CIFM (HK) RMB Diversified Income Fund. A Sub-Fund of CIFM Funds

Transcription

1 A Sub-Fund of CIFM Funds Interim report For the half-year ended 2016 (Unaudited)

2 Contents Management and administration Report of the Manager Statement of financial position Statement of comprehensive income Statement of changes in net assets attributable to unitholders of redeemable units Notes to the financial statements Statement of movements in investment portfolio Investment portfolio Performance table

3 Management and Administration Manager CIFM Asset Management (Hong Kong) Limited 7th Floor, No. 33 Des Voeux Road Central Hong Kong Directors of the Manager Chang She-Lin Jing Xiaoyun Ho Ming-Fu Wu Chi Keung Investment Adviser China International Fund Management Co., Ltd. 20th Floor, Aurora Building No. 99 Fu Cheng Road Pudong, Shanghai P.R.C Solicitors to the Manager Deacons 5th Floor, Alexandra House 18 Chater Road Central Hong Kong Trustee and Registrar State Street Trust (HK) Limited 68th Floor, Two International Finance Centre 8 Finance Street Central Hong Kong Administrator State Street Trust (HK) Limited 68th Floor, Two International Finance Centre 8 Finance Street Central Hong Kong Auditor PricewaterhouseCoopers 21st Floor, Edinburgh Tower 15 Queen s Road Central Hong Kong RQFII Custodian China Construction Bank Corporation 25 Financial Avenue Xi Cheng District, Beijing P.R.C

4 Report of the Manager Introduction CIFM (HK) Diversified Income Fund (the Sub-Fund ) is a Sub-Fund of CIFM Funds, an umbrella unit trust established under the laws of Hong Kong by the trust. Through the Renminbi Qualified Foreign Institutional Investor ( RQFII ) quota of 800 million obtained by the Manager, the Sub-Fund primarily (i.e. not less than 80% of its net assets) invest in (A) denominated and settled debt securities (including but are not limited to fixed rate or floating rate bonds, convertible bonds, commercial papers, central bank bills, short-term financing bills and certificates of deposits) issued and distributed within mainland China, and (B) fixed income funds which are authorised by the China Securities Regulatory Commission ( CSRC ) for offer to the retail public in the PRC. Market Review The weak economy, the low inflation environment as well as the ample liquidity have given support to the bond market. For the six months ended March 31, 2016, we saw continued rally in the bond market. In particular, the 10 year CGB yield was down from 3.24% to 2.84%, while the 5 year AAA grade corporate bond yield down from 4.02% to 3.25%. Elsewhere, for the A-share market, the CSI300 Index was up 0.47% whereas the ChiNext Composite Index up 12.27% during the six-month period. Yet, volatility for the market remained high, with the rebound in 4Q2015 being wiped out by the sharp correction in January In addition to the fragile market confidence, we believe the decline in January was mainly caused by market s lowering their expectation on the launch of monetary loosening policies at that time, the lifting of restrictions for major shareholders selling their stakes and the introduction of circuit breaker mechanism at January 1, 2016 (The mechanism was suspended since January 8, 2016). Market Outlook More recently, China reported the official Manufacturing PMI for March at 50.2 and Industrial production growth at 6.8% YoY, with both better than market s expectation. We think the early sign of economy recovery is encouraging although we need to monitor whether this trend is sustainable. For the bond market, we expect credit risk will be the market focus this year. In spite of the credit events last year, the rich liquidity has helped keep the credit spread and yield at low level. Looking forward, we think risks are still on the increasing volume of local government bond this year and deleverage on bond market, with some credit events also making the yield go up. Portfolio Strategy For the bond portfolio, we would maintain our position at low level and wait for a better entry point as when the yield rebounds to a relatively desirable level. We prefer sectors with relatively low correlation to the economic cycle. We would continue to focus on credit bonds with higher credit rating. For the equity portfolio, we would maintain our equity holdings at relatively low level and would consider increasing our holdings should we see market stabilize. 3

