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Investments

Frequently asked questions (FAQs)

Investments

What affects the value of money?

Money has a tendency to lose its value over time because the price of goods and services has an upward tendency. This is called inflation. Here are some factors that could eat away your money:

  • Inflation. Simply, inflation occurs when the price of goods and services rises. And when prices rise, people will ask for a rise in salary. That's why the money you earn today will be worth less 10 years from now.
  • Interest rate fluctuations. A drop in interest rates means a smaller return on your deposits, and if the interest rate is lower than the rate of inflation, your savings lose value. But for some investments, such as equities and bonds, the value of your investment may rise because of the drop in interest rates.

 

Therefore it is crucial that you have a financial plan to protect your future and to put your money where it generates reasonable returns to meet your needs.

Bonds

What are bonds?

Bonds are credit notes issued by governments, corporations or other issuers to bondholders. As a bondholder, you are extending credit to these issuers and they are obligated to repay the redemption value of the bond upon maturity, as well as a rate of interest during the life of the bond. There are many types of bonds from different issuers that vary in their terms. Some examples include the fixed rate bond, floating rate bond, zero coupon bond and convertible bond as well as Certificates of Deposit (CDs).
In general, bonds and CDs offer comparatively safe returns. At HSBC, we currently offer bonds and CDs issued by governments including PRC, US and HKSAR, local quasigovernment bodies, supranationals and well-known corporations around the world denominated in major currencies. There is also a wide selection of tenors or terms from which to choose, i.e., from 1 to 30 years with various benchmark yields. The minimum investment amount can be as low as HKD10,000.

iBond

Why my allotted iBond holding in HSBC is settled in CMU?

According to the iBond Issue Circular, if a customer applied iBond via placing Bank, the allotted iBond will be held through Central Moneymarkets Units (CMU), a debt securities custodian. The allotted iBond can be traded at Over-the Counter (OTC) through the Bank's Bond Trading Services.

Silver Bond

Why my allotted Silver Bond holding in HSBC is settled in CMU?

According to the Silver Bond Issue Circular, if a customer applied Silver Bond via placing Bank, the allotted Silver Bond will be held through Central Moneymarkets Units (CMU), a debt securities custodian.

Overseas Securities Service

What are securities?

Securities is the generic name for shares and other investment tools quoted on the stock market. Individuals may invest in securities, either through a broker or through their bank, and can check the progress of their investment every day in the newspapers or on the Internet.
It is possible to enjoy a higher rate of return from investing in securities than from savings accounts. Stock market securities in thriving economic climates will generally show an increase over time, and sometimes within a very short period. However, all stock markets are volatile and buying securities should not be seen as a short-term method of making money.
Buying securities also costs money. Stockbrokers make various charges for their services, such as commission. You may consider taking advantage of convenient payment and reimbursement terms by dealing through your bank. 
Other than investing in securities by yourself, you can assign asset management professionals or companies to invest on your behalf.

US Stock

Who is eligible for the US Stock Trading Service?

Customers are eligible for signing up for the U.S. Stock Trading Service if they are

  • Non-U.S. persons
  • Able to provide a valid identification document such as permanent Hong Kong Identity Card or passport.
  • Non professional market data subscribers* (Please refer to the NYSE Market Data Agreement [PDF]. for details.)

* One of the criteria for being classified as 'Non-professional' subscribers is not being engaged as an investment advisor. In brief, "Investment adviser" means any person who, for compensation, engages in the business of advising others, either directly or through publications or writings, as to the value of securities or as to the advisability of investing, purchasing, or selling securities, or who, for compensation and as part of a regular business, issues or promulgates analyses or reports concerning securities.

Stocks Monthly Investment Plan

What are the key benefits of the Stocks Monthly Investment Plan?

You can

  • participate in the equity market even with limited capital
  • reduce investment risk by using Dollar Cost Averaging
  • enjoy potentially higher return than general deposits as a medium-to long-term investment
  • meet your targeted investment needs

Unit trusts

What are unit trusts? How can I benefit from unit trusts investment?

Unit trusts (or mutual funds) give investors the opportunity to diversify even a small investment in securities, bonds, currencies and commodities in markets around the world. This is achieved by combining the resources of many investors into one large fund which can be spread over a number of different investments and over a wide geographical area. This range of investments is called a portfolio.

Unit trusts have a number of benefits:

  • Spreading the risk. You spread your investment across a diverse portfolio. This is usually safer than investing in a single share. Of course, levels of risk and return also vary among different funds.
  • Professional management. Fund managers spend their working lives researching and managing investments. It would be very difficult for an individual to have an in-depth knowledge of markets around the world. With a unit trust, their expertise is working for you.
  • Access to worldwide markets. Your money can be invested in overseas markets, which may not be easily accessible by individuals.
  • Economies of scale. With a large number of investors contributing to a single fund, operating costs and commissions can be amortised. Individual investors thus pay lower fees.
  • Liquidity. You can buy and sell unit trusts on any dealing day (except on public holidays in the countries to which your fund is linked). Your money need not be tied up for a specific period of time.

