CIFM (HK) RMB China A Focus Fund May 2015 (Data as of 30 April 2015) 2015年5月 • CIFM (HK) RMB China A Focus Fund (the “Fund”) primarily invests in equity securities issued or listed in China through the RQFII quota of the Manager. • The Fund is an investment fund and is not the same as deposits with a bank. The value of investments held by the Fund may fall as well as rise and investors may not get back the original investments. There is also no guarantee of dividend or distribution payments during the period you hold the units of the Sub-Fund. • Given that the top 30 holdings of the Fund shall account for no less than 70% of the Fund’s investment in equities, the Fund may be adversely affected by the performance of those equities and subject to increased price volatility. • Investment in the China market is subject to emerging market risk including political, economic, legal, regulatory, liquidity risks and the risks associated with changes in the PRC laws and regulations. The China A-Share market may be more volatile and unstable than those in more developed markets and may result in significant fluctuations in the Net Asset Value of the Fund. • The Manager will make provisions for any PRC taxes payable by the Sub-Fund on gross realised and unrealised gains on PRC securities other than equity investments, at a rate of 10%. Such provisions may be excessive or inadequate to meet the actual tax liabilities. In case of any shortfall between the provisions and actual tax liabilities, which will be debited from the Fund’s assets, the asset value of the Fund will be adversely affected. • Some of the Fund’s investments (such as investment in small/medium sized companies) may be subject to higher liquidity risk and stock prices of these companies tend to be more volatile than those of large-sized companies. These investments may reduce returns for or result in substantial losses to the Fund if the Fund is unable to sell such securities at the time or price that is desirable. • The Fund will invest in equity securities and RMB-denominated debt in China primarily through a RQFII which is subject to applicable regulations imposed by the PRC authorities. Any changes to the relevant rules may have an adverse impact on investors’ investment in the Fund and any restrictions on repatriation of the invested capital and net profits may impact on the Fund’s ability to meet redemption requests from the unitholders. • RMB is currently not freely convertible and is subject to exchange controls. There is no guarantee that RMB will not depreciate. Investors may be adversely affected by movements of exchange rates between the RMB and the class currency of the Units they invest in and may suffer losses arising from such fluctuations. • The Fund may invest in financial derivative instruments for hedging and non-hedging purposes which are subject to additional risks, including credit risk of the issuer, liquidity risk, counterparty risk and valuation risk. • You should not invest in the Fund unless the Intermediary who sells it to you has explained to you that the product is suitable for you having regard to your financial situation, investment experience and investment objectives. • You should not base on this material alone to make investment decision and should refer to the Explanatory Memorandum and the Product Key Facts Statement of the Fund for further details, including the risk factors. Investment Objective Fund Performance (%)#(In terms of denominated currency) The investment objective of the Fund is to achieve long term capital appreciation by investing in companies with long-term growth potential which benefit from the economic restructuring of China. The Fund will primarily invest in equity securities issued, listed or traded in China through the RQFII quota of the Manager or such other means as may be permitted by the relevant regulations from time to time. PA Class (RMB)- Distribution Class Performance data will be published for funds with a track record of over six months. Fund Information Fund Information Fund Manager & RQFII Holder CIFM Asset Management (Hong Kong) Limited Fund Launch Date 11 February, 2015 Base Currency RMB Trustee BOCI-Prudential Trustee Limited RQFII Custodian Bank of China Limited Bloomberg Ticker CIFCAFA HK ISIN Code HK0000222197 Fund Accumulated Performance (%)#(In terms of denominated currency) Share class 1 month 3 month Class A (RMB) Current Fee - 6 month 1 year Year to Date Since launch date - - - - - Subscription Fee: Up to 5% of the issue price per unit Switching Fee: Up to 1% of the issue price per unit of the new class Top 5 Holdings (% of Total NAV) Redemption Fee: Current rate being 0%* Name Percentage PING AN INSURANCE 5.17% Management fee (Annual rate): Classes A, X, P: Current rate being 1.50%* of the net asset value of the class Classes I, H, T: Current rate being 1.00%* of the net asset value of the class BEIJING SPC ENVIRONMENT PROTECTION 3.91% ORG PACKAGING 3.67% BEIJING DINGHAN TECHNOLOGY 3.45% MIRACLE AUTOMATION ENGINEERING 2.99% NAV per Unit 30 April 2015 Class A (RMB) 123.43 * The current rate may be increased up to a specified permitted maximum level as set out in the Explanatory Memorandum by giving one month’s prior notice to unitholders. # Fund