5 Statement of financial position As at 2016 (Unaudited) Note 2016 As at 30 September 2015 Assets Non-Current Assets Deposit reserve 30,066 39,923 Current Assets Cash and cash equivalents 19,198,770 16,206,417 Subscription receivable 147, ,680 Investments 108,343, ,238,472 Interest receivables 3,799,946 4,418, ,489, ,240,021 Total assets 131,519, ,279,944 Liabilities Non-Current Liabilities Deferred tax liability 183, ,774 Current Liabilities Distribution payable 935,093 1,544,948 Redemption payable 2,160,316 3,333,730 Withholding tax provision 750, ,456 Other accounts payable 542, ,369 4,389,290 6,128,503 Total liabilities (excluding net assets attributable to unitholders of redeemable units) 4,572,932 6,449,277 The notes on pages 9 to 19 form an integral part of these unaudited interim financial statements. 4

6 Note 2016 As at 30 September 2015 Net assets attributable to unitholders of redeemable units (before fair value adjustment) 126,946, ,830,667 Fair value adjustment of units of the Sub-Fund 3 109, ,911 Net assets attributable to unitholders of redeemable units (after fair value adjustment) 127,056, ,050,578 The notes on pages 9 to 19 form an integral part of these unaudited interim financial statements. 5

7 Statement of comprehensive income For the half-year ended 2016 (Unaudited) Note 2016 Half-year ended 2015 Income Interest income 3,673,169 3,096,912 Net changes in fair value on investments (2,096,633) 6,736,584 Net foreign exchange gain/(loss) 92,466 (17,059) Other income 43 9,019 Total net income 1,669,045 9,825,456 Expenses Administration fee 14,768 13,873 Audit fee 98,975 76,505 Formation expenses 147,865 Management fee 853, ,855 Transaction cost 26,210 87,412 Trustee fee 120,383 97,109 Other operating expenses 273,803 71,802 Total operating expenses 1,387,176 1,300,421 Operating profit 281,869 8,525,035 Finance cost Distributions to unitholders of redeemable units (4,032,486) (2,394,051) Profit/(loss) after distributions and before tax (3,750,617) 6,130,984 Taxation 4 (171,817) (495,445) (3,922,434) 5,635,539 The notes on pages 9 to 19 form an integral part of these unaudited interim financial statements. 6

8 Note 2016 Half-year ended 2015 Change in cumulative difference arising from the fair value adjustment of units of the Sub-Fund (109,956) 48,479 Increase/(decrease) in net assets attributable to holders of redeemable units and total comprehensive income (4,032,390) 5,684,018 The notes on pages 9 to 19 form an integral part of these unaudited interim financial statements. 7

9 Statement of changes in net assets attributable to unitholders of redeemable units For the half-year ended 2016 (Unaudited) 2016 Half-year ended 2015 Net assets attributable to unitholders of redeemable units at the beginning of the half-year 162,050, ,804,992 Subscription of units 7,213,311 59,947,262 Redemption of units (38,175,096) (41,086,815) Net increase from unit transactions 131,088, ,665,439 Increase/(decrease) in net assets attributable to unitholders of reedemable units and total comprehensive income (4,032,390) 5,684,018 Net assets attributable to unitholders of redeemable units at the end of the half-year 127,056, ,349,457 The notes on pages 9 to 19 form an integral part of these unaudited interim financial statements. 8

