Investment involves risks. Please refer to the Prospectus for details including the risk factors.

1. General Investment risk

• The Sub-Fund’s investment portfolio may fall in value due to any of the key risk factors below and therefore your investment in the Sub-Fund may suWffer losses. There is no guarantee of repayment of principal.

2. Risks associated with fixed income instruments

Interest rate risk

• Investment in fixed income instruments by the Sub-Fund is subject to interest rate risk. In general, the prices of fixed income instruments rise when interest rates fall, whilst their prices fall when interest rates rise.

Credit / Counterparty risk

• The Sub-Fund is exposed to the credit/default risk of issuers of the fixed income instruments that the Sub-Fund may invest in.

Downgrading risk

• The credit rating of a fixed income instrument or its issuer may subsequently be downgraded. In the event of such downgrading, the value of the Sub-Fund may be adversely affected. The Manager may or may not be able to dispose of the fixed income instruments that are being degraded.k

Credit rating riskk

• Credit ratings assigned by rating agencies are subject to limitations and do not guarantee the creditworthiness of the security and/or issuer at all times.

Credit rating agency risk

• The credit appraisal system in Mainland China and the rating methodologies employed in the Mainland China may be different from those employed in other markets. Credit ratings given by Mainland China rating agencies may therefore not be directly comparable with those given by other international rating agencies.

Sovereign debt risk

• The Sub-Fund’s investments in securities issued or guaranteed by government may be exposed to political, social and economic risks. In adverse situations, the sovereign issuers may not be able or willing to repay the principal and/or interest when due or may request the Sub-Fund to participate in restructuring such debts. The Sub-Fund may suffer significant losses when there is a default of sovereign debt issuers.

Valuation risk

• Valuation of the Sub-Fund’s investments may involve uncertainties and judgmental determinations. If such valuation turns out to be incorrect, this may affect the net asset value calculation of the Sub-Fund.

3. Currency risk

• The underlying investments of the Sub-Fund may be denominated in currencies other than the base currency of the Sub-Fund. Also, a class of shares of the Sub-Fund may be designated in a currency other than the base currency of the Sub-Fund. The net asset value of the Sub-Fund may be affected unfavourably by fluctuations in the exchange rates between these currencies and the base currency and by changes in exchange rate controls.

4. RMB currency and conversion risk associated with RMB-denominated unit classes

• As regards RMB-denominated unit classes of the Sub-Fund, non-RMB based investors investing in such classes are exposed to foreign exchange risk and there is no guarantee that the value of RMB against the investors’ home currencies will not depreciate. Any depreciation of RMB could adversely affect the value of investor’s investment in the Sub-Fund.

• RMB is currently not freely convertible and is subject to exchange controls and restrictions. Under exceptional circumstances, payment of redemptions and/or dividend payment in RMB may be delayed due to the exchange controls and restrictions applicable to RMB.

• The unit classes denominated in RMB may be valued with reference to the offshore RMB (known as “CNH”) rather than onshore RMB (known as “CNY”). Although CNH and CNY are the same currency, they are traded in different and separate markets which operate independently. As such, CNH does not necessarily have the same exchange rate and may not move in the same direction as CNY. Any divergence between CNH and CNY may adversely impact investors.

5. Risks associated with distribution of dividends out of and/or effectively out of capital

• Payment of dividends out of capital and/or effectively out of capital amounts to a return or withdrawal of part of an investor’s original investment or from any capital gains attributable to that original investments. Any such distributions may result in an immediate reduction of the net asset value per share.

• The distribution amount and net asset value of the currency hedged unit classes may be adversely affected by the differences in the interest rates of the reference currency of the currency hedged unit class and the Sub-Fund’s base currency, resulting in an increase in the amount of distribution that is paid out of capital and hence a greater erosion of capital than other non-currency hedged unit classes.