Q3 2014 Allianz Global Investors MPF Express Q3 2014 Congratulations to our Winners! Two Most Valuable Players Will Participate In the Allianz Junior Football Camp in Munich Allianz Global Investors sponsored the Junior Football Cup which kicked off at King George V School on 5 and 6 July 2014 in Hong Kong. Multiple intensive competitions were witnessed in the two-day tournament between 60 elite local football teams. The championship title for the Boys Under 17 was ultimately captured by YCH Tung Chi Ying Memorial Secondary School, whilst the Girls Under 17 champion went to Chelsea FC Soccer School (HK) who triumphed against six other solid teams. The climax of the two exciting event days was the selection of Most Valuable Players (MVPs) amongst 750 participants on 6 July, in which Cheng Chinpang and Vicky Chung Pui-ki were awarded as MVP for the Boys under 17 and Girls under 17 respectively. Both of them will represent Hong Kong to go to Germany and take part in the 6th Allianz Junior Football Camp in August, together with some 80 youth players from 30 countries to participate in football training offered by official coaches of FC Bayern München at the renowned Allianz Arena. Who won a trip to Germany to watch FC Bayern Munich live? Website : www.allianzgi.hk mobile site : www.allianzgi.hk/mpf Allianz MPF Members’ Direct : +852 2298 9000 BCT-237T Mr. Cheng Ka Fai won a trip to Germany to watch FC Bayern Munich live after winning “The Smart Attack Champions Tour” online shooting game from 19 May to 30 June 2014! Christina Hui, Chief Marketing Officer, Asia Pacific, and Head of Greater China and South East Asia, handed over the ‘air tickets’ to Mr. Cheng at the Award Ceremony. MPF Express Q3 2014 What Will You Do With Your MPF Benefits After Retirement? Allianz Global Investors helps you plan for your future today, with our “Retire Plus” service Starting from 1 August 2014, MPF members who have reached retirement age could arrange your regular withdrawal arrangement through our Special Voluntary Contribution (SVC) account according to your financial needs. With Allianz Global Investors “Retire Plus” service, you can benefit from the following advantages: • Flexible withdrawal arrangement from HKD2,000 up in multiples of HKD500 per month or lump-sum withdrawal • Management fees as low as 0.95% p.a. of NAV for Class T1 • No handling charges for setting up regular withdrawal • No limitation on the frequency and amount for fund switching • No charges for subscription, switching and redemption • A wide range of fund choices with different investment objectives, asset allocations and investment risks to suit your specific needs Monthly withdrawals could be set at a fixed amount until all MPF benefits have been completely taken out. You can also make changes to the withdrawal amount as your financial circumstance changes. ...... 1st withdrawal 2nd withdrawal 3rd withdrawal 4th withdrawal 5th withdrawal until balance has been completely taken out Why Do You Need to Consider Post Retirement Investment? In the current MPF scheme, members are allowed to withdraw your MPF assets in a lump sum once they reach the age of 65 (or early retirement at 60). However, if you retire during a market downturn and withdraw all of your assets in one-go, you may suffer losses with your retirement savings. In addition, when you hold your assets as bank deposits, at an interest rate close to zero, inflation will likely erode your assets. Flexible Withdrawal of MPF Benefits In Stages To Suit Your Financial Needs As your trusted MPF provider, our “Retire Plus” service allows you to withdraw your MPF benefits in stages to meet your financial needs with flexibility, while keeping your assets invested to gain potential returns. Once you have set up standing instructions in your special voluntary contribution account, you can receive a fixed amount on a monthly basis after retirement without hassles. Stay Invested To Seek Continued Capital Growth Potential The advantage of continued investment in MPF after retirement is that members may continue to accumulate capital while extending the consumption of benefits. Members may consider constituent funds that preserve capital or are subject to lower risk while seeking a return higher than the bank deposit rate. By doing so, you can extend the financial coverage for your retirement life. Example for illustration: Suppose a member invest in a low risk strategy that generates stable income (4% return per annum) with HKD2million capital and monthly payout of HKD10,000, he/she can prolong the capital depletion by 70%, disregarding inflation. If you would like to know more about our “Retire Plus” service, please don’t hesitate to call our Allianz MPF Members’ Direct at 2298 9000. 1 Management fee for equity / bond funds (Class T) is 1.15% p.a. of NAV, while management fee for money market funds (Class T) is 0.95% p.a. of NAV. MPF Express Q3 2014 Equity Market Recovered in the Second Quarter of 2014 Both global equities and bonds returned in the positive territory in the second quarter of 2014. Risk appetite improved during the quarter on the back of an improving global economic outlook and the still very supportive liquidity environment. The MSCI World Index was up 4.9% in the first half of 2014, whilst the World Government Bond Index All Maturities was up 5.0% over the period. Price Return (in HKD). Source: Thomson Reuters Datastream, as of end March 2014 Price Return (in HKD). Source: Thomson Reuters Datastream, as of end June 2014 US - US equities continued to rally in the second quarter. Led by a rally in energy and utilities companies, the S&P 500 Index jumped 5.2%. Investors looked beyond a precipitous drop in the first quarter gross domestic product, focusing instead on continued monetary support from the US Federal Reserve (US Fed) and prospects for economic acceleration. Europe - Europe equities underperformed in the second quarter. One of the negative factors has heightened geopolitical risks in regards to the turmoil in Ukraine and Iraq. Weaker