PRODUCT KEY FACTS Macquarie Unit Trust Series- Macquarie Asia New Stars Fund 16 December 2018 This statement provides you with key information about this product. This statement is a part of the Hong Kong offering document. You should not invest in this product based on this statement alone. Quick facts Manager: Macquarie Funds Management Hong Kong Limited Trustee: Service Provider to the Trustee: Ongoing charges over a year#: HSBC Trustee (Cayman) Limited HSBC Institutional Trust Services (Asia) Limited Share class with performa nce fees without performance fees Class A1 Class A2 1.77% 1.78% 1.77% 1.78% Dealing frequency: Base currency: Daily USD Dividend policy: No distribution will be made and any income and gains will be reinvested. Financial year end of this S30 June Fund: Minimum initial subscriptiousd3,000 Minimum subsequent subscription: USD1,000 # The ongoing charges figure is based on expenses for the year ended 30 June 2018. This figure may vary from year to year. What is this product?
The Macquarie Asia New Stars Fund (the "Sub-Fund") is a sub-fund of Macquarie Unit Trust Series (the "Fund"), which is an exempted umbrella unit trust established in the Cayman Islands. Objectives and Investment Strategy Objective The investment objective of the Sub-Fund is to capture the potential growth of small-mid market capitalisation companies with exposure to any one or more countries in Asia by investing in securities of small-mid market capitalisation companies ( Small-Mid Cap securities ) which are, or are expected to be listed on, a stock exchange of a country in Asia ( Asian Market ) or a stock exchange of a country outside Asia, including but not limited to the United Kingdom and the United States of America ( Other Eligible Market ). The relevant Asian markets are any country in Asia, including but not limited to Australia, Cambodia, Hong Kong, India, Indonesia, Korea, Malaysia, New Zealand, Pakistan, the Philippines, PRC, Singapore, Taiwan, Thailand and Vietnam, but excluding Japan. Investment Strategy The Manager will determine the portfolio of Small-Mid Cap securities using quantitative and qualitative investment criteria. These criteria may include factors such as fundamental analysis and valuation, momentum and liquidity. As a guide, Small-Mid Cap securities are securities of companies that have a market capitalisation within the minimum and maximum limits of leading small-mid cap market indices for Asia (ex Japan). At least 70% of the Net Asset Value of the Sub-Fund will generally be invested in equity markets within Asia. In addition, at least 70% of the Sub-Fund s equities investments (excluding index futures contracts) will generally be securities which are Small-Mid Cap securities at the time an initial investment is made in that security. Subject to this limit, the Sub-Fund may invest in large capitalisation companies (which may include securities of companies which were acquired as Small- Mid Cap securities but have subsequently grown to become large cap securities). There is no time limit for holding a position and there is no upper cap on the number of stocks that may be held in the portfolio. Each security may have a weight of up to 7.5% of the net asset value of the Sub-Fund. The total combined weight of unlisted securities (including those expected to be listed) will not exceed 15% of the net asset value of the Sub-Fund. The Investment Universe The eligible investment universe of the Sub-Fund includes equities that are listed, or expected to be listed, with a focus on small-mid market capitalisation securities with exposure to any one or more countries in Asia. A company will be considered to have exposure to any one or more countries in Asia if (a) it is listed, or expected to be listed, on any Asian market, or (b) if it is listed or expected to be listed, on any Other Eligible Market (for example, the United States of America or the United Kingdom) and the company derives, or is expected to derive, a significant portion of its revenue from one or more countries in Asia. The Sub-Fund may invest in China A-shares directly through Shanghai-Hong Kong Stock Connect and Shenzhen-Hong Kong Stock Connect (collectively, the Stock Connects ). Such investment may at times be more than 30% and up to 100% of its net asset value. The Sub-Fund is not subject to any limitation on the portion of its net asset value that may be invested in any industry or sector.