10 1 The Sub-Fund Notes to the Financial Statements CIFM Funds (the Trust ) is an umbrella unit trust authorised under section 104 of the Securities and Futures Ordinance and is established under the terms of the Trust Deed between CIFM Asset Management (Hong Kong) Limited (the Manager ) and State Street Trust (HK) Limited (the Trustee ), dated 25 September 2013, as amended, and governed by the laws of Hong Kong. The Trustee has appointed State Street Bank and Trust Company as the global custodian of the Trust. The Trust currently offers one Sub-Fund, CIFM (HK) Diversified Income Fund (the Sub-Fund ) which is authorised by the Securities and Futures Commission of Hong Kong. The date of commencement of operations of the Sub-Fund was 6 December The investment objective of the Sub-Fund is to achieve long term capital appreciation by investing in debt securities and equity securities which are denominated and settled in and are issued or listed in China through the RQFII quota of the Manager. All unitholders of redeemable units rights with regard to the convening, voting or otherwise acting at any meeting of unitholders of redeemable units are the same. 2 Summary of principal accounting policies (a) Accounting policies of interim financial statements The principal accounting policies applied in the preparation of these unaudited condensed interim financial statements are consistent with those used in the annual financial statements for the year ended 30 September (b) Investments Classification The Manager classifies the investments of the Sub-Fund as financial assets or financial liabilities at fair value through profit or loss. These financial assets or financial liabilities are held-for-trading as they are acquired or incurred principally for the purpose of selling or repurchasing in the near term or short-term profit taking. Recognition, derecognition and measurement Purchases and sales of investments are accounted for on the trade date basis. Investments are initially recognised at fair value and are subsequently re-measured at fair value. Realised and unrealised gains and losses on investments are recognised in the statement of comprehensive income in the period in which they arise. Investments are derecognised when the rights to receive cash flows from the investments have expired or the Sub-Fund has transferred substantially all risks and rewards of ownership. 9

11 Fair value estimation Investments that are listed or traded on an exchange and investments with prices quoted in over-thecounter markets or by market makers, are fair valued based on quoted last traded market price on reporting date. When trading in the securities of an investee company is suspended, or the quoted market prices are not available, the investment is valued at the Manager s estimate of its fair value. Debt securities are fair valued based on quoted prices exclusive accrued interest. Transfer between levels of the fair value hierarchy Transfers between levels of the fair value hierarchy are deemed to have occurred at the end of the reporting period. (c) Income and expenses Interest income is recognised in the statement of comprehensive income on a time-proportionate basis using the effective interest method. The effective interest method is a method of calculating the amortised cost of an interest bearing asset and of allocating the interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts throughout the expected life of the financial instrument, or a shorter period where appropriate, to the net carrying amount of the financial instrument. When calculating the effective interest rate, the Manager estimates cash flows considering all contractual terms of the financial instrument (for example, prepayment options) but does not consider future credit losses. The calculation includes all fees and points received between parties to the contract that are an integral part of the effective interest rate, transaction costs and all other premiums or discounts. Dividend income is recorded on the ex-dividend date with the corresponding foreign withholding taxes recorded as an expense. Expenses are accounted for on an accrual basis. (d) Foreign currency translation Functional and presentation currency Items included in the financial statements are measured using the currency of the primary economic environment in which the Sub-Fund operates (the functional currency ). The Manager mainly invests the Sub-Fund s asset in debt securities in the People s Republic of China ( PRC ) and the performance of the Sub-Fund is measured and reported to the unitholders of redeemable units in. The Manager considers as the currency that most faithfully represents the economic effects of the underlying transactions, events and conditions. The financial statements are presented in, which is the Sub-Fund s functional and presentation currency. 10

