Principal Mandatory Provident Fund Principal MPF - Smart Plan offering document Exclusive Distributor
Principal MPF Smart Plan exclusively distributed by AXA Trustee Exclusive Distributor Principal helps people and companies around the world build, protect and advance their financial well-being through retirement, insurance and asset management solutions that fit their lives. Our employees are passionate about helping clients of all income and portfolio sizes achieve their goals offering innovative ideas, investment expertise and real-life solutions to make financial progress possible. Principal is a provider of investment and retirement solutions in Hong Kong. We combine our capabilities in global investment management, retirement leadership and asset allocation expertise to provide retirement and asset management services as well as award-winning mutual funds and investment products to businesses, individuals and institutional investors. AXA is a world leading insurance and asset management group and is the No. 1 insurance brand in the world for 9 consecutive years*. We are proud to serve over 1 million customers in Hong Kong and Macau #. AXA Hong Kong is committed to continuously develop and enhance our life & savings, health, property & casualty and retirement solutions in order to satisfy the different needs of our individual and corporate customers. Our purpose is to empower people to live a better life. Principal, Principal and symbol design and Principal Financial Group are trademarks and service marks of Principal Financial Services, Inc, a member of the Principal Financial Group. * Source: Interbrand Best Global Brand 2017 (by brand value). # Including customers of AXA China Region Insurance Company Limited, AXA China Region Insurance Company (Bermuda) Limited (incorporated in Bermuda with limited liability), and AXA General Insurance Hong Kong Limited
Fifth Addendum to the Offering Document for Principal MPF Smart Plan (the Offering Document ) This Fifth Addendum should be read in conjunction with and forms part of the Offering Document for Principal MPF Smart Plan (December 2016 edition) (the Offering Document ), the First Addendum dated 12 December 2016, the Second Addendum dated 12 December 2016, the Third Addendum dated 28 February 2017 and the Fourth Addendum dated 16 October 2017. By this Fifth Addendum, the Offering Document shall be amended as follows with effect from 30 November 2017 (except as specified below): 1. The last paragraph under 3. PRINCIPAL MPF SMART PLAN on page 3 of the Offering Document shall be replaced in its entirety with the following: In respect of the Principal Guaranteed Fund, it through investing solely in a single APIF in the form of an insurance policy issued by the Sponsor (Insurance Policy APIF), invests in an APIF in the form of a unit trust (Unit Trust APIF). Such Unit Trust APIF will in turn invest in other APIFs, which are also in the form of a unit trust. 2. The paragraph immediately after the table under Section 5 CONSTITUENT FUNDS on page 8 of the Offering Document shall be replaced in its entirety with the following: With effect from 30 November 2017: All constituent funds are currently denominated in Hong Kong dollars. Each of the constituent funds (other than the Principal Guaranteed Fund and Principal Dynamic Hong Kong Equity Fund) is currently a feeder fund investing entirely in a single Unit Trust APIF or Approved Index-Tracking Fund managed by investment managers as described in Section 3.5 above. The Principal Guaranteed Fund is currently denominated in Hong Kong dollars and is a feeder fund that currently, through investing in an Insurance Policy APIF issued by the Sponsor, invests in a Unit Trust APIF. Such Unit Trust APIF will in turn invest in other Unit Trust APIFs. The Principal Dynamic Hong Kong Equity Fund is a portfolio management fund investing in two or more Unit Trust APIFs and/or Approved Index-Tracking Funds. With effect from 12 December 2017: All constituent funds are currently denominated in Hong Kong dollars. Each of the constituent funds (other than the Principal Guaranteed Fund, Principal Dynamic Hong Kong Equity Fund, Principal Dynamic Global Equity Fund, Principal Dynamic Asia Pacific Equity Fund, Principal Dynamic Global Bond Fund, Principal Dynamic Asian Bond Fund and Principal Dynamic Greater China Equity Fund) is currently a feeder fund investing entirely in a single Unit Trust APIF or Approved Index-Tracking Fund managed by investment managers as described in Section 3.5 above. The Principal Guaranteed Fund is currently denominated in Hong Kong dollars and is a feeder fund that currently, through investing in an Insurance Policy APIF issued by the Sponsor, invests in a Unit Trust APIF. Such Unit Trust APIF will in turn invest in other Unit Trust APIFs. Each of the Principal Dynamic Hong Kong Equity Fund, Principal Dynamic Global Equity Fund, Principal Dynamic Asia Pacific Equity Fund, Principal Dynamic Global Bond Fund, Principal Dynamic Asian Bond Fund and Principal Dynamic Greater China Equity Fund is a portfolio management fund investing in two or more Unit Trust APIFs and/or Approved Index-Tracking Funds. Principal Mandatory Provident Fund offering document page 1
3. The sub-heading (6) Principal Guaranteed Fund of Section 5.1 Investment Objectives and Policies on page 10 of the Offering Document shall be amended by: a) replacing the second paragraph in its entirety with the following: Investment Policy: The constituent fund, through an Insurance Policy APIF, the Principal Guaranteed Fund Policy, invests in a Unit Trust APIF, the Principal MPF Fund Principal MPF Capital Stable Fund. The Unit Trust APIF will invest through other Unit Trust APIFs to gain exposure to a diversified portfolio of bonds, equities and deposits, with heavier weighting in bonds. Normally around 60% to 90% of the assets will be invested in bonds, 10% to 25% in equities and up to 25% in deposits. b) replacing the fourth paragraph in its entirety with the following: This constituent fund, through investing in an Insurance Policy APIF, invests in a Unit Trust APIF. Such Unit Trust APIF will in turn invest in other Unit Trust APIFs. The Insurance Policy APIF involved a guarantee, which is guaranteed by the Sponsor. 