ORSO. Monthly Investment Report. Fidelity Advantage Portfolio Fund

Transcription

1 ORSO Monthly Investment Report Fidelity Advantage Portfolio Fund

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3 Contents For Fidelity Advantage Portfolio Fund, please note: The Fidelity Advantage Portfolio Fund is an umbrella fund with a number of sub-funds with different investment objectives and risk profiles. These Sub-funds may gain exposure to equities, debt, money market securities and/or other instruments, including derivatives. Sub-funds with exposure to emerging market securities may be subject to higher risks and volatility. Sub-funds investing primarily in single or a limited number of geographical market(s) may subject to higher concentration risk. Sub-funds with exposure to RMB denominated debt securities issued or distributed outside mainland China, will subject to RMB currency risk, RMB exchange risk and risk of limited pool of investments. Sub-fund with exposure to Tracker Fund of Hong Kong ( TraHK ) will be subject to risk of investing in index-tracking fund, risks relating to TraHK and risks relating to Hang Seng Index. The value of investments will vary with market movements and under extreme circumstances, may experience substantial loss. Please refer to the Risk Factors section of this Explanatory Memorandum for details. You should not invest based on this document alone and should read the Explanatory Memorandum of Fidelity Advantage Portfolio Fund (including potential risks involved) for further information. -2 Market Review Fidelity Advantage Portfolio Fund Fund Fact Sheets Equity Funds Asia Pacific Equity Fund Global Equity Fund Performance Summary Hong Kong Equity Fund Lifecycle Funds Balanced Fund Capital Stable Fund Fidelity Advantage Portfolio Fund - Fund Fact Sheets 8 Glossary Growth Fund Stable Growth Fund Bond Funds Hong Kong Bond Fund RMB Bond Fund....2 World Bond Fund Money Market Funds HK Dollar Money Fund...4 US Dollar Money Fund Supermarket Funds Fidelity Advantage Portfolio Fund - Invesco Asian Equity Fund...6 Fidelity Advantage Portfolio Fund - Tracker Fund Portfolio...7 3

4 Market Review Asia Pacific (ex. Japan) Asia Pacific ex Japan equities advanced in February. Sentiment received a boost amid progress on US-China trade negotiations. The US Fed reiterated that it would maintain a cautious stance towards interest rate hikes this year, which further lifted investor confidence. At the sector level, consumer discretionary and material stocks led gains. Sentiment towards Chinese equities strengthened amid progress on trade negotiations with the US. China s central bank also announced that it is likely to take further steps to encourage equity financing and facilitate capital market reforms to diversify financing services in the banking sector. On the economic front, bank lending, exports and imports were ahead of estimates in January. The Hong Kong market advanced, led by financials stocks and Macau-based gaming companies. AIA Group received regulatory approvals, which supported the financials sector. These stocks also rose on higher investment flows from Hong Kong to mainland China through the stock connect programme. Fourth quarter GDP growth was below expectations as exports and related jobs weakened due to the US-China trade war. Australian equities gained, led by financials and materials stocks. In key economic news, business conditions rebounded in January from December, with trading, profitability and employment improving from a month earlier. Taiwanese equities advanced, supported by positive developments in trade negotiations between the US and China, as these countries are its largest trading partners. Taiwan s export orders contracted in January, but at a slower-thanexpected pace, largely due to global uncertainty and slower smartphone sales. Conversely, weak earnings in some consumer stocks hurt Indian equities. Amid easing inflation, the Reserve Bank of India announced an interest rate cut early in the month and changed its policy stance to neutral from the earlier calibrated tightening. The GDP growth rate for the October December quarter missed expectations, with more subdued activity in key areas of the economy, including agriculture, manufacturing, utilities and the public sector. Sentiment towards South Korean equities weakened after the summit between the US and North Korea failed to reach a deal to denuclearise North Korea and lift economic sanctions against the country. Singaporean equities underperformed the broader market. Its fourth quarter GDP was weaker than expected sequentially, mainly due to a contraction in the manufacturing sector. Indonesian and Thai equities also declined, led by consumer stocks. Losses in communication services and consumer stocks weighed on the Philippines market. The headline consumer price inflation (CPI) rose, but at lower-than-anticipated pace in January. However, it remained above the Philippines central bank s target range. Meanwhile, gains in the health care and industrials sectors supported Malaysian equities. Its fourth quarter GDP was boosted by strength in private consumption and exports. Japan The Japanese market rose in February, aided by the yen s weakness against the US dollar. While domestic and overseas economic data were mixed, there were hopes that negotiations between the US and China would continue and ease the potential impact on export-reliant economies such as Japan. However, equities did see some losses during the month, as investors resorted to selling to lock-in profits. There were also continuing concerns over global growth as the EU slashed its growth outlook for the euro area, while Japanese and Chinese manufacturing data continued to show weak trends. In terms of style, growth-oriented companies particularly in the technology, software and capital good sectors performed better than value names. Smallcap stocks outpaced their larger peers. At a sector level, precision instruments, information and communication companies were among the leading gainers. The oil & coal products and other products sectors were the key laggards during the month. In economic developments, Japan s real GDP rose at an annual rate of.4% in the October-December quarter, following the decline in the previous quarter amid natural disasters. In 208, the economy grew by 0.7% in real terms, up for the seventh straight year. However, the final Markit/Nikkei Japan manufacturing PMI stood at a seasonally adjusted 48.9, slightly above a flash reading of 48.5 but below January s final The index fell below the 50 threshold that separates contraction from expansion for the first time since August 206. Exports posted their biggest decline in more than two years in January as China-bound shipments fell sharply, fuelling concerns about slowing global demand. Meanwhile, the underlying inflation rate picked up in January amid higher utility bills, but remained well below the Bank of Japan s (BoJ) 2.0% target. Core consumer prices, excluding fresh food items, rose by 0.8% from a year earlier, up from a 0.7% gain in December. United States US equities generated positive returns in February. Market sentiment was lifted after the US government extended the trade negotiation deadline with China and halted tariff hikes citing substantial progress in trade talks. Key issues included intellectual property protection, technology transfer, currency manipulation and promised increases in Chinese purchases of US agricultural products and services. The US Federal Reserve (Fed) reiterated that it will slow down interest rate increases and signalled that it would take a flexible approach to balance sheet reduction. This continued to bolster investor sentiment. All sectors generated positive returns, with information