The Manager will determine an appropriate number of positions to best serve the investment objective of the Sub-Fund having regard to the relative size of allocations that the Sub-Fund would need to make to individual positions compared to the available liquidity and likely market impact and transaction costs of trading those positions. The number of positions may be adjusted from time to time. Equity exposure may be achieved through investment in shares, depositary receipts, participation rights and potentially through other instruments which are linked to the performance of eligible securities such as participation notes, and equity linked notes, provided that exposure via investments in such instruments (excluding ADRs and GDRs) shall not exceed 15% of the net asset value of the Sub-Fund. Up to 20% of the Sub-Fund s net asset value may be held in cash and money market instruments to manage the liquidity within the Sub-Fund s portfolio. Under exceptional circumstances (e.g. market crash, major crisis, large redemption requests or large subscriptions), a significantly higher percentage of the Sub-Fund s net asset value may be temporarily held in cash and money market instruments for, amongst other purposes, cash flow management. The Sub-Fund may invest in index futures contracts which the Manager considers will provide exposure to equity markets within Asia. The net aggregate value of the prices of futures contracts may not exceed 20% of the net asset value of the Sub-Fund. The Manager does not intend to hedge foreign exchange exposure within the Sub-Fund. What are the key risks? Investment involves risk. Please refer to the Explanatory Memorandum for details including the risk factors. 1. Market Risk. The Sub-Fund s investment portfolio may fall in value due to any of the key risk factors below which may result in loss of part or the entire amount of your investment. There is no guarantee of the repayment of principal. 2. Equity Market Risk. The Sub-Fund s investment in equity securities is subject to general market risks, whose value may fluctuate due to various factors, such as changes in investment sentiment, political and economic conditions and issuer-specific factors. 3. Small/Mid-Capitalisation Companies Risk. The Sub-Fund may invest in small and medium sized companies, their stocks may have lower liquidity and their prices are generally more volatile to adverse economic developments than those of larger sized companies in general. 4. Securities Risk. The Sub-Fund may invest in IPO securities and the price performance of these securities may be difficult to assess due to lack of trading history. 5. Emerging Markets Risk. The Sub-Fund s investment in emerging markets may involve increased risks and special considerations not typically associated with investment in more developed markets, such as liquidity risks, currency risks/control, higher risk of economic, political and regulatory uncertainties/changes, legal and taxation risks, settlement risks, and custody risk. High market volatility and potential settlement difficulties in the equity markets of emerging markets may result in significant fluctuations in the prices of the securities traded on such markets and thereby may adversely affect the value of the Sub-Fund.
Securities exchanges in emerging markets typically have the right to suspend or limit trading in any security traded on the relevant exchange. The government or the regulators may also implement policies that may affect the financial markets. All these may have a negative impact on the Sub-Fund. 6. Concentration Risk. The Sub-Fund s investments are concentrated in equities of small and medium sized companies with exposure to Asia. The value of the Sub-Fund may be more volatile than that of a fund having a more diverse portfolio of investments. The value of the Sub-Fund may be more susceptible to adverse economic, political, policy, foreign exchange, liquidity, tax, legal or regulatory event affecting the Asia market. 7. Liquidity Risk. The ability of the Sub-Fund to invest and to liquidate assets may, from time to time, be restricted by the liquidity of the market for those assets. 8. Currency Risk. Certain investments of the Sub-Fund may be denominated in currencies other than the base currency of the Sub-Fund. Also, a class of units may be designated in a currency other than the base currency of the Sub-Fund. The value of those investments (when converted to the base currency of the Sub-Fund) and the net asset value of the Sub-Fund may be affected unfavourably by fluctuations in the exchange rates between these currencies and the base currency and by changes in exchange rate controls. 