Purpose and Scope 目的及適用範圍
A statement of investment policy records a fund’s investment approach and related information so that members can understand how its money will be invested. This legal disclosure requirement promotes transparency and covers every constituent fund and every approved pooled investment fund (APIF). [MPFA Study Notes, 10th edition, section 5.6](https://www.mpfa.org.hk/en/-/media/files/supervision/mpf-intermediaries/registration-requirements/study_notes_10th_v1_eng.pdf)
Both preparing and maintaining the statement are required. The disclosure must cover the individual funds: a scheme brochure containing only a broad investment description is insufficient if it omits the required information for those funds.
Investment Objectives, Asset Types and Allocation 投資目標、資產類別及配置
Distinguish what the fund seeks to achieve from what it may invest in. The first concerns its investment objectives; the second concerns the kinds of securities and other assets available to it. Both must be explained clearly, and the fund’s name alone cannot provide that information.
The statement must also explain the proportions allocated between different kinds of securities and markets. Listing assets such as equities and bonds identifies the investment universe; explaining how investments are divided between them and between markets addresses a separate disclosure requirement.
Overall Portfolio Risk and Expected Return 整體投資組合的風險及預期回報
Risk and return disclosure must address the portfolio as a whole. The statement must explain the risks of its overall investment strategy and the expected return of the overall portfolio. Describing the risk or income of one holding alone does not fully address these requirements.
Expected return concerns anticipated future results and differs from past actual performance. Stating an expected return does not, by itself, guarantee either capital or a particular return. Members should consider it alongside the disclosed portfolio risks.
Futures, Options and Securities Lending 期貨、期權及證券借貸
For financial futures and option contracts, the statement must explain the policy throughout acquisition, holding and disposal. Merely saying that the fund may buy futures or options leaves the holding and disposal policies unexplained.
The statement must also make clear whether the fund will engage in securities lending. A decision not to lend securities should therefore be stated. Requiring disclosure of whether lending will occur does not require every fund to undertake it. [MPFA Study Notes, 10th edition, section 5.6](https://www.mpfa.org.hk/en/-/media/files/supervision/mpf-intermediaries/registration-requirements/study_notes_10th_v1_eng.pdf)
Practice
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