12 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 reporting date. Foreign exchange gains and losses arising from translation are included in the statement of comprehensive income. Foreign exchange gains and losses relating to the financial assets and liabilities carried at fair value through profit or loss are presented in the statement of comprehensive income within net changes in fair value on investments. (e) Cash and cash equivalents For the purpose of the statement of cash flows, cash and cash equivalents include cash in hand, demand deposits, other short-term highly liquid investments with original maturities of three months or less and bank overdrafts. (f) Other receivables and payables Other receivables and payables are recognised initially at fair value and subsequently stated at amortised cost using the effective interest method. (g) Distribution payable to unitholders of redeemable units Distribution payable to unitholders of redeemable units are recognised in the statement of comprehensive income when they are approved by the Manager. (h) Transaction costs Transaction costs are costs incurred to acquire financial assets at fair value through profit or loss. They include the fees and commissions paid to agents, advisers, brokers and dealers. Transaction costs are expensed as incurred in the statement of comprehensive income. (i) Formation expenses Formation expenses are recognised as an expense in the period in which they are incurred. (j) Taxation The Sub-Fund currently incurs withholding taxes imposed by the PRC on investment income. Such income is recorded gross of withholding taxes in the statement of comprehensive income. Withholding taxes and capital gains tax are included as taxation in the statement of comprehensive income. 11

13 Tax provisions are also made on the gain arising from PRC investments which the Manager expects such amount may have to be paid to the tax authorities. Deferred income tax is provided, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. However, the deferred income tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction that at the time of the transaction affects neither accounting nor taxable profit or loss. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the statement of financial position date and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled. Deferred income tax assets are recognised to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised. Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities and when the deferred income tax assets and liabilities relate to income taxes levied by the same taxation authority or either the taxable entity or different taxable entities when there is an intention to settle the balances on a net basis. (k) Proceeds and payments on allotment and redemption of units The net asset value per unit is computed for each dealing day. The price at which units are allotted or redeemed is calculated by reference to the net asset value per unit as at the close of business on the relevant dealing day in accordance with the provisions of the Trust Deed dated 25 September 2013, as amended, which may be different from the accounting policies stated in the financial statements. (l) Redeemable units Units of the Sub-Fund are redeemable at the holders option, representing puttable financial instruments of the Sub-Fund. The Manager classifies the Sub-Fund s puttable financial instruments as liabilities as more than one class of redeemable shares of the Sub-Fund are issued, which are redeemable at the unitholders of the redeemable units option and do not have identical rights. Units are issued and redeemed at the holders option at prices based on the Sub-Fund s net asset value per unit at the time of issue or redemption. (m) Offsetting financial instruments Financial assets and liabilities are offset and the net amount reported in the statement of financial position when there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis or realise the asset and settle the liability simultaneously. The legally enforceable right must not be contingent on future events and must be enforceable in the normal course of business and in the event of default, insolvency or bankruptcy of the company or the counterparty. 12

14 3 Number of units in issue and net assets attributable to unitholders of redeemable units per unit As at 2016, the Sub-Fund issued 9 classes of units Class A, X, PA, PX, PI, PH, PY, U and Y. Class A, X, PA, PX, PY and Y units are available for sale to the retail public in Hong Kong. Class PI, PH and U units are offered to institutional investors. For the half-year ended 2016 Class A units Class X units Class PA units Class PX units Number of units in issue: At the beginning of the period 158, , , , Units issued 6, , , Units redeemed (30, ) (94, ) (23, ) At the end of the period 134, , , , HKD HKD Net assets attributable to unitholders of redeemable units (after fair value adjustment) 15,251,508 1,602,500 48,738,395 10,699,331 Net assets attributable to unitholders of redeemable units (per unit)

15 For the half-year ended 2016 Class PI units Class PH units Class U units Class Y units Number of units in issue: At the beginning of the period 240, , , Units issued 4, , Units redeemed (187, ) At the end of the period 58, , , , HKD USD USD Net assets attributable to unitholders of redeemable units (after fair value adjustment) 6,008,676 8,215, , ,460 Net assets attributable to unitholders of redeemable units (per unit) For the half-year ended 2016 Class PY units Class I units Class H units Number of units in issue: At the beginning of the period 53, Units issued 2, Units redeemed (5, ) At the end of the period 51, USD HKD Net assets attributable to unitholders of redeemable units (after fair value adjustment) 5,004,428 Net assets attributable to unitholders of redeemable units (per unit)

