Fidelity WorldWide Fund Annual Report

Transcription

1 Fidelity WorldWide Fund Annual Report For the period from 1 st January 2017 to 8 th March 2018 (Termination Date)

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3 ANNUAL REPORT Contents Pages Management and Administration 1 Report of the Investment Manager 2 4 Investment Report 5 6 Report of the Trustee to the Unitholders 7 Independent Auditor s Report 8 10 Statement of Net Assets Statement of Comprehensive Income Statement of Changes in Net Assets Attributable to Unitholders Statement of Cash Flows Notes to the Financial Statements Investment Portfolio Movements (Unaudited) Fidelity WorldWide Fund - RMB Bond Fund 55 Fidelity WorldWide Fund - Global Equity Income Fund 55 Performance Table (Unaudited) Fidelity WorldWide Fund - RMB Bond Fund 56 Fidelity WorldWide Fund - Global Equity Income Fund 57

4 1 MANAGEMENT AND ADMINISTRATION INVESTMENT MANAGER FIL Investment Management (Hong Kong) Limited Level 21 Two Pacific Place 88 Queensway Admiralty Hong Kong TRUSTEE Cititrust Limited 50/F, Champion Tower Three Garden Road Central Hong Kong CUSTODIAN AND ADMINISTRATOR Citibank, N.A., Hong Kong Branch 50/F, Champion Tower Three Garden Road Central Hong Kong TRANSFER AGENT Citibank Europe plc 1 North Wall Quay 3rd Floor Dublin, 1 Ireland AUDITOR PricewaterhouseCoopers 22nd Floor, Prince s Building Central Hong Kong SOLICITORS TO THE MANAGER Deacons 5/F, Alexandra House 18 Chater Road Central Hong Kong

5 2 REPORT OF THE INVESTMENT MANAGER Annual Report As at 8th March 2018 (termination date) This Annual Report does not constitute an offer of units. Units are offered on the basis of the information contained in the current Explanatory Memorandum (and the documents referred to within it). Copies of the current Explanatory Memorandum and latest annual report for the Fidelity WorldWide Fund (the Fund ) are available from the registered office of the Investment Manager or from any of the companies registered as distributors of the Fund.

6 3 REPORT OF THE INVESTMENT MANAGER (CONTINUED) Fidelity WorldWide Fund - RMB Bond Fund Market Environment Chinese offshore renminbi denominated (Dim Sum) bonds posted positive returns during the review period, driven by high coupon income and tightening credit spreads. At the start of the year, yields rose, credit spreads widened and the asset class experienced capital outflows. However, these bonds soon recovered on the back of a stronger renminbi, shrinking bond supply and positive economic data. Towards the middle of 2017, Moody s downgraded China s sovereign credit rating to A1 from Aa3, and moved its outlook to stable. Overall, the market reaction to this move was subdued as it was already priced in by domestic investors who dominate the market. On a positive note, Chinese regulators approved the long-awaited Hong Kong-China Bond Connect programme, which will allow foreign investors to buy onshore Chinese bonds using Hong Kong s market infrastructure. Furthermore, the Chinese government s decision to sell dual tranches of five and tenyear US dollar denominated sovereign bonds was well received by investors. As a result, investment grade credit spreads tightened to multi-year lows. Over the period, the Chinese government, through several forums, reiterated its agenda to focus on curbing financial risk, eradicating poverty, fighting pollution and implementing supply side reforms, while maintaining steady growth. China also announced plans to open up its financial system by removing foreign ownership limits on Chinese banks, and allowing overseas firms to take majority stakes in local securities ventures, fund managers and insurers. In a key development, China's ruling Communist Party set the stage for President Xi Jinping to stay in office indefinitely, with a proposal to remove a constitutional clause limiting presidential service to just two terms in office. China also announced that it is likely to roll out unified regulations to rein in shadow banking before its annual legislative sessions scheduled in early March. From a macro data perspective, China s GDP growth accelerated at 6.9% in FY 2017, which was slightly above market expectations. On the monetary front, the People s Bank of China (PBoC) increased money market rates three times over the period. Fund Performance The fund returned 9.12% over the review period (renminbi returns, gross of fees). Coupon income and positive credit selection were the primary contributors to performance. Coupon income, specifically from offshore renminbi and US dollar denominated bonds, enhanced gains. At a sector level, the allocation to the property and banks and brokers sectors added value, while capital goods held back gains. From a credit perspective, positions in Lai Fung Holdings and I.T. Ltd supported performance, while the exposure to Moon Wise Global and Weichai International HK Energy weighed on returns. The fund s term structure from offshore renminbi duration contributed meaningfully to performance, as yields on shorter dated bonds on the yield curve fell. Across the ratings spectrum, the exposure to some unrated bonds, BBB and A rated bonds buoyed performance.