 

Some unit trust products are linked to the index options listed on the various stock exchanges or sometimes to currency options. They can be slightly riskier than more diverse funds.

Structured Products

What are Structured Products? And How does it work?

Structured Products are investment instruments embedded with derivatives, under which the return, the amount due and/or the method of settlement is determined by reference to 1) changes in the price, value and/or level of one or more reference underlying assets; and/or 2) the occurrence or non-occurrence of an event.

Deposit Plus

How is the Integrated Account Secured Credit Facility Loan Ratio calculated when the Deposit Plus deposit date is 2 business days after the application submission?

After the Deposit Plus order placement on trade date and before deposit date:

  • For order with deposit currency in foreign currency (FCY), the order 'hold amount' will be deducted from the account available balance and thus will not be included in the Credit limit of Secured Credit Facility calculation. The Credit limit of Secured Credit Facility will drop during the period accordingly since FCY deposit has been included in the Credit limit of Secured Credit Facility calculation before trade date.
  • For order with deposit currency in HKD, the order 'hold amount' will also be deducted from the account available balance and will not be included in the Credit limit of Secured Credit Facility calculation. Yet, the Credit limit of Secured Credit Facility will not be affected during the period since HKD deposit has not been included in the Credit limit of Secured Credit Facility calculation before trade date.

 

On DPS deposit date, i.e. on trade date + 2 business days,

- Order amount in any deposit currency will be included in the calculation of Credit limit of Secured Credit Facility until it is uplifted on maturity date.

Foreign Exchange

How can I invest in foreign currency with HSBC?

You can invest in foreign currency with HSBC via a number of ways. You can use our 24-Hour Foreign Exchange Service to place your exchange instruction anytime anywhere via internet or mobile banking.

If you have a target exchange rate in mind, you can use our FX Order Watch Trading Service to preset your instruction.

If you want to accumulate your foreign currencies or RMB via regular saving, you can use the ForEx / RMB Switching Service to preset your exchange instructions and we will automatically execute the instructions for you according to your preset criteria.

IPO

What is an IPO?

IPO stands for Initial Public Offering. It is the first time a company issues securities/bonds to investors. The newly issued securities/bonds may be listed on a stock exchange.

Marginal FX (Business FAQ)

What is a Market Order?

A market order is executed immediately when placed and is priced at the prevailing market rate at the time of execution. When placing a market order, the transaction is usually executed at, or very near, the price displayed when the order was submitted. However, due to the rapidly changing nature of FX exchange rates, it is possible for the rate to move more than you are willing to accept.

To address this, HSBC Margin FX platform enables you to place upper and lower bound on each order that will prohibit the order's execution if the market rate falls outside the limits you specify. The customer is also allowed to set up stop loss, take profit and trailing stop instructions under Market Order.

Marginal FX (Technical FAQ)

Why can't I connect to the Margin FX Trading Platform?

When you log on to the Margin FX Trading Platform from the web, a pop-up window appears.

 

  Cause Solution
1 The pop-up block software installed does not allow the trading platform to load. You can configure the software so that it allows the pop-ups from Margin FX Trading Platform.
2 The Java plug-in cache is corrupted. You can clear the Java cache (See Q6 - How do I clear my Java cache?)
3 Your computer has 'behind the firewall' error. You can check if the 'behind the firewall' error is caused by hardware router. From the Windows start menu, click Run and type CMD. Once the black command prompt comes up, type IPCONFIG and press enter. If your IP address starts with 192 or 10, you have a hardware router. If not, you are directly connected to the Internet. If your computer is behind a hardware firewall, please make sure port 443(default port for HTTPS) is open when your access the Margin FX trading platform.
4 Your Java version is not upto-date. Margin FX Trading Platform is supported by Java version 1.5 or above. You can download the most updated Java version from http://java.com.

If you have any problems, please call (852) 2233 3322 for HSBC Premier customers, (852) 2748 8333 for HSBC Advance customers or (852) 2233 3000 for other Personal Banking customers

Others

What should I do before I start investing?

You should know your financial need or investment objective, your current financial situation and risk tolerance.

Your objectives could incorporate any combination of the following:

  • Protection for your family
  • Education for your children
  • Managing and growing wealth
  • Legacy planning

You should also understand how much your target is, how long you want to invest, how much you can invest and your own investment preferences.