technology, industrials and utilities among the leading gainers. In terms of style, growth-oriented companies outperformed value names, while small and mid-cap stocks outpaced their larger peers. Macroeconomic indicators remained largely mixed. Fourth-quarter GDP came in at a healthy 2.6%, supported by strong capital expenditure. The acceleration in corporate investments and solid consumption continue to bode well for the economy. Some economic data releases, which were delayed due to the partial government shutdown that ended in late January, exhibited a slowdown. US housing starts witnessed a sharp decline in December, touching its lowest level since September 206. Manufacturing activity also remained weak. The ISM manufacturing PMI fell sharply in February. This corresponded to the slowest factory activity since November 206, as new orders, production and employment witnessed a moderate increase. The US dollar strengthened against a basket of major currencies. Continental Europe European equities rose in February as investor sentiment was supported by tentative signs of progress in US-China trade talks, strong corporate earnings and the European Central Bank s (ECB) accommodative monetary policy stance. The central bank indicated that it would discuss whether additional long-term loans could be provided to eurozone banks, thereby acknowledging the slowdown in the region. Meanwhile, Brexit-related uncertainties persisted. At a sector level, cyclicals outperformed defensives. Industrials and financials were among the key performers. Within financials, Italian banking shares advanced on reports that their capital positions are above the levels required by the ECB. From a style perspective, largecap companies outperformed their smaller peers and growth stocks outperformed value stocks. Economic growth in the eurozone remained muted. Fourth quarter GDP data showed that the region grew by 0.2% for the second consecutive quarter. Though the flash composite Purchasing Managers Index (PMI) for the region rose slightly in February, there was a marked divergence between the two sectors. While the services sector witnessed a solid improvement, it was partially offset by a shift into contraction in the manufacturing sector, which was particularly hit by a reduction in new orders. Headline inflation for the eurozone edged higher, driven by rising energy prices, while core inflation for the region fell. Meanwhile, the unemployment rate fell to 7.8% in January, the lowest level since the start of the global financial crisis. United Kingdom UK equities continued to rise in February, in line with other global equity markets. Investor sentiment was supported by reports of progress on US-China trade talks and indications of more policy support by the ECB. However, gains were somewhat curbed, due to continued uncertainty around the ongoing Brexit negotiations. With the revised Brexit deal negotiations between the UK and the European Union (EU) still ongoing, the risk of the deal being rejected in the House of Commons remains high. The UK parliament is due to vote on the Brexit deal by March 2. However, recent indicative votes suggest there is a strong majority against leaving the EU with no deal. Most sectors ended in positive territory, with technology and health care outperforming the broader market, while telecommunications stocks reported negative returns. Overall, large and mid-cap stocks outperformed their smaller peers. On the economic front, growth slowed in the three months to December, as Brexitrelated uncertainty weighed on economic activity. GDP grew at only 0.2% on the quarter, slightly below the Bank of England s expectations and down from an increase of 0.6% in the three months to September. Sentiment in the manufacturing sector regarding future output also weakened, due to concerns about the impact of Brexit, exchange rate volatility and slower global economic growth. Meanwhile, the real wage growth rate increased to its highest level since 206, amid low levels of unemployment. Emerging Markets Emerging market equities ended a volatile month in positive territory, but performance at the country level was widely dispersed. Progress in trade negotiations between the US and China fuelled the robust performance of Chinese equities. However, shares in Indonesia fell due to concerns about high valuations, liquidity issues and an economic slowdown. Latin American stocks retreated. The Brazilian market slid as fourth quarter GDP declined and after President Jair Bolsonaro fired a senior cabinet minister amid news that the minister misused campaign funds. Investors feared that the brewing political scandal could hamper President Bolsonaro s ability to pass pension reforms. On a positive note, Colombian equities rose on the back of a healthy macroeconomic outlook and high prices of oil, its major export item. Equities in the emerging Europe, Middle East and Africa (EMEA) region declined. Russian markets fell as a group of US senators introduced legislation seeking fresh sanctions against Russia in retaliation for meddling in the US elections and in Ukraine. South African stocks and the rand slid owing to subdued corporate earnings. While the budget was better than expected, higher consumer taxes represent a headwind. Economic data in the developing world centred on policymakers efforts to boost their economies. Indonesia s central bank kept interest rates on hold, with policymakers highlighting their commitment to reduce the current account gap towards a range of 2.5% of GDP in 209 and maintain the attractiveness of domestic financial markets for foreign investors. In Latin America, Brazilian economic growth slowed sharply in the December quarter amid falling investments and weak consumer spending, underscoring the challenges faced by President Bolsonaro. Elsewhere, Russia s central bank left interest rates unchanged at 7.75%, indicating it would refrain from raising rates this year despite inflationary risks. Bond Fixed income markets posted mixed returns in February. According to an initial estimate of fourth quarter GDP by the Bureau of Economic Analysis (BEA), the US economy continued to weaken at the end of 208, but performed better than expected on a robust out turn of business spending. US Treasury yields rose on stronger-than-expected year-on-year GDP data. Meanwhile, economic sentiment continued to decline across most European countries, which led to corporate bonds outperforming government bonds. German bund yields edged higher. Moreover, there were bouts of volatility in the UK, driven by receding fears of a no-deal Brexit, which sparked a sell-off in UK government bonds and other safe-haven bond markets. In credit markets, corporate bond spreads tightened amid hopes for a resolution of the trade conflict between the US and China. Investors appetite for risker assets led to the strongest start to the year in two decades, primarily driven by the cautious stance adopted by global central banks. Emerging market bonds posted mixed returns, with hard currency bonds outperforming local currency bonds. Source: Fidelity, (Economic data) Reuters, Bloomberg, FT.com, Marketwatch, as at 28/02/209. The information contained in this material is only accurate on the date such information is published on this material. Opinions or forecasts contained herein are subject to change without prior notice. FIL and its subsidiaries are commonly referred to as Fidelity or Fidelity International. Any person considering an investment should seek independent advice. Fidelity, Fidelity International, the Fidelity International logo and F symbol are trademarks of FIL. The material is issued by FIL Investment Management (Hong Kong) and it has not been reviewed by the Securities and Futures Commission ( SFC ).