7 FIDELITY WORLDWIDE FUND 4 REPORT OF THE INVESTMENT MANAGER (CONTINUED) Fidelity WorldWide Fund - Global Equity Income Fund Market Environment Global equities advanced over the period, supported by strong economic and corporate data. However, there were periods of risk aversion due to concerns over a more nationalist policy agenda in the US, the influence of populism in the eurozone and geopolitical tensions over North Korea. Although uncertainty about the UK s ongoing negotiations with the European Union (EU) over the terms of its exit continued, the completion of the first phase of negotiations in December cheered investors. The deal ruled out a hard border with Northern Ireland and protected the rights of three million EU citizens in the UK. Elsewhere, the US Federal Reserve (Fed) raised interest rates thrice over the period and also increased its forecast for US economic growth in The European Central Bank (ECB) continued to emphasise the gradual withdrawal of policy support. Against this backdrop, emerging markets strongly outperformed other regions, supported by a weakening US dollar. US and UK equities lagged other markets. Fund Performance The fund recorded positive returns but underperformed the MSCI AC World Index during the period. Two themes stood out: technology stocks, particularly those perceived to be disruptors/winners, and cyclical sectors expected to benefit the most from stronger GDP growth delivered superior gains. As a result, the fund s quality bias and focus on companies with attractive valuations that can thrive under a wide range of economic scenarios hurt relative returns. At a stock level, the position in Southern Californian utility provider Edison was negatively impacted by wildfires in the region and the strict liability regulations around the firm. The allocation to consumer products major Procter & Gamble also weighed on performance. After a weak quarter and signs of pricing pressure on some products, it remains to be seen when/if the company re-accelerates sales growth and gains market share. On a positive note, exchange operators Deutsche Boerse and CME Group were the key contributors to returns. Beneficiaries of rising rates and volatility, both companies reported in-line fourth quarter earnings and maintained their 2018 earnings guidance, while raising dividends. USbased PNC Financial Services was supported by its positive outlook for improved efficiencies as it rationalises its branch count and deploys the excess liquidity in a rising interest rate environment. Director of the Investment Manager 21st May 2018

8 5 INVESTMENT REPORT Fidelity WorldWide Fund (the Fund ) is an open-ended unit trust established as an umbrella fund under the laws of Hong Kong by a trust deed dated 17th October 2012 (the Trust Deed ) between FIL Investment Management (Hong Kong) Limited (the Investment Manager ) and Cititrust Limited (the Trustee ). The following sub-funds of the Fund (each a separate sub-fund of the Fund and referred to individually or collectively as the sub-fund(s) ): Fidelity WorldWide Fund - RMB Bond Fund Fidelity WorldWide Fund - Global Equity Income Fund The investment objective and policy of the sub-funds are set out below. Fidelity WorldWide Fund - RMB Bond Fund Investment Objective The sub-fund aims to achieve income and capital appreciation via exposure to RMB denominated fixed income/debt securities, fixed income/debt instruments and deposits which include but are not limited to convertible bonds, corporate bonds, government bonds, commercial papers, medium term notes, floating rate notes, bankers acceptances and money market instruments (including but not limited to certificates of deposits, bank deposits, negotiated term deposits and commercial papers). These investments may be settled in RMB or in other currencies such as USD or HKD. Exposure to non-rmb denominated debt securities may be hedged in order to seek to maintain the currency exposure in RMB. Investment Policy The sub-fund will (a) invest at least 70% of its Net Asset Value in fixed income/debt securities, fixed income/debt instruments and deposits (including but not limited to bonds, commercial papers, bankers acceptances, notes, certificates of deposits, and other RMB denominated and settled deposits and money market instruments) that are denominated and settled in RMB; (b) invest the remaining portion (i.e. up to 30%) of its Net Asset Value in non-rmb assets that are or will be hedged back to RMB (including, but not limited to, bonds denominated in RMB but settled in other currencies such as USD or HKD); and (c) limit any non-rmb assets without any RMB currency hedge up to 10% of its Net Asset Value. For the avoidance of doubt, the Investment Manager will ensure that the sub-fund will maintain an effective currency exposure to RMB (including through currency hedging) of at least 90% of its Net Asset Value.

