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AIA MPF - PRIME VALUE CHOICE REPORTS AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 30TH NOVEMBER 2019

AIA MPF - PRIME VALUE CHOICE Contents

Pages

Scheme report 1 to 6 Investment report 7 to 72 Independent auditor’s report 73 to 76 Scheme

Statement of net assets available for benefits 77 Statement of changes in net assets available for benefits 78 to 79 Statement of cash flows 80

Constituent funds

Statement of net assets 81 to 92 Statement of comprehensive income 93 to 104 Statement of changes in net assets attributable to members 105 to 116

Statement of cash flows 117 to 128

Notes to the financial statements 129 to 211

AIA MPF - PRIME VALUE CHOICE

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SCHEME REPORT FOR THE YEAR ENDED 30TH NOVEMBER 2019

1. Background

The AIA MPF - Prime Value Choice (the “Scheme”) is a master trust scheme established by a master trust deed dated 31st January 2000, as amended (the “Trust Deed”). The sponsor of the Scheme is AIA Company Limited (the “Sponsor”). The trustee of the Scheme is AIA Company (Trustee) Limited (the “Trustee”). The investment managers of the Scheme are PineBridge Investments Hong Kong Limited, JPMorgan Asset Management (Asia Pacific) Limited (Prior to 29th July 2019, it was known as JF Asset Management Limited), Amundi Hong Kong Limited and FIL Investment Management (Hong Kong) Limited (the “Managers”). The Scheme is registered under the Hong Kong Mandatory Provident Fund Schemes Ordinance (the “MPF Ordinance”) and has been authorised by the Securities and Futures Commission of Hong Kong. (Note 1)

Whilst the Scheme has been designed to ensure that participating employers can comply with the requirements of the MPF Ordinance in respect of those employees covered by MPF legislation, it is also possible for self-employed persons and non-employed persons to join the Scheme. If an employee member changes employment, he/she can leave the whole or any part of his/her accrued benefits in the Scheme and become a personal account member. Employees, self-employed and non-employed members are all collectively referred to as “Scheme members” hereinafter. Mandatory contributions in accordance with the MPF Ordinance are fully vested and belong immediately to Scheme members from the date the contributions were received by the Trustee. Participating employers, employees and self-employed members can choose to make additional voluntary contributions at their own discretion. However, benefits accruing on employers’ voluntary contributions need not belong immediately to the employees, but will be subject to a vesting scale determined by length of employment or other conditions. In accordance with the Trust Deed of the Scheme, the Trustee must procure that the trust assets of the Scheme members are invested in constituent funds. During the year, twenty-five constituent funds, each having a separate and distinct investment objective and policy, were offered exclusively for Scheme members’ selection. They are free to allocate their accrued benefits to one or more of the constituent funds in ratios (at 5 percent intervals) that best suit their investment objectives and constraints.


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SCHEME REPORT (CONTINUED) FOR THE YEAR ENDED 30TH NOVEMBER 2019

1. Background (continued)

As at 30th November 2019 and 2018, the members’ accrued benefits were allocated as follows:

Fair Value HK$’000 2019 2018 Growth Portfolio 11,374,624 10,889,776 Balanced Portfolio 5,802,525 5,421,845 Capital Stable Portfolio 3,708,280 3,478,213 Guaranteed Portfolio 9,265,472 9,165,933 MPF Conservative Fund 5,774,428 5,369,828 Hong Kong Equity Fund 6,143,079 5,979,433 European Equity Fund 1,577,724 1,446,891 Japan Equity Fund 747,014 660,492 North American Equity Fund 3,069,582 2,496,374 Asian Equity Fund 4,254,703 3,947,409 Greater China Equity Fund 7,506,354 6,799,613 Allianz Capital Stable Fund (Note 2) - - Allianz Growth Fund (Note 2) - - Allianz Stable Growth Fund (Note 2) - - Green Fund 2,187,360 1,850,629 Global Bond Fund 2,027,702 1,515,877 World Fund 1,587,263 1,333,453 Manager's Choice Fund 4,685,949 4,303,947 Fidelity Capital Stable Fund 1,112,772 963,892 Fidelity Stable Growth Fund 2,397,055 2,075,646 Fidelity Growth Fund 2,413,829 2,126,833 Asian Bond Fund 1,235,834 962,105 Eurasia Fund 401,769 339,065 Hong Kong and China Fund 2,352,695 2,182,054 American Fund 1,295,711 889,532 Age 65 Plus Fund 766,339 441,402 Core Accumulation Fund 2,543,974 1,640,347 China HK Dynamic Asset Allocation Fund 662,931 544,292 ──────── ──────── 84,894,968 76,824,881 ════════ ════════

Note 1 : SFC authorization is not a recommendation or endorsement of an MPF scheme or pooled investment fund nor does it guarantee the commercial merits of an MPF scheme or pooled investment fund or its performance. It does not mean the MPF scheme or pooled investment fund is suitable for all scheme participants or fund holders nor is it an endorsement of its suitability for any particular scheme participant or fund holder. Note 2 : Allianz Capital Stable Fund, Allianz Growth Fund and Allianz Stable Growth Fund (“the 3 Allianz Funds”) had no investments and operations since 15th November 2018. MPFA had approved the termination of the 3 Allianz Funds to take effect on 13th March 2019.


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2. Changes to the Governing Rules and Principal Brochure of the Scheme

During the year, the following changes to the governing rules and the Principal Brochure of the Scheme were approved: 2.1 Governing Rules a) By a Deed of Variation to the Trust Deed dated 23rd April 2019, amendments were

made to the Trust Deed to reflect, among others, the implementation of tax deductible voluntary contributions with effect from 1st April 2019 pursuant to the Mandatory Provident Fund Schemes Ordinance.

b) By a Deed of Variation to the Trust Deed dated 8th November 2019, amendments were made to the Trust Deed to reflect, among others, the handling of voluntary contributions with effect from 8th November 2019, and automatic exchange of financial account information with effect from 1st January 2020.

2.2 Principal Brochure

The Sixth Addendum to the Principal Brochure issued in December 2016 was issued on 28th January 2019, unless otherwise specified therein, to reflect the enhancement on the fee breakdown disclosure among the Constituent Funds, the change of address of AIA Company (Trustee) Limited and AIA International Limited (Hong Kong Branch, the additional information on service provider functions, and the enhancement of risk disclosure for the Asian Equity Fund, with immediate effect. A new version of Principal Brochure was issued in March 2019 which conformed the previous version of Principal Brochure issued in December 2016, and the six addenda issued from December 2016 to January 2019. The First Addendum to the Principal Brochure issued in March 2019 was issued on 1st April 2019, unless otherwise specified therein, to reflect the change related to tax deductible voluntary contributions, and miscellaneous changes, with effect from1st April 2019. The Second Addendum to the Principal Brochure issued in March 2019 was issued on 8th November 2019, unless otherwise specified therein, to reflect the key changes to the Scheme related to i) the fee reduction of certain constituent funds with effect from 1st December 2019, ii) automatic exchange of financial account information (“AEOI”) with effect from 1 January 2020, iii) voluntary contributions, the clarification of investment policy and risks in relation to the Asian Bond Fund, and miscellaneous changes with immediate effect.

3. Contact

Further information about the Scheme and its operation can be obtained from the following: Employer hotline : (852) 2100-1888 Member hotline : : (852) 2200-6288 Fax number : (852) 2565-0001 Postal address : AIA International Limited

8/F, AIA Financial Centre, 712 Prince Edward Road East Kowloon, Hong Kong


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4. Service Providers

Trustee AIA Company (Trustee) Limited 友邦(信託)有限公司 11/F, AIA Hong Kong Tower, 734 King’s Road, Quarry Bay, Hong Kong Administrator AIA International Limited 友邦保險(國際)有限公司 (Note i) Clarendon House, 2 Church Street, Hamilton HM11, Bermuda Hong Kong Administration Office: 1/F, AIA Hong Kong Tower, 734 King’s Road, Quarry Bay, Hong Kong

Custodian Citibank N.A. 50/F, Champion Tower, Three Garden Road, Central, Hong Kong Investment Managers PineBridge Investments Hong Kong Limited Level 31, Three Pacific Place, 1 Queen’s Road East, Hong Kong JPMorgan Asset Management (Asia Pacific) Limited (Note ii) 21/F, Chater House, 8 Connaught Road, Central, Hong Kong Amundi Hong Kong Limited 9/F, One Pacific Place, 88 Queensway, Admiralty, Hong Kong FIL Investment Management (Hong Kong) Limited Level 21, Two Pacific Place, 88 Queensway, Admiralty, Hong Kong Insurer AIA Company Limited 友邦保險有限公司 (Note iii) 27th Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong Bank The Hong Kong and Shanghai Banking Corporation Limited HSBC Main Building, 1 Queen’s Road Central, Hong Kong Citibank, N.A. Hong Kong 50/F, Champion Tower, 3 Garden Road, Hong Kong Auditor PricewaterhouseCoopers 22/F Prince’s Building, Central, Hong Kong

Note i: Prior to 1st October 2018, the Administrator was the immediate holding company of the Trustee. With

effect from 1st October 2018, the administrator is the fellow subsidiary of the Trustee.

Note ii: Prior to 29th July 2019, JPMorgan Asset Management (Asia Pacific) Limited was known as JF Asset Management Limited

Note iii: The insurer is the intermediate holding company of the Trustee as at 30th November 2019 and 2018.


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5. Board of Directors

Directors of the Trustee Ms. Elaine Kar-Yee LAU Mr. John Tai-Wo CHU Mr. Kam Tong LAI Mr. Peter James CREWE Mr. Sai Cheong FOONG Mr. Jan Zen JIM (Appointed on 1st November 2019) Mr. Raymond Hin Tat TAM (Appointed on 1st November 2019) Ms. Bonnie Pui-Lan TSE (Resigned on 1st November 2019)

Directors of the Administrator Mr. Garth Brian JONES Mr. Keng Hooi NG Mr. Mitch David NEW Ms. Shelby Ross WELDON Mr. Timothy Carrick FARIES Mr. Wing Shing CHAN Mr. Clive Vincent ANDERSON (Alternate Director to Keng Hooi NG) Mr. Jon Paul NIELSEN (Alternate Director to Wing Shing CHAN, Resigned on 29 March 2019) Directors of the Investment Managers PineBridge Investments Hong Kong Limited Mr. Arthur Egbert Chu-Ming LAU Mr. Anthony Gerard FASSO (Appointed on 1st August 2019) Ms. Cecily Sze Sze PANG (Appointed on 18th April 2019) Ms. Jennifer THEUNISSEN (Resigned on 18th April 2019)

JPMorgan Asset Management (Asia Pacific) Limited Mr. Ayaz Hatim EBRAHIM Ms. Chloe Louise THOMAS Mr. Daniel James WATKINS Mr. Edwin Tsuen-Kay CHAN Ms. Shaw Yann HO Mr. Ioan William ROBERTS (Appointed on 27th June 2019) Mr. Aidan Daniel SHEVLIN (Resigned on 27th February 2020) Mr. Christopher David SPELMAN (Resigned on 27th February 2020) Mr. Lee Matthew BRAY (Resigned on 27th February 2020) Mr. Leon GOLDFIELD (Resigned on 27th February 2020) Mr. Philippe EL-ASMAR (Resigned on 27th February 2020) Ms. Qionghui WANG (Resigned on 27th February 2020)


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5. Board of Directors (continued)

Directors of the Investment Managers (continued) Amundi Hong Kong Limited Mr. Christianus PELLIS Mr. Guerrier de DUMAST Mr. Jean-Yves GLAIN Mr. Vincent MORTIER Mr. Xiao-Feng ZHONG FIL Investment Management (Hong Kong) Limited Mr. Bradley Duane FRESIA Mr. Paras Kishore ANAND Mr. Rajeev MITTAL Mr. Timothy John ORCHARD Ms. Victoria KELLY Ms. Wai Fun (Daisy) HO Mr. Christopher Paul QUINLAN (Resigned on 18th October 2019)

Directors of the Insurer Mr. Choi-Cheung FUNG Mr. Dominic Ka-Kui LEUNG Mr. Garth Brian JONES Mr. John Tai-Wo CHU Mr. Keng Hooi NG Mr. William LISLE Mr. Wing Shing CHAN Mr. Stuart John VALENTINE (Appointed on 13th March 2019) Mr. Qiang CAI (Resigned on 6th January 2020) Mr. Timothy Carrick FARIES (Resigned on 13th March 2019) For business address of the directors, please refer to section 4 of the Scheme Report.


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INVESTMENT REPORT FOR THE YEAR ENDED 30TH NOVEMBER 2019

Investment Policies

As at 30th November 2019 and during the year, AIA MPF – Prime Value Choice is a master trust scheme and offering the following constituent funds: 1. Growth Portfolio 2. Balanced Portfolio 3. Capital Stable Portfolio 4. Guaranteed Portfolio 5. MPF Conservative Fund 6. Hong Kong Equity Fund 7. European Equity Fund 8. Japan Equity Fund 9. North American Equity Fund 10. Asian Equity Fund 11. Greater China Equity Fund 12. Allianz Capital Stable Fund Note 1 13. Allianz Growth Fund Note 1 14. Allianz Stable Growth Fund Note 1 15. Green Fund 16. Global Bond Fund 17. World Fund 18. Manager’s Choice Fund 19. Fidelity Capital Stable Fund 20. Fidelity Stable Growth Fund 21. Fidelity Growth Fund 22. Asian Bond Fund 23. Eurasia Fund 24. Hong Kong and China Fund 25. American Fund 26. Age 65 Plus Fund 27. Core Accumulation Fund 28. China HK Dynamic Asset Allocation Fund

Note 1 : Allianz Capital Stable Fund, Allianz Growth Fund and Allianz Stable Growth Fund (“the 3 Allianz Funds”) had no investments and operations since 15th November 2018. MPFA had approved the termination of the 3 Allianz Funds to take effect on 13th March 2019. Each of the constituent funds is managed in accordance with separate and distinct investment policies reflecting the different risk profiles of the investment choices as set out below. 1. Growth Portfolio

The primary objective of the Growth Portfolio is to maximise its long term capital appreciation in Hong Kong dollar terms. The secondary objective is to outperform Hong Kong salary inflation over the long term. The Growth Portfolio seeks to achieve these investment objectives through a professionally managed portfolio, invested in two or more approved pooled investment funds (and to the extent permitted, any other permissible investment as approved by the MPFA and SFC). The Growth Portfolio asset allocation policy is normally to have an equity content of 90% with the balance invested in bonds and cash. Investments may be made in any market in any country where permitted by the Hong Kong Mandatory Provident Fund Schemes (General) Regulation (the “General Regulation”).


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INVESTMENT REPORT (CONTINUED) FOR THE YEAR ENDED 30TH NOVEMBER 2019 Investment Policies (continued) 2. Balanced Portfolio

The primary objective of the Balanced Portfolio is to maximise its long term capital appreciation in Hong Kong dollar terms within moderate risk parameters. The secondary objective is to outperform Hong Kong price inflation over the long term. The Balanced Portfolio seeks to achieve these investment objectives through a professionally managed portfolio, invested in two or more approved pooled investment funds (and to the extent permitted, any other permissible investment as approved by the MPFA and SFC).

The Balanced Portfolio asset allocation policy is normally to have an equity content of 50% with the remainder in cash and bonds. Investments may be made in any market in any country where permitted by the General Regulation.

3. Capital Stable Portfolio

The primary objective of the Capital Stable Portfolio is to minimise its short term capital risk in Hong Kong dollar terms. The secondary objective is to enhance returns over the long term through limited exposure to global equities. The Capital Stable Portfolio seeks to achieve these investment objectives through a professionally managed portfolio, invested in two or more approved pooled investment funds (and to the extent permitted, any other permissible investment as approved by the MPFA and SFC). The Capital Stable Portfolio does not guarantee the repayment of capital. The Capital Stable Portfolio asset allocation policy is normally to have the greater proportion of assets invested in bonds and cash, with the balance invested in equities. Investments may be made in any market in any country where permitted by the General Regulation.

4. Guaranteed Portfolio

The primary objective of the Guaranteed Portfolio is to minimise capital risk in Hong Kong dollar terms. The secondary objective is to achieve a stable, consistent and predictable rate of return. Due to the nature and inclusion of the guarantee, it is possible that there may be a dilution in performance of the Guaranteed Portfolio. Except for a small portion that may be held in cash or cash based investments for operational purposes, the Guaranteed Portfolio is a feeder fund investing solely in an approved pooled investment fund. The underlying approved pooled investment fund is a guaranteed insurance policy investing entirely in a pooled investment fund approved by the MPFA in the form of a unit trust which invests at least 70% of its non-cash assets in bonds and other fixed income instruments either denominated in Hong Kong dollars or, if they are not denominated in Hong Kong dollars, the effective currency exposure shall be hedged back into Hong Kong dollars in order to ensure that the approved pooled investment fund in the form of a unit trust has an effective currency exposure of at least 70% to the Hong Kong dollar. The remaining assets of the approved pooled investment fund will be held in cash and/or deposits. When investing in a pooled investment fund in the form of a unit trust approved by the MPFA, the underlying investments of such pooled investment fund shall be used to determine whether the relevant percentage limits stated in this section are adhered to. For the avoidance of doubt, units or shares of such pooled investment fund shall not be treated as equity investments for purposes of this section.


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INVESTMENT REPORT (CONTINUED) FOR THE YEAR ENDED 30TH NOVEMBER 2019 Investment Policies (continued)

4. Guaranteed Portfolio (continued)

The investments of the approved pooled investment fund in the form of a unit trust in bonds are required to comply with the minimum credit rating requirements set by the MPFA in Guidelines on Debt Securities (Guidelines III.1), where appropriate.

5. MPF Conservative Fund

The objective of the MPF Conservative Fund is to preserve principal value. The MPF Conservative Fund does not guarantee the repayment of capital. Except for a small portion to be held in cash or cash based investments for operational purposes, the MPF Conservative Fund is a feeder fund investing solely in an approved pooled investment fund. The underlying approved pooled investment fund is a money market fund investing in deposits and debt securities subject to the restrictions set out in section 37 of the General Regulation. The investments of the underlying approved pooled investment fund in debt securities are required to comply with the minimum credit rating requirements set by the MPFA in Guidelines on Debt Securities (Guidelines III.1), where appropriate.

6. Hong Kong Equity Fund

The Hong Kong Equity Fund is a portfolio management fund investing in two or more approved pooled investment funds and/or approved ITCISs. The Hong Kong Equity Fund seeks to provide long term capital appreciation through the underlying approved pooled investment funds and/or approved ITCISs which invest primarily in securities of companies either listed, based or operating principally in Hong Kong. Implementation of the investment policy is considered to be of high inherent risk. The Hong Kong Equity Fund is a portfolio management fund investing in two or more approved pooled investment funds and/or approved ITCISs which have majority of assets invested in Hong Kong equities. The Hong Kong Equity Fund may hold up to 30% of the assets in bonds, cash or cash based investments for operational purposes.

7. European Equity Fund

The European Equity Fund is a feeder fund investing solely in an approved pooled investment fund. The investment objective of the European Equity Fund is to provide investors with long term capital growth through the underlying approved pooled investment fund which consists primarily of securities of companies based or operating principally in countries in Western Europe. A portion of the underlying investment fund may be invested in companies which are based or operating in other countries in Eastern Europe. Except for a small portion that may be held in cash or cash based investments for operational purposes, the European Equity Fund will invest solely in an approved pooled investment fund whose asset allocation policy is normally to have the greater proportion of assets invested in equities and convertibles, primarily in the European market, with the remainder in cash and bonds.


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8. Japan Equity Fund

The Japan Equity Fund is a feeder fund investing solely in an approved pooled investment fund. The investment objective of the Japan Equity Fund is to provide investors with long term capital growth through the underlying approved pooled investment fund which consists primarily of securities of companies based or operating principally in Japan. Except for a small portion that may be held in cash or cash based investments for operational purposes, the Japan Equity Fund will invest solely in an approved pooled investment fund whose asset allocation policy is normally to have the greater proportion of assets invested in equities and convertibles, primarily in the Japan market, with the remainder in cash and bonds.

9. North American Equity Fund

The North American Equity Fund is a feeder fund investing entirely in an approved pooled investment fund. The North American Equity Fund seeks to provide long term capital appreciation through the underlying approved pooled investment fund which consists primarily of shares in US companies.

Except for a small portion to be held in cash or cash based investments for operational purposes, the North American Equity Fund is a feeder fund investing solely in an approved pooled investment fund whose asset allocation policy is normally to have the greater proportion of assets invested in equities and convertibles, primarily in the US market, with the remainder in cash and bonds.

10. Asian Equity Fund

The Asian Equity Fund is a feeder fund investing entirely in an approved pooled investment fund. The investment objective of the Asian Equity Fund is to provide investors with long term capital growth in US dollar terms through a portfolio consisting primarily of securities of companies based or operating principally in the Asia-Pacific region, excluding Japan and Hong Kong. Except for a small portion that may be held in cash or cash based investments for operational purposes, the Asian Equity Fund will invest solely in an approved pooled investment fund whose asset allocation policy is normally to have a maximum equity content of 100% with the remainder in cash or bonds.

11. Greater China Equity Fund

The Greater China Equity Fund is a portfolio management fund investing in two or more approved pooled investment funds and/or approved ITCISs. The Greater China Equity Fund seeks to provide long term capital appreciation through the underlying approved pooled investment funds and/or approved ITCISs which invest primarily in securities of companies based or operating principally in the Greater China Region i.e. the People’s Republic of China, Hong Kong, Macau and Taiwan - the majority of these companies will be listed on a stock exchange in Hong Kong and Taiwan. Implementation of the investment policy is considered to be of high inherent risk. The Greater China Equity Fund is a portfolio management fund investing in two or more approved pooled investment funds and/or approved ITCISs which have majority of assets invested in Greater China equities. The Greater China Equity Fund may hold up to 30% of the assets in bonds, cash or cash based investments for operational purposes.


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INVESTMENT REPORT (CONTINUED) FOR THE YEAR ENDED 30TH NOVEMBER 2019

Investment Policies (continued)

12. Allianz Capital Stable Fund (Note 1)

The Allianz Capital Stable Fund is a feeder fund investing entirely in an approved pooled investment fund. The objective of the Allianz Capital Stable Fund is to provide investors with capital preservation combined with steady capital appreciation over the long term by investing in a diversified portfolio of global equities and fixed-interest securities through the underlying approved pooled investment fund. This Allianz Capital Stable Fund is designed for members who are willing to assume a relatively low level of risk. The Allianz Capital Stable Fund does not guarantee the repayment of capital. Except for a small portion that may be held in cash or cash based investments for operational purposes, the Allianz Capital Stable Fund is intended to invest entirely in an approved pooled investment fund. This approved pooled investment fund is expected to invest 30% of its assets in equities and 70% in fixed-interest securities. The fixed income portion will consist of a range of instruments issued in countries around the world. The equity portion of the approved pooled investment fund will be invested primarily in the Hong Kong, Japan, North American and European markets with a smaller proportions being invested, at the discretion of the Manager, in other Asian countries and emerging markets.

13. Allianz Growth Fund (Note 1)

The Allianz Growth Fund is a feeder fund investing entirely in an approved pooled investment fund. The objective of the Allianz Growth Fund is to maximise long term overall returns by investing primarily in global equities through the underlying approved pooled investment fund. This Allianz Growth Fund is designed for members who are willing to assume a relatively higher level of risk to achieve potentially higher long-term returns. Except for a small portion that may be held in cash or cash based investments for operational purposes, the Allianz Growth Fund is intended to invest entirely in an approved pooled investment fund. This approved pooled investment fund, may invest in the countries comprised in the MSCI World Index which covers all the major world stock markets including those in Japan, North America, Asia and Europe.

14. Allianz Stable Growth Fund (Note 1)

The Allianz Stable Growth Fund is a feeder fund investing entirely in an approved pooled investment fund. The objective of the Allianz Stable Growth Fund is to achieve a stable overall return over the long term by investing in a diversified portfolio of global equities and fixed-interest securities through the underlying approved pooled investment fund. This Allianz Stable Growth Fund is designed for members who are willing to assume a medium level of risk. Except for a small portion that may be held in cash or cash based investments for operational purposes, the Allianz Stable Growth Fund is intended to invest entirely in an approved pooled investment fund. This approved pooled investment fund, is expected to invest 50% of its assets in equities and 50% in fixed-interest securities. The fixed income portion will consist of a range of instruments issued in countries around the world. The equity portion of the approved pooled investment fund will be invested primarily in the Hong Kong, Japan, North American and European markets with a smaller proportion being invested, at the discretion of the Manager, in other Asian countries and emerging markets.

Note 1: Allianz Capital Stable Fund, Allianz Growth Fund and Allianz Stable Growth Fund (“the 3 Allianz Funds”) had no investments and operations since 15th November 2018. MPFA had approved the termination of the 3 Allianz Funds to take effect on 13th March 2019.


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15. Green Fund

The Green Fund is a feeder fund investing entirely in an approved pooled investment fund. The objective of the Green Fund is to provide investors with long term capital appreciation through well diversified investments in global equities principally by investing in companies according to (1) their environmental ratings and (2) financial performance expectations, with a view to outperforming the MSCI World Index over the medium to long term. The Green Fund is intended to invest entirely in an approved pooled investment fund. With an exception of a small portion that may be held in cash or cash based investments or other short-term bonds permitted by the General Regulation for operational and cash management purpose, most of the assets of this approved pooled investment funds are invested in equity securities. Subject to the limitations required by the General Regulation, this approved pooled investment fund may also invest in exchange traded funds and in convertible bonds or authorised unit trust or authorised mutual fund permitted by the General Regulation for performance management purposes.

The geographical distribution of investments will be driven purely by bottom-up stock selection processes based on the securities comprised in the MSCI World Index which covers all the major world stock markets including but not limited to North America, Europe, Asia and Japan. The Green Fund will not invest in emerging market equities.

16. Global Bond Fund

The Global Bond Fund is a feeder fund investing solely in an approved pooled investment fund. The investment objective of the Global Bond Fund is to seek long term stable return from a combination of current income and capital appreciation by investing in a portfolio of debt securities in the international markets, issued by government, supranational organizations and corporates. Except for a small portion that may be held in cash or cash based investments for operational purposes, the Global Bond Fund will invest solely in an approved pooled investment fund that normally invests in a portfolio of debt securities in the international market, issued by governments, supranational organizations and corporates. The investments of the underlying approved pooled investment fund in debt securities are required to comply with the minimum credit rating requirements set by the MPFA in Guidelines on Debt Securities (Guidelines III.1), where appropriate.

17. World Fund

The World Fund is a portfolio management fund investing entirely in approved Index-tracking Collective Investment Schemes (ITCISs). The investment objective of the World Fund is to seek a long term capital appreciation by investing in a combination of global equity market index-tracking funds. The World Fund is not an index-tracking fund. The World Fund will invest mainly in approved ITCISs that track equity market indices that cover Large Cap companies in their respective markets around the world. A greater proportion of the assets will primarily be invested in equity market indices that track North American, European, Far Eastern and Australasian markets and a smaller proportion will be invested in Latin American markets. The remaining assets will be held in cash or cash based investments for operational and/or hedging purposes.


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18. Manager’s Choice Fund

The Manager’s Choice Fund seeks to achieve long term capital appreciation through a professionally managed portfolio, invested in two or more approved pooled investment funds and/or approved ITCISs. The Manager’s Choice Fund attempts to perform dynamic asset allocation in order to maximise long term capital appreciation. The Manager’s Choice Fund would be suitable to investors who are willing to accept an above average level of risk in order to achieve long term capital appreciation. Depending on the global market condition, the Manager’s Choice Fund may allocate from 10% to 90% of its assets in equities, with the balance invested in bonds, money market instruments and cash. Investments may be made in the above mentioned asset classes and may be in various markets globally where permitted by the General Regulation. The allocations will change based on the investment manager’s view on the economic and market outlook, with higher allocation to equity when equity market outlook is positive, balanced allocation when equity market outlook is neutral and higher allocation to bonds, money market instruments and cash when equity market outlook is negative.

19. Fidelity Capital Stable Fund

The Fidelity Capital Stable Fund is a feeder fund investing entirely in an approved pooled investment fund. The Fidelity Capital Stable Fund aims to produce a positive return over the long term and to focus investment towards less volatile assets of bonds and cash whilst retaining some equity exposure. It also aims to maintain a broad geographic diversification with a bias towards Hong Kong, and to ensure that the risk to the capital base is limited in the short term. The Fidelity Capital Stable Fund does not guarantee the repayment of capital. Except for a small portion that may be held in cash or cash based investments for operational purposes, the Fidelity Capital Stable Fund invests entirely in an approved pooled investment fund. This approved pooled investment fund is expected to invest 30% of its assets in equities and 70% in bonds and cash. The fund will be invested primarily in Hong Kong, Japan, Asia Pacific ex Japan ex Hong Kong, Americas and European markets.

20. Fidelity Stable Growth Fund

The Fidelity Stable Growth Fund is a feeder fund investing entirely in an approved pooled investment fund. The Fidelity Stable Growth Fund aims to generate a positive return over the long term and to broadly diversify the portfolio as to asset type as between equities and bonds. It also aims to maintain a broad geographic diversification with a bias towards Hong Kong, and to limit the volatility of returns in the short term. Except for a small portion that may be held in cash or cash based investments for operational purposes, the Fidelity Stable Growth Fund invests entirely in an approved pooled investment fund. This approved pooled investment fund is expected to invest 50% of its assets in equities and 50% in bonds and cash. The fund will be invested primarily in Hong Kong, Japan, Asia Pacific ex Japan ex Hong Kong, Americas and European markets.

21. Fidelity Growth Fund

The Fidelity Growth Fund is a feeder fund investing entirely in an approved pooled investment fund. The Fidelity Growth Fund aims to build real wealth over the long term, to focus investment into the global equity markets and to have the flexibility to invest in global bonds. It also aims to maintain a broad geographic diversification with a bias towards Hong Kong and to manage the volatility of returns in the short term.


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21. Fidelity Growth Fund (continued)

Except for a small portion that may be held in cash or cash based investments for operational purposes, the Fidelity Growth Fund invests entirely in an approved pooled investment fund. This approved pooled investment fund is expected to invest 90% of its assets in equities and 10% in bonds and cash. The fund will be invested primarily in Hong Kong, Japan, Asia Pacific ex Japan ex Hong Kong, Americas and European markets.

22. Asian Bond Fund

The Asian Bond Fund is a feeder fund investing solely in an approved pooled investment fund. The investment objective of the Asian Bond Fund is to seek long term capital growth by primarily investing in a portfolio of bonds in the Asia-Pacific region (excluding Japan), issued by, amongst others, government, supranational organizations and corporates. Except for a small portion that may be held in cash or cash based investments for operational purposes, the Asian Bond Fund will invest solely in an approved pooled investment fund whose proposed asset allocation policy is to invest 70% to 100% of assets in bonds within the Asia-Pacific region (excluding Japan), including but not limited to Australia, Hong Kong, Korea, Malaysia, New Zealand, Singapore and Thailand; and 0% to 30% of assets in bonds outside the Asia-Pacific region (excluding Japan), including but not limited to US dollar denominated bonds such as US treasury inflation-protected securities and treasury bonds for defensive purpose during periods of perceived uncertainty and volatility. The investments of the underlying approved pooled investment fund in bonds are required to comply with the minimum credit rating requirements set by the MPFA in Guidelines on Debt Securities (Guidelines III.1), where appropriate.

23. Eurasia Fund

The Eurasia Fund is a portfolio management fund investing entirely in approved ITCISs. The investment objective of the Eurasia Fund is to seek a long term capital appreciation by investing in a combination of European, Australasian and Far Eastern equity market index-tracking funds. The Eurasia Fund is not an index-tracking fund. Except for a small portion to be held in cash or cash based investments for operational and/or hedging purposes, the Eurasia Fund will invest solely in approved ITCISs that track European, Australasian and Far Eastern equity market indices.

24. Hong Kong and China Fund

The Hong Kong and China Fund is a portfolio management fund investing entirely in approved ITCISs. The investment objective of the Hong Kong and China Fund is to seek a long term capital appreciation by investing in a combination of equity market index-tracking funds that track Hong Kong equity market indices that measure the performance of companies listed in Hong Kong (including China incorporated enterprises listed in Hong Kong in the form of H Shares). The Hong Kong and China Fund is not an index-tracking fund. Except for a small portion to be held in cash or cash based investments for operational and/or hedging purposes, the Hong Kong and China Fund will invest solely in approved ITCISs that track Hong Kong equity market indices that measure the performance of companies listed in Hong Kong (including China incorporated enterprises listed in Hong Kong in the form of H Shares).


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25. American Fund

The American Fund is a portfolio management fund investing entirely in approved ITCISs. The investment objective of the American Fund is to seek a long term capital appreciation by investing in a combination of North and South American equity market index-tracking funds. The American Fund is not an index-tracking fund. Except for a small portion to be held in cash or cash based investments for operational and/or hedging purposes, the American Fund will invest solely in approved ITCISs that track North and South American equity market indices.

26. Age 65 Plus Fund The Age 65 Plus Fund is a feeder fund investing entirely in an approved pooled investment fund, namely, the Vanguard Income Fund. The investment objective of the Age 65 Plus Fund is to provide stable growth to Members in a globally diversified manner. The investment manager of the Vanguard Income Fund will adopt a passive investment strategy in managing the portfolio by investing substantially all of the assets in constituent securities included in the Reference Portfolio of the Age 65 Plus Fund using sampling techniques. The investment manager of the Vanguard Income Fund will seek to hold a range of securities that, in the aggregate, approximate the Reference Portfolio of the Age 65 Plus Fund in terms of the key characteristics: (i) for the equity investments, they will consist of a broadly diversified collection of stocks that approximate those included in the Reference Portfolio of the Age 65 Plus Fund in terms of factors such as country weightings, industry weightings, market capitalization and other financial characteristics of stocks; and (ii) for the bond investments, they will be made in consideration of factors such as country weightings, duration and cash flow. At the time of launch, the Reference Portfolio of the Age 65 Plus Fund is identified as follows: 20% FTSE MPF All-World Index (HKD unhedged total return) + 77% Citi MPF World Government Bond Index (HKD hedged total return) + 3% cash or money market instruments providing a return at MPF Prescribed Savings Rate (HKD unhedged total return). The Reference Portfolio is subject to change from time to time. Please visit www.hkifa.org.hk for further information. Sampling techniques are an approach whereby the investment manager of the Vanguard Income Fund tracks the Reference Portfolio of the Age 65 Plus Fund by investing in a representative portion, or sample, of the full list of the constituent securities of the Reference Portfolio of the Age 65 Plus Fund such that the overall characteristics of the portion of securities invested by the Vanguard Income Fund would be similar to those of the full list of constituent securities of the Reference Portfolio of the Age 65 Plus Fund. Under such sampling techniques, the vast majority of the Vanguard Income Fund’s holdings will be constituent securities that are within the universe of the Reference Portfolio of the Age 65 Plus Fund, except in limited circumstances where it is in the best interest of the Vanguard Income Fund. Such limited circumstances may include but not limited to where: (i) it is not possible or it is difficult to buy or hold constituent securities (e.g. due to liquidity or restrictions of ownership of such constituent securities); (ii) the holding of non-constituent securities which were originally constituent securities is, in the opinion of the investment manager of the Vanguard Income Fund, more cost efficient to reflect the overall characteristics of the Reference Portfolio of the Age 65 Plus Fund;


16


26. Age 65 Plus Fund (continued)

(iii) investment in the constituent securities is not the most efficient way to reflect the performance of the Reference Portfolio of the Age 65 Plus Fund, for example when it is more cost efficient to invest in the non-constituent securities which reflect the overall characteristics of the Reference Portfolio of the Age 65 Plus Fund; (iv) the non-constituent securities which are, in the reasonable opinion of the investment manager of the Vanguard Income Fund, likely to form part of the Reference Portfolio of the Age 65 Plus Fund within six months of acquisition; (v) the non-constituent securities which the investment manager of the Vanguard Income Fund considers to be an appropriate substitute for the constituent securities of the Reference Portfolio of the Age 65 Plus Fund having regard to investment objectives of the Vanguard Income Fund; and (vi) to gain exposure to permissible securities in countries where such access is otherwise limited. Such investment strategy aims to provide consistent investment returns in relation to the Reference Portfolio of the Age 65 Plus Fund in a cost efficient manner. Through such underlying investment, the Age 65 Plus Fund will indirectly hold 20% of its net assets in Higher Risk Assets (such as global equities), with the remainder investing in Lower Risk Assets (such as global bonds and money market instruments). The asset allocation of Higher Risk Assets may vary between 15% and 25% due to differing price movements of various equity and bond markets. There is no prescribed allocation for investments in any specific countries or currencies.

27. Core Accumulation Fund

The Core Accumulation Fund is a feeder fund investing entirely in an approved pooled investment fund, namely, the Vanguard Moderate Growth Fund. The investment objective of the Core Accumulation Fund is to provide capital growth to Members by indirectly investing in a globally diversified manner. The investment manager of the Vanguard Moderate Growth Fund will adopt a passive investment strategy in managing the portfolio by investing substantially all of the assets in constituent securities included in the Reference Portfolio of the Core Accumulation Fund using sampling techniques. The investment manager of the Vanguard Moderate Growth Fund will seek to hold a range of securities that, in the aggregate, approximate the Reference Portfolio of the Core Accumulation Fund in terms of the key characteristics: (i) for the equity investments, they will consist of a broadly diversified collection of stocks that approximate those included in the Reference Portfolio of the Core Accumulation Fund in terms of factors such as country weightings, industry weightings, market capitalization and other financial characteristics of stocks; and (ii) for the bond investments, they will be made in consideration of factors such as country weightings, duration and cash flow. At the time of launch, the Reference Portfolio of the Core Accumulation Fund is identified as follows: 60% FTSE MPF All-World Index (HKD unhedged total return) + 37% Citi MPF World Government Bond Index (HKD hedged total return) + 3% cash or money market instruments providing a return at MPF Prescribed Savings Rate (HKD unhedged total return). The Reference Portfolio is subject to change from time to time. Please visit www.hkifa.org.hk for further information.


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27. Core Accumulation Fund (continued)

Sampling techniques are an approach whereby the investment manager of the Vanguard Moderate Growth Fund tracks the Reference Portfolio of the Core Accumulation Fund by investing in a representative portion, or sample, of the full list of the constituent securities of the Reference Portfolio of the Core Accumulation Fund such that the overall characteristics of the portion of securities invested by the Vanguard Moderate Growth Fund would be similar to those of the full list of constituent securities of the Reference Portfolio of the Core Accumulation Fund. Under such sampling techniques, the vast majority of the Vanguard Moderate Growth Fund’s holdings will be constituent securities that are within the universe of the Reference Portfolio of the Core Accumulation Fund, except in limited circumstances where it is in the best interest of the Vanguard Moderate Growth Fund. Such limited circumstances may include but not limited to where: (i) it is not possible or it is difficult to buy or hold constituent securities (e.g. due to liquidity or restrictions of ownership of such constituent securities); (ii) the holding of non-constituent securities which were originally constituent securities is, in the opinion of the investment manager of the Vanguard Moderate Growth Fund, more cost efficient to reflect the overall characteristics of the Reference Portfolio of the Core Accumulation Fund; (iii) investment in the constituent securities is not the most efficient way to reflect the performance of the Reference Portfolio of the Core Accumulation Fund, for example when it is more cost efficient to invest in the non-constituent securities which reflect the overall characteristics of the Reference Portfolio of the Core Accumulation Fund; (iv) the non-constituent securities which are, in the reasonable opinion of the investment manager of the Vanguard Moderate Growth Fund, likely to form part of the Reference Portfolio of the Core Accumulation Fund within six months of acquisition; (v) the non-constituent securities which the investment manager of the Vanguard Moderate Growth Fund considers to be an appropriate substitute for the constituent securities of the Reference Portfolio of Core Accumulation Fund having regard to investment objectives of the Vanguard Moderate Growth Fund; and (vi) to gain exposure to permissible securities in countries where such access is otherwise limited. Such investment strategy aims to provide consistent investment returns in relation to the Reference Portfolio of the Core Accumulation Fund in a cost efficient manner. Through such underlying investment, the Core Accumulation Fund will indirectly hold 60% of its net assets in Higher Risk Assets (such as global equities), with the remainder investing in Lower Risk Assets (such as global bonds and money market instruments). Although the Core Accumulation Fund will target to indirectly hold 60% assets in Higher Risk Assets (such as global equities), with the remainder investing in Lower Risk Assets (such as global bonds and money market instruments), the asset allocation to Higher Risk Assets may vary between 55% and 65% due to differing price movements of various equity and bond markets. There is no prescribed allocation for investments in any specific countries or currencies.


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INVESTMENT REPORT (CONTINUED) FOR THE YEAR ENDED 30TH NOVEMBER 2019 Investment Policies (continued) 28. China HK Dynamic Asset Allocation Fund

The China HK Dynamic Asset Allocation Fund is a feeder fund investing entirely in an approved pooled investment fund, Value Partners Asset Allocation Fund, a sub fund of Value Partners Choice Investment Funds. The objective of the China HK Dynamic Asset Allocation Fund is to aim to achieve long-term capital growth potential with medium-high volatility through the Value Partners Asset Allocation Fund which (i) mainly invests in Hong Kong and China equities and debt securities, with up to 9% of its assets investing in exchange-traded funds that track the price of gold, and (ii) performs dynamic asset allocation. The China HK Dynamic Asset Allocation Fund is suitable to investors who are willing to accept an above average level of risk in order to aim to achieve long-term capital growth potential. Depending on the China and Hong Kong market conditions, Value Partners Asset Allocation Fund may, through investing in other approved pooled investment funds, allocate between 10% to 90% of its assets to Hong Kong and China equities, with the remaining balance mainly invested in Hong Kong and China debt securities (including debt securities that are denominated in offshore Renminbi, “Offshore RMB Bonds”) and up to 9% of its assets investing in exchange-traded funds that track the price of gold. The equities will be selected from the FTSE MPF Hong Kong Index by the adoption of a screening model, which aims to identify investment opportunities within the FTSE MPF Hong Kong Index through analyzing multiple quantitative data such as valuation, return on equity, volatility, and market capitalisation. The majority of the debt securities will be China and Hong Kong debt securities issued by (i) companies or issuers listed, established in or operating principally in, or which derive or are expected to derive a significant portion of their earnings or revenues from or which have part of their assets, production activities or other business interests based in or related to China and/or Hong Kong, and (ii) governments and government related entities in China or Hong Kong. Offshore RMB Bonds may be invested, including fixed and floating rate securities, convertible bonds and notes issued or distributed outside China by sovereigns, government agencies, supra-nationals, banks, corporations and exempt authorities. Currently, debt securities issued within China will not be invested. Debt securities issued by issuers (including corporations, government and government related entities) established outside China and Hong Kong but within the Asian region, and which are linked to or have part of their operations, revenue, assets, production activities or other business interests based in or related to China and / or Hong Kong, may also be invested. Value Partners Asset Allocation Fund, through investing in other approved pooled investment funds, may invest up to 9% of its assets in exchange-traded funds that track the price of gold and are approved by the MPFA as permissible investments from time to time. The asset allocation of the Value Partners Asset Allocation Fund will change based on its investment manager’s view on the economic and market outlook, with higher allocation to equity when equity market outlook is positive, balanced allocation between equity and debt securities when equity market outlook is neutral and higher allocation to debt securities and cash when equity market outlook is negative.


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General Investment Climate 1. North American Equity Markets

In January, equity markets rallied for the best month of performance in the past several years as some of the market panic that was prevalent in December subdued and calmer sentiment prevailed. Markets bounced back on some expectation that the Fed would reconsider their stance on gradual rate hikes given the volatility of December and this was reaffirmed as the Fed stood firm on interest rates. Escalation in the trade tensions between US/China led to a largely negative market environment for US equities as negotiations between the two countries broke down during the month of May though US equities were broadly positive for the quarter. As the market had strong expectations for a trade deal, Trump’s announcement of tariffs caught many off guard and this was evident in index performance. Adding on to strong YTD performance, the fourth quarter helped to cement an incredibly strong 2019 year for US equities, driven by gains in large cap technology names. A central theme throughout the year was the back and forth between the US and China in ongoing trade talks as the trade dispute escalated several times over the year. In December, the rumors of a Phase 1 deal came to fruition as both the US and China announced that such an agreement had been reached in principle. Some uncertainty around the terms and conditions of the deal persisted but investors largely took the news positively after months of no real change to the status quo. The broad data continues to point to a resilient and robust US economy, particularly labor market conditions and consumer confidence that have held strong through year end. Over the one-year period ending 30th November 2019, the Fund underperformed its benchmark index by 564bps on a net HKD basis. From a sector perspective, the Consumer Discretionary and Utilities sectors contributed the most to relative performance while Health Care, Financials, and Communication Services were the worst performing sectors over the one-year period. From a life-cycle category perspective, Exceptional Growth names contributed the most to performance while the laggards were mostly in the High Stable Growth and High Cyclical life-cycle categorizations. Factor performance over the year was extremely volatile, contributing to the dispersion between our Valuation factor cluster and Sentiment factor cluster. While Valuation had some comeback in the second half of the year, the spread between Valuation and Sentiment performance remained wide while Quality held steady through the year. As the market looks forward to the official signing of the Phase 1 deal, the Trump administration has indicated that negotiations for Phase 2 will begin immediately. As expected, the details of the Phase 1 deal included taking some lower hanging fruit off the table, including cancellation of the planned 15th December tariffs on list 4B and a cut on tariffs in list 4A. Regardless of when Phase 2 negotiations begin and how many phases there eventually are, there has still been little progress on hardline issues such as intellectual property and Huawei. There will be some uncertainty around continuation of trade progress in 2020 as the US presidential election draws nearer and Trump tries to position himself for a second term. Whether he is reelected or there is a new President in office also sets the market up for potential volatility due to the wide range of stances from the potential presidential candidates. While there is not a lot of consensus on recessionary conditions in 2020, there are no small number of uncertainties, foremost of which are the developments in the 2020 presidential election as well as further Federal Reserve action.