5 % % 2 Markit % 0.8% 2 0.7% 2 2.6% % 2 7.8% % 9 0.6% 206 (Jair Bolsonaro) % % Marketwatch Fidelity Fidelity International FIL Fidelity Fidelity International Fidelity International FFIL 2 2

6 Performance Summary Fidelity Advantage Portfolio Fund (FAP Fund) As at 28/02/209 Name of Fund Currency Share Class Fund Cumulative Performance % Annual Performance % YTD 3 Months 3 Year 3 Years 3 5 Years 5 0 Years Equity Funds Asia Pacific Equity Fund USD Ordinary Administration Global Equity Fund USD Ordinary Administration Hong Kong Equity Fund HKD Ordinary Administration Lifecycle Funds Balanced Fund USD Ordinary Administration Capital Stable Fund USD Ordinary Administration Growth Fund USD Ordinary Administration Stable Growth Fund USD Ordinary Administration Bond Funds Hong Kong Bond Fund HKD Ordinary Administration RMB Bond Fund HKD Ordinary ~ Administration ~ World Bond Fund USD Ordinary Administration Money Market Funds HK Dollar Money Fund HKD Ordinary Administration US Dollar Money Fund USD Ordinary Administration Supermarket Funds FAP Fund - Invesco Asian Equity Fund USD Ordinary Administration FAP Fund - Tracker Fund Portfolio HKD Ordinary Administration ~Since launch date to the end of launch year Source: Fidelity, NAV to NAV, based on denominated currency 3 3 Investment involves risks. Past performance is not indicative of future performance. Please refer to the Explanatory Memorandum of Fidelity Advantage Portfolio Fund for further details including the risk factors. If Investment returns are not denominated in HKD/USD, US/HK dollar-based investors are exposed to exchange rate fluctuations. The material is issued by FIL Investment Management (Hong Kong) and it has not been reviewed by the Securities and Futures Commission ( SFC ).

7 Fidelity Advantage Portfolio Fund - Asia Pacific Equity Fund - Fund Descriptor Equity Fund - Asia Pacific Investment Objective The fund aims to produce returns related to those achieved on the major stock market indices of Asia Pacific. The Asia Pacific Equity Fund is a feeder fund that invests in the Asia Pacific Equity Fund, a sub-fund of the Fidelity Global Investment Fund. Fund Performance Ordinary 8.85% 5.53% -5.74% 49.89% 32.62% % 84.20% Administration 8.75% 5.42% -6.8% 47.85% 29.7% % 68.50% Savings 8.76% 5.45% -6.9% 47.70% 29.37% 22.8% 66.90% Ordinary N/A N/A 0.0% 2.% 9.04% 4.70% N/A Administration N/A N/A -0.24%.28% 7.62% 38.6% N/A Savings N/A N/A -0.23%.22% 7.49% 37.82% N/A Fund Details Fund Manager Polly Kwan Launch Date Ordinary 24/07/2006 Administration 24/07/2006 Savings 24/07/2006 Unit NAV Ordinary Administration Savings Fund Size US$28.42 US$26.85 US$26.69 US$25.74M Risk Indicator (3-Year Standard Deviation) 2.92% ( ) /06 02/09 02/ 02/3 02/5 02/7 02/9 Annual Performance % -2.04% -2.07% % 34.43% 34.38% % 5.45% 5.38% % -6.65% -6.68% % 3.77% 3.68% % 3.23% 3.9% % 2.92% 2.85% % -5.90% -5.93% % 3.79% 3.75% % 79.96% 80.02% Fund Commentary^ ^ Asia Pacific ex Japan equities declined over the quarter. Investor sentiment was subdued due to concerns over China-US trade issues and a weakening global economy. Chinese equities declined on worries that the economy may be headed for a downturn. Data showed that the manufacturing sector contracted in December for the first time in more than two years. Encouragingly, Indian equities advanced as macroeconomic variables remained favourable and a fall in oil prices supported sentiment. Energy stocks tracked crude prices lower. Concerns around premium valuations, regulatory and competitive pressure, particularly among internetled businesses, as well as the risk of slowing consumption growth weighed on consumer discretionary and information technology (IT) stocks. The fund delivered negative returns over the quarter. Gaming machines manufacturer Aristocrat Leisure s results and growth outlook reflected increasing penetration of its games in North America. However, investor concerns about lower-thanexpected margins and higher reinvestment in its digital business weighed on its shares. Camera component maker Sunny Optical Technology declined amid weak demand for smartphones in China. Nevertheless, the company is likely to benefit from a visible upgrade cycle from increasing dual/triple camera penetration. Elsewhere, Oil Search and PetroChina were negatively impacted by a decline in oil prices. Encouragingly, India s HDFC Bank gained as it delivered superior growth versus competitors. Moreover, receding concerns around credit and liquidity issues among nonbanking finance companies supported Indian financials. Cummins India, a manufacturer of services engines posted strong results and optimistic earnings guidance for both domestic markets and exports. Elsewhere, a series of interest rate hikes and robust loan growth supported the position in Bank Rakyat Indonesia. 2 Aristocrat Leisure Oil Search HDFC Bank Cummins India (Bank Rakyat Indonesia) Top 0 Holdings TENCENT HOLDINGS LIMITED 6.02% TAIWAN SEMICONDUCTOR MFG CO LTD 4.28% ALIBABA GROUP HLDGS ADR 4.27% SAMSUNG ELECTRONICS 3.84% CSL 3.07% CHINA CONSTRUCTION BANK H H 2.93% WESTPAC BANKING CORP LTD 2.62% COMMONWEALTH BK OF AUSTRALIA 2.52% INDUSTRIAL & COM BK OF CHINA H SHRS H 2.5% CHINA MOBILE LTD 2.5% TOTAL 34.57% Industry Breakdown 29.3% Financials 金融 22.2% Technology 科技 8.2% Industrials 工業 7.2% Consumer Services 消費服務 6.5% Health Care 健康護理 6.2% Oil & Gas 石油及天然氣 5.2% Consumer Goods 消費品 4.2% Telecommunications 電訊 4.