As one of the products designated by New Capital Investment Entrant Scheme,  Hong Kong Open-ended Fund Company (OFC), leading the new trend toward asset allocation, is preferred by the advantages such as openness,flexibility, risk-control capacity, stable return.

The development of open-ended fund company in Hong Kong did not happen overnight. As early as 2014, Hong Kong had planned to build an open-ended fund company system in terms of rules, fees and taxation. The Securities and Futures (Amendment) Ordinance 2016 has formally been implemented since 30 July 2018. This marks that “open-ended fund company” (or “OFC”), a new company form,was introduced into Hong Kong.

As a new form of fund scheme with a wider scope, more inclusiveness and a higher degree of freedom, investors will be able to obtain stable returns by utilising OFC for global asset allocation according to their needs.

In addition, an OFC must be managed by an investment manager who has a Type 9 (asset management) regulated activities licensed/registered by Securities and Futures Commission of Hong Kong (SFC). Similar to the Hong Kong Unit Trust structure, an OFC may be established as an umbrella structure (as illustrated above) consisting of multiple sub-funds operating within a single entity with its own investment objectives in order to diversify risks.

As a late bloomer in asset allocation, OFC provides investors with an importance tool to spread their risks by asset allocation and diversification, and capture its global investment opportunities due to flexible investment strategies, wider investment scope and easier access to international markets.