SIP LIFESTYLE PORTFOLIOS FACT SHEET (NOV 2015) SIP Aggressive Portfolio SIP Aggressive Portfolio is a unitized fund, which is designed to provide long term capital growth. It is designed for those who hold a long term investment view and who are prepared to accept significant fluctuations in the value of their investment in order to achieve long term returns. MGF - American Growth Fund (A Share) 39.6% MGF - US Small Cap Equity Fund (AA Share) 15.9% MGF-Global Property Fund (AA Share) 2.1% MGF-European Growth Fund (A Share) 14.2% MGF-Japanese Growth Fund (A Share) 5.1% MGF-Asian Equity Fund (A Share) 1.9% MGF-Global Resources Fund (AA Share) 5.2% MGF-US Bond Fund (AA Share) 7.4% MGF-US Special Opportunities Fund (AA Share) 10.6% MGF-US Treasury Inflation-Protect Fund (AA Share) 3.3% Information Liquidity and others -5.3% Investment Management Fee : 1.40% per annum NAV per Unit 1.1947 6.27 million : 5.24 million SIP Growth Portfolio SIP Growth Portfolio is a unitized fund, which is designed to provide medium to long term capital growth for those who hold a long term investment view and who are prepared to accept considerable fluctuations in the value of their investments in order to achieve long term returns. MGF - American Growth Fund (A Share) 33.5% MGF - US Small Cap Equity Fund (AA Share) 4.3% MGF-Global Property Fund (AA Share) 7.4% MGF-European Growth Fund (A Share) 8.6% MGF-Japanese Growth Fund (A Share) 3.0% MGF-Asian Equity Fund (A Share) 1.1% MGF-Global Resources Fund (AA Share) 5.3% MGF-US Bond Fund (AA Share) 18.8% MGF-US Special Opportunities Fund (AA Share) 16.7% MGF-US Treasury Inflation-Protect Fund (AA Share) 5.2% Information Liquidity and others -4.0% Investment Management Fee : 1.30% per annum NAV per Unit 1.2396 5.82 million : 4.69 million 1 Month 3 Months 6 Months YTD 1 Year 3 Years 5 Years Since Inception 1 Month 3 Months 0.99% 6 Months Aggressive Portfolio -0.77% 2.31% -3.87% -0.08% -1.94% 15.92% 20.47% 19.47% Growth Portfolio -1.67% -3.95% YTD -1.23% 1 Year -3.22% 3 Years 10.22% 5 Years 17.24% Since Inception 23.96%
SIP Balanced Portfolio SIP Balanced Portfolio is a unitized fund, which is designed to provide medium to long term capital growth for those who hold a long term investment view and who are prepared to accept fluctuations in the value of their investments in order to achieve long term returns. MGF - American Growth Fund (A Share) 20.8% MGF - US Small Cap Equity Fund (AA Share) 4.2% MGF-Global Property Fund (AA Share) 5.2% MGF-European Growth Fund (A Share) 8.0% MGF-Japanese Growth Fund (A Share) 2.5% MGF-Asian Equity Fund (A Share) 0.9% MGF-Global Resources Fund (AA Share) - MGF-US Bond Fund (AA Share) 42.6% MGF-US Special Opportunities Fund (AA Share) 13.7% MGF-US Treasury Inflation-Protect Fund (AA Share) 4.2% Information Liquidity and others -2.3% Investment Management Fee : 1.20% per annum NAV per Unit 1.2814 5.12 million : 4.00 million Balanced Portfolio 1 Month -0.73% 3 Months 0.77% 6 Months -3.19% YTD -0.97% 1 Year -2.60% 3 Years 7.73% 5 Years 15.43% Since Inception 28.14% The SIP Lifestyle Portfolios are managed by Manulife Asset Management Services Berhad and are fund of funds structures. They invest all or substantially all of their assets into the Underlying Funds under the Manulife Global Fund platform. Please refer to the for the list of the Underlying Funds and the allocation for the respective portfolios. Past performance is not an indication for future results. This report is prepared for information purposes only. Important Notes: The fund performances are strictly the performance of the investment-linked (IL) fund and not to be treated as the gross premium/contribution of the IL insurance product. In the event of exceptional circumstances, such as high volume of sale investment within a short period of time, Manulife Insurance Berhad ("the Company") reserves the right to defer or suspend issuance or redemption of units. Page 2 of 5
and Outlook (Nov 2015) Asia Pacific ex Japan Asian equities fell over the month as strong US economic data boosted the case for a US interest rate hike while weaker commodity prices and generally weaker Chinese economic data reduced risk sentiment. In the US, nonfarm payrolls increased 271,000 in October, the largest gain since last December 2014 while unemployment fell to 5.0%, the lowest since April 2008. Comments during the month from US Federal Reserve officials indicated a December rate hike was likely. In China, the official purchasing managers index (PMI) was unchanged at 49.8 in October while industrial production rose a weaker-thanexpected 5.6% year-on-year. October exports fell 6.9% from a year ago while imports declined 18.8%. Inflation moderated more than expected in October while retail sales continued to accelerate, up 11% on-year. In Hong Kong, third quarter GDP grew 2.3% on-year while retail sales fell for a seventh straight month in September. In Taiwan, the economy suffered a technical recession contracting 0.30% in the third quarter from the previous three months, following a 1.14% contraction in the second quarter. Exports fell 11.0% on-year in October, while imports declined 20%. In