
<p>It&#8217;s important to ensure you&#8217;re not taking too much risk when you&#8217;re investing. You do it all the time in everyday life if you buy insurance, wearing a seatbelt in a car or even when going for a run. It&#8217;s not that you can avoid risk entirely but you want to give yourself the best chance of succeeding &#8211; whether it comes to your health or growing your investments.</p>



<p>The surest way to reduce risk when it comes to investing is to ensure your portfolio is diversified. There&#8217;s two main categories of risk:</p>



<ol><li><strong>Systematic risk</strong>: This means macro-economic risks in the broader market, geographies or asset classes e.g. the recent China-US trade war, or the dot com bubble in the early-2000s</li><li><strong>Unsystematic risk</strong>:  This means risks specific to your investments e.g. video games regulation in China affecting Tencent, or data security concerns over Facebook</li></ol>



<h2>What is diversification</h2>



<p>In short, diversification is the concept of &#8220;don&#8217;t put all your eggs in one basket&#8221;. However, an even better way is thinking about it like a fruit market.</p>



<p>If you were running a fruit market, rather than selling only one kind of fruit, you&#8217;d want to sell many different kinds. If a natural disaster occurs which means mangoes are no longer available, you&#8217;d want to make sure you have other fruits to sell as well! </p>



<p>The natural disaster here is a systematic risk and the different fruits would be asset classes.</p>



<p>To go a step further, rather than buying all your mangoes from the same supplier, you&#8217;d want to have multiple suppliers in case one goes out of business, increases their price (among the many other reasons) &#8211; this would be an example of &#8216;unsystematic risk&#8217;.</p>



<h2>How do you use diversification in a portfolio</h2>



<p>The first step for any investor is to diversify between asset classes: equities (e.g. stocks), fixed income (e.g. bonds, money market funds, etc.) and alternatives (e.g. art, commodities, etc.).</p>



<p>The next step would be, for each asset class, to invest in different geographies, and then choosing different company sizes and industries.</p>



<p>Lastly, you would diversify away from &#8216;single&#8217; companies by buying mutual funds, <a href="https://www.planto.hk/en/blog/etf-explained/">ETFs</a> or a large number of individual securities.</p>



<p>Different asset classes, company sizes and sectors have their own risks and their own returns so each investor needs to think about their own risk tolerance when creating their portfolio. A younger couple may want to invest with higher risk to get higher returns, while someone closer to retirement would want stable returns with low risk.</p>



<single-action-item title="Robo-advisors can build a diversified portfolio for you with just a few clicks" subtitle="" button_text="Learn More" type="robo_comparison"></single-action-item>



<h2>Why regular rebalancing matters</h2>



<p>Once you have determined what your portfolio should look like, it&#8217;s important to make sure it remains the same over time. It can be very tempting to chase &#8216;high return&#8217; stocks but if you think about past events e.g. dot com bubble or the 2008 financial crisis, investors who were primarily in tech or financial services stocks suffered huge losses compared to more diversified investors.</p>



<p>Over time, if you have determined your ideal portfolio is 80% stocks and 20% bonds portfolio, it&#8217;s quite likely according to historical data that your stocks would get higher returns and thus become a larger part of your portfolio e.g. 90% stocks and 10% bonds instead. At times likes this, you need to rebalance your portfolio back to match your original risk tolerance (80% stocks, 20% bonds).</p>



<h2>Summary</h2>



<p>Building a diversified portfolio can seem like a lot of work &#8211; and it is if you want to do it right! Signs of good diversification are that that your investments work well together (if your riskier investments go down, your less risky investments shouldn&#8217;t go down as much), and that your portfolio matches your risk tolerance and goals.</p>



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<p style="font-size:14px"><strong>Important information:</strong><br><br>Investment involves risks. This information is intended to be educational and is not tailored to the investment needs of any specific investor. This information does not constitute investment advice and should not be used as the basis for any investment decision nor should it be treated as a recommendation for any investment or action. Past performance is no guarantee of future results. The value of investments and the income from them can go down as well as up, so you may not get back what you invest.</p>


It's important to ensure you're not taking too much risk when you're investing. The first step for any investor is to diversify between asset classes: equities, fixed income and alternatives. The next step would be, for each asset class, to invest in different geographies, and then choosing different company sizes and industries.

[Investment Strategy] Guide to building a diversified portfolio


<p>Despite ending a rocketing streak, Hong Kong&#8217;s home prices still remain one of the most expensive in the world and, hence, stamp duty is a considerable expense for homebuyers. After the implementation of double stamp duty in 2013 and the increase of property stamp for second-home buyers to 15% in 2016, homeowners began transferring the title of a property from joint ownership to single ownership. Doing so enables them to restore the “first-time purchaser” status for one party in order to re-enter the property market without paying the additional tax.</p>



<p>Notably, a study by QFang indicated that transactions involving close relatives constituted over 10% of the second-hand residential transactions in the first seven months of last year.&nbsp; The same study indicated that this has increased in recent months and was 16% of all second-hand sales in July.&nbsp; This may indicate that some buyers are optimistic about the market outlook and are preparing to make a new purchase by restoring their “first-time purchaser” status.</p>



<h2>How much can you save with the first-time buyer status?&nbsp;</h2>



<p>A person (HKPR) holding a property as a joint proprietor or individual owner may transfer (sell) their ownership of the property to a close relative such as a parent, sibling, spouse or child. This “close relative” status exempts the relative from paying the 15% Ad Valorem Stamp Duty (AVD).&nbsp; The transaction is subject to Stamp Duty based on the determined value of the property, but the person (transferor) becomes eligible for first-time buyer status, exempting them from the 15% (AVD) on a future purchase.</p>



<p>For example, a couple jointly owns a property with a market value of HK$6 million. The husband transfers the title of the property to his spouse. The total amount of tax rate payable is HK$45,000 ($3,000,000 x 1.5%). Later, the husband purchases a residential unit with a market value of HKD$8 million as a first-time buyer, avoiding the 15% AVD (HK$1.2 million), instead paying only the 3.75% stamp duty (HK$300,000).&nbsp; This results in a net tax savings of HK$855,000 compared to what would have been paid had he purchased the property without having transferred ownership of the original property.</p>



<p>Under current laws, the husband may do this repeatedly &#8211; buy a property and then transfer it to his wife – and be entitled to the first-time buyer status and exempt from the AVD on each new purchase. Compared with the 15% AVD, the stamp duty applicable to first-time home buyers is much lower, ranging from 1.5% to 4.25%. If the property price is under HK$2 million, only a printing fee of HK$100 is required. &nbsp;</p>



<h3>A Similar Tax Saving Trick in First-hand Market</h3>



<p>In the first-hand property market, a similar strategy has evolved, with some with prospective buyers “borrowing” their relatives names and registering multiple lottery applications in order to increase their chances of purchasing units. If successful, they can transfer the property ownership from their relative to themselves, typically after waiting three years to avoid being subject to the Special Stamp Duty (SSD), an additional tax payable if you sell or transfer within 3 years of purchase.</p>



<p>These tax-saving strategies are not illegal and sound like no-brainers for anyone seeking to build a portfolio of properties.&nbsp; So why doesn’t everyone (who can afford to buy multiple properties) do this?&nbsp; This approach is obviously beneficial, but one must also pay attention to the risks involved.</p>



<h2>4 Risks of Transferring Property</h2>



<p>Although transferring property titles helps some buyers to reduce taxes, there are other considerations.</p>



<h3>Mortgage Financing</h3>



<p>Banks are naturally careful about awarding a <a href="https://www.planto.hk/en/mortgage-home/">mortgage</a> considering the financial strength of all parties involved, particularly for older purchasers or those with multiple properties in their portfolio.&nbsp; In the above example, the husband may qualify for a mortgage when acquiring a property but may later find that the bank will not transfer the mortgage to his wife if she doesn’t meet various stress tests (ie. debt-to-income, etc.).&nbsp; Or the bank may allow the mortgage transfer but at a higher interest rate.&nbsp; In such cases, the husband could provide a personal guarantee on his wife’s mortgage, though again the bank will review the combined financial strength of the two parties.&nbsp; The same applies to a parent transferring ownership to a child.&nbsp; Just as importantly, a family should not undertake more debt (i.e. risk) than they can comfortably support.</p>



<h3>Costs</h3>



<p>One must consider the costs of the transaction, both the immediate costs (such as attorney’s fees) and costs that may be incurred later.&nbsp; If the mortgage is transferred before the expiry of a penalty period, it may be necessary to return the cash rebate and pay the penalty interest to the bank.</p>



<h3>Estate Planning</h3>



<p>With joint-ownership, if one party passes away, the ownership automatically transfers to the other.&nbsp; Moving to separate ownership results in a more protracted probate process of the sole owner dies, especially if they do not have an updated will, which then leads to an even more exhaustive intestate court process and potentially legal disputes amongst the family.</p>



<h3>Other Tax and Title Considerations</h3>



<p>Some owners may attempt to transfer their property at a below-market price (to reduce stamp duty).&nbsp; However, tax authorities have the right to recover the difference, potentially with a penalty.&nbsp; If the title transfer is done as a Deed of Gift (with no money changing hands between the parties), it is still considered a property transfer and subject to the same tax treatment as a sale.&nbsp; Properties transferred via a Deed of Gift are also subject to claims by creditors if the donor declares bankruptcy within 5 years.&nbsp; This title encumbrance can cause complications later, making the property difficult to sell, since banks may be unwilling to provide a mortgage to a new buyer during that 5-year period.&nbsp;</p>



<p>In summary, property transfers are legal ways to reduce your property taxes. However, there are potential complexities to consider and you should engage professional legal and tax advisors to assist you in making an informed decision before employing this strategy.&nbsp; In addition, the Government has indicated that it is closely monitoring such transfers, so stay abreast of the latest policies in case they change.</p>



<p>Note: Illustrations in this article are for reference only and no representation or warranty is made regarding their accuracy.&nbsp; This article in no way represents legal, tax, accounting or investment advice. Readers considering real estate transactions should consult professionals in these areas for advice.</p>



<p>This article is written by <a href="https://www.okay.com/en/property-news/how-can-transferring-a-property-to-a-relative-save-taxes-in-hong-kong/900?nid=59">OKAY.com</a> and originally published in the author&#8217;s website.&nbsp;</p>



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Hong Kong Homeowners began transferring the title of a property from joint ownership to single ownership. Doing so enables them to restore the “first-time purchaser” status for one party in order to re-enter the property market without paying the additional tax.

