Defined investment in funds refers to investment in funds with defined time and sum. It is an investment mode in which investor signs an agreement with bank to authorize the bank to periodically deduct a fixed sum from the investor's account to be invested in purchasing open-end funds.

【Features and Advantages】

• Low threshold, “many a little makes a mickle”, similar to the deposit of small savings for lump-sum withdrawal.

• Long-term investment with compound interest benefit.

• No worries about “missed outs” or “hung ups”.

• Timesaving and carefree investment in funds.

【Target Group】

Investors who want to lower their investment risks, investors who have set up long-term wealth management goals such as kid's education fund, retirement pension program, etc., busy white collars sparing no time for wealth management, Moonlite (those who always spend their earnings before the end of the month) and salaried workers who force themselves to save money.

【How to Select Funds】

First of all, you need to set up goals and terms for your investment. For long-term goals such as retirement pension program, funds with high risk and high return like stock and index funds are recommended; for middle and short-term investment goals such as housing and kid's education fund, it is suggested that the proportion of balanced or bond funds be increased.

Secondly, you should select the right funds within the scope you just identified. Accumulative net value growth rate and dividend record are the factors you need to consider. Accumulative net value growth rate of a fund = (accumulative net value - unit par value)/unit par value. For example, if the current accumulative net value of a fund is 1.18 Yuan and its par value is 1.00 Yuan, its accumulative net value growth rate is 18%. For different funds with the same duration, those with higher accumulative net value growth rates usually have better operation performance. Besides, funds with one or more dividend records generally have a satisfactory operation performance.

Thirdly, you may compare fund returns with stock market trends. If a fund performs better than corresponding stock market index during most of the time, it is safe to say that this fund has an effective management. If you select this fund for defined investment, favorable risk and return levels can be expected.

Fourthly, you may compare the returns of your funds to those of other funds. Generally speaking, funds with different risk levels and types should be compared separately. Comparison between funds of different types does not lead to much useful information.

Finally, investors are encouraged to make use of analysis made by professional operators (e.g. Morningstar, Lipper, Galaxy Securities, CITIC Securities, etc.) in order to have an objective opinion on the management ability of their funds.

【Instruction for Investors】

1. What is the difference between defined fund investment and ordinary subscription?

Defined fund investment requires a lower starting sum than ordinary fund subscription. In some fund companies, the minimum requirement on subscription sum is only 100 Yuan, and the subscription sum in each investment cycle is fixed. Ordinary subscription always faces the risk of market liquidity, while defined investment in funds is regularly invested, thus ensuring a more average cost of investment and more diversified risks.

2. How is an investment of defined fund redeemed?

Same as the redemption of ordinary fund investment.

3. Can investors expect dividend from defined fund investment?

Yes, defined investment in funds provides dividend like ordinary subscriptions.

4. For funds with front-end and back-end payment modes, which mode should investor choose for defined fund investment?

Back-end payment mode allows investors to pay commission when the fund is redeemed according to the number of years during which the investors hold the fund. Therefore, longer holding period results in lower commission rate or even free of charge. Since defined fund investment is a long-term investment, it is suggested that investors choose back-end payment mode for their funds (except for funds do not support defined investment).

【Q & A】

1. How do I apply for defined investment in funds with IB?

You may apply with any one of IB branches or through CIB Online. Procedures are given below.

IB branch: investors applying for defined investment in funds are required to fill out Application Form for Fund Service (with fixed time and sum) at IB branch (identity documents and Natural Life family wealth management card or passbook required). Investors who have not opened an account with fund company should go through account opening procedures with fund company first.

CIB Online: investors who have activated online banking services may log on CIB Online (www.cib.com.cn) and select “Fund” menu – click “Register Defined Investment” on “Fund Commission” – select a wealth management card to be used and the funds to invest – input subscription sum and ID number – select investment cycle and trading date and then submit. Investors who have not opened an account with fund company should go through account opening procedures with fund company first. To open an account through CIB Online: log on CIB Online (www.cib.com.cn) – select “Fund” menu – click “Open An Account” on “Fund Commission” – select your fund company and input bankcard number, then operate as per instructions.

Note: investors may apply for defined investment only after confirming that account is opened successfully, i.e. investors are not allowed to apply for defined investment in funds on the date when his account is opened. It takes T+2 business days to confirm the successful account opening, and only after that can investors apply for defined investment in funds.

2. What is the minimum subscription sum for defined fund investment?

The minimum subscription sum for defined fund investment is specified by fund companies in the latest agreement. Varying from one company to another, generally the minimum sum is 100 Yuan, 200 Yuan or 300 Yuan. Please refer to the description of minimum sum in List of Funds Distributed by IB .

3. What is the commission fee for subscription to defined fund investment? And, are there any other charges I need to pay?

For investors applying for defined fund investment through IB branches or CIB Online, the general commission rate applies. No other charges required except for subscription commission.

4. What are the types of investment cycle? What does “defined investment on the xx business day designated” mean?

Investors applying for defined fund investment may choose from three investment cycles namely one month, one quarter and one year. Defined fund investment on a designated business day means that IB will, on behalf of the investor, subscribe to the funds specified by the investor on a business day designated by the investor in one investment cycle starting from the first business day in that investment cycle. Excluding all public holidays, business days are generally in correspondence to trading days of Shanghai and Shenzhen Securities Exchanges.

Besides, since defined investment must be made on a business day, the designated business day for defined investment in each investment cycle may vary from each other. Meanwhile, in case the business day designated by the investor happens to be the date of registration, the current investment cycle will be skipped and defined investment will be made from the next investment cycle.

Usually one month has 22 or 23 business days (or less in case of long holidays like Labor Day or National Day), therefore it is suggested that investors choosing one month as investment cycle designate a business day less than 20 so as to avoid the situation in which defined investments in some certain months are skipped.

5. If my account balance is insufficient for investment on a designated business day, will my defined investment be ceased?

If the investor's account balance is insufficient for investment on a designated business day, the current investment cycle will be skipped. If the balance is sufficient for investment on the designated business day of the next investment cycle, defined investment will continue. For investors using passbooks for defined investment, the balance of their accounts must be larger than subscription sum, otherwise transaction will be denied.

6. Is defined investment possible when a fund is suspended?

No. If the fund is reopened for subscription in the next investment cycle, defined investment will continue.

7. Can I use one wealth management card for defined investment run by several fund companies?

Yes. Each IB bankcard supports defined investment operated by several fund companies, but target funds and investment sum must be specified for each fund company.