9 6 INVESTMENT REPORT (CONTINUED) Fidelity WorldWide Fund - Global Equity Income Fund Investment Objective The sub-fund aims to achieve income and long-term capital growth by investing principally (i.e at least 70% of the fund s net asset value) in income-producing equity securities globally. The Investment Manager will target investments which it believes offer attractive dividend yields in additional to price appreciation. Investment Policy (a) The Investment Manager will actively select individual equity securities based on their potential to generate income and capital growth; (b) The Investment Manager may at its discretion select equity securities of any company and tactically allocate any of the sub-fund's investments to any particular geographical region, industry sector or companies with a particular market capitalization if it believes that, relative to other equities, they may offer greater potential for income and capital growth; (c) In addition, the Investment Manager has the freedom to invest the remaining assets (i.e. up to 30% of the sub-fund s net asset value) outside the sub-fund s principal asset classes. These include (but are not limited to) listed futures, money market instruments, commercial paper and certificates of deposit. The sub-fund s exposure to listed futures (other than futures contracts entered into for hedging purposes) in terms of the net total aggregate value of contract prices (whether payable to or by the fund under all outstanding futures contracts) may not exceed 20% of the total net asset value of the sub-fund. The sub-fund will not invest in debt securities; (d) Subject to the applicable investment restrictions, the sub-fund may use other derivative instruments for hedging purposes; (e) The sub-fund may invest up to 10% of its net asset value in China A-Shares and China B- Shares; and (f) The sub-fund will not invest in any structured deposits (including currency-linked deposits, currency and interest rate linked deposits, index-linked deposits or the like) or structured products as defined in the Securities and Futures Ordinance. Nor will the fund invest in asset backed securities (including asset backed commercial paper). The Investment Manager currently does not intend to enter into any securities lending, repurchase, or similar over-thecounter transactions in respect of the sub-fund. Any change to this investment restriction is subject to the prior approval of the Securities and Futures Commission ("SFC") and not less than one month's prior notice will be given to the sub-fund's unitholders. The Trustee of the Fund confirmed that based on the information received from the Investment Manager of the Fund during the period, to the best of the knowledge and belief of the Trustee, the investment objectives and policies for the sub-funds of the Fund were complied with.

10 7 REPORT OF THE TRUSTEE TO THE UNITHOLDERS We hereby confirm that, in our opinion, the Investment Manager of Fidelity WorldWide Fund - RMB Bond Fund and Fidelity WorldWide Fund - Global Equity Income Fund (the sub-funds ) of Fidelity WorldWide Fund (the Fund ), has, in all material respects, managed the sub-funds in accordance with the provisions of the trust deed dated 17th October 2012, as amended (the Trust Deed ) for the period from 1st January 2017 to 8th March 2018 (termination date). Cititrust Limited 21st May 2018

11 8 INDEPENDENT AUDITOR S REPORT TO THE UNITHOLDERS OF FIDELITY WORLDWIDE FUND Report on the Audit of the Financial Statements Opinion What we have audited The financial statements of Fidelity WorldWide Fund - RMB Bond Fund and Fidelity WorldWide Fund - Global Equity Income Fund (collectively the sub-funds of Fidelity WorldWide Fund) set out on pages 11 to 54, which comprise: the Statement of Net Assets as at 8th March 2018 (the termination date ); the Statement of Comprehensive Income for the period from 1st January 2017 to 8th March 2018 (the period ); the Statement of Changes in Net Assets Attributable to Unitholders for the period from 1st January 2017 to 8th March 2018; the Statement of Cash Flows for the period from 1st January 2017 to 8th March 2018; 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 each of the sub-funds as at 8th March 2018 (termination date), and of their financial transactions and cash flows for the period from 1st January 2017 to 8th March 2018 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 ) 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 sub-funds 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.

12 9 INDEPENDENT AUDITOR S REPORT TO THE UNITHOLDERS OF FIDELITY WORLDWIDE FUND (CONTINUED) Other Information The Trustee and the Manager (the Management ) of the sub-funds are 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 the Management for the Financial Statements The Management of the sub-funds is responsible for the preparation of the financial statements that give a true and fair view in accordance with HKFRSs issued by the HKICPA, and for such internal control as the Management 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 Management of the sub-funds is responsible for assessing the sub-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 Management either intends to liquidate the sub-funds or to cease operations, or has no realistic alternative but to do so. In addition, the Management of the sub-funds is required to ensure that the financial statements have been properly prepared in accordance with the relevant disclosure provisions of the Trust Deed dated 17th October 2012, as amended ( Trust Deed ) and Appendix E of the Code on Unit Trusts and Mutual Funds issued by the Hong Kong Securities and Futures Commission (the SFC Code ). 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, 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 sub-funds have been properly prepared, in all material respects, in accordance with the relevant disclosure provisions of the Trust Deed and the SFC Code.