HK Homeowners Gain Tax Advantages by Transferring Property Ownership.  Here’s How it Works and the Risks


<p>Tax is one of the things everyone hates &#8211; but there are ways to reduce it! One option is to make use of <a href="https://www.fidelity.com.hk/en/mpf-tvc/tax-deductible-voluntary-contributions">Tax Deductible Voluntary Contribution</a> (TVC). In this article, we will show you the benefits of TVC, steps to open a TVC account and how to apply for tax deductions.</p>



<h2><strong>TVC applications are rapidly increasing </strong></h2>



<p><a href="https://www.fidelity.com.hk/en/articles/press-releases/2019-12-04-global-wi-tax-incentives-1575442758915">According to Fidelity International</a>, more than 80% of Hong Kong people were positive about the government’s new tax-deductible financial products e.g. TVC and QDAP and VHIS. Based on MPFA’s research, as of September 2019, there were 19,000 TVC accounts held by Hong Kong employees, which was a five-fold increase from April 2019 (3,400 TVC accounts)!</p>



<figure class="wp-block-table"><table class=""><tbody><tr><td>Date</td><td>Contribution Accounts</td><td>Personal Accounts</td><td>TVC Accounts</td></tr><tr><td>30/6/2019</td><td>4,183,000</td><td>5,723,000</td><td>13,000</td></tr><tr><td>30/9/2019</td><td>4,228,000</td><td>5,771,000</td><td>19,000</td></tr><tr><td>Growth Rate</td><td>+1.07%</td><td>+0.83%</td><td>+46.15%</td></tr></tbody></table></figure>



<p>Although TVC has been growing since its launch, it still accounts for less than 0.2% of the total MPF accounts.</p>



<h2><strong>Benefits of TVC</strong></h2>



<h4>Pay less tax</h4>



<p>TVC contributions can be included in tax deductions under salaries tax or tax under personal assessment, with a maximum cap per year of $60,000 (which is an aggregate limit for TVC and qualifying deferred annuity policies premiums). It can save you up to HK$10,200 in tax each year. <a href="https://www.fidelity.com.hk/en/mpf-tvc/tax-deductible-voluntary-contributions">Click here to know more about TVC tax deductions</a>!</p>



<h4>Increase your net worth</h4>



<p>Under the fierce inflation in Hong Kong, relying on MPF contributions alone may not be enough to support retirement life. If you put away just a few hundred dollars each month for voluntary contributions, your net worth at retirement can be increased by millions.</p>



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<h2><strong>How to open a TVC account</strong></h2>



<p>Opening a TVC account is simple. You just need to request a TVC application form from your MPF provider, complete the form and return it with copies of HKID card and residential address proof. </p>



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<p><strong>How to transfer TVC assets</strong></p>



<p>You can only transfer balance from one TVC account to another. So if you have multiple TVC accounts (one for each MPF scheme), you may want to consolidate it all. Once you do that, your TVC account in the original scheme will be terminated. Transfer forms are downloadable from websites of MPFA or from your current MPF provider.</p>



<p><strong>How to apply for TVC tax deductions</strong></p>



<p>To apply for TVC tax deductions, you simply need to claim the deductions in the Tax Return (BIR60)<s>.</s> If you have already submitted the 2019/20 tax return, you may apply for correction within 6 years after the end of the relevant year of assessment.</p>



<p>You won’t need to attach any supporting documents to the tax returns but you should retain the contribution summaries by the trustees for 6 years, in case of a selected review by the HK IRD.</p>



<p>In addition, if a TVC member also has <a href="https://www.gov.hk/en/residents/taxes/salaries/allowances/deductions/annuity.htm">qualifying annuity premiums</a>, the TVC deductions would be claimed first. Lastly, you only claim tax deductions from your personal account, not family members’ account.</p>



<p>“In this world nothing can be said to be certain, except death and taxes,” said Benjamin Franklin. Taxes may be certain but we can be smart about it &#8211; pay less tax but use it to increase your net worth and strengthen your financial foundation after retirement.</p>


Want to pay less tax and increase your net worth? Make use of Tax Deductible Voluntary Contribution (TVC)! In this article, we will show you the steps to open a TVC account and how to apply for tax deductions.

[Save on your tax] How to open a Tax Deductible Voluntary Contribution (TVC) account


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<p>In recent years, there&#8217;s been more investment brokers launching in Hong Kong which is fantastic for consumers! Many of them have made investing very cheap, offer powerful stock research tools and help you invest smarter. <strong><a href="https://www.planto.hk/en/redirect/?params=eyJwcm9kdWN0IjoidXNtYXJ0X2Jyb2tlciIsInR5cGUiOiJpbnZlc3RtZW50X2Jyb2tlciIsImFwcGx5VXJsIjoiaHR0cHM6Ly91c21hcnRzZWN1cml0aWVzLmNvbS9BZmZpbGlhdGUvdC9jayIsImZyb20iOiJ1U01BUlQgUmV2aWV3In0=">uSMART Securities</a></strong> has done all of the above &#8211; it helps you invest in HK and US stocks with extremely low fees, uses big data to analyze stocks and give strategies you can follow. On top of that, the app is simple to use and easy to get started with!</p>



<h2>What&#8217;s great about uSMART?</h2>



<ul><li>Lowest trading fees in the market for HK and US stocks</li><li>Monthly investment plan available</li><li>Fund platform where you can buy equity, bond or money market funds with ease</li><li>AI-based stock screening tool</li><li>Easy account opening (3 minutes to get started!)</li><li>Simple app user interface</li><li>IPO stock subscription available</li><li>Licensed by the SFC for Type 1, 4 and 9 (<a href="https://www.planto.hk/en/blog/investor-compensation-fund/">your investments are protected</a>!)</li></ul>



<h2>Account opening in 3 minutes</h2>



<p>Opening a uSMART securities account is simple:</p>



<ol><li>Download the app and receive a verification code via SMS; (or log in with your Facebook or Google account)</li><li>Use your phone to take pictures and upload your ID card and address proof</li><li>Fill in some basic information such as name, contact, financial status, etc.</li><li>Deposit funds and start investing</li></ol>



<h2>Pricing plans for HK stocks</h2>



<p>uSMART securities offers two plans for HK stocks:</p>



<ol><li><strong>Pay a commission:</strong> This means that you will pay 0.03% (if your account balance is more than HKD 100,000) or 0.05% (if you account balance is less than HKD 100,000) of the transaction as a commission and $0 as platform fees. In essence, this means if your account balance is $150,000 and you buy a few lots of HK shares worth $50,000, you would have to pay 15 HKD in fees.</li><li><strong>Pay a platform fee</strong>: This is more straightforward &#8211; you pay a flat HKD 12 per transaction.</li></ol>



<p>Which one you choose depends on your trading habits &#8211; if you buy in large transactions, the platform fee makes more sense. If your transactions are smaller, then the commission plan might be more suitable.</p>



<h2>Pricing plan for US stocks</h2>



<p>For US stocks, uSMART offers zero-commission plans. You just have to pay a flat USD 1 (~HKD 7.8) as a platform fee which is one of the lowest in Hong Kong. It&#8217;s simple and ideal for starting to invest in the US!</p>



<h2>Tools and Research</h2>



<p>On top of having really low fees, uSMART also provides you with stock research functionality that can be quite powerful. The key features are:</p>



<ol><li><strong>Smart Advisor</strong>: This is an AI / Big Data driven stock screener that can help identify stocks based on various metrics including growth potential, price/earnings ratio and more. The performance is backtested but real-life performance over the long term remains to be seen &#8211; but it could still be a great tool to get ideas.</li><li><strong>Stock analysis</strong>: For individual stocks, aside from providing the price quote, uSMART provides intelligent scoring based on various factors of the company e.g. profit, growth, industry prospects, dividend yield, etc., and ranks them to help investors make more informed decisions. As an example, HSBC Holdings (0005.HK) had a score of 69.55 on January 2, 2020; Tencent Holdings (0700.HK) scored 68.34 points on the same day.</li></ol>



<figure class="wp-block-image size-large"><img src="https://cms.planto.io/wp-content/uploads/2020/01/usmart_stock_analysis.jpg" alt="" class="wp-image-7716" srcset="https://cms.planto.io/wp-content/uploads/2020/01/usmart_stock_analysis.jpg 810w, https://cms.planto.io/wp-content/uploads/2020/01/usmart_stock_analysis-300x181.jpg 300w, https://cms.planto.io/wp-content/uploads/2020/01/usmart_stock_analysis-768x465.jpg 768w" sizes="(max-width: 810px) 100vw, 810px" /></figure>



<h2>Smart Fund Platform</h2>



<p>The funds on uSMART Securities platform are divided into four types: money market, bond, balanced and equity. Each fund has a chart to clearly show the performance trend, and lists the minimum investment amount and handling fee, which makes it straightforward for investors to choose what fund they are interested in.</p>



<ol><li><strong>Money Market Funds:</strong> These have the lowest risk and invest mainly in Treasury bills, commercial paper, etc. Many investors may opt to use money market funds as a substitute for time deposit plans. As of the end of 2019, uSMART&#8217;s money market funds&#8217; returns ranged between 1.92% and 2.64% in one year.</li><li><strong>Bond funds:</strong> The risks can be high or low, depending on the fund because bonds can have various risk levels (government bonds being lower risk, corporate and junk bonds being higher risk). As of the end of 2019, uSMART&#8217;s bond funds&#8217; returns ranged between 2.69% and 14.53% in one year.</li><li><strong>Balanced funds:</strong> These funds are diversified across bonds, stocks and other products. The risk is variable depending on the holdings of the fund and thus reward is also variable. As of the end of 2019, uSMART&#8217;s balanced funds&#8217; returns ranged between 4.21% and 19.03% in one year.</li><li><strong>Equity funds:</strong> These have higher risk (and higher returns). The investments include various types of stock assets which also makes it an easy way to diversify risk. As of the end of 2019, uSMART&#8217;s equity funds&#8217; returns ranged between 7.96% and 51.78% in one year.</li></ol>



<figure class="wp-block-image size-large"><img src="https://cms.planto.io/wp-content/uploads/2020/01/usmart_smartfund.jpg" alt="" class="wp-image-7718" srcset="https://cms.planto.io/wp-content/uploads/2020/01/usmart_smartfund.jpg 540w, https://cms.planto.io/wp-content/uploads/2020/01/usmart_smartfund-300x272.jpg 300w" sizes="(max-width: 540px) 100vw, 540px" /></figure>



<h2>Summary</h2>



<p>The uSMART mobile app is powerful, affordable and easy to use. The Smart Advisor functionality is interesting but lacks real-life historical data to see if it really works and may take a while before it can be considered a replacement to robo-advisors.</p>



<p>The good news is, even if we exclude the smart advisor and analysis features, uSMART&#8217;s app is really good. Whether you&#8217;re a beginner or an experienced investor with a bank already, you&#8217;d want to give it a try yourself.</p>



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<p style="font-size:14px"><strong>Important information:</strong><br><br>Investment involves risks. This information is intended to be educational and is not tailored to the investment needs of any specific investor. This information does not constitute investment advice and should not be used as the basis for any investment decision nor should it be treated as a recommendation for any investment or action. Past performance is no guarantee of future results. The value of investments and the income from them can go down as well as up, so you may not get back what you invest.</p>


uSMART offers zero commission trading on HK and US stocks, intelligent stock screeners and a great app. Learn more about uSMART and start investing smarter and cheaper.

[Review] uSMART Securities


<p>Futu Securities, which was invested into by the Internet giant Tencent (0700.HK), is one of the most popular investment brokerages in Hong Kong with more than 600,000 users for its mobile app &#8220;Futu Niuniu&#8221;. The main advantages include cheaper transaction fees, a simple-to-use app, easy to trade Hong Kong stocks, US stocks and rich market research capabilities.</p>



<p>To help you more, we went through the account opening process and the user experience of buying and selling stocks and money market funds!</p>



<h2>Futu Securities Fees &amp; Features</h2>



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<h2>Futu Online Account Opening Process</h2>



<p>The website is Chinese only but it&#8217;s <a href="https://www.planto.hk/en/redirect/?params=eyJwcm9kdWN0IjoiZnV0dV9zZWN1cml0aWVzIiwidHlwZSI6ImludmVzdG1lbnRfYnJva2VyIiwiYXBwbHlVcmwiOiJodHRwczovL3Bhc3Nwb3J0LmZ1dHU1LmNvbS9zZW0vaGs/bGFuZGluZ0lkPTMmY2hhbm5lbD02NDIiLCJmcm9tIjoiRnV0dSBSZXZpZXcifQ==">easy enough to navigate </a></p>



<figure class="wp-block-image size-large"><img src="https://cms.planto.io/wp-content/uploads/2020/01/FutuHowToSignUp_en.jpg" alt="" class="wp-image-7639" srcset="https://cms.planto.io/wp-content/uploads/2020/01/FutuHowToSignUp_en.jpg 1013w, https://cms.planto.io/wp-content/uploads/2020/01/FutuHowToSignUp_en-300x115.jpg 300w, https://cms.planto.io/wp-content/uploads/2020/01/FutuHowToSignUp_en-768x296.jpg 768w" sizes="(max-width: 1013px) 100vw, 1013px" /></figure>



<ol><li>Enter your phone number</li><li>Click the &#8216;get verification code&#8217; button</li><li>Enter the verification code</li><li>Click open account</li></ol>



<p>Once you&#8217;ve done this, you can actually just switch to the Futu app and login with your phone number and continue the account opening process there. The steps include:</p>



<ol><li>Login to your account (via phone number)</li><li>Prepare your HKID card and address proof (screenshots or pictures of the card or proof is fine!)</li><li> Fill in some simple information such as name, date of birth, employment status, etc. Buying U.S. stocks involves U.S. taxation, so you must declare whether you are a U.S. citizen</li><li> For identity verification, you can choose from three methods: online account opening, in-person appointment, or by submitting a cheque</li></ol>



<p>and that&#8217;s it! The Planto team tested two account opening methods &#8211; doing it completely online and by making an appointment. Either way works and you can have your account open and ready to invest within 1-2 days.</p>



