Three Simple Tips for Fund Selection
Since the implementation of the Mandatory Provident Fund (MPF) Schemes in 2000, investment funds have become an essential tool for Hong Kong people to allocate assets and diversify risks, effectively helping investors achieve different financial goals.
Fund investment has many merits: you have professional fund managers to select asset categories for you; you can capture global investment opportunities with less capital, and you can spread risks more effectively. You don't have to keep an eye on them all the time, so you have more time to work hard for your career, to spend time with your family, or to develop your interests and enjoy life. However, how should investors choose funds? The following three simple tips can help you quickly select the right funds.
Conservative or aggressive?
With Risk Profiling Questionnaire, you can understand the risks level you can bear and have a clear understanding of your investment objectives, risk tolerance and investment time. You can complete the Risk Profiling Questionnaire online or contact your trusted investment and financial advisors for more in-depth assessments.
Risk Level of Fund Portfolio
You should develop your fund portfolio regarding your investment risk attitude. If you are a conservative investor, you should select funds with lower volatility, lower risks and relatively stable returns. On the contrary, if you are an aggressive investor, you can choose funds with greater volatility and risks but potentially higher yields, to gain from asset price fluctuation.
In general, investors who aim for high returns must bear higher risk levels. The risk levels of funds, from low to high, are generally ranked as below: money market funds, global bond funds, global equity funds, regional equity funds, single country equity funds and derivatives funds.
Experience and Past Performance of Fund Management Team
Every fund management team has its strengths. Read the fund manager's monthly or quarterly reports for their past investment results and fund performance. CHIEF’s Securities’ Online Fund Information Platform provides detailed information of funds, including management team, the performance of track records, industry and regional distributions, major positions and others. The fund comparison functions allow you to compare the past performance of several funds. Contact our investment and financial advisors where necessary can help you establish your ideal portfolio.