16 For the year ended 30 September 2015 Class A units Class X units Class PA units Class PX units Number of units in issue: At the beginning of the period 209, , , , Units issued 167, , , , Units redeemed (218, ) (200, ) (482, ) (91, ) At the end of the period 158, , , , HKD HKD Net assets attributable to unitholders of redeemable units (after fair value adjustment) 17,991,088 1,629,515 57,919,867 13,001,770 Net assets attributable to unitholders of redeemable units (per unit) For the year ended 30 September 2015 Class PI units Class PH units Class U units Class Y units Number of units in issue: At the beginning of the period 90, , Units issued 180, , , Units redeemed (30, ) (38, ) At the end of the period 240, , , HKD USD USD Net assets attributable to unitholders of redeemable units (after fair value adjustment) 25,780,741 8,317, ,471 96,213 Net assets attributable to unitholders of redeemable units (per unit)

17 For the year ended 30 September 2015 Class PY units Class I units Class H units Number of units in issue: At the beginning of the period Units issued 56, , Units redeemed (2, ) ( ) (131, ) At the end of the period 53, USD HKD Net assets attributable to unitholders of redeemable units (after fair value adjustment) 5,445,858 Net assets attributable to unitholders of redeemable units (per unit) In accordance with the explanatory memorandum, the formation costs incurred in the formation of the Sub-Fund are borne by the Sub-Fund. Such expenses will be amortised over 3 years. As at 2016, the unamortised formation expenses of the Sub-Fund of 109,955 (2015: 219,911) were expensed in the financial statements as Fair value adjustment of units of the Sub-Fund. Net assets attributable to unitholders of redeemable units represent a liability in the statement of financial position, carried at the redemption amount that would be payable at the statement of financial position date if the unitholders of redeemable units exercised the right to redeem the shares. Consequently, for the half-year ended 2016, the difference described above of 109,956 (2015: 48,479) is recognised in the statement of comprehensive income and the statement of financial position. 4 Taxation Hong Kong Profits Tax No provision for Hong Kong profits tax has been made for the Sub-Fund as it was authorised as a collective investment scheme under Section 104 of the Hong Kong Securities and Futures Ordinance and is therefore exempt from profits tax under Section 26A(1A) of the Hong Kong Inland Revenue Ordinance. PRC Withholding Tax For the period from 1 October 2015 to 2016, the Sub-Fund had invested in A-shares and denominated debt securities in PRC. 16

18 The taxation of the Sub-Fund for the half-year represents: 2016 Half-year ended 2015 Capital gains tax on gross realised gains on investments 24,371 67,401 Deferred tax charged on change in unrealised gains on investments (137,132) 12,813 (112,761) 80,214 Withholding tax on interest income 284, , , ,231 Taxation 171, ,445 The movement in deferred tax liabilities arising from change in unrealised gains on investments during the half-year is as follows: 2016 Half-year ended 2015 At the beginning of the half-year 320, ,321 Deferred tax charged to the statement of comprehensive income (137,132) 12,813 At the end of the half-year 183, ,134 The movement in provision for taxation during the half-year is as follows: 2016 Half-year ended 2015 At the beginning of the half-year 788, ,386 Taxation charged to the statement of comprehensive income 308, ,632 Tax paid (346,429) (278,721) At the end of the half-year 750, ,297 17