13 10 INDEPENDENT AUDITOR S REPORT TO THE UNITHOLDERS OF FIDELITY WORLDWIDE FUND (CONTINUED) Auditor s Responsibilities for the Audit of the Financial Statements (Continued) 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 sub-funds internal control. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Management. Conclude on the appropriateness of the Management 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 sub-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 sub-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 Management 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. Report on Matters under the Relevant Disclosure Provisions of the Trust Deed and the SFC Code In our opinion, the financial statements have been properly prepared, in all material respects, in accordance with the relevant disclosure provisions of the Trust Deed and the SFC Code. PricewaterhouseCoopers Certified Public Accountants Hong Kong, 21st May 2018

14 11 STATEMENT OF NET ASSETS AS AT 8TH MARCH 2018 (TERMINATION DATE) Fidelity WorldWide Fund RMB Bond Fund Note As at 8th March 2018 (termination date) RMB As at 31st December 2016 RMB Assets Current assets Financial assets at fair value through profit or loss 6, 9 116,089,823 Amounts receivable on subscription of units 483,851 Other receivables 15,336 47,817 Cash and cash equivalents 11 62,162,337 8,244,677 Total assets 62,177, ,866,168 Liabilities Current liabilities Financial liabilities at fair value through profit or loss 6, 9 290,568 Amounts payable on redemption of units 62,122,460 8,767,918 Other payables 11 55, ,382 Total liabilities (excluding net assets attributable to unitholders) 62,177,673 9,689,868 Net assets attributable to unitholders 3, 5 115,176,300 The notes on pages 19 to 54 are an integral part of these financial statements.

15 12 STATEMENT OF NET ASSETS (CONTINUED) AS AT 8TH MARCH 2018 (TERMINATION DATE) Fidelity WorldWide Fund Global Equity Income Fund Note As at 8th March 2018 (termination date) USD As at 31st December 2016 USD Assets Current assets Financial assets at fair value through profit or loss 6, 9 2,912,386 Dividend receivable 2,479 6,218 Cash and cash equivalents 11 3,348, ,202 Total assets 3,351,289 3,069,806 Liabilities Current liabilities Amounts payable on redemption of units 3,349,379 Other payables 11 1,910 52,550 Total liabilities (excluding net assets attributable to unitholders) 3,351,289 52,550 Net assets attributable to unitholders 3, 5 3,017,256 The notes on pages 19 to 54 are an integral part of these financial statements.

16 13 STATEMENT OF COMPREHENSIVE INCOME Fidelity WorldWide Fund RMB Bond Fund Note For the period from 1st January 2017 to 8th March 2018 (termination date) RMB For the year ended 31st December 2016 RMB Income Interest on bank deposits 11 29,034 4,550 Reimbursement income , ,680 Realised gains on disposal of financial assets and financial liabilities at fair value through profit or loss 7,425,584 7,383,121 Change in unrealised gains in value of financial assets and financial liabilities at fair value through profit or loss 481,462 1,267,648 Net foreign currency (losses)/gains (163,976) 102,615 Total net income 8,446,084 9,276,614 Expenses Investment management fees 7(a) (963,842) (1,030,269) Trustee fees 7(b) (25,703) (27,473) Safe custody and bank charges 11 (34,306) (28,883) Auditor s remuneration 7(c) (75,121) (91,407) Administration and accounting fees 11 (140,475) (135,679) Registration fees (7,213) (7,737) Establishment costs (206,324) (197,162) Legal and other professional fees (79,296) (17,270) Other operating expenses 11 (203,589) (325,234) Total operating expenses (1,735,869) (1,861,114) Finance costs Distributions 13 (3,278,932) (3,108,047) Total finance costs (3,278,932) (3,108,047) Increase in net assets attributable to unitholders from operations 3,431,283 4,307,453 The notes on pages 19 to 54 are an integral part of these financial statements.

17 14 STATEMENT OF COMPREHENSIVE INCOME (CONTINUED) Fidelity WorldWide Fund Global Equity Income Fund Note For the period from 1st January 2017 to 8th March 2018 (termination date) USD For the year ended 31st December 2016 USD Income Interest on bank deposits 11 1, Reimbursement income Dividend income 99,101 97,870 Other income 11 17,784 Realised gains/(losses) on disposal of financial assets and financial liabilities at fair value through profit or loss 462,297 (53,971) Change in unrealised (losses)/gains in value of financial assets and financial liabilities at fair value through profit or loss (43,673) 83,617 Net foreign currency losses (1,159) (2,364) Total net income 535, ,219 Expenses Investment management fees 7(a) (42,203) (45,401) Trustee fees 7(b) (768) (606) Safe custody and bank charges 11 (8,862) (7,181) Auditor s remuneration 7(c) (8,854) (10,336) Administration and accounting fees 11 (11,665) (9,687) Registration fees (1,264) Transaction costs on financial assets and financial liabilities at fair value through profit or loss (2,504) (1,526) Establishment costs (9,276) Legal and other professional fees (1,218) (2,657) Other operating expenses 11 (3,560) (11,348) Total operating expenses (79,634) (99,282) Net profit before taxation 455,970 25,937 Taxation Withholding tax 8 (20,730) (18,874) Increase in net assets attributable to unitholders from operations 435,240 7,063 The notes on pages 19 to 54 are an integral part of these financial statements.

