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Stocks Monthly Investment Plan
Eligible stock list for SMIP
Choose from the following Hong Kong listed stocks, as well as the Tracker Fund of Hong Kong and ABF Hong Kong Bond Index Fund.
Remarks: With effect from 8 January 2007, we will cease to accept credit card payment for SMIP monthly investment contributions. You can use your savings or current accounts for the monthly contributions.
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Dollar Cost Averaging
When the stock price goes down, you will buy more shares. Alternatively, when the price goes up, fewer shares will be bought. Over time, the average price you pay for the stock is likely to be lower than the market price because you will have bought more shares at lower prices.
Moreover, each month you will enjoy the benefit of paying the average price of those stocks purchased collectively for SMIP investors.
This investment method is called dollar cost averaging and enables you to buy shares close to their average price over the period. It helps smooth out the peaks and troughs, offsetting market volatility. Providing there is overall growth in the stocks you choose, you can profit in an easy and lower risk way. So you need worry less about timing. The risk arising from short-term market fluctuations will be reduced as a result.
HOW THE STOCKS MONTHLY INVESTMENT PLAN WORKS
| Month | Investment (HKD) | Amount availablefor share purchase*(HKD) | Share price (HKD) | Number of sharespurchased | Amount invested (HKD) | Amount refunded (HKD) |
|---|---|---|---|---|---|---|
| Jan | 4,000 | 3,950 | 1.00 | 3,950 | 3,950.00 | 0.00 |
| Feb | 4,000 | 3,950 | 0.87 | 4,540 | 3,949.80 | 0.20 |
| Mar | 4,000 | 3,950 | 0.76 | 5,197 | 3,949.72 | 0.28 |
| April | 4,000 | 3,950 | 0.80 | 4,937 | 3,949.60 | 0.40 |
| May | 4,000 | 3,950 | 0.98 | 4,030 | 3,949.40 | 0.60 |
| June | 4,000 | 3,950 | 1.09 | 3,623 | 3,949.07 | 0.93 |
| Average market price** | 0.917 |
In the above example, you invest a total of HK$24,000 to purchase 26,277 shares over six months at an average share cost*** of HK$0.913. Dollar Cost Averaging therefore enables you to buy shares lower than the average market price of HK$0.917 over the period.
* Amount available for share purchase = Monthly investment amount - Handling fee (0.25% of monthly investment amount or HKD50, whichever is higher)
** average market price = sum of share prices ÷ number of months
*** average share cost = total investments ÷ total number of shares purchased
| Tariff table | ||
|---|---|---|
| Fees | Minimum Charge | |
| Brokerage fee* | 0.25% | HKD50 per stock |
| One off top-up handling fee | Waived | -- |
| Plan amendment/suspension/termination handling fee | Waived | -- |
* Inclusive of all transaction related charges: stamp duty, stock exchange levy, trading fee, deposit transaction charge and Central Clearing and Settlement System fee.
Safe custody fee will be waived for the first two years. Other securities services charges may be levied on investment services account / securities account.
Disclaimer:
The Bank does not provide investment advice. Investment involves risk. The price of stocks may move up or down. Losses may be incurred as well as profits made as a result of buying and selling stocks.