<h4>100% online account opening &amp; identity verification</h4>



<p>This is the <strong>easiest</strong> way to open a Futu account. Fill out the information online and select &#8220;Open an account online&#8221;, use your mobile phone or computer to upload your ID card and address proof photo, then bind your bank account and deposit HK $ 10,000 to the Futu account shown on the screen. The sooner you do this, the quicker you can start investing!</p>



<h4>Make an appointment to verify your identity</h4>



<p>After filling in the information online and choosing &#8220;Make an appointment&#8221;, you can choose to meet with Futu staff and present your identification documents on the spot. Users can choose the time and place for the meeting. The Planto team submitted an online application on November 6 and successfully made an appointment to verify their identity at the Hong Kong MTR Station two days later.</p>



<p>Although it is &#8220;offline&#8221; account opening, in practice, the Futu staff only uses an iPad to take pictures and upload documents for applicants, which is almost the same as online account opening. The main benefit of meeting and opening an account is that you can open an account without having to deposit the HK$ 10,000 immediately when you open an account.</p>



<h2>Trading of Hong Kong stocks, US stocks, and new shares</h2>



<p>Futu has iPhone, Android, Windows and Mac versions of the app, which can be used to invest in Hong Kong stocks, US stocks and A shares. The buying and selling procedures are similar to those of the bank&#8217;s system. Select the stock, number of shares you want to buy, and order instructions and then you just wait for the order to be executed!</p>



<p>(Fun fact: Futu&#8217;s trading system claims to complete Hong Kong stock trading orders in 0.0037 seconds &#8211; although this probably won&#8217;t matter for most investors)</p>



<p>If you invest in US stocks, you can deposit US dollars into your account or exchange it via the Futu app directly. If investing in A shares, you&#8217;ll need to have RMB in the Futu A-share account. In addition, you can also subscribe to IPO stocks in HK and US although this would not be advisable for beginner investors!</p>



<h2>Futu MoneyPlus Fund</h2>



<p>Futu MoneyPlus includes <a href="https://www.planto.hk/en/blog/Money-Market-Fund-Intro/">money market funds</a>, stock funds and bond funds. The money market funds are particularly interesting:  while you&#8217;re waiting to invest (whether it&#8217;s for research or waiting for the right time), you can put your idle funds in the money market funds and get an annualized return of nearly 2%, <strong>withdrawable at any time</strong>. Due to the low risk and stable returns of the money fund, you could almost consider it as a high-interest savings account.</p>



<figure class="wp-block-image size-medium"><a href="https://cms.planto.io/wp-content/uploads/2020/01/FutuMoneyMarket-1.jpg" target="_blank" rel="noreferrer noopener"><img src="https://cms.planto.io/wp-content/uploads/2020/01/FutuMoneyMarket-1-295x300.jpg" alt="" class="wp-image-7662" srcset="https://cms.planto.io/wp-content/uploads/2020/01/FutuMoneyMarket-1-295x300.jpg 295w, https://cms.planto.io/wp-content/uploads/2020/01/FutuMoneyMarket-1-768x781.jpg 768w, https://cms.planto.io/wp-content/uploads/2020/01/FutuMoneyMarket-1.jpg 800w" sizes="(max-width: 295px) 100vw, 295px" /></a></figure>



<p>Bond funds are low to medium risk, with greater volatility than money market funds, but also higher returns. As for equity funds, the potential risks and returns are both higher.</p>



<h2>Stock quote, analysis, practical information</h2>



<p>Another selling point of the Futu Niuniu app is that it can provide very rich market information, including real-time quotes, valuation trends, corporate financial analysis and forecast, financial news reports, stock market basics and other information about Hong Kong and US stocks. There&#8217;s also a community where you can discuss ideas with other fellow-minded investors!</p>



<figure class="wp-block-image size-medium"><a href="https://cms.planto.io/wp-content/uploads/2020/01/FutuCommunity.jpg" target="_blank" rel="noreferrer noopener"><img src="https://cms.planto.io/wp-content/uploads/2020/01/FutuCommunity-296x300.jpg" alt="" class="wp-image-7663" srcset="https://cms.planto.io/wp-content/uploads/2020/01/FutuCommunity-296x300.jpg 296w, https://cms.planto.io/wp-content/uploads/2020/01/FutuCommunity-768x779.jpg 768w, https://cms.planto.io/wp-content/uploads/2020/01/FutuCommunity.jpg 800w" sizes="(max-width: 296px) 100vw, 296px" /></a></figure>



<p>Having said that, most of the research information is displayed in Simplified Chinese &#8211; if you can&#8217;t read Chinese, then it may not be that useful for you!  </p>



<p>Luckily, this doesn&#8217;t impact the actual experience of buying and selling securities so if you&#8217;re looking for a low-cost broker, Futu can be a great choice (whether you speak Chinese or not)!.</p>



<next-steps-list lang="en" title="Next steps:">
<next-steps-list-item title="Open a Futu account" type="content" link="https://www.planto.hk/en/redirect/?params=eyJwcm9kdWN0IjoiZnV0dV9zZWN1cml0aWVzIiwidHlwZSI6ImludmVzdG1lbnRfYnJva2VyIiwiYXBwbHlVcmwiOiJodHRwczovL3Bhc3Nwb3J0LmZ1dHU1LmNvbS9zZW0vaGs/bGFuZGluZ0lkPTMmY2hhbm5lbD02NDIiLCJmcm9tIjoiRnV0dSBSZXZpZXcifQ=="></next-steps-list-item>
<next-steps-list-item title="Compare other HK brokers" lang="en" type="content" link="https://www.planto.hk/en/blog/invest-hk-stocks-broker-bank-accounts/"></next-steps-list-item>
<next-steps-list-item type="robo_comparison" title="Want someone to do the investing for you?" subtitle="Consider a robo-advisor instead!"></next-steps-list-item>
</next-steps-list>



<p style="font-size:14px"><strong>Important information:</strong><br><br>Investment involves risks. This information is intended to be educational and is not tailored to the investment needs of any specific investor. This information does not constitute investment advice and should not be used as the basis for any investment decision nor should it be treated as a recommendation for any investment or action. Past performance is no guarantee of future results. The value of investments and the income from them can go down as well as up, so you may not get back what you invest.</p>


Futu Securities, which was invested by the Internet giant Tencent (0700.HK), is one of the most popular investment brokerages in Hong Kong with more than 600,000 users for its mobile app "Futu Niuniu". The main advantages include cheaper transaction fees, a simple-to-use app, easy to trade Hong Kong stocks, US stocks and rich market research capabilities.

[Review] Futu Securities


<p>It&#8217;s a very common statement that I don&#8217;t invest because I don&#8217;t have enough money. Several years ago, this may have been true when you needed to have a large amount of money to buy Hong Kong stocks or to open an investment account. </p>



<p>This has changed recently &#8211; here&#8217;s three ways you can start investing with as little as HKD 1,000:</p>



<h2>1. Invest with a Robo-Advisor</h2>



<p>Robo-advisors are automated investment consultants. These are companies that will help you invest by picking ETFs and stocks for you. They have very low minimums and it&#8217;s quite simple to set up an automated investment plan so you don&#8217;t have to think about it. <a href="https://www.planto.hk/en/blog/robo-advisor-compare-recommend/">We compare the major robo-advisors here</a> &#8211; Chloe and Kristal let you start with as little as HKD 1,000!</p>



<single-action-item lang="en" type="robo_comparison" title="Compare the major robo-advisors in Hong Kong" button_text="Learn more"></single-action-item>



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<h2>2. Buy ETFs</h2>



<p><a href="https://www.planto.hk/en/blog/etf-explained/">ETFs</a> are very similar to mutual funds except you can buy them on the market like a regular stock. The advantage of ETFs are that they can represent either a geography (like US or China, etc.), a sector (like Financial Services or Technology, etc.) or even an investment approach! A comprehensive <a href="https://www.etf.com/channels">list of ETFs can be found here</a>. </p>



<p>You&#8217;d have to <a href="https://www.planto.hk/en/blog/US-Stock-Account-Compare/">open a US investment account</a> in order to access most ETFs and given there&#8217;s no lot size restriction, you can buy just 1 stock of an ETF too! Luckily, opening a US account is quite easy with the low-cost brokers available in Hong Kong.</p>



<single-action-item type="content" link="https://www.planto.hk/en/blog/US-Stock-Account-Compare/" title="Compare securities brokers to invest in the US market" button_text="Learn more"></single-action-item>



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<h2>3. Get a Monthly Investment Plan</h2>



<p>This is what people are most familiar with &#8211; banks often provide <a href="https://www.planto.hk/en/blog/monthly-stock-investment-plan-compare/">Monthly Investment Plans</a> which can seem like an easy way to get started investing with a small amount of money. However, it&#8217;s not that simple: most banks will charge you a transaction fee for each stock you purchase every month and <strong>these costs add up really fast. </strong></p>



<p>Example: Lets say you&#8217;re buying 5 stocks a month, contributing HKD 2,000.</p>



<p>If you were using the Monthly Investment Plan offered by BOC or Hang Seng, you would be paying min. 50 HKD per stock which means <strong>a minimum of HKD 250 per month to buy your stocks</strong>!</p>



<p>This is: HKD 250 / HKD 2000 = <strong>12.5% in fees</strong></p>



<p>In order to accommodate for this, you may think you can just invest more but the cost remains really high. If you&#8217;re looking for a Monthly Investment Plan, going for a bank would not be advisable. Luckily, some <a href="https://www.planto.hk/en/redirect/?params=eyJwcm9kdWN0IjoidXNtYXJ0X2Jyb2tlciIsInR5cGUiOiJpbnZlc3RtZW50X2Jyb2tlciIsImFwcGx5VXJsIjoiaHR0cHM6Ly91c21hcnRzZWN1cml0aWVzLmNvbS9BZmZpbGlhdGUvdC9jayIsImZyb20iOiJJbnZlc3QgV2l0aCBMaXR0bGUgTW9uZXkgQXJ0aWNsZSJ9">investment brokers like uSMART</a> offer affordable monthly investment plans which could be a consideration:</p>



<single-action-item type="content" link="https://www.planto.hk/en/redirect/?params=eyJwcm9kdWN0IjoidXNtYXJ0X2Jyb2tlciIsInR5cGUiOiJpbnZlc3RtZW50X2Jyb2tlciIsImFwcGx5VXJsIjoiaHR0cHM6Ly91c21hcnRzZWN1cml0aWVzLmNvbS9BZmZpbGlhdGUvdC9OciIsImZyb20iOiJJbnZlc3QgV2l0aCBMaXR0bGUgTW9uZXkgQXJ0aWNsZSJ9" title="uSMART Securities offers affordable monthly investment plans" subtitle="Transaction fees range between HKD 8-12 per stock" button_text="Learn more"></single-action-item>
<single-action-item type="content" link="https://www.planto.hk/en/blog/monthly-stock-investment-plan-compare/" title="Compare all monthly investment plans" button_text="Learn more"></single-action-item>



<div style="height:40px" aria-hidden="true" class="wp-block-spacer"></div>



<h2>Takeaways</h2>



<p>Starting to invest doesn&#8217;t mean you have to wait until you have a large amount of money saved up. In fact,<strong> investing a consistent amount each month over a long period of time is the surest way to build your wealth</strong>. Whether you prefer do-it-yourself investing via ETFs and monthly investment plans, or if you want a robo-advisor to do it for you &#8211; there&#8217;s many options to invest even if you aren&#8217;t saving a huge amount each month.</p>



<p style="font-size:14px"><strong>Important information:</strong><br><br>Investment involves risks. This information is intended to be educational and is not tailored to the investment needs of any specific investor. This information does not constitute investment advice and should not be used as the basis for any investment decision nor should it be treated as a recommendation for any investment or action. Past performance is no guarantee of future results. The value of investments and the income from them can go down as well as up, so you may not get back what you invest.</p>


In the past, you may have needed a lot of money to start investing. With robo-advisors, monthly investment plans and ETFs, you can start with as little as HKD 1,000!