18 15 STATEMENT OF CHANGES IN NET ASSETS ATTRIBUTABLE TO UNITHOLDERS Fidelity WorldWide Fund RMB Bond Fund Note For the period from 1st January 2017 to 8th March 2018 (termination date) RMB For the year ended 31st December 2016 RMB Net assets attributable to unitholders at beginning of the period/year 115,176, ,807,967 Subscription of units 5 125,834,394 83,456,811 Redemption of units 5 (244,441,977) (111,395,931) Net decrease from units transactions (118,607,583) (27,939,120) Increase in net assets attributable to unitholders from operations 3,431,283 4,307,453 Net assets attributable to unitholders at end of the period/year 115,176,300 The notes on pages 19 to 54 are an integral part of these financial statements.

19 16 STATEMENT OF CHANGES IN NET ASSETS ATTRIBUTABLE TO UNITHOLDERS (CONTINUED) Fidelity WorldWide Fund Global Equity Income Fund Note For the period from 1st January 2017 to 8th March 2018 (termination date) USD For the year ended 31st December 2016 USD Net assets attributable to unitholders at beginning of the period/year 3,017,256 2,982,135 Subscription of units 5 46,901 Redemption of units 5 (3,452,496) (18,843) Net (decrease)/increase from units transactions (3,452,496) 28,058 Increase in net assets attributable to unitholders from operations 435,240 7,063 Net assets attributable to unitholders at end of the period/year 3,017,256 The notes on pages 19 to 54 are an integral part of these financial statements.

20 17 STATEMENT OF CASH FLOWS Fidelity WorldWide Fund RMB Bond Fund Note For the period from 1st January 2017 to 8th March 2018 (termination date) RMB For the year ended 31st December 2016 RMB Cash flows from operating activities Increase in net assets attributable to unitholders from operations 3,431,283 4,307,453 Adjustment for: Distributions 3,278,932 3,108,047 Operating profit before working capital changes 6,710,215 7,415,500 Net decrease in financial assets at fair value through profit or loss 116,089,823 22,291,596 Net (decrease)/increase in financial liabilities at fair value through profit or loss (290,568) 264,081 Net decrease/(increase) in other receivables 32,481 (3,804) Net (decrease)/increase in other payables (576,169) 63,931 Net cash generated from operating activities 121,965,782 30,031,304 Cash flows from financing activities Proceeds from subscription of units 126,318,245 83,076,222 Payments on redemption of units (191,087,435) (102,635,240) Distributions (3,278,932) (3,108,047) Net cash used in financing activities (68,048,122) (22,667,065) Net increase in cash and cash equivalents 53,917,660 7,364,239 Cash and cash equivalents at beginning of the period/year 8,244, ,438 Cash and cash equivalents at end of the period/year 62,162,337 8,244,677 Analysis of balances of cash and cash equivalents: Cash and bank deposits (representing cash and bank deposits with original maturity of 3 months or less) 11 62,162,337 8,244,677 The notes on pages 19 to 54 are an integral part of these financial statements.

21 18 STATEMENT OF CASH FLOWS (CONTINUED) Fidelity WorldWide Fund Global Equity Income Fund Note For the period from 1st January 2017 to 8th March 2018 (termination date) USD For the year ended 31st December 2016 USD Cash flows from operating activities Increase in net assets attributable to unitholders from operations 435,240 7,063 Adjustments for: Dividend Income (99,101) (97,870) Withholding tax 20,730 18,874 Operating profit/(loss) before working capital changes 356,869 (71,933) Net decrease in financial assets at fair value through profit or loss 2,912,386 71,892 Net (decrease)/increase in other payables (50,640) 16,330 Cash generated from operating activities 3,218,615 16,289 Dividend received 102,840 95,701 Withholding tax paid (20,730) (18,874) Net cash generated from operating activities 3,300,725 93,116 Cash flows from financing activities Proceeds from subscription of units 46,901 Payments on redemption of units (103,117) (18,843) Net cash (used in)/generated from financing activities (103,117) 28,058 Net increase in cash and cash equivalents 3,197, ,174 Cash and cash equivalents at beginning of the period/year 151,202 30,028 Cash and cash equivalents at end of the period/year 3,348, ,202 Analysis of balances of cash and cash equivalents: Cash and bank deposits (representing cash and bank deposits with original maturity of 3 months or less) 11 3,348, ,202 The notes on pages 19 to 54 are an integral part of these financial statements.

