Zurich BOCHK Hong Kong Dollar Income Fund

December 2014 Issue
BOCHK INVESTMENT FUNDS
(Data as of 28 November 2014)
BOCHK HONG KONG DOLLAR INCOME FUND
Eligible Collective Investment Scheme under
“Capital Investment Entrant Scheme”∆
Key Features and Risk Disclosure:
INVESTMENT OBJECTIVES AND POLICIES
•
The BOCHK Hong Kong Dollar Income Fund seeks to
provide a stable income stream and long-term capital
appreciation through a portfolio which mainly consists
of Hong Kong dollar denominated investment grade
bonds.
•
•
•
The BOCHK Hong Kong Dollar Income Fund (the “Sub-Fund”) will mainly consist of Hong Kong dollar denominated investment
grade bonds.
Investment involves risks. The Sub-Fund is subject to market fluctuations and exchange rate fluctuations and to the risks
inherent in all investments.
Past performance is not indicative of future performance. Price of Units and the income (if any) generated from the Sub-Fund
may go down as well as up. Therefore, investors could face no returns and/or suffer significant loss related to the investments.
Please refer to the Explanatory Memorandum of the Sub-Fund for further details including investment policy and risk factors,
before making any investment decision.
CUMULATIVE PERFORMANCE IN HKD [Gross Distribution Reinvested]
BOCHK Hong Kong Dollar
Income Fund — Class A
HSBC Hong Kong Dollar Bond Index
3 Months
0.82%
Year to date
2.38%
1 Year
2.09%
3 Years
4.39%
5 Years
9.59%
Since Inception
41.46%
1.61%
5.62%
4.73%
7.66%
17.14%
65.86%
CALENDAR YEAR PERFORMANCE IN HKD
2009
2010
2011
2012
2013
BOCHK Hong Kong
Dollar Income Fund — Class A
0.57%
3.38%
3.01%
2.44%
-0.55%
HSBC Hong Kong
Dollar Bond Index
-0.53%
4.26%
6.06%
4.59%
-2.49%
TOP 10 HOLDINGS
1
2
3
4
5
6
7
8
9
10
BOCIP FLEXI HKD INCOME FUND
BOCIP CHINA BOND FUND
ICBC ASIA 1.95% Q 09SEP2016
R-REIT INTERNATI 4.125% Q 22MAR2018
CHINA DEVELOP BK 2.4% A 20JUN2017
CHINA MERCHANTS 1.4% A 19DEC2014
BANK EAST ASIA 1.4% A 09DEC2015
AGR BK CHINA(HK) 1.46% A 19MAR2015
CHINA CITIC BANK 1.52% A 23APR2015
BANK EAST ASIA 2.07% A 12SEP2016
2.2%
1.7%
1.1%
1.0%
0.9%
0.9%
0.9%
0.9%
0.9%
0.9%
FUND DATA (Class A)
Investment Manager
Fund Size (Million)
Inception Date
Currency
Management Fee (p.a.)
Initial Charge
Switching Fee
Distribution
NAV per unit
12 Months NAV††
Morningstar Overall Rating™†
Risk Level◆
Standard Deviation
Beta
Bloomberg Ticker
ISIN Code
Fixed Income Team
HKD 10,948.28
12 July 2002
HKD
0.5%
3%
1%▲ or Nil▲▲
Aim to make distributions semi-annually*
(Distribution rate is not guaranteed)
HKD 10.9953
Highest: HKD 10.9953
Lowest: HKD 10.8489
★★
Low to Medium
1.24%
0.45
BOCHDIA HK EQUITY
HK0000039773
SECTOR ALLOCATION**
Telecom 0.8%
Energy related 1.2%
Information
Technology
1.3%
Others – BOCIP
China Bond
Fund 1.7%
Consumption related 0.7%
Basic Materials 0.3%
Cash & Deposit 3.8%
Utilities 1.9%
Others – BOCIP
Flexi HKD Income
Fund 2.2%
Industrials 3.8%
Financial
Services
71.5%
Government 10.8%
CREDIT RATING (Bond)
AAA
AA
A
BBB
Others
5.9%
12.9%
57.2%
12.5%
11.5%
RECENT 12 MONTHS
DISTRIBUTION HISTORY
Record
Date
Sep 30, 2014
Mar 31, 2014
Distribution
Per Unit
HKD 0.0707
HKD 0.0652
Fund Price on
Record Date
HKD 10.9671
HKD 10.8884
MANAGER’S COMMENT##
On Market
Hong Kong economy regained momentum in the third
quarter, underpinned by a relative improvement in
both services exports and private consumption.
