FAQs: Investments and Wealth Management

HSBC structured products are structured deposits embedded with derivatives. The product is linked to specific underlying assets, which enables depositors to obtain relevant returns (if any) while taking certain risks. It usually links to the performance of the underlying asset(s). The potential return depends on the performance of the underlying asset(s), but does not 100% reflect or represent the actual performance of the underlying assets. The funds raised by the product will be centrally managed by the Bank, in accordance with the principle of separation management of deposits and derivative transactions. The principal amount is centrally managed by the Bank internally. The derivatives embedded in the product are invested in the relevant derivative market of the reference underlying, and the final performance of the product is linked to the derivatives component.

You should understand that investment in this product is not the same as an investment in the underlying asset, and you will not hold any underlying asset due to your investment in this product. You will not be entitled to any rights related to the underlying asset.

A Structured product is linked to the performance of the relevant underlying assets. The potential return depends on the product structure and the performance of the underlying assets, but does not 100% reflect or represent the actual performance of the underlying assets.

A structured product is usually linked to one or more securities, ETFs, indices, funds, gold ETFs and/or other financial assets in global markets such as the US, Europe and Asia. The potential return depends on the product structure and the performance of the underlying assets. It is not a 100% reflection or representation of the actual performance of the underlying assets.

Generally between 1 month to 5 years, depending on the product. Please refer to the specific product subscription document for more detailed information.

The minimum investment amount for Structured product is different for each payoff, and in general, RMB 10,000 for normal products and RMB 1,000,000 for tailor made products. Please refer to the product sales package for more detailed information.

There are different risks under different structured invesments. Generally, the risks are principal risk, return risk, early redemption risk, market risk, foreign exchange risk, re-investment risk, credit risk, liquidity risk, non-acceptance risk, inflation risk, early termination risk, adjustment /substitution risk, tax risk and etc.

It will be clearly stated in product brochures and product sales documents.

A fund is a form of collective investment plan managed by professional fund managers. Subject to an agreed investment scope and strategy, the funds collected from a mass of investors will be invested into stocks, bonds and money market instruments etc.

When investors subscribe for funds, they will be given a certain number of fund units or shares whose value will change with the fluctuation of the net asset value of the funds. The price of each unit or share reflects the net asset value plus or minus any disclosed charges.

There are many types of funds and their risk characteristics differ greatly from fund to fund. The main reason is that different assets invested under the relevant funds have different risk profiles.

Capital Gain Potential: You can benefit from capital appreciation if fund prices move up.

Dividend income (if applicable): Dividend distributions may be available to investors of funds. Dividends may be distributed on a monthly, quarterly or annually basis.

Funds could be divided into Open-Ended Funds and Closed-End Funds depending on their different operational model.

Closed-End Funds have a fixed number of fund units during the tenor specified in the fund contract. Fund units may be traded on lawfully organized stock exchanges, but fund unit holders are not allowed to apply for early redemption of their fund units.

Open-Ended Funds do not have a fixed number of fund units. Units can be subscribed and redeemed at the time and venue agreed in the fund contract.

You can apply for product subscriptions/redemptions and go through the subscription/redemption procedures (including but not limited to reading and signing the various documents required for subscription/redemption) by personally visiting our branch office before 2:30 PM Beijing Time on each working day.

Currently, you can use our online trading service on HSBC Personal Internet Banking to trade an Overseas Investment Plan Offshore Fund by logging on Personal Internet Banking from 3:00AM to 9:00PM Beijing Time every day. At other times, investment transactions (including subscription, redemption, switching and canceling orders) might not be conducted successfully due to system maintainance. For more details, please visit a local branch or call our customer service hotline on 400-820-8878 (Please dial the country code of mainland China +86 if you are calling from overseas, Hong Kong SAR, Macau SAR, or Taiwan).

As far as Overseas Investment Plan – Offshore Fund is concerned, if the relevant offshore fund management company accepts the redemption request of the Bank, the Bank will proceed the Investment Plan Redemption amount to you after the Offshore Fund Redemption amount from the offshore fund management company is received. The Bank usually makes the payment to the investor within 10 working days after receiving the redemption application from the investor under the Investment Plan.

The main risks of investment in an Overseas Investment Plan Offshore Fund include return risk, principal risk, credit risk, offshore fund risk, liquidity risk, foreign exchange risk etc.