South Korea, industrial output in October fell by 1.4% while manufacturing PMI remained in contraction at 49.1. In India, manufacturing PMI fell in October for third consecutive month while the defeat of the ruling Bharatiya Janata party in a key state election also weighed on markets. In Indonesia, third quarter GDP expanded to 4.7% on-year on increased government spending while inflation fell to 6.25% in October. In Malaysia, GDP expanded at the slowest pace in two years during the third quarter, growing 4.7% from a year earlier while both exports and imports rose in September. In Thailand, third quarter GDP grew 2.9% on-year while headline inflation fell for the 10th consecutive month, to -0.77% in October. In the Philippines, economic growth accelerated to 6.0% year-on-year in the third quarter while exports fell 24.7% in September, the worst year-on-year in four years. Imports meanwhile, rose for the fourth straight month, by 6.7% year-on-year in September. In Singapore, the government revised up its third quarter GDP figures to 1.9% on-year, up from the 0.1% advance reading. In Australia, strong job numbers for October reduced expectations of an interest rate cut this year. We are cautiously optimistic that markets can gradually advance for the remaining months of the year. We are particularly encouraged by developments in North Asia. Large South Korean corporates are better aligning their interests with those of minority shareholders through share buybacks and higher dividend payouts. In Taiwan, several merger and acquisition transactions have been announced, showing a change in culture and recognition of the increasing competition from Chinese companies. While quarterly earnings announcements have been generally mixed, a number of our holdings, particularly in the technology and consumer discretionary sectors, are continuing to deliver and offer constructive outlooks. North America The US stock market took a breather in November, following a strong rally in October. Shifting views on whether the US Federal Reserve Board would hike interest rates for the first time in nearly 10 years and concern over geopolitical issues further stalled the market s progress. Financials, which often benefit from an interest rate hike, led the S&P 500, while dividend-paying sectors, including utilities, were laggards. We expect modest economic growth in the US to support consumer spending and lower unemployment. However, slower earnings growth will make security selection critical. We plan to stay focused on quality companies that are selling at discounts relative to their intrinsic value. At period end, the Fund had overweights in the more economically sensitive financials and consumer discretionary sectors and underweights in healthcare and consumer staples, where we found fewer attractively valued opportunities. Europe During the period, the euro weakened against the US dollar as it became more likely that the US Federal Reserve Board (Fed) would raise interest rates before year-end. In contrast to the Fed s intention to normalise interest rates, European economic data, indicating subdued growth and low inflation expectations, resulted in the European Central Bank signaling the potential for an expanded round of monetary stimulus. We continue to take a long-term approach, investing in companies which trade at attractive valuations, demonstrate a competitive advantage and have opportunity to grow earnings power. We have identified such companies in the information technology and healthcare sectors, in which the Fund holds overweight positions. We also see value in the aerospace and defense sub-sectors and in the mining and energy sectors. Page 3 of 5
and Outlook (Nov 2015) (continued) Japan The market improved slightly in Japanese yen terms, but was down in US dollar terms due to a further appreciation of the yen versus the dollar in the run-up to an expected US Federal Reserve rate hike. Although Japan was in a technical recession for the last two quarters, the market chose to ignore this data as the domestic economy is expected to recover. The GDP weakness had been driven primarily by a rundown of inventories and a lack of corporate capital expenditure spending. From a recent visit to Japan, it appears that consumption trends are improving and inbound tourism remains a strong support for consumption, especially in Tokyo. The best performing sectors over the month were metal products, retail and precision instruments while the worst performing were paper, utilities and airlines. Retail has been the strongest sector over the year, driven in part by inbound tourism. Among the strongest performers were Colopl (mobile games) and Sundrug (pharmacies) while some of the weakest performers included Oki Electric (ATM machines) and Asics (running shoes). The recent volatility in the Japanese market has led many investors to question the long-term outlook for Japanese equities. The concerns over the lack of domestic growth opportunities and the declining demographic outlook as well as the heavy burden of government debt remain. However, the Japanese market has been the only global market which has