% Basic Materials 基本物料 2.2% Utilities 公用事業 4.7% Others* 其他 * * May include cash, account payables, account receivables and other industries (if any). Geographical Breakdown CHINA 32.3% AUSTRALIA 7.2% TAIWAN.7% KOREA (SOUTH).2% INDIA 0.3% HONG KONG 4.4% INDONESIA.9% SINGAPORE.8% PHILIPPINES.4% MALAYSIA.2% OTHERS # # 6.6% # May include cash, account payables, account receivables and other countries (if any). / Due to rounding, the total may not be equal to %. % NAV to NAV, in USD. / please contact Fidelity for further details about which specific investment funds are available to the general investing public. FIL and its subsidiaries are commonly referred to as Fidelity or Fidelity International. Fidelity, Fidelity International, the Fidelity International logo and F symbol are trademarks of FIL. Any person considering an investment should seek independent advice. The material is issued by FIL Investment Management (Hong Kong) and it has not been reviewed by the Securities and Futures Commission ( SFC ). Fidelity Fidelity International FIL Fidelity Fidelity International Fidelity International F FIL 4

8 Fidelity Advantage Portfolio Fund - Global Equity Fund - Fund Descriptor Equity Fund - Global Investment Objective The fund aims to invest primarily in the global equity markets and produce returns that are related to those achieved on the major world stock market indices. Fund Details Fund Manager Pek Ng Launch Date Ordinary 30/06/2003 Administration 30/06/2003 Savings 30/06/2003 Unit NAV Ordinary US$29.4 Administration US$27.42 Savings US$27.20 Fund Size US$28.88M Risk Indicator (3-Year Standard Deviation) 0.23% Fund Commentary^ ^ Global equities fell over the fourth quarter. Concerns about the global economy and the interest rate hike by the US Federal Reserve weighed on sentiment. Continued Brexit-related uncertainty and US-China trade tensions further concerned investors, despite the US and China reaching a 90-day truce to temporarily halt new tariffs and finalise a trade deal. The fund s exposure to Hong Kong and Asia Pacific ex Japan equities was increased. The Hong Kong market could receive support from a stable property market and pick-up in infrastructure spending in the near term. In Asia Pacific ex Japan, a significant fall in crude oil prices could benefit oil importing nations and countries with current account deficits, although earnings expectations have weakened. Conversely, the exposure to European equities was lowered as the region faces political risks and its growth momentum has slowed. The allocation to Japan was also reduced, although the outlook for the market remains supported by its healthy domestic economy and an increased corporate focus on shareholder returns. The exposure to the US market was largely unchanged. The country s economic growth remains above-trend; however, trade-frictions with China, potentially higher wages and a slowdown in the property sector could present challenges. 90 Fund Performance Ordinary 9.86%.45% -2.49% 3.35% 26.22% 204.4% 94.0% Administration 9.8%.37% -2.90% 29.65% 23.46% 90.77% 74.20% Savings 9.77%.30% -3.00% 29.40% 23.3% 89.05% 72.00% Ordinary N/A N/A -0.24% 8.4% 3.66% 46.86% N/A Administration N/A N/A -0.45% 7.66% 2.35% 43.4% N/A Savings N/A N/A -0.50% 7.54% 2.7% 42.69% N/A ( ) /03 02/05 02/07 02/09 02/ 02/3 02/5 Top 0 Holdings ALPHABET A 2.69% MICROSOFT CORP 2.67% AMAZON.COM 2.03% JPMORGAN CHASE & CO.98% FACEBOOK A.78% JOHNSON & JOHNSON.65% MASTERCARD.59% COMCAST CLASS A.49% VERIZON COMMUNICATIONS.43% APPLE INC.4% TOTAL 8.72% Industry Breakdown 02/7 02/9 7.8% Technology 科技 6.8% Financials 金融 4.9% Industrials 工業 3.% Health Care 健康護理 0.9% Consumer Services 消費服務 7.8% Consumer Goods 消費品 6.4% Oil & Gas 石油及天然氣 4.0% Basic Materials 基本物料 3.5% Telecommunications 電訊 2.3% Utilities 公用事業 2.5% Others* 其他 * Annual Performance % -0.92% -0.96% % 9.53% 9.44% % 2.58% 2.55% % -0.44% -0.48% % 4.60% 4.53% % 25.00% 24.94% % 7.07% 7.00% % -0.50% -0.54% % 2.26% 2.23% % 3.77% 3.68% Fund Allocation by Asset Class HONG KONG EQUITY FUND 2.38% JAPANESE EQUITY FUND 8.93% ASIA PACIFIC EQUITY FUND* * 6.63% AMERICAS EQUITY FUND 62.45% EUROPEAN EQUITY FUND 9.75% OTHERS # # -0.4% * May include investments in Japan and Hong Kong. # May include cash, account payables and account receivables. / Due to rounding, the total may not be equal to %. % NAV to NAV, in USD. / * May include cash, account payables, account receivables and other industries (if any). 5 please contact Fidelity for further details about which specific investment funds are available to the general investing public. FIL and its subsidiaries are commonly referred to as Fidelity or Fidelity International. Fidelity, Fidelity International, the Fidelity International logo and F symbol are trademarks of FIL. Any person considering an investment should seek independent advice. The material is issued by FIL Investment Management (Hong Kong) and it has not been reviewed by the Securities and Futures Commission ( SFC ). Fidelity Fidelity International FIL Fidelity Fidelity International Fidelity International F FIL

