Principal Prosperity Series Principal Asia Pacific High Dividend Equity Fund Grasp the Chance for Yielding Growth and Income! August 218 Important Notes 1. The Principal Asia Pacific High Dividend Equity Fund ( Fund ) will invest in a diversified portfolio of listed securities in the Asia Pacific region, including but not limited to the following countries: Australia, China, Hong Kong, Indonesia, Malaysia, New Zealand, Philippines, Singapore, South Korea, Taiwan and Thailand. Principal Asset Management Company (Asia) Limited ( Manager ) will focus on companies which demonstrate strong corporate fundamentals and offer the potential for superior dividend yields. The Fund may also on an ancillary basis from time to time hold cash, deposits and instruments with floating or fixed rates such as certificates of deposits, bankers acceptances and commercial paper. 2. The Fund invests in equities located in developed markets and in emerging markets. Such investments carry market, credit, liquidity, currency, regulatory and other associated risks that can cause portfolio values to be very volatile.. For Income Class Units of the Fund, dividend is not guaranteed. The Manager may at its discretion pay dividend out of gross income while paying all or part of the fees and expenses attributable to the Income Class Units out of the capital of such Units, resulting in an increase in distributable income for the payment of dividends by the Income Class Units and therefore, the Sub-Fund may effectively pay dividend paid out of capital. Payment of dividend effectively out of capital amounts to a return or withdrawal of part of the investor s original investment in the Income Class Units or from any capital gains attributable to that original investment. Any distributions involving payment of dividends effectively out of the capital of the Income Class Units may result in an immediate reduction of its net asset value per Unit. 4. Investment involves risk. There is no assurance on investment returns and you may not get back the amount originally invested. Dividend rate is not guaranteed.. The investment decision is yours and you should not invest in this Fund unless the intermediary who sells it to you has advised you that it is suitable for you and explained how it is consistent with your investment objectives. 6. You should not rely solely on this marketing material when making your investment decision. You should read the Explanatory Memorandum of Principal Prosperity Series for further details (including investment policy, risk factors, fees and charges, and fund information). Average annualized dividend rate for the past 1 years.9% 1 Monthly Dividend Distributions Available Income Class Units 1 1. Dividend is not guaranteed. Fund Merits: Leverage of dividend-paying large-caps and growth-potential small-caps A performing, well-diversified portfolio of ~1 holdings Steady stream of monthly distribution 1 Consistent Total return return Lipper Leader Fund Rating 2 as of 6/29/18 Quartile Ranking 4 # YTD, 1Yr, Yr and Yr Over 17-Years track record of the fund 4, with 1st quartile ranking in YTD, 1 Year, Years and Years outperforming over peers
Why Investing in Asia Pacific Region? 1. Structural Financial Strength Yearly Gross Domestic Product (GDP) Growth (As of 218 2nd Quarter) GDP in Asia Pacific (ex-japan) ( Asia Pacific ) countries continue to outpace matured economies. Healthy public finances enable local governments to adopt flexible fiscal policies, creating a strong basis for long-term and steady economic growth. 8.% 7.% 6.%.% 4.%.% 2.% 1.% China Indonesia Asia Pacific # Thailand Malaysia U.S.A. Taiwan Korea India Spain Euro Zone* Greece Japan.%.%.% 1.% 1.% 2.% 2.% Italy Government Debt / Gross National Product (As of end 217). A Subdued-Inflation Environment Enables Flexibility in Fiscal Policies in Asia Pacific 1 6.. 4.. 2. 1.. 1. 2. 2. 1.7 2.2 2. 2. Taiwan Korea Australia China Thailand Malaysia Hong Kong 2.7 218 Inflation 1.4 1.1.2 2. 