How to start investing with a small amount of money

<p>In recent years, it&#8217;s becoming more common to <a href="https://www.planto.hk/en/blog/invest-hk-stocks-broker-bank-accounts/">open accounts with securities brokers</a> rather than banks in order to save money on commissions and transaction fees for buying and selling stocks. However, there are still investors who use large banks and are worried about switching to a securities bank. What happens if the securities broker defaults&#8217; &#8211; will you lose your money? What does the investor protection look like?</p>
<p>In order to protect investors, the Securities Regulatory Commission has established what it calls the <a href="https://www.hkicc.org.hk/about_us/introduction_e.htm">Investor Compensation Company</a>. Once a securities broker, bank, or other qualified intermediary fails or an event of default occurs, causing investors to suffer losses, investors can claim compensation from this fund.</p>


<h2>How much you will be compensated</h2>



<p><strong>Under the current regulations, the Investor Compensation Fund will compensate investors up to HKD 500,000 in each case</strong> (since 1 Jan 2020) which is in line with the <a href="https://www.dps.org.hk/index_EN.html">Deposit Protection Scheme</a>. In other words, the compensation amount is the same as if your bank was to fail. In addition, the protection scope of this mechanism will also be expanded to invest through Northbound Connect, which will increase the protection for investors who wish to buy stocks via Shanghai Stock Connect and Shenzhen Stock Connect A shares through Hong Kong securities brokers.</p>



<p>Investors are able to claim under defaults that include &#8220;bankruptcy, winding up or insolvency or has committed breach of trust, defalcation, fraud or misfeasance&#8221;. The violating intermediary can be a licensed individual, or an institution such as a bank or a securities broker.</p>



<p>There are still some investors who would rather pay a <a href="https://www.planto.hk/en/blog/invest-hk-stocks-broker-bank-accounts/">higher commission for stock trading</a> and choose to invest with large banks that they consider more robust. However, with the increase in the upper limit and scope of the protection amount, there&#8217;s very little reason to stick with the large banks. Along side the SFC-provided investor protection, <a href="https://www.planto.hk/en/redirect/?params=eyJwcm9kdWN0IjoidXNtYXJ0X2Jyb2tlciIsInR5cGUiOiJpbnZlc3RtZW50X2Jyb2tlciIsImFwcGx5VXJsIjoiaHR0cHM6Ly91c21hcnRzZWN1cml0aWVzLmNvbS9BZmZpbGlhdGUvdC9LdCIsImZyb20iOiJJbnZlc3RtZW50IFJpc2sgUHJvdGVjdGlvbiBBcnRpY2xlIn0=">uSMART Securities</a>, <a href="https://www.planto.hk/zh/blog/invest-hk-stocks-broker-bank-accounts/">8 Securities</a> and other emerging securities brokers also have lower fees and sometimes have promotional offers with stock and cash coupons.</p>



<next-steps-list lang="en">
    <next-steps-list-item type="content" link="https://www.planto.hk/en/blog/US-Stock-Account-Compare" title="Compare US Investment Brokers" subtitle="Understand the basics of investing in the US market"></next-steps-list-item>
    <next-steps-list-item type="robo_comparison" title="Want someone to do the investing for you?" subtitle=" Consider a robo-advisor instead!"></next-steps-list-item>
    <next-steps-list-item type="content" link="https://www.planto.hk/en/blog/low-risk-investment-tools" title="Looking for a safe place to park your cash?" subtitle="Do better than a savings account with these low risk investments"></next-steps-list-item>
</next-steps-list>



<h2>How compensation amount is calculated</h2>



<p>Investor Compensation Co., Ltd. states that the amount of compensation received by investors from the relevant mechanism is calculated based on the closing price of securities on the date of breach. The following is an example of compensation based on the current compensation limit of HKD 500,000.</p>



<p>Lets say Mike bought the following portfolio on a certain date:</p>



<figure class="wp-block-table"><table class=""><tbody><tr><td>Stock Name</td><td># of Stocks</td><td>Purchase Price (HKD)</td><td>Total Price (HKD)</td></tr><tr><td>Company A</td><td>10,000</td><td>25.5</td><td>255,000</td></tr><tr><td>Company B</td><td>8,000</td><td>21.0</td><td>168,000</td></tr><tr><td>Company C</td><td>40,000</td><td>3.7</td><td>148,000</td></tr><tr><td></td><td></td><td>Total Investment</td><td>571,000</td></tr></tbody></table></figure>



<p>However, his securities broker defaults on 22 December 2019. His holdings at the close of that date looked like this:</p>



<figure class="wp-block-table"><table class=""><tbody><tr><td>Stock Name</td><td># of Stocks</td><td>Current Price (HKD)</td><td>Total Price (HKD)</td></tr><tr><td>Company A</td><td>10,000</td><td>20.0</td><td>200,000</td></tr><tr><td>Company B</td><td>8,000</td><td>15.0</td><td>120,000</td></tr><tr><td>Company C</td><td>40,000</td><td>3.0</td><td>120,000</td></tr><tr><td></td><td></td><td>Total Investment</td><td>440,000</td></tr></tbody></table></figure>



<p>In this case, Mike bought his stocks at HKD 571,000 and the securities broker defaulted on 22 December 2019, and the market price (on that date) was HKD 440,000. In this case, Mike would receive investor protection compensation of <strong>HKD 440,000.</strong></p>



<h2>Frequently Asked Questions about Investor Compensation</h2>



<p><br><strong>What is the maximum compensation limit for joint securities accounts?</strong></p>



<p>The maximum compensation is calculated for <em>each investor</em>. Even if a joint securities account is used, the maximum compensation for each person is still HKD 500,000.</p>



<p></p>



<p><strong>What is the maximum compensation limit for an investor who holds more than one account in a single bank or securities bank?</strong></p>



<p>No matter how many securities accounts an investor holds in a default institution, the maximum compensation per person in a single default event is only HKD 500,000.</p>



<p></p>



<p><strong>Can cash in securities accounts be protected?</strong></p>



<p>The coverage of the compensation fund also includes cash in securities accounts, but the cash must be intended for purchase and sale of securities.</p>



<p style="font-size:14px"><strong>Important information:</strong><br><br>Investment involves risks. This information is intended to be educational and is not tailored to the investment needs of any specific investor. This information does not constitute investment advice and should not be used as the basis for any investment decision nor should it be treated as a recommendation for any investment or action. Past performance is no guarantee of future results. The value of investments and the income from them can go down as well as up, so you may not get back what you invest.</p>


Is it risky to use a securities broker rather than a bank? How does the investor compensation fund help? 

Is it risky to use a securities broker rather than a bank?


<p>If you&#8217;ve realized you need to start investing, congratulations! Thinking about investing means that you&#8217;re already know how important it is to your future, whether it&#8217;s to grow your wealth, reach financial freedom or even <a href="https://www.planto.hk/en/blog/invest-inflation-risk/">just to avoid inflation</a>.</p>



<p>On the most basic level, the first question you need to ask yourself is, in an ideal world:</p>



<p class="has-large-font-size"><strong>1) Do you want to do your investing yourself?</strong></p>



<p>You&#8217;ll need to learn about the basics of investing, concepts like time horizon, diversification, asset classes and more. It&#8217;s not rocket science, but it&#8217;s not for everyone either!</p>



<p class="has-large-font-size"><strong>2) Do you want someone else to manage your investments for you?</strong></p>



<p>In this case, you&#8217;re entrusting someone else to do all the research and ensure you have a portfolio that is right for you. In Hong Kong, the easiest (and cheapest) way to do this would be using a robo-advisor. </p>



<single-action-item title="Let a robo-advisor manage your investments" subtitle="It's easy to get started with as little as HKD 500!" button_text="Learn more" type="robo_comparison" lang="en"></single-action-item>



<h3>Which one is better?</h3>



<p>Ultimately, this is a question for you to answer yourself. Are you committed to learning more about investing responsibly? Do you find it interesting? Would you be able to stay rational in an emotional market? </p>



<p>There&#8217;s pros and cons to each &#8211; but ultimately the best way is <strong>whichever will get you started sooner</strong> and <strong>whichever will keep you investing consistently</strong>.</p>



<h3>I really want to do it myself</h3>



<p>At Planto, we believe in <strong>responsible investing</strong> &#8211; you don&#8217;t need to be a genius stock-picker. As long as you are committed to investing for the long-term in a disciplined way, you&#8217;ll be fine!</p>



<p>The three most important things for being a responsible investor are:<br> 1) Start early<br> 2) Understand some basic concepts<br> 3) Be disciplined in investing each month</p>



<h4>1. Start early</h4>



<p>Starting early means you can take advantage of compound interest to grow your wealth exponentially faster. Here&#8217;s a visualization:</p>



<investment-asset-growth-calculator title="How your wealth grows with time" language="en"></investment-asset-growth-calculator>



<p>As you can see, compound interest accelerates your wealth growth over time, which means the sooner you start, the more time your wealth has to grow.</p>



<p>Do future-you a favor and take the leap to open an investment account &#8211; the lower the fees, the better. Here&#8217;s <a href="https://www.planto.hk/en/blog/US-Stock-Account-Compare/">the best brokers for investing in the US</a>, and here&#8217;s <a href="https://www.planto.hk/en/blog/invest-hk-stocks-broker-bank-accounts/">the best brokers to invest in HK</a>.</p>



<h4>2. Basic Concepts</h4>



<p>There&#8217;s two major concepts you need to understand to be a responsible investor: </p>



<h5>A) Time Horizon</h5>



<p>This means your investing strategy should depend on your goals. If your goals are in the short term, you should not be buying risky stocks because if the market goes down (even temporarily), your goal may be delayed! </p>



<p>On the other hand, if your goal is far away (like financial freedom), you want to invest more aggressively for higher returns to be able to reach it!</p>



<p>The easiest way to adjust your risk is to build a portfolio of different asset classes: <a href="https://www.planto.hk/en/blog/low-risk-investment-tools/">low risk investments</a> like time deposits, money market funds and bonds will lower your risk, while stocks will increase your risk.</p>



<h5>B) Diversification</h5>



<p>This means don&#8217;t put all your eggs in one basket. There&#8217;s two things to consider: <strong>geography</strong> and <strong>sector</strong>.</p>



<p><strong>Geography</strong>: If most of your investments are in a market like China, Hong Kong or United States &#8211; a single event like the trade war, or Brexit could cause your investments to suffer. Having your investments spread across geographies reduces that risk.</p>



<p><strong>Sector</strong>: If most of your investments are in technology, then a single bad event like the dot com bubble could erase your returns. Having investments across all sectors &#8211; utilities, energy, financial services, technology, etc., reduces that risk.</p>



<p>The easiest way to diversify is to build a portfolio <a href="https://www.planto.hk/en/blog/etf-explained/">using ETFs</a> &#8211; this reduces on your transactions cost (since one ETF can cover multiple geographies, sectors, or even asset classes!) and makes it easier to manage your investments.</p>



<h4>3. Discipline</h4>



<p>The surest way to build your wealth is to invest every single month, taking advantage of<a href="https://www.planto.hk/en/blog/monthly-stocks-savings-plans/"> dollar cost averaging</a> and <a href="https://www.planto.hk/en/blog/invest-inflation-risk/">compound interest</a>. <a href="https://www.planto.hk/en/blog/expense-tracking-budgeting-101/">Set a budget for yourself</a> (it doesn&#8217;t have to be super strict) to ensure you save consistently, and consider a <a href="https://www.planto.hk/en/blog/monthly-stock-investment-plan-compare/">monthly investment plan</a> (or <a href="https://www.planto.hk/en/blog/robo-advisor-compare-recommend/">use a robo-advisor</a>) to automatically transfer a fixed amount of money each month if that&#8217;s what it takes! </p>



<h2>Next steps</h2>



<p>The very first thing you should do is open your investment account (whether with a robo-advisor or with an investment broker) &#8211; it&#8217;s easy to fall into the trap of <em>&#8220;I don&#8217;t know what to buy yet &#8211; I&#8217;ll open an account later&#8221;</em>. In reality, what you&#8217;ll find is that once you have an account open, you&#8217;ll find the motivation to start doing your own research and grow your wealth!</p>



<p class="has-normal-font-size">If you&#8217;re too scared to take the leap, there&#8217;s also <a href="https://www.planto.hk/en/blog/low-risk-investment-tools/">low risk investments</a> you can start with just to get the hang of things!</p>



<next-steps-list lang="en" title="">
    <next-steps-list-item type="content" link="https://www.planto.hk/en/blog/US-Stock-Account-Compare" title="Compare US Investment Brokers" subtitle="Understand the basics of investing in the US market"></next-steps-list-item>
    <next-steps-list-item type="robo_comparison" title="Want someone to do the investing for you?" subtitle=" Consider a robo-advisor instead!"></next-steps-list-item>
    <next-steps-list-item type="content" link="https://www.planto.hk/en/blog/low-risk-investment-tools" title="Looking for a safe place to park your cash?" subtitle="Do better than a savings account with these low risk investments"></next-steps-list-item>
</next-steps-list>



<p style="font-size:14px"><strong>Important information:</strong><br><br>Investment involves risks. This information is intended to be educational and is not tailored to the investment needs of any specific investor. This information does not constitute investment advice and should not be used as the basis for any investment decision nor should it be treated as a recommendation for any investment or action. Past performance is no guarantee of future results. The value of investments and the income from them can go down as well as up, so you may not get back what you invest.</p>


Once you have your emergency savings, it's important to make your money work for you. Here's how you can start investing responsibly by building a portfolio that considers your time-horizon and diversification.