Foreign Exchange risk must be considered if you intend to invest in the Overseas Investment Plan – Offshore Fund. If the investment currency is not your base currency and you choose to convert other currencies to the investment currency of the Investment Plan in order to subscribe the Investment Plan, and/or you need to convert the redemption proceeds (if any) back to your base currency, your actual investment return may be affected negatively or positively due to foreign exchange fluctuations. Investors should be aware of the foreign exchange risk associated with the Investment Plan. Investment return could be affected negatively or positively due to exchange fluctuation. In the worst scenario, investors may obtain no return and lose the entire principal due to foreign exchange fluctuations.

The key charges directly borne by investors include: subscription fee, redemption fee, switching fee. For actual charges and fees please refer to product brochure.

You can get access to this information by logging on our website or contacting your Relationship Officer/Manager or calling our customer service hotline on 400-820-8878 (Please dial the country code of mainland China +86 if you are calling from overseas, Hong Kong SAR, Macau SAR, or Taiwan).

HSBC will provide you with fund product and transaction information via the channels and methods as below:

• Product advice
• Composite statement
• Offshore Fund Net Asset Value and Monthly Factsheet

You can also contact your relationship manager or call the bank to check the performance of the Investment Plan on +86 400-820-8878. If you have registered for Online Banking, you can also log on to check the Investment Plan you hold.

This Investment Plan is suitable for investors who have securities or fund investment experience and risk level corresponding with the relevant Overseas Investment Plan. (please refer to the HSBC Offshore Fund Prospectus for details about risk levels and suitable customers). Please consult our staff for suitability for specific products. 

Investors may apply for subscription/redemption and go through the subscription/redemption procedures (including but not limited to reading and signing various documents required for the redemption) by visiting a local branch in person before 2:30PM Beijing Time on a Business Day.

As far as local mutual fund is concerned, if the relevant local fund management company accepts the redemption request, the bank will pay the redemption amount to you after the corresponding funds are received from the fund management company. The bank usually makes the payment to the investor within 7 business days after receiving the local mutual fund redemption application from investor.

As far as Hong Kong Mutual Recognition of Fund is concerned, if the relevant offshore fund management company accepts the redemption request of the bank, the bank will pay the redemption amount to you after it receives the offshore fund redemption amount. The bank usually makes the payment to investor within 10 business days after receiving the redemption application from the investor.

Customers face various risks during their investment in local mutual funds. These risks include but are not limited to market risk, management risk, technical risk and compliance risk in respect of the fund itself.

Foreign exchange risk must be considered if you intend to invest in Hong Kong Mutual Recognition of Fund. If the investment currency is not your base currency and you choose to convert other currencies to the investment currency in order to subscribe the Product, and/or you need to convert the redemption proceeds (if any) back to your base currency, your actual investment return may be affected negatively or positively due to exchange fluctuations. Investors should be aware of the Foreign Exchange Risk associated with the Product. Investment return could be affected negatively or positively due to exchange fluctuation. In the worst scenario, investors may obtain no return and lose the entire principle due to exchange fluctuations. 

The key charges usually directly borne by investors include: subscription fee, redemption fee, switching fee and etc. Those charges created in the fund management like fund management fee, custodian fee, information disclosure fee and etc. are borne by fund assets. 

You can get access to such information by logging on our website, or contacting your Relationship Officer/Manager or calling our Customer service hotline: 400-820-8828 (Premier customer) / 400-820-8878 (Advance customer) (Please dial the country code of mainland China +86 if you are calling from overseas, Hong Kong SAR, Macau SAR, or Taiwan).

The Bank will disclose product and transaction information via channels below: 

• Product advice
• Composite statement
• Fund Net Asset Value and Monthly Factsheet

You could also contact your relationship manager or call the Bank to check the performance of the product, please call 400-820-8828 (Premier customer) / 400-820-8878 (Advance customer) (Please dial the country code of mainland China +86 if you are calling from overseas, Hong Kong SAR, Macau SAR, or Taiwan). If you have registered Personal Internet Banking, you could also log on Personal Internet Banking to check the prodcut you hold. 

Investors with related experience on bonds and fonds, and whose specific attitude toward investment risk matches the risk level of the related products under Local Mutual Fund/ Hong Kong Mutual Recognition of Fund.