4. The second paragraph under 7.3 Realisation of Units of Section 7 BENEFITS on page 25 of the Offering Document shall be replaced in its entirety with the following: Units in a constituent fund realised on a valuation date will be realised at the bid price of such units (but in the case of the Principal Guaranteed Fund Policy in which the Principal Guaranteed Fund invests, the Guaranteed Balance of the member in the Insurance Policy APIF may be subject to a reduction determined at the Sponsor s absolute discretion). From 1 December 2015 onwards, the rate of reduction is maintained at 0%. The calculation of the bid price of units is set out in the Section below headed Calculation of Offer and Bid Prices of Constituent Funds. 5. The third paragraph under the subheading Principal Guaranteed Fund Policy of Section 9.5 Calculation of Offer and Bid Prices of the APIFs and Approved Index-Tracking Fund on page 31 of the Offering Document shall be replaced in its entirety with the following: The Sponsor will maintain a reserved fund (the Reserved Fund ) in respect of the Insurance Policy APIF. The Reserved Fund will be used to meet the Sponsor s obligations in the event where the net asset value of the Insurance Policy APIF is insufficient to discharge its obligations to pay the Guaranteed Balance payable under the Insurance Policy APIF. Other than the aforesaid, members will not have any interest whatsoever in the Reserved Fund. For the avoidance of doubt, the Reserved Fund will not be taken into account in the determination of: (i) the bid price and the offer price of a unit in the Insurance Policy APIF; (ii) the Declared Crediting Rate; and (iii) any fees and charges payable under the Insurance Policy APIF. The Reserved Fund forms part of the Insurance Policy APIF. Except as amended by this Fifth Addendum, the Offering Document remains in full force and effect. Principal Trust Company (Asia) Limited 30 November 2017 Principal Mandatory Provident Fund offering document page 2
Fourth Addendum to the Offering Document for Principal MPF Smart Plan (the Offering Document ) This Fourth Addendum should be read in conjunction with and forms part of the Offering Document for Principal MPF Simple Plan (December 2016 edition) (the Offering Document ), the First Addendum dated 12 December 2016, the Second Addendum dated 12 December 2016 and the Third Addendum dated 28 February 2017. By this Fourth Addendum, the Offering Document shall be amended as follows: A. Change of Address With effect from 16 October 2017: (i) Section 1 DIRECTORY OF PARTIES on page 1 of the Offering Document shall be amended by: (a) replacing the paragraph headed Investment Manager of all Constituent Funds (other than Principal Hang Seng Index Tracking Fund) in its entirety with the following: Investment Managers of all Constituent Funds (other than Principal Hang Seng Index Tracking Fund) PRINCIPAL ASSET MANAGEMENT COMPANY (ASIA) LIMITED 30/F, Millennium City 6 392 Kwun Tong Road Kwun Tong, Kowloon Hong Kong (b) replacing the address of Principal Asset Management Company (Asia) Limited under paragraph headed Investment Managers of the Underlying Approved Pooled Investment Funds/Approved Index- Tracking Fund (in respect of Constituent Funds in the form of feeder funds) in its entirety with the following: 30/F, Millennium City 6 392 Kwun Tong Road Kwun Tong, Kowloon Hong Kong (c) replacing the paragraph headed Trustee in its entirety with the following: Trustee PRINCIPAL TRUST COMPANY (ASIA) LIMITED Registered Office 30/F, Millennium City 6 392 Kwun Tong Road Kwun Tong, Kowloon, Hong Kong Principal Mandatory Provident Fund offering document page 1
(d) replacing the paragraph headed Sponsor in its entirety with the following: Sponsor PRINCIPAL INSURANCE COMPANY (HONG KONG) LIMITED Registered Office 30/F Millennium City 6 392 Kwun Tong Road Kwun Tong, Kowloon Hong Kong (ii) The footer on page 43 of the Offering Document shall be amended by replacing the address of Principal Trust Company (Asia) Limited in its entirety with the following: 30/F Millennium City 6 392 Kwun Tong Road Kwun Tong, Kowloon Hong Kong With effect from 1 December 2017: (iii) Section 3.5 Investment Managers of the Underlying APIFs and Approved Index-Tracking Fund on page 3 of the Offering Document shall be amended by replacing the address of Principal Global Investors (Hong Kong) Limited under the sub-section Sub-Investment Managers in its entirety with the following: Unit 1001-1002 Central Plaza 18 Harbour Road Wan Chai Hong Kong B. Changes relating to the Constituent Funds With effect from 12 December 2017: (i) Section 1 DIRECTORY OF PARTIES on page 1 of the Third Addendum shall be amended by replacing the paragraph headed Investment Managers of the Underlying Approved Pooled Investment Funds/Approved Index-Tracking Fund (in respect of Constituent Funds in the form of feeder funds) in its entirety with the following: Investment Managers of the Underlying Approved Pooled Investment Funds/Approved Index-Tracking Fund (in respect of Constituent Funds in the form of feeder funds) PRINCIPAL ASSET MANAGEMENT COMPANY (ASIA) LIMITED 30/F Millennium City 6 392 Kwun Tong Road Kwun Tong, Kowloon Hong Kong STATE STREET GLOBAL ADVISORS ASIA LIMITED 68/F., Two International Finance Centre 8 Finance Street Central Hong Kong Principal Mandatory Provident Fund offering document page 2
(ii) Each reference to each of Principal Fidelity Global Equity Fund, Principal -Fidelity Asia Pacific Equity Fund, Principal Templeton Global Bond Fund, Principal- JPMorgan Asian Bond Fund and Principal JPMorgan Greater China Equity Fund whenever it appears in the Offering Document shall be replaced with the words Principal Dynamic Global Equity Fund, Principal Dynamic Asia Pacific Equity Fund, Principal Dynamic Global Bond Fund, Principal Dynamic Asian Bond Fund and Principal Dynamic Greater China Equity Fund respectively. (iii) Section 3.5 Investment Managers of the Underlying APIFs and Approved Index-Tracking Fund on page 3 of the Offering Document shall be amended by: (a) replacing the first paragraph under it in its entirety with the following: The investment managers of the underlying APIFs and Approved Index-Tracking Fund in which the constituent funds in the form of feeder funds invest are Principal Asset Management Company (Asia) Limited and