economic data from the region also weighed on investor sentiment. The European Central Bank announced further monetary easing measures to combat the weaker macro numbers. Asia - Asian equities performed well in the second quarter, particularly helped by market recovery in Japan. In Japan, sentiment improved by mid-May as global macroeconomic data improved. In addition, the negative impact of the April tax hike was milder than feared. The government’s growth strategy in June 2014 also pushed markets higher. Fixed Income - Global fixed income markets performed well in the second quarter of 2014. Whilst macroeconomic conditions continued to improve generally, major central banks continued to maintain an accommodative liquidity environment. European bonds outperformed, with Germany’s 10-year Bund yield contracting by 32 basis points. Outlook We maintain a generally positive view of the global macroeconomic environment, supported by economic recovery in the developed world and the still-accommodative monetary stance by major central banks. Gradual improvement in macroeconomic data suggests that recovery in the developed world remains intact. On the Japanese economy, while the effect of recent consumption tax hike is negative, data suggest that the impact has been milder than expected. Overall, we remain positive towards global equities. In terms of investment strategy, we overweight US and Japan but underweight Asia Pacific excluding Japan and Europe. On a sectorial basis, we overweight the industrials and technology sectors. On fixed income, we continue to expect the US Fed will keep rates unchanged till the first half of 2015. We expect medium term high grade quality corporate bonds will outperform US Treasuries over time and maintain an overweight position. Q3 2014 MPF Express How To Read Your MPF Fund Returns? One day, Gary and his sister Alexa looked at some MPF prices on a local newspaper – "I have started to pay attention to MPF fund prices for a while, but how do I know which ‘Returns’ to look at on the reports as there are many different types of ‘Returns’?" Employees in Hong Kong are, of course, concern about MPF fund performances. But in addition to just looking at the ups and downs of the fund prices, it is important to take a few steps further to try to understand how to interpret fund performance. ‘Cumulative Return’, ‘Annualised Return’, and ‘Calendar Year Return’ “To compare fund performance, you may start with their ‘Returns’. ‘Cumulative Return’ is the total amount that an investment has gained or lost over a specific reported period. In your MPF fund performance report, 1-year, 3-year and 5-year ‘Cumulative Returns’ are displayed as of a certain date. Regulated by the MPFA, funds with over 10 years track record are required to display their 10-year ‘Cumulative Returns’. Employees, therefore, can make reference of the funds’ long term performance.” said Alexa. Gary asked “Do I divide the 5-year ‘Cumulative Return’ of the fund by five to come up with the corresponding 5-year ‘Annualised Return’?” “You are close but not quite right. Based on a 5-year investment period and the effect of compound interest, the average ‘Annualised return’ of the fund does not simply equal to its ‘Cumulative Return’ divided by the reported period.” answered Alexa. “As for the ‘Calendar Year Return’, by definition is the fund's ‘Cumulative Return’ of an individual calendar year, which is the fund’s return from the beginning of a year to the end of the same year. Suppose the fund price of a fund on 1 January 2013 was HKD15, and its fund price on 31 December 2013 was HKD15.5, its calendar year return was 3.3%.” Alexa continued. It may also be worthwhile to mention that for a vast majority of MPF funds in the market, the published fund returns are already net of fees and expenses. The fund performances you see are your actual returns after the deduction of fees and expenses. Let’s Keep In Touch It is important to stay abreast of the latest development in MPF. As your trusted retirement investment partner, Allianz Global Investors is happy to provide you with regular newsletters, market overview and regular seminars, and offer you the latest information on our MPF plan by email or sms. Please update your contact details by logging into your online MPF account at www.allianzgi.hk or through our newly launched mobile site at www.allianzgi.hk/mpf by using your mobile device(s). If you have lost your password, please kindly contact our MPF Members' Direct at 2298-9000 to regenerate your password. That way, you will be able to gain access to your MPF account and continue to receive important updates from us on a regular basis. • All investments involve risks. Past performance is not indicative of future performance. • The views and opinions expressed in this document, which are subject to change without notice, are those of RCM Asia Pacific Limited and/or its affiliated companies at the time of publication. • Some of the information contained herein including any expression of opinion or forecast has been obtained from or is based on sources believed by us to be reliable, but is not guaranteed and we do not warrant nor do we accept liability as to adequacy, accuracy, reliability or completeness of such information obtained from or based on external sources. • The information contained herein including any expression of opinion is for information purposes only without consideration given to specific investment objectives, financial situation or particular needs of any person and is given on the understanding that it is not a recommendation nor investment advice and any person who acts upon it or otherwise changes his or her position in reliance thereon does so entirely at his or her own risk without liability on our part. • This is not a recommendation or offer to buy or sell or a solicitation or incitement of offer to buy or sell any particular security, strategy, investment product or services. Issuer: RCM Asia Pacific Limited
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