Wealth Management Product means a non-principal-protected wealth management product that a wealth management company pays income to investors in accordance with the agreed conditions and actual circumstances of investment income, without guaranteeing the payment of the principal and the level of income. Wealth Management Company means a wealth management subsidiary of a commercial bank formed in accordance with the law within the territory of the People's Republic of China or any other non-bank financial institution mainly engaged in wealth management business formed with the approval of the China Banking and Insurance Regulatory Commission.

Based on different investment nature, Wealth Management Products can be categorised into fixed-income wealth management products, equity wealth management products, commodity and financial derivative wealth management products and mixed wealth management products. For a fixed-income wealth management product, the proportion of investment in deposits, bonds and other debt assets shall not be less than 80%; for an equity wealth management product, the proportion of investment in equity assets shall not be less than 80%; for a commodity or financial derivative wealth management product, the proportion of investment in commodities or financial derivatives shall not be less than 80%; and for a mixed wealth management product, the investment is made in debt assets, equity assets and commodity and financial derivative assets, and the proportion of investment in any of the three types of assets does not reach the standards for the aforesaid three types of wealth management products.

Based on different operation modes, Wealth Management Products can be categorised into close-end wealth management products and open-end wealth management products. “Close-end wealth management products” means wealth management products that have certain maturity dates and cannot be subscribed for or redeemed by investors during the period from the date of establishment to the date of termination of the products. “Open-end wealth management products” means wealth management products that have non-fixed total number of shares and may be subscribed for or redeemed by investors as agreed upon on open days and at corresponding places during the period from the date of establishment to the date of termination of products.

According to different raising methods, Wealth Management Products can be categorised into publicly offered wealth management products and privately offered wealth management products. “Publicly offered wealth management products” means wealth management products offered by commercial banks to the general public. “Privately offered wealth management products” means wealth management products offered by commercial banks to qualified investors in a non-public manner. All Wealth Management Products distributed by HSBC (China) at present are publicly offered wealth management products.

The time value of money is the concept that money today is worth more than the same amount in the future.

As the price of products and services rises, currency purchasing power will decline over time, which leads to inflation. Money value will be affected by the following factors:  

Inflation:

In simple terms, the price of goods and services rise and thus the purchasing power of the currency will continue to decline. This is inflation. 

Fluctuations of interest rates:

When interest rates fall, the interest return on deposits will be reduced. If deposit rates fall below the inflation rate, the savings would lose their value over time in real terms. 

International economic trends: 

The purchasing power of a currency (money value) may be affected by circumstance changes of home country or other countries or regions including political situation, GNP (Gross National Product), stock market indices and etc. Given different factors may affect currency values, financial plans should be developed in order to get a reasonable return on investment and to cater for actual needs and thus to safeguard the future. 

You first need to understand your financial needs, investment objectives, financial situation and risk appetite. 

Your goals may include the following:  

• protect your family
• children's education
• retirement planning
• wealth management and growth
• legacy planning

You should also consider your goals, investment tenor, affordable investment amount and personal investment preferences. 

Financial planning is a sound financial management process to develop and achieve personal and family financial goals through investments, asset allocation, risk control, retirement planning etc. Financial planning is not simply saving money or cutting living costs. Reasonable financial planning can help individuals and families set financial goals for different life stages and help them achieve these financial goals through proper investment tools and portfolios; it could contribute to wealth accumulation and growth as well as prepare individuals and families to respond to adverse effects of unexpected events.

There is no set formula for financial planning. It varies by person, circumstance and life stage. You should start your financial planning as early as possible. 

Dollar Cost Averaging is a timed investment strategy in which regular investment is made. In addition to the accumulation of capital, investors also use this approach to overcome the risk of a single investment, eliminating the factor of "timing the market" from the investment decision-making process. The regular investment strategy mitigates the risk of single point investment, so that investors don't have to "wait" or "guess" the so-called right time. Investors can take action right after investment target, date and amount are decided.

You may contact your relationship manager or call our hotline at 400-820-8828 (for Premier customers) or 400-820- 8878 (for Advance customers) (Please dial the country code of mainland China +86 if you are calling from overseas, Hong Kong SAR, Macau SAR, or Taiwan) at your convenience.