22 19 1 The Fund Fidelity WorldWide Fund (the Fund ) is an open-ended unit trust established under the terms of the trust deed dated 17th October 2012 (the Trust Deed ) between FIL Investment Management (Hong Kong) Limited (the Investment Manager ) and Cititrust Limited (the Trustee ). The Fund has two sub-funds as at 8th March 2018 (termination date), Fidelity WorldWide Fund - RMB Bond Fund and Fidelity WorldWide Fund - Global Equity Income Fund referred to individually or collectively as the sub-fund(s), which are authorised by the Securities and Futures Commission of Hong Kong (the SFC ) pursuant to section 104(1) of the Securities and Futures Ordinance. As at 8th March 2018 (termination date), there were four classes of units in relation to the Fidelity WorldWide Fund - RMB Bond Fund - Class A-ACC-RMB, Class A-MDIST-RMB, Class A-MINCOME(G)-RMB and Class A-ACC-USD. As at 8th March 2018 (termination date), there were two classes of units in relation to Fidelity WorldWide Fund - Global Equity Income Fund - Class A-ACC-USD and Class I-ACC-USD. Termination of the Fund and sub-funds Pursuant to the Notice to Unitholders dated 30th November 2017 issued by the Investment Manager, the Fund and sub-funds are terminated with effect on 8th March 2018 (termination date) in accordance with the Clause 27.3 of the Trust Deed of the Fund, as its aggregate net asset value falls below US$50 million and it is no longer in the interests of the unitholders and would be uneconomical to maintain the sub-funds. In accordance with the Notice to the Unitholders dated 30th November 2017 issued by the Investment Manager, all costs and expenses associated with the termination of the sub-fund (other than normal operating expenses such as transaction costs and any taxes relating to the liquidation of assets of a sub-fund) are borne by the Investment Manager. The estimated expenses associated with liquidation have not been accrued in the Statement of Net Assets as at 8th March 2018 (termination date) and Statement of Comprehensive Income for the period from 1st January 2017 to 8th March 2018 (termination date). These financial statements relate to the above-mentioned sub-funds. The Investment Manager and the Trustee (collectively, the Management ) are responsible for the preparation of the financial statements. Fidelity WorldWide Fund - RMB Bond Fund The objective of the sub-fund is to achieve income and capital appreciation via exposure to Chinese Renminbi ( RMB ) denominated fixed income/debt securities, fixed income/debt instruments and deposits which include but are not limited to convertible bonds, corporate bonds, government bonds, commercial papers, medium term notes, floating rate notes, bankers acceptances and money market instruments (including but not limited to certificates of deposits, bank deposits, negotiated term deposits and commercial papers). These investments may be settled in RMB or in other currencies such as United States Dollar ( USD ) or Hong Kong Dollar ( HKD ). Exposure to non-rmb denominated debt securities may be hedged in order to seek to maintain the currency exposure in RMB.

23 20 1 The Fund (Continued) Fidelity WorldWide Fund - Global Equity Income Fund The objective of the sub-fund is to achieve income and long-term capital growth by investing principally (i.e. at least 70% of the sub-fund s net asset value) in income-producing equity securities globally. The Investment Manager will target investments which it believes offer attractive dividend yields in additional to price appreciation. 2 Summary of significant accounting policies The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the period/year presented, unless otherwise stated. (a) Basis of preparation The financial statements have been prepared in accordance with all applicable Hong Kong Financial Reporting Standards ( HKFRS ) issued by the Hong Kong Institute of Certified Public Accountants ( HKICPA ). The financial statements have been prepared under the historical cost convention, as modified by the revaluation of financial assets and financial liabilities (including derivative financial instruments) at fair value through profit or loss. As mentioned in note 1 to the financial statements, the sub-funds will be terminated on 8th March 2018 (termination date) in accordance with the Notice to Unitholders dated 30th November 2017 issued by the Investment Manager. Accordingly, the financial statements of the sub-funds for the period from 1st January 2017 to 8th March 2018 (termination date) have been prepared on a non-going concern basis. The Management has assessed that the values of all assets and liabilities at the termination date approximate their net realizable values, and therefore no changes to accounting policies or adjustments have been made in the financial statements of the sub-funds in order to reflect the fact that it will be able to realise its assets or to extinguish its liabilities in the normal course of business. The preparation of financial statements in conformity with HKFRS requires the Management to make judgements, estimates and assumptions that affect the application of 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 judgements 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 unitholders unless otherwise stated.

