The Hong Kong Polytechnic University MPF Member Briefing Sep 2016 Silvia Kong Client Director For investment professional use only and not for general public distribution
Fidelity Retirement Master Trust (“FRMT”) Please note: You should consider your own risk tolerance level and financial circumstances before making any investment choices. When, in your selection of funds, you are in doubt as to whether a certain fund is suitable for you (including whether it is consistent with your investment objectives), you should seek financial and/or professional advice and choose the fund(s) most suitable for you taking into account your circumstances. The MPF Conservative Fund under the Fidelity Retirement Master Trust does not guarantee the repayment of capital. You should not invest based on this document alone and should read the Principal Brochure of Fidelity Retirement Master Trust for further information. Fidelity SaveEasy Funds are not savings deposits and involve investment risks and this product may not be suitable for everyone. Investors should also consider factors other than age and review their own investment objectives. Fidelity Hong Kong Tracker Fund is subject to market risk of the sector or market tracked by the relevant index, tracking error risk, passive management risk, early termination risk, etc. Please refer to the “Risk Factors” sub-section in the Principal Brochure of Fidelity Retirement Master Trust for further information. Funds with exposure to RMB denominated debt securities issued or distributed outside mainland China, will subject to RMB currency risk, RMB exchange risk and risk of limited pool of investments. | 1
Contents Fidelity Retirement Master Trust Investment performance Market review & outlook Member services Appendix
Fidelity Retirement Master Trust
A dedicated partnership delivering a leading MPF solution HSBC Institutional Trust FIL Investment Management (Asia) Limited (Hong Kong) Limited Trustee Scheme Sponsor Custodian Investment Manager 1 Administrator 1 Fidelity is the investment manager for all of the constituent funds under FRMT with the exception of the FRMT – Hong Kong Tracker Fund, which is managed by State Street Global Advisors (SSgA). | 4
Fidelity Retirement Master Trust 19 choices to cater for your risk appetite Newly added on 16 May 2016 ^ Investors are reminded that the above only represents the target asset allocations of the Constituent Fund and the actual asset allocations will at times vary considerably from that shown above as market, political, structural, economic and other conditions change. For the actual asset allocations of each Constituent Fund, you may refer to the fund fact sheet of the relevant Constituent Fund which is available on the Fidelity Website. ~ Fidelity Hong Kong Tracker Fund is subject to market risk of the sector or market tracked by the relevant index, tracking error risk, passive management risk, early termination risk, etc. Please refer to the “Risk Factors” sub-section in the Principal Brochure of FRMT for further information. ◊ RMB Bond Fund is denominated in HKD only and not in RMB. The Constituent Fund is subject to RMB currency risk and exchange risk, risk of limited pool of investments, etc. Please refer to the “Risk Factors” sub-section in the Principal Brochure of FRMT for further information. Δ Fees and charges of MPF Conservative Funds can be deducted from either (i) the assets of the fund or (ii) members’ account by way of unit deduction. The MPF Conservative Fund under the FRMT uses method (i) and, therefore, its unit prices / NAV / fund performance have incorporated the impact of fees and charges. The purchase of a unit in the MPF Conservative Fund is not the same as placing funds on deposit with a bank or deposit-taking company. | 5
Fidelity Retirement Master Trust SaveEasy Funds ▲ The SaveEasy Funds will initially have greater exposure to underlying funds investing into equities (which risk/return rating is 5). However, as the SaveEasy Funds draw closer to the applicable target year, the SaveEasy Funds would have a greater exposure to underlying funds investing into bonds and cash (risk/return rating will move down to 2 gradually). As and when the SaveEasy Funds exposures change, the risk/return rating of the SaveEasy Funds would move lower down the risk/ return rating scale. Please refer to the sub- section headed “Risk and Return Profile” and the chart displaying the Fidelity SaveEasy Funds Asset Rolldown in the sub-section headed “SaveEasy Funds” in the Principal Brochure of FRMT for details. ▲ The Fidelity SaveEasy Funds Asset Rolldown Chart above provides a simple method for investors to view the indicative