AMP Capital China Growth Fund Q&A
1. Who is the issuer of units in the fund?
AMP Capital Funds Management Limited, the responsible entity and investment manager of the AMP Capital China Growth Fund, is the issuer of units in the fund.
2. What is the AMP Capital China Growth Fund?
The fund is an Australian registered managed investment scheme which is listed on the ASX, and which provides investors with access to the China A share market.
3. What are the fund’s investment objectives?
The fund’s investment objectives are:
to achieve long term capital growth, with a focus on investing in China A shares, and
to outperform the S&P/CITIC 300 Total Return index (expressed in Australian dollars).
The objectives do not include the payment of regular income to investors.
4. What are China A shares?
China A shares are shares in Chinese companies listed on the Shanghai or Shenzhen stock exchanges. There are over 1,300 companies listed, diversified across a broad range of sectors.
China A shares are denominated in renminbi (the official currency of China, of which the basic unit is the yuan) and can only be purchased by domestic Chinese investors, holders of a Qualified Foreign Institutional Investor (QFII) Licence, and foreign investors under the Strategic Investment Scheme.
5. How can the Fund gain access to China A shares?
Under the prevailing regulations in China, foreign investors can only invest in the China A share market through entities that have been granted a QFII Licence by the China Securities Regulatory Commission, or under the Strategic Investment Scheme. The Fund is able to gain access to China A shares because we are the investment manager of the Fund and we hold a QFII Licence.
6. How will the Fund invest in China A shares?
The fund has made its investments in the China A share market through a wholly owned subsidiary, AMP Capital China Growth Fund (InvestCo), incorporated in Mauritius.
The reasons for this structure (investing through a subsidiary in Mauritius) include:
the structure satisfies the corporate regulatory regimes of both China and Australia
we are familiar with and have experience with the Mauritian legal and regulatory environment, and
the tax treaty between Mauritius and China provides an efficient tax structure, including prevention of the double taxation of income.
7. What are the benefits of investing in the fund?
Investment in the fund provides you with:
exposure to the growing Chinese economy
the potential to diversify your investment risk, as the China A share market has not been correlated with major international share markets, including the Australian share market, over the last 10 years
access to China A shares, which are not readily available to Australian investors, and
access to the combined investment strength and expertise of AMP Capital’s investment team and global and regional specialists.
8. What fees and costs can I expect to pay in relation to my investment in the fund?
Fees and costs that you may be required to pay in relation to your investment include:
Base fee -1.65%pa of the value of the fund's assets
Performance fee - 20% of outperformance above the S&P/CITIC 300 Total Return index (expressed in Australian dollars).
We also recover ongoing expenses from the fund.
GST is payable on fees and costs.
We will receive the base and performance fees in cash. However, we may elect, subject to the Corporations Act and ASX Listing Rules, to receive part or all of such fees as Units. We will make the election to receive cash or Units at the time these fees are payable.