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General Investment Climate (continued) 2. European Equity Markets

It has been a positive year so far for equity investors, with the index up around 25.1% (YTD) in EUR on a total return basis. Despite the clear deterioration of global manufacturing indices during the year, markets continue to focus on robust services data, a potential reprieve in manufacturing activity, labour markets and consumer confidence. Global trade tensions between the US and China continued to ease which supported investor sentiment. In terms of economic data, the latest Eurozone consumer confidence data showed signs of improvement and the manufacturing Purchasing Managers Index (PMI) also rose on a month-on-month basis, driven by improvements in German manufacturing data. The services sector delivered weaker than expected growth but the labour market continues to be a point of strength for the region. Christine Lagarde has now taken over from Mario Draghi as President of the European Central Bank (ECB). Expectations are a continuation of many of the initiatives delivered under Draghi and maintaining the existing policy measures of negative interest rates and monthly quantitative easing measures. European bond yield rose over the month underlining growing confidence from investors. In the UK, political parties have been campaigning in the lead up to the General Election on 12 December. The UK’s departure from the European Union (EU) remains a key topic of debate between the main political parties. The Bank of England left interest rates unchanged over the month however, there are calls for raising interest rates in light of the strength of the UK labour market. Other economic data was weaker with third quarter economic growth and wage growth falling short of expectations. UK equities (a represented by the FTSE All Share Index) returned 0.9% whilst sterling strengthened relative to the Euro and remain flat versus the US Dollar. The picture on trade is still very difficult to analyse as communications tend to be erratic and sometimes contradictory. Despite this it looks as if investors are attaching a lower likelihood to an imminent recession and this improvement in sentiment has taken equity markets to new 12-month highs. European growth is likely to remain below trend for the next two years and we view the expectations for next year of earnings growth in Europe and the US of around 10% as being unreasonably optimistic – although we would certainly like to be proved wrong. Given the paucity of opportunities in other asset classes, though, it leaves equities looking attractive, and we could see further upside with more clarity on trade, Brexit, and perhaps some renewed talk of fiscal stimulus.

3. Pacific Asia Equity Markets Asian equities endured a volatile year but ended the year positively in 2019, outperforming other emerging markets. Volatility persisted throughout the year, driven by forces like slowing global growth, heightened geopolitical risks as well as a stronger US Dollar. However, the dovish actions by central banks, the incremental progress in trade negotiations between the United States and China, as well as signs of green shoots in various economic data points and business sentiment around the region provided support. All Asian markets except Malaysia, gained, with Taiwan being one of the top performers, driven mainly by the technology sector as investments in communications equipment related to cloud platform and 5G have shown signs of picking up. Overall, growth sectors notably technology and consumer outperformed while defensive sectors such as communication services and utility underperformed.


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General Investment Climate (continued)

3. Pacific Asia Equity Markets (continued)

Asia Pacific markets have been caught in a tug-of-war between slowing global growth and looser central bank policy. Corporate earnings have been under pressure and a stubbornly strong US dollar has been a headwind. However, in the past few months, economic activity indicators have stopped falling. In China, the latest manufacturing reports have jumped into positive territory for the first time since April. Importantly, service sectors remain stable and the trend to upgrade consumption habits as incomes rise is intact. Our view remains that the economy now is better positioned than in 2015, when there were heightened concerns about a global slowdown and hard landing in China. We believe Asia Pacific markets will still ‘muddle through’ given expectations for earnings growth have fallen significantly, making a lower hurdle to beat, and valuations remain below average.

4. Global Bond Markets

2019 was a great year across different asset classes, as a number of downside risks that investors had feared would materialize were in fact avoided. In the end, 2019 didn’t see a recession in the US or Europe, despite previous fears of a slowdown and an inversion in the US 2s10s yield curve. A phase-one trade deal between the US and China was agreed, and a no-deal Brexit didn’t happen either. Indeed, for the first time since 2007, all 38 non-currency assets are up on an annual basis in local currency terms. This figure represents a stark contrast to 2018, when 31/38 actually had a negative performance. Central banks were also a driver of the strong performance in fixed income as 2019 will be remembered by a dovish shift in the Fed’s & ECB’s assessment of their respective monetary policies. The Fed started the move at the beginning of the year, when Powell stressed that low inflation would allow the Fed to be patient when making decisions on further policy tightening. Later in the year (June), both the Fed and ECB sent dovish messages, first the ECB opened the possibility of rate cuts and a new quantitative easing program while the Fed also opened the door to rate cuts in the second half of the year. Both signals were correct; the ECB cut rates (10bps) and announced the second round of QE in September while the Fed cut rates three times in 2019 (July, September & October). During the twelve months under review (11/2018 – 11/2019), rates, credit and the USD had strong returns. Starting with rates, 10yr rates in the US moved from 2.99% to 1.78%, in Europe from 0.31% to negative 0.36%, in the UK from 1.36% to 0.70% and in Japan from 0.09% to negative 0.07%. In credit, the USD Corporate Index OAS went from 129bps to 100bps while the Euro Corporate Index OAS went from 149bps to 103bps. Finally, DXY went from 97.3 to 98.3.


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General Investment Climate (continued)

5. Asia Bond Markets

During the period, macroeconomic data releases continued to point towards weaker growth globally, survey data pointed to a meaningful slowdown in US and Europe due to adverse impact from trade wars. To counter this slowdown, most of the central banks started global easing cycle. The Federal Reserve took a dramatically dovish turn and delivered its first rate cut of 25 basis points (bps) since December 2008 in July followed by interest rates cuts in September and October by 25 bps each time. European Central Bank (ECB) cut rates further into negative territory and restarting quantitative easing and committing to continue with asset purchases until it achieves its inflation target. In China, GDP growth eased to 6.0%, weakest growth since 1992. This had been driven primarily by the trade war between the U.S. and China. Targeted fiscal and monetary easing continued in China, aiming to stabilize domestic demand and reducing the negative impact from the trade war. PBOC cut broad-based reserve requirement ratio (RRR) in January, May and September. CSRC announced to scrap foreign ownership limits, the agency stated overseas institutions can apply for total control of onshore ventures starting 2020.

In the local currencies space, performance of Asia local currencies was mixed against USD during this period. The Markit iBoxx Asian Local Bond Indices returned 8.8%. In Asia USD credit market, the J.P. Morgan Asia Credit Index returned 12.5% over the period as the credit spread continues to tighten on lower yields and technicals remained supportive. We expect the case for Asian Bond Markets remains intact due to appealing growth premium, further supported by an attractive yield.


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Trustee’s Commentary

A. Trustee's Commentary on analysis of the investments held by the scheme and supporting

information of its commentary

Annualized return (in terms of %) 1 year 5 years 10 years Since Launch Growth Portfolio Launch date: 01/12/2000

7.10 3.83 4.69 5.00

Benchmark / Performance Target (Lipper MPF Lifestyle (>80-100% Equity) Fund Category median)

7.42 3.97 4.62 4.21

Deviation from the benchmark / performance target

-0.32 -0.14 0.07 0.79

Trustee's Commentary The fund underperformed the market median in 1 year and 5 years but it outperformed the market median in 10 years and since launch. The fund also outperformed Hong Kong Nominal Wage Index in the above periods as of 30th November 2019. According to the Investment Manager, after falling sharply in Q4 2018, equity markets rebounded strongly as central banks signalled that they would provide yet more stimulus to keep the expansion intact. Asset allocation decisions over the year detracted which was driven by the Investment Manager's underweight to equity markets from the concerns around worsening economic activity. Stock selection in the US and European equities were negative which overshadowed positive selection in Hong Kong and in Japan equities.

Annualized return (in terms of %)

1 year 5 years 10 years Since Launch Balanced Portfolio Launch date: 01/12/2000

7.41 2.39 2.89 4.08


6.91 2.61 3.22 3.87


0.50 -0.22 -0.33 0.21

Trustee's Commentary The fund outperformed the market median in 1 year and since launch but underperformed in 5 years and 10 years. The fund also outperformed Hong Kong Composite Consumer Price Index in 1 year, 5 years and since launch while underperformed in 10 years term. According to the Investment Manager, the overweight to Hong Kong Equities and underweight in Japanese Equities were top contributors over the year. Meanwhile, the fund’s positions in US Equities and European Equities detracted from performance. As for fixed income, the underweight to Global Fixed Income was the other major contributor to performance. Overall, both asset allocation and security selection contributed to the underperformance, yet security selection within the underlying managers contributed to performance.


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INVESTMENT REPORT (CONTINUED) FOR THE YEAR ENDED 30TH NOVEMBER 2019 Trustee’s Commentary (continued)

Annualized return (in terms of %) 1 year 5 years 10 years Since Launch Capital Stable Portfolio Launch date: 01/12/2000

6.77 1.76 1.94 3.51


6.66 1.96 1.94 3.46


0.11 -0.20 0.00 0.05

Trustee's Commentary The fund outperformed the market median in 1 year and since launch, and was in-line with the market median in 10 years but underperformed in 5 years. The fund also outperformed 1-month Hong Kong Dollar Deposit Rate in the above periods as of 30th November 2019. According to the Investment Manager, the overweight to HK Equities and underweight in Japanese Equities were the primary contributor over the year. Meanwhile, the fund’s underweight to European Equities detracted from performance as well as the overweight to US Equity despite to a lesser extent on a relative basis. As for fixed income, the underweight to Global Fixed Income and the positions in Asian Bond contributed to performance. Overall, both asset allocation and security selection contributed to the underperformance, yet security selection within the underlying managers contributed to performance.


1 year 5 years 10 years Since Launch Guaranteed Portfolio Launch date: 01/12/2000

0.15 0.22 0.83 1.58

Benchmark / Performance Target (MPFA Prescribed Savings)

0.13 0.03 0.02 0.61


0.02 0.19 0.81 0.97

Trustee's Commentary The fund outperformed the MPF Prescribed Savings Rates for Capital Preservation in 1 year, 5 years, 10 years and since launch.


1 year 5 years 10 years Since Launch MPF Conservative Fund Launch date: 01/12/2000

1.13 0.41 0.28 0.67

Benchmark / Performance Target (MPFA Prescribed Savings)

0.13 0.03 0.02 0.61


1.00 0.38 0.26 0.06

Trustee's Commentary The fund outperformed the MPF Prescribed Savings Rates for Capital Preservation in 1 year, 5 years, 10 years and since launch.


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Trustee’s Commentary (continued)


1 year 5 years 10 years Since Launch Hong Kong Equity Fund Launch date: 01/01/2002

2.38 0.70 1.45 6.83

Benchmark / Performance Target (Lipper MPF Hong Kong Equity Fund category median)

3.57 3.55 3.33 8.36


-1.19 -2.85 -1.88 -1.53

Trustee's Commentary The fund underperformed the market median in 1 year, 5 years, 10 years and since launch. According to the Investment Manager, the fund returned 2.38% over the year despite underperformed market median, attributed to the drag from the underlying APIF allocation. Nevertheless, the funds’ relative underperformance narrowed and its peer ranking improved since the fund's restructuring in September 2018. Stock selection in financials, consumer goods and industrials contributed to the performance but was offset by the stock selection in property and energy sectors.


1 year 5 years 10 years Since Launch European Equity Fund Launch date: 01/01/2002

10.01 2.20 4.43 4.67

Benchmark / Performance Target (Lipper MPF European Equity Fund category median)

10.66 3.17 4.48 2.86


-0.65 -0.97 -0.05 1.81

Trustee's Commentary The fund underperformed the market median in 1 year, 5 years, and 10 years while outperformed the market median in since launch. According to the Investment Manager, positive contributors to the fund over the year included stock selection in banks and materials while the detractors included stock selection in transportation and capital goods.


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Annualized return (in terms of %) 1 year 5 years 10 years Since Launch Japan Equity Fund Launch date: 01/01/2002

8.51 5.81 5.79 3.39

Benchmark / Performance Target (Lipper MPF Japanese Equity Fund category median)

6.64 4.64 5.23 3.47


1.87 1.17 0.56 -0.08

Trustee's Commentary The fund outperformed the market median in 1 year, 5 years, and 10 years but underperformed the market median in since launch. According to the Investment Manager, stock selection in consumer goods, financial and basic materials sectors were the key distributors over the year. On the negative side, the underweight and stock selection in technology sector detracted the most.


1 year 5 years 10 years Since Launch North American Equity Fund Launch date: 01/01/2002

8.75 6.97 10.84 5.24

Benchmark / Performance Target (Lipper MPF United States Equity Fund category median)

13.56 8.05 10.57 4.66


-4.81 -1.08 0.27 0.58

Trustee's Commentary The fund underperformed the market median in 1 year and 5 years but it outperformed the median in 10 years and since launch. According to the Investment Manager, over the year, the best performing sector was consumer discretionary sector while health care, financials, and communication services sectors were the major detractors that dragged the overall fund performance.


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Annualized return (in terms of %) 1 year 5 years 10 years Since Launch Asian Equity Fund Launch date: 01/12/2004

8.24 3.14 3.48 5.95

Benchmark / Performance Target (Lipper MPF Asia ex Japan ex HK Equity Fund category median)

8.24 4.02 4.23 4.38


0.00 -0.88 -0.75 1.57

Trustee's Commentary The fund's performance was in-line with market median in 1 year and outperformed the market median in since launch but underperformed the market median in 5 years and 10 years. According to the Investment Manager, the fund's stock selection in India added the most value over the year. However, it was more than offset by the drag from stock selection in Korea, Australia and New Zealand. At the sector level, stock selection in healthcare, materials and financials sectors added the most value, however, was offset by the drag in stock selection in IT and consumer sectors.


1 year 5 years 10 years Since Launch Greater China Equity Fund Launch date: 01/12/2004

12.27 2.48 2.50 5.63

Benchmark / Performance Target (Lipper MPF Greater China Equity Fund category median)

8.64 4.59 3.33 5.63


3.63 -2.11 -0.83 0.00

Trustee's Commentary The fund outperformed the market median in 1 year, and was in-line with market median in since launch but underperformed in 5 years and 10 years. According to the Investment Manager, the fund returned 12.27% over the year which strongly outperformed market median, due to strong stock selection across sectors including healthcare, financials and consumer sectors. Overweight in information technology sector also added value. Since the fund’s restructuring in September 2018, the fund’s relative underperformance in longer term narrowed and its peer ranking improved.


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Annualized return (in terms of %) 1 year 5 years 10 years Since Launch Allianz Capital Stable Fund Launch date: 01/09/2005

N/A N/A N/A N/A

Benchmark / Performance Target N/A N/A N/A N/A Deviation from the benchmark / performance target

N/A N/A N/A N/A

Trustee's Commentary The fund had no investments and operations since 15th November 2018. Mandatory Provident Fund Schemes Authority had approved the termination of the fund to take effect on 13th March 2019.


1 year 5 years 10 years Since Launch Allianz Growth Fund Launch date: 01/09/2005

N/A N/A N/A N/A


N/A N/A N/A N/A



1 year 5 years 10 years Since Launch Allianz Stable Growth Fund Launch date: 01/09/2005

N/A N/A N/A N/A


N/A N/A N/A N/A



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Annualized return (in terms of %) 1 year 5 years 10 years Since Launch Green Fund Launch date: 31/03/2006

13.06 5.71 7.94 4.46

Benchmark / Performance Target (Lipper MPF Global Equity Fund category median)

9.88 5.16 6.54 3.88


3.18 0.55 1.40 0.58

Trustee's Commentary The fund outperformed the market median in 1 year, 5 years, 10 years and since launch. According to the Investment Manager, the fund was up 13.06% over the year, which was primarily driven by stock picking based on environmental criteria and quantitative analysis on corporate performance, as the fund is sector and country neutral. Comparing to MSCI World Index, the fund underperformed the index which returned 14.53% over the year. Positive backdrop over the year was contributed from selection of stocks in the US and UK and in Real Estate and Communication Services sectors, while partially offset by stocks in Australia and Canada, and in Industrials and Energy sectors.


1 year 5 years 10 years Since Launch Global Bond Fund Launch date: 01/12/2007

8.14 0.90 0.77 1.82

Benchmark / Performance Target (Lipper MPF Global Bond Fund category median)

6.68 0.72 0.95 1.73


1.46 0.18 -0.18 0.09

Trustee's Commentary The fund outperformed the market median in 1 year, 5 years and since launch but underperformed the market median in 10 years. According to the Investment Manager, the fund’s outperformance over the year was driven by asset allocation and security selection, slightly offset by FX positioning. The fund had a strong performance from asset allocation as the overweight to credit relative to sovereigns proved positive during the year. Credit markets in both the US and Europe had a positive year posting strong excess returns. The fund benefitted from the overweight in banking, communication, industrial and consumer sectors. In terms of security selection, the fund had a positive performance from the holdings in the banking, utility, consumer and communication sectors as well. On the negative side, the fund had a negative performance from its FX positioning as the overweight to the EUR and GBP relative to the USD proved negative.


30



Annualized return (in terms of %) 1 year 5 years 10 years Since Launch World Fund Launch date: 01/12/2007

9.77 5.37 6.71 3.36

Benchmark / Performance Target (50% S&P 500 Index + 30% MSCI EAFE Index + 20% S&P Latin America 40 Index)

11.04 6.30 7.29 3.88


-1.27 -0.93 -0.58 -0.52

Trustee's Commentary The fund's performance has underperformed 1 year, 5 years, 10 years and since launch returns when compared with its benchmark. The underperformance is mainly due to asset allocation, fee differences, cashflow, and tracking difference between the underlying ITCISs and their underlying benchmarks. According to the Investment Manager, over the year, exposures from US Equity and EAFE Equity have benefited from more clarity over fading US-China trade frictions, whereas LATAM Equity remained under pressure due to the risk-off sentiment in mid-2019, with investors rotated to safer spots of the markets.


1 year 5 years 10 years Since Launch Manager's Choice Fund Launch date: 01/08/2008

7.69 3.41 5.00 5.43


6.91 2.61 3.22 2.92


0.78 0.80 1.78 2.51

Trustee's Commentary The fund outperformed the market median in 1 year, 5 years, 10 years and since launch. According to the Investment Manager, over the year, the overweight to Japanese Equities and Far East Equities ex Japan ex HK were the major contributors, while the overweight to HK Equities and European Equities detracted from performance. As for fixed income, the underweight to Global Fixed Income and positions in Asian Bonds remained as major contributors. Overall, the excess return from asset allocation decision contributed the most to performance while manager selection at neutral (minor detraction). The Fund is a total-return focused strategy as it seeks to achieve real return outcomes with moderate volatility over market cycles which the Investment Manager measure over rolling 5 years cycles.


31



Annualized return (in terms of %) 1 year 5 years 10 years Since Launch Fidelity Capital Stable Fund Launch date: 01/12/2010

6.97 2.00 N/A 2.35


6.66 1.96 N/A 2.03


0.31 0.04 N/A 0.32

Trustee's Commentary The fund outperformed the market median in the 1 year, 5 years and since launch. According to the Investment Manager, over the year, the manager increased the allocation to equities and bonds and reduced the exposure to cash. The fund generated positive returns over the year, led by the strong performance of bonds. During the year, Central banks deploy whatever tools they can to stimulate growth and avoid a full-blown recession. While rates are expected to remain low in the US and to perhaps become even more negative in Europe. Fixed income markets posted positive returns over the year, with corporate bonds outperforming government bonds as credit spreads tightened. Within equities, the fund retained significant exposure to Hong Kong. The allocation to European, Japanese and Asia Pacific ex Japan ex Hong Kong equities edged higher. Additionally, the allocation to equities contributed significantly to returns. Global financial markets performed positively, as the accommodative monetary policy stance adopted by most major global central banks supported investor sentiment. However, headwinds surrounding the global economy kept markets volatile. Given this backdrop, the fund’s allocation to US and European equities added value. The exposure to Japan, Hong Kong and other Asia Pacific equity markets also supported performance.


32



Annualized return (in terms of %) 1 year 5 years 10 years Since Launch Fidelity Stable Growth Fund Launch date: 01/12/2010

8.01 3.37 N/A 3.68


6.91 2.61 N/A 3.09


1.10 0.76 N/A 0.59

Trustee's Commentary The fund outperformed the market median in the 1 year, 5 years and since launch. According to the Investment Manager, over the year, the manager increased the allocation to equities and bonds and reduced the exposure to cash. Within equities, the fund retained significant exposure to Hong Kong. The allocation to European, Japanese and Asia Pacific ex Japan ex Hong Kong equities edged higher. The fund generated positive returns over the year, led by the strong performance of the equity segment. Global financial markets performed positively, as the accommodative monetary policy stance adopted by most major global central banks supported investor sentiment. However, headwinds surrounding the global economy kept markets volatile. Given this backdrop, the fund’s allocation to US and European equities added value. The exposure to Japan, Hong Kong and other Asia Pacific equity markets also supported performance. Additionally, the position in bonds contributed significantly to returns.


33



Annualized return (in terms of %) 1 year 5 years 10 years Since Launch Fidelity Growth Fund Launch date: 01/12/2010

9.18 4.31 N/A 4.47


7.42 3.97 N/A 4.39


1.76 0.34 N/A 0.08

Trustee's Commentary The fund outperformed the market median in 1 year, 5 years and since launch. According to the Investment Manager, over the year, the manager increased the allocation to equities and bonds and reduced the exposure to cash. Within equities, the fund retained significant exposure to Hong Kong. The allocation to European, Japanese and Asia Pacific ex Japan ex Hong Kong equities edged higher. The fund generated positive returns over the year, led by the strong performance of the equity segment. Global financial markets performed positively, as the accommodative monetary policy stance adopted by most major global central banks supported investor sentiment. However, headwinds surrounding the global economy kept markets volatile. Given this backdrop, the fund’s allocation to US and European equities added significant value. The exposure to Japan, Hong Kong and other Asia Pacific equity markets also supported performance. Additionally, the position in bonds contributed to returns.


1 year 5 years 10 years Since Launch Asian Bond Fund Launch date: 23/09/2011

6.40 1.62 N/A 1.55

Benchmark / Performance Target (Lipper MPF Asian Bond category median)

6.04 1.35 N/A 1.55


0.36 0.27 N/A 0.00

Trustee's Commentary The fund outperformed market median in 1 year and 5 years, and was in-line with since launch performance. According to the Investment Manager, the underweight allocation and security selection in Hong Kong Dollar was the contributor to the performance over the year, partially offset by overweight exposure in RMB which detracted from performance. Meanwhile, the overweight allocation in USD also contributed to performance.


34



Annualized return (in terms of %) 1 year 5 years 10 years Since Launch Eurasia Fund Launch date: 23/09/2011

8.39 3.13 N/A 6.55

Benchmark / Performance Target (80% MSCI EAFE Index + 20% Hang Seng Index)

10.56 4.78 N/A 7.95


-2.17 -1.65 N/A -1.40

Trustee's Commentary The fund's performance has underperformed in 1 year, 5 years and since launch returns when compared with its benchmark. The underperformance is mainly due to asset allocation, fee differences, cashflow, and tracking difference between the underlying ITCISs and their underlying benchmarks. According to the Investment Manager, over the year, European Equity and Japanese Equity both benefited from fading US-China trade uncertainties, whereas HK Equity remained under pressure due to the social unrest that started in mid-2019.


1 year 5 years 10 years Since Launch Hong Kong and China Fund Launch date: 23/09/2011

1.30 3.75 N/A 6.22

Benchmark / Performance Target (Lipper MPF Hong Kong Equity (Index Tracking) Fund category median)

1.88 4.36 N/A 7.21


-0.58 -0.61 N/A -0.99

Trustee's Commentary The fund underperformed the market median in 1 year, 5 years and since launch. The fund is investing in a combination of equity market index tracking funds that track Hong Kong equity market indices, of which a smaller portion was investing in an index tracking fund that tracked the performance of H-Shares. According to Investment Manager, Hong Kong equity was under pressure due to the social unrest which started in mid-2019, while H-Shares had better performance on the back of fading US-China trade uncertainties towards the end of 2019.


35



Annualized return (in terms of %) 1 year 5 years 10 years Since Launch American Fund Launch date: 23/09/2011

10.85 7.22 N/A 10.01

Benchmark / Performance Target (80% S&P 500 Index + 20% S&P Latin American 40 Index)

11.44 7.64 N/A 11.07


-0.59 -0.42 N/A -1.06

Trustee's Commentary The fund's performance has underperformed 1 year, 5 years, and since launch returns when compared with its benchmark. The underperformance is mainly due to asset allocation, fee differences, cashflow, and tracking difference between the underlying ITCISs and their underlying benchmarks. According to the Investment Manager, over the year, US Equity has benefited from the Federal Reserve’s rate cuts and fading US-China Trade uncertainties. LATAM Equity was under pressure due to the risk-off sentiment in mid-2019, where investors rotated to safer spots of the markets.


1 year 5 years 10 years Since Launch Age 65 Plus Fund Launch date: 01/04/2017

9.28 N/A N/A 4.18

Benchmark / Performance Target (Willis Towers Watson - MPF DIS Reference Portfolio - Age 65 Plus Fund)

9.32 N/A N/A 4.30


-0.04 N/A N/A -0.12

Trustee's Commentary The fund slightly underperformed the Reference Portfolio in 1 year and since launch returns. The difference of cashflow pattern between the Constituent Fund and the underlying fund as well as the tracking difference between the underlying fund and its underlying benchmark were the main reasons of the since launch underperformance. According to the Investment Manager, over the year, security selection detracted from the fund performance while asset allocation contributed. In security selection, fixed income selection is the main detractor. In asset allocation, equity allocation is the main contributor, offsetting the detraction from cash allocation. Over the period, both global equities and global fixed income had delivered strong performance, driven by supportive monetary policy by global central banks with the Federal Reserve reversing its course to loosening monetary policy. In addition, global economic growth remains steady which is also supportive to investment sentiment while trade conflict between the United States and China increased volatility to the market


36




1 year 5 years 10 years Since Launch Core Accumulation Fund Launch date: 01/04/2017

10.86 N/A N/A 6.52

Benchmark / Performance Target (Willis Towers Watson - MPF DIS Reference Portfolio - Core Accumulation Fund)

11.00 N/A N/A 6.81


-0.14 N/A N/A -0.29

Trustee's Commentary The fund slightly underperformed the Reference Portfolio in 1 year and since launch returns. The difference of cashflow pattern between the Constituent Fund and the underlying fund as well as the tracking difference between the underlying fund and its underlying benchmark were the main reasons of the since launch underperformance. According to the Investment Manager, both security selection and asset allocation detracted from the fund performance over the year. In security selection, equity selection was the main detractor while cash allocation was the main detractor in asset allocation. Over the period, both global equities and global fixed income had delivered strong performance, driven by supportive monetary policy by global central banks with the Federal Reserve reversing its course to loosening monetary policy. In addition, global economic growth remains steady which is also supportive to investment sentiment while trade conflict between the United States and China increased volatility to the market.


37




1 year 5 years 10 years Since Launch China HK Dynamic Asset Allocation Fund Launch date: 04/07/2017

-0.24 N/A N/A 2.84

Benchmark / Performance Target (50% FTSE MPF HK + 25% Markit iBoxx ALBI HK + 25% HK 3m HIBOR)

4.33 N/A N/A 3.84


-4.57 N/A N/A -1.00

Trustee's Commentary The fund's performance has underperformed in 1 year and since launch returns when compared with its benchmark. According to the Investment Manager of the underlying APIF, facing worries about potential recession, overall market risk appetite was sluggish during the first half in 2019. As the fundamentals had not turned positive, the Fund did not position for a momentum-driven rally as seen in January 2019, resulting in a slight detraction in overall equities allocation. Within equities, the overweight holdings in some of the value sectors detracted. However, value stocks are priced at historical deep discount versus growth stocks, making its risk-reward profile attractive when the economy recovers. Bond allocation underperformed the benchmark as 3-month HIBOR rallied on the tight liquidity situation in Hong Kong versus the longer duration of the Fund’s bond holdings. U.S. Federal Reserve cut interest rates three times in 2019. Uncertain global geopolitical landscape, low-rate environment and liquidity injection altogether supported gold price, which made gold exposure the biggest contributor to the Fund performance.


38



B. Supporting Information in relation to trustee’s assessment framework for deriving its commentary and trustee’s action, if any, to address its concerns raised in its commentary in Section A

The Board of Directors of the Trustee (“the Board”) meets on a regular basis to review the result of fund performance monitoring of the AIA MPF - Prime Value Choice (“the Scheme”) conducted by the Fund Review Committee, a governance committee established by the Board, which comprises of relevant functional heads. The performance of constituent funds under the Scheme are assessed regularly against relevant market medians and benchmarks. During the year ended 30th November 2019, 14 constituent funds in the Scheme aligned with or outperformed the market medians / benchmarks. Proper actions had been taken on the constituent funds with underperformance issues. This includes short term actions such as requesting investment manager to provide more regular updates on the funds’ strategies and attributions and longer term ones such as requesting a full review of the investment process and an action plan for improving the fund performance.

To act for the interests of the Scheme’s participants, initiatives have been taken to regularly review the Scheme in order to deliver value and simplified choice of funds to the Scheme participants. With effect from 1st December 2019, investment management fee of 10 constituent funds across the asset type of both Equity and Fixed Income had been reduced by 20 basis points. The 10 constituent funds are namely the Manager’s Choice Fund, Asian Equity Fund, European Equity Fund, Greater China Fund, Hong Kong Equity Fund, North American Equity Fund, Green Fund, Growth Portfolio, Balanced Portfolio, and Capital Stable Portfolio. The Trustee is also in the process of evaluating other initiatives, which aim to simplify the choice of the constituent funds available under the Scheme and enhance its overall competitiveness in terms of fund performance in the long run. The Scheme recorded a positive return during the year and the Investment Report set forth on pages 39 to 72 serves to summarise the following: a) Investment Valuations; b) Investment Performance; c) Investment Portfolio; and d) Statement of Movement in Portfolio Holdings.


39


a) Investment Valuations Contribution monies received during the year were invested into the following constituent funds based on the investment options chosen by the Scheme members. Their net asset value positions at year end are summarised as follows:

Growth Portfolio

HK$

Balanced Portfolio

HK$

Capital Stable Portfolio

HK$

Guaranteed Portfolio

HK$

MPF Conservative Fund

HK$ As at 30th November 2019 Investments 10,846,011,690 5,663,253,296 3,433,273,396 9,267,276,380 5,786,902,689 (% of net asset value) 95.35% 97.60% 92.58% 100.02% 100.22% Other assets/(liabilities) 528,612,678 139,271,636 275,006,942 (1,804,690) (12,474,731) (% of net asset value) 4.65% 2.40% 7.42% (0.02%) (0.22%) Closing net asset value 11,374,624,368 5,802,524,932 3,708,280,338 9,265,471,690 5,774,427,958 Net asset value per unit 252.50 213.90 192.53 N/A 113.61 As at 30th November 2018 Investments 10,530,985,402 5,102,134,197 3,109,760,235 9,168,614,948 5,358,106,261 (% of net asset value) 96.71% 94.10% 89.41% 100.03% 99.78% Other assets/(liabilities) 358,790,124 319,711,018 368,453,227 (2,682,313) 11,722,043 (% of net asset value) 3.29% 5.90% 10.59% (0.03%) 0.22% Closing net asset value 10,889,775,526 5,421,845,215 3,478,213,462 9,165,932,635 5,369,828,304 Net asset value per unit 235.77 199.16 180.33 N/A 112.34


40


a) Investment Valuations (continued)

Hong Kong

Equity Fund HK$

European Equity Fund

HK$

Japan Equity Fund

HK$

North American Equity Fund

HK$

Asian Equity Fund

HK$ As at 30th November 2019 Investments 6,151,020,829 1,580,454,771 747,598,201 3,072,396,977 4,262,472,975 (% of net asset value) 100.13% 100.17% 100.08% 100.09% 100.18% Other assets/(liabilities) (7,942,321) (2,730,626) (583,883) (2,814,773) (7,770,068) (% of net asset value) (0.13%) (0.17%) (0.08%) (0.09%) (0.18%) Closing net asset value 6,143,078,508 1,577,724,145 747,014,318 3,069,582,204 4,254,702,907 Net asset value per unit 326.37 226.43 181.76 249.55 238.09 As at 30th November 2018 Investments 5,994,590,747 1,449,718,959 662,964,708 2,499,986,790 3,954,418,559 (% of net asset value) 100.25% 100.20% 100.37% 100.14% 100.18% Other assets/(liabilities) (15,157,282) (2,827,982) (2,472,191) (3,613,287) (7,009,397) (% of net asset value) (0.25%) (0.20%) (0.37%) (0.14%) (0.18%) Closing net asset value 5,979,433,465 1,446,890,977 660,492,517 2,496,373,503 3,947,409,162 Net asset value per unit 318.78 205.84 167.51 229.49 219.97


41



Greater China Equity Fund

HK$

Allianz Capital Stable Fund

Note i HK$

Allianz Growth Fund

Note i HK$

Allianz Stable Growth fund

Note i HK$

Green Fund HK$

As at 30th November 2019 Investments 7,524,995,577 - - - 2,190,069,269 (% of net asset value) 100.25% N/A N/A N/A 100.12% Other assets/(liabilities) (18,641,437) - - - (2,709,402) (% of net asset value) (0.25%) N/A N/A N/A (0.12%) Closing net asset value 7,506,354,140 - - - 2,187,359,867 Net asset value per unit 227.46 N/A N/A N/A 181.59 As at 30th November 2018 Investments 6,813,678,268 - - - 1,852,870,067 (% of net asset value) 100.21% N/A N/A N/A 100.12% Other assets/(liabilities) (14,065,603) - - - (2,241,028) (% of net asset value) (0.21%) N/A N/A N/A (0.12%) Closing net asset value 6,799,612,665 - - - 1,850,629,039 Net asset value per unit 202.61 N/A N/A N/A 160.62

Note i: Allianz Capital Stable Fund, Allianz Growth Fund and Allianz Stable Growth Fund (“the 3 Allianz Funds”) had no investments and operations since 15th November

2018. MPFA had approved the termination of the 3 Allianz Funds to take effect on 13th March 2019.


42



Global

Bond Fund HK$

World Fund HK$

Manager’s Choice Fund

HK$

Fidelity Capital Stable Fund

HK$

Fidelity Stable Growth Fund

HK$ As at 30th November 2019 Investments 2,030,017,391 1,587,562,863 4,434,508,643 1,112,716,572 2,400,549,006 (% of net asset value) 100.11% 100.02% 94.63% 100.00% 100.15% Other assets/(liabilities) (2,315,421) (299,410) 251,440,056 55,028 (3,494,287) (% of net asset value) (0.11%) (0.02%) 5.37% 0.00% (0.15%) Closing net asset value 2,027,701,970 1,587,263,453 4,685,948,699 1,112,771,600 2,397,054,719 Net asset value per unit 124.20 148.65 182.14 123.21 138.44 As at 30th November 2018 Investments 1,517,266,766 1,334,015,963 4,183,082,705 966,407,721 2,078,453,875 (% of net asset value) 100.09% 100.04% 97.19% 100.26% 100.14% Other assets/(liabilities) (1,389,936) (563,173) 120,864,239 (2,515,878) (2,807,766) (% of net asset value) (0.09%) (0.04%) 2.81% (0.26%) (0.14%) Closing net asset value 1,515,876,830 1,333,452,790 4,303,946,944 963,891,843 2,075,646,109 Net asset value per unit 114.85 135.42 169.15 115.18 128.18


43



Fidelity Growth Fund HK$

Asian Bond Fund

HK$

Eurasia Fund HK$

Hong Kong and China Fund

HK$

American Fund HK$

As at 30th November 2019 Investments 2,416,816,585 1,236,115,866 399,268,714 2,288,751,737 1,295,567,782 (% of net asset value) 100.12% 100.02% 99.38% 97.28% 99.99% Other assets/(liabilities) (2,987,719) (281,867) 2,500,731 63,943,632 142,695 (% of net asset value) (0.12%) (0.02%) 0.62% 2.72% 0.01% Closing net asset value 2,413,828,866 1,235,833,999 401,769,445 2,352,695,369 1,295,710,477 Net asset value per unit 148.23 113.41 168.05 163.67 218.38 As at 30th November 2018 Investments 2,129,698,307 961,947,625 337,455,029 2,138,147,608 889,021,497 (% of net asset value) 100.13% 99.98% 99.53% 97.99% 99.94% Other assets/(liabilities) (2,864,864) 157,607 1,609,902 43,905,931 510,031 (% of net asset value) (0.13%) 0.02% 0.47% 2.01% 0.06% Closing net asset value 2,126,833,443 962,105,232 339,064,931 2,182,053,539 889,531,528 Net asset value per unit 135.77 106.59 155.16 161.82 196.94


44



Age 65 Plus Fund

HK$ Core Accumulation Fund

HK$

China HK Dynamic Asset Allocation Fund

HK$ As at 30th November 2019 Investments 768,382,074 2,543,483,730 663,633,319 (% of net asset value) 100.27% 99.98% 100.11% Other assets/(liabilities) (2,043,192) 490,072 (702,031) (% of net asset value) (0.27%) 0.02% (0.11%) Closing net asset value 766,338,882 2,543,973,802 662,931,288 Net asset value per unit 1.1155 1.1835 106.98

As at 30th November 2018 Investments 441,799,804 1,638,954,245 543,234,678 (% of net asset value) 100.09% 99.92% 99.81% Other assets/(liabilities) (397,725) 1,393,157 1,057,027 (% of net asset value) (0.09%) 0.08% 0.19% Closing net asset value 441,402,079 1,640,347,402 544,291,705 Net asset value per unit 1.0208 1.0676 107.24

Note 1: Please refer to pages 63 to 67 for details of the investment portfolio held by each constituent fund. Note 2: All constituent funds were launched on 1st December 2000 except for the following:

- Hong Kong Equity Fund, European Equity Fund, Japan Equity Fund and North American Equity Fund were launched on 1st January 2002 (soft launched date, whereas hard launched date was 19th March 2002),

- Asian Equity Fund and Greater China Equity Fund were launched on 1st December 2004, - Allianz Capital Stable Fund, Allianz Growth Fund and Allianz Stable Growth Fund were launched on 1st September 2005, - Green Fund was launched on 31st March 2006, - Global Bond Fund and World Fund were launched on 1st December 2007, - Manager’s Choice Fund was launched on 1st August 2008, - Fidelity Capital Stable Fund, Fidelity Stable Growth Fund and Fidelity Growth Fund were launched on 1st December 2010, - Asian Bond Fund, Eurasia Fund, Hong Kong and China Fund and American Fund were launched on 23rd September 2011, - Age 65 Plus Fund and Core Accumulation Fund were launched on 1st April 2017, and - China HK Dynamic Asset Allocation Fund was launched on 4th July 2017.


45


b) Investment Performance

Growth Portfolio

HK$

Balanced Portfolio

HK$


HK$


HK$


HK$ 30th November 2019 Interest on bank deposits 1,811,264 1,730,562 2,073,564 - - Declared investment return - - - 13,763,844 - Dividend income - - - - - Total comprehensive income/(loss) excluding

capital appreciation/(depreciation) (204,190,384) (102,689,183) (64,904,047) 13,801,910 (53,987,010)

Capital appreciation/(depreciation) 970,163,482 504,348,350 300,765,861 - 116,877,732 Total comprehensive income/(loss) for the year 765,973,098 401,659,167 235,861,814 13,801,910 62,890,722 Total net asset value 11,374,624,368 5,802,524,932 3,708,280,338 9,265,471,690 5,774,427,958 Total value of investments 10,846,011,690 5,663,253,296 3,433,273,396 9,267,276,380 5,786,902,689 Net asset value per unit 252.50 213.90 192.53 N/A 113.61 Highest issue price 255.43 215.64 193.82 N/A 113.61 Lowest redemption price 221.19 193.09 177.81 N/A 112.34 Net annualised investment return 7.10% 7.40% 6.77% 0.15% 1.13% 30th November 2018 Interest on bank deposits 633,939 1,175,697 1,245,390 - - Declared investment return - - - 13,085,783 - Dividend income - - - - - Total comprehensive income/(loss) excluding

capital appreciation/(depreciation) (219,479,835) (104,439,429) (65,264,114) 13,085,789 (46,740,066)

Capital appreciation/(depreciation) (670,698,992) (260,429,103) (115,657,489) - 76,638,413 Total comprehensive income/(loss) for the year (890,178,827) (364,868,532) (180,921,603) 13,085,789 29,898,347 Total net asset value 10,889,775,526 5,421,845,215 3,478,213,462 9,165,932,635 5,369,828,304 Total value of investments 10,530,985,402 5,102,134,197 3,109,760,235 9,168,614,948 5,358,106,261 Net asset value per unit 235.77 199.16 180.33 N/A 112.34 Highest issue price 281.21 225.25 196.92 N/A 112.34 Lowest redemption price 227.82 195.62 178.52 N/A 111.69 Net annualised investment return (7.62%) (6.30%) (4.92%) 0.15% 0.58%


46


b) Investment Performance (continued)

Growth Portfolio

HK$

Balanced Portfolio

HK$


HK$


HK$


HK$ 30th November 2017 Interest on bank deposits 186,831 628,384 518,784 - - Declared investment return - - - 12,140,719 - Dividend income - - - - -

Total comprehensive income/(loss) excluding capital appreciation/(depreciation)

(207,152,289) (99,949,987) (63,758,788) 12,140,757 (34,272,304)

Capital appreciation/(depreciation) 2,812,664,885 854,113,182 386,328,983 - 38,572,665 Total comprehensive income/(loss) for the year 2,605,512,596 754,163,195 322,570,195 12,140,757 4,300,361 Total net asset value 12,318,303,585 5,816,682,714 3,631,059,301 8,204,463,212 4,251,325,414 Total value of investments 12,327,767,383 5,506,146,912 3,296,920,687 8,205,078,039 4,252,337,870 Net asset value per unit 255.23 212.56 189.66 N/A 111.69 Highest issue price 257.54 213.68 190.28 N/A 111.69 Lowest redemption price 199.56 183.54 171.57 N/A 111.57 Net annualised investment return 26.25% 14.92% 9.76% 0.15% 0.11%


47



Hong Kong Equity Fund

HK$


HK$

Japan Equity Fund

HK$


HK$

Asian Equity Fund

HK$ 30th November 2019 Interest on bank deposits - - - - - Declared investment return - - - - - Dividend income - - - - - Total comprehensive income/(loss) excluding

capital appreciation/(depreciation) (116,293,013) (28,083,395) (12,350,647) (49,016,251) (75,682,941)

Capital appreciation/(depreciation) 259,372,106 172,303,297 70,232,130 286,051,445 401,087,041 Total comprehensive income/(loss) for the year 143,079,093 144,219,902 57,881,483 237,035,194 325,404,100 Total net asset value 6,143,078,508 1,577,724,145 747,014,318 3,069,582,204 4,254,702,907 Total value of investments 6,151,020,829 1,580,454,771 747,598,201 3,072,396,977 4,262,472,975 Net asset value per unit 326.37 226.43 181.76 249.55 238.09 Highest issue price 364.26 229.94 183.21 250.55 243.13 Lowest redemption price 299.71 192.78 152.96 195.50 210.46 Net annualised investment return 2.38% 10.00% 8.51% 8.74% 8.24% 30th November 2018 Interest on bank deposits - - - - - Declared investment return - - - - - Dividend income - - - - - Total comprehensive income/(loss) excluding


Capital appreciation/(depreciation) (402,310,391) (175,836,726) (67,087,857) 80,224,714 (261,050,476) Total comprehensive income/(loss) for the year (522,641,649) (206,502,847) (80,625,247) 35,891,964 (341,582,876) Total net asset value 5,979,433,465 1,446,890,977 660,492,517 2,496,373,503 3,947,409,162 Total value of investments 5,994,590,747 1,449,718,959 662,964,708 2,499,986,790 3,954,418,559 Net asset value per unit 318.78 205.84 167.51 229.49 219.97 Highest issue price 395.22 257.95 205.51 247.65 261.37 Lowest redemption price 296.32 205.04 160.67 218.60 209.99 Net annualised investment return (8.32%) (12.47%) (10.95%) 2.03% (7.99%)


48




HK$


HK$

Japan Equity Fund

HK$


HK$

Asian Equity Fund

HK$ 30th November 2017 Interest on bank deposits - - - - - Declared investment return - - - - - Dividend income - - - - - Total comprehensive income/(loss) excluding


Capital appreciation/(depreciation) 1,568,748,170 429,877,794 177,020,307 432,944,683 1,005,168,884 Total comprehensive income/(loss) for the year 1,455,532,293 400,736,103 165,063,719 395,663,434 929,091,971 Total net asset value 6,731,427,187 1,725,358,764 747,364,912 2,290,425,897 4,437,700,145 Total value of investments 6,736,249,763 1,727,869,690 750,128,734 2,295,704,110 4,450,838,370 Net asset value per unit 347.72 235.16 188.10 224.93 239.07 Highest issue price 358.44 238.11 190.31 224.93 245.65 Lowest redemption price 258.52 180.26 143.30 184.02 187.76 Net annualised investment return 26.55% 30.28% 28.55% 21.79% 26.44%


49




HK$


(Note i) HK$

Allianz Growth Fund

(Note i) HK$


(Note i) HK$

Green Fund HK$

30th November 2019 Interest on bank deposits - - - - - Declared investment return - - - - - Dividend income - - - - - Total comprehensive income/(loss) excluding

capital appreciation/(depreciation) (133,919,393) - - - (29,515,012)

Capital appreciation/(depreciation) 963,407,016 - - - 278,036,582 Total comprehensive income/(loss) for the year 829,487,623 - - - 248,521,570 Total net asset value 7,506,354,140 - - - 2,187,359,867 Total value of investments 7,524,995,577 - - - 2,190,069,269 Net asset value per unit 227.46 N/A N/A N/A 181.59 Highest issue price 236.75 N/A N/A N/A 182.43 Lowest redemption price 189.04 N/A N/A N/A 141.13 Net annualised investment return 12.26% N/A N/A N/A 13.06% 30th November 2018 Interest on bank deposits - - - - - Declared investment return - - - - - Dividend income - - - - - Total comprehensive income/(loss) excluding


Capital appreciation/(depreciation) (633,517,482) (19,503,418) (92,586,478) (47,492,193) (29,725,849) Total comprehensive income/(loss) for the year (775,035,296) (26,997,520) (110,956,042) (61,349,274) (57,960,759) Total net asset value 6,799,612,665 - - - 1,850,629,039 Total value of investments 6,813,678,268 - - - 1,852,870,067 Net asset value per unit 202.61 N/A N/A N/A 160.62 Highest issue price 253.61 148.36 214.90 174.76 179.63 Lowest redemption price 189.86 132.94 169.96 150.16 155.21 Net annualised investment return (10.26%) N/A N/A N/A (2.91%)

Note i: Allianz Capital Stable Fund, Allianz Growth Fund and Allianz Stable Growth Fund (“the 3 Allianz Funds”) had no investments and operations since 15th November 2018. MPFA had approved the termination of the 3 Allianz Funds to take effect on 13th March 2019.


