SFC-authorised Listed Closed-ended Alternative Asset Funds
Listed closed-ended funds that invest in alternative assets have recently emerged.
/sites/web/common/images/investment/investment-products/funds/closed-ended-alternative-asset-funds/closed-ended-alternative.jpg
youtube
2026
Features-InvestmentPortal
Article
Hot
23/01/2026
SFC-authorised Listed Closed-ended Alternative Asset Funds
Key points to note
- SFC-authorised Listed Closed-ended Alternative Asset Funds (LAFs) are actively managed closed-ended funds listed on The Stock Exchange of Hong Kong Limited (SEHK). They are different from conventional exchange traded funds (ETFs).
- LAFs are complex products investing mainly in illiquid assets and investors should exercise caution
- LAFs target investors with long-term investment horizon, who understand the nature and risks of investing in illiquid assets and who have sufficient resources to be able to assume the risks and bear any potential losses.
- Any target dividend is not guaranteed and may be paid out of the fund’s capital, reducing the capital available for future investment. Paying out of capital represents a withdrawal of investors’ initial investments. Positive dividend payout does not represent positive investment return and investors may suffer losses in their investments.
- Fees and expenses of LAFs are typically charged to or paid out of the assets of the funds and will reduce investors’ potential return.
- Investors do not have the right to demand redemption of the units of the LAFs. The units may trade at a significant discount to the net asset value (NAV) per unit and hence investors may not be able to sell their units at a price that reflects its value. Investors should carefully consider their own circumstances, including their liquidity needs and investment concentration before making any investment decisions. Investors should not allocate all or a significant portion of their investment portfolio into LAFs.
- Investments in LAFs involve significant risks, including valuation and liquidity risks due to the illiquid nature of underlying investments. Investors may lose a significant portion or all of their investments.
- Investors should seek independent professional advice if in doubt.
In response to market developments and demand, fund offerings in Hong Kong have continued to evolve. Recently, listed closed-ended funds that invest in alternative assets have also emerged, and these are different to traditional ETFs.
SFC-authorised listed closed-ended alternative asset funds (LAFs) are complex in nature and mainly invest in illiquid assets. They are intended for investors with long-term investment horizon, who understand the nature of investing into illiquid assets and the associated risks, and who have the capacity to assume the risks and bear potential losses.
