund

Overview

i Capital China Fund (the “Sub-Fund”) is a fund constituted in the form of a unit trust under i Capital Master Fund, an umbrella unit trust established under the laws of Hong Kong.

Investment Objective

The Sub-Fund seeks to achieve long-term capital appreciation by primarily investing in equity securities issued by companies listed in Hong Kong, Shanghai and/or Shenzhen.

Investors should note that the Sub-Fund’s allocation between instruments in the mainland China and the Hong Kong markets may change significantly from time to time.  This may result in the Sub-Fund’s investment portfolio becoming more concentrated on either the mainland China market or the Hong Kong market from time to time.

Investment Strategy

The Sub-Fund’s investment strategy is driven by the Manager’s long term value investing philosophy. The Manager adapts its value investing approach by considering political and economic factors, and aims at drawing on the intrinsic value of a company having regard to the principle of margin of safety (the difference between the intrinsic value of a stock and its market price) as its core investment philosophy. The Sub-Fund’s investment horizon will not be restricted by sector or market cap.

The Sub-Fund aims to invest predominantly in listed securities whilst maintaining a cash buffer on a temporary basis (pending suitable investment opportunities and also for defensive purposes). The actual asset allocation is driven by the Manager’s value investing philosophy which is based on two components: namely the valuation of a listed company AND its market price. When the Manager considers the market is undervalued and there are appropriate investment opportunities whereby listed companies are trading below their fair value, the Sub-Fund may invest as much as 98% of its Net Asset Value in listed equity securities. In times of extreme market conditions such as when there are speculative bubbles in the mainland China and/or Hong Kong markets where the Manager considers that securities are overvalued and/or the mainland China or the Hong Kong economy is overheating, the Sub-Fund’s assets may invest up to 100% in cash/cash equivalent products on a temporary basis (such as money market instruments) in order to mitigate risk and/or maintain liquidity of the Sub-Fund.

In seeking to achieve the long term capital appreciation investment objective of the Sub-Fund, the Manager may consider a broad variety of factors and circumstances in the selection of securities and construction of the Sub-Fund’s portfolio. Such factors may include, but are not limited to, a company’s profitability, debt, valuation, growth prospects, actual or future cash flows, volatility, availability and liquidity of securities, sector outlook or prospects, the overall economic, political, tax and regulatory environment affecting the relevant securities and markets in mainland China and/or Hong Kong.

Dealing information

Quick facts

Manager: Capital Dynamics Asset Management (HK) Private Limited
Trustee: BOCI-Prudential Trustee Limited
Custodian: Bank of China (Hong Kong) Limited
Ongoing charges over a year#+: Class A:
Without performance fee: 2.85%
With performance fee: 3.46%#The ongoing charges figure is an annualized ongoing charges incurred by the Sub-Fund from 1 August 2020 to 31 January 2021 based on the information in the latest interim report. It represents the sum of ongoing expenses chargeable expressed as a percentage of the average net asset value of the Unit class for the corresponding period. This figure may vary from year to year.The ongoing charges figure takes into account the amount of reimbursements by the Manager to the Sub-Fund for the half-year ended 31 January 2021. Amortized portion of the set-up costs (based on amortization over first 5 accounting periods), the management fee and the trustee fee have been included in the ongoing charges figure.+ The ongoing charges figure will be capped at 2.90% of the average net asset value of the Sub-Fund over a 12-month period. Any ongoing expenses in excess of 2.90% will be borne by the Manager. For the avoidance of doubt, any performance fee payable to the Manager is excluded from this cap. Where the performance fee is levied, the component in the ongoing charges figure which does not include performance fee will be capped at the percentage stated above.If there is any change to the cap on ongoing charges, the Manager shall provide at least one month’s prior written notice to investors and obtain the SFC’s prior approval (where applicable).
Dealing frequency: Weekly (last Hong Kong Business Day of every week)
Base currency: USD
Dividend Policy: Class A: No distribution, any income received will be accumulated and reflected in the Unit price.
Financial year end: 31 July

Fees and charges

Fee What you pay
Subscription Fee Nil
Switching fee^

(% of switching out amount)

5% for switching out of Units held for 1 year or less; Nil for switching out of Units held for more than 1 year

^For the avoidance of doubt, the switching fee will be charged for switching between classes of the Sub-Fund and switching between sub-funds of the i Capital Master Fund that are authorised by the SFC (if any).

Redemption fee

(% of redemption amount)

5% for Units held for 1 year or less; Nil for Units held for more than 1 year
Ongoing Fees Annual rate (as a % of the Sub-Fund’s Net Asset Value)
Management fee 1.5% (150 basis points)**
Trustee fee Up to 0.15% (15 basis points)**, subject to a minimum monthly fee of USD5,000
Custodian fee Up to 0.0275% (2.75 basis points)
Performance fee 10% (1000 basis points) of the outperformance of the Net Asset Value per Unit during a performance period over the High Water Mark.

Outperformance means the amount by which the increase in Net Asset Value per Unit during the relevant performance period exceeds the High Water Mark.