2.2 2.2 222 Forecast..6 Indonesia India 4.8 2. Growing Household Income Middle Class Portion in the World 6 In years time, Asia Pacific will account for 42% of middle-class household of the world s population; in 2, it will reach close to 6%. Higher income in the region is expected to set the stage for a strong service and consumption economy. 6 4 2 1 26% 17% 1% 8% 29% 2% 7% 7% 6% 2% 42% 9% North America Europe Central and South America Asia Pacific 22 2 % % % Others Total Return 11 4. Small Cap Outperforms Continuously 6 4 2 1-1 2 MSCI AP ex-japan Small Cap Index MSCI AP ex-japan Index 22. 449. 21 22 2 24 2 2 26 27 211 21 21 21 217 218. Seize the Opportunities for Attractive Valuation 8 P/E Ratio (multiple) Global Equity Market Index 11-Year Average Dividend Yield Current Difference P/E Ratio (x) 9 2 2 1 1 17. 1.7 Global 18.1 18..2 United States 17. 2.4. 27 211 21 21 217 218 Emerging Market 1.7 1.4 -. 11-Year Average P/E Asia Pacific ex-japan Asia Pacific ex Japan 17. 1.7 -.6 Europe 19.7 1.8 -.8
Investment Strategy for Asia Pacific Region 1. Attractive Dividend Yield Asia Pacific s corporates are posting attractive dividend yield compared to its respective 1-year government bond yield 12. Equity investors benefit from steady dividend income, in addition to capital appreciation. 6.. Asia Pacific Developed Market Region 4.2 4.12 4. 4.. 2..9.2 1.9 1.9 2.67 2.4 1.. Australia Taiwan Singapore Hong Kong Germany U.S Japan MSCI Asia Pacific ex-japan 218E Dividend Yield 1 - Year Government Bond Yield Global 2. Dividends Contribute Return in the past 1 years Dividend yield accounts for 2% of total returns in Asia Pacific 1, a key contributor to performance growth. 2. 1.. Australia Singapore Hong Kong Dividend Taiwan Europe American Japan Asia Pac Global ex Japan Capital Appreciation Total Return 14. Dividend Income Adds to Total Return 6 4 2 1-1 In the past 18 years, Asia Pacific corporates that distribute higher dividend continue to outperform the broad market. The accelerating economy and healthy public finances are great thesis for profit margins and steady cash flow; further support the dividend payout. 2 21 22 2 24 2 2 26 27 MSCI AP ex-japan HD Yield Index 211 21 21 21 41.2 449. 217 MSCI AP ex-japan Index 218
How to Invest in Asia Pacific Dividend Income and Capital Appreciation? 1. Stock Selection Criteria A performing, well-diversified portfolio with 1 securities, encompassing dividend-paying large-caps and highgrowth potential mid-to-small caps. 2. Consistent Outperformance 6 +6.9 7+ securities across Asia Pacific Bottom-up stock selection Sustainable business fundamentals rising expectation Attractive valuation Investment team with prove track record Global research platform Total Return 1 4 2 1-1 22 2 24 24 2 26 26 27 Principal Asia Pacific High Dividend Fund Cumulative Return 4 Principal Asia Pacific High Dividend Fund 1 year years 211 21 21 217 218 years Benchmark 1 years Since Inception 12.7 22.7 47.9 66.1 498. Approximately 1 holdings Benchmark 9.7 22.87 4.6 66.8 47.12 Excess Return 2. -.12 4.4 -.7 6.9 Steady Distribution Strong Cash Flow Corporate Governance Growth Potention. Potential for Yielding Opportunity Distribution Yield Average annualized dividend rate for the past 1 years.9% 1. Record Year Dividend Yield Record Year Dividend Yield Record Year Dividend Yield 2.% 4.6% 21.7% 24.2% 2.6%.8% 2 6.4% 2.9% 21.% 26.7% 211 4.%.2% 27.1%.7% 217 2.%
About the Fund 1. Fund Information Fund Manager Fund Domicile Base Currency Portfolio Dividend Yield (Weighted average) Donghui (David) Han, CFA 17 years of industry experience Alan Xi Wang, CFA 18 years of industry experience Hong Kong US Dollar.1% 16 Initial Charge Up to % Management Fee 1.4% p.a. 17 Inception Date 1 December 22 Benchmark Fund Codes ISIN Bloomberg MSCI Ac Asia Pacific ex Japan Net Return Index (USD) HK272416 DAOAPDO HK 2. Top 1 Holdings 19 Stock % Tencent Holdings Ltd 4.9 Alibaba Group Holding Ltd.9 Samsung Electronics Co Ltd.7 Taiwan Semiconductor Manufacturing Co Ltd.1 AIA Group Ltd 2.9 China Construction Bank Corp-H 2. DBS Group Holdings Ltd 1.8 SK Hynix Inc 1.7 Commonwealth Bank of Australia 1.7 Industrial & Comm Bank of China Ltd-H 1. Total 27.2 Total Holdings 14 Dividend Policy 1 Monthly 18. Geographic Allocation 4. Sector Allocation 6 7 11 8 91 1 6 7 8 9 1 11 1 4 4 2 1 China 28.8 2 Australia 18.9 Korea 12.2 4 Hong Kong 9.7 Taiwan 9.1 6 India 7.7 7 Singapore 4. 8 Thailand 1.8 9 Malaysia.9 1 Others 1.2 11 Cash.2 1 Financials 6. 2 Information Technology 24.2 Materials 8.4 4 Industrials 6.4 Consumer Discretionary.7 6 Energy. 7 2 Telecommunication Services.2 8 Utilities 2.2 9 Health Care 1.9 1 Consumer Staples 1.6 11 Cash.2