[Investing for Beginners] How to start investing


<p><a href="https://www.planto.hk/en/redirect/?params=eyJwcm9kdWN0IjoiYXF1bW9uX3dlYiIsInR5cGUiOiJyb2JvIiwiYXBwbHlVcmwiOiJodHRwczovL3NtYXJ0aGsuYXF1bW9uLmNvbS8jL3JlZ2lzdGVyP2xhbmc9ZW4mcWQ9UGxhbnRvIiwiZnJvbSI6IkFxdW1vbiBSZXZpZXcifQ==">Aqumon</a> is the first US ETF <a href="https://www.planto.hk/en/blog/robo-advisor-compare-recommend/">robo-advisor (automated investment consultant)</a> in Hong Kong. You tell them some information about yourself and your risk appetite, they build an investment portfolio and basically do everything (buying, selling) for you.</p>



<p>The Planto team has done a deep-dive into Aqumon&#8217;s pricing, account opening process and past performance benchmarks to help you decide if they&#8217;re right for you.</p>



<h2 id="background">Background</h2>



<p>Aqumon was incubated in HKUST and are fully licensed by the Securities and Futures Commission (SFC) for Type 1, 4 and 9. They&#8217;ve partnered with 60+ financial institutions including CMB Wing Lung Bank, ChinaAMC and BOCI so they have a strong track record as well.</p>



<h2 id="account-opening">Account Opening</h2>



<p>The account opening process is end-to-end online and can be done either via mobile or on a computer. It can feel a bit longer than opening an account with a securities broker but, ultimately, it only took us about 10 minutes to open our account and then another day for the money to be transferred in.</p>



<h2 id="how-it-works">How it works</h2>



<p>Once you&#8217;ve opened your account, you answer a few questions about your risk tolerance and Aqumon will start building your portfolio. All you need to do is tell them whether you would like your portfolio to have more stocks (higher risk, higher return) or bonds (lower risk, lower return) and a new portfolio is created just for you!</p>



<figure class="wp-block-image"><a href="/assets/images/website/blogContentAssets/aqumon_review/combined-process_en.jpg" target="_blank" rel="noreferrer noopener"><img src="https://cms.planto.io/wp-content/uploads/2019/12/combined-process_en.jpg" alt=""/></a></figure>



<h2 id="past-performance">Past Performance</h2>



<p>This is where Aqumon truly shines among the robo-advisors. They are very transparent about their performance and give monthly updates on how their portfolios are doing. Overall, they have two types of accounts which have different risk tolerances (ranging from conservative to aggressive):</p>



<h4 id="smartglobal-max-globally-diversified">SmartGlobal Max (globally diversified):</h4>



<figure class="wp-block-image size-large"><a href="/assets/images/website/blogContentAssets/aqumon_review/smartglobalmax_performance_en.jpg" target="_blank" rel="noreferrer noopener"><img src="https://cms.planto.io/wp-content/uploads/2020/01/SmartGlobalMax_Performance_2019-1024x585.jpeg" alt="" class="wp-image-7795" srcset="https://cms.planto.io/wp-content/uploads/2020/01/SmartGlobalMax_Performance_2019-1024x585.jpeg 1024w, https://cms.planto.io/wp-content/uploads/2020/01/SmartGlobalMax_Performance_2019-300x171.jpeg 300w, https://cms.planto.io/wp-content/uploads/2020/01/SmartGlobalMax_Performance_2019-768x439.jpeg 768w, https://cms.planto.io/wp-content/uploads/2020/01/SmartGlobalMax_Performance_2019-1200x686.jpeg 1200w, https://cms.planto.io/wp-content/uploads/2020/01/SmartGlobalMax_Performance_2019.jpeg 1323w" sizes="(max-width: 1024px) 100vw, 1024px" /></a></figure>



<h4 id="smartglobal-asia-focused">SmartGlobal (Asia-focused):</h4>



<figure class="wp-block-image size-large"><a href="/assets/images/website/blogContentAssets/aqumon_review/smartglobal_performance_en.jpg" target="_blank" rel="noreferrer noopener"><img src="https://cms.planto.io/wp-content/uploads/2020/01/SmartGlobal_Performance_2019-1024x585.jpeg" alt="" class="wp-image-7796" srcset="https://cms.planto.io/wp-content/uploads/2020/01/SmartGlobal_Performance_2019-1024x585.jpeg 1024w, https://cms.planto.io/wp-content/uploads/2020/01/SmartGlobal_Performance_2019-300x171.jpeg 300w, https://cms.planto.io/wp-content/uploads/2020/01/SmartGlobal_Performance_2019-768x439.jpeg 768w, https://cms.planto.io/wp-content/uploads/2020/01/SmartGlobal_Performance_2019-1200x686.jpeg 1200w, https://cms.planto.io/wp-content/uploads/2020/01/SmartGlobal_Performance_2019.jpeg 1323w" sizes="(max-width: 1024px) 100vw, 1024px" /></a></figure>



<p>As you can see, the more risk you are willing to take, the higher the return is. It goes without saying that past performance is not an indicator of the future but the fact that they are willing to share performance benchmarks is a great start!</p>



<p>Aqumon has also recently launched a bond portfolio which could be an alternative to holding cash or as a way to reduce your risk if you&#8217;re concerned about the future of the financial markets.</p>



<figure class="wp-block-image"><a href="/assets/images/website/blogContentAssets/aqumon_review/bondportfolio_performance_en.jpg" target="_blank" rel="noreferrer noopener"><img src="https://cms.planto.io/wp-content/uploads/2019/12/bondportfolio_performance_en.jpg" alt=""/></a></figure>



<p>Lastly, Aqumon has also launched a Basic portfolio (a ‘mini’ version of their existing ETF portfolios) which lowers the investment minimum to USD 1,000 (~HKD 8,000). <br></p>



<div class="row">
    <div class="col-6 col-m-6 col-sm-12" style="justify-content: center; padding: 0;">
<h2>Rebalancing:</h2>
        <p>Every now and then, your portfolio will need adjustments because of changes in the market, performance of individual holdings, etc. Aqumon will help out with this process by informing you whenever an adjustment is needed and you can execute it with just one click:</p>
    </div>
    <div class="col-6 col-m-6 col-sm-12" style="align-items: center; padding: 0;">
        <a href="https://cms.planto.io/wp-content/uploads/2019/12/rebalancingExample_en.jpg" target="_blank" rel="noopener noreferrer"><img style="width: 150px;" src="https://cms.planto.io/wp-content/uploads/2019/12/rebalancingExample_en.jpg"></img></a>
    </div>
</div>



<h2 id="pricing">Pricing</h2>



<p>Aqumon charges a flat fee of 0.8% per year but their new bond and basic portfolios charge a flat fee of 0.4% per year This is less than Chloe but higher than Kristal.</p>



<h2 id="minimum-investment-amount">Minimum Investment Amount</h2>



<p>Aqumon Standard portfolios (12-14 ETFs) has a higher minimum investment amount than the other robo-advisors. You’d need at least HKD 40,000 to start with them which can be a big commitment for some people.</p>



<p>However, Aqumon&#8217;s Basic portfolios solve this so you can get started investing with as little as HKD 8,000 (USD 1,000)!</p>



<h2 id="promotions">Promotions</h2>



<p>Until Dec 31, 2019, Aqumon has a special offer for their new defensive (all-bond) portfolio:<br>(1) Discounted fee. Enjoy 50% off the usual advisory fee. Only 0.4% (on asset under management) per year.<br>(2) HKD 200 cash coupon upon fund injection of more than HKD 100,000</p>



<h2 id="summary">Summary</h2>



<p>In all, Aqumon is transparent about their performance, which (historically, at least) has been quite strong. With the new Basic portfolios with lower minimums, they are great for people who want to start investing and want to be completely hands-off the process.</p>



<robo-advisor-card language="en" show_review="false" selected_advisor="aqumon"></robo-advisor-card>


<p><sub><sup><strong>Important information:</strong> Investment involves risks. This information is intended to be educational and is not tailored to the investment needs of any specific investor. This information does not constitute investment advice and should not be used as the basis for any investment decision nor should it be treated as a recommendation for any investment or action. Past performance is no guarantee of future results. The value of investments and the income from them can go down as well as up, so you may not get back what you invest.</sup></sub></p>

Aqumon is the first US ETF robo-advisor in Hong Kong - Planto has deep-dived into Aqumon's pricing, account opening process and past performance benchmarks to help you decide if they're right for you.

[Review] Aqumon Robo-Advisor Breakdown & Performance

<p>Inflation is said to be an investor&#39;s worst enemy &#8211; although it&#39;s safe to say it&#39;s even worse if you&#39;re not investing.</p>
<p>In a nutshell, inflation reduces your purchasing power. If the inflation rate is 3%, a coffee that costs $30 today will cost $30.9 next year.</p>
<p>Over time, this can mean your hard earned savings, if not managed properly, will be worth much less than they are today!</p>
<h2 id="your-weapon-against-inflation">Your weapon against inflation</h2>
<p>In short, investing is the easiest way to combat inflation and ensure your wealth is protected. We&#39;ll show you how big a difference this makes:</p>
<h3 id="case-1-putting-your-cash-in-a-savings-account-or-under-your-mattress">Case 1: Putting your cash in a savings account (or under your mattress)</h3>
<p>Assume that Flora saves HKD 5,000 each month starting today and carefully puts the money in a savings account (which offers negligible interest, equivalent to having it under the mattress).</p>
<p>Lets also assume that inflation will remain steady at 2.5% (the Hong Kong Government&#39;s forecast for the next five years).</p>
<p>30 years from now, Flora who saved HKD 5,000 each month would have accumulated a total of HKD 1.8 million. However, inflation has eroded this by 30.8% leaving her with only HKD 1,245,151 in savings &#8211; <strong>inflation cost her HKD 554,849</strong>!</p>

<p><inflation-lost-calculator language="en"></inflation-lost-calculator></p>


<h3 id="case-2：investing-responsibly-in-a-diversified-portfolio">Case 2：Investing responsibly in a diversified portfolio</h3>
<p>In an alternate timeline, Flora understood the importance of investments and put the HKD 5,000 she saved each month into a diversified portfolio returning a modest 4.5% &#8211; thanks to the power of compounding, <strong>her wealth grows by HKD 1,191,649</strong> &#8211; an improvement of 94.7% after inflation!</p>

<p><investment-asset-growth-calculator language="en"></investment-asset-growth-calculator></p>


<h2 id="how-to-get-started-investing">How to get started investing</h2>
<p>The lesson here is that even though a savings account sounds like a &#39;safe&#39; way to park your cash, you may actually be losing more money by not doing anything with it.</p>

<next-steps-list lang="en">
    <next-steps-list-item type="content" link="https://www.planto.hk/en/blog/US-Stock-Account-Compare" title="Compare US Investment Brokers" subtitle="Understand the basics of investing in the US market"></next-steps-list-item>
    <next-steps-list-item type="robo_comparison" title="Want someone to do the investing for you?" subtitle=" Consider a robo-advisor instead!"></next-steps-list-item>
    <next-steps-list-item type="content" link="https://www.planto.hk/en/blog/low-risk-investment-tools" title="Looking for a safe place to park your cash?" subtitle="Do better than a savings account with these low risk investments"></next-steps-list-item>
</next-steps-list>
 


<p><sub><sup><strong>Important information:</strong> Investment involves risks. This information is intended to be educational and is not tailored to the investment needs of any specific investor. This information does not constitute investment advice and should not be used as the basis for any investment decision nor should it be treated as a recommendation for any investment or action. Past performance is no guarantee of future results. The value of investments and the income from them can go down as well as up, so you may not get back what you invest.</sup></sub></p>
<h4 id="related-reading">Related Reading</h4>
<ul>
<li><a href="https://www.planto.hk/en/blog/US-Stock-Account-Compare/">[Investing for Beginners] Introduction to US Stock and Securities Account Fee Comparison</a></li>
<li><a href="https://www.planto.hk/en/blog/etf-explained/">[Investing for Beginners] Intro to ETFs (Exchange Traded Funds)</a></li>
<li><a href="https://www.planto.hk/en/blog/become-rich-easiest-way">4 Ways to Become Rich – “&#8230;and this is the easiest one,” says US Money Expert</a></li>
<li><a href="https://www.planto.hk/en/blog/robo-advisor-compare-recommend">[Investing for Beginners] Robo-Advisors Comparison：Chloe by 8 Securities, Kristal.ai, Aqumon</a></li>
</ul>


The average inflation rate in Hong Kong for the past 10 years has been ~3%. Inflation erodes our wealth and investment is a good way to fight it and add value to our assets. See how big a role investment plays in fighting inflation.