asset allocations and also the shift in their risk/return profile over the duration of the particular SaveEasy Fund. Investors are reminded that this is an indicative rolldown and at any particular point in time actual portfolios may vary considerably from that shown above as market, political, structural, economic and other conditions change. The actual asset allocations in respect of the SaveEasy Funds may change at the discretion of FIL Investment Management (Hong Kong) Limited (“Fidelity”) without unitholders’ approval, notice to unitholders or approval from the Securities and Futures Commission / Mandatory Provident Fund Schemes Authority. * Fidelity SaveEasy Funds are not savings deposits and involve investment risks. This product may not be suitable for everyone. Investor should also consider factors other than age and review their own investment objectives. | 6
Reduction of management fees – MPF Conservative Fund and Hong Kong Bond Fund Effective 16 May 2016 Existing Fund Management Fee New Fund Management Fee Name of Constituent Fund (% p.a. of NAV) (% p.a. of NAV) 0.93% p.a. of NAV 1.08% p.a. of NAV MPF Conservative Fund* Up to 1.20% p.a. of NAV Up to 1.45% p.a. of NAV Hong Kong Bond Fund * Fees and charges of MPF Conservative Funds can be deducted from either (i) the assets of the fund or (ii) members’ account by way of unit deduction. The MPF Conservative Fund under the FRMT uses method (i) and, therefore, its unit prices / NAV / fund performance have incorporated the impact of fees and charges. The purchase of a unit in the MPF Conservative Fund is not the same as placing funds on deposit with a bank or deposit-taking company. Source: Fidelity International, May 2016 | 7
Fidelity Retirement Master Trust Recognized for outstanding performance The above awards are for reference only, it is not indicative of the actual performance of the constituent funds. The third party mark appearing in this material is the property of the respective owner and not by Fidelity. The awards only represent Morningstar’s Best MPF Scheme Award Methodology (for details, please visit: awards.morningstar.com). The results are based on the quantitative and qualitative assessment of an MPF scheme as of 31 Dec 2015. The quantitative assessment is based on 1-year, 3-year and 5-year risk-adjusted returns of each constituent fund. The qualitative assessment is based on product diversity, transparency and disclosure, and investor experience of each MPF scheme from 1 Jan 2015 to 31 Dec 2015. Source: Fidelity International | 8
Investment performance
FRMT performance vs median (as at 31 Aug 2016) YTD 3 Months 1 Year 3 Years 5 Years 10 Years (%) (%) (%) (% p.a.) (% p.a.) (% p.a.) Index Tracking Funds Fidelity Hong Kong Tracker Fund Fund 7.21 11.81 8.62 3.83 - - Median 7.19 11.80 8.53 4.44 - - Equity Funds Hong Kong Equity Fund Fund 5.29 11.63 8.20 4.02 3.23 6.36 Median 4.95 10.81 7.23 3.56 3.24 5.22 Asia Pacific Equity Fund Fund 10.49 8.65 14.72 5.05 4.24 7.06 Median 10.07 8.29 8.47 4.61 3.43 1.92 Global Equity Fund Fund 1.86 1.85 3.35 6.19 8.29 3.79 Median 1.63 2.79 2.82 5.09 7.02 2.30 Lifecycle Funds Growth Fund Fund 2.69 4.74 4.07 4.31 5.40 4.80 Median 2.65 5.01 3.86 3.50 4.48 3.18 Balanced Fund Fund 3.60 4.28 4.64 3.87 4.48 4.62 Median 4.08 4.39 4.72 3.14 3.95 3.68 Stable Growth Fund Fund 4.58 3.72 5.23 3.42 3.57 4.35 Median 4.70 3.79 5.15 2.64 2.63 3.26 Capital Stable Fund Fund 5.17 3.10 5.32 2.69 2.45 3.80 Median 5.17 3.10 5.12 2.25 1.60 2.90 Blue highlights represent funds that are in line with or outperform median. Source: Morningstar, net of fees, in HKD | 10
FRMT performance vs median (as at 31 Aug 2016) YTD 3 Months 1 Year 3 Years 5 Years 10 Years (%) (%) (%) (% p.a.) (% p.a.) (% p.a.) Bond and Money Markets Funds Hong Kong Bond Fund Fund 3.65 1.97 4.51 3.34 1.84 2.90 Median 3.05 1.63 3.98 2.78 1.10 2.23 World Bond Fund Fund 7.79 2.73 7.19 2.43 1.41 3.12 Median 6.65 2.39 6.39 1.46 -0.22 2.38 RMB Bond Fund Fund - - - - - - Median - - - - - - MPF Conservative Fund* Fund 0.00 0.00 0.00 0.00 0.00 0.43 Median 0.00 0.00 0.01 0.07 0.04 0.53 Blue highlights represent funds that are in line with or outperform median; yellow highlights represent funds with no relevant median for comparison purpose. * Fees and charges of MPF conservative funds can be deducted from either (i) the assets of the fund or (ii) members’ account by way of unit deduction. MPF Conservative Fund under the Fidelity Retirement Master Trust uses method (i) and, therefore, its unit prices / NAV / fund performance have incorporated the impact of fees and charges. Source: Morningstar, net of fees, in HKD | 11
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