9 Fidelity Advantage Portfolio Fund - Hong Kong Equity Fund - Fund Descriptor Equity Fund - Hong Kong Investment Objective The fund aims to invest 0 0% into the Fidelit y Global Investment Fund Hong Kong Equity Fund. The Fidelity Global Investment Fund Hong Kong Equity Fund aims to focus investment into the equity market of Hong Kong, namely equities of companies listed in Hong Kong (including Greater China companies that are listed in Hong Kong) or companies which have a business connection with Hong Kong (including companies which are listed outside Hong Kong). Companies which have a business connection with Hong Kong include but are not limited to companies that are domiciled or incorporated in Hong Kong. The objective of the fund is to produce returns that related to those achieved on the major stock market indices of Hong Kong. % Fund Details Fund Manager Raymond Ma Launch Date Ordinary 30/06/2003 Administration 30/06/2003 Savings 30/06/2003 Unit NAV Ordinary Administration Savings Fund Size HK$ HK$ HK$ HK$2,04.5M Risk Indicator (3-Year Standard Deviation) 4.89% Fund Commentary^ ^ Concerns over a slowdown in economic growth against the backdrop of a China-US trade war dampened investor confidence towards Chinese equities. Tightening liquidity due to the central government s efforts to contain excess debt in the financial system also contributed to the weakness. However, sentiment received some support after China announced that it is likely to unveil stimulus measures to cushion the economy from the trade war. On the economic front, third quarter GDP rose at a slowerthan-anticipated pace as the government s year-long campaign to tackle debt risks and a trade war with the US started to hurt the economy. In Hong Kong, financials were among the worst performers, while consumer staples rose. The pace of expansion in Hong Kong s trade-reliant economy moderated from the previous quarter, mainly due to lacklustre consumption and a deterioration in exports. The portfolio generated negative returns over the quarter. Selected energy and consumer discretionary positions came under pressure. Oil companies CNOOC and PetroChina declined amid a fall in crude oil prices. Nonetheless, the former is retained for its strong balance sheet, robust dividend growth outlook and healthy prospects for unlocking value from its marketing business. The latter is expected to be a beneficiary of domestic natural gas pricing reforms in China. In the consumer discretionary space, e-commerce giant Alibaba Group Holding declined on concerns that lower monetisation of recommendation feeds from the upgrade of its Taobao application would weigh on its near-term earnings. Conversely, pharmaceutical company Innovent Biologics rose after the listing application for its new drug was approved by the Chinese regulatory agency. Property developer China Resources Land advanced as it benefited from optimism around its healthy sales momentum. Fund Performance Ordinary.79% 8.60% -5.67% 62.54% 42.90% 86.22% % Administration.7% 8.48% -6.0% 60.37% 39.72% 73.63% % Savings.70% 8.47% -6.4% 60.3% 39.38% 72.25% % Ordinary N/A N/A.57% 7.76% 25.% 45.73% N/A Administration N/A N/A.33% 6.88% 23.60% 42.5% N/A Savings N/A N/A.3% 6.79% 23.43% 4.77% N/A ( ) /03 02/05 02/07 02/09 02/ 02/3 02/5 Top 0 Holdings TENCENT HOLDINGS LIMITED 8.79% AIA GROUP LTD 7.68% HSBC HOLDINGS PLC 7.60% INDUSTRIAL & COM BK OF CHINA H SHRS H 4.93% CHINA CONSTRUCTION BANK H H 4.48% CHINA MOBILE LTD 3.94% CHINA LIFE INSURANCE H H 2.63% PING AN INSURANCE CO LTD H SHRS H 2.24% CNOOC LTD 2.% ALIBABA GROUP HLDGS ADR 2.04% TOTAL 46.44% Industry Breakdown 02/7 02/9 45.6% Financials 金融.5% Technology 科技 7.2% Consumer Goods 消費品 6.8% Industrials 工業 6.2% Consumer Services 消費服務 5.9% Telecommunications 電訊 5.2% Oil & Gas 石油及天然氣 2.6% Basic Materials 基本物料 2.6% Health Care 健康護理.7% Utilities 公用事業 4.7% Others* 其他 * * May include cash, account payables, account receivables and other industries (if any). Annual Performance % -3.2% -3.6% % 42.04% 4.96% % 0.86% 0.82% % -4.72% -4.76% % 3.24% 3.9% % 7.89% 7.83% % 20.90% 20.84% % % -22.3% % 0.73% 0.67% % 64.09% 64.0% Geographical Breakdown CHINA 62.% HONG KONG 33.2% SINGAPORE 0.2% OTHERS # # 4.5% # May include cash, account payables, account receivables and other countries (if any). / Due to rounding, the total may not be equal to %. % NAV to NAV, in HKD. / please contact Fidelity for further details about which specific investment funds are available to the general investing public. FIL and its subsidiaries are commonly referred to as Fidelity or Fidelity International. Fidelity, Fidelity International, the Fidelity International logo and F symbol are trademarks of FIL. Any person considering an investment should seek independent advice. The material is issued by FIL Investment Management (Hong Kong) and it has not been reviewed by the Securities and Futures Commission ( SFC ). Fidelity Fidelity International FIL Fidelity Fidelity International Fidelity International F FIL 6