State Street Global Advisors Asia Limited. (b) adding the following two constituent funds as the last two sub-bullet points under the first bullet point under it: Principal Core Accumulation Fund Principal Age 65 Plus Fund (c) replacing the paragraph under the sub-section Sub-Investment Managers after the first bullet point in its entirety with the following: Under the trust deeds of the relevant APIFs managed by PAM and subject to the requirements under the MPF Ordinance and the Regulation, PAM may delegate all or any of its duties, powers and discretions to another corporation. Currently, the following entities are sub-investment managers, delegates or subdelegates of the relevant underlying APIFs of the constituent funds mentioned above: (d) deleting the second, third and fourth bullet points under it in its entirety without replacement; and (e) deleting the footnote ** immediately under the fourth bullet point under it in its entirety without replacement. Principal Mandatory Provident Fund offering document page 3
(iv) Section 5 CONSTITUENT FUNDS on page 6 of the Offering Document shall be amended by: (a) replacing the table (amended by page 13 of the First Addendum and page 3 of the Third Addendum in its entirety with the following under the table headed as follows: At the underlying APIF/ Approved Index-Tracking Fund level Name of Constituent Funds Investment Structure Investment manager Sub-investment manager/ delegate of the investment manager Fund Type Principal Growth Fund Invest solely in a unit trust APIF, Principal MPF Fund Principal MPF Growth Fund Principal Asset Management Company (Asia) Limited Principal Global Investors, LLC Principal Global Investors (Hong Kong Limited Mixed Assets Fund Global maximum equity 100% Principal Balanced Fund Invest solely in a unit trust APIF, Principal MPF Fund Principal MPF Balanced Fund Principal Asset Management Company (Asia) Limited Principal Global Investors, LLC Principal Global Investors (Hong Kong) Limited Mixed Assets Fund Global maximum equity 85% Principal Stable Fund Invest solely in a unit trust APIF, Principal MPF Fund Principal MPF Stable Fund Principal Asset Management Company (Asia) Limited Principal Global Investors, LLC Principal Global Investors (Hong Kong) Limited Mixed Assets Fund Global maximum equity 45% Principal Mandatory Provident Fund offering document page 4
Name of Constituent Funds Investment Structure At the underlying APIF/ Approved Index-Tracking Fund level Investment manager Sub-investment manager/ delegate of the investment manager Fund Type Principal Cash Fund Invest solely in a unit trust APIF, Principal MPF Fund Principal MPF Cash Fund Principal Asset Management Company (Asia) Limited Principal Global Investors, LLC Principal Global Investors (Hong Kong) Limited Money Market Fund Hong Kong Principal - MPF Conservative Fund Principal Guaranteed Fund Principal Dynamic Global Equity Fund Invest solely in a unit trust APIF, Principal MPF Fund Principal MPF Conservative Fund Invest solely in an insurance policy APIF, Principal Guaranteed Fund Policy**, which in turn invests in a unit trust APIF, Principal MPF Fund Principal MPF Capital Stable Fund Invest in two or more unit trust APIFs and/or Approved Index- Tracking Funds Principal Asset Management Company (Asia) Limited Principal Asset Management Company (Asia) Limited Principal Global Investors, LLC Principal Global Investors (Hong Kong) Limited Principal Global Investors, LLC Principal Global Investors (Hong Kong) Limited Money Market Fund Hong Kong Guaranteed Fund Multi-managers* Nil Equity Fund Global Principal Mandatory Provident Fund offering document page 5
Name of Constituent Funds Investment Structure At the underlying APIF/ Approved Index-Tracking Fund level Investment manager Sub-investment manager/ delegate of the investment manager Fund Type Principal Dynamic Asia Pacific Equity Fund Invest in two or more unit trust APIFs and/ or Approved Index-Tracking Funds Multi-managers* Nil Equity Fund Asia Pacific Principal Dynamic Global Bond Fund Invest in two or more unit trust APIFs and/ or Approved Index- Tracking Funds Multi-managers* Nil Bond Fund Global Principal Dynamic Asian Bond Fund Principal Dynamic Greater China Equity Fund Principal Dynamic Hong Kong Equity Fund Principal Hang Seng Index Tracking Fund Invest in two or more unit trust APIFs and/ or Approved Index-Tracking Funds Invest in two or more unit trust APIFs and/ or Approved Index-Tracking Funds Invest in two or more unit trust APIFs and/ or Approved Index-Tracking Funds Invest solely in an Approved Index Tracking Fund, Tracker Fund of Hong Kong Multi-managers* Nil Bond Fund Asia Pacific Multi-managers* Nil Equity Fund Greater China Multi-managers* Nil Equity Fund Hong Kong State Street Global Advisors Asia Limited (acts as the investment manager of both the constituent fund and the underlying Approved Index Tracking Fund) Nil Equity Fund Hong Kong Principal Mandatory Provident Fund offering document page 6
Name of Constituent Funds Investment Structure At the underlying APIF/ Approved Index-Tracking Fund level Investment manager Sub-investment manager/ delegate of the investment manager Fund Type Principal Core Accumulation Fund Invest solely in a unit trust APIF, Principal Unit Trust Umbrella Fund Principal Core Accumulation Fund Principal Asset Management Company (Asia) Limited Principal Global Investors, LLC Note: Principal Global Investors (Hong Kong) Limited acts as sub-delegate Mixed Assets Fund (Global) Principal Age 65 Plus Fund Invest solely in a unit trust APIF, Principal Unit Trust Umbrella Fund Principal Age 65 Plus Fund Principal Asset Management Company (Asia) Limited Principal Global Investors, LLC Note: Principal Global Investors (Hong Kong) Limited acts as sub-delegate Mixed Assets Fund (Global) * The identities of multi-managers may change as a result of any changes to the underlying APIFs and/or Approved Index-Tracking Funds as the Investment Manager may from time to time determine. ** Principal Insurance Company (Hong Kong) Limited is the issuer and guarantor of the Principal Guaranteed Fund Policy. Principal Mandatory Provident Fund offering document page 7