50




HK$


HK$

Allianz Growth Fund HK$


HK$

Green Fund HK$

30th November 2017 Interest on bank deposits - - - - - Declared investment return - - - - - Dividend income - - - - - Total comprehensive income/(loss) excluding


Capital appreciation/(depreciation) 1,921,414,990 44,940,560 249,005,739 118,983,910 352,485,155 Total comprehensive income/(loss) for the year 1,787,343,914 37,956,624 230,500,491 105,582,402 329,140,272 Total net asset value 8,008,277,456 407,570,094 1,098,909,279 793,405,649 1,827,608,875 Total value of investments 8,026,981,823 408,303,580 1,099,968,179 794,286,225 1,827,780,805 Net asset value per unit 225.78 142.54 195.81 164.81 165.44 Highest issue price 233.48 143.44 198.25 166.20 165.44 Lowest redemption price 167.00 127.46 154.29 141.07 133.60 Net annualised investment return 27.95% 10.74% 26.12% 15.81% 23.56%


51



Global Bond Fund

HK$

World Fund HK$


HK$


HK$


HK$ 30th November 2019 Interest on bank deposits - 6,281 741,718 - - Declared investment return - - - - - Dividend income - 25,440,878 - - - Total comprehensive income/(loss) excluding

capital appreciation/(depreciation) (16,030,193) 14,076,944 (69,001,837) (18,047,885) (39,089,740)

Capital appreciation/(depreciation) 143,805,346 122,952,259 402,076,929 87,450,105 211,499,049 Total comprehensive income/(loss) for the year 127,775,153 137,029,203 333,075,092 69,402,220 172,409,309 Total net asset value 2,027,701,970 1,587,263,453 4,685,948,699 1,112,771,600 2,397,054,719 Total value of investments 2,030,017,391 1,587,562,863 4,434,508,643 1,112,716,572 2,400,549,006 Net asset value per unit 124.20 148.65 182.14 123.21 138.44 Highest issue price 126.86 149.33 184.13 123.88 139.26 Lowest redemption price 114.85 119.82 161.22 113.64 124.42 Net annualised investment return 8.14% 9.77% 7.68% 6.97% 8.00% 30th November 2018 Interest on bank deposits - 1,311 254,251 - - Declared investment return - - - - - Dividend income - 21,126,694 - - - Total comprehensive income/(loss) excluding


Capital appreciation/(depreciation) (62,841,773) (27,462,940) (239,987,684) (13,434,490) (43,566,560) Total comprehensive income/(loss) for the year (76,036,122) (16,622,359) (310,213,252) (22,942,995) (64,322,687) Total net asset value 1,515,876,830 1,333,452,790 4,303,946,944 963,891,843 2,075,646,109 Total value of investments 1,517,266,766 1,334,015,963 4,183,082,705 966,407,721 2,078,453,875 Net asset value per unit 114.85 135.42 169.15 115.18 128.18 Highest issue price 122.82 151.63 198.00 124.81 142.79 Lowest redemption price 114.53 131.15 164.64 114.00 125.81 Net annualised investment return (4.82%) (1.04%) (6.72%) (3.93%) (4.76%)


52



Global Bond Fund

HK$

World Fund HK$


HK$


HK$


HK$ 30th November 2017 Interest on bank deposits - 299 593,582 - - Declared investment return - - - - - Dividend income - 15,965,786 - - - Total comprehensive income/(loss) excluding


Capital appreciation/(depreciation) 83,741,956 200,761,265 853,411,084 45,687,941 161,578,591 Total comprehensive income/(loss) for the year 73,372,074 208,085,366 792,391,371 39,320,732 146,584,081 Total net asset value 1,300,016,705 1,259,043,415 4,598,162,245 450,712,102 1,196,709,981 Total value of investments 1,299,403,744 1,255,558,954 4,452,023,893 451,589,480 1,195,891,799 Net asset value per unit 120.66 136.84 181.33 119.89 134.58 Highest issue price 121.75 137.49 182.67 120.46 135.53 Lowest redemption price 111.97 111.28 148.02 106.83 114.88 Net annualised investment return 6.56% 21.61% 21.32% 11.30% 16.19%


53




Asian Bond Fund

HK$

Eurasia Fund HK$


HK$

American Fund HK$

30th November 2019 Interest on bank deposits - - 1,757 7,886 6,420 Declared investment return - - - - - Dividend income - - 8,949,250 76,783,352 16,122,192 Total comprehensive income/(loss) excluding

capital appreciation/(depreciation) (39,362,737) (7,861,419) 6,245,456 57,928,167 6,993,532

Capital appreciation/(depreciation) 239,245,334 73,645,158 23,246,869 (38,477,903) 106,081,838 Total comprehensive income/(loss) for the year 199,882,597 65,783,739 29,492,325 19,450,264 113,075,370 Total net asset value 2,413,828,866 1,235,833,999 401,769,445 2,352,695,369 1,295,710,477 Total value of investments 2,416,816,585 1,236,115,866 399,268,714 2,288,751,737 1,295,567,782 Net asset value per unit 148.23 113.41 168.05 163.67 218.38 Highest issue price 149.84 114.29 170.59 183.31 219.16 Lowest redemption price 126.88 106.59 143.55 152.23 170.82 Net annualised investment return 9.18% 6.40% 8.31% 1.14% 10.89% 30th November 2018 Interest on bank deposits - - 204 603 1,849 Declared investment return - - - - - Dividend income - - 8,348,716 72,070,960 10,860,795 Total comprehensive income/(loss) excluding


Capital appreciation/(depreciation) (58,696,903) (4,621,985) (38,570,251) (213,574,323) 14,956,628 Total comprehensive income/(loss) for the year (80,870,115) (10,814,719) (32,774,110) (159,403,650) 18,857,166 Total net asset value 2,126,833,443 962,105,232 339,064,931 2,182,053,539 889,531,528 Total value of investments 2,129,698,307 961,947,625 337,455,029 2,138,147,608 889,021,497 Net asset value per unit 135.77 106.59 155.16 161.82 196.94 Highest issue price 160.07 110.06 185.62 198.30 211.89 Lowest redemption price 131.00 104.31 150.58 151.28 189.07 Net annualised investment return (6.69%) (0.93%) (8.71%) (6.63%) 2.97%


54




Asian Bond Fund

HK$

Eurasia Fund HK$


HK$

American Fund HK$

30th November 2017 Interest on bank deposits - - 63 46 229 Declared investment return - - - - - Dividend income - - 5,636,655 65,201,856 7,760,894 Total comprehensive income/(loss) excluding


Capital appreciation/(depreciation) 236,580,738 36,531,979 55,052,014 408,889,604 103,439,752 Total comprehensive income/(loss) for the year 219,591,764 32,272,257 58,856,530 460,021,012 106,009,018 Total net asset value 1,185,921,646 761,148,739 330,408,277 2,184,310,749 729,442,976 Total value of investments 1,185,279,278 760,909,171 328,368,177 2,140,019,767 727,201,669 Net asset value per unit 145.51 107.59 169.97 173.31 191.26 Highest issue price 147.12 108.77 171.27 178.66 191.48 Lowest redemption price 115.17 100.35 134.01 127.17 156.91 Net annualised investment return 25.07% 5.04% 26.50% 28.79% 20.55%


55



Age 65 Plus Fund

HK$

Core Accumulation Fund HK$


HK$ 30th November 2019 Interest on bank deposits - - - Declared investment return - - - Dividend income - - - Total comprehensive income/(loss) excluding

capital appreciation/(depreciation) (3,489,768) (12,056,971) (6,648,956)

Capital appreciation/(depreciation) 53,622,914 229,607,030 2,031,452 Total comprehensive income/(loss) for the period 50,133,146 217,550,059 (4,617,504) Total net asset value 766,338,882 2,543,973,802 662,931,288 Total value of investments 768,382,074 2,543,483,730 663,633,319 Net asset value per unit 1.1155 1.1835 106.98 Highest issue price 1.1173 1.1877 114.27 Lowest redemption price 1.0091 1.0044 105.07 Net annualised investment return 9.28% 10.86% (0.24%) 30th November 2018 Interest on bank deposits - - - Declared investment return - - - Dividend income - - - Total comprehensive income/(loss) excluding

capital appreciation/(depreciation) (1,956,050) (7,813,006) (4,301,051)

Capital appreciation/(depreciation) (1,997,921) (18,853,061) (7,189,461) Total comprehensive income/(loss) for the period (3,953,971) (26,666,067) (11,490,512) Total net asset value 441,402,079 1,640,347,402 544,291,705 Total value of investments 441,799,804 1,638,954,245 543,234,678 Net asset value per unit 1.0208 1.0676 107.24 Highest issue price 1.0418 1.1344 118.31 Lowest redemption price 1.0108 1.0452 104.88 Net annualised investment return (0.93%) (1.15%) (1.16%)


56



Age 65 Plus Fund

HK$

Core Accumulation Fund HK$


HK$ 30th November 2017 Interest on bank deposits - - - Declared investment return - - - Dividend income - - - Total comprehensive income/(loss) excluding

capital appreciation/(depreciation) (570,923) (2,803,000) (649,824)

Capital appreciation/(depreciation) 4,011,795 53,319,679 9,068,660 Total comprehensive income/(loss) for the period 3,440,872 50,516,679 8,418,836 Total net asset value 216,208,205 1,047,003,385 296,668,928 Total value of investments 215,319,489 1,043,110,801 289,459,669 Net asset value per unit 1.0304 1.0800 108.50 Highest issue price 1.0304 1.0800 110.81 Lowest redemption price 1.0000 1.0000 99.86 Net annualised investment return N/A N/A N/A


57



Growth Portfolio

HK$

Balanced Portfolio

HK$


HK$


HK$


HK$ 30th November 2016 Highest issue price 209.07 192.14 179.69 N/A 111.57 Lowest redemption price 174.89 168.76 163.48 N/A 111.45 Net annualised investment return (0.27%) 0.04% 0.35% 0.15% 0.11% 30th November 2015 Highest issue price 230.08 200.90 182.48 N/A 111.45 Lowest redemption price 188.53 175.99 166.87 N/A 111.33 Net annualised investment return (3.13%) (2.70%) (2.42%) 0.50% 0.11% 30th November 2014 Highest issue price 214.58 194.30 180.25 N/A 111.33 Lowest redemption price 192.13 180.75 171.13 N/A 111.15 Net annualised investment return 2.23% 1.58% 1.06% 0.52% 0.16% 30th November 2013 Highest issue price 204.71 187.07 174.76 N/A 111.15 Lowest redemption price 171.48 168.19 162.57 N/A 111.03 Net annualised investment return 18.96% 8.83% 3.66% 0.82% 0.11% 30th November 2012 Highest issue price 172.07 171.88 168.43 N/A 111.03 Lowest redemption price 147.13 155.62 156.93 N/A 110.76 Net annualised investment return 13.59% 8.94% 6.54% 1.94% 0.24% 30th November 2011 Highest issue price 186.25 176.87 169.65 N/A 110.76 Lowest redemption price 138.08 150.70 154.49 N/A 110.64 Net annualised investment return (10.41%) (4.28%) (1.16%) 1.94% 0.11% 30th November 2010 Highest issue price 180.18 174.02 168.06 N/A 110.64 Lowest redemption price 144.42 148.41 147.46 N/A 110.52 Net annualised investment return 5.86% 2.42% 0.64% 2.75% 0.11%


58




HK$


HK$

Japan Equity Fund

HK$


HK$

Asian Equity Fund

HK$ 30th November 2016 Highest issue price 287.93 200.33 156.25 185.87 200.16 Lowest redemption price 224.24 168.13 123.00 154.51 157.94 Net annualised investment return (0.78%) (9.76%) (2.56%) 4.46% 6.40% 30th November 2015 Highest issue price 368.02 215.14 158.23 183.55 215.63 Lowest redemption price 261.39 185.71 131.32 157.93 163.16 Net annualised investment return (12.11%) (1.50%) 9.61% (0.76%) (12.87%) 30th November 2014 Highest issue price 330.41 221.40 151.97 179.27 222.04 Lowest redemption price 280.84 186.22 127.50 151.47 189.49 Net annualised investment return 1.51% 1.09% (8.54%) 14.05% (1.38%) 30th November 2013 Highest issue price 310.41 200.89 153.11 156.56 215.27 Lowest redemption price 251.88 155.40 107.37 119.18 182.99 Net annualised investment return 13.32% 29.27% 39.52% 29.13% 6.88% 30th November 2012 Highest issue price 273.91 156.50 117.31 123.42 193.52 Lowest redemption price 227.95 125.29 100.99 100.00 161.45 Net annualised investment return 20.03% 14.73% (2.01%) 17.07% 10.82% 30th November 2011 Highest issue price 323.21 178.73 128.72 111.56 222.44 Lowest redemption price 205.23 119.62 103.90 90.25 154.24 Net annualised investment return (25.55%) (5.87%) (1.62%) 8.04% (6.29%) 30th November 2010 Highest issue price 330.96 162.13 115.38 99.37 200.10 Lowest redemption price 248.88 118.56 98.62 83.98 146.26 Net annualised investment return 8.43% (2.00%) 7.60% 7.26% 10.18%


59




HK$


HK$

Allianz Growth Fund HK$


HK$

Green Fund HK$

30th November 2016 Highest issue price 185.80 136.00 162.25 149.91 137.70 Lowest redemption price 146.53 124.23 134.12 132.64 117.40 Net annualised investment return 1.50% 0.06% (1.52%) 0.43% (1.90%) 30th November 2015 Highest issue price 231.59 137.57 183.93 155.82 145.34 Lowest redemption price 163.90 126.96 147.30 137.89 124.70 Net annualised investment return (13.58%) (3.99%) (5.10%) (4.46%) (0.76%) 30th November 2014 Highest issue price 212.32 137.36 173.10 153.07 139.20 Lowest redemption price 180.19 131.91 155.98 144.25 122.98 Net annualised investment return 3.62% (0.50%) (1.02%) (0.81%) 7.84% 30th November 2013 Highest issue price 194.16 134.74 167.93 149.59 127.53 Lowest redemption price 158.90 126.16 141.09 135.42 99.51 Net annualised investment return 13.29% 3.10% 17.43% 7.35% 28.03% 30th November 2012 Highest issue price 171.37 130.62 143.85 139.28 101.44 Lowest redemption price 142.37 121.90 121.65 126.23 85.54 Net annualised investment return 18.52% 6.25% 13.91% 8.67% 11.67% 30th November 2011 Highest issue price 200.37 131.12 153.75 142.19 103.08 Lowest redemption price 130.92 119.83 113.14 122.13 81.34 Net annualised investment return (24.05%) (1.32%) (10.68%) (3.91%) 0.70% 30th November 2010 Highest issue price 200.54 129.72 148.94 139.66 93.63 Lowest redemption price 154.37 115.06 116.52 119.46 77.22 Net annualised investment return 7.08% 1.16% 7.44% 2.50% 4.69%


60



Global Bond Fund

HK$

World Fund HK$


HK$


HK$


HK$ 30th November 2016 Highest issue price 120.34 114.87 154.51 113.53 121.87 Lowest redemption price 111.17 92.79 129.46 103.07 106.92 Net annualised investment return 1.27% 5.31% (1.05%) 0.47% 1.27% 30th November 2015 Highest issue price 118.96 117.81 169.49 114.92 124.68 Lowest redemption price 110.66 98.09 139.73 105.49 110.36 Net annualised investment return (5.85%) (6.42%) (1.94%) (3.93%) (2.49%) 30th November 2014 Highest issue price 123.46 117.70 158.17 113.71 119.37 Lowest redemption price 117.94 102.41 144.72 107.68 110.12 Net annualised investment return (0.27%) 7.08% 1.20% 1.79% 3.43% 30th November 2013 Highest issue price 123.28 107.67 153.12 109.67 113.41 Lowest redemption price 114.60 89.10 137.21 102.29 102.73 Net annualised investment return (2.89%) 19.46% 10.64% 5.10% 9.40% 30th November 2012 Highest issue price 123.36 92.14 137.58 104.33 103.67 Lowest redemption price 117.43 77.91 116.69 96.13 93.07 Net annualised investment return 3.96% 9.33% 14.98% 7.92% 10.13% 30th November 2011 Highest issue price 123.55 94.16 132.96 104.05 105.39 Lowest redemption price 112.33 72.64 112.28 95.02 90.69 Net annualised investment return 4.14% (0.50%) (2.09%) (3.33%) (5.87%) 30th November 2010 Highest issue price 120.08 87.05 128.99 N/A N/A Lowest redemption price 105.25 70.75 103.89 N/A N/A Net annualised investment return (1.55%) 5.73% 9.31% N/A N/A


61




Asian Bond Fund

HK$

Eurasia Fund HK$


HK$

American Fund HK$

30th November 2016 Highest issue price 121.77 108.45 141.44 141.19 159.73 Lowest redemption price 100.43 99.91 118.01 104.68 128.21 Net annualised investment return (0.09%) 1.49% (2.90%) 5.59% 8.60% 30th November 2015 Highest issue price 133.65 105.81 157.34 165.64 156.27 Lowest redemption price 108.50 98.99 128.56 119.09 132.95 Net annualised investment return (3.00%) (3.55%) (3.98%) (6.36%) (4.93%) 30th November 2014 Highest issue price 123.08 106.32 153.00 142.51 155.23 Lowest redemption price 109.73 100.98 134.67 116.00 131.94 Net annualised investment return 3.24% 2.60% (0.93%) 2.48% 12.15% 30th November 2013 Highest issue price 116.29 107.93 145.85 133.05 138.66 Lowest redemption price 97.64 99.14 121.61 109.11 113.65 Net annualised investment return 18.74% (4.55%) 19.49% 10.67% 19.97% 30th November 2012 Highest issue price 97.93 106.86 121.82 121.18 119.10 Lowest redemption price 83.95 100.33 102.02 99.37 101.00 Net annualised investment return 13.86% 5.67% 11.82% 20.54% 9.21% 30th November 2011 Highest issue price 105.45 101.69 112.23 110.03 108.77 Lowest redemption price 79.44 99.34 97.98 91.75 98.58 Net annualised investment return (13.99%) 1.13% 8.86% (0.43%) 4.58% 30th November 2010 Highest issue price N/A N/A N/A N/A N/A Lowest redemption price N/A N/A N/A N/A N/A Net annualised investment return N/A N/A N/A N/A N/A


62



Note 1 : Past performance is not indicative of future performance. The price of units may go down as well as up.

Note 2 : Annualised Investment Return

(a) For unitised funds except (b) below

The annualised investment return is calculated by comparing the net asset value per unit at period/year end against the net asset value per unit at the beginning of the period/year except for the first year of the following funds where the initial subscription price per unit is used.

- Fidelity Capital Stable Fund, Fidelity Stable Growth Fund and Fidelity Growth Fund were launched on 1st December 2010 at the initial subscription price of HK$100 per unit,

- Asian Bond Fund, Eurasia Fund, Hong Kong and China Fund and American Fund were launched on 23rd September 2011 at the initial subscription price of HK$100 per unit,

- Age 65 Plus Fund and Core Accumulation Fund were launched on 1st April 2017, and - China HK Dynamic Asset Allocation Fund was launched on 4th July 2017.

(b) For Guaranteed Portfolio

The annualised investment return is the declared investment return of its underlying investment, the MPF Capital Guaranteed Plus Policy, for each of the years.


63


c) Investment Portfolio As At 30th November 2019

2019 Holding

Units Fair Value

HK$ Cost HK$

% of Net Assets

Growth Portfolio JPMorgan SAR American Fund 4,479,288 1,353,768,784 983,899,753 11.90 JPMorgan SAR Asian Fund 1,249,888 763,820,106 662,877,055 6.72 JPMorgan SAR European Fund 4,528,435 1,147,785,285 950,902,944 10.09 JPMorgan SAR Global Emerging Markets Fund 2,999,318 52,698,011 46,318,715 0.46 JPMorgan SAR Hong Kong Fund 27,050,253 2,186,742,445 1,639,671,517 19.23 JPMorgan SAR Japan Fund 2,354,031 654,885,368 585,745,865 5.76 PineBridge Asian Fund 1,252,867 536,056,138 477,688,802 4.71 PineBridge Europe Equity Fund 33,702,071 847,607,095 709,892,510 7.45 PineBridge Hong Kong Equity Fund 23,039,154 958,659,186 786,650,444 8.43 PineBridge Japan Equity Fund 31,819,498 677,118,926 618,941,431 5.95 PineBridge US Equity Fund 26,508,985 891,497,151 613,715,162 7.84 JPMorgan SAR Asian Bond Fund 2,308,769 28,721,083 27,893,409 0.25 JPMorgan SAR Global Bond Fund 1,935,943 398,551,109 372,240,454 3.50 PineBridge Asian Bond Fund 246,025 28,925,715 27,155,409 0.25 PineBridge Global Bond Fund 1,808,202 319,175,288 308,587,522 2.81

────────── ────────── ──────── Total 10,846,011,690 8,812,180,992 95.35 ══════════ ══════════ ════════

Balanced Portfolio JPMorgan SAR American Fund 1,354,116 409,252,647 328,823,998 7.05 JPMorgan SAR Asian Fund 414,614 253,375,055 222,080,318 4.37 JPMorgan SAR European Fund 1,743,802 441,987,163 413,654,357 7.62 JPMorgan SAR Global Emerging Markets Fund 2,607,968 45,822,001 49,046,628 0.79 JPMorgan SAR Greater China Fund 14,642 2,589,120 2,161,130 0.04 JPMorgan SAR Hong Kong Fund 7,063,545 571,017,016 444,667,667 9.84 JPMorgan SAR Japan Fund 459,366 127,794,529 105,573,510 2.20 PineBridge Asian Fund 395,165 169,076,912 146,994,874 2.91 PineBridge Europe Equity Fund 7,548,473 189,844,084 179,283,833 3.27 PineBridge Greater China Equity Fund 221,226 6,006,294 5,667,961 0.10 PineBridge Hong Kong Equity Fund 10,109,644 420,662,299 377,482,046 7.25 PineBridge Japan Equity Fund 14,012,371 298,183,254 264,093,802 5.14 PineBridge US Equity Fund 5,220,188 175,554,917 128,129,945 3.03 JPMorgan SAR Asian Bond Fund 7,921,534 98,543,885 90,533,368 1.70 JPMorgan SAR Global Bond Fund 2,778,262 571,958,576 477,899,123 9.86 PineBridge Asian Bond Fund 1,395,684 164,093,998 133,366,911 2.83 PineBridge Global Bond Fund 9,729,989 1,717,491,546 1,561,358,527 29.60 ────────── ────────── ──────── Total 5,663,253,296 4,930,817,998 97.60 ══════════ ══════════ ════════


64


c) Investment Portfolio As At 30th November 2019 (continued)

2019 Holding

Units Fair Value

HK$ Cost HK$

% of Net Assets

Capital Stable Portfolio JPMorgan SAR American Fund 518,284 156,640,111 127,751,714 4.22 JPMorgan SAR Asian Fund 179,344 109,599,251 98,636,274 2.96 JPMorgan SAR European Fund 692,041 175,405,988 168,024,706 4.73 JPMorgan SAR Global Emerging Markets Fund 831,826 14,615,188 16,714,571 0.39 JPMorgan SAR Greater China Fund 6,227 1,101,075 898,998 0.03 JPMorgan SAR Hong Kong Fund 2,687,815 217,282,924 181,201,437 5.86 JPMorgan SAR Japan Fund 189,376 52,683,959 43,526,322 1.42 PineBridge Asian Fund 170,932 73,135,784 65,836,606 1.97 PineBridge Europe Equity Fund 2,995,671 75,341,122 72,943,933 2.03 PineBridge Greater China Equity Fund 94,081 2,554,311 2,375,593 0.07 PineBridge Hong Kong Equity Fund 3,847,086 160,077,264 149,193,112 4.32 PineBridge Japan Equity Fund 5,776,681 122,927,771 109,127,066 3.31 PineBridge US Equity Fund 1,998,012 67,193,149 51,038,460 1.81 JPMorgan SAR Asian Bond Fund 5,614,709 69,846,984 63,968,910 1.88 JPMorgan SAR Global Bond Fund 2,235,109 460,140,149 377,596,385 12.41 JPMorgan SAR HKD Bond Fund 2,438,117 61,806,257 55,029,811 1.67 PineBridge Asian Bond Fund 989,247 116,308,230 93,761,667 3.14 PineBridge Global Bond Fund 7,827,774 1,381,721,514 1,250,932,360 37.26 PineBridge Hong Kong Dollar Fixed Income Fund 5,152,124 114,892,365 102,229,506 3.10 ────────── ────────── ─────── Total 3,433,273,396 3,030,787,431 92.58 ══════════ ══════════ ═══════

Guaranteed Portfolio MPF Capital Guaranteed Plus Policy N/A 9,267,276,380 8,412,920,769 100.02 ══════════ ══════════ ═══════

MPF Conservative Fund PineBridge Hong Kong Dollar Money Market Fund 384,001,506 5,786,902,689 5,498,710,834 100.22 ══════════ ══════════ ═══════

Hong Kong Equity Fund JPMorgan SAR Hong Kong Fund 38,179,254 3,086,410,863 2,884,666,323 50.24 PineBridge Hong Kong Equity Fund 73,650,804 3,064,609,966 2,374,915,535 49.89 ────────── ────────── ───────

Total 6,151,020,829 5,259,581,858 100.13 ══════════ ══════════ ═══════

European Equity Fund JPMorgan SAR European Fund 6,235,475 1,580,454,771 1,159,770,860 100.17 ══════════ ══════════ ═══════

Japan Equity Fund JPMorgan SAR Japan Fund 2,687,294 747,598,201 588,918,908 100.08 ══════════ ══════════ ═══════

North American Equity Fund PineBridge US Equity Fund 91,358,816 3,072,396,977 2,043,808,812 100.09 ══════════ ══════════ ═══════

Asian Equity Fund JPMorgan SAR Asian Fund 6,974,961 4,262,472,975 2,918,270,588 100.18 ══════════ ══════════ ═══════


65

INVESTMENT REPORT (CONTINUED) FOR THE YEAR ENDED 30TH NOVEMBER 2019 c) Investment Portfolio As At 30th November 2019 (continued)

2019 Holding

Units Fair Value

HK$ Cost HK$

% of Net Assets

Greater China Equity Fund JPMorgan SAR Greater China Fund 30,121,127 5,326,318,906 4,646,759,790 70.96 PineBridge Greater China Equity Fund 80,982,566 2,198,676,671 1,635,926,700 29.29

────────── ────────── ──────── Total 7,524,995,577 6,282,686,490 100.25 ══════════ ══════════ ════════

Allianz Capital Stable Fund (Note 1) Allianz Choice Capital Stable Fund (Class I) - - - N/A ══════════ ══════════ ════════

Allianz Growth Fund (Note 1) Allianz Choice Growth Fund (Class I) - - - N/A ══════════ ══════════ ════════

Allianz Stable Growth Fund (Note 1) Allianz Choice Stable Growth Fund (Class I) - - - N/A ══════════ ══════════ ════════

Green Fund Amundi HK-Green Planet Fund (Class S) 109,503,463 2,190,069,269 1,563,411,821 100.12 ══════════ ══════════ ════════

Global Bond Fund PineBridge Global Bond Fund 11,500,521 2,030,017,391 1,870,319,336 100.11 ══════════ ══════════ ════════

World Fund iShares Core S&P 500 ETF 343,655 850,213,300 560,225,865 53.57 iShares Latin America 40 ETF 1,214,976 299,866,093 302,595,529 18.89 iShares MSCI EAFE ETF 819,967 437,483,470 394,882,428 27.56 ────────── ────────── ──────── Total 1,587,562,863 1,257,703,822 100.02 ══════════ ══════════ ════════

Note 1 : Allianz Capital Stable Fund, Allianz Growth Fund and Allianz Stable Growth Fund (“the 3 Allianz Funds”) had no investments and operations since 15th November 2018. MPFA had approved the termination of the 3 Allianz Funds to take effect on 13th March 2019.


66



2019 Holding

Units Fair Value

HK$ Cost HK$

% of Net Assets

Manager's Choice Fund JPMorgan SAR American Fund 1,725,979 521,640,237 426,624,969 11.13 JPMorgan SAR Asian Fund 565,362 345,498,643 317,972,840 7.37 JPMorgan SAR European Fund 2,230,665 565,388,277 544,548,240 12.07 JPMorgan SAR Global Emerging Markets Fund 1,714,881 30,130,467 28,643,240 0.64 JPMorgan SAR Greater China Fund 19,749 3,492,181 2,968,441 0.07 JPMorgan SAR Hong Kong Fund 8,780,874 709,845,893 611,016,530 15.16 JPMorgan SAR Japan Fund 601,898 167,446,419 143,619,021 3.57 PineBridge Asian Fund 538,845 230,551,981 213,201,381 4.92 PineBridge Europe Equity Fund 9,655,914 242,846,235 235,911,643 5.18 PineBridge Greater China Equity Fund 298,394 8,101,391 7,657,069 0.17 PineBridge Hong Kong Equity Fund 12,567,231 522,922,476 502,101,337 11.16 PineBridge Japan Equity Fund 18,360,066 390,702,206 353,072,129 8.34 PineBridge US Equity Fund 6,653,712 223,764,346 171,258,167 4.78 JPMorgan SAR Asian Bond Fund 6,268,323 77,977,935 74,499,460 1.66 JPMorgan SAR Global Bond Fund 320,794 66,041,516 59,859,604 1.41 PineBridge Asian Bond Fund 1,104,408 129,847,953 110,692,965 2.77 PineBridge Global Bond Fund 1,123,475 198,310,487 184,854,651 4.23 ────────── ────────── ──────── Total 4,434,508,643 3,988,501,687 94.63 ══════════ ══════════ ════════

Fidelity Capital Stable Fund Fidelity Global Investment Fund

-Capital Stable Fund - Class B 77,866,800 1,112,716,572 1,000,841,316 100.00 ══════════ ══════════ ════════

Fidelity Stable Growth Fund Fidelity Global Investment Fund

-Stable Growth Fund - Class B 154,276,928 2,400,549,006 2,061,801,678 100.15 ══════════ ══════════ ════════

Fidelity Growth Fund Fidelity Global Investment Fund

-Growth Fund - Class B 136,082,015 2,416,816,585 1,986,638,370 100.12 ══════════ ══════════ ════════

Asian Bond Fund JPMorgan SAR Asian Bond Fund 99,366,227 1,236,115,866 1,139,851,351 100.02 ══════════ ══════════ ════════

Eurasia Fund iShares MSCI EAFE ETF 601,646 321,000,942 297,978,673 79.90 Tracker Fund of Hong Kong 2,959,084 78,267,772 75,152,301 19.48 ────────── ────────── ──────── Total 399,268,714 373,130,974 99.38 ══════════ ══════════ ════════

Hong Kong and China Fund Hang Seng China Enterprises Index ETF 4,388,150 457,684,045 478,840,147 19.45 Tracker Fund of Hong Kong 69,227,512 1,831,067,692 1,754,081,277 77.83 ────────── ────────── ──────── Total 2,288,751,737 2,232,921,424 97.28 ══════════ ══════════ ════════


67



2019 Holding

Units Fair Value

HK$ Cost HK$

% of Net Assets

American Fund iShares Core S&P 500 ETF 424,905 1,051,228,361 821,352,070 81.13 iShares Latin America 40 ETF 989,997 244,339,421 248,386,237 18.86 ────────── ────────── ──────── Total 1,295,567,782 1,069,738,307 99.99 ══════════ ══════════ ════════

Age 65 Plus Fund Vanguard Income Fund 67,432,103 768,382,074 714,814,687 100.27

══════════ ══════════ ════════ Core Accumulation Fund

Vanguard Moderate Growth Fund 209,507,486 2,543,483,730 2,281,526,642 99.98 ══════════ ══════════ ════════

China HK Dynamic Asset Allocation Fund Value Partners Asset Allocation Fund 60,071,992 663,633,319 660,325,486 100.11

══════════ ══════════ ════════

Note 2: The underlying approved pooled investment funds as listed above were established in Hong Kong and have been approved by the MPFA and authorised by the SFC.

Note 3: The investments are accounted for on a trade date basis.


68


d) Statement of Movement in Portfolio Holdings

2019 % of

Net Assets

2018 % of

Net Assets Growth Portfolio

Harbinger Japanese Equity Fund - 2.00 JPMorgan SAR American Fund 11.90 9.18 JPMorgan SAR Asian Fund 6.72 6.70 JPMorgan SAR European Fund 10.09 8.39 JPMorgan SAR Global Emerging Markets Fund 0.46 0.47 JPMorgan SAR Hong Kong Fund 19.23 16.24 JPMorgan SAR Japan Fund 5.76 6.45 PineBridge Asian Fund 4.71 3.82 PineBridge Europe Equity Fund 7.45 7.05 PineBridge Hong Kong Equity Fund 8.43 12.74 PineBridge Japan Equity Fund 5.95 5.02 PineBridge US Equity Fund 7.84 11.91 JPMorgan SAR Asian Bond Fund 0.25 - JPMorgan SAR Global Bond Fund 3.50 4.09 PineBridge Asian Bond Fund 0.25 - PineBridge Global Bond Fund 2.81 2.65

──────── ──────── 95.35 96.71 ════════ ════════

Balanced Portfolio Harbinger Japanese Equity Fund - 0.68 JPMorgan SAR American Fund 7.05 8.67 JPMorgan SAR Asian Fund 4.37 1.77 JPMorgan SAR European Fund 7.62 4.60 JPMorgan SAR Global Emerging Markets Fund 0.79 1.15 JPMorgan SAR Greater China Fund 0.04 - JPMorgan SAR Hong Kong Fund 9.84 11.54 JPMorgan SAR Japan Fund 2.20 2.42 PineBridge Asian Fund 2.91 2.66 PineBridge Europe Equity Fund 3.27 4.64 PineBridge Greater China Equity Fund 0.10 - PineBridge Hong Kong Equity Fund 7.25 4.95 PineBridge Japan Equity Fund 5.14 2.94 PineBridge US Equity Fund 3.03 4.17 JPMorgan SAR Asian Bond Fund 1.70 1.69 JPMorgan SAR Global Bond Fund 9.86 11.87 PineBridge Asian Bond Fund 2.83 2.81 PineBridge Global Bond Fund 29.60 27.54 ──────── ─────── 97.60 94.10 ════════ ════════


69


d) Statement of Movement in Portfolio Holdings (continued)

2019 % of

Net Assets

2018 % of

Net Assets Capital Stable Portfolio

Harbinger Japanese Equity Fund - 0.41 JPMorgan SAR American Fund 4.22 5.21 JPMorgan SAR Asian Fund 2.96 1.16 JPMorgan SAR European Fund 4.73 2.75 JPMorgan SAR Global Emerging Markets Fund 0.39 0.60 JPMorgan SAR Greater China Fund 0.03 - JPMorgan SAR Hong Kong Fund 5.86 6.87 JPMorgan SAR Japan Fund 1.42 1.46 PineBridge Asian Fund 1.97 1.75 PineBridge Europe Equity Fund 2.03 2.77 PineBridge Greater China Equity Fund 0.07 - PineBridge Hong Kong Equity Fund 4.32 2.95 PineBridge Japan Equity Fund 3.31 1.77 PineBridge US Equity Fund 1.81 2.50 JPMorgan SAR Asian Bond Fund 1.88 1.88 JPMorgan SAR Global Bond Fund 12.41 14.76 JPMorgan SAR HKD Bond Fund 1.67 1.82 PineBridge Asian Bond Fund 3.14 3.13 PineBridge Global Bond Fund 37.26 34.23 PineBridge Hong Kong Dollar Fixed Income Fund 3.10 3.39 ──────── ──────── 92.58 89.41 ════════ ════════

Guaranteed Portfolio MPF Capital Guaranteed Plus Policy 100.02 100.03 ════════ ════════

MPF Conservative Fund PineBridge Hong Kong Dollar Money Market Fund 100.22 99.78 ════════ ════════

Hong Kong Equity Fund JPMorgan SAR Hong Kong Fund 50.24 48.68 PineBridge Hong Kong Equity Fund 49.89 51.57 ──────── ──────── 100.13 100.25 ════════ ════════

European Equity Fund JPMorgan SAR European Fund 100.17 100.20 ════════ ════════

Japan Equity Fund JPMorgan SAR Japan Fund 100.08 100.37 ════════ ════════

North American Equity Fund PineBridge US Equity Fund 100.09 100.14 ════════ ════════

Asian Equity Fund JPMorgan SAR Asian Fund 100.18 100.18 ════════ ════════


70

INVESTMENT REPORT (CONTINUED) FOR THE YEAR ENDED 30TH NOVEMBER 2019 d) Statement of Movement in Portfolio Holdings (continued)

2019 % of

Net Assets

2018 % of

Net Assets Greater China Equity Fund

JPMorgan SAR Greater China Fund 70.96 42.77 PineBridge Greater China Equity Fund 29.29 57.44

──────── ──────── 100.25 100.21 ════════ ════════

Allianz Capital Stable Fund (Note 1) Allianz Choice Capital Stable Fund (Class I) N/A N/A ════════ ════════

Allianz Growth Fund (Note 1) Allianz Choice Growth Fund (Class I) N/A N/A ════════ ════════

Allianz Stable Growth Fund (Note 1) Allianz Choice Stable Growth Fund (Class I) N/A N/A ════════ ════════

Green Fund Amundi HK-Green Planet Fund (Class S) 100.12 100.12 ════════ ════════

Global Bond Fund PineBridge Global Bond Fund 100.11 100.09 ════════ ════════

World Fund iShares Core S&P 500 ETF 53.57 51.92 iShares Latin America 40 ETF 18.89 19.80 iShares MSCI EAFE ETF 27.56 28.32 ──────── ──────── 100.02 100.04 ════════ ════════



71



2019 % of

Net Assets

2018 % of

Net Assets Manager's Choice Fund

Harbinger Japanese Equity Fund - 0.95 JPMorgan SAR American Fund 11.13 11.88 JPMorgan SAR Asian Fund 7.37 2.68 JPMorgan SAR European Fund 12.07 6.50 JPMorgan SAR Global Emerging Markets Fund 0.64 0.90 JPMorgan SAR Greater China Fund 0.07 - JPMorgan SAR Hong Kong Fund 15.16 16.39 JPMorgan SAR Japan Fund 3.57 3.39 PineBridge Asian Fund 4.92 4.04 PineBridge Europe Equity Fund 5.18 6.56 PineBridge Greater China Equity Fund 0.17 - PineBridge Hong Kong Equity Fund 11.16 7.03 PineBridge Japan Equity Fund 8.34 4.11 PineBridge US Equity Fund 4.78 5.71 JPMorgan SAR Asian Bond Fund 1.66 1.65 JPMorgan SAR Global Bond Fund 1.41 6.82 PineBridge Asian Bond Fund 2.77 2.75 PineBridge Global Bond Fund 4.23 15.83 ──────── ──────── 94.63 97.19 ════════ ════════

Fidelity Capital Stable Fund Fidelity Global Investment Fund

-Capital Stable Fund - Class B 100.00 100.26 ════════ ════════

Fidelity Stable Growth Fund Fidelity Global Investment Fund

-Stable Growth Fund - Class B 100.15 100.14 ════════ ════════

Fidelity Growth Fund Fidelity Global Investment Fund

-Growth Fund - Class B 100.12 100.13 ════════ ════════

Asian Bond Fund JPMorgan SAR Asian Bond Fund 100.02 99.98 ════════ ════════

Eurasia Fund iShares MSCI EAFE ETF 79.90 78.59 Tracker Fund of Hong Kong 19.48 20.94 ──────── ──────── 99.38 99.53 ════════ ════════

Hong Kong and China Fund Hang Seng China Enterprises Index ETF (Note 2) 19.45 21.50 Tracker Fund of Hong Kong 77.83 76.49 ──────── ──────── 97.28 97.99 ════════ ════════

Note 2: Formerly known as Hang Seng H-share Index ETF prior to 5th March 2018.


72



2019 % of

Net Assets

2018 % of

Net Assets American Fund

iShares Core S&P 500 ETF 81.13 80.66 iShares Latin America 40 ETF 18.86 19.28 ──────── ──────── 99.99 99.94 ════════ ════════

Age 65 Plus Fund Vanguard Income Fund 100.27 100.09

════════ ════════ Core Accumulation Fund

Vanguard Moderate Growth Fund 99.98 99.92 ════════ ════════

China HK Dynamic Asset Allocation Fund Value Partners Asset Allocation Fund 100.11 99.81 ════════ ════════

73

INDEPENDENT AUDITOR’S REPORT TO THE TRUSTEE OF AIA MPF - PRIME VALUE CHOICE Opinion What we have audited The financial statements of the AIA MPF – Prime Value Choice (the “Scheme”) and each of its constituent funds, Growth Portfolio, Balanced Portfolio, Capital Stable Portfolio, Guaranteed Portfolio, MPF Conservative Fund, Hong Kong Equity Fund, European Equity Fund, Japan Equity Fund, North American Equity Fund, Asian Equity Fund, Greater China Equity Fund, Green Fund, Global Bond Fund, World Fund, Manager’s Choice Fund, Fidelity Capital Stable Fund, Fidelity Stable Growth Fund, Fidelity Growth Fund, Asian Bond Fund, Eurasia Fund, Hong Kong and China Fund, American Fund, Age 65 Plus Fund, Core Accumulation Fund and China HK Dynamic Asset Allocation Fund, set out on pages 77 to 211, which comprise: • the statement of net assets available for benefits of the Scheme and the statement of net assets of each

of its constituent funds as at 30th November 2019; • the statement of comprehensive income of each of its constituent funds for the year then ended; • the statement of changes in net assets available for benefits of the Scheme and the statement of changes

in net assets attributable to members of each of its constituent funds for the year then ended; • the statement of cash flows of the Scheme and the statement of cash flows of each of its constituent

funds for the year then ended; and • the notes to the financial statements, which include a summary of significant accounting policies. Our opinion In our opinion, the financial statements give a true and fair view of the financial position of the Scheme and each of its constituent funds as at 30th November 2019, and of their financial transactions and cash flows for the year then ended in accordance with Hong Kong Financial Reporting Standards (“HKFRSs”) issued by the Hong Kong Institute of Certified Public Accountants (“HKICPA”). Basis for Opinion We conducted our audit in accordance with Hong Kong Standards on Auditing (“HKSAs”) and with reference to Practice Note 860.1 (Revised), “The Audit of Retirement Schemes” issued by the HKICPA. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Independence We are independent of the Scheme in accordance with the HKICPA’s Code of Ethics for Professional Accountants (the “Code”), and we have fulfilled our other ethical responsibilities in accordance with the Code.

74

INDEPENDENT AUDITOR’S REPORT TO THE TRUSTEE OF AIA MPF - PRIME VALUE CHOICE (CONTINUED)

Other Information The Trustee is responsible for the other information. The other information comprises all of the information included in the annual report other than the financial statements and our auditor’s report thereon. Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon. In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. Responsibilities of Trustee for the Financial Statements The Trustee is responsible for the preparation of financial statements that give a true and fair view in accordance with HKFRSs issued by the HKICPA, and for such internal control as the Trustee determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the Trustee is responsible for assessing the Scheme’s and each of its constituent funds’ ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Trustee either intends to liquidate the Scheme and its constituent funds or to cease operations, or has no realistic alternative but to do so. In addition, the Trustee is required to ensure that the financial statements have been properly prepared in accordance with sections 80, 81, 83 and 84 of the Hong Kong Mandatory Provident Fund Schemes (General) Regulation (the “General Regulation”).

75

INDEPENDENT AUDITOR’S REPORT TO THE TRUSTEE OF AIA MPF - PRIME VALUE CHOICE (CONTINUED) Auditor’s Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. We report our opinion solely to you, as a body, in accordance with section 102 of the General Regulation, and for no other purpose. We do not assume responsibility towards or accept liability to any other person for the contents of this report. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with HKSAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. In addition, we are required to assess whether the financial statements of the Scheme and each of its constituent funds have been properly prepared, in all material respects, in accordance with sections 80, 81, 83 and 84 of the General Regulation. As part of an audit in accordance with HKSAs, we exercise professional judgment and maintain professional scepticism throughout the audit. We also: • Identify and assess the risks of material misstatement of the financial statements, whether due to fraud

or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Scheme’s and each of its constituent funds’ internal control.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Trustee.