[Visualization] How inflation erodes your wealth

<p>Have you ever felt that your salary is never enough, housing is too unaffordable, that it’s so difficult to achieve financial progress and so on?</p>
<p>No matter whether you’re a realist or an idealist, living in Hong Kong, where the Gini coefficient is among the highest in the world, we might all have some trouble with money. Learning proper wealth management can help us solve some of these troubles and get on the road to financial freedom. </p>
<h2 id="understand-net-assets">Understand Net Assets</h2>
<p>Wealth Management is the management of assets – so to understand wealth management, you have to establish a basic concept of ‘net assets’. </p>
<p>Net assets are defined as the sum of current assets (cash and bank deposit), non-current assets (properties and automobiles) and investments (stocks, bonds and MPF) minus liabilities (mortgages, loans and credit card balance). </p>
<p><a href="https://cms.planto.io/wp-content/uploads/2019/12/en-fidelity-1-ct-_final.jpg"></a></p>
<p>There are many kinds of personal assets, and the value of assets can rise or fall every day. It is not easy to master the value of your assets. Planto can help you stay on top of your net assets – once you link your accounts, you can get a clear snapshot of your assets’ value. </p>

<p><single-action-item 
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<h2 id="how-inflation-can-erode-your-wealth">How inflation can erode your wealth</h2>
<p>When managing your wealth, the impact of inflation must be considered. In recent years, Hong Kong’s inflation rate has been about 2.5%. If a person has a monthly saving of $5,000, he will have $1,800,000 in 30 years, but by that time the $1,800,000 will be equal to only about $1,250,000 now! Inflation cost him 30% of his assets. </p>
<p>No matter how frugal you are, assets of cash or bank deposits will still be eroded by inflation. The only way to fight inflation is to grow your assets with investment.</p>

<p><single-action-item 
      title="Understand inflation and how it erodes wealth" 
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<h2 id="master-cash-flow-through-expense-tracking-and-budgeting">Master cash flow through expense tracking and budgeting</h2>
<p>Cash flow is one of the key concepts in personal finance. It refers to the inflows and outflows of funds, which means our income and expenses. The goal is to increase capital inflows and reduce outflows. </p>
<p>Saving money is not about being abstinence. As you understand your consumption habits, you can effectively eliminate the unnecessary expenditures to increase your savings without affecting your quality of life. Unnecessary expenditures might include taxi fares due to getting up late or the subscription fee of streaming services that you don’t use!</p>
<p>Many Hong Kong people have more than one credit card and bank account, which makes recording expenses more difficult. <a href="https://www.planto.hk/zh/expense-tracking">Planto’s automatic expense tracking</a> will help track your monthly income and expenses by categories so that your cash flow is clear at a glance! It also helps you distinguish between the “wants” and “needs” of your daily expenses to make a better monthly financial plan and help you figure out what works for you!</p>
<h2 id="credit-cards-earn-cash-backs-to-cut-expenses">Credit Cards: Earn cash-backs to cut expenses</h2>
<p>There are <a href="https://www.planto.hk/en/blog/credit-card-compare-recommend/">so many credit cards on the market</a>, and each has its unique benefits, including cash rebates, Asia Miles rewards, automatic add value service (AAVS) of Octopus Cards, free entry to airport VIP lounges and so on. Choose the best credit cards according to your consumption habits to help reduce daily expenses. </p>

<p><single-action-item 
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<h2 id="start-investing-with-securities-firms-at-a-lower-cost">Start Investing: With securities firms at a lower cost</h2>
<p>To start investing, you have to open a securities account. Many banks and securities firms provide <a href="https://www.planto.hk/en/blog/invest-hk-stocks-broker-bank-accounts">Hong Kong stock accounts</a> and <a href="https://www.planto.hk/en/blog/US-Stock-Account-Compare/">US stock accounts</a> with varied fees – so how do you choose?</p>
<p>Assuming investors put HKD 20,000 each month to invest in stocks and trade on average five times a month. The mainstream banks would cost you around $525 each month. If you use the securities firms mentioned above, the monthly transaction fee is only about $100 per month.</p>
<p>This difference of 425 HKD each month adds up fast. In 10 years, it becomes HKD 51,000 in expenses (HKD 425 x 12 months x 10 years)!</p>
<p>If you were to invest this difference with an annual return of 6%, you’d be missing out on almost HKD 70,000 (assuming a 6% annual investment return).</p>
<p>Given that these securities firms are licensed by the SFC and you get investor protection, you may want to think twice before choosing a bank for investing. </p>

<p><single-action-item 
      title="Compare HK brokerage accounts" 
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<p><single-action-item 
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<p><single-action-item 
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<h2 id="start-investing-understand-the-risks-of-products">Start Investing: Understand the risks of products</h2>
<p>Investing helps to add value to our assets, fight against inflation, increase cash flow and improve quality of life. Amateur investors might be worried about losing money. But as mentioned above, without investing, cash is bound to be eroded by inflation. Therefore, we should not resist investing because of fear. Instead, we try our best to increase the return on investment and taking risk you’re comfortable with.</p>
<p>Common investment and saving products include stocks, currency funds, time deposits, bonds and annuities. Recently, there have also been <a href="https://www.planto.hk/en/blog/robo-advisor-compare-recommend/">robo-advisors that help invest</a> by select stocks and funds, and ultimately do the investing for you. Don’t forget that MPF is also an investment tool, which includes stocks, funds and bonds with different risks &#8211; instead of leaving your MPF unchecked, <a href="https://www.planto.hk/en/mpf">manage it properly</a> like another investment account!</p>
<p>You must first understand the characteristics and risks of products before investing them. In general, the higher the risk, the higher the return, and vice versa. For example, Futu Securities’ monetary fund is a low-risk product with only about 2% return rate. The stock market has high volatility, but the return is also high. <a href="https://www.planto.hk/en/blog/etf-explained/">Buying ETFs</a> is equivalent to buying multiple stocks at the same time, which has a diversified investment effect. </p>

<p><single-action-item 
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<h3 id="how-to-develop-your-investment-strategy">How to develop your investment strategy</h3>
<p>Making money is a game of numbers, and our ultimate goal is to achieve our life goals through investing and increasing net assets. Therefore, you must develop an investment strategy based on your personal goals. </p>
<p>For example, if you are planning to buy a home and get married in 1 year, you should take stability as the priority, so that you don’t put your grand plan of starting a family at risk. If you are a fresh graduate and planning to buy a property in 10 years, you could consider being a bit more aggressive. If your investment objective is to increase your cash flow every month, you may consider more stable dividend stocks or bonds. </p>
<h2 id="manage-your-mpf-well">Manage your MPF well</h2>
<p>For every Hong Kong employee, a monthly salary of 5% is required for MPF contributions, and employers are also required to contribute another 5% for the employee. Take a 25-year-old employee with a monthly income of $20,000 as an example. Calculated with a salary increase, 10% of monthly contribution and an annual return rate of 4.8%, at the age of 65, the MPF can bring him more than $5,000,000 of wealth. If you ignore the management of MPF, you will miss out the opportunity for assets accumulation. </p>
<p>There are mainly 5 types of MPF, ranging from the highest risk to the lowest risk, are equity funds, mixed-assets funds, bond funds, guaranteed funds and conservative funds, and can be invested in different countries, regions and types of asset. Employees should make diversified investment based on their life stages and retirement targets. If you choose <a href="https://www.planto.hk/en/blog/mpf-tdf-dis-compare/">Target Date Fund (TDF)</a> or <a href="https://www.planto.hk/en/blog/mpf-tdf-dis-compare/">Default Investment Strategy (DIS)</a>, the risk of investment portfolio would decrease as you age. If you wish to increase your MPF contributions, you may consider using <a href="https://www.planto.hk/en/blog/MPF-special-voluntary-contribution-comparison-advantages/">Tax Deductible Voluntary Contribution (TVC)</a>, to earn a tax deduction of an annual cap of $60,000.</p>
<p>After each transfer of jobs, if the employee does not give any instruction to the MPF account, the original contribution account will automatically become a “Personal Account” to continue investing. An employee can choose between having more than one MPF account to make diversified investments or consolidate the MPF personal accounts to make more convenient management. </p>
<h2 id="buying-insurance-set-a-financial-safety-net-for-you-and-your-family">Buying Insurance: Set a financial safety net for you and your family</h2>
<p>Young workers might be confused about life insurance or even think it is unnecessary. From the perspective of personal finance and risk management, insurance can be regarded as a line of defense. Once the insured person encounters a disease, accident or even death, he will not lose all financial support immediately. </p>
<p>To avoid savings and life plans being affected by accidents, we should consider buying medical, critical illness, accident, home, travel or other insurance under the circumstance of economic stability. Besides, the Hong Kong government provide tax incentives for the Voluntary Medical Insurance (VHIS) program users. Buying insurance for yourself and your family could save taxes. </p>
<p><sub><sup><strong>Important information:</strong> Investment involves risks. This information is intended to be educational and is not tailored to the investment needs of any specific investor. This information does not constitute investment advice and should not be used as the basis for any investment decision nor should it be treated as a recommendation for any investment or action. Past performance is no guarantee of future results. The value of investments and the income from them can go down as well as up, so you may not get back what you invest.</sup></sub></p>


The goal of wealth management is to grow your assets and help you achieve your goals. You can obtain passive income through investment and move towards financial freedom. Once you achieve financial freedom, work isn't just for the money - you can work on what you love.