24 21 2 Summary of significant accounting policies (Continued) (a) Basis of preparation (Continued) Standards and amendments to existing standards effective 1st January 2017 Amendments to HKAS 7, Statement of Cash Flows became effective for annual periods beginning on or after 1 January These amendments require an entity to provide disclosures that enable users of financial statements to evaluate changes in liabilities arising from financing activities, including both changes arising from cash flows and non-cash changes. Adoption of these amendments did not have a material impact on the sub-funds financial statements. There are no standards, interpretations or amendments to existing standards that are effective for the first time for the financial year beginning 1st January 2017 that would be expected to have a material impact on the sub-funds. (b) Financial assets and financial liabilities at fair value through profit or loss (i) Classification The sub-funds classify their investments in debt and equity securities, and derivatives as financial assets or financial liabilities at fair value through profit or loss. This category has two sub-categories: financial assets or financial liabilities held for trading; and those designated at fair value through profit or loss at inception. Financial assets and liabilities held for trading A financial asset or financial liability is classified as held for trading if it is acquired or incurred principally for the purpose of selling or repurchasing in the near term or if on initial recognition is part of a portfolio of identifiable financial investments that are managed together and for which there is evidence of a recent actual pattern of shortterm profit taking. Derivatives are also categorised as held for trading. The sub-funds do not classify any derivatives as hedges in a hedging relationship. Financial assets and liabilities designated at fair value through profit or loss at inception Financial assets and financial liabilities designated at fair value through profit or loss at inception are financial instruments that are not classified as held for trading but are managed, and their performance is evaluated on a fair value basis in accordance with the sub-funds documented investment strategy.

25 22 2 Summary of significant accounting policies (Continued) (b) Financial assets and financial liabilities at fair value through profit or loss (Continued) (ii) Recognition, derecognition and measurement Regular purchases and sales of investments are recognised on the trade date the date on which the sub-funds commit to purchase or sell the investment. Financial assets and financial liabilities at fair value through profit or loss are initially recognised at fair value. Derivatives are recognised at fair value on the date on which a derivative contract is entered into. Transaction costs are expensed as incurred in the Statement of Comprehensive Income. Financial assets are derecognised when the rights to receive cash flows from the investments have expired or the sub-funds have transferred substantially all risks and rewards of ownership. 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 Financial assets or financial liabilities at fair value through profit or loss category are presented in the Statement of Comprehensive Income within Change in unrealised (losses)/gains in value of financial assets and financial liabilities at fair value through profit or loss and Realised gains/(losses) on disposal of financial assets and financial liabilities at fair value through profit or loss in the period/year in which they arise. Subsequent changes in the fair value of any derivative instrument are recognised immediately in the Statement of Comprehensive Income. (iii) 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. The fair value of financial assets and liabilities traded in active markets (such as publicly traded equities and debt securities) are based on quoted market prices at the close of trading on the reporting date. The quoted market price used for both financial assets and financial liabilities held by the sub-funds is the last traded market price where the last traded market price falls within the bid-ask spread. In circumstances where the last traded price is not within the bid-ask spread, management will determine the point within the bid-ask spread that is more representative of fair value. Investments which are not listed on an exchange or are thinly traded are valued by using quotes from brokers. (iv) Transfers between levels of the fair value hierarchy Transfers between levels of the fair value hierarchy are deemed to have occurred at the beginning of the reporting period/year.

26 23 2 Summary of significant accounting policies (Continued) (c) Offsetting financial instruments Financial assets and liabilities are offset and the net amount reported in the Statement of Net Assets where the sub-funds currently have a legally enforceable right to set-off the recognised amounts and there is an intention to settle on a net basis or realise the asset and settle the liability simultaneously. (d) Income Dividend income is recognised when the right to receive payment is established, with the corresponding foreign withholding taxes recorded as an expense. Interest income from bank deposits is recognised on a time-proportionate basis using the effective interest method. Other income is accounted for on an accruals basis and credited to the Statement of Comprehensive Income. (e) Expenses All expenses are accounted for on an accruals basis and are charged to the Statement of Comprehensive Income. (f) Redeemable units Fidelity WorldWide Fund - RMB Bond Fund issues four classes of redeemable units and Fidelity WorldWide Fund - Global Equity Income Fund issues two classes of redeemable units. These classes of redeemable units are redeemable at the holder s option, do not have identical rights and neither/no class is subordinated to the other. Such units are classified as financial liabilities. Redeemable units can be put back to the sub-funds at any dealing date for cash equal to a proportionate share of the sub-funds net asset value attributable to the unit class. Units are redeemable daily. The redeemable units are carried at the redemption amount that is payable at the year/period end date if the holder exercises the right to put the unit back to the sub-funds. Redeemable units are issued and redeemed at the holder s option at prices based on the sub-funds net asset value per unit at the time of issue or redemption. The sub-funds net asset value per unit is calculated by dividing the net assets attributable to the holders of each class of redeemable units with the total number of outstanding redeemable units for each respective class. In accordance with the provisions of the sub-funds offering document, investment positions are valued based on the last traded market price for the purpose of determining the net asset value per unit for subscriptions and redemptions.