• Conclude on the appropriateness of the Trustee’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Scheme’s and each of its constituent funds’ ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Scheme and each of its constituent funds to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

We communicate with the Trustee regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

INDEPENDENT AUDITOR’S REPORT

TO THE TRUSTEE OF AJA MPF - PRIME VALUE CHOICE (CONTINUED)

Report on Matters under the General Regulation

(a) In our opinion, the financial statements of the Scheme and each of its constituent funds have been properly prepared, in all material respects, in accordance with sections 80, 81, 83 and 84 of the General Regulation; and

(b) We have obtained all the information and explanations which, to the best of our knowledge and belief, are necessary for the purpose of our audit.

PricewaterhouseCoopers Certified Public Accountants

Hong Kong, 22nd May 2020

76


STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS — SCHEME

AS AT 30TH NOVEMBER 2019

Note 2019 2018

HK$ HKS

Assets

Current assets

Investments in constituent funds 8 84,894,967 944 76,824,880,845

Contributions receivable 6

From employers 52,572,120 62,852,152

From members 57,261,122 67,118,007 Amounts receivable on redemption of units in constituent funds 238,365,757 224,846,266

Other receivables 5,033,488 13,784,763

Bank balances 261,697,105 211,870,745

Total assets 85,509,897,536 77,405,352,778

Liabilities

Current liabilities

Benefits payable 7 106,107,570 92,818,829 Forfeitures payable 140,525,777 144,762,310

Amounts payable on subscription of units in constituent funds 250,108,579 207,259,142 Accruals and other payables 148,730,269 150,776,940

Total liabilities 645,472,195 $95,617,221

Net assets available for benefits attributable to

members 84,864,425,341 76,809,735,557

On behalf of AIA Company (Trustee) Limited

es

© &

Director Direétor

The accompanying notes are an integral part of these financial statements.

77


78

STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS – SCHEME FOR THE YEAR ENDED 30TH NOVEMBER 2019

Note 2019 2018 HK$ HK$ Income

Net unrealised gains/(losses) on investments in constituent funds 3,772,553,796 (6,737,179,590) Net realised gains on redemption of units in constituent funds 1,223,702,853 2,399,181,825 Interest on bank deposits 1,148,724 17,189 Other income 449,481 841,107

────────── ────────── Total income/(loss) 4,997,854,854 (4,337,139,469) ------------------ ------------------ Expenses

Bank charges 1,028,719 864,048 ────────── ────────── Total expenses 1,028,719 864,048 ------------------ ------------------- Net income/(loss) 4,996,826,135 (4,338,003,517) ------------------ ------------------ Contributions received and receivable 6

From employers Mandatory 3,023,025,343 2,993,046,621 Voluntary 858,305,900 827,464,580

From members Mandatory 3,272,141,043 3,218,332,166 Voluntary 272,231,874 253,036,518

────────── ────────── 7,425,704,160 7,291,879,885 ------------------ ------------------ Contribution surcharge 7,093,669 7,083,615 ------------------ ------------------ Transfers in

Group transfers in from other schemes 223,438,681 480,668,973 Individual transfers in from other schemes 2,457,951,795 2,644,788,353

────────── ────────── 2,681,390,476 3,125,457,326 ------------------- -------------------



79

STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS – SCHEME (CONTINUED)

FOR THE YEAR ENDED 30TH NOVEMBER 2019

Note 2019 2018 HK$ HK$ Benefits paid and payable 7

Retirement/early retirement 1,077,493,106 922,661,533 Death 81,270,451 67,249,351 Permanent departure 476,965,616 511,979,054 Total incapacity 22,141,979 19,954,288 Small balance 23,344 40,092 Refund of additional voluntary contributions to leavers and

offsetting of long service payment/ severance payment 672,880,178 702,101,638 ────────── ────────── 2,330,774,674 2,223,985,956 ------------------ ------------------ Transfers out

Group transfers out to other schemes 834,692,770 678,025,779 Individual transfers out to other schemes 3,792,294,907 4,082,233,860

────────── ────────── 4,626,987,677 4,760,259,639 ------------------ ------------------ Forfeitures 98,562,305 108,641,945 ----------------- ----------------- Change in net assets available for benefits attributable to

members 8,054,689,784 (1,006,470,231) Net assets available for benefits attributable to members at the

beginning of the year - Members' accounts 76,809,735,557 77,816,205,788

─────────── ─────────── Net assets available for benefits attributable to members at the

end of the year - Members' accounts 84,864,425,341 76,809,735,557

═══════════ ═══════════ The accompanying notes are an integral part of these financial statements.


80

STATEMENT OF CASH FLOWS – SCHEME FOR THE YEAR ENDED 30TH NOVEMBER 2019

2019 2018 HK$ HK$ Cash flows from operating activities Net income/(loss) 4,996,826,135 (4,338,003,517) Adjustment for:

- Interest on bank deposits (1,148,724) (17,189) ────────── ────────── 4,995,677,411 (4,338,020,706)

Net (increase)/decrease in investments in constituent funds (8,070,087,099) 1,020,758,992 Net (increase)/decrease in amounts receivable on redemption of

units in constituent funds (13,519,491) 95,748,339 Net decrease in other receivables 8,751,275 7,282,265 Net increase/(decrease) in amounts payable on subscription of

units in constituent funds 42,849,437 (103,869,851) Net (decrease)/increase in accruals and other payables (2,046,671) 20,502,626 ─────────── ─────────── Cash used in operations (3,038,375,138) (3,297,598,335) Interest received 1,148,724 17,189

─────────── ─────────── Net cash used in operating activities (3,037,226,414) (3,297,581,146) -------------------- -------------------- Cash flows from financing activities

Contributions and transfers in received 10,134,325,222 10,387,661,814 Benefits, transfers out paid (6,944,473,610) (6,993,897,554) Forfeitures paid (102,798,838) (86,177,341)

─────────── ─────────── Net cash generated from financing activities 3,087,052,774 3,307,586,919 -------------------- -------------------- Net increase in cash and cash equivalents 49,826,360 10,005,773 Cash and cash equivalents at the beginning of the year 211,870,745 201,864,972 ─────────── ─────────── Cash and cash equivalents at the end of the year 261,697,105 211,870,745 ═══════════ ═══════════ Analysis of balances of cash and cash equivalents

Bank balances 261,697,105 211,870,745 ═══════════ ═══════════



STATEMENT OF NET ASSETS - CONSTITUENT FUNDS


As at 30th November 2019

Growth Balanced Capital Stable Guaranteed MPF

Note Portfolio Portfolio Portfolio Portfolio | Conservative Fund

HK$ HK$ HK$ HK$ HK$ Assets

Current assets

Investments 8 10,846,01 1,690 5,663,253,296 3,433,273,396 9,267,276,380 5,786,902,689 Derivative financial instruments 9 112,860 - - - - Amounts receivable on subscription 11,104,530 5,927,169 4,364,611 18,260,865 12,499,412 Amounts receivable on sale of investments 6,144,311] 4,051,422 3,289,246 1,682,568 - Other receivables 29,759 9,962 14,801 38,066 - Bank balances 548,591,108 183,651,509 301,320,092 - -

Total assets 11,411,994,258 5,856,893,358 3,742,262,146 9,287,257,879 5,799,402, 101

Liabilities

Current liabilities

Derivative financial instruments 9 357,828 455,953 221,087 - - Amounts payable on redemption 17,699,526 7,665, 160 5,749,039 21,786,189 20,424,836 Amounts payable on purchase of investments - 36,395,633 21,710,858 - - Accruals and other payables 19,312,536 9,851,680 6,300,824 - 4,549,307

Total liabilities 37,369,890 54,368,426 33,981,808 21,786,189 24,974,143

Net assets attributable to members 10 11,374,624,368 5,802,524,932 3,708,280,338 9,265,471,690 5,774,427,958


sn Con - 2

Director |


81


STATEMENT OF NET ASSETS — CONSTITUENT FUNDS (CONTINUED)



Hong Kong European Japan North American Asian

Note Equity Fund Equity Fund Equity Fund Equity Fund Equity Fund

HK$ HK$ HK$ HK$ HK$

Assets

Current assets

Investments 8 6,151,020,829 1,580,454,771 747,598,201 3,072,396,977 4,262,472,975

Derivative financial instruments 9 - 264 251 - 700

Amounts receivable on subscription 30,933,023 3,244,636 6,571,531 19,078,416 7,589,368

Amounts receivable on sale of investments 2,414,546 1,374,936 134,861 - 3,070,068

Other receivables - 884,805 401,905 1,467,744 2,324,652

Bank balances - - - : - -

Total assets 6,184,368,398 1,585,959,412 754,706,749 3,092,943,137 4,275,457,763

Liabilities

Current liabilities

Derivative financial instruments 9 - 430,998 205,781 725,383 1,170,966

Amounts payable on redemption 30,414,626 4,829,091 4,373,432 8,328,019 11,369,958

Amounts payable on purchase of investments 233,491 294,186 1,849,283 9,246,742 952,010

Accruals and other payables 10,641,773 2,680,992 1,263,935 5,060,789 7,261,922


Net assets attributable to members 10 6,143,078,508 1,577,724,145 747,014,318 3,069,582,204 4,254,702,907


Director Directo!


82





Allianz Capital Allianz Growth Allianz Stable

Greater China Stable Fund Fund Growth Fund Green Note Equity Fund (Note i) (Note i) (Note i) Fund

HK$ HKS HK$ HK$ HK$

Assets

Current assets

Investments 8 7,524,995,577 - - - 2,190,069,269

Derivative financial instruments 9 - - - - -

Amounts receivable on subscription 17,617,435 - - - 9,812,838

Amounts receivable on sale of investments 589,512 - - - -

Other receivables - - - - - Bank balances - - - - -

Total assets 7,543,202,524 - - - 2,199,882,107

Liabilities

Current liabilities


Amounts payable on redemption 19,248,071 - - - 5,734,217

Amounts payable on purchase of investments 4,708,738 - - - 4,097,303 Accruals and other payables 12,891,575 - - - 2,690,720

Total liabilities 36,848,384 - - - 12,522,240

Net assets attributable to members 10 7,506,354,140 - - - 2,187,359,867


Sue tl Director , Dire

r

Note i: Allianz Capital Stable Fund, Allianz Growth Fund and Allianz Stable Growth Fund (“the 3 ation unds”) had no investments and operations since 15th November 2018. MPFA

had approved the termination of the 3 Allianz Funds to take effect on 13th March 2019. :


83

AJA MPF - PRIME VALUE CHOICE




Global Bond World Manager’s Fidelity Capital Fidelity Stable

Note Fund Fund Choice Fund Stable Fund Growth Fund

HK$ HK$ HK$ HK$ HK$

Assets

Current assets .

Investments 8 2,030,017,391 1,587,562,863 4,434,508,643 1,112,716,572 2,400,549,006



Amounts receivable on sale of investments - - 1,700,782 2,445,778 327,915

Other receivables 1,042,217 781,839 15,526 16,462 35,515

Bank balances - 1,306,870 286,270,583 - -

Total assets 2,047,979,594 1,593,227,639 4,732,700,273 1,119,878,964 2,404,854,958

Liabilities

Current liabilities

Derivative financial instruments 9 485,828 378,331 47,164 - -


Amounts payable on purchase of investments 5,304,036 1,307,987 33,686,818 - $16,162



Net assets attributable to members 10 2,027,701,970 1,587,263,453 4,685,948,699 1,112,771,600 2,397,054,719


Director Direct


84

AJA MPF - PRIME VALUE CHOICE




Fidelity Growth Asian Eurasia Hong Kong and American

Note Fund Bond Fund Fund China Fund Fund

HK$ HK$ HK$ HK$ HK$

Assets

Current assets

Investments 8 2,416,816,585 1,236,115,866 399,268,714 2,288,75 1,737 1,295,567,782 Derivative financial instruments 9 - - - - -


Amounts receivable on sale of investments 428,369 - - 2,543,367 -

Other receivables 37,742 - 86,023 79,583 638,554

Bank balances - - 2,471,799 60,978,334 3,332,019

Total assets 2,421,249,386 1,246,678,618 403,172,722 2,365,034,621 1,305,884,481

Liabilities

Current liabilities

Derivative financial instruments 9 - - 40,527 - 307,685

Amounts payable on redemption 3,939,953 5,964,759 494,736 10,655,831 4,137,295

Amounts payable on purchase of investments - 4,002,062 348,346 - 4,344,919

Accruals and other payables 3,480,567 877,798 519,668 1,683,421 1,384,105




remorse = ~

®

Director Peet


85




Note

Assets

Current assets

Investments 8

Derivative financial instruments 9

Amounts receivable on subscription

Amounts receivable on sale of investments

Other receivables

Bank balances

Total assets

Liabilities

Current liabilities


Amounts payable on redemption

Amounts payable on purchase of investments

Accruals and other payables

Total liabilities

Net assets attributable to members 10

On behaif of AIA Company (Trustee) Limited

HX Co Director


Core China HK Dynamic

Age 65 Plus Fund = Accumulation Fund = Asset Allocation Fund Total

HK$ HKS — HK$ HK$

768,382,074 2,543,483,730 663,633,319 83,703,100,332

- - - 114,075

7,575,146 17,981,088 3,301,691 250,108,579

- 106,097 1,602,359 31,906,137

- 3 - 7,905,158 - - - 1,387,922,314

775,957,220 2,561,570,918 668,537,369 85,381,056,595

- - - 4,827,531

7,321,303 10,987,936 4,879,996 238,365,757

1,806,197 5,051,989 - 135,856,760

490,838 1,557,191 726,085 107,038,603

9,618,338 17,597,116 5,606,081 486,088,651

766,338,882 2,543,973,802 662,931,288 84,894,967,944


es

reel

86


STATEMENT OF NET ASSETS - CONSTITUENT FUNDS (CONTINUED)



Growth Balanced Capital Stable Guaranteed MPF

Note Portfolio Portfolio Portfolio Portfolio © Conservative Fund

HK$ HK$ HK$ HK$ HK$

Assets

Current assets

Investments 8 10,530,985,402 5,102,134,197 3,109,760,235 9,168,614,948 5,358,106,261



Amounts receivable on sale of investments 2,381,086 1,126,838 1,927,342 2,324,966 -

Other receivables 6,249 5,375 4,902 - -

Bank balances 383,945,947 330,240,128 378,785,211 - -

Total assets 10,925,319,910 5,440,219,858 3,494,363,475 9,186,935,616 5,384,214,645

Liabilities

Current liabilities

Derivative financial instruments 9 81,171 114,332 57,967 - -


Amounts payable on purchase of investments 2,746,293 1,164,445 1,269,986 - -

Accruals and other payables 18,637,489 9,260,153 5,950,910 - 4,193,603


Net assets attributable to members 10 10,889,775,526 5,421,845,215 3,478,213,462 9,165,932,635 §,369,828,304

On behalf of AIA Company (Trustee) Limited yf Ss

oe 3

¢ > x i“ f ; ot

Director .


87


STATEMENT OF NET ASSETS —- CONSTITUENT FUNDS (CONTINUED)



Hong Kong European Japan North American Asian

Note Equity Fund Equity Fund ~ Equity Fund Equity Fund Equity Fund

HK$ HK$ HK$ HK$ HKS

Assets

Current assets

Investments 8 5,994,590,747 1,449,718,959 662,964,708 2,499,986,790 3,954,418,559

Derivative financial instruments 9 - 132 1,321 - 1,071


Amounts receivable on sale of investments 6,026,177 754,445 6,679,945 334,562 6,651,997

Other receivables - 512,846 222,674 734,085 1,370,461

Bank balances - - - - -

Total assets 6,028,028,296 1,453,537,040 683,467,905 2,514,492,029 3,969,773,735

Liabilities

Current liabilities

Derivative financial instruments 9 - 156,334 70,402 224,827 416,828


Amounts payable on purchase of investments 981,316 343,469 9,563,820 3,114,854 641,524





So. gl <= Director Director /

iu


88





Allianz Capital Allianz Growth Allianz Stable

Greater China Stable Fund Fund Growth Fund Green Note Equity Fund {Note i) (Note i) (Note i) Fund

HK$ HK$ HKS HK$ HK$ Assets

Current assets

Investments 8 6,813,678,268 - - - 1,852,870,067


Amounts receivable on subscription 10,959,598 - - - 6,325,201

Amounts receivable on sale of investments 2,546,817 - - - 279,784

Other receivables - - - - - Bank balances - - - - -

Total assets 6,827,184,683 - - - 1,859,475,052

Liabilities

Current liabilities


Amounts payable on redemption 14,412,940 - - - 5,008,066

Amounts payable on purchase of investments 1,483,156 - - - 1,557,502 Accruals and other payables 11,675,922 - - - 2,280,445

Total liabilities 27,572,018 - - - 8,846,013

Net assets attributable to members 10 6,799,612,665 - - - 1,850,629,039


2S t= Director mee ir

Note i: Allianz Capital Stable Fund, Allianz Growth Fund and Allianz Stable Growth Fund (“the 3 Allianzunds”) had no investments and operations since 15th November 2018. MPFA. had approved the termination of the 3 Allianz Funds to take effect on 13th March 2019.


89




Note

Assets

Current assets

Investments 8


Amounts receivable on subscription

Amounts receivable on sale of investments

Other receivables

Bank balances

Total assets

Liabilities

Current liabilities


Amounts payable on redemption

Amounts payable on purchase of investments


Total liabilities

Net assets attributable to members 10


2a Con. Director



Global Bond World Manager’s Fidelity Capital Fidelity Stable

Fund Fund Choice Fund Stable Fund Growth Fund

HK$ HK$ HK$ HKS HK$

1,517,266,766 1,334,015,963 4,183,082,705 966,407,721 2,078,453,875

11,810,084 1,834,402 8,656,838 3,389,010 3,473,267

- 128,258 277,353 1,411,273 981,810

422,098 394,276 2,105 15,092 32,458

- 372,091 129,333,385 - -

1,529,498,948 1,336,744,990 4,321,352,386 971,223,096 2,082,941,410

141,346 121,596 81,370 - -

8,014,185 1,941,158 9,031,839 6,239,312 4,688,127 4,347,839 291,031 3,142,983 - 175,042

1,118,748 938,415 5,149,250 1,091,941 2,432,132

13,622,118 3,292,200 17,405,442 7,331,253 7,295,301

1,515,876,830 1,333,452,790 4,303,946,944 963,891,843 2,075,646,109

i ———)

|

90

“eet

q





Fidelity Growth Asian Eurasia Hong Kong and American

Note Fund Bond Fund Fund China Fund Fund

HK$ HK$ HK$ HK$ HK$

Assets

Current assets

Investments 8 2,129,698,307 961,947,625 337,455,029 2,138,147,608 889,021,497


Amounts receivable on subscription 3,166,886 8,729,079 , 632,338 7,710,139 3,558,771

Amounts receivable on sale of investments 548,726 113,789 75,428 5,690,995 82,610

Other receivables 35,009 - 48,945 120,132 273,750

Bank balances - - 2,100,874 49,282,127 348,240

Total assets 2,133,448,928 970,790,493 340,312,614 2,200,951,001 893,284,868

Liabilities

Current liabilities

Derivative financial instruments 9 - - 12,286 - 80,339

Amounts payable on redemption 4,246,666 4,526,305 776,195 17,520,898 2,708,270

Amounts payable on purchase of investinents - 3,528,379 59,911 - 333,277

Accruals and other payables . 2,368,819 630,577 399,291 1,376,564 631,454

Totat liabilities 6,615,485 8,685,261 1,247,683 18,897,462 3,753,340

Net assets attributable to members 10 2,126,833,443 962,105,232 339,064,931 2,182,053,539 889,531,528


Qa fh The accompanying notes are an integral part of these financial statements.

91





Core China HK Dynamic

Note Age 65 Plus Fund Accumulation Fund Asset Allocation Fund Total

HK$ HK$ HK$ HK$

Assets

Current assets

Investments 8 441,799,804 1,638,954,245 543,234,678 75,657,3 14,964

Derivative financial instruments 9 - - - 2,524

Amounts receivable on subscription 2,448,059 7,367,169 2,164,358 207,259, 142

Amounts receivable on sale of investments - - - 40,344,201

Other receivables - - - 4,200,457

Bank balances - - - 1,274,408,003

Total assets 444,247,863 1,646,321,414 545,399,036 77,183,529,291

Liabilities

Current liabilities

Derivative financial instruments 9 - - - 1,558,798

Amounts payable on redemption 1,887,525 2,991,527 593,495 224,846,266

Amounts payable on purchase of investments 665,223 1,965,875 - 37,375,925

Accruals and other payables 293,036 1,016,610 513,836 94,867,457

Total liabilities 2,845,784 5,974,012 1,107,331 358,648,446

Net assets attributable to members 10 441,402,079 1,640,347,402 544,291,705 76,824,880,845

On behalf of AIA Company (Trustee) Limited 5

wo of On. Zon

Director


vl

92


93

STATEMENT OF COMPREHENSIVE INCOME – CONSTITUENT FUNDS FOR THE YEAR ENDED 30TH NOVEMBER 2019

2019

Note Growth

Portfolio Balanced Portfolio




HK$ HK$ HK$ HK$ HK$ Income

Net gains/(losses) on investments and derivative financial instruments 4 970,163,482 504,348,350 300,765,861 - 116,877,732 Interest on bank deposits 1,811,264 1,730,562 2,073,564 - - Declared investment return - - - 13,763,844 - Dividend income - - - - - Exchange gains/(losses) 12 (15) (15) - - Others - 39 - 38,066 -

───────────── ───────────── ───────────── ───────────── ───────────── Total income/(loss) 971,974,758 506,078,936 302,839,410 13,801,910 116,877,732 ----------------------- ----------------------- ----------------------- ----------------------- ----------------------- Expenses

Investment management fees 5(b) 100,624,357 50,984,635 32,681,473 - 20,243,374 Trustee and administration fees 5(a) 95,034,116 48,152,155 30,865,835 - 33,738,957 Auditor's remuneration 143,733 82,246 54,322 - - Registrar fees 4,800 4,800 4,800 - - Legal and other professional fees 244,796 124,015 79,536 - - Transaction costs 4,715 4,715 4,715 - 4,679 Other operating expenses 9,945,143 5,067,203 3,286,915 - -

───────────── ───────────── ───────────── ───────────── ───────────── Total expenses 206,001,660 104,419,769 66,977,596 - 53,987,010 ------------------------ ------------------------ ------------------------ ------------------------ ------------------------ Total comprehensive income/(loss) 765,973,098 401,659,167 235,861,814 13,801,910 62,890,722 ═════════════ ═════════════ ═════════════ ═════════════ ═════════════



94

STATEMENT OF COMPREHENSIVE INCOME – CONSTITUENT FUNDS (CONTINUED) FOR THE YEAR ENDED 30TH NOVEMBER 2019

2019

Note Hong Kong

Equity Fund European

Equity Fund Japan

Equity Fund North American

Equity Fund Asian

Equity Fund HK$ HK$ HK$ HK$ HK$ Income

Net gains/(losses) on investments and derivative financial instruments 4 259,372,106 172,303,297 70,232,130 286,051,445 401,087,041 Interest on bank deposits - - - - - Declared investment return - - - - - Dividend income - - - - - Exchange gains/(losses) (84) (83) (84) (84) (83) Others 58 459 - 112 -


Investment management fees 5(b) 56,727,450 13,676,742 6,001,314 23,912,928 36,924,884 Trustee and administration fees 5(a) 53,575,924 12,916,924 5,667,908 22,584,433 34,873,502 Auditor's remuneration 86,419 16,112 7,111 49,612 46,088 Registrar fees 300 300 300 300 300 Legal and other professional fees 138,251 33,364 14,434 57,735 89,689 Transaction costs 4,679 4,679 4,679 4,679 4,679 Other operating expenses 5,759,964 1,435,650 654,817 2,406,592 3,743,716

───────────── ───────────── ───────────── ───────────── ───────────── Total expenses 116,292,987 28,083,771 12,350,563 49,016,279 75,682,858 ------------------------ ------------------------ ------------------------ ------------------------ ------------------------ Total comprehensive income/(loss) 143,079,093 144,219,902 57,881,483 237,035,194 325,404,100 ═════════════ ═════════════ ═════════════ ═════════════ ═════════════



95


2019

Note Greater China

Equity Fund Allianz Capital

Stable Fund Allianz Growth

Fund Allianz Stable Growth Fund

Green Fund

(Note i) (Note i) (Note i) HK$ HK$ HK$ HK$ HK$ Income

Net gains/(losses) on investments and derivative financial instruments 4 963,407,016 - - - 278,036,582 Interest on bank deposits - - - - - Declared investment return - - - - - Dividend income - - - - - Exchange gains/(losses) (83) - - - - Others - - - - -

───────────── ───────────── ───────────── ───────────── ───────────── Total income/(loss) 963,406,933 - - - 278,036,582 ----------------------- ----------------------- ----------------------- ----------------------- ----------------------- Expenses

Investment management fees 5(b) 65,361,834 - - - 12,898,556 Trustee and administration fees 5(a) 61,730,620 - - - 16,611,777 Auditor's remuneration 95,948 - - - - Registrar fees 300 - - - - Legal and other professional fees 158,543 - - - - Transaction costs 4,679 - - - 4,679 Other operating expenses 6,567,386 - - - -

───────────── ───────────── ───────────── ───────────── ───────────── Total expenses 133,919,310 - - - 29,515,012 ------------------------ ------------------------ ------------------------ ------------------------ ------------------------ Total comprehensive income/(loss) 829,487,623 - - - 248,521,570 ═════════════ ═════════════ ═════════════ ═════════════ ═════════════

Note i: Allianz Capital Stable Fund, Allianz Growth Fund and Allianz Stable Growth Fund (“the 3 Allianz Funds”) had no investments and operations since 15th November 2018. MPFA

had approved the termination of the 3 Allianz Funds to take effect on 13th March 2019. The accompanying notes are an integral part of these financial statements.


96


2019

Note Global Bond

Fund World Fund





Net gains/(losses) on investments and derivative financial instruments 4 143,805,346 122,952,259 402,076,929 87,450,105 211,499,049 Interest on bank deposits - 6,281 741,718 - - Declared investment return - - - - - Dividend income - 25,440,878 - - - Exchange gains/(losses) - (19,897) (14) - - Others - - - 190,564 424,342


Investment management fees 5(b) 5,428,330 2,022,932 31,227,661 9,377,367 20,319,122 Trustee and administration fees 5(a) 10,597,184 8,669,708 38,468,857 8,856,403 19,190,281 Auditor's remuneration - 23,062 - - - Registrar fees - 2,400 - - - Legal and other professional fees - 31,497 - - - Transaction costs 4,679 4,679 4,715 4,679 4,679 Other operating expenses - 596,040 42,308 - -




97


2019

Note Fidelity Growth

Fund Asian

Bond Fund Eurasia

Fund Hong Kong and

China Fund American

Fund HK$ HK$ HK$ HK$ HK$ Income

Net gains/(losses) on investments and derivative financial instruments 4 239,245,334 73,645,158 23,246,869 (38,477,903) 106,081,838 Interest on bank deposits - - 1,757 7,886 6,420 Declared investment return - - - - - Dividend income - - 8,949,250 76,783,352 16,122,192 Exchange gains/(losses) - - (8,951) - (7,220) Others 436,509 - - 95 5


Investment management fees 5(b) 20,465,777 975,091 332,337 4,456,254 2,308,172 Trustee and administration fees 5(a) 19,328,790 6,701,649 2,215,584 14,285,233 6,295,014 Auditor’s remuneration - - 3,017 - 16,096 Registrar fees - - 1,200 - 2,400 Legal and other professional fees - 10,690 6,209 - 22,641 Transaction costs 4,679 4,679 4,679 4,679 4,679 Other operating expenses - 169,310 133,574 117,000 478,863




98


2019

Note Age 65 Plus Fund

Core Accumulation

Fund

China HK Dynamic Asset

Allocation Fund Total HK$ HK$ HK$ HK$ Income

Net gains/(losses) on investments and derivative financial instruments 4 53,622,914 229,607,030 2,031,452 5,979,431,422 Interest on bank deposits - - - 6,379,452 Declared investment return - - - 13,763,844 Dividend income - - - 127,295,672 Exchange gains/(losses) - - - (36,601) Others - 3 - 1,090,252

───────────── ───────────── ───────────── ───────────── Total income/(loss) 53,622,914 229,607,033 2,031,452 6,127,924,041 ----------------------- ----------------------- ----------------------- ----------------------- Expenses

Investment management fees 5(b) - - 600,947 517,551,537 Trustee and administration fees 5(a) 2,911,043 10,182,225 5,390,083 568,844,205 Auditor’s remuneration 12,682 39,920 11,383 687,751 Registrar fees 300 300 300 23,100 Legal and other professional fees 12,745 44,687 13,923 1,082,755 Transaction costs 4,715 4,715 4,711 112,544 Other operating expenses 548,283 1,785,127 627,609 43,365,500

───────────── ───────────── ───────────── ───────────── Total expenses 3,489,768 12,056,974 6,648,956 1,131,667,392 ------------------------ ------------------------ ------------------------ ------------------------ Total comprehensive income/(loss) 50,133,146 217,550,059 (4,617,504) 4,996,256,649 ═════════════ ═════════════ ═════════════ ═════════════



99


2018

Note Growth






Net gains/(losses) on investments and derivative financial instruments 4 (670,698,992) (260,429,103) (115,657,489) - 76,638,413 Interest on bank deposits 633,939 1,175,697 1,245,390 - - Declared investment return - - - 13,085,783 - Dividend income - - - - - Exchange gains/(losses) - - - - - Others (14) (26) (29) 6 -

───────────── ───────────── ───────────── ───────────── ───────────── Total income/(loss) (670,065,067) (259,253,432) (114,412,128) 13,085,789 76,638,413 ----------------------- ----------------------- ----------------------- ----------------------- ----------------------- Expenses

Investment management fees 5(b) 108,330,043 51,960,885 32,703,759 - 17,740,816 Trustee and administration fees 5(a) 102,311,708 49,074,170 30,886,884 - 28,994,570 Auditor's remuneration 633,588 306,248 192,901 - - Registrar fees 4,769 4,770 4,770 - - Legal and other professional fees 29,222 13,826 8,648 - - Transaction costs 4,720 4,720 4,720 - 4,680 Other operating expenses 8,799,710 4,250,481 2,707,793 - -

───────────── ───────────── ───────────── ───────────── ───────────── Total expenses 220,113,760 105,615,100 66,509,475 - 46,740,066 ------------------------ ------------------------ ------------------------ ------------------------ ------------------------ Total comprehensive income/(loss) (890,178,827) (364,868,532) (180,921,603) 13,085,789 29,898,347 ═════════════ ═════════════ ═════════════ ═════════════ ═════════════



100


2018

Note Hong Kong


Equity Fund Japan


Equity Fund Asian

Equity Fund HK$ HK$ HK$ HK$ HK$ Income

Net gains/(losses) on investments and derivative financial instruments 4 (402,310,391) (175,836,726) (67,087,857) 80,224,714 (261,050,476) Interest on bank deposits - - - - - Declared investment return - - - - - Dividend income - - - - - Exchange gains/(losses) 6 6 3 6 6 Others 313 88 - - 19

───────────── ───────────── ───────────── ───────────── ───────────── Total income/(loss) (402,310,072) (175,836,632) (67,087,854) 80,224,720 (261,050,451) ----------------------- ----------------------- ----------------------- ----------------------- ----------------------- Expenses

Investment management fees 5(b) 59,128,760 15,050,230 6,625,780 21,803,678 39,584,576 Trustee and administration fees 5(a) 55,843,829 14,214,106 6,257,681 20,592,363 37,385,433 Auditor's remuneration 359,956 85,670 37,701 133,197 225,503 Registrar fees 269 269 269 269 269 Legal and other professional fees 16,154 4,073 1,776 5,502 10,634 Transaction costs 4,680 4,680 4,680 4,680 4,680 Other operating expenses 4,977,929 1,307,187 609,506 1,793,067 3,321,330

───────────── ───────────── ───────────── ───────────── ───────────── Total expenses 120,331,577 30,666,215 13,537,393 44,332,756 80,532,425 ------------------------ ------------------------ ------------------------ ------------------------ ------------------------ Total comprehensive income/(loss) (522,641,649) (206,502,847) (80,625,247) 35,891,964 (341,582,876) ═════════════ ═════════════ ═════════════ ═════════════ ═════════════



101


2018

Note Greater China


Stable Fund Allianz Growth


Green Fund

(Note i) (Note i) (Note i) HK$ HK$ HK$ HK$ HK$ Income

Net gains/(losses) on investments and derivative financial instruments 4 (633,517,482) (19,503,418) (92,586,478) (47,492,193) (29,725,849) Interest on bank deposits - - - - - Declared investment return - - - - - Dividend income - - - - - Exchange gains/(losses) 7 (121) (123) (121) - Others 116 7,077 22,597 16,640 73

───────────── ───────────── ───────────── ───────────── ───────────── Total income/(loss) (633,517,359) (19,496,462) (92,564,004) (47,475,674) (29,725,776) ----------------------- ----------------------- ----------------------- ----------------------- ----------------------- Expenses

Investment management fees 5(b) 69,541,369 3,676,181 9,065,692 6,833,028 12,233,939 Trustee and administration fees 5(a) 65,677,960 3,471,515 8,562,032 6,453,411 15,995,806 Auditor's remuneration 422,431 16,603 41,189 30,887 - Registrar fees 269 240 240 240 - Legal and other professional fees 19,051 1,033 2,592 1,926 - Transaction costs 4,680 4,385 4,385 4,385 5,238 Other operating expenses 5,852,177 331,101 715,908 549,723 -

───────────── ───────────── ───────────── ───────────── ───────────── Total expenses 141,517,937 7,501,058 18,392,038 13,873,600 28,234,983 ------------------------ ------------------------ ------------------------ ------------------------ ------------------------ Total comprehensive income/(loss) (775,035,296) (26,997,520) (110,956,042) (61,349,274) (57,960,759) ═════════════ ═════════════ ═════════════ ═════════════ ═════════════




102


2018

Note Global Bond

Fund World Fund





Net gains/(losses) on investments and derivative financial instruments 4 (62,841,773) (27,462,940) (239,987,684) (13,434,490) (43,566,560) Interest on bank deposits - 1,311 254,251 - - Declared investment return - - - - - Dividend income - 21,126,694 - - - Exchange gains/(losses) - (6,998) - - - Others - - (42) 111,100 273,269

───────────── ───────────── ───────────── ───────────── ───────────── Total income/(loss) (62,841,773) (6,341,933) (239,733,475) (13,323,390) (43,293,291) ----------------------- ----------------------- ----------------------- ----------------------- ----------------------- Expenses

Investment management fees 5(b) 4,396,556 1,864,131 31,298,156 4,944,819 9,627,868 Trustee and administration fees 5(a) 8,793,113 7,989,134 39,132,690 4,670,106 11,396,848 Auditor's remuneration - - - - - Registrar fees - - - - - Legal and other professional fees - - - - - Transaction costs 4,680 4,680 4,713 4,680 4,680 Other operating expenses - 422,481 44,218 - -

───────────── ───────────── ───────────── ───────────── ───────────── Total expenses 13,194,349 10,280,426 70,479,777 9,619,605 21,029,396 ------------------------ ------------------------ ------------------------ ------------------------ ------------------------ Total comprehensive income/(loss) (76,036,122) (16,622,359) (310,213,252) (22,942,995) (64,322,687) ═════════════ ═════════════ ═════════════ ═════════════ ═════════════



103


2018

Note Fidelity Growth

Fund Asian

Bond Fund Eurasia

Fund Hong Kong and

China Fund American

Fund HK$ HK$ HK$ HK$ HK$ Income

Net gains/(losses) on investments and derivative financial instruments 4 (58,696,903) (4,621,985) (38,570,251) (213,574,323) 14,956,628 Interest on bank deposits - - 204 603 1,849 Declared investment return - - - - - Dividend income - - 8,348,716 72,070,960 10,860,795 Exchange gains/(losses) - - (3,244) - (489) Others 269,851 - - - -

───────────── ───────────── ───────────── ───────────── ───────────── Total income/(loss) (58,427,052) (4,621,985) (30,224,575) (141,502,760) 25,818,783 ----------------------- ----------------------- ----------------------- ----------------------- ----------------------- Expenses

Investment management fees 5(b) 11,539,740 662,859 318,156 4,129,894 1,793,660 Trustee and administration fees 5(a) 10,898,643 5,425,195 2,121,042 13,766,316 4,891,802 Auditor’s remuneration - - - - - Registrar fees - - - - - Legal and other professional fees - - - - - Transaction costs 4,680 4,680 4,680 4,680 4,680 Other operating expenses - 100,000 105,657 - 271,475

───────────── ───────────── ───────────── ───────────── ───────────── Total expenses 22,443,063 6,192,734 2,549,535 17,900,890 6,961,617 ------------------------ ------------------------ ------------------------ ------------------------ ------------------------ Total comprehensive income/(loss) (80,870,115) (10,814,719) (32,774,110) (159,403,650) 18,857,166 ═════════════ ═════════════ ═════════════ ═════════════ ═════════════



104


2018

Note Age 65 Plus Fund

Core Accumulation

Fund


Allocation Fund Total HK$ HK$ HK$ HK$ Income

Net gains/(losses) on investments and derivative financial instruments 4 (1,997,921) (18,853,061) (7,189,461) (3,334,874,051) Interest on bank deposits - - - 3,313,244 Declared investment return - - - 13,085,783 Dividend income - - - 112,407,165 Exchange gains/(losses) - - - (11,062) Others - - - 701,038

───────────── ───────────── ───────────── ───────────── Total income/(loss) (1,997,921) (18,853,061) (7,189,461) (3,205,377,883) ----------------------- ----------------------- ----------------------- ----------------------- Expenses

Investment management fees 5(b) - - - 524,854,575 Trustee and administration fees 5(a) 1,649,642 6,782,699 3,894,145 567,132,843 Auditor’s remuneration 17,570 49,066 16,412 2,568,922 Registrar fees 269 213 208 17,333 Legal and other professional fees 700 2,998 1,000 119,135 Transaction costs 4,698 4,698 4,700 126,242 Other operating expenses 283,171 973,332 384,586 37,800,832

───────────── ───────────── ───────────── ───────────── Total expenses 1,956,050 7,813,006 4,301,051 1,132,619,882 ------------------------ ------------------------ ------------------------ ------------------------ Total comprehensive income/(loss) (3,953,971) (26,666,067) (11,490,512) (4,337,997,765) ═════════════ ═════════════ ═════════════ ═════════════



105

STATEMENT OF CHANGES IN NET ASSETS ATTRIBUTABLE TO MEMBERS – CONSTITUENT FUNDS FOR THE YEAR ENDED 30TH NOVEMBER 2019 2019

Note Growth




MPF Conservative

Fund HK$ HK$ HK$ HK$ HK$ Balance at the beginning of the year 10,889,775,526 5,421,845,215 3,478,213,462 9,165,932,635 5,369,828,304 ------------------ ------------------ ------------------ ------------------ ------------------ Subscription of units 10 909,984,310 649,611,963 505,581,483 1,966,812,261 3,005,583,493 Redemption of units 10 (1,191,108,566) (670,591,413) (511,376,421) (1,881,075,116) (2,663,874,561) ────────── ────────── ────────── ────────── ────────── Net subscription/(redemption) (281,124,256) (20,979,450) (5,794,938) 85,737,145 341,708,932 ------------------ ------------------ ------------------ ------------------ ------------------ Total comprehensive income/(loss) for the year 765,973,098 401,659,167 235,861,814 13,801,910 62,890,722 ------------------ ------------------ ------------------ ------------------ ------------------ Balance at the end of the year 11,374,624,368 5,802,524,932 3,708,280,338 9,265,471,690 5,774,427,958 ═════════ ═════════ ═════════ ═════════ ═════════



106

STATEMENT OF CHANGES IN NET ASSETS ATTRIBUTABLE TO MEMBERS – CONSTITUENT FUNDS (CONTINUED) FOR THE YEAR ENDED 30TH NOVEMBER 2019 2019

Note Hong Kong


Equity Fund Japan

Equity Fund

North American

Equity Fund Asian

Equity Fund HK$ HK$ HK$ HK$ HK$ Balance at the beginning of the year 5,979,433,465 1,446,890,977 660,492,517 2,496,373,503 3,947,409,162 ------------------ ------------------ ------------------ ------------------ ------------------ Subscription of units 10 1,966,296,099 241,566,831 380,690,082 1,072,658,563 603,472,353 Redemption of units 10 (1,945,730,149) (254,953,565) (352,049,764) (736,485,056) (621,582,708) ────────── ────────── ────────── ────────── ────────── Net subscription/(redemption) 20,565,950 (13,386,734) 28,640,318 336,173,507 (18,110,355) ------------------ ------------------ ------------------ ------------------ ------------------ Total comprehensive income/(loss) for the year 143,079,093 144,219,902 57,881,483 237,035,194 325,404,100 ------------------ ------------------ ------------------ ------------------ ------------------ Balance at the end of the year 6,143,078,508 1,577,724,145 747,014,318 3,069,582,204 4,254,702,907 ═════════ ═════════ ═════════ ═════════ ═════════



107

STATEMENT OF CHANGES IN NET ASSETS ATTRIBUTABLE TO MEMBERS – CONSTITUENT FUNDS (CONTINUED) FOR THE YEAR ENDED 30TH NOVEMBER 2019

2019

Note Greater China

Equity Fund


(Note i)

Allianz Growth Fund

(Note i)

Allianz Stable Growth Fund

(Note i) Green Fund HK$ HK$ HK$ HK$ HK$ Balance at the beginning of the year 6,799,612,665 - - - 1,850,629,039 ------------------ ------------------ ------------------ ------------------ ------------------ Subscription of units 10 1,107,012,802 - - - 440,042,546 Redemption of units 10 (1,229,758,950) - - - (351,833,288) ────────── ────────── ────────── ────────── ────────── Net subscription/(redemption) (122,746,148) - - - 88,209,258 ------------------ ------------------ ------------------ ------------------ ------------------ Total comprehensive income/(loss) for the year 829,487,623 - - - 248,521,570 ------------------ ------------------ ------------------ ------------------ ------------------ Balance at the end of the year 7,506,354,140 - - - 2,187,359,867 ═════════ ═════════ ═════════ ═════════ ═════════

Note i: Allianz Capital Stable Fund, Allianz Growth Fund and Allianz Stable Growth Fund (“the 3 Allianz Funds”) had no investments and operations since 15th November 2018. MPFA had approved the termination of the 3 Allianz Funds to take effect on 13th March 2019. The accompanying notes are an integral part of these financial statements.


