IMPORTANT: Investment involves risk, including the loss of principal. Investors should refer to the Prospectus and Key Facts Statement of the iShares Core CSI 300 Index ETF (the “ETF”) for details, including the risk factors. Investors should not base investment decisions on this marketing material alone. Investors should note:
• The ETF aims to provide investment results that, before fees and expenses, closely correspond to the performance of CSI 300 Index (the “Underlying Index”).
• Generally, investments in emerging markets, such as the A Share market, may involve increased risks such as liquidity risks, currency risks/control, political and economic uncertainties, legal, regulatory and taxation risks, settlement risks, custody risk and the likelihood of a high degree of volatility. The A Share market may be more volatile and unstable than those in the more developed markets. The ETF’s exposure is concentrated in the PRC and may be more volatile than funds adopting a more diversified strategy.
• The ETF currently does not provision for withholding tax on capital gains (“CGT”) arising from its investment via RQFII or its investment via Stock Connect. There are risks and uncertainties associated with the current PRC tax laws, regulations and practice in respect of capital gains realized on the ETF’s PRC investments, which may have retrospective effect. Any increased tax liabilities on the ETF may adversely affect its value, and the resultant tax liability would be eventually borne by investors.
• The ETF is subject to restrictions and requirements applicable to RQFII investment, and the applicable laws, rules and regulations in the PRC, which are subject to change and such change may have potential retrospective effect. The ETF may be unable to invest via the RQFII Licence Holder’s RQFII status including if the approval of the RQFII Licence Holder is revoked/terminated or otherwise invalidated as the ETF may be prohibited from trading of relevant securities and repatriation of the ETF’s monies, or if any of the key operators (including the RQFII Custodian and PRC broker) is bankrupt or in default and/or is disqualified from performing its obligations (including execution or settlement of any transaction or transfer of monies or securities).
• The relevant rules and regulations on the Stock Connect are subject to change. The Stock Connect is subject to quota limitations. Where a suspension in the trading through the programme is effected, the ETF’s ability to invest in A shares through Stock Connect will be adversely affected.
• The Base Currency of the ETF is RMB which is currently not freely convertible and is subject to exchange controls and restrictions. Non-RMB based investors are exposed to foreign exchange risk.
• The ETF is subject to tracking error risk, which is the risk that its performance may not track that of the Underlying Index exactly.
• If there is a suspension of the inter-counter transfer of units between the counters and/or any limitation on the level of services provided by brokers and CCASS participants, Unitholders will only be able to trade their units in one counter, which may inhibit or delay an investor dealing. The market price of units traded in each counter may deviate significantly.
• The Manager may at its discretion pay dividends out of capital or effectively out of capital which 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 distributions involving payment of dividends out of the ETF’s capital may result in an immediate reduction of the ETF’s NAV per unit.
• All units will receive distributions in the base currency (RMB) only. In the event that a unitholder has no RMB account, the unitholder may have to bear (i) the fees and charges associated with the conversion of such dividend distributions from RMB to USD, HKD or any other currency; and (ii) other bank or financial institutional fees and charges associated with the handling of the distribution payment in currencies other than RMB. Unitholders are advised to check with their brokers regarding arrangements for distribution.
• The trading price of the units of the ETF on the SEHK is subject to market forces and may trade at a substantial premium/discount to the ETF’s NAV.