【Financial Freedom】An Ultimate Guide to Wealth Management

<p>It&#39;s tax season &#8211; and all major banks are beginning to offer tax loan products. It&#39;s a big deal because these tax loans have lower interest rates than most personal instalment loans!</p>
<p>Although with tax loans, you are supposed to be &quot;borrowing to pay your tax&quot;, <strong>banks don&#39;t generally restrict how you can use these borrowed funds</strong>, essentially giving taxpayers a great opportunity to borrow money at a lower interest rate.</p>
<p>Looking at this year&#39;s tax loan products, the benefits offered by banks are quite attractive due to the interest rate cut cycle. In the case of the Bank of East Asia (BEA), designated customers can enjoy a discounted annual interest rate as low as 1.78%; Citibank has a minimum annual interest rate of 2.01% on tax loans, and eligible applicants can enjoy up to HKD 10,000 in cash vouchers. Of course, to get the best rates, there are certain thresholds so we&#39;ve simplified it all and analyzed the tax loans on offer this year:</p>
<h2 id="2019-tax-loan-apr-comparison">2019 Tax Loan APR Comparison</h2>

<p><tax-loan-calculator language="en"></tax-loan-calculator></p>


<h2 id="what-do-i-need-to-pay-attention-to">What do I need to pay attention to?</h2>
<h3 id="annual-percentage-rate-apr">Annual Percentage Rate (APR)</h3>
<p>The annual percentage rate (APR) is the final interest rate after calculating the interest rate, handling fee and cash rebate, which helps to understand the borrowing cost. APR varies depending on factors such as the loan amount, your credit rating and the repayment period. Not everyone is eligible for the best APR.</p>
<h3 id="tax-loan-amount-and-repayment-period">Tax loan amount and repayment period</h3>
<p>Banks generally provide tax loans no more than to 10 to 12 times your monthly salary. For example, a wage earner with a monthly salary of HKD 20,000 can borrow a loan of between HKD 200,000 to HKD 240,000. The repayment period is generally 12 to 24 months.</p>
<h3 id="documents-required-for-applying-for-tax-loans">Documents required for applying for tax loans</h3>
<p>Banks will usually require the applicant to submit your HKID card, proof of address, income proof and tax bill.</p>
<h3 id="risk-of-using-tax-loans-to-invest">Risk of using tax loans to invest</h3>
<p>Banks generally do not restrict the use of tax credits so some people may choose to borrow money through tax loans to increase their investment capital. If one borrows tax at a rate of less than 2% per annum, it may not difficult to find stocks, ETFs, bonds, funds and other investment products that are higher than 2%. However, with Hong Kong’s recent economic turmoil, you must pay attention to risks and clearly understand the actual costs and returns of borrowing and investment. If there is a downturn in the market, you may take quite a loss!</p>
<h3 id="the-impact-of-tax-loans-on-your-credit-score">The impact of tax loans on your credit score</h3>
<p>As with other loans, tax loans will leave a record in the TransUnion credit report and making a large number of applications, being late to pay, or defaulting on your loan will have a negative impact on credit history. Therefore, you must consider the ability to repay before borrowing money and repay on time.</p>
<h3 id="why-do-banks-offer-tax-loans-anyway">Why do banks offer tax loans anyway?</h3>
<p>The annual interest rate of tax loans is generally lower than that of the personal loans. Generally, it works itself out for the banks because loan amounts are limited based on your salary and it gives the bank a chance to acquire &quot;higher quality&quot; customers. It&#39;s a great way for them to start a banking relationship with you and, In the long term, provide you with other products in the future!</p>
<p><sup>Disclaimer: The APR includes the basic interest rate, as well as any other fees and charges (i.e.: Handling Fee) so that it reflects the actual total cost of borrowing. The actual APR applicable may differ, please check with the provider to confirm your final APR based on your loan. </sup>
<br/>
<sup>To borrow or not to borrow? Borrow only if you can repay!</sup></p>


Compare the annual interest rate (APR) and rebates of tax loans from banks in Hong Kong - we simplify it all to help you analyze the terms and benefits of tax loans and help you save more.

[Tax Season] Tax Loans APR Comparison

<p>People who love to travel are <strong>always</strong> thinking about their next getaway. Unfortunately, before the getaway really begins, you have to spend money to buy your flight. Luckily, there&#39;s quite a few credit cards which make it easier on your pocket &#8211; we&#39;ve shortlisted the four best credit cards to get miles faster.</p>
<p>In short, the best cards are:</p>
<ul>
<li><a href="https://www.planto.hk/en/redirect/?params=eyJwcm9kdWN0IjoiZGJzX2JsYWNrX21hc3RlcmNhcmQiLCJ0eXBlIjoiY2MiLCJhcHBseVVybCI6Imh0dHBzOi8vd3d3LmNoaW5lc2Vhbi5jb20vYWZmaWxpYXRlL2NsaWNrQmFubmVyLmRvP3dJZD02Mzc3NSZwSWQ9MTkxMzMmY0lkPTMxNTUzIiwiZnJvbSI6IkFzaWEgTWlsZXMgQ3JlZGl0IENhcmQgQXJ0aWNsZSJ9">DBS Black World MasterCard</a></li>
<li><a href="https://www.planto.hk/en/redirect/?params=eyJwcm9kdWN0Ijoic3RhbmNfYXNpYV9taWxlcyIsInR5cGUiOiJjYyIsImFwcGx5VXJsIjoiaHR0cHM6Ly9yZWJyYW5kLmx5LzN4NGZ0NiIsImZyb20iOiJBc2lhIE1pbGVzIENyZWRpdCBDYXJkIEFydGljbGUifQ==">Standard Chartered Asia Miles MasterCard</a></li>
<li><a href="https://www.planto.hk/en/redirect/?params=eyJwcm9kdWN0IjoiY2l0aV9wcmVtaWVyX21pbGVzIiwidHlwZSI6ImNjIiwiYXBwbHlVcmwiOiJodHRwczovL3d3dy5jaGluZXNlYW4uY29tL2FmZmlsaWF0ZS9jbGlja0Jhbm5lci5kbz93SWQ9NjM3NzUmcElkPTE3MjMxJmNJZD0yODkzNiIsImZyb20iOiJBc2lhIE1pbGVzIENyZWRpdCBDYXJkIEFydGljbGUifQ==">Citi PremierMiles</a> </li>
<li><a href="https://www.planto.hk/en/redirect/?params=eyJwcm9kdWN0IjoiYW1leF9jYXRoYXlfZWxpdGUiLCJ0eXBlIjoiY2MiLCJhcHBseVVybCI6Imh0dHBzOi8vcmVicmFuZC5seS91cnRjbTciLCJmcm9tIjoiQXNpYSBNaWxlcyBDcmVkaXQgQ2FyZCBBcnRpY2xlIn0=">American Express Cathay Pacific Elite Credit Card</a> </li>
</ul>
<p>Read on to see why we think they&#39;re the best: </p>
<h2 id="dbs-black-world-mastercard">DBS Black World MasterCard</h2>
<p>If you have an annual salary of more than HK$ 240,000, this could be the card for you. Even though the card is pretty good for spending locally in Hong Kong, it&#39;s even better if you plan to spend abroad with it &#8211; local spending gives you 1 mile / HK$ 6, and overseas spending gives you 1 mile / HK$ 4.</p>
<p>DBS$ can be exchanged for either cash back or for a few different kind of frequent flyer programs like Asia Miles, KrisFlyer, Avios or Phoenix Miles.</p>
<p>The welcome offer gives preferential rate on miles as well &#8211; here&#39;s how it works:</p>
<p><img src="https://cms.planto.io/wp-content/uploads/2019/12/DBS_BlackWorldMasterCardTable.jpg" alt="DBS Black World MasterCard Asia Miles Spending Comparison" title="星展銀行 Black World Mastercard 亞洲萬里通 Asia Miles 飛行里數"></p>

<p><credit-card-comparison-page language="en" creditcardtype="asia_miles" particularcard="dbs_black_world_master"></credit-card-comparison-page></p>


<h2 id="standard-chartered-asia-miles-mastercard">Standard Chartered Asia Miles MasterCard</h2>
<p>Unlike the DBS Black World MasterCard, <a href="https://www.planto.hk/en/redirect/?params=eyJwcm9kdWN0Ijoic3RhbmNfYXNpYV9taWxlcyIsInR5cGUiOiJjYyIsImFwcGx5VXJsIjoiaHR0cHM6Ly9yZWJyYW5kLmx5LzN4NGZ0NiIsImZyb20iOiJBc2lhIE1pbGVzIENyZWRpdCBDYXJkIEFydGljbGUifQ==">Standard Chartered&#39;s Asia Miles MasterCard</a> has a much lower salary requirement (HK$ 96,000 per year only) making it a very suitable starter card. Local restaurants, overseas &amp; online spending all get you 1 mile / HK$ 4, and all other eligible spending gives you 1 mile / HK$ 6. Probably best of all, they automatically redeem each month into your Asia Miles account without any conversion fees! </p>
<p>Just like the DBS Black World MasterCard, this card also has preferential rates on miles as part of the welcome offer &#8211; this is what it adds up to:</p>
<p><img src="https://cms.planto.io/wp-content/uploads/2019/12/StanChart_AsiaMilesCardTable.jpg" alt="Standard Chartered Asia Miles MasterCard Spending Comparison"></p>

<p><credit-card-comparison-page language="en" creditcardtype="asia_miles" particularcard="stanc_asia_miles"></credit-card-comparison-page></p>


<h2 id="citi-premiermiles-credit-card">Citi PremierMiles Credit Card</h2>
<p>The <a href="https://www.planto.hk/en/redirect/?params=eyJwcm9kdWN0IjoiY2l0aV9wcmVtaWVyX21pbGVzIiwidHlwZSI6ImNjIiwiYXBwbHlVcmwiOiJodHRwczovL3d3dy5jaGluZXNlYW4uY29tL2FmZmlsaWF0ZS9jbGlja0Jhbm5lci5kbz93SWQ9NjM3NzUmcElkPTE3MjMxJmNJZD0yODkzNiIsImZyb20iOiJBc2lhIE1pbGVzIENyZWRpdCBDYXJkIEFydGljbGUifQ==">Citi PremierMiles Credit Card</a> requires an annual salary of HK$ 240,000. It&#39;s quite good for people who spend overseas or in foreign currencies a lot. Local spending gives you 1 mile / HK$ 8 which isn&#39;t great compared to the others.. but if you spend more than HK$20,000 each month, you get 1 mile / HK$ 3 for overseas &amp; foreign currency spending. If you spend less than HK$ 20,000 each month, you still get a great 1 mile / HK$ 4 for overseas &amp; foreign currency spending.</p>
<p>In addition to that, 12 &#39;free&#39; airport lounge services are provided each year, but you need to spend $5,000 within 30 days after each usage of the airport lounge.</p>
<p>The card also has a great welcome offer for new customers &#8211; if you spend more than HK$ 10,000 within 2 months of card issuance, you can choose:</p>
<ul>
<li>HK$ 800 supermarket cash coupon; or</li>
<li>HK$ 700 SOGO cash coupon, or</li>
<li>Hong Kong Mandarin Oriental Hotel Double Afternoon Tea</li>
</ul>

<p><credit-card-comparison-page language="en" creditcardtype="asia_miles" particularcard="citi_premier_miles"></credit-card-comparison-page></p>


<h2 id="american-express-cathay-pacific-elite-credit-card">American Express Cathay Pacific Elite Credit Card</h2>
<p>The <a href="https://www.planto.hk/en/redirect/?params=eyJwcm9kdWN0IjoiYW1leF9jYXRoYXlfZWxpdGUiLCJ0eXBlIjoiY2MiLCJhcHBseVVybCI6Imh0dHBzOi8vcmVicmFuZC5seS91cnRjbTciLCJmcm9tIjoiQXNpYSBNaWxlcyBDcmVkaXQgQ2FyZCBBcnRpY2xlIn0=">American Express Cathay Pacific Elite Credit Card</a> application requires a slightly higher annual salary of HK$ 300,000. The card is great for frequent travellers since you get to use the Plaza Premium Lounge around Asia for the whole year, and you get decent rewards &#8211; 1 mile per HK$ 6 for local spending and 1 mile per HK$ 4 for overseas spending.</p>
<p>The AMEX Cathay Pacific Elite Credit Card also gives some preferential treatment as part of the welcome offer, alongside a 1000 mile granted on application:</p>
<p><img src="https://cms.planto.io/wp-content/uploads/2019/12/Amex_CathayEliteCardTable.jpg" alt="American Express Cathay Pacific Elite Credit Card Spending Comparison"></p>

<p><credit-card-comparison-page language="en" creditcardtype="asia_miles" particularcard="ae_cathay_elite"></credit-card-comparison-page></p>



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<h4 id="recommended-reads">Recommended Reads</h4>
<ul>
<li><a href="https://www.planto.hk/en/blog/iphone-11-pro-Max-credit-cards/">The smartest way to buy the new iPhone</a></li>
<li><a href="https://www.planto.hk/en/blog/virtual-credit-card-apple-hk/">A Guide to Virtual Credit Cards in Hong Kong</a></li>
</ul>


Many credit cards offer rewards for spending - these are the four best credit cards that have the best welcome offers and spending rewards: DBS Black World MasterCard, Standard Chartered Asia Miles MasterCard, Citi PremierMiles, American Express Cathay Pacific Elite Credit Card. Choose the right card and be rewarded!