108


Note Global

Bond Fund World

Fund Manager's

Choice Fund

Fidelity Capital Stable

Fund Fidelity Stable Growth Fund

HK$ HK$ HK$ HK$ HK$ Balance at the beginning of the year 1,515,876,830 1,333,452,790 4,303,946,944 963,891,843 2,075,646,109 ------------------ ------------------ ------------------ ------------------ ------------------ Subscription of units 10 1,026,474,420 373,920,774 647,977,835 343,851,970 512,481,530 Redemption of units 10 (642,424,433) (257,139,314) (599,051,172) (264,374,433) (363,482,229) ────────── ────────── ────────── ────────── ────────── Net subscription/(redemption) 384,049,987 116,781,460 48,926,663 79,477,537 148,999,301 ------------------ ------------------ ------------------ ------------------ ------------------ Total comprehensive income/(loss) for the year 127,775,153 137,029,203 333,075,092 69,402,220 172,409,309 ------------------ ------------------ ------------------ ------------------ ------------------ Balance at the end of the year 2,027,701,970 1,587,263,453 4,685,948,699 1,112,771,600 2,397,054,719 ═════════ ═════════ ═════════ ═════════ ═════════



109


Note Fidelity

Growth Fund Asian

Bond Fund Eurasia Fund Hong Kong and

China Fund American

Fund HK$ HK$ HK$ HK$ HK$ Balance at the beginning of the year 2,126,833,443 962,105,232 339,064,931 2,182,053,539 889,531,528 ------------------ ------------------ ------------------ ------------------ ------------------ Subscription of units 10 434,039,857 537,065,662 112,158,652 1,066,427,967 634,625,988 Redemption of units 10 (346,927,031) (329,120,634) (78,946,463) (915,236,401) (341,522,409) ────────── ────────── ────────── ────────── ────────── Net subscription/(redemption) 87,112,826 207,945,028 33,212,189 151,191,566 293,103,579 ------------------ ------------------ ------------------ ------------------ ------------------ Total comprehensive income/(loss) for the year 199,882,597 65,783,739 29,492,325 19,450,264 113,075,370 ------------------ ------------------ ------------------ ------------------ ------------------ Balance at the end of the year 2,413,828,866 1,235,833,999 401,769,445 2,352,695,369 1,295,710,477 ═════════ ═════════ ═════════ ═════════ ════════



110


Note Age 65 Plus

Fund

Core Accumulation

Fund


Allocation Fund Total

HK$ HK$ HK$ HK$ Balance at the beginning of the year 441,402,079 1,640,347,402 544,291,705 76,824,880,845 ------------------ ------------------ ------------------ ------------------ Subscription of units 10 609,893,887 1,154,089,791 306,199,767 20,608,520,886 Redemption of units 10 (335,090,230) (468,013,450) (182,942,680) (17,534,690,436) ────────── ────────── ────────── ─────────── Net subscription/(redemption) 274,803,657 686,076,341 123,257,087 3,073,830,450 ------------------ ------------------ ------------------ ------------------- Total comprehensive income/(loss) for the year 50,133,146 217,550,059 (4,617,504) 4,996,256,649 ------------------ ------------------ ------------------ ------------------- Balance at the end of the year 766,338,882 2,543,973,802 662,931,288 84,894,967,944 ═════════ ═════════ ═════════ ═════════



111


Note Growth




MPF Conservative

Fund HK$ HK$ HK$ HK$ HK$ Balance at the beginning of the year 12,318,303,585 5,816,682,714 3,631,059,301 8,204,463,212 4,251,325,414 ------------------ ------------------ ------------------ ------------------ ------------------ Subscription of units 10 1,047,704,572 759,475,138 625,206,112 2,760,555,073 3,869,908,136 Redemption of units 10 (1,586,053,804) (789,444,105) (597,130,348) (1,812,171,439) (2,781,303,593) ────────── ────────── ────────── ────────── ────────── Net subscription/(redemption) (538,349,232) (29,968,967) 28,075,764 948,383,634 1,088,604,543 ------------------ ------------------ ------------------ ------------------ ------------------ Total comprehensive income/(loss) for the year (890,178,827) (364,868,532) (180,921,603) 13,085,789 29,898,347 ------------------ ------------------ ------------------ ------------------ ------------------ Balance at the end of the year 10,889,775,526 5,421,845,215 3,478,213,462 9,165,932,635 5,369,828,304 ═════════ ═════════ ═════════ ═════════ ═════════



112


Note Hong Kong


Equity Fund Japan

Equity Fund

North American

Equity Fund Asian

Equity Fund HK$ HK$ HK$ HK$ HK$ Balance at the beginning of the year 6,731,427,187 1,725,358,764 747,364,912 2,290,425,897 4,437,700,145 ------------------ ------------------ ------------------ ------------------ ------------------ Subscription of units 10 2,412,826,693 307,151,118 426,551,372 1,058,051,532 680,127,476 Redemption of units 10 (2,642,178,766) (379,116,058) (432,798,520) (887,995,890) (828,835,583) ────────── ────────── ────────── ────────── ────────── Net subscription/(redemption) (229,352,073) (71,964,940) (6,247,148) 170,055,642 (148,708,107) ------------------ ------------------ ------------------ ------------------ ------------------ Total comprehensive income/(loss) for the year (522,641,649) (206,502,847) (80,625,247) 35,891,964 (341,582,876) ------------------ ------------------ ------------------ ------------------ ------------------ Balance at the end of the year 5,979,433,465 1,446,890,977 660,492,517 2,496,373,503 3,947,409,162 ═════════ ═════════ ═════════ ═════════ ═════════



113

STATEMENT OF CHANGES IN NET ASSETS ATTRIBUTABLE TO MEMBERS – CONSTITUENT FUNDS (CONTINUED) FOR THE YEAR ENDED 30TH NOVEMBER 2019

2018

Note Greater China

Equity Fund


(Note i)

Allianz Growth Fund

(Note i)


(Note i) Green Fund HK$ HK$ HK$ HK$ HK$ Balance at the beginning of the year 8,008,277,456 407,570,094 1,098,909,279 793,405,649 1,827,608,875 ------------------ ------------------ ------------------ ------------------ ------------------ Subscription of units 10 1,227,404,698 147,391,213 143,023,115 163,288,524 552,181,070 Redemption of units 10 (1,661,034,193) (527,963,787) (1,130,976,352) (895,344,899) (471,200,147) ────────── ────────── ────────── ────────── ────────── Net subscription/(redemption) (433,629,495) (380,572,574) (987,953,237) (732,056,375) 80,980,923 ------------------ ------------------ ------------------ ------------------ ------------------ Total comprehensive income/(loss) for the year (775,035,296) (26,997,520) (110,956,042) (61,349,274) (57,960,759) ------------------ ------------------ ------------------ ------------------ ------------------ Balance at the end of the year 6,799,612,665 - - - 1,850,629,039 ═════════ ═════════ ═════════ ═════════ ═════════



114


Note Global

Bond Fund World

Fund Manager's

Choice Fund

Fidelity Capital Stable

Fund Fidelity Stable Growth Fund

HK$ HK$ HK$ HK$ HK$ Balance at the beginning of the year 1,300,016,705 1,259,043,415 4,598,162,245 450,712,102 1,196,709,981 ------------------ ------------------ ------------------ ------------------ ------------------ Subscription of units 10 959,038,760 374,318,593 853,846,268 787,898,563 1,250,663,120 Redemption of units 10 (667,142,513) (283,286,859) (837,848,317) (251,775,827) (307,404,305) ────────── ────────── ────────── ────────── ────────── Net subscription/(redemption) 291,896,247 91,031,734 15,997,951 536,122,736 943,258,815 ------------------ ------------------ ------------------ ------------------ ------------------ Total comprehensive income/(loss) for the year (76,036,122) (16,622,359) (310,213,252) (22,942,995) (64,322,687) ------------------ ------------------ ------------------ ------------------ ------------------ Balance at the end of the year 1,515,876,830 1,333,452,790 4,303,946,944 963,891,843 2,075,646,109 ═════════ ═════════ ═════════ ═════════ ═════════



115


Note Fidelity

Growth Fund Asian

Bond Fund Eurasia Fund Hong Kong and

China Fund American

Fund HK$ HK$ HK$ HK$ HK$ Balance at the beginning of the year 1,185,921,646 761,148,739 330,408,277 2,184,310,749 729,442,976 ------------------ ------------------ ------------------ ------------------ ------------------ Subscription of units 10 1,309,518,440 562,051,492 146,326,170 1,271,023,172 518,680,558 Redemption of units 10 (287,736,528) (350,280,280) (104,895,406) (1,113,876,732) (377,449,172) ────────── ────────── ────────── ────────── ────────── Net subscription/(redemption) 1,021,781,912 211,771,212 41,430,764 157,146,440 141,231,386 ------------------ ------------------ ------------------ ------------------ ------------------ Total comprehensive income/(loss) for the year (80,870,115) (10,814,719) (32,774,110) (159,403,650) 18,857,166 ------------------ ------------------ ------------------ ------------------ ------------------ Balance at the end of the year 2,126,833,443 962,105,232 339,064,931 2,182,053,539 889,531,528 ═════════ ═════════ ═════════ ═════════ ════════



116


Note Age 65 Plus

Fund

Core Accumulation

Fund



HK$ HK$ HK$ HK$ Balance at the beginning of the year 216,208,205 1,047,003,385 296,668,928 77,845,639,837 ------------------ ------------------ ------------------ ------------------ Subscription of units 10 432,118,312 964,126,812 446,000,180 26,056,456,282 Redemption of units 10 (202,970,467) (344,116,728) (186,886,891) (22,739,217,509) ────────── ────────── ────────── ─────────── Net subscription/(redemption) 229,147,845 620,010,084 259,113,289 3,317,238,773 ------------------ ------------------ ------------------ ------------------- Total comprehensive income/(loss) for the year (3,953,971) (26,666,067) (11,490,512) (4,337,997,765) ------------------ ------------------ ------------------ ------------------- Balance at the end of the year 441,402,079 1,640,347,402 544,291,705 76,824,880,845 ═════════ ═════════ ═════════ ═════════



117

STATEMENT OF CASH FLOWS – CONSTITUENT FUNDS FOR THE YEAR ENDED 30TH NOVEMBER 2019

2019

Growth Portfolio

Balanced Portfolio




HK$ HK$ HK$ HK$ HK$ Cash flows from operating activities Total comprehensive income/(loss) for the year 765,973,098 401,659,167 235,861,814 13,801,910 62,890,722 Adjustment for: Interest on bank deposits (1,811,264) (1,730,562) (2,073,564) - -

Dividend income - - - - -

Operating profit/(loss) before working capital changes 764,161,834 399,928,605 233,788,250 13,801,910 62,890,722 Net (increase)/decrease in investments (315,026,288) (561,119,099) (323,513,161) (98,661,432) (428,796,428) Net (increase)/decrease in derivative financial instruments 163,797 341,621 163,120 - - Net (increase)/decrease in amounts receivable on sale of investments (3,763,225) (2,924,584) (1,361,904) 642,398 - Net (increase)/decrease in other receivables - - - (38,066) - Net increase/(decrease) in amounts payable on purchase of investments (2,746,293) 35,231,188 20,440,872 - - Net increase/(decrease) in accruals and other payables 675,047 591,527 349,914 - 355,704 Cash generated from/(used in) operations 443,464,872 (127,950,742) (70,132,909) (84,255,190) (365,550,002) Interest on bank deposits received 1,787,754 1,725,975 2,063,665 - - Dividend income received - - - - - Net cash generated from/(used in) operating activities 445,252,626 (126,224,767) (68,069,244) (84,255,190) (365,550,002) Cash flows from financing activities Receipts on subscription 906,881,006 650,398,114 505,102,657 1,964,547,098 3,019,192,465 Payments on redemption (1,187,488,471) (670,761,966) (514,498,532) (1,880,291,908) (2,653,642,463) Net cash generated from/(used in) financing activities (280,607,465) (20,363,852) (9,395,875) 84,255,190 365,550,002 Net increase/(decrease) in cash and cash equivalents 164,645,161 (146,588,619) (77,465,119) - - Cash and cash equivalents at the beginning of the year 383,945,947 330,240,128 378,785,211 - - Cash and cash equivalents at the end of the year 548,591,108 183,651,509 301,320,092 - - Analysis of balances of cash and cash equivalents Cash at banks 548,591,108 183,651,509 301,320,092 - -



118

STATEMENT OF CASH FLOWS – CONSTITUENT FUNDS (CONTINUED) FOR THE YEAR ENDED 30TH NOVEMBER 2019

2019

Hong Kong Equity

Fund European Equity

Fund Japan Equity

Fund North American

Equity Fund Asian Equity

Fund HK$ HK$ HK$ HK$ HK$

Cash flows from operating activities Total comprehensive income/(loss) for the year 143,079,093 144,219,902 57,881,483 237,035,194 325,404,100 Adjustment for: Interest on bank deposits - - - - - Dividend income - - - - - Operating profit/(loss) before working capital changes 143,079,093 144,219,902 57,881,483 237,035,194 325,404,100 Net (increase)/decrease in investments (156,430,082) (130,735,812) (84,633,493) (572,410,187) (308,054,416) Net (increase)/decrease in derivative financial instruments - 274,532 136,449 500,556 754,509 Net (increase)/decrease in amounts receivable on sale of investments 3,611,631 (620,491) 6,545,084 334,562 3,581,929 Net (increase)/decrease in other receivables - (371,959) (179,231) (733,659) (954,191) Net increase/(decrease) in amounts payable on purchase of investments (747,825) (49,283) (7,714,537) 6,131,888 310,486 Net increase/(decrease) in accruals and other payables 446,781 108,611 114,540 875,435 455,782 Cash generated from/(used in) in operations (10,040,402) 12,825,500 (27,849,705) (328,266,211) 21,498,199 Interest on bank deposits received - - - - - Dividend income received - - - - - Net cash generated from/(used in) operating activities (10,040,402) 12,825,500 (27,849,705) (328,266,211) 21,498,199 Cash flows from financing activities Receipts on subscription 1,962,774,448 240,872,853 387,717,808 1,067,016,739 603,214,632 Payments on redemption (1,952,734,046) (253,698,353) (359,868,103) (738,750,528) (624,712,831) Net cash generated from/(used in) financing activities 10,040,402 (12,825,500) 27,849,705 328,266,211 (21,498,199) Net increase/(decrease) in cash and cash equivalents - - - - - Cash and cash equivalents at the beginning of the year - - - - - Cash and cash equivalents at the end of the year - - - - - Analysis of balances of cash and cash equivalents Cash at banks - - - - -



119


2019



(Note i)

Allianz Growth Fund

(Note i)


(Note i)

Green Fund

HK$ HK$ HK$ HK$ HK$ Cash flows from operating activities Total comprehensive income/(loss) for the year 829,487,623 - - - 248,521,570 Adjustment for: Interest on bank deposits - - - - - Dividend income - - - - - Operating profit/(loss) before working capital changes 829,487,623 - - - 248,521,570 Net (increase)/decrease in investments (711,317,309) - - - (337,199,202) Net (increase)/decrease in derivative financial instruments - - - - - Net (increase)/decrease in amounts receivable on sale of investments 1,957,305 - - - 279,784 Net (increase)/decrease in other receivables - - - - - Net increase/(decrease) in amounts payable on purchase of investments 3,225,582 - - - 2,539,801 Net increase/(decrease) in accruals and other payables 1,215,653 - - - 410,275 Cash generated from/(used in) operations 124,568,854 - - - (85,447,772) Interest on bank deposits received - - - - - Dividend income received - - - - - Net cash generated from/(used in) operating activities 124,568,854 - - - (85,447,772) Cash flows from financing activities Receipts on subscription 1,100,354,965 - - - 436,554,909 Payments on redemption (1,224,923,819) - - - (351,107,137) Net cash generated from/(used in) financing activities (124,568,854) - - - 85,447,772 Net increase/(decrease) in cash and cash equivalents - - - - - Cash and cash equivalents at the beginning of the year - - - - - Cash and cash equivalents at the end of the year - - - - - Analysis of balances of cash and cash equivalents Cash at banks - - - - -



120


2019

Global Bond Fund World Fund Manager's Choice

Fund Fidelity Capital

Stable fund Fidelity Stable Growth Fund

HK$ HK$ HK$ HK$ HK$ Cash flows from operating activities Total comprehensive income/(loss) for the year 127,775,153 137,029,203 333,075,092 69,402,220 172,409,309 Adjustment for: Interest on bank deposits - (6,281) (741,718) - - Dividend income - (25,440,878) - - - Operating profit/(loss) before working capital changes 127,775,153 111,582,044 332,333,374 69,402,220 172,409,309 Net (increase)/decrease in investments (512,750,625) (253,546,900) (251,425,938) (146,308,851) (322,095,131) Net (increase)/decrease in derivative financial instruments 344,482 256,735 (34,206) - - Net (increase)/decrease in amounts receivable on sale of investments - 128,258 (1,423,429) (1,034,505) 653,895 Net (increase)/decrease in other receivables (620,119) (387,563) - (1,370) (3,057) Net increase/(decrease) in amounts payable on purchase of investments 956,197 1,016,956 30,543,835 - 341,120 Net increase/(decrease) in accruals and other payables 390,936 676,942 493,193 508,473 1,012,847 Cash generated from/(used in) operations (383,903,976) (140,273,528) 110,486,829 (77,434,033) (147,681,017) Interest on bank deposits received - 6,281 728,297 - - Dividend income received - 25,440,878 - - - Net cash generated from/(used in) in operating activities (383,903,976) (114,826,369) 111,215,126 (77,434,033) (147,681,017) Cash flows from financing activities Receipts on subscription 1,021,364,518 372,179,109 646,429,934 342,540,828 512,012,275 Payments on redemption (637,460,542) (256,417,961) (600,707,862) (265,106,795) (364,331,258) Net cash generated from/(used in) financing activities 383,903,976 115,761,148 45,722,072 77,434,033 147,681,017 Net decrease in cash and cash equivalents - 934,779 156,937,198 - - Cash and cash equivalents at the beginning of the year - 372,091 129,333,385 - - Cash and cash equivalents at the end of the year - 1,306,870 286,270,583 - - Analysis of balances of cash and cash equivalents Cash at banks - 1,306,870 286,270,583 - -



121


2019

Fidelity Growth

Fund Asian Bond

Fund Eurasia

Fund Hong Kong and

China Fund American


Cash flows from operating activities Total comprehensive income/(loss) for the year 199,882,597 65,783,739 29,492,325 19,450,264 113,075,370 Adjustment for: Interest on bank deposits - - (1,757) (7,886) (6,420) Dividend income - - (8,949,250) (76,783,352) (16,122,192) Operating profit/(loss) before working capital changes 199,882,597 65,783,739 20,541,318 (57,340,974) 96,946,758 Net (increase)/decrease in investments (287,118,278) (274,168,241) (61,813,685) (150,604,129) (406,546,285) Net (increase)/decrease in derivative financial instruments - - 28,241 - 227,346 Net (increase)/decrease in amounts receivable on sale of investments 120,357 113,789 75,428 3,147,628 82,610 Net (increase)/decrease in other receivables (2,733) - (37,078) 40,549 (364,804) Net increase/(decrease) in amounts payable on purchase of investments - 473,683 288,435 - 4,011,642 Net increase/(decrease) in accruals and other payables 1,111,748 247,221 120,377 306,857 752,651 Cash generated from/(used in) operations (86,006,309) (207,549,809) (40,796,964) (204,450,069) (304,890,082) Interest on bank deposits received - - 1,757 7,886 6,420 Dividend income received - - 8,949,250 76,783,352 16,122,192 Net cash generated from/(used in) operating activities (86,006,309) (207,549,809) (31,845,957) (127,658,831) (288,761,470) Cash flows from financing activities Receipts on subscription 433,240,053 535,231,989 111,444,804 1,061,456,506 631,838,633 Payments on redemption (347,233,744) (327,682,180) (79,227,922) (922,101,468) (340,093,384) Net cash generated from/(used in) financing activities 86,006,309 207,549,809 32,216,882 139,355,038 291,745,249 Net increase/(decrease) in cash and cash equivalents - - 370,925 11,696,207 2,983,779 Cash and cash equivalents at the beginning of the year - - 2,100,874 49,282,127 348,240 Cash and cash equivalents at the end of the year - - 2,471,799 60,978,334 3,332,019 Analysis of balances of cash and cash equivalents Cash at banks - - 2,471,799 60,978,334 3,332,019



122


2019

Age 65 Plus Fund Core Accumulation

Fund China HK Dynamic Asset


HK$ HK$ HK$ HK$

Cash flows from operating activities Total comprehensive income/(loss) for the year 50,133,146 217,550,059 (4,617,504) 4,996,256,649 Adjustment for: Interest on bank deposits - - - (6,379,452) Dividend income - - - (127,295,672) Operating profit/(loss) before working capital changes 50,133,146 217,550,059 (4,617,504) 4,862,581,525 Net (increase)/decrease in investments (326,582,270) (904,529,485) (120,398,641) (8,045,785,368) Net (increase)/decrease in derivative financial instruments - - - 3,157,182 Net (increase)/decrease in amounts receivable on sale of investments - (106,097) (1,602,359) 8,438,064 Net (increase)/decrease in other receivables - (3) - (3,653,284) Net increase/(decrease) in amounts payable on purchase of investments 1,140,974 3,086,114 - 98,480,835 Net increase/(decrease) in accruals and other payables 197,802 540,581 212,249 12,171,146 Cash generated from/ (used in) operations (275,110,348) (683,458,831) (126,406,255) (3,064,609,900) Interest on bank deposits received - - - 6,328,035 Dividend income received - - - 127,295,672 Net cash generated from/(used in) operating activities (275,110,348) (683,458,831) (126,406,255) (2,930,986,193) Cash flows from financing activities Receipts on subscription 604,766,800 1,143,475,872 305,062,434 20,565,671,449 Payments on redemption (329,656,452) (460,017,041) (178,656,179) (17,521,170,945) Net cash generated from/(used in) financing activities 275,110,348 683,458,831 126,406,255 3,044,500,504 Net increase/(decrease) in cash and cash equivalents - - - 113,514,311 Cash and cash equivalents at the beginning of the year - - - 1,274,408,003 Cash and cash equivalents at the end of the year - - - 1,387,922,314 Analysis of balances of cash and cash equivalents Cash at banks - - - 1,387,922,314



123


2018

Growth Portfolio

Balanced Portfolio




HK$ HK$ HK$ HK$ HK$ Cash flows from operating activities Total comprehensive income/(loss) for the year (890,178,827) (364,868,532) (180,921,603) 13,085,789 29,898,347 Adjustment for: Interest on bank deposits (633,939) (1,175,697) (1,245,390) - - Dividend income - - - - -

Operating profit/(loss) before working capital changes (890,812,766) (366,044,229) (182,166,993) 13,085,789 29,898,347 Net (increase)/decrease in investments 1,796,781,981 404,012,715 187,160,452 (963,536,909) (1,105,768,391) Net (increase)/decrease in derivative financial instruments (1,064,968) (2,605,835) (1,696,401) - - Net (increase)/decrease in amounts receivable on sale of investments 9,191,257 3,463,743 330,210 605,945 8,657,356 Net (increase)/decrease in other receivables - - - - - Net increase/(decrease) in amounts payable on purchase of investments 2,746,293 1,164,445 (311,493) - - Net increase/(decrease) in accruals and other payables (2,532,213) (778,905) (350,952) - 1,641,093 Cash generated from/(used in) operations 914,309,584 39,211,934 2,964,823 (949,845,175) (1,065,571,595) Interest on bank deposits received 627,833 1,172,950 1,242,652 - - Dividend income received - - - - - Net cash generated from/(used in) operating activities 914,937,417 40,384,884 4,207,475 (949,845,175) (1,065,571,595) Cash flows from financing activities Receipts on subscription 1,048,910,661 760,001,457 626,827,420 2,765,101,012 3,881,410,093 Payments on redemption (1,597,429,165) (793,160,113) (595,959,102) (1,815,255,837) (2,815,838,498) Net cash generated from/(used in) financing activities (548,518,504) (33,158,656) 30,868,318 949,845,175 1,065,571,595 Net increase/(decrease) in cash and cash equivalents 366,418,913 7,226,228 35,075,793 - - Cash and cash equivalents at the beginning of the year 17,527,034 323,013,900 343,709,418 - - Cash and cash equivalents at the end of the year 383,945,947 330,240,128 378,785,211 - - Analysis of balances of cash and cash equivalents Cash at banks 383,945,947 330,240,128 378,785,211 - -



124


2018

Hong Kong Equity

Fund European Equity

Fund Japan Equity

Fund North American

Equity Fund Asian Equity


Cash flows from operating activities Total comprehensive income/(loss) for the year (522,641,649) (206,502,847) (80,625,247) 35,891,964 (341,582,876) Adjustment for: Interest on bank deposits - - - - - Dividend income - - - - - Operating profit/(loss) before working capital changes (522,641,649) (206,502,847) (80,625,247) 35,891,964 (341,582,876) Net (increase)/decrease in investments 741,659,016 278,150,731 87,164,026 (204,282,680) 496,419,811 Net (increase)/decrease in derivative financial instruments - (176,067) (76,179) (154,704) (464,130) Net (increase)/decrease in amounts receivable on sale of investments (3,180,456) 1,025,997 (5,859,046) 2,115,685 (4,563,498) Net (increase)/decrease in other receivables - (512,846) (222,674) (734,085) (1,370,461) Net increase/(decrease) in amounts payable on purchase of investments 347,915 343,469 8,816,343 1,743,065 (549,050) Net increase/(decrease) in accruals and other payables (1,458,045) (959,571) (365,182) (307,859) (2,413,043) Cash generated from/(used in) in operations 214,726,781 71,368,866 8,832,041 (165,728,614) 145,476,753 Interest on bank deposits received - - - - - Dividend income received - - - - - Net cash generated from/(used in) operating activities 214,726,781 71,368,866 8,832,041 (165,728,614) 145,476,753 Cash flows from financing activities Receipts on subscription 2,438,986,329 312,923,195 418,762,087 1,056,970,453 685,461,187 Payments on redemption (2,653,713,110) (384,292,061) (427,594,128) (891,241,839) (830,937,940) Net cash generated from/(used in) financing activities (214,726,781) (71,368,866) (8,832,041) 165,728,614 (145,476,753) Net increase/(decrease) in cash and cash equivalents - - - - - Cash and cash equivalents at the beginning of the year - - - - - Cash and cash equivalents at the end of the year - - - - - Analysis of balances of cash and cash equivalents Cash at banks - - - - -



125


2018



(Note i)

Allianz Growth Fund

(Note i)


(Note i)

Green Fund

HK$ HK$ HK$ HK$ HK$ Cash flows from operating activities Total comprehensive income/(losses) for the year (775,035,296) (26,997,520) (110,956,042) (61,349,274) (57,960,759) Adjustment for: Interest on bank deposits - - - - - Dividend income - - - - - Operating profit/(loss) before working capital changes (775,035,296) (26,997,520) (110,956,042) (61,349,274) (57,960,759) Net (increase)/decrease in investments 1,213,303,555 408,303,580 1,099,968,179 794,286,225 (25,089,262) Net (increase)/decrease in derivative financial instruments - - - - - Net (increase)/decrease in amounts receivable on sale of investments 5,276,930 1,947,804 3,123,800 234,209 (279,784) Net (increase)/decrease in other receivables - - - - - Net increase/(decrease) in amounts payable on purchase of investments 930,040 - - - (1,156,802) Net increase/(decrease) in accruals and other payables (2,250,233) (725,249) (1,905,670) (1,378,629) (25,736) Cash generated from/(used in) operations 442,224,996 382,528,615 990,230,267 731,792,531 (84,512,343) Interest on bank deposits received - - - - - Dividend income received - - - - - Net cash generated from/(used in) operating activities 442,224,996 382,528,615 990,230,267 731,792,531 (84,512,343) Cash flows from financing activities Receipts on subscription 1,239,396,937 148,969,499 147,108,843 167,412,591 556,385,745 Payments on redemption (1,681,621,933) (531,498,114) (1,137,339,110) (899,205,122) (471,873,402) Net cash generated from/(used in) financing activities (442,224,996) (382,528,615) (990,230,267) (731,792,531) 84,512,343 Net increase/(decrease) in cash and cash equivalents - - - - - Cash and cash equivalents at the beginning of the year - - - - - Cash and cash equivalents at the end of the year - - - - - Analysis of balances of cash and cash equivalents Cash at banks - - - - -




126


2018

Global Bond

Fund World

Fund Manager's Choice

Fund Fidelity Capital

Stable fund Fidelity Stable Growth Fund

HK$ HK$ HK$ HK$ HK$ Cash flows from operating activities Total comprehensive income/(loss) for the year (76,036,122) (16,622,359) (310,213,252) (22,942,995) (64,322,687) Adjustment for: Interest on bank deposits - (1,311) (254,251) - - Dividend income - (21,126,694) - - - Operating profit/(loss) before working capital changes (76,036,122) (37,750,364) (310,467,503) (22,942,995) (64,322,687) Net (increase)/decrease in investments (217,863,022) (78,457,009) 268,941,188 (514,818,241) (882,562,076) Net (increase)/decrease in derivative financial instruments (78,349) (88,980) (5,521) - - Net (increase)/decrease in amounts receivable on sale of investments 1,949,293 212,659 (277,353) (1,411,273) (981,810) Net (increase)/decrease in other receivables (422,098) (374,961) - (15,092) (32,458) Net increase/(decrease) in amounts payable on purchase of investments 1,907,134 (1,812,918) (119,460) (1,619,423) (234,425) Net increase/(decrease) in accruals and other payables (198,168) (387,890) (770,927) 456,057 902,523 Cash generated from/(used in) operations (290,741,332) (118,659,463) (42,699,576) (540,350,967) (947,230,933) Interest on bank deposits received - 1,311 253,384 - - Dividend income received - 21,126,694 - - - Net cash generated from/(used in) in operating activities (290,741,332) (97,531,458) (42,446,192) (540,350,967) (947,230,933) Cash flows from financing activities Receipts on subscription 961,754,628 376,722,699 859,789,961 788,550,448 1,252,884,207 Payments on redemption (671,013,296) (283,342,620) (840,140,722) (248,199,481) (305,653,274) Net cash generated from/(used in) financing activities 290,741,332 93,380,079 19,649,239 540,350,967 947,230,933 Net decrease in cash and cash equivalents - (4,151,379) (22,796,953) - - Cash and cash equivalents at the beginning of the year - 4,523,470 152,130,338 - - Cash and cash equivalents at the end of the year - 372,091 129,333,385 - - Analysis of balances of cash and cash equivalents Cash at banks - 372,091 129,333,385 - -



127


2018

Fidelity Growth

Fund Asian Bond

Fund Eurasia

Fund Hong Kong and

China Fund American


Cash flows from operating activities Total comprehensive income/(loss) for the year (80,870,115) (10,814,719) (32,774,110) (159,403,650) 18,857,166 Adjustment for: Interest on bank deposits - - (204) (603) (1,849) Dividend income - - (8,348,716) (72,070,960) (10,860,795) Operating profit/(loss) before working capital changes (80,870,115) (10,814,719) (41,123,030) (231,475,213) 7,994,522 Net (increase)/decrease in investments (944,419,029) (201,038,454) (9,086,852) 1,872,159 (161,819,828) Net (increase)/decrease in derivative financial instruments - - (8,884) - (40,798) Net (increase)/decrease in amounts receivable on sale of investments 136,816 (113,789) (75,428) (5,690,995) (82,610) Net (increase)/decrease in other receivables (35,009) - (35,622) 24,052 (261,142) Net increase/(decrease) in amounts payable on purchase of investments - (1,010,776) (219,166) (4,914,385) (865,585) Net increase/(decrease) in accruals and other payables 675,849 237,869 (95,462) (416,524) (190,826) Cash generated from/(used in) operations (1,024,511,488) (212,739,869) (50,644,444) (240,600,906) (155,266,267) Interest on bank deposits received - - 204 603 1,849 Dividend income received - - 8,348,716 72,070,960 10,860,795 Net cash generated from/(used in) operating activities (1,024,511,488) (212,739,869) (42,295,524) (168,529,343) (144,403,623) Cash flows from financing activities Receipts on subscription 1,310,588,579 564,107,916 147,350,598 1,276,119,889 518,352,612 Payments on redemption (286,077,091) (351,368,047) (105,036,871) (1,107,255,805) (376,213,470) Net cash generated from/(used in) financing activities 1,024,511,488 212,739,869 42,313,727 168,864,084 142,139,142 Net increase/(decrease) in cash and cash equivalents - - 18,203 334,741 (2,264,481) Cash and cash equivalents at the beginning of the year - - 2,082,671 48,947,386 2,612,721 Cash and cash equivalents at the end of the year - - 2,100,874 49,282,127 348,240 Analysis of balances of cash and cash equivalents Cash at banks - - 2,100,874 49,282,127 348,240



128


2018


Fund China HK Dynamic Asset


HK$ HK$ HK$ HK$

Cash flows from operating activities Total comprehensive income/(loss) for the year (3,953,971) (26,666,067) (11,490,512) (4,337,997,765) Adjustment for: Interest on bank deposits - - - (3,313,244) Dividend income - - - (112,407,165) Operating profit/(loss) before working capital changes (3,953,971) (26,666,067) (11,490,512) (4,453,718,174) Net (increase)/decrease in investments (226,480,315) (595,843,444) (253,775,009) 1,393,183,097 Net (increase)/decrease in derivative financial instruments - - - (6,460,816) Net (increase)/decrease in amounts receivable on sale of investments - - - 15,755,662 Net (increase)/decrease in other receivables - - - (3,992,396) Net increase/(decrease) in amounts payable on purchase of investments (171,876) 1,851,289 - 6,864,634 Net increase/(decrease) in accruals and other payables 197,267 334,517 226,731 (12,839,178) Cash generated from/ (used in) operations (230,408,895) (620,323,705) (265,038,790) (3,061,207,171) Interest on bank deposits received - - - 3,300,786 Dividend income received - - - 112,407,165 Net cash generated from/(used in) operating activities (230,408,895) (620,323,705) (265,038,790) (2,945,499,220) Cash flows from financing activities Receipts on subscription 432,796,530 964,164,512 452,516,045 26,160,326,133 Payments on redemption (202,387,635) (343,840,807) (187,477,255) (22,834,965,848) Net cash generated from/(used in) financing activities 230,408,895 620,323,705 265,038,790 3,325,360,285 Net increase/(decrease) in cash and cash equivalents - - - 379,861,065 Cash and cash equivalents at the beginning of the year - - - 894,546,938 Cash and cash equivalents at the end of the year - - - 1,274,408,003 Analysis of balances of cash and cash equivalents Cash at banks - - - 1,274,408,003



129

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30TH NOVEMBER 2019

1 The Scheme

AIA MPF - Prime Value Choice (the “Scheme”) is established and governed by its Trust Deed dated 31st January 2000, as amended. The Scheme is registered under Section 21 of the Hong Kong Mandatory Provident Fund Schemes Ordinance (the “MPF Ordinance”) and is required to comply with the MPF Ordinance and the relevant regulations, guidelines and codes issued by the Mandatory Provident Fund Schemes Authority (the “MPFA”) and the Securities and Futures Commission of Hong Kong (the “SFC”). The Scheme comprises 25 constituent funds as at 30th November 2019 (2018: 28). Each of the constituent funds is approved by the MPFA and authorised by the SFC, and has its own investment policy and predetermined fees and charges. Contributions and benefits are dealt with at the scheme level whereas investments in approved pooled investment funds and approved index-tracking collective investment schemes are dealt with at the constituent funds level. Allianz Capital Stable Fund, Allianz Growth Fund and Allianz Stable Growth Fund (“the 3 Allianz Funds”) had no investments and operations since 15th November 2018. MPFA had approved the termination of the 3 Allianz Funds to take effect on 13th March 2019. The financial information of the Scheme comprises (i) the statement of net assets available for benefits as at 30th November 2019, and the statement of changes in net assets available for benefits and statement of cash flows for the year ended 30th November 2019 of the Scheme on a standalone basis; and (ii) the statement of financial position as at 30th November 2019, and the statement of comprehensive income, statement of changes in net assets attributable to members and statement of cash flows for the year ended 30th November 2019 for each of the Scheme’s constituent funds.

2 Summary of significant accounting policies The principal accounting policies applied in the preparation of these financial statements of the Scheme

and its constituent funds are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.

(a) Basis of preparation

The financial statements have been prepared in accordance with Hong Kong Financial Reporting Standards (“HKFRS”) issued by the Hong Kong Institute of Certified Public Accountants. The financial statements have been prepared under the historical cost convention, as modified by the revaluation of financial assets and liabilities (including derivative financial instruments) held at fair value through profit or loss.


130

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 30TH NOVEMBER 2019

2 Summary of significant accounting policies (continued)

(a) Basis of preparation (continued)

The preparation of financial statements in conformity with HKFRS requires AIA Company (Trustee) Limited (the “Trustee”) to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgments about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates. All references to net assets throughout the financial statements refer to net assets attributable to members unless otherwise stated. All the Scheme and its constituent funds’ assets and liabilities are held for the purpose of being traded or are expected to be realised within one year. Standards and amendments to existing standards effective 1st December 2018

HKFRS 9 “Financial Instruments” became effective for annual periods beginning on or after 1st January 2018. It addresses the classification, measurement and derecognition of financial assets and liabilities and replaces the multiple classification and measurement models in HKAS 39. Classification and measurement of debt assets is driven by the entity’s business model for managing the financial assets and the contractual cash flow characteristics of the financial assets. A debt instrument is measured at amortised cost if the objective of the business model is to hold the financial asset for the collection of the contractual cash flows and the contractual cash flows under the instrument solely represent payments of principal and interest (SPPI). A debt instrument is measured at fair value through other comprehensive income if the objective of the business model is to hold the financial asset both to collect contractual cash flows from SPPI and to sell. All other debt instruments must be recognised at fair value through profit or loss. An entity may however, at initial recognition, irrevocably designate a financial asset as measured at fair value through profit or loss if doing so eliminates or significantly reduces a measurement or recognition inconsistency. Derivative and equity instruments are measured at fair value through profit or loss unless, for equity instruments not held for trading, an irrevocable option is taken to measure at fair value through other comprehensive income. HKFRS 9 also introduces a new expected credit loss (ECL) impairment model. HKFRS 9 has been applied retrospectively by the Scheme and its constituent funds and did not result in a change to the classification or measurement of financial instruments as outlined in note 2(b)(ii). The Scheme’s and its constituent funds’ investment portfolio continues to be classified as fair value through profit or loss and other financial assets which are held for collection continue to be measured at amortised cost. There was no material impact on adoption from the application of the new impairment model. There are no other standards, amendments to standards or interpretations that are effective for annual periods beginning on 1st December 2018 that have a material effect on the financial statements of the Scheme and its constituent funds. New standards and amendments issued but not effective for the financial year beginning 1st December 2018 and not early adopted. There are no HKFRSs or HK (IFRIC) interpretations that are not yet effective that would be expected to have a material impact on the Scheme and its constituent funds.


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(b) Investments

(i) Classification

Assets The Scheme and its constituent funds classify their investments based on both the Scheme’s and its constituent funds’ business models for managing those financial assets and the contractual cash flow characteristics of the financial assets. The portfolios of financial assets are managed and performances are evaluated on a fair value basis. The Scheme and its constituent funds are primarily focused on fair value information and use that information to assess the assets’ performance and to make decisions. The Scheme and its constituent funds have not taken the option to irrevocably designate any equity securities as fair value through other comprehensive income. Consequently, all investments are measured at fair value through profit or loss. Liabilities All derivatives are carried as assets when fair value is positive and as liabilities when fair value is negative. As such, the Scheme and its constituent funds classify all of their investment portfolios as financial assets at fair value through profit or loss.

The Scheme’s and its constituent funds’ policies require the Investment Managers to evaluate the information about these financial assets on a fair value basis together with other related financial information.

(ii) Investments in financial assets previously designated at fair value through profit or loss

All of the Scheme’s and its constituent funds’ investments were previously designated at fair value through profit or loss. On adoption of HKFRS 9 these investments are mandatorily classified as fair value through profit or loss.

(iii) Recognition, derecognition and measurement Regular purchases and sales of investments are recognised on the trade date - the date on which the Scheme and its constituent funds commit to purchase or sell the investments. Financial assets at fair value through profit or loss are initially recognised at fair value. Transaction costs are expensed as incurred in the statement of changes in net assets available for benefits for the scheme and the statement of comprehensive income for the constituent funds. Financial assets are derecognised when the rights to receive cash flows from the investments have expired or the Scheme and its constituent funds have transferred substantially all risks and rewards of ownership.


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(b) Investments (continued)

(iii) Recognition, derecognition and measurement (continued) Subsequent to initial recognition, all financial assets and financial liabilities at fair value through profit or loss are measured at fair value. Gains and losses arising from changes in the fair value of the “investments in constituent funds”, “investments” and “derivative financial instruments” categories are presented in the statement of changes in net assets available for benefits within “net unrealised gains/(losses) on investments in constituent funds” and “net realised gains on redemption of units in constituent funds’ for the Scheme and in the statement of comprehensive income within “net gains/(losses) on investments and derivative financial instruments” for the constituent funds in the period in which they arise.

(iv) Fair value estimation

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

Investments in unitised constituent funds are valued at their respective closing net asset value per unit. Investments in approved pooled investment funds (“APIFs”) and approved index-tracking collective investment schemes are valued at their respective closing bid prices. The value attributable to the APIFs which are insurance policies is the value of the right to claim against the insurance company.

(v) Transfers between levels of the fair value hierarchy Transfers between levels of the fair value hierarchy are deemed to have occurred at the end of the reporting year.

(c) Income and expenses

Declared investment return is recognised when declared by the underlying investment. Dividend income from investments is brought into account on the ex-dividend dates. Interest income is recognised on a time-proportion basis using the effective interest method. Other income is accounted for on an accruals basis. Expenses are accounted for on an accruals basis.

(d) Translation of foreign currencies

(i) Functional and presentation currency

Items included in the financial statements of the Scheme and its constituent funds are measured using the currency of the primary economic environment in which they operate (the “functional currency”). The financial statements are presented in Hong Kong dollars, which is the functional and presentation currency of the Scheme and its constituent funds.


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(d) Translation of foreign currencies (continued)

(ii) Transactions and balances

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign currency assets and liabilities are translated into the functional currency using the exchange rate prevailing at the year end date. Foreign exchange gains and losses arising from translation are included in the statement of changes in net assets available for benefits for the Scheme and the statement of comprehensive income for the constituent funds. Foreign exchange gains and losses relating to cash and cash equivalents are presented in the statement of changes in net assets available for benefits for the Scheme and the statement of comprehensive income for the constituent funds within exchange losses. Foreign exchange gains and losses relating to the financial assets and liabilities carried at fair value through profit or loss are presented in the statement of changes in net assets available for benefits within net unrealised losses on investments in constituent funds and net realised gains on redemption of units in constituent funds for the Scheme and in the statement of comprehensive income within net gains/(losses) on investments for the constituent funds.

(e) Proceeds and payments on issue and redemption of units

The net asset value of the constituent funds is computed on each business day. Prices for issues and redemptions on each business day are based on the closing valuation of that business day.

Proceeds and payments for units subscribed and redeemed are included in the statement of changes in net assets attributable to members of the respective constituent funds.

(f) Cash and cash equivalents For the purposes of the statement of cash flows, cash and cash equivalents comprise bank deposits with a

maturity of three months or less from the date of placement, net of bank overdraft, if any.


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(g) Amounts receivable on sale of investments/payable on purchase of investments Amounts receivable on sale of investments/payable on purchase of investments represent receivables for

investments sold and payables for investments purchased that have been contracted for but not yet settled or delivered by the end of the year respectively.

These amounts are recognised initially at fair value and subsequently measured at amortised cost. At each

reporting date, the Scheme and its constituent funds shall measure the loss allowance on amounts receivable on sale of investments at an amount equal to the lifetime expected credit losses if the credit risk has increased significantly since initial recognition. If, at the reporting date, the credit risk has not increased significantly since initial recognition, the Scheme and its constituent funds shall measure the loss allowance at an amount equal to 12-month expected credit losses. Significant financial difficulties of the counterparty, probability that the counterparty will enter bankruptcy or financial reorganisation, and default in payments are all considered indicators that a loss allowance may be required. If the credit risk increases to the point that it is considered to be credit impaired, interest income will be calculated based on the gross carrying amount adjusted for the loss allowance. A significant increase in credit risk is defined by the Investment Managers as any contractual payment which is more than 30 days past due. Any contractual payment which is more than 120 days past due is considered credit impaired.

(h) Contributions

Contributions are accounted for on an accruals basis.

(i) Benefits Benefits are accounted for on an accruals basis. (j) Transfers in/out Transfer-in amounts are recognised when the right to receive payment is established. Transfer-out

amounts are accounted for when the obligation to make payment is established.

(k) Forfeitures

If a member ceases to be a member, the part of the employer’s voluntary balance not otherwise disposed of in accordance with the rules of the Scheme may be applied in reducing the contributions of the employer, or in such other manner as the Trustee may determine, having consulted the employers (including payment to the employers). Forfeitures arising from such cases which have not been designated for the benefit of existing members and which have not been returned to the employers would be treated as liabilities of the Scheme.


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(l) Redeemable value/units

The redeemable value attributable to the Guaranteed Portfolio and the redeemable units issued by all other constituent funds, which are redeemable at the holder’s option and are classified as equity in accordance with the HKAS 32 (Amendment).

Should the redeemable value’s/units’ terms or conditions change such that they do not comply with the strict criteria contained in the HKAS 32 (Amendment), the redeemable value/units would be reclassified to a financial liability from the date the instrument ceases to meet the criteria. The financial liability would be measured at the instrument’s fair value at the date of reclassification. Any difference between the carrying value of the equity instrument and fair value of the liability on the date of reclassification would be recognised in equity. Redeemable value/units are redeemed at the members’ option. The redeemable value is issued value based on the ratio of outstanding holding balance of the Guaranteed Portfolio’s net assets attributable to members as at the close of business on the relevant dealing day, and the redeemable units are issued at prices based on the respective constituent funds’ net asset value per unit as at the close of business on the relevant dealing day. The net asset value per unit of the respective constituent fund is calculated by dividing the net assets attributable to members with the total number of outstanding units of the respective constituent funds.

(m) Interest in structured entities

A structured entity is an entity that has been designed so that voting or similar rights are not the dominant factor in deciding who controls the entity, such as when any voting rights relate to administrative tasks only, and the relevant activities are directed by means of contractual arrangements. A structured entity often has some or all of the following features or attributes: (a) restricted activities, (b) a narrow and well-defined objective, such as to provide investment opportunities for investors by passing on risks and rewards associated with the assets of the structured entity to investors, (c) insufficient equity to permit the structured entity to finance its activities without subordinated financial support and (d) financing in the form of multiple contractually linked instruments to investors that create concentrations of credit or other risks. The Scheme and its constituent funds consider all of their investments in other funds (“Underlying Funds”) to be investments in unconsolidated structured entities. The Scheme and its constituent funds invest in Underlying Funds whose objective is to achieve long term capital growth. The Underlying Funds are managed by investment managers who apply various investment strategies to accomplish their respective investment objectives. The Scheme’s and its constituent funds’ maximum exposures to losses arising from their interests in these unconsolidated structured entities are limited to the carrying amount of the assets. The change in fair value of each Underlying Fund is included in the statement of comprehensive income in ‘net gains on investments and derivative financial instruments’.


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(n) Offsetting financial instruments

Financial assets and liabilities are offset and the net amount reported in the statement of financial position when there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis, or realise the asset and settle the liability simultaneously.

3 Financial risk management

The Scheme and its constituent funds are exposed to various risks which are discussed below.

(a) Strategy in using financial instruments Growth Portfolio The primary objective of the Growth Portfolio is to maximise its long term capital appreciation in Hong Kong dollar terms. The secondary objective is to outperform Hong Kong salary inflation over the long term. The Growth Portfolio seeks to achieve these investment objectives through a professionally managed portfolio, invested in two or more approved pooled investment funds (and to the extent permitted, any other permissible investment as approved by the MPFA and SFC). The Growth Portfolio asset allocation policy is normally to have an equity content of 90% with the balance invested in bonds and cash. Investments may be made in any market in any country where permitted by the Hong Kong Mandatory Provident Fund Schemes (General) Regulation (the “General Regulation”). Balanced Portfolio The primary objective of the Balanced Portfolio is to maximise its long term capital appreciation in Hong Kong dollar terms within moderate risk parameters. The secondary objective is to outperform Hong Kong price inflation over the long term. The Balanced Portfolio seeks to achieve these investment objectives through a professionally managed portfolio, invested in two or more approved pooled investment funds (and to the extent permitted, any other permissible investment as approved by the MPFA and SFC). The Balanced Portfolio asset allocation policy is normally to have an equity content of 50% with the remainder in cash and bonds. Investments may be made in any market in any country where permitted by the General Regulation.