27 24 2 Summary of significant accounting policies (Continued) (g) Proceeds and payments on subscription and redemption of units Proceeds and payments on the subscription and redemption of units are recorded in the subfunds Statement of Changes in Net Assets Attributable to Unitholders. The price at which units are subscribed or redeemed is calculated by reference to the net asset value per unit as at the close of business on the relevant dealing day. (h) Foreign currency translation (i) Functional and presentation currency Fidelity WorldWide Fund - RMB Bond Fund The primary activity of the sub-fund is to invest in RMB denominated fixed income/debt securities and derivatives to achieve income and capital appreciation. Whilst RMB is traded both onshore in China and offshore (primarily in Hong Kong), it is the same currency although currently traded at different rates. The exchange rate for the onshore RMB market in China is generally referred to as CNY ; the exchange rate for the offshore RMB market in Hong Kong is generally referred to as CNH. The CNH rate will be used when determining the value of the redeemable units of the subfund. The Management considers the RMB to be the currency that most faithfully represents the economic effect of the underlying transactions, events and conditions. The RMB is the currency in which the sub-fund measures its performance and reports its results. The financial statements of this sub-fund are presented in RMB, which is the subfund s functional and presentation currency. Fidelity WorldWide Fund - Global Equity Income Fund The primary activity of the sub-fund is to invest in income-producing equity securities globally to achieve income and long-term capital growth. The Management considers the USD to be the currency that most faithfully represents the economic effect of the underlying transactions, events and conditions. The USD is the currency in which the sub-fund measures its performance and reports its results. The financial statements of this sub-fund are presented in USD, which is the subfund s functional and presentation currency.

28 25 2 Summary of significant accounting policies (Continued) (h) Foreign currency translation (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 period/year end date. Foreign exchange gains and losses arising from translation are included in the Statement of Comprehensive Income. Foreign exchange gains and losses relating to cash and cash equivalents are presented in the Statement of Comprehensive Income within Net foreign currency (losses)/gains. Foreign exchange gains and losses relating to financial assets and liabilities carried at fair value through profit or loss are presented in the Statement of Comprehensive Income within Realised gains/(losses) on disposal of financial assets and financial liabilities at fair value through profit or loss and Change in unrealised (losses)/gains in value of financial assets and financial liabilities at fair value through profit or loss. (i) Cash and cash equivalents Cash and cash equivalents include cash at bank, bank deposits with original maturities of 3 months or less from the date of placement net of bank overdrafts, if any. (j) Amounts receivable on sale of financial assets at fair value through profit or loss/payable on purchase of financial assets at fair value through profit or loss Amounts receivable on sale of financial assets at fair value through profit or loss/payable on purchase of financial assets at fair value through profit or loss represent receivables for securities sold and payables for securities purchased that have been contracted for but not yet settled or delivered on the period/year end date respectively. These amounts are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method, less provision for impairment for amounts receivable on sale of financial assets at fair value through profit or loss. (k) Accrued expenses Accrued expenses are recognised initially at fair value and subsequently stated at amortised cost using the effective interest method.

29 26 2 Summary of significant accounting policies (Continued) (l) Distributions payable to unitholders Proposed distributions to unitholders are recognised in the Statement of Comprehensive Income as finance costs when they are approved by the Management. 3 Net assets attributable to unitholders The sub-funds use last traded prices as their valuation inputs for financial assets and liabilities. This is consistent with the inputs prescribed in the sub-funds offering document for the calculation of their per unit trading value for subscriptions and redemptions. The sub-funds objectives and policies for managing their obligations to redeem these instruments are included in note 6(c) on liquidity risk and note 6(e) on capital risk management. 4 Critical accounting estimates and judgements The Investment Manager makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. Estimates are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are outlined below. Fair value of investments Fidelity WorldWide Fund - RMB Bond Fund holds a number of unlisted debt securities that are valued by reference to broker quotes. In determining the fair value of such investments, the Investment Manager exercises judgements and estimates on the sources of brokers and the quantity and quality of quotes used. Such quotes may be indicative and not executable or legally binding. As such, broker quotes do not necessarily indicate the price at which the security could actually be traded as of the year end date. Actual transacted prices may differ from the quotes provided by the brokers. The Investment Manager considers that in the absence of any other reliable market sources, the broker quotes available to them reflects the best estimate of fair value.