19 5 Soft commission arrangements The Manager and any Connected Persons of the Manager may effect transactions for the account of the Sub-Fund through the agency of another person with whom the Manager and any of its Connected Persons have an arrangement under which such other person agrees to pay in whole or in part for the provision of goods to and/or the supply of services to the Manager or Connected Persons of the Manager in consideration of the Manager or a Connected Person of the Manager procuring that such other person (or person connected thereto) executes transactions to be entered into for the account of the Sub-Fund. The Manager shall procure that no such contractual arrangements are entered into unless the goods and services to be provided pursuant thereto are of demonstrable benefit to unitholders of redeemable units whether by assisting the Manager in its ability to manage the Sub-Fund, or by contributing to an improvement in the Sub-Fund s performance or otherwise. During the period, the Investment Manager and its associates did not enter into any soft dollar arrangements/commission sharing arrangements in connection with directing transactions of the Sub- Fund through a broker or a dealer (2015: Nil). 6 Distribution 2016 Half-year ended 2015 Class PA Shares Distribution of 3.21 per share on - 501,556 shares ex 31 December 2015 (1,609,994) Distribution of 0.93 per share on - 476,481 shares ex 2016 (443,127) Distribution of 1.03 per share on - 686,610 shares ex 31 December 2014 (707,209) Distribution of 1.16 per share on - 678,490 shares ex 2015 (787,048) Class PH HKD Shares Distribution of HKD3.03 per share on - 82,312 shares ex 31 December 2015 (208,970) Distribution of HKD0.88 per share on - 84,915 shares ex 2016 (62,308) Distribution of HKD1.00 per share on - 117,020 shares ex 31 December 2014 (93,637) Distribution of HKD1.14 per share on - 117,805 shares ex 2015 (107,389) 18

20 2016 Half-year ended 2015 Class PI Shares Distribution of 3.24 per share on - 193,461 shares ex 31 December 2015 (626,814) Distribution of 0.94 per share on - 58,308 shares ex 2016 (54,810) Distribution of 0.87 per share on - 188,183 shares ex 31 December 2014 (163,719) Distribution of 1.06 per share on - 240,437 shares ex 2015 (254,864) Class PX HKD Shares Distribution of HKD3.00 per share on - 119,221 shares ex 31 December 2015 (299,675) Distribution of HKD0.87 per share on - 111,777 shares ex 2016 (81,086) Distribution of HKD1.00 per share on - 169,237 shares ex 31 December 2014 (135,420) Distribution of HKD1.14 per share on - 141,486 shares ex 2015 (128,976) Class PY USD Shares Distribution of USD1.00 per share on - 54,198 shares ex 31 December 2015 (351,940) Distribution of USD0.89 per share on - 51,034 shares ex 2016 (293,762) Distribution of USD0.50 per share on - 5,094 shares ex 2015 (15,789) The amount of undistribution income carried forward includes both distribution classes and nondistribution classes. The amount of undistributed income carried forward for distribution classes and for non-distribution classes amounted to Nil (2015: 440,895) and 2,323,536 (2015: 902,860) respectively as of

21 STATEMENT OF MOVEMENTS IN INVESTMENT PORTFOLIO For the half-year ended 2016 and year ended 30 September 2015 (unaudited) Percentage of total net assets at 2016 Percentage of total net assets at 30 September 2015 Listed/Quoted Investments Equity securities China Debt securities China Other Assets Net assets attributable to unitholders of redeemable units