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3 Financial risk management (continued)

(a) Strategy in using financial instruments (continued)

Capital Stable Portfolio The primary objective of the Capital Stable Portfolio is to minimise its short term capital risk in Hong Kong dollar terms. The secondary objective is to enhance returns over the long term through limited exposure to global equities. The Capital Stable Portfolio seeks to achieve these investment objectives through a professionally managed portfolio, invested in two or more approved pooled investment funds (and to the extent permitted, any other permissible investment as approved by the MPFA and SFC). The Capital Stable Portfolio does not guarantee the repayment of capital. The Capital Stable Portfolio asset allocation policy is normally to have the greater proportion of assets invested in bonds and cash, with the balance invested in equities. Investments may be made in any market in any country where permitted by the General Regulation. Guaranteed Portfolio The primary objective of the Guaranteed Portfolio is to minimise capital risk in Hong Kong dollar terms. The secondary objective is to achieve a stable, consistent and predictable rate of return. Due to the nature and inclusion of the guarantee, it is possible that there may be a dilution in performance of the Guaranteed Portfolio. Except for a small portion that may be held in cash or cash based investments for operational purposes, the Guaranteed Portfolio is a feeder fund investing solely in an approved pooled investment fund. The underlying approved pooled investment fund is a guaranteed insurance policy investing entirely in a pooled investment fund approved by the MPFA in the form of a unit trust which invests at least 70% of its non-cash assets in bonds and other fixed income instruments either denominated in Hong Kong dollars or, if they are not denominated in Hong Kong dollars, the effective currency exposure shall be hedged back into Hong Kong dollars in order to ensure that the approved pooled investment fund in the form of a unit trust has an effective currency exposure of at least 70% to the Hong Kong dollar. The remaining assets of the approved pooled investment fund will be held in cash and/or deposits. When investing in a pooled investment fund in the form of a unit trust approved by the MPFA, the underlying investments of such pooled investment fund shall be used to determine whether the relevant percentage limits stated in this section are adhered to. For the avoidance of doubt, units or shares of such pooled investment fund shall not be treated as equity investments for purposes of this section. The investments of the approved pooled investment fund in the form of a unit trust in bonds are required to comply with the minimum credit rating requirements set by the MPFA in Guidelines on Debt Securities (Guidelines III.1), where appropriate.


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MPF Conservative Fund The objective of the MPF Conservative Fund is to preserve principal value. The MPF Conservative Fund does not guarantee the repayment of capital. Except for a small portion to be held in cash or cash based investments for operational purposes, the MPF Conservative Fund is a feeder fund investing solely in an approved pooled investment fund. The underlying approved pooled investment fund is a money market fund investing in deposits and debt securities subject to the restrictions set out in section 37 of the General Regulation. The investments of the underlying approved pooled investment fund in debt securities are required to comply with the minimum credit rating requirements set by the MPFA in Guidelines on Debt Securities (Guidelines III.1), where appropriate. Hong Kong Equity Fund The Hong Kong Equity Fund is a portfolio management fund investing in two or more approved pooled investment funds and/or approved ITCISs. The Hong Kong Equity Fund seeks to provide long term capital appreciation through the underlying approved pooled investment funds and/ or approved ITCISs which invest primarily in securities of companies either listed, based or operating principally in Hong Kong. Implementation of the investment policy is considered to be of high inherent risk. The Hong Kong Equity Fund is a portfolio management fund investing in two or more approved pooled investment funds and/or approved ITCISs which have majority of assets invested in Hong Kong equities. The Hong Kong Equity Fund may hold up to 30% of the assets in bonds, cash or cash based investments for operational purposes. European Equity Fund The European Equity Fund is a feeder fund investing solely in an approved pooled investment fund. The investment objective of the European Equity Fund is to provide investors with long term capital growth through the underlying approved pooled investment fund which consists primarily of securities of companies based or operating principally in countries in Western Europe. A portion of the underlying investment fund may be invested in companies which are based or operating in other countries in Eastern Europe. Except for a small portion that may be held in cash or cash based investments for operational purposes, the European Equity Fund will invest solely in an approved pooled investment fund whose asset allocation policy is normally to have the greater proportion of assets invested in equities and convertibles, primarily in the European market, with the remainder in cash and bonds. Japan Equity Fund The Japan Equity Fund is a feeder fund investing solely in an approved pooled investment fund. The investment objective of the Japan Equity Fund is to provide investors with long term capital growth through the underlying approved pooled investment fund which consists primarily of securities of companies based or operating principally in Japan.


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Japan Equity Fund (continued) Except for a small portion that may be held in cash or cash based investments for operational purposes, the Japan Equity Fund will invest solely in an approved pooled investment fund whose asset allocation policy is normally to have the greater proportion of assets invested in equities and convertibles, primarily in the Japan market, with the remainder in cash and bonds. North American Equity Fund The North American Equity Fund is a feeder fund investing entirely in an approved pooled investment fund. The North American Equity Fund seeks to provide long term capital appreciation through the underlying approved pooled investment fund which consists primarily of shares in US companies. Except for a small portion to be held in cash or cash based investments for operational purposes, the North American Equity Fund is a feeder fund investing solely in an approved pooled investment fund whose asset allocation policy is normally to have the greater proportion of assets invested in equities and convertibles, primarily in the US market, with the remainder in cash and bonds. Asian Equity Fund The Asian Equity Fund is a feeder fund investing entirely in an approved pooled investment fund. The investment objective of the Asian Equity Fund is to provide investors with long term capital growth in US dollar terms through a portfolio consisting primarily of securities of companies based or operating principally in the Asia-Pacific region, excluding Japan and Hong Kong. Except for a small portion that may be held in cash or cash based investments for operational purposes, the Asian Equity Fund will invest solely in an approved pooled investment fund whose asset allocation policy is normally to have a maximum equity content of 100% with the remainder in cash or bonds. Greater China Equity Fund The Greater China Equity Fund is a portfolio management fund investing in two or more approved pooled investment funds and/or approved ITCISs. The Greater China Equity Fund seeks to provide long term capital appreciation through the underlying approved pooled investment funds and/or approved ITCISs which invest primarily in securities of companies based or operating principally in the Greater China Region i.e. the People’s Republic of China, Hong Kong, Macau and Taiwan - the majority of these companies will be listed on a stock exchange in Hong Kong and Taiwan. Implementation of the investment policy is considered to be of high inherent risk. The Greater China Equity Fund is a portfolio management fund investing in two or more approved pooled investment funds and/or approved ITCISs which have majority of assets invested in Greater China equities. The Greater China Equity Fund may hold up to 30% of the assets in bonds, cash or cash based investments for operational purposes.


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Allianz Capital Stable Fund (Note 1) The Allianz Capital Stable Fund is a feeder fund investing entirely in an approved pooled investment fund. The objective of the Allianz Capital Stable Fund is to provide investors with capital preservation combined with steady capital appreciation over the long term by investing in a diversified portfolio of global equities and fixed-interest securities through the underlying approved pooled investment fund. This Allianz Capital Stable Fund is designed for members who are willing to assume a relatively low level of risk. The Allianz Capital Stable Fund does not guarantee the repayment of capital. Except for a small portion that may be held in cash or cash based investments for operational purposes, the Allianz Capital Stable Fund is intended to invest entirely in an approved pooled investment fund. This approved pooled investment fund is expected to invest 30% of its assets in equities and 70% in fixed-interest securities. The fixed income portion will consist of a range of instruments issued in countries around the world. The equity portion of the approved pooled investment fund will be invested primarily in the Hong Kong, Japan, North American and European markets with a smaller proportions being invested, at the discretion of the Manager, in other Asian countries and emerging markets. Allianz Growth Fund (Note 1) The Allianz Growth Fund is a feeder fund investing entirely in an approved pooled investment fund. The objective of the Allianz Growth Fund is to maximise long term overall returns by investing primarily in global equities through the underlying approved pooled investment fund. This Allianz Growth Fund is designed for members who are willing to assume a relatively higher level of risk to achieve potentially higher long-term returns. Except for a small portion that may be held in cash or cash based investments for operational purposes, the Allianz Growth Fund is intended to invest entirely in an approved pooled investment fund. This approved pooled investment fund, may invest in the countries comprised in the MSCI World Index which covers all the major world stock markets including those in Japan, North America, Asia and Europe. Allianz Stable Growth Fund (Note 1) The Allianz Stable Growth Fund is a feeder fund investing entirely in an approved pooled investment fund. The objective of the Allianz Stable Growth Fund is to achieve a stable overall return over the long term by investing in a diversified portfolio of global equities and fixed-interest securities through the underlying approved pooled investment fund. This Allianz Stable Growth Fund is designed for members who are willing to assume a medium level of risk. Except for a small portion that may be held in cash or cash based investments for operational purposes, the Allianz Stable Growth Fund is intended to invest entirely in an approved pooled investment fund. This approved pooled investment fund, is expected to invest 50% of its assets in equities and 50% in fixed-interest securities. The fixed income portion will consist of a range of instruments issued in countries around the world. The equity portion of the approved pooled investment fund will be invested primarily in the Hong Kong, Japan, North American and European markets with a smaller proportion being invested, at the discretion of the Manager, in other Asian countries and emerging markets.



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Green Fund The Green Fund is a feeder fund investing entirely in an approved pooled investment fund. The objective of the Green Fund is to provide investors with long term capital appreciation through well diversified investments in global equities principally by investing in companies according to (1) their environmental ratings and (2) financial performance expectations, with a view to outperforming the MSCI World Index over the medium to long term. The Green Fund is intended to invest entirely in an approved pooled investment fund. With an exception of a small portion that may be held in cash or cash based investments or other short-term bonds permitted by the General Regulation for operational and cash management purpose, most of the assets of this approved pooled investment funds are invested in equity securities. Subject to the limitations required by the General Regulation, this approved pooled investment fund may also invest in exchange traded funds and in convertible bonds or authorised unit trust or authorised mutual fund permitted by the General Regulation for performance management purposes. The geographical distribution of investments will be driven purely by bottom-up stock selection processes based on the securities comprised in the MSCI World Index which covers all the major world stock markets including but not limited to North America, Europe, Asia and Japan. The Green Fund will not invest in emerging market equities. Global Bond Fund The Global Bond Fund is a feeder fund investing solely in an approved pooled investment fund. The investment objective of the Global Bond Fund is to seek long term stable return from a combination of current income and capital appreciation by investing in a portfolio of debt securities in the international markets, issued by government, supranational organizations and corporates. Except for a small portion that may be held in cash or cash based investments for operational purposes, the Global Bond Fund will invest solely in an approved pooled investment fund that normally invests in a portfolio of debt securities in the international market, issued by governments, supranational organizations and corporates. The investments of the underlying approved pooled investment fund in debt securities are required to comply with the minimum credit rating requirements set by the MPFA in Guidelines on Debt Securities (Guidelines III.1), where appropriate. World Fund The World Fund is a portfolio management fund investing entirely in approved Index-tracking Collective Investment Schemes (ITCISs). The investment objective of the World Fund is to seek a long term capital appreciation by investing in a combination of global equity market index-tracking funds. The World Fund is not an index-tracking fund. The World Fund will invest mainly in approved ITCISs that track equity market indices that cover Large Cap companies in their respective markets around the world. A greater proportion of the assets will primarily be invested in equity market indices that track North American, European, Far Eastern and Australasian markets and a smaller proportion will be invested in Latin American markets. The remaining assets will be held in cash or cash based investments for operational and/or hedging purposes.


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Manager’s Choice Fund The Manager’s Choice Fund seeks to achieve long term capital appreciation through a professionally managed portfolio, invested in two or more approved pooled investment funds and/or approved ITCISs. The Manager’s Choice Fund attempts to perform dynamic asset allocation in order to maximise long term capital appreciation. The Manager’s Choice Fund would be suitable to investors who are willing to accept an above average level of risk in order to achieve long term capital appreciation. Depending on the global market condition, the Manager’s Choice Fund may allocate from 10% to 90% of its assets in equities, with the balance invested in bonds, money market instruments and cash. Investments may be made in the above mentioned asset classes and may be in various markets globally where permitted by the General Regulation. The allocations will change based on the investment manager’s view on the economic and market outlook, with higher allocation to equity when equity market outlook is positive, balanced allocation when equity market outlook is neutral and higher allocation to bonds, money market instruments and cash when equity market outlook is negative. Fidelity Capital Stable Fund The Fidelity Capital Stable Fund is a feeder fund investing entirely in an approved pooled investment fund. The Fidelity Capital Stable Fund aims to produce a positive return over the long term and to focus investment towards less volatile assets of bonds and cash whilst retaining some equity exposure. It also aims to maintain a broad geographic diversification with a bias towards Hong Kong, and to ensure that the risk to the capital base is limited in the short term. The Fidelity Capital Stable Fund does not guarantee the repayment of capital. Except for a small portion that may be held in cash or cash based investments for operational purposes, the Fidelity Capital Stable Fund invests entirely in an approved pooled investment fund. This approved pooled investment fund is expected to invest 30% of its assets in equities and 70% in bonds and cash. The fund will be invested primarily in Hong Kong, Japan, Asia Pacific ex Japan ex Hong Kong, Americas and European markets. Fidelity Stable Growth Fund The Fidelity Stable Growth Fund is a feeder fund investing entirely in an approved pooled investment fund. The Fidelity Stable Growth Fund aims to generate a positive return over the long term and to broadly diversify the portfolio as to asset type as between equities and bonds. It also aims to maintain a broad geographic diversification with a bias towards Hong Kong, and to limit the volatility of returns in the short term. Except for a small portion that may be held in cash or cash based investments for operational purposes, the Fidelity Stable Growth Fund invests entirely in an approved pooled investment fund. This approved pooled investment fund is expected to invest 50% of its assets in equities and 50% in bonds and cash. The fund will be invested primarily in Hong Kong, Japan, Asia Pacific ex Japan ex Hong Kong, Americas and European markets.

Fidelity Growth Fund The Fidelity Growth Fund is a feeder fund investing entirely in an approved pooled investment fund. The Fidelity Growth Fund aims to build real wealth over the long term, to focus investment into the global equity markets and to have the flexibility to invest in global bonds. It also aims to maintain a broad geographic diversification with a bias towards Hong Kong and to manage the volatility of returns in the short term.


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3 Financial risk management (continued) (a) Strategy in using financial instruments (continued)

Fidelity Growth Fund (continued) Except for a small portion that may be held in cash or cash based investments for operational purposes, the Fidelity Growth Fund invests entirely in an approved pooled investment fund. This approved pooled investment fund is expected to invest 90% of its assets in equities and 10% in bonds and cash. The fund will be invested primarily in Hong Kong, Japan, Asia Pacific ex Japan ex Hong Kong, Americas and European markets.

Asian Bond Fund The Asian Bond Fund is a feeder fund investing solely in an approved pooled investment fund. The investment objective of the Asian Bond Fund is to seek long term capital growth by primarily investing in a portfolio of bonds in the Asia-Pacific region (excluding Japan), issued by, amongst others, government, supranational organizations and corporates. Except for a small portion that may be held in cash or cash based investments for operational purposes, the Asian Bond Fund will invest solely in an approved pooled investment fund whose proposed asset allocation policy is to invest 70% to 100% of assets in bonds within the Asia-Pacific region (excluding Japan), including but not limited to Australia, Hong Kong, Korea, Malaysia, New Zealand, Singapore and Thailand; and 0% to 30% of assets in bonds outside the Asia-Pacific region (excluding Japan), including but not limited to US dollar denominated bonds such as US treasury inflation-protected securities and treasury bonds for defensive purpose during periods of perceived uncertainty and volatility. The investments of the underlying approved pooled investment fund in bonds are required to comply with the minimum credit rating requirements set by the MPFA in Guidelines on Debt Securities (Guidelines III.1), where appropriate. Eurasia Fund The Eurasia Fund is a portfolio management fund investing entirely in approved ITCISs. The investment objective of the Eurasia Fund is to seek a long term capital appreciation by investing in a combination of European, Australasian and Far Eastern equity market index-tracking funds. The Eurasia Fund is not an index-tracking fund. Except for a small portion to be held in cash or cash based investments for operational and/or hedging purposes, the Eurasia Fund will invest solely in approved ITCISs that track European, Australasian and Far Eastern equity market indices. Hong Kong and China Fund The Hong Kong and China Fund is a portfolio management fund investing entirely in approved ITCISs. The investment objective of the Hong Kong and China Fund is to seek a long term capital appreciation by investing in a combination of equity market index-tracking funds that track Hong Kong equity market indices that measure the performance of companies listed in Hong Kong (including China incorporated enterprises listed in Hong Kong in the form of H Shares). The Hong Kong and China Fund is not an index-tracking fund. Except for a small portion to be held in cash or cash based investments for operational and/or hedging purposes, the Hong Kong and China Fund will invest solely in approved ITCISs that track Hong Kong equity market indices that measure the performance of companies listed in Hong Kong (including China incorporated enterprises listed in Hong Kong in the form of H Shares).


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American Fund The American Fund is a portfolio management fund investing entirely in approved ITCISs. The investment objective of the American Fund is to seek a long term capital appreciation by investing in a combination of North and South American equity market index-tracking funds. The American Fund is not an index-tracking fund. Except for a small portion to be held in cash or cash based investments for operational and/or hedging purposes, the American Fund will invest solely in approved ITCISs that track North and South American equity market indices. Age 65 Plus Fund The Age 65 Plus Fund is a feeder fund investing entirely in an approved pooled investment fund, namely, the Vanguard Income Fund. The investment objective of the Age 65 Plus Fund is to provide stable growth to Members in a globally diversified manner. The investment manager of the Vanguard Income Fund will adopt a passive investment strategy in managing the portfolio by investing substantially all of the assets in constituent securities included in the Reference Portfolio of the Age 65 Plus Fund using sampling techniques. The investment manager of the Vanguard Income Fund will seek to hold a range of securities that, in the aggregate, approximate the Reference Portfolio of the Age 65 Plus Fund in terms of the key characteristics: (i) for the equity investments, they will consist of a broadly diversified collection of stocks that approximate those included in the Reference Portfolio of the Age 65 Plus Fund in terms of factors such as country weightings, industry weightings, market capitalization and other financial characteristics of stocks; and (ii) for the bond investments, they will be made in consideration of factors such as country weightings, duration and cash flow. At the time of launch, the Reference Portfolio of the Age 65 Plus Fund is identified as follows: 20% FTSE MPF All-World Index (HKD unhedged total return) + 77% Citi MPF World Government Bond Index (HKD hedged total return) + 3% cash or money market instruments providing a return at MPF Prescribed Savings Rate (HKD unhedged total return). The Reference Portfolio is subject to change from time to time. Please visit www.hkifa.org.hk for further information. Sampling techniques are an approach whereby the investment manager of the Vanguard Income Fund tracks the Reference Portfolio of the Age 65 Plus Fund by investing in a representative portion, or sample, of the full list of the constituent securities of the Reference Portfolio of the Age 65 Plus Fund such that the overall characteristics of the portion of securities invested by the Vanguard Income Fund would be similar to those of the full list of constituent securities of the Reference Portfolio of the Age 65 Plus Fund. Under such sampling techniques, the vast majority of the Vanguard Income Fund’s holdings will be constituent securities that are within the universe of the Reference Portfolio of the Age 65 Plus Fund, except in limited circumstances where it is in the best interest of the Vanguard Income Fund. Such limited circumstances may include but not limited to where: (i) it is not possible or it is difficult to buy or hold constituent securities (e.g. due to liquidity or restrictions of ownership of such constituent securities);


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Age 65 Plus Fund (continued) (ii) the holding of non-constituent securities which were originally constituent securities is, in the opinion of the investment manager of the Vanguard Income Fund, more cost efficient to reflect the overall characteristics of the Reference Portfolio of the Age 65 Plus Fund; (iii) investment in the constituent securities is not the most efficient way to reflect the performance of the Reference Portfolio of the Age 65 Plus Fund, for example when it is more cost efficient to invest in the non-constituent securities which reflect the overall characteristics of the Reference Portfolio of the Age 65 Plus Fund; (iv) the non-constituent securities which are, in the reasonable opinion of the investment manager of the Vanguard Income Fund, likely to form part of the Reference Portfolio of the Age 65 Plus Fund within six months of acquisition; (v) the non-constituent securities which the investment manager of the Vanguard Income Fund considers to be an appropriate substitute for the constituent securities of the Reference Portfolio of the Age 65 Plus Fund having regard to investment objectives of the Vanguard Income Fund; and (vi) to gain exposure to permissible securities in countries where such access is otherwise limited. Such investment strategy aims to provide consistent investment returns in relation to the Reference Portfolio of the Age 65 Plus Fund in a cost efficient manner. Through such underlying investment, the Age 65 Plus Fund will indirectly hold 20% of its net assets in Higher Risk Assets (such as global equities), with the remainder investing in Lower Risk Assets (such as global bonds and money market instruments). The asset allocation of Higher Risk Assets may vary between 15% and 25% due to differing price movements of various equity and bond markets. There is no prescribed allocation for investments in any specific countries or currencies.


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Core Accumulation Fund The Core Accumulation Fund is a feeder fund investing entirely in an approved pooled investment fund, namely, the Vanguard Moderate Growth Fund. The investment objective of the Core Accumulation Fund is to provide capital growth to Members by indirectly investing in a globally diversified manner. The investment manager of the Vanguard Moderate Growth Fund will adopt a passive investment strategy in managing the portfolio by investing substantially all of the assets in constituent securities included in the Reference Portfolio of the Core Accumulation Fund using sampling techniques. The investment manager of the Vanguard Moderate Growth Fund will seek to hold a range of securities that, in the aggregate, approximate the Reference Portfolio of the Core Accumulation Fund in terms of the key characteristics: (i) for the equity investments, they will consist of a broadly diversified collection of stocks that approximate those included in the Reference Portfolio of the Core Accumulation Fund in terms of factors such as country weightings, industry weightings, market capitalization and other financial characteristics of stocks; and (ii) for the bond investments, they will be made in consideration of factors such as country weightings, duration and cash flow. At the time of launch, the Reference Portfolio of the Core Accumulation Fund is identified as follows: 60% FTSE MPF All-World Index (HKD unhedged total return) + 37% Citi MPF World Government Bond Index (HKD hedged total return) + 3% cash or money market instruments providing a return at MPF Prescribed Savings Rate (HKD unhedged total return). The Reference Portfolio is subject to change from time to time. Please visit www.hkifa.org.hk for further information. Sampling techniques are an approach whereby the investment manager of the Vanguard Moderate Growth Fund tracks the Reference Portfolio of the Core Accumulation Fund by investing in a representative portion, or sample, of the full list of the constituent securities of the Reference Portfolio of the Core Accumulation Fund such that the overall characteristics of the portion of securities invested by the Vanguard Moderate Growth Fund would be similar to those of the full list of constituent securities of the Reference Portfolio of the Core Accumulation Fund.

Under such sampling techniques, the vast majority of the Vanguard Moderate Growth Fund’s holdings will be constituent securities that are within the universe of the Reference Portfolio of the Core Accumulation Fund, except in limited circumstances where it is in the best interest of the Vanguard Moderate Growth Fund. Such limited circumstances may include but not limited to where: (i) it is not possible or it is difficult to buy or hold constituent securities (e.g. due to liquidity or restrictions of ownership of such constituent securities); (ii) the holding of non-constituent securities which were originally constituent securities is, in the opinion of the investment manager of the Vanguard Moderate Growth Fund, more cost efficient to reflect the overall characteristics of the Reference Portfolio of the Core Accumulation Fund; (iii) investment in the constituent securities is not the most efficient way to reflect the performance of the Reference Portfolio of the Core Accumulation Fund, for example when it is more cost efficient to invest in the non-constituent securities which reflect the overall characteristics of the Reference Portfolio of the Core Accumulation Fund;


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Core Accumulation Fund (continued) (iv) the non-constituent securities which are, in the reasonable opinion of the investment manager of the Vanguard Moderate Growth Fund, likely to form part of the Reference Portfolio of the Core Accumulation Fund within six months of acquisition; (v) the non-constituent securities which the investment manager of the Vanguard Moderate Growth Fund considers to be an appropriate substitute for the constituent securities of the Reference Portfolio of Core Accumulation Fund having regard to investment objectives of the Vanguard Moderate Growth Fund; and (vi) to gain exposure to permissible securities in countries where such access is otherwise limited. Such investment strategy aims to provide consistent investment returns in relation to the Reference Portfolio of the Core Accumulation Fund in a cost efficient manner. Through such underlying investment, the Core Accumulation Fund will indirectly hold 60% of its net assets in Higher Risk Assets (such as global equities), with the remainder investing in Lower Risk Assets (such as global bonds and money market instruments). Although the Core Accumulation Fund will target to indirectly hold 60% assets in Higher Risk Assets (such as global equities), with the remainder investing in Lower Risk Assets (such as global bonds and money market instruments), the asset allocation to Higher Risk Assets may vary between 55% and 65% due to differing price movements of various equity and bond markets. There is no prescribed allocation for investments in any specific countries or currencies.

China HK Dynamic Asset Allocation Fund The China HK Dynamic Asset Allocation Fund is a feeder fund investing entirely in an approved pooled investment fund, Value Partners Asset Allocation Fund, a sub fund of Value Partners Choice Investment Funds. The objective of the China HK Dynamic Asset Allocation Fund is to aim to achieve long-term capital growth potential with medium-high volatility through the Value Partners Asset Allocation Fund which (i) mainly invests in Hong Kong and China equities and debt securities, with up to 9% of its assets investing in exchange-traded funds that track the price of gold, and (ii) performs dynamic asset allocation. The China HK Dynamic Asset Allocation Fund is suitable to investors who are willing to accept an above average level of risk in order to aim to achieve long-term capital growth potential. Depending on the China and Hong Kong market conditions, Value Partners Asset Allocation Fund may, through investing in other approved pooled investment funds, allocate between 10% to 90% of its assets to Hong Kong and China equities, with the remaining balance mainly invested in Hong Kong and China debt securities (including debt securities that are denominated in offshore Renminbi, “Offshore RMB Bonds”) and up to 9% of its assets investing in exchange-traded funds that track the price of gold.

The equities will be selected from the FTSE MPF Hong Kong Index by the adoption of a screening model, which aims to identify investment opportunities within the FTSE MPF Hong Kong Index through analyzing multiple quantitative data such as valuation, return on equity, volatility, and market capitalisation.


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China HK Dynamic Asset Allocation Fund (continued) The majority of the debt securities will be China and Hong Kong debt securities issued by (i) companies or issuers listed, established in or operating principally in, or which derive or are expected to derive a significant portion of their earnings or revenues from or which have part of their assets, production activities or other business interests based in or related to China and/or Hong Kong, and (ii) governments and government related entities in China or Hong Kong. Offshore RMB Bonds may be invested, including fixed and floating rate securities, convertible bonds and notes issued or distributed outside China by sovereigns, government agencies, supra-nationals, banks, corporations and exempt authorities. Currently, debt securities issued within China will not be invested. Debt securities issued by issuers (including corporations, government and government related entities) established outside China and Hong Kong but within the Asian region, and which are linked to or have part of their operations, revenue, assets, production activities or other business interests based in or related to China and / or Hong Kong, may also be invested. Value Partners Asset Allocation Fund, through investing in other approved pooled investment funds, may invest up to 9% of its assets in exchange-traded funds that track the price of gold and are approved by the MPFA as permissible investments from time to time. The asset allocation of the Value Partners Asset Allocation Fund will change based on its investment manager’s view on the economic and market outlook, with higher allocation to equity when equity market outlook is positive, balanced allocation between equity and debt securities when equity market outlook is neutral and higher allocation to debt securities and cash when equity market outlook is negative.

(b) Market price risk

Market price risk is the risk that the value of a financial instrument will fluctuate as a result of changes in market prices, whether those changes are caused by factors specific to the individual instrument or factors affecting all instruments in the market. The investments are subject to market price risk arising from uncertainties about the future prices of the investments. The constituent funds’ market price risk is managed through diversification of the underlying investment portfolio of the approved pooled investment funds and index-tracking collective investment schemes held. The market exposures arising from investments in approved pooled investment funds for each of the constituent funds are disclosed in note 8 of these financial statements.


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(b) Market price risk (continued)

The table below summarizes the impact on the constituent funds’ net assets attributable to members as a result of increases/decreases of the key benchmark indices to which the constituent funds are exposed. The analysis is based on the assumption that the benchmark indices had increased/decreased by the stated percentage with all other variables held constant and the fair value of the constituent funds’ investments moved according to the historical correlation with the benchmark indices.

Constituent funds Benchmark

Change in market index

%

Impact on the net assets attributable

to members 2019


to members 2018

HK$ HK$ Growth Portfolio Benchmark indices (Note 1) 5% 545,524,416 521,916,165 Balanced Portfolio Benchmark indices (Note 1) 5% 284,832,033 265,155,191 Capital Stable Portfolio Benchmark indices (Note 1) 5% 179,890,871 168,188,160 Guaranteed Portfolio Interest rate 5% 371,628,505 357,288,804 MPF Conservative Fund HKD Prescribed Savings Rate 5% 271,922,340 257,143,979 Hong Kong Equity Fund FTSE MPF Hong Kong (Total Net) 5% 292,687,578 247,218,032 European Equity Fund MSCI Europe (NDR) 5% 77,119,164 71,429,595 Japan Equity Fund FTSE World Japan (Total) 5% 37,232,662 32,910,206 North American Equity Fund S&P 500 Daily Total Return Index 5% 151,655,634 123,843,467 Asian Equity Fund MSCI AC Asia Pacific x Japan x HK

x China x Indo ex Phil (NDR) 5% 215,116,479 201,613,182 Greater China Equity Fund MSCI Golden Dragon ex China A-

Shares ex Foreign Listing (NDR) 5% 377,856,410 269,150,307 Allianz Capital Stable Fund* Benchmark indices (Note 2) 5% - - Allianz Growth Fund* Benchmark indices (Note 2) 5% - - Allianz Stable Growth Fund* Benchmark indices (Note 2) 5% - -

*Allianz Capital Stable Fund, Allianz Growth Fund and Allianz Stable Growth Fund (“the 3 Allianz Funds”) had no investments and operations since 15th November 2018. MPFA had approved the termination of the 3 Allianz Funds to take effect on 13th March 2019.


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Constituent funds Benchmark

Change in market index

%


to members 2019


to members 2018

HK$ HK$ Green Fund MSCI The World Index 5% 109,503,463 93,547,083 Global Bond Fund Citi WBIG ex MBS in USD 5% 925,435,866 482,197,832 World Fund Benchmark indices (Note 3) 5% 77,840,045 65,282,544

Manager's Choice Fund Volatility 10.8%

(2018: 11.4%) 477,340,410 477,706,947 Fidelity Capital Stable Fund Benchmark indices (Note 4) 5% 55,285,428 48,577,997 Fidelity Stable Growth Fund Benchmark indices (Note 4) 5% 121,878,773 105,684,095 Fidelity Growth Fund Benchmark indices (Note 4) 5% 122,473,813 109,215,298 Asian Bond Fund JPM Customized Asian Bond

Index 5% 452,116,334 314,849,352 Eurasia Fund Benchmark indices (Note 5) 5% 18,599,604 15,601,812 Hong Kong and China Fund Benchmark indices (Note 6) 5% 109,099,175 100,859,092 American Fund Benchmark indices (Note 7) 5% 58,739,055 39,475,775 Age 65 Plus Fund Benchmark indices (Note 8) 5% 37,431,561 53,524,360 Core Accumulation Fund Benchmark indices (Note 8) 5% 123,546,564 200,609,602 China HK Dynamic Asset Allocation Fund

Benchmark indices (Note 9) 5% 30,798,910

25,413,154

The Trustee and the Investment Managers have used their view of what would be a reasonable shift in each key market to estimate the change for use in the market sensitivity analysis above. Disclosures above are shown in absolute terms, changes and impacts could be positive or negative. Changes in benchmark indices percentage are revised annually depending on the current view of the Trustee and the Investment Managers on market volatility and other relevant factors.

As at 30th November 2019 and 2018, except for Growth Portfolio, Balanced Portfolio and Capital Stable Portfolio, the benchmark indices used are same as those used for the underlying investment funds. The benchmark indices used compose of the following indices:

Growth Portfolio

Balanced Portfolio


Note 1: FTSE MPF Hong Kong (Total Return) 30.0% 17.0% 10.0% FTSE MPF Asia Pacific ex Japan ex Hong Kong (Total Return)

12.0% 6.5% 4.0%

MPF Prescribed Savings Rate 3.0% 5.0% 10.0% FSTE World Government Bond Index (35% HK$ hedged) (Previously known as “Citigroup World Government Bond Index (35%HK$ hedged)”)

7.0% 45.0% 60.0%

FTSE MPF USA (Total Return) 18.0% 10.0% 6.0% FTSE MPF Europe (Total Return) 18.0% 10.0% 6.0% FTSE MPF Japan (Total Return) 12.0% 6.5% 4.0%


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Allianz Stable

Growth Fund

Allianz Growth Fund

Note 2: FTSE MPF Hong Kong (Total Return) 10.0% 17.0% 30.0% FTSE All World Asia Pacific ex Japan And Hong Kong Index (Total Return)

4.0% 6.5% 12.0%

FTSE Japan Index 4.0% 6.5% 12.0% FTSE All World North America Index (Total Return)

6.0% 10.0% 18.0%

FTSE All World Europe Index (Total Return)

6.0% 10.0% 18.0%

FTSE WGBI All Maturities USD (Previously known as “Citigroup WGBI All Maturities USD”)

45.0% 33.75% 5.25%

FTSE WGBI All Maturities USD (Hedged) (Previously known as “Citigroup WGBI All Maturities USD (hedged)”)

15.0% 11.25% 1.75%

MPFA Prescribed Savings Rate 10.0% 5.0% 3.0%

World Fund

Note 3: MSCI EAFE DTR Net

30.0% S&P Latin America 40 Index

20.0%

S&P 500 Index

50.0%


Fidelity Stable

Growth Fund

Fidelity Growth Fund

Note 4: FTSE MPF Hong Kong Index 10.0% 17.0% 30.0% FTSE All-World Asia Pacific ex Japan ex Hong Kong Index

4.0% 6.5% 12.0%

FTSE World Japan Index 4.0% 6.5% 12.0% FTSE All-World North America Index 6.0% 10.0% 18.0% FTSE All-World Europe Index 6.0% 10.0% 18.0% FTSE MPF World Government Bond Index, 25% Hedged to HKD (Previously known as “Citi MPF World Government Bond Index, 25% Hedged to HKD”)

60.0% 45.0% 7.0%

1 Month HIBOR 10.0% 5.0% 3.0%

Eurasia Fund

Note 5: MSCI EAFE DTR Net

80.0% Hang Seng Index (Total Return)

20.0%

Hong Kong and

China Fund Note 6: Hang Seng Index (Total Return)

80.0%

Hang Seng China Enterprise Index (Total Return)

20.0%

American Fund

Note 7: S&P 500 (Price Return) 80.0% S&P Latin America 40 DTR Net 20.0%


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Age 65 Plus Fund

Core Accumulation

Fund Note 8: FTSE MPF All World Index (HKD

Unhedged Total Return) 20.0% 60.0%

FTSE MPF World Government Bond Index (HKD Hedged Total Return)* (Prior to 1st April 2019, known as “Citi MPF World Government Bond Index (HKD Hedged Total Return)”)

77.0% 37.0%

MPFA Prescribed Savings Rate (HKD hedged total return)

3.0% 3.0%

China HK

Dynamic Asset Allocation Fund

Note 9: FTSE MPF Hong Kong Index 50.0% Markit iBoxx ALBI HK 25.0% 3 Month HIBOR 25.0%

(c) Interest rate risk

Interest rate risk is the risk that the value of a financial instrument will fluctuate due to changes in market interest rates. Except for bank balances, the majority of the financial assets and liabilities of the Scheme and its constituent funds are non-interest bearing. As a result, the Scheme and its constituent funds are not subject to significant amounts of risk due to fluctuations in the prevailing levels of market interest rates. However, certain constituent funds are indirectly exposed to interest rate risk in respect of their underlying investment funds that invest in debt securities and money market instruments, and is reflected under market price risk. The Scheme and its constituent funds had interest bearing bank deposits of HK$211,399,613 (2018: HK$170,356,301) and HK$1,306,572,522 (2018: HK$1,210,039,061) respectively as at year end and are therefore exposed to interest rate risk on these bank deposits.

As at year end, should the relevant market interest rates have risen/lowered by 1% with all other variables held constant, the increase/decrease in net assets of the Scheme and its constituent funds for the year would amount to approximately HK$2,113,996 (2018: HK$1,703,563) and HK$13,065,725 (2018: HK$12,100,391) respectively, arising mainly from the increase/decrease in the bank interest income.


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(d) Credit and custody risk

The Scheme and its constituent funds are exposed to credit risk, which is the risk that one party to a financial instrument will cause a financial loss to the other party by failing to discharge an obligation. The main concentration to which the Scheme and its constituent funds are exposed arises from the debt securities held by the underlying APIFs. The Scheme and its constituent funds are also exposed to counterparty credit risk on contributions receivable, amounts receivable on redemption of units in constituent funds, trading derivative financial instruments, amounts receivable on subscriptions, amounts receivable on sale of investments, other receivables and cash and cash equivalents. The Scheme and its constituent funds measure credit risk and expected credit losses using probability of default, exposure at default and loss given default. Management considers both historical analysis and forward looking information in determining any expected credit loss. At 30th November 2019, all contributions receivable, amounts receivable on redemption of units in constituent funds, trading derivative financial instruments, amounts receivable on subscriptions, amounts receivable on sale of investments, other receivables and cash and cash equivalents are held with counterparties with a credit rating of Aa3 (2018: A2) or higher as assigned by Moody’s, and are due to be settled within 1 month. The Trustee and the Investment Managers consider the probability of default to be close to zero as the counterparties have a strong capacity to meet their contractual obligations in the near term. As a result, no loss allowance has been recognised based on 12-month expected credit losses as any such impairment would be wholly insignificant to the Scheme and its constituent funds. The maximum exposure to credit risk at year end is the carrying amount of the financial assets as shown on the statement of net assets available for benefits for the Scheme and the statement of net assets for the constituent funds. As at 30th November 2019 and 2018, there were no significant concentrations of credit risk to counterparties. The Scheme’s financial assets which are potentially subject to concentrations of credit risk consist principally of bank deposits. As at 30th November 2019, bank deposits of HK$261,697,105 (2018: HK$211,870,745) are placed with Citibank N.A. with a credit rating by Moody’s of Aa3 (2018: A1). Certain transactions entered into by the constituent funds may expose them to risks associated with counterparties not able to fulfil their obligations. To mitigate this risk, the constituent funds only buy and sell through brokers who have been approved as an acceptable counterparty according to the Investment Managers’ internal counterparty credit review procedures. All derivative financial instruments represent outstanding forward foreign exchange contracts as disclosed in note 9. The counterparty of these forward foreign exchange contracts is The Hongkong and Shanghai Banking Corporation Limited with a credit rating by S&P of A (2018: A).

The constituent funds’ financial assets which are potentially subject to concentrations of credit risk consist principally of bank deposits and investments held with the custodian. The table below summarises the assets placed with the banks and custodian at 30th November 2019 and 2018.