9. RMB Currency and Conversion Risks. Renminbi ( RMB ) is currently not freely convertible and is subject to exchange controls and restrictions. Non-RMB based investors are exposed to foreign exchange risk and there is no guarantee that the value of RMB against the investors base currencies (for example HKD) will not depreciate. Any depreciation of RMB could adversely affect the value of investor s investment in the Sub-Fund. Although offshore RMB (CNH) and onshore RMB (CNY) are the same currency, they trade at different rates. Any divergence between CNH and CNY may adversely impact investors. Under exceptional circumstances, payment of redemptions and/or dividend payment in RMB may be delayed due to the exchange controls and restrictions applicable to RMB. 10. Risks associated with the Stock Connects. The relevant rules and regulations on the Stock Connects are subject to change which may have potential retrospective effect. The Stock Connects are subject to quota limitations. Where a suspension in the trading through the programme is effected, the Sub-Fund s ability to invest in China A-shares or access the PRC market through the programme will be adversely affected. In such event, the Sub-Fund s ability to achieve its investment objective could be negatively affected. 11. PRC Tax Risk. There are risks and uncertainties associated with the current PRC tax laws, regulations and practice in respect of capital gains realised via the Stock Connects or access products on the Sub-Fund s investments in the PRC (which may have retrospective effect). Any increased tax liabilities on the Sub-Fund may adversely affect the Sub-Fund s value. Based on professional and independent tax advice, the Sub-Fund will: - provide for withholding income tax ( WIT ) at 10% on dividend from China A-shares if such WIT is not withheld at source; and - not make provisions for any PRC WIT in respect of gross realised and unrealised capital gains derived from the trading of China A-shares via Stock Connects. Any shortfall between the provision and the actual tax liabilities, which will be debited from the Sub-Fund s assets, will adversely affect the Sub-Fund s net asset value. The actual tax liabilities may
be lower than the tax provision made. Depending on the timing of their subscriptions and/or redemptions, investors may be disadvantaged as a result of any shortfall of tax provision and will not have the right to claim any part of the overprovision (as the case may be). 12. Money Markets Instruments Risk. Holdings in money market instruments are not the same as deposits with bank or deposit-taking company. The Sub-Fund may suffer losses in trading such instruments which may adversely affect the net asset value of the Sub-Fund. 12. Derivative Risk. Investments in financial derivative instruments ( FDI ) present risks including counterparty/credit risk, liquidity risk, valuation risk, volatility risk, over-the-counter transaction risk, and the risk that the broker, dealer or bank that issues them will not fulfil its contractual obligations under the notes, and further that it will be unable to repay monies owing to the Sub- Fund. And if the relevant counterparty fails, there is no guarantee that the monies provided by the Sub-Fund will be returned. The leverage element/component of an FDI can result in a loss significantly greater than the amount invested in the FDI by the Sub-Fund. Exposure to FDI may lead to a high risk of significant loss by the Sub-Fund. 13. Risk of Conflict of Interest. The Manager and the Trustee (and their related parties) may from time to time act for themselves or their clients in such a manner that gives rise to potential conflicts of interest with the Sub-Fund. In particular, they may act on behalf of other funds which use investment strategies that are identical or similar to, or in competition with, the Sub-Fund. 14. Performance Fee Risk. Performance fees may encourage the Manager of the Sub-Fund to make riskier investments than would be the case in the absence of the performance-based incentive system. Given there is no equalisation arrangement for the calculation of the performance fee, it gives rise to the risk that a unitholder redeeming units may still incur a performance fee in respect of the units, even though the redeeming unitholder has suffered a loss in capital over the term of his or her investment. In addition, performance fees may be paid on unrealised gains which may never be realised by the Sub-Fund.