22 InvesTment portfolio As at 2016 (Unaudited) Listed/Quoted Investments Holding Fair value Percentage of Net assets % Equity Securities China (2.96%) BEIJING SIFANG AUTOMATION A 30, , CHINA EASTERN AIRLINES CO A 67, , CHINA GEZHOUBA GROUP CO LT A 34, , CHINA INTERNATIONAL TRAVEL A 10, , CHINA YANGTZE POWER CO LTD A 70, , HUATAI SECURITIES CO LTD A 16, , JSTI GROUP A 11, , KINGENTA ECOLOGICAL ENGINE A 36, , PING AN INSURANCE GROUP CO A 8, , SHENZHEN JINJIA COLOR PRIN A 20, , Total Equity securities 3,756, Debt securities China (82.31%) ADVANCED TECHNOLOGY MATE 11/ ,000,000 3,066, ANHUI SHANYING PAPER UNSECURED 08/19 VAR 5,285,000 5,670, BAOXINIAO GAR FRN 24 NOV 11/16 7 3,457,000 3,536, BEIJING NORTH STAR FRN 01/ ,000,000 2,119, BEIJING URBAN CONSTRUCTI COMPANY GUAR 09/16 VAR 4,800,000 4,881, BLACK PEONY GR FRN 29 OCT /19 VAR 5.4 2,500,000 2,575, CHINA PETROLEUM + CHEM COMPANY GUAR 06/ ,480,000 2,526, CHINA YANGTZE POWER CO BANK GUARANT 09/ ,613,000 1,679, CQ XINGRONG ST ASSET 8.35 SER 04/19 ZCP 1,570,000 1,336, FUTURE LAND HOLDINGS UNSECURED 07/19 VAR 2,200,000 2,401, GD POWER DEVELOPMENT CO / ,961,000 4,046, HAOXIANGNI JUJUBE VRN 04/ ,000,000 1,100, HEFEI CONSTR INVEST GRP SECURED 08/18 VAR 1,000,000 1,039, HUAFA INDUSTRIAL SHARE UNSECURED 10/17 VAR 3,853,000 4,072, HUAXIN CEMENT CO FRN SER B 05/ ,490,000 2,614, HUAXIN CEMENT CO UNSECURED 05/17 VAR 2,000,000 2,046,

23 Listed/Quoted Investments Holding Fair value Percentage of Net assets % HUBEI YIHUA CHEMICAL IND COMPANY GUAR 12/19 VAR 4,999,300 5,074, HUMON SMELTING CO FRN 10/ ,396,000 3,476, JIANGSU SHUANGLIANG UNSECURED 11/17 VAR 3,487,000 3,591, JIZHONG ENERGY RESOURCES COMPANY GUAR 05/16 VAR 3,800,000 3,812, KANGMEI PHARMACEUTICAL UNSECURED 06/18 VAR 3,501,000 3,728, LIANFA TEXTILE CO FRN 25 OCT 2 10/ ,000,000 3,105, LUXI CHEMICAL GROUP CO 07/ ,196,000 3,379, SC HEBANG BIOTECHNOLOGY UNSECURED 04/20 VAR 2,301,000 2,335, SHANGHAI TUNNEL ENGINEER COMPANY GUAR 10/16 VAR 3,800,000 3,869, SHENZHEN EXPRESSWAY CO UNSECURED 07/16 VAR 4,480,000 4,524, SHUANGYASHAN DADI CONTR FRN 12/ ,457,000 1,443, SUNING COMMERCE GRP CO 12/ ,438,000 2,523, WANXIANG QIANCHAO CO LTD FRN 04/17 6 5,800,000 5,988, WUHAN METRO UNSECURED 10/18 VAR 3,000,000 3,415, XINSHENG CONSTR DEVE + INV 05/ ,000,000 2,362, ZHEJIANG YASHA DECORATIO 07/17 FIXED 5.2 4,000,000 4,060, ZJ CHINT ELECTRICS CO LT COMPANY GUAR 07/16 VAR 3,156,000 3,184, Total Debt securities 104,587, Total Listed/Quoted Investments 108,343, Other net assets 18,713, Net assets attributable to unitholders of redeemable units 127,056, Total investments, at cost 107,623,671 22

24 PERFORMANCE TABLE Net asset value As at 2016 Class Currency Net Asset Value per unit Total Net Asset Value Class A ,251,508 Class X HKD ,602,500 Class PA ,738,395 Class PX HKD ,699,331 Class PI ,008,676 Class PH HKD ,215,553 Class U USD ,400 Class Y USD ,460 Class PY USD ,004,428 Class I Class H HKD Highest/lowest net asset value per unit For the half-year ended 2016 Class Currency Highest net assets value per unit Lowest net assets value per unit Class A Class X HKD Class PA Class PX HKD Class PI Class PH HKD Class U USD Class Y USD Class PY USD Class I Class H HKD 23

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