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(d) Credit and custody risk (continued)

At 30th November 2019 Bank and custodian Bank HK$

Custodian HK$

Credit rating

Source of credit rating

Growth Portfolio Citibank N.A. 5,485,911 10,846,011,690 Aa3 Moody’s

Dah Sing Bank Limited 543,105,197 - A2 Moody’s Balanced Portfolio Citibank N.A. 1,836,515 5,663,253,296 Aa3 Moody’s Dah Sing Bank Limited 181,814,994 - A2 Moody’s Capital Stable Portfolio Citibank N.A. 3,013,201 3,433,273,396 Aa3 Moody’s Dah Sing Bank Limited 260,714,700 - A2 Moody’s

OCBC Wing Hang Bank Limited 37,592,191 - A1

Moody’s

Guaranteed Portfolio Citibank N.A.* - 9,267,276,380 Aa3 Moody’s MPF Conservative Fund Citibank N.A. - 5,786,902,689 Aa3 Moody’s Hong Kong Equity Fund Citibank N.A. - 6,151,020,829 Aa3 Moody’s European Equity Fund Citibank N.A. - 1,580,454,771 Aa3 Moody’s Japan Equity Fund Citibank N.A. - 747,598,201 Aa3 Moody’s North American Equity Fund Citibank N.A. - 3,072,396,977 Aa3 Moody’s Asian Equity Fund Citibank N.A. - 4,262,472,975 Aa3 Moody’s Greater China Equity Fund Citibank N.A. - 7,524,995,577 Aa3 Moody’s Allianz Capital Stable Fund (Note i) Citibank N.A. - -

Aa3 Moody’s Allianz Growth Fund (Note i) Citibank N.A. - - Aa3 Moody’s Allianz Stable Growth Fund (Note i) Citibank N.A. - -

Aa3 Moody’s Green Fund Citibank N.A. - 2,190,069,269 Aa3 Moody’s Global Bond Fund Citibank N.A. - 2,030,017,391 Aa3 Moody’s World Fund Citibank N.A. 1,306,870 1,587,562,863 Aa3 Moody’s Manager's Choice Fund Citibank N.A. 2,925,143 4,434,508,643 Aa3 Moody’s Dah Sing Bank Limited 283,345,440 - A2 Moody’s Fidelity Capital Stable Fund Citibank N.A. - 1,112,716,572 Aa3 Moody’s Fidelity Stable Growth Fund Citibank N.A. - 2,400,549,006 Aa3 Moody’s Fidelity Growth Fund Citibank N.A. - 2,416,816,585 Aa3 Moody’s Asian Bond Fund Citibank N.A. - 1,236,115,866 Aa3 Moody’s Eurasia Fund Citibank N.A. 2,471,799 399,268,714 Aa3 Moody’s Hong Kong and China Fund Citibank N.A. 60,978,334 2,288,751,737 Aa3 Moody’s American Fund Citibank N.A. 3,332,019 1,295,567,782 Aa3 Moody’s Age 65 Plus Fund Citibank N.A. - 768,382,074 Aa3 Moody’s Core Accumulation Fund Citibank N.A. - 2,543,483,730 Aa3 Moody’s China HK Dynamic Asset Allocation Fund Citibank N.A. - 663,633,319

Aa3

Moody’s

Note i: Allianz Capital Stable Fund, Allianz Growth Fund and Allianz Stable Growth Fund (“the 3 Allianz Funds”) had no investments and operations since 15th November 2018. MPFA had approved the termination of the 3 Allianz Funds to take effect on 13th March 2019. * represents custodian of the underlying investments


155



(d) Credit and custody risk (continued)

At 30th November 2018 Bank and custodian Bank HK$

Custodian HK$

Credit rating

Source of credit rating

Growth Portfolio Citibank N.A. 3,857,645 10,530,985,402 A1 Moody’s

Dah Sing Bank Limited 380,088,302 - A2 Moody’s Balanced Portfolio Citibank N.A. 3,302,401 5,102,134,197 A1 Moody’s Dah Sing Bank Limited 326,937,727 - A2 Moody’s Capital Stable Portfolio Citibank N.A. 3,812,230 3,109,760,235 A1 Moody’s Dah Sing Bank Limited 243,166,800 - A2 Moody’s

OCBC Wing Hang Bank Limited 131,806,181 - A1

Moody’s

Guaranteed Portfolio Citibank N.A.* - 9,168,614,948 A1 Moody’s MPF Conservative Fund Citibank N.A. - 5,358,106,261 A1 Moody’s Hong Kong Equity Fund Citibank N.A. - 5,994,590,747 A1 Moody’s European Equity Fund Citibank N.A. - 1,449,718,959 A1 Moody’s Japan Equity Fund Citibank N.A. - 662,964,708 A1 Moody’s North American Equity Fund Citibank N.A. - 2,499,986,790 A1 Moody’s Asian Equity Fund Citibank N.A. - 3,954,418,559 A1 Moody’s Greater China Equity Fund Citibank N.A. - 6,813,678,268 A1 Moody’s Allianz Capital Stable Fund (Note i) Citibank N.A. - -

A1 Moody’s Allianz Growth Fund (Note i) Citibank N.A. - - A1 Moody’s Allianz Stable Growth Fund (Note i) Citibank N.A. - -

A1 Moody’s Green Fund Citibank N.A. - 1,852,870,067 A1 Moody’s Global Bond Fund Citibank N.A. - 1,517,266,766 A1 Moody’s World Fund Citibank N.A. 372,091 1,334,015,963 A1 Moody’s Manager's Choice Fund Citibank N.A. 1,293,334 4,183,082,705 A1 Moody’s Dah Sing Bank Limited 128,040,051 - A2 Moody’s Fidelity Capital Stable Fund Citibank N.A. - 966,407,721 A1 Moody’s Fidelity Stable Growth Fund Citibank N.A. - 2,078,453,875 A1 Moody’s Fidelity Growth Fund Citibank N.A. - 2,129,698,307 A1 Moody’s Asian Bond Fund Citibank N.A. - 961,947,625 A1 Moody’s Eurasia Fund Citibank N.A. 2,100,874 337,455,029 A1 Moody’s Hong Kong and China Fund Citibank N.A. 49,282,127 2,138,147,608 A1 Moody’s American Fund Citibank N.A. 348,240 889,021,497 A1 Moody’s Age 65 Plus Fund Citibank N.A. - 441,799,804 A1 Moody’s Core Accumulation Fund Citibank N.A. - 1,638,954,245 A1 Moody’s China HK Dynamic Asset Allocation Fund Citibank N.A. - 543,234,678

A1

Moody’s

Note i: Allianz Capital Stable Fund, Allianz Growth Fund and Allianz Stable Growth Fund (“the 3 Allianz Funds”) had no investments and operations since 15th November 2018. MPFA had approved the termination of the 3 Allianz Funds to take effect on 13th March 2019. * represents custodian of the underlying investments


156


3 Financial risk management (continued) (e) Liquidity risk

Liquidity risk is the risk that an entity will encounter difficulty in settling a liability, including a redemption request. The constituent funds are exposed to daily cash redemptions of units in the constituent funds. The constituent funds invest in approved pooled investment funds and approved index-tracking collective investment schemes that are considered to be readily realisable. The table below analyses the non-derivative financial liabilities of the Scheme and its constituent funds into relevant maturity groupings based on the remaining period at the statement of net assets date to the contractual maturity date. The amounts in the table are the contractual undiscounted cash flows. Scheme

Within 1 month

HK$ Over 1 month

HK$ As at 30th November 2019 Benefits payable 106,107,570 - Forfeitures payable 140,525,777 - Amount payable on subscription of units in constituent funds 250,108,579 - Accruals and other payables 148,730,269 - ────────── ────────── Contractual cash out flows 645,472,195 - ══════════ ══════════ As at 30th November 2018 Benefits payable 92,818,829 - Forfeitures payable 144,762,310 - Amount payable on subscription of units in constituent funds 207,259,142 - Accruals and other payables 150,776,940 - ────────── ────────── Contractual cash out flows 595,617,221 - ══════════ ══════════


157


3 Financial risk management (continued) (e) Liquidity risk (continued)

Constituent funds As at 30th November 2019 Less than 7 days 7 days to 12 months

Amounts payable on

redemption HK$

Amounts payable on

purchase of investments

HK$ Total HK$


HK$ Total HK$

Contractual cash outflows

HK$ Growth Portfolio 17,699,526 - 17,699,526 19,312,536 19,312,536 37,012,062 Balanced Portfolio 7,665,160 36,395,633 44,060,793 9,851,680 9,851,680 53,912,473 Capital Stable Portfolio 5,749,039 21,710,858 27,459,897 6,300,824 6,300,824 33,760,721 Guaranteed Portfolio 21,786,189 - 21,786,189 - - 21,786,189 MPF Conservative Fund 20,424,836 - 20,424,836 4,549,307 4,549,307 24,974,143 Hong Kong Equity Fund 30,414,626 233,491 30,648,117 10,641,773 10,641,773 41,289,890 European Equity Fund 4,829,091 294,186 5,123,277 2,680,992 2,680,992 7,804,269 Japan Equity Fund 4,373,432 1,849,283 6,222,715 1,263,935 1,263,935 7,486,650 North American Equity Fund 8,328,019 9,246,742 17,574,761 5,060,789 5,060,789 22,635,550 Asian Equity Fund 11,369,958 952,010 12,321,968 7,261,922 7,261,922 19,583,890 Greater China Equity Fund 19,248,071 4,708,738 23,956,809 12,891,575 12,891,575 36,848,384 Allianz Capital Stable Fund* - - - - - - Allianz Growth Fund* - - - - - - Allianz Stable Growth Fund* - - - - - - Green Fund 5,734,217 4,097,303 9,831,520 2,690,720 2,690,720 12,522,240 Global Bond Fund 12,978,076 5,304,036 18,282,112 1,509,684 1,509,684 19,791,796 World Fund 2,662,511 1,307,987 3,970,498 1,615,357 1,615,357 5,585,855 Manager's Choice Fund 7,375,149 33,686,818 41,061,967 5,642,443 5,642,443 46,704,410 Fidelity Capital Stable Fund 5,506,950 - 5,506,950 1,600,414 1,600,414 7,107,364 Fidelity Stable Growth Fund 3,839,098 516,162 4,355,260 3,444,979 3,444,979 7,800,239 Fidelity Growth Fund 3,939,953 - 3,939,953 3,480,567 3,480,567 7,420,520 Asian Bond Fund 5,964,759 4,002,062 9,966,821 877,798 877,798 10,844,619 Eurasia Fund 494,736 348,346 843,082 519,668 519,668 1,362,750 Hong Kong and China Fund 10,655,831 - 10,655,831 1,683,421 1,683,421 12,339,252 American Fund 4,137,295 4,344,919 8,482,214 1,384,105 1,384,105 9,866,319 Age 65 Plus Fund 7,321,303 1,806,197 9,127,500 490,838 490,838 9,618,338 Core Accumulation Fund 10,987,936 5,051,989 16,039,925 1,557,191 1,557,191 17,597,116 China HK Dynamic Asset

Allocation Fund 4,879,996 -

4,879,996

726,085 726,085

5,606,081 Total 238,365,757 135,856,760 374,222,517 107,038,603 107,038,603 481,261,120



158



Constituent funds As at 30th November 2018 Less than 7 days 7 days to 12 months

Amounts payable on

redemption HK$

Amounts payable on

purchase of investments

HK$ Total HK$


HK$ Total HK$

Contractual cash outflows

HK$ Growth Portfolio 14,079,431 2,746,293 16,825,724 18,637,489 18,637,489 35,463,213 Balanced Portfolio 7,835,713 1,164,445 9,000,158 9,260,153 9,260,153 18,260,311 Capital Stable Portfolio 8,871,150 1,269,986 10,141,136 5,950,910 5,950,910 16,092,046 Guaranteed Portfolio 21,002,981 - 21,002,981 - - 21,002,981 MPF Conservative Fund 10,192,738 - 10,192,738 4,193,603 4,193,603 14,386,341 Hong Kong Equity Fund 37,418,523 981,316 38,399,839 10,194,992 10,194,992 48,594,831 European Equity Fund 3,573,879 343,469 3,917,348 2,572,381 2,572,381 6,489,729 Japan Equity Fund 12,191,771 9,563,820 21,755,591 1,149,395 1,149,395 22,904,986 North American Equity Fund 10,593,491 3,114,854 13,708,345 4,185,354 4,185,354 17,893,699 Asian Equity Fund 14,500,081 641,524 15,141,605 6,806,140 6,806,140 21,947,745 Greater China Equity Fund 14,412,940 1,483,156 15,896,096 11,675,922 11,675,922 27,572,018 Allianz Capital Stable Fund* - - - - - - Allianz Growth Fund* - - - - - - Allianz Stable Growth Fund* - - - - - - Green Fund 5,008,066 1,557,502 6,565,568 2,280,445 2,280,445 8,846,013 Global Bond Fund 8,014,185 4,347,839 12,362,024 1,118,748 1,118,748 13,480,772 World Fund 1,941,158 291,031 2,232,189 938,415 938,415 3,170,604 Manager's Choice Fund 9,031,839 3,142,983 12,174,822 5,149,250 5,149,250 17,324,072 Fidelity Capital Stable Fund 6,239,312 - 6,239,312 1,091,941 1,091,941 7,331,253 Fidelity Stable Growth Fund 4,688,127 175,042 4,863,169 2,432,132 2,432,132 7,295,301 Fidelity Growth Fund 4,246,666 - 4,246,666 2,368,819 2,368,819 6,615,485 Asian Bond Fund 4,526,305 3,528,379 8,054,684 630,577 630,577 8,685,261 Eurasia Fund 776,195 59,911 836,106 399,291 399,291 1,235,397 Hong Kong and China Fund 17,520,898 - 17,520,898 1,376,564 1,376,564 18,897,462 American Fund 2,708,270 333,277 3,041,547 631,454 631,454 3,673,001 Age 65 Plus Fund 1,887,525 665,223 2,552,748 293,036 293,036 2,845,784 Core Accumulation Fund 2,991,527 1,965,875 4,957,402 1,016,610 1,016,610 5,974,012 China HK Dynamic Asset

Allocation Fund 593,495 - 593,495

513,836 513,836 1,107,331 Total 224,846,266 37,375,925 262,222,191 94,867,457 94,867,457 357,089,648



159



Units are redeemable on demand at the members’ option.

As at 30th November 2019 and 2018, no individual member held more than 10% of each constituent fund’s units. The Scheme and its constituent funds manage their liquidity risk by investing predominantly in investments that are expected to be able to realise within 1 month or less. The following table illustrates the expected liquidity of non-derivatives assets held:

Scheme Within 1 month Over 1 month HK$ HK$ As at 30th November 2019 Total assets 85,489,289,777 20,607,759 As at 30th November 2018 Total assets 77,385,246,884 20,105,894 Constituent funds As at 30th November 2019 As at 30th November 2018

Less than 7 days 7 days to 12

months

Less than 7 days 7 days to 12

months HK$ HK$ HK$ HK$ Growth Portfolio 11,411,881,398 - 10,925,319,910 - Balanced Portfolio 5,856,893,358 - 5,440,219,858 - Capital Stable Portfolio 3,742,262,146 - 3,494,363,475 - Guaranteed Portfolio 9,287,257,879 - 9,186,935,616 - MPF Conservative Fund 5,799,402,101 - 5,384,214,645 - Hong Kong Equity Fund 6,184,368,398 - 6,028,028,296 - European Equity Fund 1,585,959,148 - 1,453,536,908 - Japan Equity Fund 754,706,498 - 683,466,584 - North American Equity Fund 3,092,943,137 - 2,514,492,029 - Asian Equity Fund 4,275,457,063 - 3,969,772,664 - Greater China Equity Fund 7,543,202,524 - 6,827,184,683 - Allianz Capital Stable Fund* - - - - Allianz Growth Fund* - - - - Allianz Stable Growth Fund* - - - - Green Fund 2,199,882,107 - 1,859,475,052 - Global Bond Fund 2,047,979,594 - 1,529,498,948 - World Fund 1,593,210,002 17,637 1,336,727,050 17,940 Manager's Choice Fund 4,732,700,273 - 4,321,352,386 - Fidelity Capital Stable Fund 1,119,878,964 - 971,223,096 - Fidelity Stable Growth Fund 2,404,854,958 - 2,082,941,410 - Fidelity Growth Fund 2,421,249,386 - 2,133,448,928 - Asian Bond Fund 1,246,678,618 - 970,790,493 - Eurasia Fund 403,164,077 8,645 340,304,025 8,589 Hong Kong and China Fund 2,364,955,038 79,583 2,200,830,869 120,132 American Fund 1,305,850,692 33,789 893,259,700 25,168 Age 65 Plus Fund 775,957,220 - 444,247,863 - Core Accumulation Fund 2,561,570,918 - 1,646,321,414 - China HK Dynamic Asset Allocation Fund 668,537,369

- 545,399,036 -

85,380,802,866 139,654 77,183,354,938 171,829



160



(e) Liquidity risk (continued)

The table below analyses the constituent funds’ derivative financial instruments in a net loss position for which the contractual maturities are considered to be essential to an understanding of the timing of cash flows based on the constituent funds’ investment strategy. Net settled forward foreign exchange contracts

1-3 months HK$

As at 30th November 2019 Growth Portfolio 244,968 Balanced Portfolio 455,953 Capital Stable Portfolio 221,087 European Equity Fund 430,734 Japan Equity Fund 205,530 North American Equity Fund 725,383 Asian Equity Fund 1,170,266 Global Bond Fund 485,828 World Fund 378,331 Manager’s Choice Fund 47,164 Eurasia Fund 40,527 American Fund 307,685 As at 30th November 2018 Growth Portfolio 81,171 Balanced Portfolio 114,332 Capital Stable Portfolio 57,967 European Equity Fund 156,202 Japan Equity Fund 69,081 North American Equity Fund 224,827 Asian Equity Fund 415,757 Global Bond Fund 141,346 World Fund 121,596 Manager’s Choice Fund 81,370 Eurasia Fund 12,286 American Fund 80,339


161



(f) Currency risk

Currency risk is the risk that the value of assets and liabilities will fluctuate due to changes in foreign exchange rates. As at 30th November 2019 and 2018, the Scheme and its constituent funds had assets and liabilities mainly denominated in Hong Kong dollar, the functional and presentation currency, and United States dollar. Since Hong Kong dollar is pegged to United States dollar, the currency risk is considered minimal. In addition, the constituent funds have entered into forward foreign exchange contracts designed to hedge some or all of the exposure to United States dollar. Please refer to note 9 for details on forward foreign exchange contracts.

(g) Fair value estimation

The Scheme and its constituent funds classify fair value measurements using a fair value hierarchy that reflects the significance of the inputs used in making the measurements. The fair value hierarchy has the following levels: Quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1). Inputs other than quoted prices included within level 1 that are observable for the asset or liability,

either directly (that is, as prices) or indirectly (that is, derived from prices) (level 2). Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs)

(level 3).

The level in the fair value hierarchy within which the fair value measurement is categorised in its entirety is determined on the basis of the lowest level input that is significant to the fair value measurement in its entirety. For this purpose, the significance of an input is assessed against the fair value measurement in its entirety. If a fair value measurement uses observable inputs that require significant adjustment based on unobservable inputs, that measurement is a level 3 measurement. Assessing the significance of a particular input to the fair value measurement in its entirety requires judgment, considering factors specific to the asset or liability. The determination of what constitutes “observable” requires significant judgment by the Scheme and its constituent funds. The Scheme and its constituent funds consider observable data to be such market data that is readily available, regularly distributed or updated, reliable and verifiable, not proprietary, and provided by independent sources that are actively involved in the relevant market.

The following table analyses within the fair value hierarchy the financial assets of the Scheme and the financial assets and liabilities of its constituent funds measured at fair value at 30th November 2019 and 2018: Scheme Level 2 Total HK$ HK$ As at 30th November 2019 Assets Financial assets at fair value through profit or loss: - Investment funds 84,894,967,944 84,894,967,444 ═══════════ ═══════════ As at 30th November 2018 Assets Financial assets at fair value through profit or loss: - Investment funds 76,824,880,845 76,824,880,845 ═══════════ ═══════════


162



(g) Fair value estimation (continued) Constituent funds As at 30th November 2019 Level 2

Investment funds

Derivative financial

instruments Total Assets HK$ HK$ HK$ Financial assets at fair value through profit or loss: Growth Portfolio 10,846,011,690 112,860 10,846,124,550 Balanced Portfolio 5,663,253,296 - 5,663,253,296 Capital Stable Portfolio 3,433,273,396 - 3,433,273,396 Guaranteed Portfolio 9,267,276,380 - 9,267,276,380 MPF Conservative Fund 5,786,902,689 - 5,786,902,689 Hong Kong Equity Fund 6,151,020,829 - 6,151,020,829 European Equity Fund 1,580,454,771 264 1,580,455,035 Japan Equity Fund 747,598,201 251 747,598,452 North American Equity Fund 3,072,396,977 - 3,072,396,977 Asian Equity Fund 4,262,472,975 700 4,262,473,675 Greater China Equity Fund 7,524,995,577 - 7,524,995,577 Allianz Capital Stable Fund* - - - Allianz Growth Fund * - - - Allianz Stable Growth Fund* - - - Green Fund 2,190,069,269 - 2,190,069,269 Global Bond Fund 2,030,017,391 - 2,030,017,391 World Fund 1,587,562,863 - 1,587,562,863 Manager's Choice Fund 4,434,508,643 - 4,434,508,643 Fidelity Capital Stable Fund 1,112,716,572 - 1,112,716,572 Fidelity Stable Growth Fund 2,400,549,006 - 2,400,549,006 Fidelity Growth Fund 2,416,816,585 - 2,416,816,585 Asian Bond Fund 1,236,115,866 - 1,236,115,866 Eurasia Fund 399,268,714 - 399,268,714 Hong Kong and China Fund 2,288,751,737 - 2,288,751,737 American Fund 1,295,567,782 - 1,295,567,782 Age 65 Plus Fund 768,382,074 - 768,382,074 Core Accumulation Fund 2,543,483,730 - 2,543,483,730 China HK Dynamic Asset Allocation Fund 663,633,319 - 663,633,319 Total 83,703,100,332 114,075 83,703,214,407 *Allianz Capital Stable Fund, Allianz Growth Fund and Allianz Stable Growth Fund (“the 3 Allianz Funds”) had no investments and operations since 15th November 2018. MPFA had approved the termination of the 3 Allianz Funds to take effect on 13th March 2019.


163



(g) Fair value estimation (continued) Constituent funds (continued) As at 30th November 2019 Level 2


instruments Total Liabilities HK$ HK$ Financial liabilities at fair value through profit or loss: Growth Portfolio 357,828 357,828 Balanced Portfolio 455,953 455,953 Capital Stable Portfolio 221,087 221,087 European Equity Fund 430,998 430,998 Japan Equity Fund 205,781 205,781 North American Equity Fund 725,383 725,383 Asian Equity Fund 1,170,966 1,170,966 Global Bond Fund 485,828 485,828 World Fund 378,331 378,331 Manager's Choice Fund 47,164 47,164 Eurasia Fund 40,527 40,527 American Fund 307,685 307,685 Total 4,827,531 4,827,531


164



(g) Fair value estimation (continued)

Constituent funds (continued)

As at 30th November 2018 Level 2

Investment funds


instruments Total Assets HK$ HK$ HK$ Financial assets at fair value through profit or loss: Growth Portfolio 10,530,985,402 - 10,530,985,402 Balanced Portfolio 5,102,134,197 - 5,102,134,197 Capital Stable Portfolio 3,109,760,235 - 3,109,760,235 Guaranteed Portfolio 9,168,614,948 - 9,168,614,948 MPF Conservative Fund 5,358,106,261 - 5,358,106,261 Hong Kong Equity Fund 5,994,590,747 - 5,994,590,747 European Equity Fund 1,449,718,959 132 1,449,719,091 Japan Equity Fund 662,964,708 1,321 662,966,029 North American Equity Fund 2,499,986,790 - 2,499,986,790 Asian Equity Fund 3,954,418,559 1,071 3,954,419,630 Greater China Equity Fund 6,813,678,268 - 6,813,678,268 Allianz Capital Stable Fund* - - - Allianz Growth Fund * - - - Allianz Stable Growth Fund* - - - Green Fund 1,852,870,067 - 1,852,870,067 Global Bond Fund 1,517,266,766 - 1,517,266,766 World Fund 1,334,015,963 - 1,334,015,963 Manager's Choice Fund 4,183,082,705 - 4,183,082,705 Fidelity Capital Stable Fund 966,407,721 - 966,407,721 Fidelity Stable Growth Fund 2,078,453,875 - 2,078,453,875 Fidelity Growth Fund 2,129,698,307 - 2,129,698,307 Asian Bond Fund 961,947,625 - 961,947,625 Eurasia Fund 337,455,029 - 337,455,029 Hong Kong and China Fund 2,138,147,608 - 2,138,147,608 American Fund 889,021,497 - 889,021,497 Age 65 Plus Fund 441,799,804 - 441,799,804 Core Accumulation Fund 1,638,954,245 - 1,638,954,245 China HK Dynamic Asset Allocation Fund 543,234,678 - 543,234,678 Total 75,657,314,964 2,524 75,657,317,488 *Allianz Capital Stable Fund, Allianz Growth Fund and Allianz Stable Growth Fund (“the 3 Allianz Funds”) had no investments and operations since 15th November 2018. MPFA had approved the termination of the 3 Allianz Funds to take effect on 13th March 2019.


165



(g) Fair value estimation (continued)

Constituent funds (continued) As at 30th November 2018 Level 2


instruments Total Liabilities HK$ HK$ Financial liabilities at fair value through profit or loss: Growth Portfolio 81,171 81,171 Balanced Portfolio 114,332 114,332 Capital Stable Portfolio 57,967 57,967 European Equity Fund 156,334 156,334 Japan Equity Fund 70,402 70,402 North American Equity Fund 224,827 224,827 Asian Equity Fund 416,828 416,828 Global Bond Fund 141,346 141,346 World Fund 121,596 121,596 Manager's Choice Fund 81,370 81,370 Eurasia Fund 12,286 12,286 American Fund 80,339 80,339 Total 1,558,798 1,558,798 The investments held by the Scheme and its constituent funds are not traded in active markets and are valued based on quoted prices supported by observable inputs, and are therefore classified within level 2. The other financial assets and financial liabilities held by the Scheme and its constituent funds are carried at value that reflects a reasonable approximation of their fair value. There has been no transfers between levels for the year ended 30th November 2019 and 30th November 2018.

(h) Capital risk management

The capital of the constituent funds is represented by the units in the constituent funds, and shown as net assets attributable to members in the statement of net assets. The amount of net assets attributable to members for each constituent fund can change significantly on a daily basis as the constituent funds are subject to daily subscriptions and redemptions at the discretion of members. Subscriptions and redemptions of units during the year are shown in the statement of changes in net assets attributable to members. The constituent funds’ objective when managing capital is to safeguard the constituent funds’ ability to continue as a going concern in order to provide retirement benefits to members. In order to achieve the investment objectives, the constituent funds endeavour to invest their capital in accordance with the investment policies as outlined in note 3(a), whilst maintaining sufficient liquidity to meet redemption requests. Such liquidity is augmented by the holding of liquid investments. The Trustee and the Investment Managers monitor capital on the basis of the value of net assets attributable to members.


166


4 Net gains/(losses) on investments and derivative financial instruments

2019

Growth Portfolio Balanced Portfolio



MPF Conservative

Fund Hong Kong

Equity Fund HK$ HK$ HK$ HK$ HK$ HK$ Net unrealised gains/(losses) on investments 404,358,407 322,580,756 218,628,191 - 91,664,012 158,306,379 Net realised gains/(losses) on sales of investments 566,952,673 185,990,095 84,055,343 - 25,213,720 101,065,727 Net unrealised gains/(losses) on derivative financial instruments

(163,797)

(341,621)

(163,120)

-

-

-

Net realised gains/(losses) on derivative financial instruments (983,801) (3,880,880) (1,754,553) - - - Net gains/(losses) on investments and derivative financial

instruments 970,163,482 504,348,350 300,765,861 - 116,877,732

259,372,106 2019


Japan Equity Fund


Asian Equity Fund



(Note i) HK$ HK$ HK$ HK$ HK$ HK$ Net unrealised gains/(losses) on investments 151,082,327 44,956,838 250,053,211 340,029,625 307,986,212 - Net realised gains/(losses) on sales of investments 26,826,276 27,754,921 44,252,813 76,198,946 655,420,804 - Net unrealised gains/(losses) on derivative financial instruments (274,532) (136,448) (500,555) (754,509) - - Net realised gains/(losses) on derivative financial instruments (5,330,774) (2,343,181) (7,754,024) (14,387,021) - - Net gains/(losses) on investments and derivative financial

instruments 172,303,297 70,232,130 286,051,445 401,087,041 963,407,016 - Note i: Allianz Capital Stable Fund, Allianz Growth Fund and Allianz Stable Growth Fund (“the 3 Allianz Funds”) had no investments and operations since 15th November 2018. MPFA had approved the termination of the 3 Allianz Funds to take effect on 13th March 2019.


167


4 Net gains/(losses) on investments and derivative financial instruments (continued) 2019

Allianz Growth


Green Fund

Global Bond Fund

World Fund

Manager’s Choice

Fund


(Note i) (Note i) HK$ HK$ HK$ HK$ HK$ HK$ HK$ Net unrealised gains/(losses) on investments - - 255,975,094 143,878,540 117,925,673 218,811,547 80,676,932 Net realised gains/(losses) on sales of investments - - 22,061,488 5,127,117 9,510,593 186,716,861 6,773,173 Net unrealised gains/(losses) on derivative financial instruments - - - (344,482) (256,736) 34,207 - Net realised gains/(losses) on derivative financial instruments - - - (4,855,829) (4,227,271) (3,485,686) - Net gains/(losses) on investments and derivative financial

instruments - -

278,036,582

143,805,346

122,952,259

402,076,929

87,450,105



168


4 Net gains/(losses) on investments and derivative financial instruments (continued)

2019


Fidelity Growth

Fund Asian

Bond Fund Eurasia

Fund

Hong Kong China Fund

American Fund

HK$ HK$ HK$ HK$ HK$ HK$ Net unrealised gains/(losses) on investments 201,057,065 224,395,939 70,845,892 23,239,639 (56,667,351) 99,486,978 Net realised gains/(losses) on sales of investments 10,441,984 14,849,395 2,799,266 449,876 18,189,448 9,676,349 Net unrealised gains/(losses) on derivative financial instruments - - - (28,241) - (227,346) Net realised gains/(losses) on derivative financial instruments - - - (414,405) - (2,854,143) Net gains/(losses) on investments and derivative financial

instruments 211,499,049

239,245,334

73,645,158

23,246,869

(38,477,903)

106,081,838 2019


Fund

China HK Dynamic Asset Allocation

Fund Total HK$ HK$ HK$ HK$ Net unrealised gains/(losses) on investments 51,774,576 228,259,467 1,738,126 3,951,044,075 Net realised gains/(losses) on sales of investments 1,848,338 1,347,563 293,326 2,083,816,095 Net unrealized gains/(losses) on derivative financial instruments - - - (3,157,180) Net realised gains/(losses) on derivative financial instruments - - - (52,271,568) Net gains/(losses) on investments and derivative financial

instruments 53,622,914 229,607,030 2,031,452 5,979,431,422


169



2018




MPF Conservative

Fund Hong Kong

Equity Fund HK$ HK$ HK$ HK$ HK$ HK$ Net unrealised gains/(losses) on investments (1,829,439,909) (686,356,763) (342,860,869) - 56,498,351 (1,264,551,224) Net realised gains/(losses) on sales of investments 1,161,429,090 431,195,953 230,232,751 - 20,140,062 862,240,833 Net unrealised gains/(losses) on derivative financial instruments 1,064,968 2,605,835 1,696,401 - - - Net realised gains/(losses) on derivative financial instruments (3,753,141) (7,874,128) (4,725,772) - - - Net gains/(losses) on investments and derivative financial

instruments (670,698,992) (260,429,103) (115,657,489) - 76,638,413 (402,310,391)

2018

European

Equity Fund Japan


Equity Fund Asian

Equity Fund Greater China


Stable Fund (Note i) HK$ HK$ HK$ HK$ HK$ HK$ Net unrealised gains/(losses) on investments (217,103,717) (118,453,107) (12,060,536) (370,273,555) (1,568,133,378) - Net realised gains/(losses) on sales of investments 48,933,159 54,781,374 101,474,516 129,213,031 934,615,896 (19,503,418) Net unrealised gains/(losses) on derivative financial instruments 176,067 76,179 154,704 464,130 - - Net realised gains/(losses) on derivative financial instruments (7,842,235) (3,492,303) (9,343,970) (20,454,082) - - Net gains/(losses) on investments and derivative financial

instruments (175,836,726) (67,087,857) 80,224,714 (261,050,476) (633,517,482) (19,503,418) Note i: Allianz Capital Stable Fund, Allianz Growth Fund and Allianz Stable Growth Fund (“the 3 Allianz Funds”) had no investments and operations since 15th November 2018. MPFA had approved the termination of the 3 Allianz Funds to take effect on 13th March 2019.


170



2018

Allianz Growth


Green Fund

Global Bond Fund

World Fund

Manager’s Choice

Fund


(Note i) (Note i) HK$ HK$ HK$ HK$ HK$ HK$ HK$

Net unrealised gains/(losses) on investments - - (69,318,606) (61,160,832)

(53,748,556) (602,587,833)

(18,492,160)

Net realised gains/(losses) on sales of investments (92,586,478) (47,492,193) 39,592,757

3,897,775 31,465,161 365,736,614 5,057,670 Net unrealised gains/(losses) on derivative financial instruments - - - 78,349 88,980 5,521 - Net realised gains/(losses) on derivative financial instruments - - - (5,657,065) (5,268,525) (3,141,986) - Net gains/(losses) on investments and derivative financial

instruments (92,586,478) (47,492,193) (29,725,849) (62,841,773) (27,462,940) (239,987,684) (13,434,490)



171



2018


Fidelity Growth

Fund Asian

Bond Fund Eurasia

Fund

Hong Kong China Fund

American Fund

HK$ HK$ HK$ HK$ HK$ HK$ Net unrealised gains/(losses) on investments (50,056,282) (75,492,832) (6,797,588) (40,485,450) (265,712,427) (8,863,012) Net realised gains/(losses) on sales of investments 6,489,722 16,795,929 2,175,603 2,442,270 52,138,104 26,856,770 Net unrealised gains/(losses) on derivative financial instruments - - - 8,884 - 40,798 Net realised gains/(losses) on derivative financial instruments - - - (535,955) - (3,077,928) Net gains/(losses) on investments and derivative financial

instruments (43,566,560) (58,696,903) (4,621,985) (38,570,251) (213,574,323) 14,956,628

2018

Age 65 Plus

Fund

Core Accumulation

Fund

China HK Dynamic Asset Allocation

Fund Total HK$ HK$ HK$ HK$ Net unrealised gains/(losses) on investments (2,123,766) (19,443,070) (7,486,940) (7,634,504,061) Net realised gains/(losses) on sales of investments 125,845 590,009 297,479 4,368,336,284 Net unrealized gains/(losses) on derivative financial instruments - - - 6,460,816 Net realised gains/(losses) on derivative financial instruments - - - (75,167,090) Net gains/(losses) on investments and derivative financial

instruments (1,997,921) (18,853,061) (7,189,461) (3,334,874,051)


172


5 Transactions with associates/related parties

Except as disclosed below and in note 8, the Scheme and its constituent funds did not have any transactions and balances with related parties including the Trustee, the Managers and their associates or delegates during the year ended 30th November 2019 and 30th November 2018. Associates or delegates of the Investment Manager are those as defined in the Ordinance established by the MPFA.

(a) Trustee and administration fees

The Trustee, AIA Company (Trustee) Limited, and the administrator, AIA International Limited (prior to 1st October 2018, AIA Pension and Trustee Co. Ltd.), are entitled to receive a fee in aggregate calculated on the net asset value of the respective constituent funds, other than the Guaranteed Portfolio, MPF Conservative Fund, Global Bond Fund, American Fund, World Fund, Asian Bond Fund, Eurasia Fund, Hong Kong and China Fund, Age 65 Plus Fund and Core Accumulation Fund, at an annual rate of 0.85%. The applicable annual rate for MPF Conservative Fund, Global Bond Fund, World Fund, Asian Bond Fund, Eurasia Fund, Hong Kong and China Fund and American Fund is 0.6%. The applicable annual rates for Age 65 Plus Fund and Core Accumulation Fund is 0.495%. The trustee and administration fees for the MPF Conservative Fund are deducted in accordance with section 37 of the General Regulation. For the Guaranteed Portfolio, the trustee and administration fees are charged on the underlying investment, which is an insurance policy. The trustee and administration fees are calculated and accrued on each valuation day and payable monthly in arrears.


173


5 Transactions with associates/related parties (continued)

(a) Trustee and administration fees (continued) The trustee and administration fees for each constituent fund incurred during the year ended 30th November 2019 and 30th November 2018 are disclosed in the statement of comprehensive income of the constituent funds. The trustee and administration fees payable as at 30th November 2019 and 2018 were as follows: 2019 2018 HK$ HK$ Growth Portfolio 7,999,276 7,579,122 Balanced Portfolio 4,071,151 3,777,026 Capital Stable Portfolio 2,595,386 2,427,554 Guaranteed Portfolio - - MPF Conservative Fund 2,842,606 2,620,278 Hong Kong Equity Fund 4,373,445 4,126,300 European Equity Fund 1,102,158 1,033,807 Japan Equity Fund 519,393 456,802 North American Equity Fund 2,109,579 1,719,118 Asian Equity Fund 3,005,860 2,756,329 Greater China Equity Fund 5,341,889 4,704,542 Allianz Capital Stable Fund* - - Allianz Growth Fund* - - Allianz Stable Growth Fund * - - Green Fund 1,514,005 1,283,043 Global Bond Fund 994,647 745,060 World Fund 779,332 652,093 Manager's Choice Fund 3,284,884 2,991,174 Fidelity Capital Stable Fund 776,793 529,810 Fidelity Stable Growth Fund 1,672,733 1,180,768 Fidelity Growth Fund 1,690,009 1,150,007 Asian Bond Fund 605,794 467,136 Eurasia Fund 198,190 166,570 Hong Kong and China Fund 1,188,792 1,057,999 American Fund 631,409 431,918 Age 65 Plus Fund 307,664 175,175 Core Accumulation Fund 1,017,220 651,555 China HK Dynamic Asset Allocation Fund 469,747 372,064 ────────── ────────── Total 49,091,962 43,055,250 ══════════ ══════════ *Allianz Capital Stable Fund, Allianz Growth Fund and Allianz Stable Growth Fund (“the 3 Allianz Funds”) had no investments and operations since 15th November 2018. MPFA had approved the termination of the 3 Allianz Funds to take effect on 13th March 2019.

(b) Investment management fees The Investment Managers, PineBridge Investments Hong Kong Limited, JPMorgan Asset Management (Asia Pacific) Limited (previously known as JF Asset Management Limited prior to 29th July 2019), Allianz Global Investors Asia Pacific Limited (ceased to be an investment manager of the Scheme on 15th November 2018), Amundi Hong Kong Limited and FIL Investment Management (Hong Kong) Limited are entitled to receive a fee calculated on the net asset value of the respective constituent funds, other than the Guaranteed Portfolio, MPF Conservative Fund, Fidelity Stable Growth Fund, Green Fund, Global Bond Fund, World Fund, Manager’s Choice Fund, Asian Bond Fund, Eurasia Fund, Hong Kong and China Fund, American Fund, Age 65 Plus Fund, Core Accumulation Fund and China HK Dynamic Asset Allocation Fund, at an annual rate of 0.9%. The applicable annual rate for the Guaranteed Portfolio is 0.65%. The applicable annual rate for the MPF Conservative Fund is 0.36%.


174



(b) Investment management fees (continued) The applicable annual rate for the Global Bond Fund is between 0.30% and 0.31%. The applicable annual rate for the World Fund is 0.14%. The applicable annual rate for the Asian Bond Fund is between 0.08% and 0.09%. The applicable annual rate for the Eurasia Fund is 0.09%. The applicable annual rate for the Hong Kong and China Fund is between 0.18% and 0.19%. The applicable annual rate for the American Fund is 0.22%. The applicable annual rate for the Manager’s Choice Fund is 0.69%. The applicable annual rate for the Green Fund is 0.66%. The applicable annual rate for the China HK Dynamic Asset Allocation Fund is between 0% and 0.13%. The investment management fees for the MPF Conservative Fund are deducted in accordance with section 37 of the General Regulation. For the Guaranteed Portfolio, the investment management fees are charged on the underlying investment, which is an insurance policy. No investment management fees for Age 65 Plus Fund and Core Accumulation Fund. The fees are calculated and accrued on each valuation day and payable monthly in arrears.


175



(b) Investment management fees (continued)

The investment management fees for each constituent fund incurred during the year ended 30th November 2019 and 30th November 2018 are disclosed in the statement of comprehensive income of the constituent funds. The investment management fees payable as at 30th November 2019 and 2018 were as follows:

2019 HK$

2018 HK$

Growth Portfolio 8,469,822 8,024,952 Balanced Portfolio 4,310,631 3,999,204 Capital Stable Portfolio 2,748,055 2,570,352 Guaranteed Portfolio - - MPF Conservative Fund 1,705,564 1,572,167 Hong Kong Equity Fund 4,630,707 4,369,023 European Equity Fund 1,166,991 1,094,619 Japan Equity Fund 549,946 483,673 North American Equity Fund 2,233,672 1,820,243 Asian Equity Fund 3,182,675 2,918,465 Greater China Equity Fund 5,656,117 4,981,280 Allianz Capital Stable Fund* - - Allianz Growth Fund* - - Allianz Stable Growth Fund* - - Green Fund 1,175,580 996,245 Global Bond Fund 513,901 372,530 World Fund 181,844 152,155 Manager's Choice Fund 2,666,553 2,428,130 Fidelity Capital Stable Fund 822,486 560,975 Fidelity Stable Growth Fund 1,771,129 1,250,225 Fidelity Growth Fund 1,789,422 1,217,654 Asian Bond Fund 90,869 62,285 Eurasia Fund 29,729 24,986 Hong Kong and China Fund 376,451 317,400 American Fund 231,517 158,370 Age 65 Plus Fund - - Core Accumulation Fund - - China HK Dynamic Asset Allocation Fund 71,844 - ────────── ────────── Total 44,375,505 39,374,933 ══════════ ══════════ *Allianz Capital Stable Fund, Allianz Growth Fund and Allianz Stable Growth Fund (“the 3 Allianz Funds”) had no investments and operations since 15th November 2018. MPFA had approved the termination of the 3 Allianz Funds to take effect on 13th March 2019.

(c) Expenses Certain expenses of the constituent funds were absorbed by the administrator, AIA International Limited (prior to 1st October 2018, AIA Pension and Trustee Co. Ltd.), during the year ended 30th November 2019 and 30th November 2018.


176


6 Contributions

Mandatory contributions for both employers and employee/self-employed members are 5% of the employee/self-employed members’ relevant income, subject to the minimum and maximum relevant income levels as described below:

Each employee member with monthly relevant income of HK$7,100 or more; and self-employed member with monthly relevant income of HK$7,100 or more or with yearly relevant income of HK$85,200 would be required to pay mandatory contributions up to the maximum monthly relevant income of HK$30,000 or yearly relevant income of HK$360,000. Any contributions made to the Scheme by the employers or employee/self-employed members in excess of their mandatory contributions are voluntary contributions.

7 Benefits

Members will become entitled to benefits in respect of mandatory contributions to the Scheme in the circumstances set out in the MPF Ordinance. Currently, these circumstances include where the members (i) reach the age of 65; (ii) permanently cease employment, after reaching the age of 60; (iii) become totally incapacitated; (iv) permanently depart from Hong Kong; (v) die or (vi) have the right to claim a small balance pursuant to the MPF Ordinance. Members will become entitled to benefits in respect of voluntary contributions to the Scheme in circumstances set out in the Trust Deed and the relevant participation agreement. Benefits are paid to members via the Trustee on behalf of the Scheme.


177


8 Investments 2019 2018 The Scheme HK$ HK$ Investments in constituent funds

Growth Portfolio 11,374,624,368 10,889,775,526 Balanced Portfolio 5,802,524,932 5,421,845,215 Capital Stable Portfolio 3,708,280,338 3,478,213,462 Guaranteed Portfolio 9,265,471,690 9,165,932,635 MPF Conservative Fund 5,774,427,958 5,369,828,304 Hong Kong Equity Fund 6,143,078,508 5,979,433,465 European Equity Fund 1,577,724,145 1,446,890,977 Japan Equity Fund 747,014,318 660,492,517 North American Equity Fund 3,069,582,204 2,496,373,503 Asian Equity Fund 4,254,702,907 3,947,409,162 Greater China Equity Fund 7,506,354,140 6,799,612,665 Allianz Capital Stable Fund (Note i) - - Allianz Growth Fund (Note i) - - Allianz Stable Growth Fund (Note i) - - Green Fund 2,187,359,867 1,850,629,039 Global Bond Fund 2,027,701,970 1,515,876,830 World Fund 1,587,263,453 1,333,452,790 Manager's Choice Fund 4,685,948,699 4,303,946,944 Fidelity Capital Stable Fund 1,112,771,600 963,891,843 Fidelity Stable Growth Fund 2,397,054,719 2,075,646,109 Fidelity Growth Fund 2,413,828,866 2,126,833,443 Asian Bond Fund 1,235,833,999 962,105,232 Eurasia Fund 401,769,445 339,064,931 Hong Kong and China Fund 2,352,695,369 2,182,053,539 American Fund 1,295,710,477 889,531,528 Age 65 Plus Fund 766,338,882 441,402,079 Core Accumulation Fund 2,543,973,802 1,640,347,402 China HK Dynamic Asset Allocation Fund 662,931,288 544,291,705 ─────────── ───────────

Investments at fair value 84,894,967,944 76,824,880,845 ═══════════ ═══════════ Investments at cost 76,184,111,302 71,886,577,999 ═══════════ ═══════════ Note i: Allianz Capital Stable Fund, Allianz Growth Fund and Allianz Stable Growth Fund (“the 3 Allianz Funds”) had no investments and operations since 15th November 2018. MPFA had approved the termination of the 3 Allianz Funds to take effect on 13th March 2019.