(b) replacing the paragraph immediately after the table under it in its entirety with the following: All constituent funds are currently denominated in Hong Kong dollars. Each of the constituent funds (other than the Principal Guaranteed Fund, Principal Dynamic Hong Kong Equity Fund, Principal Dynamic Global Equity Fund, Principal Dynamic Asia Pacific Equity Fund, Principal Dynamic Global Bond Fund, Principal Dynamic Asian Bond Fund and Principal Dynamic Greater China Equity Fund) is currently a feeder fund investing entirely in a single Unit Trust APIF or Approved Index-Tracking Fund managed by investment managers as described in Section 3.5 above. The Principal Guaranteed Fund is currently denominated in Hong Kong dollars and is a feeder fund that currently invests in an Insurance Policy APIF issued by the Sponsor, which in turn invests in a Unit Trust APIF. Such Unit Trust APIF will in turn invest in other Unit Trust APIFs. Each of the Principal Dynamic Hong Kong Equity Fund, Principal Dynamic Global Equity Fund, Principal Dynamic Asia Pacific Equity Fund, Principal Dynamic Global Bond Fund, Principal Dynamic Asian Bond Fund and Principal Dynamic Greater China Equity Fund is a portfolio management fund investing in two or more Unit Trust APIFs and/or Approved Index-Tracking Funds. For a constituent fund that is a portfolio management fund, it may invest in APIFs and/or ITCISs managed by the investment manager of the constituent fund or any affiliate(s) of the investment manager. The investment manager of the constituent fund, in deciding which APIFs and/or ITCISs the constituent fund may invest, will exercise its professional and independent judgment, taking into account members interests. (v) Section 5.1 Investment Objectives and Policies on page 8 of the Offering Document shall be amended by: (a) replacing the sub-heading under subsection 5.1(7) with the following: Principal Dynamic Global Equity Fund (b) replacing the second paragraph of subsection 5.1(7) in its entirety with the following: Investment Policy: The constituent fund will invest in two or more APIFs and/or ITCISs managed by different managers, which in turn, invest in a diversified portfolioof global equities and have the flexibility to invest in fixed income securities and money market in a limited manner. Normally, around 98% of the assets will be invested in equities and around 2% in cash or cash equivalent. The actual portfolio will at times vary considerably from the above as market, political, structural, economic and other conditions change. Neither the constituent fund nor the underlying APIFs and/or ITCISs will enter into any securities lending agreement, repurchase agreement or enter into any financial futures contracts or financial options contracts. (c) replacing the sub-heading under subsection 5.1(8) with the following: Principal Dynamic Asia Pacific Equity Fund Principal Mandatory Provident Fund offering document page 8
(d) replacing the second paragraph of subsection 5.1(8) in its entirety with the following: Investment Policy: The constituent fund will invest in two or more APIFs and/or ITCISs managed by different managers, which in turn, invest directly into the Asia Pacific equity markets and have the flexibility to invest in the money market in a limited manner. Normally, around 95% of the assets will be invested in equities and around 5% in cash or cash equivalent. The actual portfolio will at times vary considerably from the above as market, political, structural, economic and other conditions change. Neither the constituent fund nor the underlying APIFs and/or ITCISs will enter into any securities lending agreement, repurchase agreement or enter into any financial futures contracts or financial options contracts. (e) replacing the sub-heading under subsection 5.1(9) with the following: Principal Dynamic Global Bond Fund (f) replacing the second paragraph of subsection 5.1(9) in its entirety with the following: Investment Policy: The constituent fund will invest in two or more APIFs and/or ITCISs managed by different managers so that at least 70% of the assets of the constituent fund are invested in fixed income securities issued by governments and governmental agencies globally. Investment assets include debt obligations (bonds), preferred stocks, corporate debt obligations and convertible securities. Neither the constituent fund nor the underlying APIFs and/or ITCISs will enter into any securities lending agreement, repurchase agreement or enter into any financial futures contracts or financial options contracts. (g) replacing the sub-heading under subsection 5.1(10) with the following: Principal Dynamic Greater China Equity Fund (h) replacing the second paragraph of subsection 5.1(10) in its entirety with the following: Investment Policy: The constituent fund will invest in two or more APIFs and/or ITCISs managed by different managers, which in turn, follow the proposed asset allocation of 70-100% assets in Greater China equities, 0-30% assets in other equities and 0-30% assets in bonds*. Neither the constituent fund nor the underlying APIFs and/or ITCISs will enter into any securities lending agreement, repurchase agreement or enter into any financial futures contracts or financial options contracts. (i) replacing the sub-heading under subsection 5.1(11) with the following: Principal Dynamic Asian Bond Fund (j) replacing the second paragraph of subsection 5.1(11) in its entirety with the following: Investment Policy: The constituent fund will invest in two or more APIFs and/or ITCISs managed by different managers, which in turn, follow the proposed asset allocation of 70-100% assets in bonds within the Asia-Pacific region (excluding Japan), including but not limited to Australia, Hong Kong, Korea, Malaysia, New Zealand, Singapore and Thailand and 0-30% assets in bonds outside the Asia-Pacific region (excluding Japan) including but not limited to US dollar denominated bonds such as US treasury inflation-protected securities and treasury bonds for defensive purpose during periods of perceived uncertainty and volatility in Asian Bond Market. Neither the constituent fund nor the underlying APIFs and/or ITCISs will enter into any securities lending agreement, repurchase agreement or enter into any financial futures contracts or financial options contracts. Principal Mandatory Provident Fund offering document page 9