Looking ahead, the rather encouraging developments
may not be sustainable, in the light of disruptions to
economic activities caused by the “Occupy Central”
event since late September. New home market saw
minimal negative impact thus far. Developers were
still active in launching new projects. Primary homes
offering at thin premium over secondary flats were
highly sought after. We should closely monitor
whether the domestic consumption for the long
holidays would be weakened by the “Occupy Central”
event overhang.
Government bond market in Hong Kong generally
moved in tandem with its US counterpart during the
month of November. Bond yields fell, led by the
medium-to-long tenors. The 10-year Hong Kong
Exchange Fund Note yield dropped by 10 basis points
to end the month at 1.72%, against the 2 basis points
jump in yield of the 3-year tenor to 0.63%. On
currency front, Hong Kong Dollar (HKD) continued to
trade in a tight range close to the stronger side of the
HKD 7.75-7.85/ USD Convertibility Undertaking band
throughout the month, despite a slight pick-up in
volatility along Renminbi post the announcement of
rate cut by People’s Bank of China (PBoC) in the middle
of the month.
On Portfolio
The Sub-Fund managed to deliver a slight positive
return in November, thanks to the bond market rally,
whilst the Sub-Fund’s corporate bond holdings
continued to provide steady interest income. We
remain our cautious view on interest rate outlook, with
a relatively short duration being maintained for the
Sub-Fund. This is on the back of our view that global
political and economic developments should continue
to dominate, with heightened volatility in bond
markets being warranted. Meanwhile, an overweight
position in corporate bonds is maintained for yield
enhancement.
Class B of the Sub-Fund has been closed for subscription.
* The Manager may in its discretion make distributions to Unitholders at 30 September and 31 March of each year as the Manager considers appropriate, having regard to the net income of
the respective Sub-Fund and provided that there is distributable income for that period. The amount of distributions (if any) may go up or go down. The Manager retains the absolute
discretion to determine the frequency and dates for distributions.
†
Data Source – © 2014 Morningstar, Inc. All Rights Reserved.
∆
The Sub-Fund is approved as Eligible Collective Investment Scheme under “Capital Investment Entrant Scheme” of Hong Kong Special Administrative Region.
**With effect from 1 September 2012, new sector classification methodology is applied. As a result, the following changes are made in the “Sector Allocation”. “Financials” was divided into
“Financial Services” and “Property”; “Materials” was changed to “Basic Materials”; “Consumer Discretionary” and “Consumer Staple” were grouped together as “Consumption related”;
“Energy” was changed to “Energy related”; “Health Care” was changed to “Health Care & Pharmaceuticals”.
##
The manager’s comment above solely reflects the opinion, view and interpretation of the fund managers as of the date of issuance of this document. Investors should not solely rely on such
information to make any investment decision.
◆
Risk levels are categorized into low, low to medium, medium, medium to high and high. The risk levels are determined by BOCI-Prudential Asset Management Limited based on the
investment mix of each Sub-Fund and/or its underlying investments, and represent only the views of BOCI-Prudential Asset Management Limited in respect of the relevant Sub-Fund. Such
risk levels are for reference only and should not be regarded as investment advice. You should not rely on the risk levels only when making any investment decision. The risk level is
determined based on data as at 30 September 2014 and will be reviewed and (if appropriate) updated at least annually without prior notice, taking into account the prevailing market
circumstances. If you are in doubt about the information of risk level, you should seek independent financial and professional advice.
††
12 Months Highest / Lowest NAV per Unit was calculated by reference to the NAV per Unit on each month’s last dealing day.
▲
For switching into Units of an existing Sub-Fund which is not a Money Market Sub-Fund as defined in the Explanatory Memorandum.
▲▲
For switching into Units of a Money Market Sub-Fund.
Investors should note that Bank of China (Hong Kong) Limited is not the Manager of the Sub-Fund and will only act as the Sponsor and Distributor whilst BOCI-Prudential Asset Management
Limited is the Manager. Fund performance is calculated in sub-fund’s base currency on NAV-to-NAV basis with gross distribution reinvested. The data for “Standard Deviation”, “Beta” and
“Morningstar Overall RatingTM” will not be shown for sub-funds with less than 3-year history. “Standard Deviation”, a risk measurement, is based on the sub-fund’s monthly return over the
past 3 years in sub-fund’s base currency. “Beta” measures the sensitivity of a sub-fund’s return to the changes in its reference index. This document is issued by BOCI-Prudential Asset
Management Limited and has not been reviewed by the SFC.
Fund Manager & Factsheets Issuer: BOCI-Prudential Asset Management Limited

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