E Fund CSI 100 A-Share Index ETF Successfully Listed on Main Board of the HK Stock Exchange

(Stock Code: 83100)

Launching E Fund Hang Seng China Enterprises Index ETF and Related Products

Pioneering the Chinese Fund Market with Two-Way Cross-Border Strategic roadmap

HONG KONG, Aug. 27, 2012 /PRNewswire-Asia/ -- E Fund CSI 100 A-Share Index ETF ("E Fund CSI 100", Stock Code: 83100), the first A-Share index-tracking Exchange Trading Fund of E Fund Management (Hong Kong) Co., Ltd., commenced trading on the Main Board of The Stock Exchange of Hong Kong Limited today. E Fund Management (Hong Kong) Co., Ltd. is the Hong Kong subsidiary of E Fund Management Co., Ltd., mainland China's largest index fund manager*.

From left to right: Professor KC Chan, Secretary for Financial Services and the Treasury; Mr. YE Junying, Chairman of E Fund Management Co., Limited, host the Gong Ceremony to celebrate the successful listing of E Fund CSI 100 A-Share Index ETF.

Mr. Calvin Tai Chi-kin, Head of the Trading Division, Hong Kong Exchanges and Clearing Limited; Ms. YANG Qiumei, Head of Mainland Development, Hong Kong Exchanges and Clearing Limited; Mr. FAN Yue, Chief Product Officer of E Fund Management Co., Limited and Board Director of E Fund Management Co., (HK) Limited; Mr. CHOW Chung-kong, Chairman of Hong Kong Exchanges and Clearing Limited; Professor KC Chan, Secretary for Financial Services and the Treasury; Ms. Christina CHOI Fung-yee, Senior Director, Policy, China and Investment Products; Mr. YE Junying, Chairman of E Fund Management Co., Limited; Mr. Julien BAHUREL, Managing Director, Head of Equity Derivatives Sales APAC, UBS Securities Hong Kong Limited; Ms. Nicole YUEN, Managing Director and Head of Greater China Equities, Credit Suisse Securities Hong Kong Limited; Mr. Kazuma NAITO, Managing Director, Head of Asia Equities Derivatives Group, J.P Morgan Broking (Hong Kong) Limited and Mr. Mark DICKENS, Head of Listing, Hong Kong Exchanges and Clearing Limited, were present at the listing ceremony for the trading debut.

E Fund Management Co., Ltd, the parent company, launched the Hang Seng China Enterprises Index ETF and Feeder Fund not long prior to the listing of the E Fund CSI 100. Denominated in RMB and USD, the two products have raised approximately RMB 5 billion among mainland investors to invest in the Hong Kong Hang Seng H-share market, a record high in capital since the development of the QDII funds in 2008.

Mr. FAN Yue, Chief Product Officer of E Fund Management Co., Limited and Board Director of E Fund Management Co., (HK) Limited, said, "As the ETF market leader in the region, E Fund has taken the first step among mainland fund companies to achieve the launch of two-way cross-border products, echoing the innovative approach of regulatory authorities in mainland China and Hong Kong and at the same time achieving a major milestone in expediting the internationalization of the company's business. Looking forward, we will continue our efforts in launching more products to tap the China market to satisfy demand for diversified products among institutional and retail investors."

Mr. Nathan Lin, Managing Director of E Fund Management (Hong Kong), said, "We are excited to see the successful listing of the E Fund CSI 100 A-Share ETF on the Main Board of The Stock Exchange of Hong Kong Limited today. As the first RQFII ETF of E Fund, E Fund CSI 100 represents a significant milestone for our commitment to developing RQFII-related products as our core strategic business in Hong Kong."

The approved RQFII quota of E Fund CSI 100 was fully subscribed by institutional investors on the first day of offering. Many of the institutional investors which subscribed for ETF are our clients of our first RQFII product E Fund RMB Fixed Income Fund. As of 23 August, the fund tops the rankings among similar products with its rate of aggregate net growth reaching 3.62% since the first trading day on 5 May 2012. It announced its first interim cash dividend of RMB1 per unit in July 2012. Leveraging its outstanding investment performance, the fund has continued to attain net buying with the size of the fund having reached the RQFII quota granted by the State Administration of Foreign Exchange as of 16 August 2012. This demonstrates that the E Fund Management brand, mainland China's largest index fund manager*, is highly recognized by the majority of investors in Hong Kong and overseas.

About E Fund CSI 100 A-Share Index ETF
CSI 100, known as the "Core A-Share", is made up of the 100 largest A-Share issuers in terms of market capitalization listed on the Shanghai and Shenzhen stock exchanges.  With an investment strategy of full replication, E Fund CSI 100 aims to closely correspond to the performance of the CSI 100 Index after fees and costs. In addition, with the support of physical ETF, E Fund CSI 100 A-Share ETF is not exposed to counterparty risks of derivatives, resulting in a more competitive total expense ratio. Also, it has less of an impact on exchange rate fluctuations in investment returns, and will therefore be safer and more cost-efficient for investors when they track the performance of A-Shares. According to Bloomberg, as at 31 July, 2012, the CSI 100 Index has outperformed FTSE China A50 Index over the past five years.

Citigroup Global Markets, Credit Suisse Securities, HSBC Securities Services, J.P. Morgan, Nomura Securities and UBS Securities are the first dealers of E Fund CSI 100. GF Capital (Hong Kong) Limited is the listing agent, and E Fund Management Co., Limited is the investment adviser.