(k) replacing the last paragraph of section 5.1 in its entirety with the following: The Trustee does not intend to enter into futures and options contracts or engage in securities lending activities for the account of the constituent funds. Although the Trust Deed does not prohibit the lending of assets of constituent funds to third parties, the Trustee does not intend to exercise this power in the normal course of managing the constituent funds. (vi) Subsection 5.3(q) headed Fund of funds risk on page 4 of the Third Addendum shall be replaced in its entirety with the following: (q) Fund of funds risk The assets of each of the Principal Dynamic Hong Kong Equity Fund, Principal Dynamic Global Equity Fund, Principal Dynamic Asia Pacific Equity Fund, Principal Dynamic Global Bond Fund, Principal Dynamic Asian Bond Fund and Principal Dynamic Greater China Equity Fund will be invested in two or more Unit Trust APIFs and/or Approved Index-Tracking Funds which are managed by different investment managers. While PAM will select Unit Trust APIFs and Approved Index-Tracking Funds for these constituent funds investments with a view to allowing these constituent funds to achieve their investment objectives, there can be no assurance that the investment objectives can be achieved nor the selection of Unit Trust APIFs or Approved Index-Tracking Funds will result in an effective diversification of investment risks. (vii) Section 10.1 Fee Table on page 33 of the Offering Document shall be amended by deleting the sub-rows Principal Fidelity Global Equity Fund (Note g), Principal -Fidelity Asia Pacific Equity Fund (Note g), Principal Templeton Global Bond Fund (Note h), Principal-JPMorgan Asian Bond Fund and Principal JPMorgan Greater China Equity Fund from the row beginning with Management fees 7 (Note e) under the table headed (C) Annual Fund Operating Charges & Expenses Of Constituent Funds & Underlying Funds. (viii) Section 10.1 Fee Table on page 4 of the Third Addendum shall be amended by replacing the row beginning with Management fees 7 of constituent funds in the form of portfolio management funds (Note e) under the table headed (C) Annual Fund Operating Charges & Expenses Of Constituent Funds & Underlying Funds with the following: Type of charges & expenses Name of constituent fund Current level Deducted from Management fees 7 of constituent funds in the form of portfolio management funds (Note e) Principal Dynamic Hong Kong Equity Fund Principal Dynamic Global Equity Fund Principal Dynamic Asia Pacific Equity Fund Principal Dynamic Global Bond Fund Principal Dynamic Asian Bond Fund Principal Dynamic Greater China Equity Fund 1.59% p.a. of NAV Relevant assets of the Constituent Fund 1.75% p.a. of NAV Relevant assets of the Constituent Fund 1.75% p.a. of NAV Relevant assets of the Constituent Fund 1.49% p.a. of NAV Relevant assets of the Constituent Fund 1.33% p.a. of NAV Relevant assets of the Constituent Fund 1.37% p.a. of NAV Relevant assets of the Constituent Fund Principal Mandatory Provident Fund offering document page 10
(ix) Subsection Constituent funds in the form of feeder fund on page 36 of the Offering Document in note (e) of the EXPLANATORY NOTES, such heading being added pursuant to page 4 of the Third Addendum shall be amended by replacing the first paragraph under the subsection in its entirety with the following: At the constituent fund level, management fee includes only (a) the Trustee fee (currently up to a maximum of 0.5% p.a. of NAV), (b) the Sponsor fee (currently up to a maximum of 1.5% p.a. of NAV) and (c) any investment management fees payable to the investment manager of the relevant APIF(s) for managing the relevant APIF(s). The investment management fees payable to PAM for managing the relevant APIF(s) are currently subject to a maximum of 2.0% p.a. in respect of the amount invested by the relevant constituent fund. The Trustee and/or the Sponsor may, from its respective fees, pay the fees charged by other service providers including at present the fees to the investment manager of the constituent fund. (x) Subsection APIF or Approved Index-Tracking Fund level (for constituent funds in the form of feeder fund) on page 37 of the Offering Documents in note (e) of the EXPLANATORY NOTES, such heading being added pursuant to page 4 of the Third Addendum shall be amended by: (a) deleting the rows in relation to Principal Fidelity Global Equity Fund, Principal Fidelity Asia Pacific Equity Fund, Principal Templeton Global Bond Fund, Principal JPMorgan Asian Bond Fund and Principal JPMorgan Greater China Equity Fund from the table with the following header immediately after the subsection: APIFs/Approved Index-Tracking Fund under the following Constituent Fund Management Fee Current Level Maximum Level (% p.a. of NAV) The Percentages consist of (b) deleting the words and JF appearing in footnote ^ immediately after the table under the subsection without replacement; (c) deleting the footnote # immediately after the table under the subsection without replacement; (xi) The note immediately after the table described in (x)(a) above (i.e. on page 5 of the Third Addendum) shall be replaced in its entirety with the following: Note: The information in the table above is not applicable to the Principal Dynamic Hong Kong Equity Fund, Principal Dynamic Global Equity Fund, Principal Dynamic Asia Pacific Equity Fund, Principal Dynamic Global Bond Fund, Principal Dynamic Asian Bond Fund and Principal Dynamic Greater China Equity Fund as the management fee for each of the abovementioned constituent funds will be charged at the constituent fund level (such management fee will cover also any fees payable at the underlying fund level). (xii) The EXPLANATORY NOTES section on page 38 of the Offering Document shall be amended by removing note (g) and (h) in their entirety and accordingly each reference to note (i) and (j) in the Offering Document shall be replaced with note (g) and (h) respectively; Except as amended by this Fourth Addendum, the Offering Document remains in full force and effect. Principal Trust Company (Asia) Limited 16 October 2017 Principal Mandatory Provident Fund offering document page 11