10 Fidelity Advantage Portfolio Fund - Balanced Fund - Fund Descriptor Mixed Assets Fund - Global with around 70% in equities and 30% in bonds and cash 70% 30% Investment Objective The fund aims to normally maintain a balanced, global portfolio of bond funds and equity funds with the aim of achieving a consistent overall return higher than Hong Kong inflation but with lower risk and volatility than the Growth Fund. Fund Details Fund Manager Pek Ng Launch Date Ordinary 6/0/995 Administration 6/0/995 Savings 5/03/2002 Unit NAV Ordinary US$46.63 Administration US$4.92 Savings US$4.58 Fund Size US$,420.27M Risk Indicator (3-Year Standard Deviation) 8.84% Fund Commentary^ ^ Global equities fell over the fourth quarter. Concerns about the global economy and the interest rate hike by the US Federal Reserve weighed on sentiment. Continued Brexit-related uncertainty and US-China trade tensions further concerned investors, despite the US and China reaching a 90-day truce to temporarily halt new tariffs and finalise a trade deal. Fixed income markets generated mixed returns, with global government bonds ending the quarter on a positive note. Credit markets posted negative performance and spreads widened across major regions amid global growth concerns and a broader deterioration in risk sentiment. The fund s equity exposure was reduced, and the allocation to highquality bonds was raised. Within equities, the position in the US and Europe was lowered. Notwithstanding above-trend economic growth, the US market could face challenges from trade-frictions with China, potentially higher wages and a slowdown in the property sector. The European market faces political risks, and its growth momentum has slowed. The allocation to Japan was reduced, although the outlook for the market remains supported by its healthy domestic economy and an increased corporate focus on shareholder returns. The exposure to the Asia Pacific ex Japan equities was also trimmed marginally. Earnings expectations for the region have weakened, although a significant fall in crude oil prices could support oil-importing nations and countries with current account deficit. Meanwhile, the allocation to the Hong Kong market was raised as it could benefit from a stable property market and a pick-up in infrastructure spending. 90 Fund Performance Ordinary 7.27% 3.67% -4.2% 30.36% 20.87% 38.03% % Administration 7.2% 3.56% -4.62% 28.59% 8.8% 27.58% 39.20% Savings 7.9% 3.56% -4.68% 28.4% 7.89% 26.47% 97.64% Ordinary N/A N/A -0.8% 8.08% 2.28% 3.90% N/A Administration N/A N/A -0.4% 7.3% 0.96% 28.67% N/A Savings N/A N/A -0.43% 7.23% 0.82% 28.32% N/A ( ) /00 02/03 02/05 02/07 02/09 02/ 02/3 02/5 02/7 02/9 Top 0 Holdings USTN 2.625% 5/02/ % 5/02/ % TENCENT HOLDINGS LIMITED 2.75% AIA GROUP LTD.93% HSBC HOLDINGS PLC.9% GERMANY SER 78 0% 3/0/ % INDUSTRIAL & COM BK OF CHINA H SHRS H.46% USTN 2.875% 3/0/ % 3/0/ % CHINA CONSTRUCTION BANK H H.39% GERMANY 0.25% 5/08/2028 REGS.38% CHINA MOBILE LTD.22% TOTAL 8.38% Annual Performance % -9.9% -9.94% % 22.84% 22.78% % 0.89% 0.83% % -2.37% -2.4% %.2%.6% % 2.90% 2.84% % 4.65% 4.6% % -0.26% -0.30% % 9.79% 9.7% % 33.86% 33.83% Fund Allocation by Asset Class HONG KONG EQUITY FUND 25.2% JAPANESE EQUITY FUND 9.40% ASIA PACIFIC EQUITY FUND* * 9.04% AMERICAS EQUITY FUND 4.83% EUROPEAN EQUITY FUND 3.8% GLOBAL BOND FUND 2.4% HONG KONG BOND FUND 2.90% US$ MONEY FUND 3.89% OTHERS # # -0.3% * May include investments in Japan and Hong Kong. # May include cash, account payables and account receivables. / Due to rounding, the total may not be equal to %. % NAV to NAV, in USD. / 7 please contact Fidelity for further details about which specific investment funds are available to the general investing public. FIL and its subsidiaries are commonly referred to as Fidelity or Fidelity International. Fidelity, Fidelity International, the Fidelity International logo and F symbol are trademarks of FIL. Any person considering an investment should seek independent advice. The material is issued by FIL Investment Management (Hong Kong) and it has not been reviewed by the Securities and Futures Commission ( SFC ). Fidelity Fidelity International FIL Fidelity Fidelity International Fidelity International F FIL

11 Fidelity Advantage Portfolio Fund - Capital Stable Fund - Fund Descriptor Mixed Assets Fund - Global with around 30% in equities and 70% in bonds and cash 30% 70% Investment Objective The fund aims to invest primarily in money market funds and global bond funds with the aim of achieving a stable level of return, minimising volatility whilst achieving some capital appreciation at low risk. Fund Details Fund Manager Pek Ng Launch Date Ordinary 6/0/995 Administration 6/0/995 Savings 5/03/2002 Unit NAV Ordinary US$35.30 Administration US$3.72 Savings US$3.46 Fund Size US$499.48M Risk Indicator (3-Year Standard Deviation) 5.43% Fund Commentary^ ^ Global equities fell over the fourth quarter. Concerns about the global economy and the interest rate hike by the US Federal Reserve weighed on sentiment. Continued Brexit-related uncertainty and US-China trade tensions further concerned investors, despite the US and China reaching a 90-day truce to temporarily halt new tariffs and finalise a trade deal. Fixed income markets generated mixed returns, with global government bonds ending the quarter on a positive note. Credit markets posted negative performance and spreads widened across major regions amid global growth concerns and a broader deterioration in risk sentiment. The fund s equity exposure was reduced, and the allocation to highquality bonds was raised. Within equities, the position in the US and Europe was lowered. Notwithstanding above-trend economic growth, the US market could face challenges from trade-frictions with China, potentially higher wages and a slowdown in the property sector. The European market faces political risks, and its growth momentum has slowed. The allocation to Japan was reduced, although the outlook for the market remains supported by its healthy domestic economy and an increased corporate focus on shareholder returns. The exposure to the Asia Pacific ex Japan equities was also trimmed marginally. Earnings expectations for the region have weakened, although a significant fall in crude oil prices could support oil-importing nations and countries with current account deficit. Meanwhile, the allocation to the Hong Kong market was raised as it could benefit from a stable property market and a pick-up in infrastructure spending. 