Proactively adapt to market shifts, capture compelling income opportunities

Capital markets in the second half of 2024 are expected to perform well, but persistently elevated geopolitical
tensions, inflation, evolving rates and US presidential election uncertainty will drive market volatility.

The global rate-cutting cycle is expected to begin, which may impact returns on savings.

It is sensible to focus on seeking sustainable income, lowering volatility and unpredictability, while ensuring
liquidity. Resilience is the cornerstone of the investment approach.


Short-term bonds offer appealing yields

Market is anticipating an impending rate cut. However, as global economies exhibit resilience, interest rates will
likely hover at relatively high levels before inflation returns to target. This environment is favourable for keeping
short-term bond yields at attractive levels.

Investing in short-term bonds at this time offers a good opportunity to garner relatively higher yields.



Short-term investment-grade bonds offer lower price volatility, higher liquidity

Short-term investment-grade bonds are less sensitive to rate movements, and are relatively unaffected by
changing rates.

Shorter maturities facilitate the assessment of issuers' financial situations, business operations and financial metrics,
among others, which can help reduce credit risks.

Mark-to-market risk is relatively lower, allowing greater investment flexibility and allocation.



BEA Union Investment Global Quality Bond Fund characteristics
Stay attuned to market trends, pursue attractive income opportunities

Harness current opportunities for appealing yields
The Fund leverages the competitive yields of short-term investment-grade bonds to generate income potential
Aim to provide monthly dividend (Dividend rate is not guaranteed, and distributions may be paid out of income
and/or capital) Important note 6

Short-duration bond allocations as a defensive strategy
With less sensitivity to rate movements, short-term bonds exhibit lower price volatility, which helps withstand market shifts
Duration of the model portfolio^ is less than the 1-3 Year bond index. This is expected to further minimise price volatility

Highly liquid with flexible adaptability to market changes
The Fund can be traded daily and has strong liquidity

Meticulous selection of quality assets to reduce investment risks
About 80% of the fund is invested in developed markets, including the US, Europe, Japan and Australia. The average rating of the model portfolio is A^
Diversify investment across USD-denominated bonds from various global sectors to reduce volatility amidst the current economic situation

 

1 The Fund achieving awards from The Asset, AsianInvestor, BENCHMARK, Fund Selector Asia, Fundsupermart.com and Lipper.

^ Sources of expected statistical summary and model portfolio: BEA Union Investment and Bloomberg, as of July 30, 2024; the expected return on investment of the model portfolio, bond examples and the model portfolio are for illustrative purposes only and do not represent the actual returns that will be achieved. References to specific securities in this article are for illustrative purposes only and should not be construed as a recommendation to buy or sell the relevant securities. Actual asset allocation may differ. The asset mixes of the model portfolio may be greater/less than 100% due to rounding. As such the values of the geographical and sector allocation displayed may not total 100%.
^^ If the 14th is not a business day in any particular month, the record date will be the immediately preceding business day.

Important note:
1. BEA Union Investment Global Quality Bond Fund (the “Fund”) is a sub-fund of BEA Union Investment Series, which is a unit trust established as an umbrella fund under the laws of Hong Kong.
2. The Fund seeks medium to long term capital growth and regular income by primarily investing in a portfolio of global investment-grade debt securities.
3. The Fund is subject to general investment risk, emerging market risk, derivative risk and currency risk.
4. The Fund invests in debts securities and are subject to risks in interest rates, credit/counterparty, downgrading, below investment grade or non-rated securities, volatility and liquidity, valuation and sovereign debt, credit rating risks which may adversely affect the price of the debt securities.
5. The Fund’s investment in debt instruments with loss-absorption features are subject to risks of being written down or converted to ordinary shares upon the occurrence of complex and unpredictable trigger event which may result in a significant or total reduction in the value of such instruments. These debt instruments may also be exposed to liquidity, valuation and sector concentration risk.
6. The manager may at its discretion make distributions from income and/or capital in respect of the distributing classes of the Fund. Distributions paid out of capital amount to a return or withdrawal of part of the unitholders original investment or from any capital gains attributable to that original investment. Such distribution may result in an immediate reduction of the net asset value per unit.
7. In terms of currency hedged class units, adverse exchange rate fluctuations between the base currency of the Fund and the class currency of the currency hedged class units may result in a decrease in return and/or loss of capital for unitholders. Over-hedged or under-hedged positions may arise and there can be no assurance that the currency hedged class units will be hedged at all times or that the manager will be successful in employing the hedge.
8. RMB is currently not a freely convertible currency as it is subject to exchange controls and restrictions. Non-RMB based (e.g. Hong Kong) investors are exposed to foreign exchange risk and there is no guarantee that the value of RMB against the investors base currencies (for example HKD) will not depreciate. Any depreciation of the RMB could adversely affect the value of investors’ investments.
9. The Fund may use financial derivative instruments for hedging and investment purposes which may not achieve the intended purpose and may result in significant losses. Risks associated with derivative instruments include counterparty/credit risk, liquidity risk, valuation risk, volatility risk and over-the-counter transaction risk.
10. Investors should not make an investment decision based solely on this material.


Investments in the Fund are subject to investment risks, including the possible loss of the principal amount invested. For full details and risk factors of the Fund, please refer to the Explanatory Memorandum of the Fund. Investors should also read the Explanatory Memorandum of the Fund for detailed information prior to any subscription. The information contained herein is only a brief introduction to the Fund. Investors should be aware that the price of units may go down as well as up as the investments of the Fund are subject to market fluctuations and to the risks inherent in all investments. Past performance is not indicative of future performance. The information contained in this document is based upon information which BEA Union Investment Management Limited considers reliable and is provided on an “as is” basis. This document does not constitute an offer, recommendation or solicitation to buy or sell any securities or financial instruments. The Fund has been authorised by the Securities and Futures Commission (“SFC”) in Hong Kong.
SFC authorisation is not a recommendation or endorsement of a scheme nor does it guarantee the commercial merits of a scheme or its performance. It does not mean the scheme is suitable for all investors nor is it an endorsement of its suitability for any particular investor or class of investors. This material and the website have not been reviewed by the SFC in Hong Kong.
Issuer: BEA Union Investment Management Limited

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