Third Addendum to the Offering Document for Principal MPF Smart Plan (the Offering Document ) This Third Addendum should be read in conjunction with and forms part of the Offering Document for Principal MPF Smart Plan (December 2016 edition) (the Offering Document ), the First Addendum dated 12 December 2016 and the Second Addendum dated 12 December 2016. By this Third Addendum, the Offering Document shall be amended as follows with effect from 28 February 2017 (save for the change set out in section 3(i) below, which will take immediate effect): 1. Appointment of investment manager of all constituent funds (other than Principal Hang Seng Index Tracking Fund) (i) Section 1 DIRECTORY OF PARTIES on page 1 of the Offering Document shall be amended by: (a) inserting the following paragraphs immediately after the paragraph headed Custodian of the Constituent Fund, Principal Hang Seng Index Tracking Fund : Investment Manager of all Constituent Funds (other than Principal Hang Seng Index Tracking Fund) PRINCIPAL ASSET MANAGEMENT COMPANY (ASIA) LIMITED Unit 1001-1003 Central Plaza 18 Harbour Road Wanchai Hong Kong Investment Manager of Principal Hang Seng Index Tracking Fund STATE STREET GLOBAL ADVISORS ASIA LIMITED 68/F., Two International Finance Centre 8 Finance Street Central Hong Kong (b) replacing the paragraph headed Investment Managers of the Constituent Funds and/or the Underlying Approved Pooled Investment Funds/Approved Index-Tracking Fund in its entirety with the following: Investment Managers of the Underlying Approved Pooled Investment Funds/Approved Index- Tracking Fund (in respect of Constituent Funds in the form of feeder funds) PRINCIPAL ASSET MANAGEMENT COMPANY (ASIA) LIMITED Unit 1001-1003 Central Plaza 18 Harbour Road Wanchai Hong Kong FIL INVESTMENT MANAGEMENT (HONG KONG) LIMITED Level 21, Two Pacific Place 88 Queensway Admiralty Hong Kong Principal Mandatory Provident Fund offering document page 1
FRANKLIN TEMPLETON INVESTMENTS (ASIA) LIMITED 17/F Chater House 8 Connaught Road Central Hong Kong JF ASSET MANAGEMENT LIMITED 21/F Chater House 8 Connaught Road Central Hong Kong STATE STREET GLOBAL ADVISORS ASIA LIMITED 68/F., Two International Finance Centre 8 Finance Street Central Hong Kong (ii) Section 3 PRINCIPAL MPF SMART PLAN on page 2 of the Offering Document shall be amended by replacing the third paragraph under the section in its entirety with the following: Under the Trust Deed, subject to the approval of the Commission and the Authority, the Trustee (with the agreement of the Sponsor) has the power to appoint a person as an investment manager to manage all or part of the assets of the scheme. Principal Asset Management Company (Asia) Limited (PAM) has been appointed as the investment manager of all constituent funds (other than Principal Hang Seng Index Tracking Fund). For Principal Hang Seng Index Tracking Fund, State Street Global Advisors Asia Limited (SSgA) has been appointed as the investment manager. The underlying unit trust APIFs and Approved Index-Tracking Funds are managed by investment managers as described in Section 3.5 below. (iii) The paragraph under Section 3.4 Investment Managers of the Constituent Funds on page 3 of the Offering Document shall be replaced in its entirety with the following: For all constituent funds of the Plan (other than Principal Hang Seng Index Tracking Fund), PAM has been appointed as the investment manager. For Principal Hang Seng Index Tracking Fund, SSgA has been appointed as the investment manager. (iv) Section 3.5 Investment Managers of the Underlying APIFs and Approved Index-Tracking Fund on page 3 of the Offering Document shall be amended by replacing the words Principal Asset Management Company (Asia) Limited and Principal Asset Management Company (Asia) Limited (PAM) whenever they appear with the words PAM. 2. Restructure of the Principal RCM Hong Kong Fund (i) Each reference to Principal RCM Hong Kong Fund whenever it appears in the Offering Document shall be replaced with the words Principal Dynamic Hong Kong Equity Fund. (ii) Section 3.5 Investment Managers of the Underlying APIFs and Approved Index-Tracking Fund on page 3 of the Offering Document shall be amended by: (a) deleting the words, RCM Asia Pacific Limited appearing in the first paragraph under it without replacement; and (b) deleting the fifth bullet point under it in its entirety without replacement. Principal Mandatory Provident Fund offering document page 2
(iii) Section 5 CONSTITUENT FUNDS on page 6 of the Offering Document shall be amended by: (a) replacing the row relating to Principal RCM Hong Kong Fund in its entirety with the following under the table headed as follows: Name of Constituent Funds Principal Dynamic Hong Kong Equity Fund Investment Structure Invest in two or more unit trust APIFs and/or Approved Index- Tracking Funds Investment manager of the underlying APIF/Approved Index-Tracking Fund (each, Underlying Fund ) Sub-investment manager (as indicated with#) /investment adviser (as indicated with*) of the Underlying Fund Fund Type Multi-managers* Nil Equity Fund Hong Kong * The identities of multi-managers may change as a result of any changes to the underlying APIFs and/or Approved Index-Tracking Funds as the Investment Manager may from time to time determine. (b) replacing the paragraph immediately after the table under it in its entirety with the following: All constituent funds are currently denominated in Hong Kong dollars. Each of the constituent funds (other than the Principal Guaranteed Fund and Principal Dynamic Hong Kong Equity Fund) is currently a feeder fund investing entirely in a single Unit Trust APIF or Approved Index-Tracking Fund managed by investment managers as described in Section 3.5 above. The Principal Guaranteed Fund is currently denominated in Hong Kong dollars and is a feeder fund that currently invests in an Insurance Policy APIF issued by the Sponsor, which in turn invests in a Unit Trust APIF. Such Unit Trust APIF will in turn invest in other Unit Trust APIFs. The Principal Dynamic Hong Kong Equity Fund is a portfolio management fund investing in two or more Unit Trust APIFs and/or Approved Index-Tracking Funds. (iv) Section 5.1 Investment Objectives and Policies on page 8 of the Offering Document shall be amended by: (a) replacing the sub-heading under subsection 5.1(12) with the following: Principal Dynamic Hong Kong Equity Fund ; and (b) replacing the second paragraph of subsection 5.1(12) in its entirety with the following: Investment Policy: The constituent fund pursues its investment objective by investing in two or more Unit Trust APIFs and/or Approved Index-Tracking Funds, which in turn, invest in a diversified portfolio of Hong Kong equities. Such underlying Unit Trust APIFs and Approved Index-Tracking Funds may or may not be managed by PAM and/or its affiliates. Normally 95% of the assets of the constituent fund will be invested in Hong Kong equities, while the remaining will be held in cash or short-term deposits. Any holding of cash or short term deposits is to provide liquidity and/or for any other purpose as the investment manager considers appropriate. Principal Mandatory Provident Fund offering document page 3