performance is calculated on NAV to NAV basis, including dividend reinvestment. Return of RMB share class is denominated in RMB. Investors of USD/HKD are exposed to foreign exchange movements of USD/HKD against RMB. CIFM (HK) RMB China A Focus Fund May 2015 (Data as of 30 April 2015) Asset Allocation Country Allocation Cash & Others 10.51% Sector Allocation Utilities 1.53% China 100% 2015年5月 Financials 14.08% IT 20.99% Industrial 30.36% Consumer 13.74% Equities 89.49% Health Care 11.25% Materials 8.05% Market Review The macro economic data in April revealed that China’s economy remains weak. While the official manufacturing PMI was maintained at 50.1, HSBC PMI was down further to 48.9. On the other hand, CPI in April was lower than expected at 1.5% (vs market consensus of 1.6%). Additionally, the trade number also revealed slow demand for both domestic and overseas markets (export was down 6.2% YoY vs market consensus of a 0.9% increase YoY). Import number was down 16.1% YoY, vs the 12.3% decline in March. Overall, weak economic reading has given the government more rooms to loosen the monetary policy. As we expected, PBoC cut RRR by 100 bps on 20 April and interest rate by 25 bps on 11 May. For bond market, the macro data and loosening policy supported a bull market. 10-year government bond yield was down 29.8bps while the 5-year AAA grade enterprise bond yield down 53.04bps. For the equity market, CSI 300 Index was up 17.25% while ChiNext Composite Index up 19.47%. Among the sectors, Industrials, Telecom, Utilities and Energy outperformed while Consumer Discretionary, Consumer Staples, Materials, Health Care, Financials and IT underperformed. Market Outlook We maintain our positive view on the stock market although we continue to see high market volatility. We believe A-share market will continue to be benefited from the loosening monetary policy, as well as the government’s measures on financial reform and opening up of the market. We also think the recent rate cut and RRR cut would be helpful in supporting the real economy, and we could see signs of growth stabilization and sequential recovery in the coming months. Meanwhile, we believe the government would continue to step up its stimulus measures if necessary to maintain a stable economic growth. Portfolio Strategy Our portfolio strategy is to focus on sectors and companies which we believe will benefit from China’s structural reform and policy direction, such as the application of Internet in various industries, Health Care (such as innovative drugs and internet Medical), Industrial 4.0, Environmental protection, New Energy Car and One belt one road etc. We target to pick companies within our preferred sectors and provide promising earnings outlook and sound fundamentals. During the month, we mainly increased our weightings on IT, Industrial and Health Care sectors, while reduced our weightings in Consumer and Utilities. By the end of April, our portfolio overweight IT, Industrials, Health Care and Material sectors. Looking forward, we will continue with our portfolio strategy. Yet given that we expect market volatility to remain high, we will also look for profit taking opportunities while accumulate quality counters with reasonable valuations. Disclaimer Investment involves risks. Investors should not make investment decisions based on this document alone. Before making any investment decision, investors should carefully read the “explanatory memorandum” and the “product key facts statement” of the Fund (collectively named as “Offering Documents”) for further details, including the risk factors. Information sources in this document are considered reliable but you should conduct your own verification of information contained herein. Past performance information (if there is any) is not indicative of future performance. The Fund does not have any guarantees. You may not get back the full amount of money you invest. This document is for information purpose only and does not constitute an offer or invitation or inducement in any form to enter into any securities or investment transactions, nor does it constitute any investment advice and hence must not be construed as such. It does not express any view as to the suitability of any investments described therein for any individual investor. Before acting on the content in this document, you should read the Offering Documents of the Fund and consider whether any such investment is suitable for your particular circumstances. If necessary, you should seek independent professional advice. The Fund has been authorized by the Securities and Futures Commission of Hong Kong (“SFC”). However, SFC authorization is not a recommendation or endorsement of the Fund nor does it guarantee the commercial merits of the Fund or its performance. It does not mean the Fund is suitable for all investors nor is it an endorsement of its suitability for any particular investor or class of investors. This document has been prepared and issued by CIFM Asset Management (Hong Kong) Limited but has not been reviewed by the SFC. For more information, please contact us: Address: Unit 1702-03, 17/F, Tower 2, Lippo Centre, 89 Queensway, Admiralty, Hong Kong Tel: (852) 3975 2121 Website: www.cifm.com.hk