[Asia Miles Hacks] The 4 Best Credit Cards

<p>Life is often about trade-offs &#8211; investing is no difference. With low risk investments, you won&#8217;t lose your principal amount but you also sacrifice higher returns. Having said that, keeping yourself sane during a volatile market is to ensure you have balanced your risk. Here&#8217;s a few ways you can hedge risk and still get some returns.</p>
<h2 id="money-market-funds-low-risk-decent-returns">Money Market Funds: low risk, decent returns</h2>
<p><a href="https://www.planto.hk/en/blog/Money-Market-Fund-Intro">Money market funds</a> mainly invest in short-term government bonds, bank deposit certificates, and other low risk instruments. They&#8217;re highly liquid (so if you need the money, you can just sell them whenever you want), don&#8217;t have high fees and are low risk since you&#8217;re essentially lending money to governments like the United States. </p>
<p>As an example, the annualized returns of HKD and USD money market funds offered by <a href="https://www.planto.hk/en/redirect/?params=eyJwcm9kdWN0IjoiZnV0dV9zZWN1cml0aWVzIiwidHlwZSI6ImludmVzdG1lbnRfYnJva2VyIiwiYXBwbHlVcmwiOiJodHRwczovL3Bhc3Nwb3J0LmZ1dHU1LmNvbS9zZW0vaGs/bGFuZGluZ0lkPTMmY2hhbm5lbD02NDIiLCJmcm9tIjoiTG93IFJpc2sgSW52ZXN0bWVudCBBcnRpY2xlIn0=">Futu&#8217;s MoneyPlus</a> can have returns of 1.5% to 1.9%. Given their liquidity, they&#8217;re a great place to store idle cash while you&#8217;re waiting to make your next investment. </p>
<p>However, it&#8217;s important to note that returns from money market funds can be affected by short-term interest rate changes and exchange rate fluctuations.</p>


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<h2 id="time-deposits-simple-but-with-limitations">Time Deposits: simple, but with limitations</h2>
<p><a href="https://www.planto.hk/en/blog/term-deposit-latest-offers-comparison/">Time deposits</a> are quite possibly the simplest instrument you can buy &#8211; you deposit your funds in the bank for a fixed period of time and get a return for that. The returns aren&#8217;t usually very high (since there&#8217;s essentially no risk), and even though some banks may offer annual interest rates of more than 2%, they&#8217;re usually only for shorter periods of time (e.g. 3 months) which means you&#8217;d have to find another time deposit after that. </p>
<p>Furthermore, if you want to take the money out early, the bank may charge a penalty and you won&#8217;t get any interest either. This can be troublesome if you need to get your money out sooner (for an investment opportunity or for an emergency)!</p>
<h2 id="bonds-variable-risk-more-complex">Bonds: variable risk, more complex</h2>
<p>Bonds are generally issued by companies or governments with the aim of raising funds. When you buy a bond, you&#8217;re basically lending money to a company or government and in return they will give you a fixed interest each month or year (also why they&#8217;re often called &#8216;fixed income&#8217;). </p>
<p>The rate of return on a bond depends on the risk you&#8217;re taking. The safest bonds e.g. US Treasury Bills only have returns of 2% to 2.5% but the chance of you losing your money is really low (what are the odds the US government will be unable to pay you back!). On the other side of the spectrum are junk bonds &#8211; these are companies who credit agencies have assigned a &#8216;junk&#8217; rating. This means their financial situation is not very strong and thus there is a higher chance they will not be able to pay the interest on your bond!</p>
<p>Investors can buy bonds directly from banks / asset management firms, or buy bond ETFs from the stock market directly. The advantage of a bond ETF is that it is highly liquid and the risks are relatively dispersed since each fund would buy hundreds of bonds. It should be noted that different funds have different investment strategies and risk. You should do your own research to understand what kind of bond portfolio an ETF consists of and what kind of risks are involved.</p>
<h2 id="good-investing-practices">Good investing practices</h2>
<p>The best portfolios should be diversified and tied to your goals. If you&#8217;re goals are primarily in the short term, low-risk investments are a great idea. However, you are losing out on returns when you go for low risk. If you have goals for financial freedom or retirement that are much further away, you would want to have more stocks in your portfolio. </p>
<p>Either way, if you&#8217;re still deciding or researching, it doesn&#8217;t hurt to have a securities account ready to help you make the jump into investing. </p>


<next-steps-list lang="en">
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<p><strong>Important information:</strong><br>
Investment involves risks. This information is intended to be educational and is not tailored to the investment needs of any specific investor. This information does not constitute investment advice and should not be used as the basis for any investment decision nor should it be treated as a recommendation for any investment or action. Past performance is no guarantee of future results. The value of investments and the income from them can go down as well as up, so you may not get back what you invest.</p>

Three low risk investments - money market funds, time deposits and bonds. Even though their returns aren't the highest, they are an essential part of risk management in an intelligent investor's portfolio.

[Investing for Beginners] 3 Low Risk Investments

<p>Since Hong Kong remains one of the world’s most expensive housing markets, you need to apply for mortgage if you wish to buy a property. The HKMA has set certain regulations on bank mortgage loans which affects the amount of mortgage first-time home-buyers can borrow and hence the size of the flat they can afford to buy.</p>
<p>This article will help you understand how Loan-To-Value Ratio (LTV) and Stress Test work so you can plan your first home!</p>
<h3 id="ltv-caps-vary-by-property-value-up-to-90-ltv-for-property-value-below-8-million"><strong>LTV caps vary by property value: Up to 90% LTV for property value below $8 million.</strong></h3>
<p>In the past few years, the market has generally defined residential properties valued $6 million or below as “first-time homes”. However, first-time home-buyers in Hong Kong can now set their sights on more expensive flats under a new measure to relax mortgage rules announced in the 2019 policy address.</p>
<p>Under the new measure, the LTV caps, down payments, monthly repayment amounts and income requirements are calculated as follows:</p>
<table>
<thead>
<tr>
<th>Property Value</th>
<th>LTV Cap</th>
<th>Down Payment</th>
<th>Loan Amount</th>
<th>Monthly Repayment Amount</th>
<th>Base Income Requirement</th>
<th>Stressed Income Requirement</th>
</tr>
</thead>
<tbody><tr>
<td>$4,000,000</td>
<td>90%</td>
<td>$400,000</td>
<td>$3,600,000</td>
<td>$14,459</td>
<td>$28,918</td>
<td>$34,540</td>
</tr>
<tr>
<td>$5,000,000</td>
<td>90%</td>
<td>$500,000</td>
<td>$4,500,000</td>
<td>$18,074</td>
<td>$36,148</td>
<td>$43,175</td>
</tr>
<tr>
<td>$6,000,000</td>
<td>90%</td>
<td>$600,000</td>
<td>$5,400,000</td>
<td>$21,689</td>
<td>$43,378</td>
<td>$51,808</td>
</tr>
<tr>
<td>$7,000,000</td>
<td>90%</td>
<td>$700,000</td>
<td>$6,300,000</td>
<td>$25,304</td>
<td>$50,608</td>
<td>$60,443</td>
</tr>
<tr>
<td>$8,000,000</td>
<td>90%</td>
<td>$800,000</td>
<td>$7,200,000</td>
<td>$28,919</td>
<td>$57,838</td>
<td>$69,078</td>
</tr>
<tr>
<td>$9,000,000</td>
<td>80%</td>
<td>$1,800,000</td>
<td>$7,200,000</td>
<td>$28,919</td>
<td>$57,838</td>
<td>$69,078</td>
</tr>
<tr>
<td>$10,000,000</td>
<td>80%</td>
<td>$2,000,000</td>
<td>$8,000,000</td>
<td>$32,132</td>
<td>$64,264</td>
<td>$76,755</td>
</tr>
<tr>
<td>$11,000,000</td>
<td>50%</td>
<td>$5,500,000</td>
<td>$5,500,000</td>
<td>$22,091</td>
<td>$44,182</td>
<td>$52,768</td>
</tr>
<tr>
<td>$12,000,000</td>
<td>50%</td>
<td>$6,000,000</td>
<td>$6,000,000</td>
<td>$24,099</td>
<td>$48,198</td>
<td>$57,565</td>
</tr>
<tr>
<td>$13,000,000</td>
<td>50%</td>
<td>$6,500,000</td>
<td>$6,500,000</td>
<td>$26,107</td>
<td>$52,214</td>
<td>$62,363</td>
</tr>
</tbody></table>
<p>*The above table assumes a mortgage interest rate of 2.625%, a repayment period of 30 years, the mortgagor is not holding any residential properties in Hong Kong. The table does not include any additional insurance premium.</p>
<p>*The new LTV measure only applies to completed residential properties, in other words, off-plan properties are not applicable.</p>
<p>*If you fail the stress test, you will still be eligible for loans up to 80% or 90<strong>%</strong>, but the insurance premium will be adjusted accordingly.</p>
<p>*The new LTV measure does not apply to mortgage refinancing</p>
<p>*All leased properties have LTV caps of 50%, regardless of property prices</p>
<h3 id="mortgage-insurance-plans-mip"><strong>Mortgage Insurance Plans (MIP)</strong></h3>
<p>Mortgage insurance is a must if your LTV is more than 60%. It aims to protect mortgage loan providers (banks) from losses. The premium amount will range from about 1.15% to 4.35% of the loan amount.</p>
<p>For home-buyers taking mortgage loans with property values going beyond the existing caps, an additional 15% premium will be charged. Under the new measure, if you cannot pass the stress test, you will still be eligible for MIP loans up to 80% or 90% LTV ratio, subject to an additional adjustment to the premium based on relevant risk factors.</p>
<p>Home-buyers can choose between a single premium payment or an instalment payment. Besides, mortgagors often receive a premium discount from mortgage insurance providers.</p>
<h3 id="stress-test-less-important-under-the-new-measure"><strong>Stress Test: less important under the new measure</strong></h3>
<p>When approving a mortgage loan application, banks will assess an applicants’ Debt-Servicing Ratio (DSR) to measure how stressful the mortgage&#39;s repayments will be on an applicant&#39;s finances. They will also perform a stress test to estimate their repayment ability after a simulated 3% raise in interest rate.</p>
<p>Before the Stress Test, the base DSR limit is 50%. For example, if you want to buy an $8 million property, with a loan amount of $7.2 million, an interest rate of 2.625% and monthly repayment amount of $28,919, your monthly income must be no less than $57,838 to get an approval for a mortgage loan.</p>
<p>The stress test is calculated at the current interest rate plus 3%, requiring the applicant’s DSR to be less than 60%. Using the above example, assuming the interest rate rises to 5.625%, the monthly repayment amount will increase to $41,447. The applicant’s monthly income must be no less than $69,078 to pass the Stress Test.</p>
<p>In the past, mortgage applicants are required to pass the Stress Test. But as mentioned above, under the new measure applicants will still be eligible for MIP loans up to 80% or 90% LTV ratio even if they cannot pass the Stress Test. This has greatly reduced the importance of the Stress Test.</p>
<table>
<thead>
<tr>
<th>Property Value</th>
<th>LTV Cap</th>
<th>Loan Amount</th>
<th>Interest Rate</th>
<th>Monthly Repayment Amount</th>
<th>Base DSR Limit (50%)</th>
<th>Stressed DSR Limit (60%)</th>
</tr>
</thead>
<tbody><tr>
<td>$8,000,000</td>
<td>90% ($800,000)</td>
<td>$7,200,000</td>
<td>2.625%</td>
<td>$28,919</td>
<td>Min. income of $57,838</td>
<td>Min. income of $69,078</td>
</tr>
</tbody></table>
<p>*For the actual mortgage terms, please refer to the information provided by banks and insurance providers.</p>
<h3 id="mortgage-tips-shop-around-to-find-the-best-interest-rate-and-rebates"><strong>Mortgage Tips: Shop around to find the best interest rate and rebates</strong></h3>
<p>The mortgage rates currently offered by banks range from 2.375% to 2.625%. Many banks offer cash rebates as well, generally 1% to 2% of the loan amount. For a loan amount of $4 million, a cashback at 2% could be as high as $80,000. It could really help you repaying several instalments and reducing your mortgage burden.</p>
<p>Nevertheless, banks have different criteria for approving loans and rebates, which also depends on the applicant’s financial situation. Shop around and find the best mortgage offer for you!</p>

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[Updated based on Mortgage Guidelines in October 2019] Must read for first time house buyers - understand the latest regulation in LTV and Stress Test for first-time applicants looking to get a mortgage.