178


8 Investments (continued)

Constituent funds 2019 2018

Fair Value

HK$ % of Net

Assets Fair Value

HK$ % of Net

Assets Growth Portfolio

Harbinger Japanese Equity Fund - - 217,473,332 2.00 JPMorgan SAR American Fund 1,353,768,784 11.90 999,653,395 9.18 JPMorgan SAR Asian Bond Fund 28,721,083 0.25 - - JPMorgan SAR Asian Fund 763,820,106 6.72 728,994,270 6.70 JPMorgan SAR European Fund 1,147,785,285 10.09 914,027,603 8.39 JPMorgan SAR Global Bond Fund 398,551,109 3.50 445,000,450 4.09 JPMorgan SAR Global Emerging Markets Fund 52,698,011 0.46 51,569,052 0.47 JPMorgan SAR Hong Kong Fund 2,186,742,445 19.23 1,768,424,096 16.24 JPMorgan SAR Japan Fund 654,885,368 5.76 702,603,739 6.45 PineBridge Asian Bond Fund1 28,925,715 0.25 - - PineBridge Asian Fund1 536,056,138 4.71 416,104,619 3.82 PineBridge Europe Equity Fund1 847,607,095 7.45 768,008,067 7.05 PineBridge Global Bond Fund1 319,175,288 2.81 288,569,805 2.65 PineBridge Hong Kong Equity Fund1 958,659,186 8.43 1,387,059,591 12.74 PineBridge Japan Equity Fund1 677,118,926 5.95 546,115,774 5.02 PineBridge US Equity Fund1 891,497,151 7.84 1,297,381,609 11.91 ────────── ──── ────────── ────

10,846,011,690 95.35 10,530,985,402 96.71 ══════════ ════ ══════════ ════

Investments at cost 8,812,180,992 8,901,513,111 ══════════ ══════════

Balanced Portfolio Harbinger Japanese Equity Fund - - 36,750,130 0.68 JPMorgan SAR American Fund 409,252,647 7.05 469,977,483 8.67 JPMorgan SAR Asian Bond Fund 98,543,885 1.70 91,707,303 1.69 JPMorgan SAR Asian Fund 253,375,055 4.37 95,988,765 1.77 JPMorgan SAR European Fund 441,987,163 7.62 249,478,854 4.60 JPMorgan SAR Global Bond Fund 571,958,576 9.86 643,714,684 11.87 JPMorgan SAR Global Emerging Markets Fund 45,822,001 0.79 62,444,626 1.15 JPMorgan SAR Greater China Fund 2,589,120 0.04 - - JPMorgan SAR Hong Kong Fund 571,017,016 9.84 625,886,098 11.54 JPMorgan SAR Japan Fund 127,794,529 2.20 131,187,850 2.42 PineBridge Asian Bond Fund1 164,093,998 2.83 152,544,787 2.81 PineBridge Asian Fund1 169,076,912 2.91 144,313,045 2.66 PineBridge Europe Equity Fund1 189,844,084 3.27 251,520,612 4.64 PineBridge Greater China Equity Fund1 6,006,294 0.10 - - PineBridge Global Bond Fund1 1,717,491,546 29.60 1,493,301,486 27.54 PineBridge Hong Kong Equity Fund1 420,662,299 7.25 268,301,090 4.95 PineBridge Japan Equity Fund 1 298,183,254 5.14 159,147,688 2.94 PineBridge US Equity Fund1 175,554,917 3.03 225,869,696 4.17 ────────── ──── ────────── ────

5,663,253,296 97.60 5,102,134,197 94.10 ══════════ ════ ══════════ ════

Investments at cost 4,930,817,998 4,692,279,655 ══════════ ══════════


179




2019 2018 Fair Value

HK$ % of Net

Assets Fair Value

HK$ % of Net

Assets Capital Stable Portfolio

Harbinger Japanese Equity Fund - - 14,088,748 0.41 JPMorgan SAR American Fund 156,640,111 4.22 181,247,449 5.21 JPMorgan SAR Asian Bond Fund 69,846,984 1.88 65,508,739 1.88 JPMorgan SAR Asian Fund 109,599,251 2.96 40,335,639 1.16 JPMorgan SAR European Fund 175,405,988 4.73 95,556,140 2.75 JPMorgan SAR Global Bond Fund 460,140,149 12.41 513,238,459 14.76 JPMorgan SAR Global Emerging Markets Fund 14,615,188 0.39 20,921,549 0.60 JPMorgan SAR Greater China Fund 1,101,075 0.03 - - JPMorgan SAR HKD Bond Fund 61,806,257 1.67 63,421,338 1.82 JPMorgan SAR Hong Kong Fund 217,282,924 5.86 239,034,322 6.87 JPMorgan SAR Japan Fund 52,683,959 1.42 50,830,557 1.46 PineBridge Asian Bond Fund1 116,308,230 3.14 108,966,627 3.13 PineBridge Asian Fund1 73,135,784 1.97 60,655,160 1.75 PineBridge Europe Equity Fund1 75,341,122 2.03 96,336,189 2.77 PineBridge Greater China Fund1 2,554,311 0.07 - - PineBridge Global Bond Fund1 1,381,721,514 37.26 1,190,524,903 34.23 PineBridge Hong Kong Dollar Fixed Income Fund1 114,892,365 3.10 117,853,625 3.39 PineBridge Hong Kong Equity Fund1 160,077,264 4.32 102,465,855 2.95 PineBridge Japan Equity Fund1 122,927,771 3.31 61,667,750 1.77 PineBridge US Equity Fund1 67,193,149 1.81 87,107,186 2.50 ─────────── ──── ────────── ──── 3,433,273,396 92.58 3,109,760,235 89.41 ═══════════ ════ ══════════ ════ Investments at cost 3,030,787,431 2,925,902,461 ═══════════ ══════════


HK$ % of Net

Assets Fair Value

HK$ % of Net

Assets Guaranteed Portfolio

MPF Capital Guaranteed Plus Policy2 9,267,276,380 100.02 9,168,614,948 100.03 ══════════ ═════ ══════════ ═════ Investments at cost 8,412,920,769 8,328,023,181 ══════════ ══════════

The Guaranteed Portfolio invests in the MPF Capital Guaranteed Plus Policy (the "underlying fund"). The overall market exposures for the underlying fund were as follows:

% of investments of the underlying fund 2019 2018

Bonds 5% 4% Investment fund 95% 96%

───────── ───────── 100% 100% ═════════ ═════════


180



Constituent funds (continued) Guaranteed Portfolio (continued) The following table shows the net market exposures of the underlying fund:

% of investments of the underlying fund

2019 2018 Asia ex Hong Kong 64% 68% Europe 11% 7% Hong Kong 18% 18% North America 7% 7%

───────── ───────── 100% 100% ═════════ ═════════

2019 2018

Fair Value HK$

% of Net

Assets Fair Value

HK$

% of Net

Assets MPF Conservative Fund PineBridge Hong Kong Dollar Money Market Fund1 5,786,902,689 100.22 5,358,106,261 99.78 ══════════ ═════ ══════════ ═════ Investments at cost 5,498,710,834 5,161,578,418 ══════════ ══════════

The MPF Conservative Fund invests in PineBridge Hong Kong Dollar Money Market Fund (the "underlying fund"). The overall market exposures for the underlying fund were as follows:


2019 2018

Certificates of deposits 100% 100% ═════════ ═════════

The following table shows the net market exposures of the underlying fund:


2019 2018 Canada - 16% China 48% 84% Hong Kong 7% Japan 5% - Macau 16% - South Korea 24% -

───────── ───────── 100% 100% ═════════ ═════════


181





HK$ % of Net

Assets Fair Value

HK$ % of Net

Assets Hong Kong Equity Fund

PineBridge Hong Kong Equity Fund1 3,064,609,966 49.89 3,083,753,607 51.57 JPMorgan SAR Hong Kong Fund 3,086,410,863 50.24 2,910,837,140 48.68 ────────── ───── ────────── ───── 6,151,020,829 100.13 5,994,590,747 100.25 ══════════ ═════ ══════════ ═════ Investments at cost 5,259,581,858 5,261,458,155 ══════════ ══════════


HK$ % of Net

Assets Fair Value

HK$ % of Net

Assets European Equity Fund

JPMorgan SAR European Fund 1,580,454,771 100.17 1,449,718,959 100.20 ══════════ ═════ ══════════ ═════ Investments at cost 1,159,770,860 1,180,117,375 ══════════ ══════════

The European Equity Fund invests in the JPMorgan SAR European Fund (the "underlying fund"). The overall market exposures for the underlying fund were as follows:


Listed equities 100% 100%

═════════ ═════════ The following table shows the net market exposures of the underlying fund:


Belgium 2% 2% Denmark 2% 3% Finland 1% 3% France 15% 14% Germany 17% 12% Italy 4% 3% Netherlands 9% 9% Norway 3% 3% Spain 4% 6% Sweden 1% 4% Switzerland 18% 16% United Kingdom 24% 25%

───────── ───────── 100% 100% ═════════ ═════════


182





HK$ % of Net

Assets Fair Value

HK$ % of Net

Assets Japan Equity Fund

JPMorgan SAR Japan Fund 747,598,201 100.08 662,964,708 100.37 ══════════ ════ ══════════ ════ Investments at cost 588,918,908 549,242,253 ══════════ ══════════

The Japan Equity Fund invests in the JPMorgan SAR Japan Fund (the "underlying fund"). The overall market exposures for the underlying fund were as follows:



═════════ ═════════


Japan 97% 100% North America 3% -

───────── ───────── 100% 100%

═════════ ═════════


HK$ % of Net

Assets Fair Value

HK$ % of Net

Assets North American Equity Fund

PineBridge US Equity Fund1 3,072,396,977 100.09 2,499,986,790 100.14 ══════════ ═════ ══════════ ═════ Investments at cost 2,043,808,812 1,721,451,836 ══════════ ══════════

The North American Equity Fund invests in the PineBridge US Equity Fund (the "underlying fund"). The overall market exposures for the underlying fund were as follows:





United States of America 100% 100%

═════════ ═════════


183





HK$ % of Net

Assets Fair Value

HK$ % of Net

Assets Asian Equity Fund

JPMorgan SAR Asian Fund 4,262,472,975 100.18 3,954,418,559 100.18 ══════════ ═════ ══════════ ═════ Investments at cost 2,918,270,588 2,950,245,797 ══════════ ══════════

The Asian Equity Fund invests in the JPMorgan SAR Asian Fund (the "underlying fund"). The overall market exposures for the underlying fund were as follows:





Australia 26% 31% Hong Kong 1% 1% India 17% 18% Indonesia 2% 2% Korea 22% 22% Malaysia 1% - New Zealand 2% 2% Singapore 6% 6% Taiwan 21% 14% Thailand 1% 2% United States 1% 2%

───────── ───────── 100% 100% ═════════ ═════════


HK$ % of Net

Assets Fair Value

HK$ % of Net

Assets Greater China Equity Fund

PineBridge Greater China Equity Fund1 2,198,676,671 29.29 3,905,433,427 57.44 JPMorgan SAR Greater China Fund 5,326,318,906 70.96 2,908,244,841 42.77 ────────── ───── ────────── ───── 7,524,995,577 100.25 6,813,678,268 100.21 ══════════ ═════ ══════════ ═════ Investments at cost 6,282,686,490 5,879,355,393 ══════════ ══════════


184





HK$ % of Net

Assets Fair Value

HK$ % of Net

Assets Allianz Capital Stable Fund (Note i)

Allianz Choice Capital Stable Fund (Class I) - N/A - N/A ══════════ ═════ ══════════ ═════ Investments at cost - - ══════════ ══════════

The Allianz Capital Stable Fund invests in the Allianz Choice Capital Stable Fund (Class I) (the "underlying fund"). The overall market exposures for the underlying fund were as follows:


Bonds - - Listed equities - - ───────── ───────── - -



Asia ex Hong Kong ex Japan - - Europe - - Hong Kong - - Japan - - North America - - Others - -

───────── ───────── - - ═════════ ═════════



185





HK$ % of Net

Assets Fair Value

HK$ % of Net

Assets Allianz Growth Fund (Note i)

Allianz Choice Growth Fund (Class I) - N/A - N/A ══════════ ═════ ══════════ ═════ Investments at cost - - ══════════ ══════════

The Allianz Growth Fund invests in the Allianz Choice Growth Fund (Class I) (the "underlying fund"). The overall market exposures for the underlying fund were as follows:





Asia ex Hong Kong ex Japan - - Europe - - Hong Kong - - Japan - - North America - -

───────── ───────── - - ═════════ ═════════



186





HK$ % of Net

Assets Fair Value

HK$ % of Net

Assets Allianz Stable Growth Fund (Note i)

Allianz Choice Stable Growth Fund (Class I) - N/A - N/A ══════════ ═════ ══════════ ═════ Investments at cost - - ══════════ ══════════

The Allianz Stable Growth Fund invests in the Allianz Choice Stable Growth Fund (Class I) (the "underlying fund"). The overall market exposures for the underlying fund were as follows:





Asia ex Hong Kong ex Japan - - Europe - - Hong Kong - - Japan - - North America - - Others - -

───────── ───────── - - ═════════ ═════════



187




2019 2018

Fair Value HK$

% of Net

Assets Fair Value

HK$

% of Net

Assets Green Fund Amundi HK-Green Planet Fund (Class S) 2,190,069,269 100.12 1,852,870,067 100.12 ══════════ ═════ ══════════ ═════ Investments at cost 1,563,411,821 1,482,187,713 ══════════ ══════════

The Green Fund invests in the Amundi HK-Green Planet Fund (Class S) (the "underlying fund"). The overall market exposures for the underlying fund were as follows:


Listed equities 99% 98% Money market instruments 1% 2% ───────── ───────── 100% 100%



Asia ex Hong Kong ex Japan 3% 3% Europe 22% 22% Hong Kong 34% 35% Japan 8% 9% North America 33% 28% Others - 3%

───────── ───────── 100% 100% ═════════ ═════════


HK$ % of Net

Assets Fair Value

HK$ % of Net

Assets Global Bond Fund

PineBridge Global Bond Fund1 2,030,017,391 100.11 1,517,266,766 100.09 ══════════ ═════ ══════════ ═════ Investments at cost 1,870,319,336 1,501,447,251 ══════════ ══════════

The Global Bond Fund invests in the PineBridge Global Bond Fund (the "underlying fund"). The overall market exposures for the underlying fund were as follows:


Bonds 100% 100%

═════════ ═════════


188



Constituent funds (continued) Global Bond Fund (continued) The following table shows the net market exposures of the underlying fund:


Australia 2% 2% Canada 1% 1% Denmark 2% - France 5% 8% Germany 3% 4% Italy 2% 6% Japan 9% 9% Netherlands 1% 1% Portugal 1% 2% South Africa 1% 1% Spain 1% 5% Supranational 1% 1% Switzerland 4% 5% United Kingdom 11% 9% United States of America 56% 46%

───────── ───────── 100% 100% ═════════ ═════════


HK$ % of Net

Assets Fair Value

HK$ % of Net

Assets World Fund

iShares Core S&P 500 ETF 850,213,300 53.57 692,341,997 51.92 iShares Latin America 40 ETF 299,866,093 18.89 263,961,823 19.80 iShares MSCI EAFE ETF 437,483,470 27.56 377,712,143 28.32 ────────── ──── ────────── ──── 1,587,562,863 100.02 1,334,015,963 100.04 ══════════ ═════ ══════════ ═════ Investments at cost 1,257,703,822 1,122,082,595 ══════════ ══════════


189





HK$ % of Net

Assets Fair Value

HK$ % of Net

Assets Manager's Choice Fund

Harbinger Japanese Equity Fund - - 40,986,519 0.95 JPMorgan SAR American Fund 521,640,237 11.13 511,348,578 11.88 JPMorgan SAR Asian Bond Fund 77,977,935 1.66 71,104,438 1.65 JPMorgan SAR Asian Fund 345,498,643 7.37 115,554,431 2.68 JPMorgan SAR European Fund 565,388,277 12.07 279,918,633 6.50 JPMorgan SAR Global Bond Fund 66,041,516 1.41 293,609,307 6.82 JPMorgan SAR Global Emerging Markets Fund 30,130,467 0.64 38,679,487 0.90 JPMorgan SAR Greater China Fund 3,492,181 0.07 JPMorgan SAR Hong Kong Fund 709,845,893 15.16 705,364,314 16.39 JPMorgan SAR Japan Fund 167,446,419 3.57 145,940,550 3.39 PineBridge Asian Bond Fund1 129,847,953 2.77 118,273,831 2.75 PineBridge Asian Fund1 230,551,981 4.92 173,735,057 4.04 PineBridge Europe Equity Fund1 242,846,235 5.18 282,205,714 6.56 PineBridge Global Bond Fund1 198,310,487 4.23 681,215,884 15.83 PineBridge Greater China Equity Fund1 8,101,391 0.17 PineBridge Hong Kong Equity Fund1 522,922,476 11.16 302,370,900 7.03 PineBridge Japan Equity Fund1 390,702,206 8.34 177,022,840 4.11 PineBridge US Equity Fund1 223,764,346 4.78 245,752,222 5.71 ────────── ──── ────────── ──── 4,434,508,643 94.63 4,183,082,705 97.19 ══════════ ════ ══════════ ════ Investments at cost 3,988,501,687 3,955,887,296 ══════════ ══════════


HK$ % of Net

Assets Fair Value

HK$ % of Net

Assets Fidelity Capital Stable Fund

Fidelity Global Investment Fund-Capital Stable Fund - Class B 1,112,716,572 100.00 966,407,721 100.26

══════════ ═════ ══════════ ═════ Investments at cost 1,000,841,316 935,209,397 ══════════ ══════════

The Fidelity Capital Stable Fund invests in the Fidelity Global Investment Fund-Capital Stable Fund - Class B (the "underlying fund"). The overall market exposures for the underlying fund were as follows:


Bonds 68% 66% Listed equities 32% 34% ───────── ───────── 100% 100%

═════════ ═════════


190



Constituent funds (continued) Fidelity Capital Stable Fund (continued)

The following table shows the net market exposures of the underlying fund:


Asia Pacific Equities 4% 4% Europe Equities 6% 7% Hong Kong Dollar Bonds 11% 7% Hong Kong Equities 10% 11% Japan Equities 5% 5% Other Bonds 57% 58% United States Equities 7% 8%

───────── ───────── 100% 100% ═════════ ═════════


HK$ % of Net

Assets Fair Value

HK$ % of Net

Assets Fidelity Stable Growth Fund

Fidelity Global Investment Fund-Stable Growth Fund - Class B 2,400,549,006 100.15 2,078,453,875 100.14

══════════ ═════ ══════════ ═════ Investments at cost 2,061,801,678 1,940,763,612 ══════════ ══════════






───────── ───────── 100% 100% ═════════ ═════════


191





HK$ % of Net

Assets Fair Value

HK$ % of Net

Assets Fidelity Growth Fund

Fidelity Global Investment Fund-Growth Fund - Class B 2,416,816,585 100.12 2,129,698,307 100.13 ══════════ ═════ ══════════ ═════ Investments at cost 1,986,638,370 1,923,916,031 ══════════ ══════════

The Fidelity Growth Fund invests in the Fidelity Global Investment Fund-Growth Fund - Class B (the "underlying fund"). The overall market exposures for the underlying fund were as follows:






───────── ───────── 100% 100% ═════════ ═════════


HK$ % of Net

Assets Fair Value

HK$ % of Net

Assets Asian Bond Fund

JPMorgan SAR Asian Bond Fund 1,236,115,866 100.02 961,947,625 99.98 ══════════ ════ ══════════ ════ Investments at cost 1,139,851,351 936,529,002 ══════════ ══════════

The Asian Bond Fund invests in the JPMorgan SAR Asian Bond Fund (the "underlying fund"). The overall market exposures for the underlying fund were as follows:


Bonds 100% 100%

═════════ ═════════


192




Asian Bond Fund (continued) The following table shows the net market exposures of the underlying fund:


Australia 11% 10% China 2% 2% Hong Kong 28% 33% India 1% - Indonesia 5% 4% Korea 10% 10% Malaysia 9% 6% New Zealand 4% 5% Philippine 2% 1% Singapore 10% 11% Thailand 10% 10% United States of America 8% 8%

───────── ───────── 100% 100% ═════════ ═════════


HK$ % of Net

Assets Fair Value

HK$ % of Net

Assets Eurasia Fund

iShares MSCI EAFE ETF 321,000,942 79.90 266,450,411 78.59 Tracker Fund of Hong Kong 78,267,772 19.48 71,004,618 20.94 ────────── ──── ────────── ──── 399,268,714 99.38 337,455,029 99.53 ══════════ ════ ══════════ ════ Investments at cost 373,130,974 334,556,928 ══════════ ══════════


HK$ % of Net

Assets Fair Value

HK$ % of Net

Assets Hong Kong and China Fund

Hang Seng China Enterprises Index ETF (Note ii) 457,684,045 19.45 469,108,608 21.50 Tracker Fund of Hong Kong 1,831,067,692 77.83 1,669,039,000 76.49 ────────── ──── ────────── ──── 2,288,751,737 97.28 2,138,147,608 97.99 ══════════ ════ ══════════ ════ Investments at cost 2,232,921,424 2,025,649,944 ══════════ ══════════

Note ii: Formerly known as Hang Seng H-share Index ETF prior to 5th March 2018.


193





HK$ % of Net

Assets Fair Value

HK$ % of Net

Assets American Fund

iShares Core S&P 500 ETF 1,051,228,361 81.13 717,501,830 80.66 iShares Latin America 40 ETF 244,339,421 18.86 171,519,667 19.28 ────────── ──── ────────── ──── 1,295,567,782 99.99 889,021,497 99.94 ══════════ ════ ══════════ ════ Investments at cost 1,069,738,307 762,679,001 ══════════ ══════════

2019 2018

Fair Value HK$

% of Net

Assets Fair Value

HK$

% of Net

Assets Age 65 Plus Fund

Vanguard Income Fund 768,382,074 100.27 441,799,804 100.09 ══════════ ════ ══════════ ════ Investments at cost 714,814,687 440,006,994 ══════════ ══════════

The Age 65 Plus Fund invests in the Vanguard Income Fund (the "underlying fund"). The overall market exposures for the underlying fund were as follows:



═════════ ═════════


194



Constituent funds (continued) Age 65 Plus Fund (continued) The following table shows the net market exposures of the underlying fund:


Australia 2% 2% Austria 1% 1% Belgium 2% 2% Canada 2% 2% Denmark - 1% Finland - 1% France 9% 8% Germany 6% 5% Hong Kong - 4% Ireland 1% 1% Italy 8% 6% Japan 9% 9% Mexico 1% 1% Netherlands 2% 2% South Africa 1% 1% Spain 5% 4% Switzerland - 1% United Kingdom 6% 6% United States 45% 43%

───────── ───────── 100% 100% ═════════ ═════════

2019 2018

Fair Value HK$

% of Net

Assets Fair Value

HK$

% of Net

Assets Core Accumulation Fund

Vanguard Moderate Growth Fund 2,543,483,730 99.98 1,638,954,245 99.92 ══════════ ════ ══════════ ════ Investments at cost 2,281,526,642 1,605,256,624 ══════════ ══════════

The Core Accumulation Fund invests in the Vanguard Moderate Growth Fund (the "underlying fund"). The overall market exposures for the underlying fund were as follows:



═════════ ═════════


195



Constituent funds (continued) Core Accumulation Fund (continued) The following table shows the net market exposures of the underlying fund:


Australia 2% 2% Austria 1% - Belgium 2% 1% Brazil - 1% Canada 2% 3% Cayman Islands - 1% China - 1% Denmark - 1% Finland 1% - France 9% 5% Germany 6% 4% Hong Kong - 4% India - 1% Ireland 1% 1% Italy 8% 3% Japan 9% 9% Mexico 1% - Netherlands 2% 2% South Africa 1% 1% South Korea - 1% Spain 5% 2% Sweden - 1% Switzerland - 2% Taiwan - 1% United Kingdom 6% 5% United States 44% 48%

───────── ───────── 100% 100% ═════════ ═════════


HK$ % of Net

Assets Fair Value

HK$ % of Net

Assets China HK Dynamic Asset Allocation Fund

Value Partners Asset Allocation Fund 663,633,319 100.11 543,234,678 99.81 ══════════ ════ ══════════ ════ Investments at cost 660,325,486 541,664,971 ══════════ ══════════

The China HK Dynamic Asset Allocation Fund invests in the Value Partners Asset Allocation Fund (the "underlying fund"). The overall market exposures for the underlying fund were as follows:



═════════ ═════════


196



Constituent funds (continued) China HK Dynamic Asset Allocation Fund (continued) The following table shows the net market exposures of the underlying fund:


China 5% 6% Hong Kong 92% 93% United States 3% - Singapore - 1%

───────── ───────── 100% 100% ═════════ ═════════

1 The Trustee of the underlying funds is AIA Company (Trustee) Limited, the Trustee of the Scheme as at 30th November 2019 and 2018. 2 The insurer of the policy is AIA Company Limited which is the intermediate holding company of the Trustee of the Scheme as at 30th November 2019 and 2018.


197


9 Derivative financial instruments Derivative financial instruments represent outstanding forward foreign exchange contracts. Forward foreign exchange contracts are entered into to manage exposure to fluctuations in foreign exchange rates. Outstanding forward foreign exchange contracts as at 30th November 2019 and 2018 were as follows: As at 30th November 2019

Contract to deliver In exchange for Settlement Date Fair Value HK$

Growth Portfolio USD 63,490,765 HKD 496,720,000 13th December 2019 (357,828)

USD 13,846,793 HKD 108,521,318 13th December 2019 112,860 Balanced Portfolio USD 92,372,383 HKD 722,740,000 13th December 2019 (455,953) Capital Stable Portfolio USD 44,790,522 HKD 350,450,000 13th December 2019 (221,087) European Equity Fund USD 80,300,301 HKD 628,655,000 28th February 2020 (430,921) USD 15,024 HKD 117,674 28th February 2020 (23) HKD 216,806 USD 27,667 28th February 2020 (54)

(430,998) HKD 388,092 USD 49,563 28th February 2020 189 HKD 91,363 USD 11,670 28th February 2020 63 HKD 76,744 USD 9,798 28th February 2020 12 HKD 256,425 USD 32,732 28th February 2020 -

264 Japan Equity Fund USD 38,206,494 HKD 299,111,000 28th February 2020 (205,030) USD 93,320 HKD 730,585 28th February 2020 (501) USD 68,494 HKD 536,359 28th February 2020 (237) USD 25,959 HKD 203,354 28th February 2020 (10)

HKD 21,704 USD 2,770 28th February 2020 (3) (205,781)

HKD 515,447 USD 65,827 28th February 2020 251

HKD 32,240 USD 4,115 28th February 2020 - 251


198


9 Derivative financial instruments (continued)

As at 30th November 2019 (continued)


North American Equity Fund USD 135,008,814 HKD 1,056,957,000 28th February 2020 (724,507)

USD 25,111 HKD 196,566 28th February 2020 (157) USD 67,572 HKD 529,135 28th February 2020 (234) USD 216,113 HKD 1,692,955 28th February 2020 (108) USD 141,452 HKD 1,107,946 28th February 2020 (213) USD 55,605 HKD 435,459 28th February 2020 (164) (725,383)

Asian Equity Fund USD 218,148,886 HKD 1,707,844,000 28th February 2020 (1,170,667) USD 16,404 HKD 128,453 28th February 2020 (57) USD 32,218 HKD 252,351 28th February 2020 (49)

HKD 768,817 USD 98,112 28th February 2020 (193) (1,170,966)


HKD 878,197 USD 112,175 28th February 2020 602 HKD 459,210 USD 58,616 28th February 2020 - 700

Global Bond Fund USD 48,899 HKD 382,778 28th February 2020 (306) USD 41,113 HKD 321,866 28th February 2020 (221) USD 90,257,383 HKD 706,607,000 28th February 2020 (484,354) USD 122,139 HKD 956,435 28th February 2020 (423) USD 73,308 HKD 574,195 28th February 2020 (110) USD 140,891 HKD 1,103,351 28th February 2020 (414) (485,828)

World Fund USD 17,907 HKD 140,189 28th February 2020 (96) USD 70,449,111 HKD 551,532,000 28th February 2020 (378,056) USD 27,862 HKD 218,183 28th February 2020 (96) USD 13,128 HKD 102,843 28th February 2020 (5) USD 40,458 HKD 316,897 28th February 2020 (61) USD 5,894 HKD 46,156 28th February 2020 (17)

(378,331)


199




Manager's Choice Fund USD 12,703,352 HKD 99,452,000 27th February 2020 (47,096)

USD 52,686 HKD 412,594 27th February 2020 (68)

(47,164)

Eurasia Fund USD 7,548,156 HKD 59,093,000 28th February 2020 (40,506)



USD 439 HKD 3,438 28th February 2020 (1)


(40,527)

American Fund USD 20,880 HKD 163,448 28th February 2020 (131)


USD 57,231,632 HKD 448,055,000 28th February 2020 (307,126)





(307,685)


200


9 Derivative financial instruments (continued) As at 30th November 2018


Growth Portfolio USD 43,588,727 HKD 340,890,000 14th December 2018 (81,171) Balanced Portfolio USD 83,944,714 HKD 656,540,000 14th December 2018 (114,332) Capital Stable Portfolio USD 42,560,509 HKD 332,870,000 14th December 2018 (57,967) European Equity Fund USD 75,123,395 HKD 586,278,000 28th February 2019 (156,209) USD 14,146 HKD 110,368 28th February 2019 (60) USD 17,604 HKD 137,387 28th February 2019 (33) HKD 65,697 USD 8,412 28th February 2019 (28) HKD 93,917 USD 12,030 28th February 2019 (4)

(156,334) HKD 95,912 USD 12,288 28th February 2019 10 HKD 134,508 USD 17,237 28th February 2019 48 HKD 167,270 USD 21,437 28th February 2019 74

132 Japan Equity Fund USD 33,095,513 HKD 258,284,000 28th February 2019 (68,818) USD 319,760 HKD 2,496,543 28th February 2019 (591) USD 170,480 HKD 1,329,985 28th February 2019 (833) HKD 366,043 USD 46,871 28th February 2019 (155) HKD 110,293 USD 14,128 28th February 2019 (5) (70,402)



HKD 2,671,978 USD 342,437 28th February 2019 1,184 1,321


201





North American Equity Fund USD 107,790,421 HKD 841,218,000 28th February 2019 (224,136)

USD 19,676 HKD 153,562 28th February 2019 (36) USD 120,069 HKD 936,637 28th February 2019 (655) (224,827)

Asian Equity Fund USD 200,407,345 HKD 1,564,019,000 28th February 2019 (416,721) USD 32,880 HKD 256,609 28th February 2019 (61) HKD 108,214 USD 13,857 28th February 2019 (46) HKD 6,038 USD 773 28th February 2019 - (416,828)


HKD 185,988 USD 23,832 28th February 2019 53 HKD 2,215,566 USD 283,920 28th February 2019 794 HKD 445,233 USD 57,061 28th February 2019 197 1,071

Global Bond Fund USD 67,975,321 HKD 530,493,000 28th February 2019 (141,346)

World Fund USD 58,449,297 HKD 456,150,000 28th February 2019 (121,538) USD 11,821 HKD 92,221 28th February 2019 (58)

(121,596)

Manager's Choice Fund USD 42,796,187 HKD 333,990,000 27th February 2019 (81,370)

Eurasia Fund USD 5,903,488 HKD 46,072,000 28th February 2019 (12,276)


(12,286)

American Fund USD 38,602,932 HKD 301,265,000 28th February 2019 (80,270)


(80,339)


202


10 Net assets attributable to members per unit and units in issue

2019




MPF Conservative

Fund Hong Kong

Equity Fund Opening outstanding units 46,187,271 27,223,325 19,287,634 N/A 47,796,279 18,757,059 Units issued 3,736,931 3,128,929 2,690,398 N/A 26,609,359 5,915,296 Units redeemed (4,876,769) (3,225,395) (2,717,766) N/A (23,579,032) (5,850,002) Closing outstanding units 45,047,433 27,126,859 19,260,266 N/A 50,826,606 18,822,353 HK$ HK$ HK$ HK$ HK$ HK$ Net assets attributable to members per unit 252.50 213.90 192.53 N/A 113.61 326.37

2018




MPF Conservative

Fund Hong Kong

Equity Fund Opening outstanding units 48,262,618 27,364,430 19,144,625 N/A 38,063,618 19,358,503 Units issued 4,089,082 3,591,180 3,315,193 N/A 34,601,469 6,916,774 Units redeemed (6,164,429) (3,732,285) (3,172,184) N/A (24,868,808) (7,518,218) Closing outstanding units 46,187,271 27,223,325 19,287,634 N/A 47,796,279 18,757,059 HK$ HK$ HK$ HK$ HK$ HK$ Net assets attributable to members per unit 235.77 199.16 180.33 N/A 112.34 318.78


203


10 Net assets attributable to members per unit and units in issue (continued)

2019

European Equity

Fund Japan


Equity Fund Asian

Equity Fund Greater China Equity Fund

Allianz Capital Stable

Fund (Note i) Opening outstanding units 7,029,149 3,942,927 10,877,671 17,944,997 33,559,889 - Units issued 1,112,335 2,282,224 4,599,005 2,653,564 5,115,124 - Units redeemed (1,173,929) (2,115,281) (3,176,493) (2,728,601) (5,674,453) - Closing outstanding units 6,967,555 4,109,870 12,300,183 17,869,960 33,000,560 - HK$ HK$ HK$ HK$ HK$ HK$ Net assets attributable to members per unit 226.43 181.76 249.55 238.09 227.46 N/A 2018

European Equity

Fund Japan


Equity Fund Asian

Equity Fund Greater China Equity Fund

Allianz Capital Stable

Fund (Note i) Opening outstanding units 7,336,907 3,973,128 10,182,822 18,561,821 35,468,200 2,859,190 Units issued 1,307,974 2,304,873 4,510,879 2,812,178 5,436,088 1,035,502 Units redeemed (1,615,732) (2,335,074) (3,816,030) (3,429,002) (7,344,399) (3,894,692) Closing outstanding units 7,029,149 3,942,927 10,877,671 17,944,997 33,559,889 - HK$ HK$ HK$ HK$ HK$ HK$ Net assets attributable to members per unit 205.84 167.51 229.49 219.97 202.61 N/A Note i: Allianz Capital Stable Fund, Allianz Growth Fund and Allianz Stable Growth Fund (“the 3 Allianz Funds”) had no investments and operations since 15th November 2018. MPFA had approved the termination of the 3 Allianz Funds to take effect on 13th March 2019.


204



2019 Allianz Growth


Green Fund

Global Bond Fund World Fund

Manager's Choice Fund

(Note i) (Note i) Opening outstanding units - - 11,521,104 13,198,401 9,846,537 25,444,128 Units issued - - 2,636,421 8,392,900 2,663,183 3,672,707 Units redeemed - - (2,111,975) (5,265,220) (1,832,074) (3,390,965) Closing outstanding units - - 12,045,550 16,326,081 10,677,646 25,725,870 HK$ HK$ HK$ HK$ HK$ HK$ Net assets attributable to members per unit N/A N/A 181.59 124.20 148.65 182.14

2018 Allianz Growth


Green Fund

Global Bond Fund World Fund

Manager's Choice Fund

(Note i) (Note i) Opening outstanding units 5,611,938 4,813,939 11,046,806 10,773,565 9,200,798 25,357,613 Units issued 729,640 992,126 3,274,061 8,034,771 2,665,607 4,695,948 Units redeemed (6,341,578) (5,806,065) (2,799,763) (5,609,935) (2,019,868) (4,609,433) Closing outstanding units - - 11,521,104 13,198,401 9,846,537 25,444,128 HK$ HK$ HK$ HK$ HK$ HK$ Net assets attributable to members per unit N/A N/A 160.62 114.85 135.42 169.15 Note i: Allianz Capital Stable Fund, Allianz Growth Fund and Allianz Stable Growth Fund (“the 3 Allianz Funds”) had no investments and operations since 15th November 2018. MPFA had approved the termination of the 3 Allianz Funds to take effect on 13th March 2019.


205



2019 Fidelity

Capital Stable Fund


Fidelity Growth

Fund Asian

Bond Fund Eurasia Fund

Hong Kong and China

Fund American

Fund Opening outstanding units 8,368,499 16,192,436 15,663,943 9,025,864 2,185,128 13,483,836 4,516,680 Units issued 2,862,083 3,830,642 3,065,707 4,823,345 695,670 6,313,878 3,092,664 Units redeemed (2,199,345) (2,708,801) (2,445,418) (2,952,258) (490,103) (5,423,646) (1,676,105) Closing outstanding units 9,031,237 17,314,277 16,284,232 10,896,951 2,390,695 14,374,068 5,933,239 HK$ HK$ HK$ HK$ HK$ HK$ HK$ Net assets attributable to members per unit 123.21 138.44 148.23 113.41 168.05 163.67 218.38

2018 Fidelity

Capital Stable Fund


Fidelity Growth

Fund Asian

Bond Fund Eurasia Fund

Hong Kong and China

Fund American

Fund Opening outstanding units 3,759,255 8,891,946 8,149,690 7,074,204 1,943,893 12,602,980 3,813,746 Units issued 6,713,616 9,587,268 9,482,057 5,216,429 859,764 7,233,305 2,603,033 Units redeemed (2,104,372) (2,286,778) (1,967,804) (3,264,769) (618,529) (6,352,449) (1,900,099) Closing outstanding units 8,368,499 16,192,436 15,663,943 9,025,864 2,185,128 13,483,836 4,516,680 HK$ HK$ HK$ HK$ HK$ HK$ HK$ Net assets attributable to members per unit 115.18 128.18 135.77 106.59 155.16 161.82 196.94


206



2019


Fund China HK Dynamic

Asset Allocation Fund Opening outstanding units 432,401,334 1,536,436,467 5,075,375 Units issued 564,493,793 1,030,037,694 2,802,295 Units redeemed (309,926,226) (417,015,393) (1,680,981) Closing outstanding units 686,968,901 2,149,458,768 6,196,689 HK$ HK$ HK$ Net assets attributable to members per unit 1.1155 1.1835 106.98

2018


Fund China HK Dynamic

Asset Allocation Fund Opening outstanding units 209,811,198 969,415,577 2,734,196 Units issued 420,041,429 882,460,749 4,037,075 Units redeemed (197,451,293) (315,439,859) (1,695,896) Closing outstanding units 432,401,334 1,536,436,467 5,075,375 HK$ HK$ HK$ Net assets attributable to members per unit 1.0208 1.0676 107.24


207


11 Payments charged to Default Investment Strategy (“DIS”) constituent funds or scheme or members who invest in the constituent funds

In accordance with the Mandatory Provident Fund legislation, the aggregate of the payment for services of the Core Accumulation Fund and Age 65 Plus Fund must not, in a single day, exceed a daily rate of 0.75% per annum of the net asset value of each of the Core Accumulation Fund and Age 65 Plus Fund divided by the number of days in the year. The above aggregate payments for services include, but is not limited to , the fees paid or payable for the services provided by the Trustee, the Administrator, the Investment Manager, the Custodian and the Sponsor and/or promoter (if any) of the AIA MPF – Prime Value Choice and the underlying investment fund(s) of each of the Core Accumulation Fund and Age 65 Plus Fund, and such fees are calculated as a percentage of the net asset value of each of the DIS Constituent Fund and their underlying investment fund(s), but do not include any out-of-pocket expenses incurred by each of the Core Accumulation Fund and Age 65 Plus Fund and their underlying investment fund(s). In accordance with the Mandatory Provident Fund legislation, the total amount of all payment are charged to or imposed on a DIS Constituent Fund or members who invest in a DIS Constituent Fund, for out-of-pocket expenses incurred by the Trustee on a recurrent basis in the discharge of the Trustee’s duties to provide services in relation to a DIS Constituent Fund, shall not in a single year exceed 0.2% of the net asset value of each of the Core Accumulation Fund and Age 65 Plus Fund. For this purpose, out-of-pocket expense include, for example, annual audit expense, printing or postage expenses relating to recurrent activities (such as issuing annual benefit statements), recurrent legal and professional expenses, safe custody charge which are customarily not calculated as a percentage of the net asset value and transactions cost incurred by a DIS Constituent Fund in connection with the recurrent acquisition of investments for the DIS Constituent Fund (including, for example, costs incurred in acquiring underlying investment funds) and annual statutory expenses( such as compensation fund levy where relevant) of the DIS Constituent Fund. Out-of-pocket expenses that are not incurred on a recurrent basic may still be charged to or imposed on a DIS Constituent Fund and such out-of-pocket expenses are not subject to the above statutory limit. Payment for services, out-of-pocket expenses and other payment charged to the DIS constituent funds are disclosed below. Payment for services and out-of-pocket expenses are those defined in the MPF Ordinance.


208


11 Payments charged to Default Investment Strategy (“DIS”) constituent funds or scheme or members who invest in the constituent funds (continued) During the year ended 30th November 2019

Age 65 Plus Fund Core Accumulation Fund

Payments for Services HK$ HK$ -Trustee fee 588,090 2,057,015 -Administration fee 2,322,953 8,125,210 Total payment services 2,911,043 10,182,225 Proportionate underlying investment fund fees (“Proportionate UIFF’)

0.25% 0.25%

Payment for Services expressed as a percentage of net asset value of the DIS funds 0.75% 0.75% Out-of-pocket expense HK$ HK$ - Auditor’s remuneration 12,682 39,920 - Registrar fees 300 300 - Legal and other professional fees 12,745 44,687 - Transaction costs 4,715 4,715 - Other operating expenses 548,283 1,785,127 Total out-of-pocket expenses 578,725 1,874,749 Other payments -Establishment cost - - Total other payments - - HK$ 3,489,768 and HK$ 12,056,974 and 0.25% of 0.25% of Total payments Proportionate UIFF Proportionate UIFF Out-of-pocket expenses expressed as a percentage of net asset value of the DIS constituent funds 0.10% 0.09%


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11 Payments charged to Default Investment Strategy (“DIS”) constituent funds or scheme or members who invest in the constituent funds (continued)

During the year ended 30th November 2018

Age 65 Plus Fund Core Accumulation Fund

Payments for Services HK$ HK$ -Trustee fee 333,261 1,370,242 -Administration fee 1,316,381 5,412,457 Total payment services 1,649,642 6,782,699 % % Proportionate underlying investment fund fees (“Proportionate UIFF’)

0.25% 0.25%

Payment for Services expressed as a percentage of net asset value of the DIS funds 0.75% 0.75% Out-of-pocket expense HK$ HK$ - Auditor’s remuneration 17,570 49,066 - Registrar fees 269 213 - Legal and other professional fees 700 2,998 - Transaction costs 4,698 4,698 - Other operating expenses 283,171 973,332 Total out-of-pocket expenses 306,408 1,030,307 Other payments -Establishment cost - - Total other payments - - HK$ 1,956,050 and HK$ 7,813,006 and 0.25% of 0.25% of Total payments Proportionate UIFF Proportionate UIFF Out-of-pocket expenses expressed as a percentage of net asset value of the DIS constituent funds 0.07% 0.06%

12 Bank loans, overdrafts and other borrowings

The Scheme and its constituent funds had no bank loans, overdrafts and other borrowings as at 30th November 2019 and 2018.

13 Accrued benefits of the Scheme

The total accrued benefits vested in the members’ accounts amounted to HK$83,856,315,060 (2018: HK$75,865,494,782) as at 30th November 2019.


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14 Taxation

The Scheme is not subject to Hong Kong profits tax as it is considered as a recognized retirement scheme and not carrying on a business in Hong Kong according to the Inland Revenue Department Practice Note No.23.

15 Soft commission arrangements

During the year ended 30th November 2019 and 30th November 2018, the Managers and their associates/related parties did not enter into any soft commission arrangements with brokers in relation to dealings in the assets of the Scheme and its constituent funds.

16 Security lending arrangements

During the year ended 30th November 2019 and 30th November 2018, the Scheme and its constituent funds did not enter into any security lending arrangements.

17 Negotiability of assets

There were no statutory or contractual requirements restricting the negotiability of the assets of the Scheme and its constituent funds as at 30th November 2019 and 2018.

18 Commitments

The Scheme and its constituent funds had no commitments as at 30th November 2019 and 2018.

19 Contingent liabilities

The Scheme and its constituent funds had no contingent liabilities as at 30th November 2019 and 2018.

20 Marketing expenses

There have been no advertising expenses, promotional expenses or commissions or brokerage fees paid or payable to the MPF intermediaries deducted from the Scheme or its constituent funds during the year ended 30th November 2019 and 30th November 2018.


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21 Subsequent event

For Growth Portfolio, Balanced Portfolio, Capital Stable Portfolio, Hong Kong Equity Fund, European Equity Fund, North American Equity Fund, Asian Equity Fund, Greater China Equity Fund, Green Fund, and Manager's Choice Fund, the investment management fee payable out of these Constituent Funds will be reduced by 20 basis point with effect from 1st December 2019, due to the reduction of the investment management fee at the constituent fund level. No other significant events have occurred since the year end date which would impact on the financial position of the Scheme disclosed in the statement of net assets available for benefits as at 30th November 2019 or on the results and cash flows of the Scheme for the year ended on that date.

22 Approval of financial statements

The financial statements were approved by the Trustee on 22nd May 2020.

1

AIA MPF - PRIME VALUE CHOICE COMPLIANCE REPORT FOR THE YEAR ENDED 30TH NOVEMBER 2019

2

INDEPENDENT AUDITOR’S ASSURANCE REPORT TO THE TRUSTEE OF AIA MPF - PRIME VALUE CHOICE (“THE SCHEME”) We have audited the financial statements of the Scheme and its constituent funds (hereafter referred to as the “Scheme”) for the year ended 30th November 2019 in accordance with Hong Kong Standards on Auditing and with reference to Practice Note 860.1 (Revised) “The Audit of Retirement Schemes” issued by the Hong Kong Institute of Certified Public Accountants (the “HKICPA”), and have issued an unqualified auditor’s report thereon dated 22nd May 2020. Pursuant to section 102 of the Hong Kong Mandatory Provident Fund Schemes (General) Regulation (the “General Regulation”), we are required to report whether the Scheme complied with certain requirements of the Hong Kong Mandatory Provident Fund Schemes Ordinance (the “Ordinance”) and the General Regulation. Trustee’s Responsibility The General Regulation requires the Trustee to ensure that: (a) proper accounting and other records are kept in respect of the constituent funds of the

Scheme, the Scheme assets and all financial transactions entered into in relation to the Scheme;

(b) the requirements specified in the guidelines made by the Mandatory Provident Fund

Schemes Authority (the “MPFA”) under section 28 of the Ordinance with respect to forbidden investment practices and the requirements of sections 37(2), 51 and 52 and Part X of, and Schedule 1 to, the General Regulation are complied with;

(c) the requirements under sections 34DB(1)(a), (b), (c) and (d), 34DC(1), and 34DD(1)

and (4) of the Ordinance are complied with; and (d) the Scheme assets are not subject to any encumbrance, otherwise than as permitted by

the General Regulation. Our Independence and Quality Control We have complied with the independence and other ethical requirements of the Code of Ethics for Professional Accountants issued by the HKICPA, which is founded on fundamental principles of integrity, objectivity, professional competence and due care, confidentiality and professional behavior. Our firm applies Hong Kong Standard on Quality Control 1 issued by the HKICPA and accordingly maintains a comprehensive system of quality control including documented policies and procedures regarding compliance with ethical requirements, professional standards and applicable legal and regulatory requirements.

3

INDEPENDENT AUDITOR’S ASSURANCE REPORT TO THE TRUSTEE OF AIA MPF - PRIME VALUE CHOICE (“THE SCHEME”) (CONTINUED) Auditor’s Responsibility Our responsibility is to report solely to the Trustee, in accordance with section 102 of the General Regulation, on the Scheme’s compliance with the above requirements based on the results of the procedures performed by us, and for no other purpose. We do not assume responsibility towards or accept liability to any other person for the contents of this report. We conducted our engagement in accordance with Hong Kong Standard on Assurance Engagements 3000 (Revised), “Assurance Engagements Other Than Audits or Reviews of Historical Financial Information” and with reference to Practice Note 860.1, (Revised) “The Audit of Retirement Schemes” issued by the HKICPA. We have planned and performed our work to obtain reasonable assurance on whether the Scheme has complied with the above requirements. We have planned and performed such procedures as we considered necessary with reference to the procedures recommended in Practice Note 860.1 (Revised), which included reviewing, on a test basis, evidence obtained from the Trustee regarding the Scheme's compliance with the above requirements. We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Opinion Based on the foregoing: (a) in our opinion:

(i) proper accounting and other records have been kept during the year ended 30th November 2019 in respect of the constituent funds of the Scheme, the Scheme assets and all financial transactions entered into in relation to the Scheme; and

(ii) the requirements specified in the guidelines made by the MPFA under section

28 of the Ordinance with respect to forbidden investment practices and the requirements of sections 37(2), 51 and 52 and Part X of, and Schedule 1 to, the General Regulation have been complied with, in all material respects, as at 30th November 2019, 31st July 2019 and 29th March 2019; and

(iii) the requirements specified in the Ordinance under sections 34DB(1)(a), (b), (c)

and (d), 34DC(1) and 34DD(1) and (4)(a) with respect to the investment of accrued benefits and control of payment for services relating to Core Accumulation Fund and Age 65 Plus Fund have been complied with, in all material respects, as at 30th November 2019, 31st July 2019 and 29th March 2019; and

(iv) the requirements specified in section 34DD(4)(b) of the Ordinance with respect

to the controls of out-of-pocket expenses of the Core Accumulation Fund and Age 65 Plus Fund have been complied with, in all material respects, as at 30th November 2019 .

(b) as at 30th November 2019, the Scheme assets were not subject to any encumbrance,

otherwise than as permitted by the General Regulation.

INDEPENDENT AUDITOR’S ASSURANCE REPORT TO THE TRUSTEE OF AIA MPF - PRIME VALUE CHOICE (“THE SCHEME”) (CONTINUED)

Other Maiter

The requirements specified in the Ordinance under sections 34DI(1) and (2) and 34DK(2) with respect to the transfer of accrued benefits to an account and specified notice, and 34DJ(2), (3), (4) and (5) with respect to locating scheme members relating to Core Accumulation Fund and Age 65 Plus Fund are not applicable to the Trustee during the year ended 30th November 2019 as the Trustee has completed the relevant transitional provisions. Accordingly, there is no reporting on these sections.

Intended Users and Purpose

This report is intended solely for submission by the Trustee to the MPFA pursuant to section 102 of the General Regulation, and is not intended to be, and should not be, used by anyone for any other purpose. ,

PricewaterhouseCoopers Certified Public Accountants

Hong Kong, 22nd May 2020

AIA MPF - PRIME VALUE CHOICEFOR THE YEAR ENDED 30 NOVEMBER 2019INFORMATION ON FUND EXPENSE RATIO

2019Fund expense ratio %

Growth Portfolio 1.97%Balanced Portfolio 1.95%Capital Stable Portfolio 1.93%Guaranteed Portfolio 1.60%MPF Conservative Fund 0.97%Hong Kong Equity Fund 1.93%European Equity Fund 1.91%Japan Equity Fund 1.91%North American Equity Fund 1.90%Asian Equity Fund 1.94%Greater China Equity Fund 1.92%Allianz Capital Stable Fund N/A Note 1Allianz Growth Fund N/A Note 1Allianz Stable Growth Fund N/A Note 1Green Fund 1.64%Global Bond Fund 0.97%World Fund 0.99%Manager's Choice Fund 1.66%Fidelity Capital Stable Fund 1.84%Fidelity Stable Growth Fund 1.85%Fidelity Growth Fund 1.86%Asian Bond Fund 0.79%Eurasia Fund 0.99%Hong Kong and China Fund 0.98%American Fund 0.99%Age 65 Plus Fund 0.83%Core Accumulation Fund 0.83%China HK Dynamic Asset Allocation Fund 1.32%


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