90 Fund Performance Ordinary 3.49% 2.98% -.94% 5.89% 0.24% 74.67% % Administration 3.39% 2.85% -2.40% 4.35% 7.78% 66.95% 27.20% Savings 3.42% 2.84% -2.45% 4.9% 7.52% 66.0% 29.64% Ordinary N/A N/A 0.40% 4.63% 6.97% 7.59% N/A Administration N/A N/A 0.5% 3.88% 5.7% 4.78% N/A Savings N/A N/A 0.4% 3.82% 5.60% 4.49% N/A ( ) /00 02/03 02/05 02/07 02/09 02/ 02/3 02/5 02/7 02/9 Top 0 Holdings USTN 2.625% 5/02/ % 5/02/ % GERMANY SER 78 0% 3/0/ % USTN 2.875% 3/0/ % 3/0/ % GERMANY 0.25% 5/08/2028 REGS 3.46% GERMANY 0.5% 2/04/209 REGS 2.37% USTN 3.375% 5// % 5// % JAPAN SER 35 0.% 20/06/2028.6% JAPAN (5 YEAR ISSUE) SER 28 0.% 20/06/202.25% TENCENT HOLDINGS LIMITED.2% USTN 2.5% 3/0/ % 3/0/202.2% TOTAL 28.83% Annual Performance % -5.04% -5.09% % 3.4% 3.33% 206.9% 0.74% 0.68% % -3.5% -3.54% 204.% 0.65% 0.59% % 4.67% 4.63% % 9.0% 8.94% % -2.8% -2.23% % 6.66% 6.6% % 7.77% 7.73% Fund Allocation by Asset Class HONG KONG EQUITY FUND.0% JAPANESE EQUITY FUND 4.54% ASIA PACIFIC EQUITY FUND* * 4.% AMERICAS EQUITY FUND 6.87% EUROPEAN EQUITY FUND 5.65% GLOBAL BOND FUND 52.95% HONG KONG BOND FUND 6.02% HK$ MONEY FUND 0.7% US$ MONEY FUND 8.25% OTHERS # # -0.% * May include investments in Japan and Hong Kong. # May include cash, account payables and account receivables. / Due to rounding, the total may not be equal to %. % NAV to NAV, in USD. / please contact Fidelity for further details about which specific investment funds are available to the general investing public. FIL and its subsidiaries are commonly referred to as Fidelity or Fidelity International. Fidelity, Fidelity International, the Fidelity International logo and F symbol are trademarks of FIL. Any person considering an investment should seek independent advice. The material is issued by FIL Investment Management (Hong Kong) and it has not been reviewed by the Securities and Futures Commission ( SFC ). Fidelity Fidelity International FIL Fidelity Fidelity International Fidelity International F FIL 8

12 Fidelity Advantage Portfolio Fund - Growth Fund - Fund Descriptor Mixed Assets Fund - Global with around 90% in equities and 0% in bonds and cash 90% 0% Investment Objective The fund aims mainly invest in equity funds, with a geographical bias towards Hong Kong with the aim of maximising long-term returns. Fund Details Fund Manager Pek Ng Launch Date Ordinary 6/0/995 Administration 6/0/995 Savings 5/03/2002 Unit NAV Ordinary US$5.04 Administration US$45.87 Savings US$45.49 Fund Size US$,249.79M Risk Indicator (3-Year Standard Deviation) 0.76% Fund Commentary^ ^ Global equities fell over the fourth quarter. Concerns about the global economy and the interest rate hike by the US Federal Reserve weighed on sentiment. Continued Brexit-related uncertainty and US-China trade tensions further concerned investors, despite the US and China reaching a 90-day truce to temporarily halt new tariffs and finalise a trade deal. Fixed income markets generated mixed returns, with global government bonds ending the quarter on a positive note. Credit markets posted negative performance and spreads widened across major regions amid global growth concerns and a broader deterioration in risk sentiment. The fund s equity exposure was reduced, and the allocation to highquality bonds was raised. Within equities, the position in the US and Europe was lowered. Notwithstanding above-trend economic growth, the US market could face challenges from trade-frictions with China, potentially higher wages and a slowdown in the property sector. The European market faces political risks, and its growth momentum has slowed. The allocation to Japan was reduced, although the outlook for the market remains supported by its healthy domestic economy and an increased corporate focus on shareholder returns. Conversely, the allocation to Hong Kong and Asia Pacific ex Japan equities was raised. The Hong Kong market could receive support from a stable property market and pick-up in infrastructure spending in the near term. In Asia Pacific ex Japan, a significant fall in crude oil prices could benefit oil importing nations and countries with current account deficits, although earnings expectations have weakened. 90 Fund Performance Ordinary 9.8% 3.9% -5.45% 37.72% 26.02% 73.97% 40.40% Administration 9.