Smart investors always do their homework to understand the product features and risks before making an investment decision. To learn more about a fund, we can start with the Product Key Facts Statement (KFS) and fund factsheet.
1. It is crucial to read the KFS before investing
As the fund’s offering document includes all relevant information, it is very detailed and may take time to read. For a quick overview of the key features of the fund, the KFS will come in handy.
A KFS lists out the important information about a fund in easy-to-understand language, including:
- Quick facts (including the names of the fund manager and custodian, dealing frequency, dividend policy, base currency, and ongoing charges figure of the fund)
- Product profile, investment objectives and strategy of the fund
- Investment mix (optional)
- Use of derivatives
- Key risks
- Past performance
- Fees and charges
- Additional information, such as dealing cut-off time for subscription or redemption of the fund (unlisted class)
You can find the KFS in the “Fund Repository” on HKEX’s Integrated Fund Platform, or the websites of the distributors and fund companies. However, it is important to note that a KFS can never replace the full offering document. Investors should always refer to the offering document to gain a better understanding before investing.
2. Fund factsheet provides the latest information of a fund
In addition to the KFS, the Fund Factsheet is another useful material that gives investors a quick overview of a fund. This document is usually published monthly and provides the most updated information. In addition to the fund’s basic information, investment objective and fees and charges, it also illustrates the fund’s performance, returns, and portfolio. Fund factsheets can be downloaded from the websites of the distributors or fund companies.
Most fund factsheets share the performance data of the funds across different investment periods, both the cumulative and annual returns, and the overall performance compared with the benchmarks to give investors a clear overview. However, past performance does not guarantee the future performance, so investors should not choose a fund solely based on its past performance.
Meanwhile, many investors would like to know the stocks or securities held by a fund. The fund factsheet usually states the fund’s “top 10 holdings” and the sector or country allocation. Some factsheets also provide other data, such as volatility, Sharpe ratio, number of holdings and cash level etc. Investors can make good use of the KFS and fund factsheets to learn more about and compare different funds to pick the most suitable product.
13 January 2025