grown aggregate earnings at 10% or more over the last three years. First half earnings confirmed an outlook of continued double digit earnings growth for this year as a number of companies revised up their earnings for the full year. The focus on improving returns and more efficient use of corporate cash positions is also starting to have a positive effect. The government is in the process of lowering corporate tax rates and is looking at incentivising corporates to spend their cash piles rather than just have them sitting on their balance sheets. This should provide positive momentum for an economic recovery. Global Global equity market returns were relatively flat in November as investors weighed potential global central bank action. The MSCI World Index fell 0.7%. Global monetary policy continued to diverge. Additional stimulus was expected from the European Central Bank, while investors looked to US economic data as an indicator of whether the US Federal Reserve Board (Fed) would raise interest rates in December. The US dollar climbed against the euro, pound and yen. Commodities were weaker overall, including crude oil, which fell 10%. We believe US equity markets have slightly above-average valuations on earnings but are highly valued on a cyclically adjusted price-earning basis. Forward estimates may generally prove optimistic, particularly considering the potential peaking of margins and declining impact of share buybacks. European multiples appear cheaper than their US counterparts, in our view, and may have more earnings recovery potential, although much of this is sourced in structurally challenged industries. We remain cautious of excess debt and continue to focus on companies with what we believe to be sustainable cash flow streams. Page 4 of 5
SIP Lifestyle Portfolio (Nov 2015) (continued) Investment in the fund is subject to certain risks, including but not limited to: Risk Type Description Risk Management (Bond funds) Risk Management (Equity funds) Fund Management Risk The selection of securities which make up the investments of the fund is subjective and securities selected may perform better or worse than overall market. To mitigate this risk, the investment Manager has in place a disciplined investment process and practices prudent risk management. Manager has in place a disciplined investment process and practices prudent risk management. In addition, risk is also monitored through risk models. Liquidity Risk The risk of the funds being unable to meet their obligations at the reasonable cost or at any time. Manager will review and monitor the Fund continuously, and actively manage asset allocations of the Fund. In addition, the investment Manager will practice prudent liquidity management to enable the Fund to meet short term obligations. Manager will review and monitor the Fund continuously, and actively manage asset allocations of the Fund. In addition, the Investment Manager will practice prudent liquidity management. Market or Price Risk Market risk arises when the value of the securities fluctuate in response to the general market and economic conditions. The Investment Manager will attempt to diversify the portfolio, and monitor the investment climate and market conditions to take measures, where necessary and appropriate, to mitigate this risk. This risk is managed through sector/stock diversification and asset allocation. Timing Risk Company / Stock Specific Risk Interest Rate Risk Inflation Risk Credit Risk The risk is subject to the volatility of the market/interest rate. The risk of loss due to the fall of stocks/shares prices given the deteriorating business condition. The Investment Manager will manage it based on its professional knowledge and experienced investment skill. N/A The interest rate is a general economic This risk will be mitigated via the N/A indicator that will have an impact on the management of the duration of the fixed management of the Fund. This risk refers income securities. to the effect of interest rate changes on the market value of fixed income securities. In the event of rising interest rates, prices of fixed income securities will decrease and vice versa. Meanwhile, fixed income securities with longer maturities and lower coupon/profit rates are more sensitive to interest rate changes. This is the risk that investors' investment The risk may be mitigated by investing in N/A in the Fund may not grow or generate fixed income securities that can provide income at a rate that keeps pace with positive real rate of return. inflation. The risk of loss due to the counter party's Credit risk may be managed by performing N/A inability to make payment of coupon/profit continuous fundamental credit research and and/or principal. analysis to ascertain the creditworthiness of its issuer. Timing risk will be managed via technical tools (i.e. from Bloomberg) as well as based on the Investment Manager's professional knowledge and experience investment skill. Manager will be performing continuous research and analysis on the balance sheet strength, earnings generation capability and strength of management team of the company. Page 5 of 5