(v) Section 5.3 Risk Factors on page 10 of the First Addendum shall be amended by inserting the following paragraph immediately after the end of subsection 5.3(p): (q) Fund of funds risk The assets of the Principal Dynamic Hong Kong Equity Fund will be invested in two or more Unit Trust APIFs and/or Approved Index-Tracking Funds which are managed by different investment managers. While PAM will select Unit Trust APIFs and Approved Index-Tracking Funds for the constituent fund s investments with a view to allowing the constituent fund to achieve its investment objectives, there can be no assurance that the investment objectives can be achieved nor the selection of Unit Trust APIFs or Approved Index-Tracking Funds will result in an effective diversification of investment risks. (vi) Section 10.1 Fee Table on page 33 of the Offering Document shall be amended by: (a) amending the table headed (C) Annual Fund Operating Charges & Expenses Of Constituent Funds & Underlying Funds : (I) deleting the sub-row Principal RCM Hong Kong Fund from the row beginning with Management fees 7 (Note e) (II) adding the following row immediately after the row beginning with Management fees 7 (Note e) with the header as follows: Type of charges & expenses Management fees 7 of constituent funds in the form of portfolio management funds (Note e) Name of constituent fund Principal Dynamic Hong Kong Equity Fund Current level Deducted from 1.59% p.a. of NAV Relevant assets of the Constituent Fund (b) inserting the following sub-heading immediately below the words Constituent fund level in note (e) of the EXPLANATORY NOTES : (i) Constituent funds in the form of feeder fund (c) replacing the sub-heading APIF or Approved Index-Tracking Fund level in note (e) of the EXPLANATORY NOTES in its entirety with the sub-heading APIF or Approved Index-Tracking Fund level (for constituent funds in the form of feeder fund) ; (d) inserting the following paragraph immediately before the re-named subsection APIF or Approved Index-Tracking Fund level (for constituent funds in the form of feeder fund) in note (e) of the EXPLANATORY NOTES : (ii) Constituent funds in the form of portfolio management funds The management fee of each constituent fund includes (a) the Trustee fee (currently up to a maximum of 0.5% p.a. of NAV), (b) the Sponsor fee (currently up to a maximum of 1.5% p.a. of NAV), (c) any investment management fees payable to PAM for managing the constituent fund, (d) any investment management fee (where applicable) payable to the investment manager of the underlying Unit Trust APIFs and/or Approved Index-Tracking Funds in which the constituent fund invests, and (e) any trustee and administration fee (where applicable) of such underlying APIFs and/ or Approved Index-Tracking Funds. The Trustee and/or the Sponsor may, from its respective fees, pay the fees charged by other service providers including at present the fees to the Administrator and the investment manager of the constituent fund. Principal Mandatory Provident Fund offering document page 4
(e) deleting the words, RCM and and RCM appearing in the first paragraph under the subsection Constituent fund level in note (e) of the EXPLANATORY NOTES without replacement; (f) replacing the first sentence appearing in the second paragraph under the subsection Constituent fund level in note (e) of the EXPLANATORY NOTES in its entirety with the following: Currently, for the Principal MPF Conservative Fund, the Principal Cash Fund, the Principal Growth Fund, the Principal Balanced Fund and the Principal Stable Fund, the maximum rate of the management fee at the constituent fund level is 4.00%. (g) replacing the last sentence appearing in the second paragraph under the subsection Constituent fund level in note (e) of the EXPLANATORY NOTES in its entirety with the following: In respect of the Principal Fidelity Global Equity Fund, the Principal Fidelity Asia Pacific Equity Fund, the Principal Templeton Global Bond Fund, the Principal Hang Seng Index Tracking Fund and the Principal Dynamic Hong Kong Equity Fund, the management fee at the constituent fund level is subject to a maximum rate of 2.00%. (h) deleting the row in relation to Principal RCM Hong Kong Fund from the table with the following header immediately after the renamed subsection APIF or Approved Index-Tracking Fund level (for constituent funds in the form of feeder fund) in note (e) of the EXPLANATORY NOTES : APIFs/Approved Index-Tracking Fund under the following Constituent Fund Management Fee Current Level Maximum Level (% p.a. of NAV) The Percentages consist of (i) inserting the following note immediately after the table described in (h) above: Note: The information in the table above is not applicable to the Principal Dynamic Hong Kong Equity Fund as the management fee for the Principal Dynamic Hong Kong Equity Fund will be charged at the constituent fund level (such management fee will cover also any fees payable at the underlying fund level). (j) deleting the word, RCM appearing in footnote ^ immediately after the table under the renamed subsection APIF or Approved Index-Tracking Fund level (for constituent funds in the form of feeder fund) in note (e) of the EXPLANATORY NOTES without replacement. Principal Mandatory Provident Fund offering document page 5