How has the Sub-Fund performed? 150% 127.4% 100% 50% 45.3% 26.6% 21.8% 12.0% 1.7% 31.0% 0% -50% -61.7% -100% -20.3% -16.5% -150% 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Past performance information is not indicative of future performance. Investors may not get back the full amount invested. The computation basis of the performance is based on the calendar year end, NAV-To- NAV, with dividend reinvested. These figures show by how much the Class A1increased or decreased in value during the calendar year being shown. Performance data has been calculated in USD including ongoing charges and excluding subscription fee and redemption fee you might have to pay. Class A1 is selected as representative share class as it has the longest track record. When no past performance is shown there was insufficient data available in that year to provide performance. Sub-Fund launch date: 5 December 2007 Class A1 launch date: 5 December 2007 The performance prior to 16 December 2018 was achieved under circumstances that no longer apply, the investment strategy was updated to include China A-shares and the definition of Asia was expanded for the purpose of defining the Sub-Fund s investment universe. These changes have not changed the way the Sub-Fund is being managed. Is there any guarantee? This Sub-Fund does not have any guarantees. You may not get back the full amount of money you invest. What are the fees and charges? Charges which may be payable by you You may have to pay the following fees when dealing in the units of the Sub-Fund. Fee What you pay
Preliminary Charge Conversion Charge (or Switching Fee) Redemption Fee Up to 5% of the subscription amount Nil * Nil Ongoing fees payable by the Sub-Fund The following expenses will be paid out of the Sub-Fund. They affect you because they reduce the return you get on your investments. Management Fee 1.5 % p.a. of the Sub-Fund's net asset value * Trustee Fee Nil. Currently, this is borne by the Manager and not by the Sub-Fund. * Performance Fee 10% of the positive difference between the net asset value per unit on a Dealing Day (net of other fees and expenses) and the Benchmark Value. The Benchmark Value is 5.0% p.a. above the High Water Mark on an adjusted basis. The High Water Mark is initially set at the Issue Price per unit. Thereafter, the High Water Mark is the higher of the Issue price and the net asset value per unit as at the end of any previous performance period in respect of which a performance fee was last paid (on an adjusted basis). Where a performance fee is payable for a performance period, the net asset value per unit as at the end of that performance period will be set as the High Water Mark for the next performance period. The performance fee accruals as at any Dealing Day will be included in the calculation of the net asset value per unit. In the event of the net asset value per unit being less than the Benchmark Value, following a Dealing Day where a positive performance fee accrual was made, the performance fee accrual will reduce to zero. No further daily performance fee accruals will be made until the net asset value per unit exceeds the Benchmark Value. The performance period corresponds to the financial year of the Sub-Fund. For further details and illustrative examples of the performance fee calculation, please refer to Appendix III of the Explanatory Memorandum. Administration Fee 0.25% p.a. of the Sub-Fund's net asset value. * * These fees may be increased, up to the permitted maximum level specified in the Explanatory Memorandum by giving the relevant unitholders at least three months prior notice.
Other Fees You may have to pay other fees when dealing in the shares of the Sub-Fund. The Sub-Fund will also bear the costs which are directly attributable to it, as set out in the Explanatory Memorandum. Additional Information You generally buy and redeem units of the Sub-Fund at the Sub-Fund s next-determined net asset value (NAV) after an authorised distributor or the Service Provider of the Trustee receives your request in good order on or before 4:00 p.m. (Hong Kong time) on the relevant Dealing Day, which is generally every Business Day. Sub distributor(s) may impose different dealing deadlines for receiving instructions for subscriptions, redemptions or conversions. Please contact the relevant sub distributor for their respective Dealing Cut-off Time and procedures. The net asset value per unit of the Sub-Fund is published on each Valuation Day (i.e. Dealing Day) on the website: www.macquarie.hk/mfg in US Dollars. This website has not been reviewed by the Securities and Futures Commission. Investors may obtain the past performance information of other classes offered to Hong Kong investors and other information from the website www.macquarie.hk/mfg (then click on Individual Investor and click on Macquarie Asia New Stars Fund ). This website has not been reviewed by the Securities and Futures Commission. Important If you are in doubt, you should seek professional advice. The SFC takes no responsibility for the contents of this statement and makes no representation as to its accuracy or completeness.