1. Distribution policy: Monthly dividend distribution (if any), but the policy is subject to the complete and absolute decision of the fund manager and there is no guarantee that a particular dividend policy will continue. Dividend is not guaranteed. Calculation: Annualised yield = [(1+distribution per unit/ Ex-Dividend Price)^distribution frequency] 1, the annualized dividend yield is calculated based on the latest dividend distribution with dividend reinvested, and may be higher or lower than the actual annual dividend yield. Positive distribution yield does not imply positive return. For funds offering classes with a distribution feature, such classes aim at monthly distribution as the case may be. Dividend rate is not guaranteed. Distributions may be paid from capital. 2. Source: Lipper, data as of 29 June 218. The Lipper Ratings for Consistent Return and Total Return of the fund are 4. Lipper Leaders Fund Ratings: Funds are ranked on a scale of to 1, the top 2% of funds receive a rating of and are named Lipper Leaders.. 218 Morningstar, Inc. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar; (2) may not be copied or distributed; and () is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. 4. Source: 218 Morningstar, as of 29 June 218. Peer group refers to Asia Pacific ex-japan Equity. Performance is calculated on a bid to bid basis, fund currency (dividend reinvested). 218 Morningstar, Inc. All Rights Reserved. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Index is MSCI AC Asia Pacific ex-japan Net Return Index (USD). The calendar year performance of the fund for the preceding years are: 218 YTD: -2.7%; 217: 6.%; : 6.2%; 21: -6.7%; :.7% and 21: 2.8%. The calendar year performance of 218 YTD for the fund represents performance from 1 January 218 to June 218 which is not a full year performance.. Source: Bloomberg / CIA / *Eurostat / #International Monetary Fund (IMF), last update as of end 217; GDP growth data as of June 218. 6. Source: Organization for Economic Co-operation and Development (OECD) as of 1 December. 7. Source: Global Finance, last update as of 1 March. 8. Source: Bloomberg, last update as of June 218. 9. Source: Bloomberg, last update as of June 218. 1. Source: Bloomberg and IMF, last update as of June 218. 11. Source: 218 Morningstar, last update as of June 218. 12. Source: Bloomberg, last update as of June 218. 1. Source: Bloomberg, last update as of December 217. 14. Source: 218 Morningstar, last update as of June 218. 1. Source: Bloomberg, last update as of June 218. 16. The figure is for reference only and does not represent the actual yield received by investors. 17. The management fee has been changed from 1.2% to 1.4% effective from 1 July 27. 18. The Manager intends to distribute dividend monthly. For detail of dividend disclosures, please refer to point of the Important Notes on page 1. 19. Investors should be aware that the exposure of the Fund can change significantly on a daily basis. Disclosures: Source of data: All fund data is as of June 218 and all figures shown in this document are in U.S. dollars unless stated otherwise. Investment involves risks. Past performance of any particular fund or product mentioned in this document is not indicative of future performance of the relevant fund or product, and the value of the each fund or product mentioned in this document may go down as well as up. You should not invest solely in reliance on this document. There is no assurance on investment returns and you may not get back the amount originally invested. You should