% 3.80% -5.87% 35.87% 23.2% 6.82% % Savings 9.09% 3.76% -5.93% 35.67% 22.88% 60.54% % Ordinary N/A N/A -0.55% 9.69% 4.7% 39.4% N/A Administration N/A N/A -0.79% 8.89% 3.35% 35.66% N/A Savings N/A N/A -0.82% 8.80% 3.20% 35.28% N/A ( ) /00 02/03 02/05 02/07 02/09 02/ 02/3 02/5 02/7 02/9 Top 0 Holdings TENCENT HOLDINGS LIMITED 3.47% AIA GROUP LTD 2.40% HSBC HOLDINGS PLC 2.37% INDUSTRIAL & COM BK OF CHINA H SHRS H.84% CHINA CONSTRUCTION BANK H H.75% CHINA MOBILE LTD.53% ALIBABA GROUP HLDGS ADR.5% CHINA LIFE INSURANCE H H.04% ROYAL DUTCH SHELL PLC A SHRS A 0.87% ALPHABET A 0.82% TOTAL 7.24% Annual Performance % -2.36% -2.39% % 27.65% 27.58% % 0.75% 0.70% % -.74% -.80% %.52%.48% % 7.32% 7.25% % 7.26% 7.23% % -4.5% -4.2% 200.7%.20%.4% % 42.00% 4.92% Fund Allocation by Asset Class HONG KONG EQUITY FUND 3.27% JAPANESE EQUITY FUND 2.09% ASIA PACIFIC EQUITY FUND* * 2.04% AMERICAS EQUITY FUND 8.93% EUROPEAN EQUITY FUND 7.97% GLOBAL BOND FUND 5.0% HONG KONG BOND FUND.35% HK$ MONEY FUND 0.02% US$ MONEY FUND.36% OTHERS # # -0.3% * May include investments in Japan and Hong Kong. # May include cash, account payables and account receivables. / Due to rounding, the total may not be equal to %. % NAV to NAV, in USD. / 9 please contact Fidelity for further details about which specific investment funds are available to the general investing public. FIL and its subsidiaries are commonly referred to as Fidelity or Fidelity International. Fidelity, Fidelity International, the Fidelity International logo and F symbol are trademarks of FIL. Any person considering an investment should seek independent advice. The material is issued by FIL Investment Management (Hong Kong) and it has not been reviewed by the Securities and Futures Commission ( SFC ). Fidelity Fidelity International FIL Fidelity Fidelity International Fidelity International F FIL

13 Fidelity Advantage Portfolio Fund - Stable Growth Fund - Fund Descriptor Mixed Assets Fund - Global with around 50% in equities and 50% in bonds and cash 50% 50% Investment Objective The fund aims to invest in a global portfolio of bond funds, cash funds and equity funds, with a lower weighting in equities than the Balanced Fund, with the aim of achieving a consistent overall return higher than Hong Kong inflation. Fund Details Fund Manager Pek Ng Launch Date Ordinary 30/05/997 Administration 30/05/997 Savings 5/03/2002 Unit NAV Ordinary US$46.5 Administration US$42.24 Savings US$4.92 Fund Size US$428.72M Risk Indicator (3-Year Standard Deviation) 7.0% Fund Commentary^ ^ Global equities fell over the fourth quarter. Concerns about the global economy and the interest rate hike by the US Federal Reserve weighed on sentiment. Continued Brexit-related uncertainty and US-China trade tensions further concerned investors, despite the US and China reaching a 90-day truce to temporarily halt new tariffs and finalise a trade deal. Fixed income markets generated mixed returns, with global government bonds ending the quarter on a positive note. Credit markets posted negative performance and spreads widened across major regions amid global growth concerns and a broader deterioration in risk sentiment. The fund s equity exposure was reduced, and the allocation to highquality bonds was raised. Within equities, the position in the US and Europe was lowered. Notwithstanding above-trend economic growth, the US market could face challenges from trade-frictions with China, potentially higher wages and a slowdown in the property sector. The European market faces political risks, and its growth momentum has slowed. The allocation to Japan was reduced, although the outlook for the market remains supported by its healthy domestic economy and an increased corporate focus on shareholder returns. The exposure to the Asia Pacific ex Japan equities was also trimmed marginally. Earnings expectations for the region have weakened, although a significant fall in crude oil prices could support oil-importing nations and countries with current account deficit. Meanwhile, the allocation to the Hong Kong market was raised as it could benefit from a stable property market and a pick-up in infrastructure spending. 90 Fund Performance Ordinary 5.37% 3.40% -3.2% 23.% 5.67% 06.44% 20.07% Administration 5.3% 3.28% -3.56% 2.48% 3.09% 97.38% 8.60% Savings 5.30% 3.28% -3.6% 2.30% 2.8% 96.44% 65.99% Ordinary N/A N/A 0.% 6.35% 9.68% 24.92% N/A Administration N/A N/A -0.2% 5.60% 8.4% 2.9% N/A Savings N/A N/A -0.4% 5.53% 8.27% 2.59% N/A ( ) /00 02/03 02/05 02/07 02/09 02/ 02/3 02/5 02/7 02/9 Top 0 Holdings USTN 2.625% 5/02/ % 5/02/ % GERMANY SER 78 0% 3/0/ % USTN 2.875% 3/0/ % 3/0/ % GERMANY 0.25% 5/08/2028 REGS 2.55% TENCENT HOLDINGS LIMITED.99% GERMANY 0.5% 2/04/209 REGS.75% USTN 3.375% 5// % 5// % AIA GROUP LTD.39% HSBC HOLDINGS PLC.38% JAPAN SER 35 0.% 20/06/2028.9% TOTAL 23.42% Annual Performance % -7.56% -7.59% % 8.29% 8.22% % 0.88% 0.83% % -2.99% -3.03% %.00% 0.95% % 8.70% 8.62% %.97%.96% % -6.0% -6.5% % 8.45% 8.38% % 25.85% 25.79% Fund Allocation by Asset Class HONG KONG EQUITY FUND 8.7% JAPANESE EQUITY FUND 7.0% ASIA PACIFIC EQUITY FUND* * 6.5% AMERICAS EQUITY FUND 0.88% EUROPEAN EQUITY FUND 9.7% GLOBAL BOND FUND 39.4% HONG KONG BOND FUND 4.72% HK$ MONEY FUND 0.29% US$ MONEY FUND 3.70% OTHERS # # -0.3% * May include investments in Japan and Hong Kong. # May include cash, account payables and account receivables. / Due to rounding, the total may not be equal to %. % NAV to NAV, in USD. / please contact Fidelity for further details about which specific investment funds are available to the general investing public. FIL and its subsidiaries are commonly referred to as Fidelity or Fidelity International. Fidelity, Fidelity International, the Fidelity International logo and F symbol are trademarks of FIL. Any person considering an investment should seek independent advice. The material is issued by FIL Investment Management (Hong Kong) and it has not been reviewed by the Securities and Futures Commission ( SFC ). Fidelity Fidelity International FIL Fidelity Fidelity International Fidelity International F FIL 0