3. Miscellaneous changes (i) The Offering Document shall be amended by inserting the words or 2885 8011 immediately after the words 2802 2812 whenever they appear in the Offering Document. (ii) Paragraph 2 of the First Addendum shall be amended by replacing the words interactive voice recording system appearing in the definition of Specific Investment Instruction in section 6.5A MPF Default Investment Strategy (to be introduced by paragraph 2 of the First Addendum) with the words interactive voice response system. Except as amended by this Third Addendum, the Offering Document remains in full force and effect. Principal Trust Company (Asia) Limited 28 February 2017 Principal Mandatory Provident Fund offering document page 6
Second Addendum to the Offering Document for Principal MPF Smart Plan (the Offering Document ) This Second Addendum should be read in conjunction with and forms part of the Offering Document for the Principal MPF Smart Plan (the Offering Document ) and the First Addendum dated 12 December 2016. By this Second Addendum, the Offering Document shall be amended as follows with effect from 1 April 2017 (being the commencement date of the MPF default investment strategy): 1. The section headed TABLE OF CONTENTS shall be amended by inserting the following immediately after the line 6.5. Mandates to Invest : 6.5A MPF Default Investment Strategy. 2. The subsection headed 6.5 Mandates to Invest on page 24 of the Offering Document shall be amended by: (a) replacing the first paragraph under it in its entirety with the following: On becoming a member of the Plan, a member must give a written investment mandate to the Trustee by completing the investment mandate section on an application for membership setting out how amounts paid by or on behalf of the member to the Plan are to be invested in the constituent funds and returning it to the Trustee. In the absence of a member s valid investment mandate, the Trustee will invest such amounts (net of charges) in DIS. Where a member has multiple capacities under the Plan, the investment arrangement applies to the account of the member in each capacity individually. In other words, if a member is an employee member and a personal account member and wishes to switch his accrued benefits and contributions under the account related to his/her employee member status into DIS, such switching will only impact the account related to his/her employee member status and not the account related to his/her personal account member status. Any change of investment mandate only applies to future contributions and will therefore not affect the existing investments of the accrued benefits. For the avoidance of doubt, any change of mandate instruction given after enrolment and not meeting the requirements for a Specific Investment Instruction will be rejected, and in that case, the existing investment allocation (in respect of future contributions and accrued benefits transferred from another MPF scheme) will remain unchanged. (b) inserting the following paragraph immediately after the second paragraph: In respect of an account of a member for which no investment instruction was given but for whatever reasons some but not all of the accrued benefits in that account are invested in the default fund (designated by the Trustee with the agreement of the Sponsor from time to time currently the Principal MPF Conservative Fund and prior to 10 January 2011, the Principal Cash Fund) immediately before 1 April 2017, unless the Trustee has received any specific investment instructions, the member s accrued benefits (including future contributions and accrued benefits transferred from another MPF scheme) in that account will be invested in the same manner as accrued benefits in that account were invested immediately before 1 April 2017. Principal Mandatory Provident Fund offering document page 1
3. The subsection headed 6.6 Switching Instructions on page 24 of the Offering Document shall be amended by the replacement of the first paragraph under it in its entirety with the following: A member has the right to give a switching instruction (the minimum investment allocation in any constituent fund selected must be an integer percentage and 100% of the switch-out total must be invested in one or more constituent fund(s)) to switch all or part of his/her units in a constituent fund into units in another constituent fund by giving a duly completed change in investment form to the Trustee. Provided that the switching instruction is valid, the switching instruction will take effect as soon as practicable, and in any case, within one calendar month (subject to any suspension in the determination of the net asset value of any relevant constituent fund) after receipt of the change in investment form by the Trustee. Any invalid switching instruction (e.g. the switch-in total is less than or exceeds 100% of the switch-out total) will be rejected and will not be processed. For the avoidance of doubt, where a member switches all or part of his/her existing investments, such switching instruction only applies to existing investments and not the new contributions. Any switching instruction given after enrolment and not meeting the requirements for a Specific Investment Instruction will be rejected, and in that case, existing investment (in respect of the existing accrued benefits) will remain unchanged. 4. The subsection headed 8.1 Transfers to Other Schemes on page 27 of the Offering Document shall be amended by inserting the following paragraph at the end of the subsection: Any money paid to the Plan after the relevant member s accrued benefits have been transferred to another MPF scheme under this section 8.1 (e.g. outstanding contributions and contribution surcharge) will be transferred to the transferee MPF scheme as soon as practicable and will not be invested. 5. The subsection headed EXPLANATORY NOTES on page 36 of the Offering Document shall be amended by replacing the third paragraph under explanatory note (e) in its entirety with the following: Following is a breakdown of the management fees in respect of each constituent fund (other than the Principal Core Accumulation Fund and Principal Age 65 Plus Fund) on the constituent fund level and the underlying APIF or Approved Index-Tracking Fund level. Except as amended by this Second Addendum, the Offering Document remains in full force and effect. Principal Trust Company (Asia) Limited 12 December 2016 Principal Mandatory Provident Fund offering document page 2