consider your own risk tolerance level and financial circumstances before making any investment choices. If you are in doubt as to whether a certain fund or product mentioned in this document is suitable for you (including whether it is consistent with your investment objectives), you should seek legal, financial, tax, accounting and other professional advice to ensure that any decision made is suitable with regards to that your circumstances and financial position, and choose the fund(s)/product(s) suitable for you accordingly. The information contained in this document has been derived from sources believed to be accurate and reliable as of the date of publishing of this document, and may no longer be true, accurate or complete when viewed by you. The content is for informational purpose only and does not constitute an offer, a solicitation of an offer or invitation, advertisement, inducement, representation of any kind or form whatsoever or any advice or recommendation to enter into any transactions in respect of the funds/products referred to in this document. This document is not intended to be relied upon as a forecast, research, or investment advice regarding a particular investment or the markets in general, nor is it intended to predict or guarantee the performance of any investment. The information does not take account of any investor s investment objectives, particular needs or financial situation. You should not consider the information as a comprehensive statement to be relied upon. All expressions of opinion and predictions in this document are subject to change without notice. Subject to any contrary provisions of applicable law, neither the Company, nor any of its affiliates, nor any of the employees or directors of the Company and its affiliates, warrants or guarantees the accuracy of the information contained in this document, nor accepts any responsibility arising out of or in connection with any errors or omissions of the contents set out in this document. This document is the property of Principal Investment & Retirement Services Limited that no part of this document may be modified, reproduced, transmitted, stored or distributed to any other person or incorporation in any format for any purposes without Principal Investment & Retirement Services Limited s prior written consent. Principal Global Investors is the original owner and author of the content of this document. Principal Global Investors is the asset management arm of the Principal Financial Group (The Principal ) # and includes the asset management operations of the following subsidiaries of The Principal: Principal Global Investors, LLC; Principal Real Estate Investors, LLC; Principal Enterprise Capital, LLC, Spectrum Asset Management, Inc.; Post Advisory Group, LLC; Columbus Circle Investors; Edge Asset Management, Inc.; Morley Capital Management, Inc.; Finisterre Capital, LLP; Origin Asset Management, LLP; Principal Global Investors (Europe) Limited; Principal Global Investors (Singapore) Ltd.; Principal Global Investors (Australia) Ltd.; Principal Global Investors (Japan) Ltd.; Principal Global Investors (Hong Kong) Ltd.; CIMB-Principal Islamic Asset Management Sdn. Bhd.; and the majority owned affiliates of Principal International, Inc. Assets under management includes assets managed by investment professionals of Principal Global Investors under dual employee arrangements with other subsidiaries of The Principal and assets managed in accordance with investment advice provided by Principal Global Investors through the delivery of a model. # The Principal Financial Group and The Principal are registered trademarks of Principal Financial Services, Inc., a member of the Principal Financial Group. This document has not been reviewed by the Securities and Futures Commission or any regulatory authority in Hong Kong. This document is issued by Principal Investment & Retirement Services Limited. www.principal.com.hk Mutual Funds Products Hotline (82) 2117 88 Email mfsaleshk@exchange.principal.com Fax (82) 2827 1848 MF-DADOSF-E-N-2188-1