About E Fund Management (Hong Kong) Co., Ltd.
E Fund Management (HK) Co., Limited ("E Fund HK") was established in August 2008 in Hong Kong with Type 4 (Advising on Securities) and Type 9 (Asset Management) licensed by the securities and Futures Commission in Hong Kong. It is a wholly owned subsidiary of E Fund Management Co., Limited ("E Fund"), which is a fund management company licensed by the China Securities Regulatory Commission. Founded in April 2001, E Fund is the China largest index fund manager* and one of the three largest asset managers in mainland China with assets under management of about RMB 203 billion (over US$30 billion) as of end June 2012. Based in Guangzhou, E Fund has offices in Beijing and Shanghai. E Fund has received numerous industry awards and accolades over the years. Most notably, E Fund was awarded the "Best Passive Fund Management Firm" for two years consecutively (2011 & 2012) by the China Securities Journal.

E Fund HK is the global investment and business platform for its parent company, servicing Hong Kong and international clients through its RMB-related products.

*Source：Wind Information Co., Limited, June 2012

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Hill + Knowlton Strategies Asia

CSI Disclaimer
The CSI 100 Index ("Index") is compiled and calculated by China Securities Index Co., Ltd. ("CSI"). All copyright in the Index values and constituent list vest in CSI. CSI will apply all necessary means to ensure the accuracy of the Index. However, CSI does not guarantee its instantaneity, completeness or accuracy, nor shall it be liable (whether in negligence or otherwise) to any person for any error in the Index or under any obligation to advise any person of any error therein.

E Fund CSI 100 A-Share ETF Disclaimer
The Fund has been authorized by the Securities and Futures Commission of Hong Kong ("SFC") but such authorization is not a recommendation or endorsement of the Fund. Investment involves risk. Past performance is not indicative of future performance. Please refer to the offering document for details of the Fund including the risk factors. This document has not been reviewed by the SFC. Issued by E Fund Management (Hong Kong) Co., Limited.

Important Information

• E Fund CSI 100 A-Share ETF (the "Fund") is a passively managed exchange traded fund ("ETF") and is traded on the Stock Exchange of Hong Kong ("SEHK") like stocks. The investment objective is to provide investment result that, before fees and expenses, closely corresponds to the performance of the CSI 100 Index (the "Index"). The Fund invests in the PRC's domestic securities market through the Manager’s status as a RMB Qualified Foreign Institutional Investor ("RQFII") and the RQFII quota obtained by the Manager on behalf of the Fund.
• The Fund is subject to concentration risk as a result of tracking the performance of a single geographical region (the PRC).
• In the event of any default of either a PRC broker or the PRC Custodian (directly or through its delegate) in the execution or settlement of any transaction or in the transfer of any funds or securities in the PRC, the Fund may encounter delays in recovering its assets which may in turn impact the NAV.
• The RQFII policy and rules are new and there may be uncertainty to its implementation and such policy and rules are subject to change, such changes may also have potential retrospective effect. Repatriations by RQFIIs in respect of fund such as the Fund conducted in RMB are permitted daily and are not subject to any lock-up periods or prior approval. There is no assurance, however, that PRC rules and regulations will not change or that repatriation restrictions will not be imposed in the future. Any restrictions on repatriation of the invested capital and net profits may impact on the Fund’s ability to meet redemption requests.
• The Fund will utilize the Manager's RQFII quota. In the event the quota is reached and the Manager is unable to acquire additional RQFII quota, the Manager may suspend creations of Units. In such event the trading price of a Unit will be at a significant premium to the NAV of each Unit.
• Not all stockbrokers or custodians may be ready and able to carry out trading and settlement of the Units which may be amongst the first RMB denominated RQFII ETF units listed on the SEHK.
• Investing in emerging markets, such as the PRC, involves a greater risk of loss than investing in more developed markets due to, among other factors, greater political, tax, economic, foreign exchange, liquidity and regulatory risks.
• There are risks and uncertainties associated with the current PRC tax laws, regulations and practice in respect of capital gains realised by RQFIIs on its investments in the PRC (which may have retrospective effect). The Manager will make a 10% provision for the account of the Fund in respect of any potential tax liability on capital gains. In case of any shortfall between the provision and actual tax liabilities, which will be debited from the Fund's assets, the Fund's Net Asset Value ("NAV") will be adversely affected.
• The Fund is denominated in RMB. RMB is currently not freely convertible and is subject to exchange controls and restrictions. There is no guarantee that the value of RMB against the investors' base currencies (for example HKD) will not depreciate.
• A-Shares are subject to trading bands which restrict increase and decreases in the trading price. Units listed on the SEHK are not. This difference may also increase the level of premium discount of the Unit price to its NAV.
• The Fund is not "actively managed" and therefore, when there is a decline in the Index, the Fund will also decrease in value. The Manager will not adopt any temporary defensive position against any market downturn. Investors may lose part or all of their investment.
• Generally, retail investors can only buy or sell Units of the Fund on the SEHK. The trading price of the Units on the SEHK is driven by market factors such as the demand and supply of the Units. Therefore, the Units may trade at a substantial premium or discount to the Fund's NAV.
• Due to fees and expenses of the Fund, liquidity of the market and different investment strategies adopted by the Manager, the Fund's return may deviate from that of the Index.
• You should not make any investment decision solely based on the information on this material alone. Please read the relevant offering documents for details including the risk factors before making any investment decisions.