High Water Mark is the higher of (i) the initial subscription price and (ii) the Net Asset Value per Unit as at the end of the performance period in respect of which a performance fee was last paid. Where a performance fee is payable for a performance period, the Net Asset Value per Unit on the last Valuation Day of that performance period will be set as the High Water Mark for the next performance period.

Performance fee accrues on each Valuation Day if the Net Asset Value per value exceeds the High Water Mark. On each Valuation Day, the performance fee accrual made (if any) on the previous Valuation Day will be reversed and a new performance fee accrual will be calculated. If the Net Asset Value per Unit is lower than or equal to the High Water Mark, any performance fee accrual will be reversed and no performance fee will be accrued.

For details and illustrative examples of the performance fee calculation, please refer to “Performance Fee” in Appendix 1 of the Explanatory Memorandum.

 Other fees You may have to pay other fees when dealing in the Units of the Sub-Fund.

**   The fees and charges may also be increased up to the maximum level as specified in the Explanatory Memorandum by giving at least one month’s prior notice to investors. Please refer to the Explanatory Memorandum for further details.

If you have decided to become an investor of i Capital China Fund (Fund), please follow the 4 steps below to find out how to proceed with making an initial investment.

Alternatively, you may watch the following video:-

[STEP 1] READ THE FUND’S DOCUMENTS CAREFULLY

– Download and read the Explanatory Memorandum, the Product Key Fact Sheet and the latest financial report of i Capital China Fund here.

[STEP 2] COMPLETE THE ACCOUNT OPENING PACK

– Download and complete the 4 following Forms here :

  1. Master Account Opening Form;
  2. Common Reporting Standard (CRS) Tax Residency Self Certification Form;
  3. Investor Profile Questionnaire; and
  4. Internal Revenue Service Form W8-BEN

Alternatively, contact us at enquiries@capitaldynamics.hk for a hard copy to be mailed to you.

For more detailed instructions on how to fill up the Forms, please refer “How to Invest” guide here.

[STEP 3] TRANSFER YOUR SUBSCRIPTION MONEY

Payment Instruction

  • All payment must be in US Dollars
  • All subscription money must originate from an account held by you and in the case of joint account, from an account held by the same joint holders.
  • No cash or third party payment will be accepted.

Option [1]. By Telegraphic Transfer (TT)

Bank Account Name: BOCI-Prudential Trustee Limited – iCapital Master Fund
Bank Account Number: 012-875-9-295472-6
Beneficiary Bank: Bank of China (Hong Kong) Ltd, Hong Kong
SWIFT Code: BKCHHKHHXXX
Beneficiary Bank Address: Bank of China Tower, 1 Garden Road, Central, Hong Kong

Option [2]. By Cheque or By RTGS

For those who have a bank account in Hong Kong, you can transfer your funds by cheque or RTGS.

Correspondent Bank: Bank of China (Hong Kong) Ltd
Bank Account Number: BOCI-Prudential Trustee Limited – iCapital Master Fund
Bank Account Number: 012-875-9-295472-6
SWIFT Code: BKCHHKHHXXX

Please ensure that you:

  • ask your bank to record the applicant/investor’s name as a description on the TT instruction; and
  • notify Capital Dynamics of the details of your TT as soon as possible so that we can identify your money.

Failure to take either of these steps may result in processing delays and additional costs to you.

[STEP 4] SUBMIT YOUR APPLICATION

Option [1]. In person

Submit the filled Forms (unsigned) in person at our Hong Kong or our overseas offices.

Bring along original copies of the following documents for the face-to-face meeting:

  1. a valid original IC AND passport/driving license; and
  2. address proof in English (e.g. Residential address and/or permanent address (not required if both are the same) as indicated in utility bill or bank statement issued within the last 3 months).

Our staff will conduct the following with you:

  1. the witnessing of signing the Master Account Opening Form and the Investor Profile Questionnaire;
  2. sighting and certification of original identity document and address proof; and
  3. risk disclosures reminders.

Option [2]. By mail

If you are unable to submit your application in person, you can mail in your application to either our Hong Kong or Kuala Lumpur offices provided that a third party has witnessed your signature on the completed Forms.

Capital Dynamics, Hong Kong:
Suite 701, Chinachem Leighton Plaza
29 Leighton Road
Causeway Bay
Hong Kong

Capital Dynamics, Kuala Lumpur:
16.01A, 16th Floor Plaza First Nationawide
No. 161, Jalan Tun H. S. Lee
50000, Kuala Lumpur, Malaysia

To find out who can be a third party certifier, please read the “How to Invest” guide here.

In your mail, please enclose the certified true copy of the documents below:

  • a valid original IC AND passport/driving license; and
  • address proof in English (e.g. Residential address and/or permanent address (not required if both are the same) as indicated in utility bill or bank statement issued within the last 3 months).

*IMPORTANT NOTE: WE WILL ONLY START PROCESSING YOUR APPLICATION ONCE ALL THE ABOVE STEPS HAVE BEEN COMPLETED.