1 Value Partners High-Dividend Stocks Fund 31 August 2012 2 Pages NAV per unit: US$55.68 / HK$431.8541 2 (for reference only) Fund size: US$719.06 million Please pay particular attention to the risk of investment in China and other markets in the Asian region and in companies with medium or small capitalization. The value of the fund can be extremely volatile and could go down substantially within a short period of time. It is possible that the entire value of your investment could be lost. The fund may also invest in derivatives which can involve material risks, e.g. counterparty default risk, insolvency or liquidity risk, and may expose the fund to significant losses. You should not make investment decision on the basis of this material alone. Please read the explanatory memorandum for details and risk factors. Value Partners High-Dividend Stocks Fund attractive opportunities for stable growth Named Lipper Fund Awards 2012 (Hong Kong) Best Equity Asia Pacific (Ex Japan) 5 Years Category 3 Selected as Top 100 Funds of the Year 2010 in Equity Asia Ex-Japan 4 Takes a defensive approach to investing in stocks with high dividend yields 5 in the Asia Pacific ex-japan region Investment objective The fund aims to provide capital appreciation to unitholders by investing primarily in a portfolio of relatively higher yielding debt and equity securities in Asian region. Performance update Value Partners High-Dividend Stocks Fund MSCI Asia Pacific (ex-japan) Index One month +0.4% -0. Year-to-date +10. +6.4% One year -2.1% -4.7% Three years +48.0% +16.0% Five years +28.4% -10. Since launch +456. +156.4% Annualized return +18.7% +9.9% Annualized volatility 20. 24. Annualized return and volatility are calculated from inception on 2 September 2002. Volatility is a measure of the theoretical risk in terms of standard deviation; in general, the lower the number, the less risky the investment, and vice versa. Annual return since launch Year Annual return 2002 (Since launch) +10. 2003 +79.7% 2004 +8.9% 2005 +11.0% 2006 +35.0% 2007 +44.2% 2008-46. 2009 +82. 2010 +25. 2011-11.9% 2012 (YTD) +10. All performance data is sourced from HSBC Institutional Trust Services (Asia) Limited and Bloomberg, in USD, NAV to NAV. Performance data is net of all fees. All performance figures were updated as of 31 August 2012. 1. 2012 Morningstar, Inc. All Rights Reserved. Morningstar Rating TM as at 31 July 2012. 2. Investors should note that the base currency of the fund is in USD. The HKD equivalent is for reference only and should not be used for subscription or redemption purpose. Conversion to the base currency of the fund will normally take place at the prevailing rate (as determined by the fund s Trustee or Custodian) on the corresponding fund dealing day. Investor should be aware of possible risks resulting from fluctuations of exchange rates against USD. 3. Based on data as of year-end 2011. 4. Based on fund size, track record, Morningstar s Star rating and one year absolute ranking as at month end October 2010. 5. Stocks that offer above market average dividends and/or with potential dividend growth. Please note dividend payout is at Fund Manager s discretion. 9th Floor, Nexxus Building, 41 Connaught Road Central, Hong Kong Tel : (852) 2880 9263 Fax : (852) 2565 7975 Email : vpl@vp.com.hk Website : www.valuepartners.com.hk
31 August 2012 Top 10 security holdings Name Industry 6 % China Petroleum & Chemical Energy 3.6 CapitaCommercial Trust REITs 3.4 China Construction Bank Banks 3.4 Industrial & Commercial Banks 3.3 Bank of China Bank of China Banks 2.9 PetroChina Energy 2.8 Emperor International Real estate 2.8 China Shenhua Energy Energy 2.7 Shenzhou International Group Consumer durables & 2.6 apparel Hyundai Marine & Fire Insurance Insurance 2.6 These stocks constitute 30% of the fund. Geographical exposure by listing 7 H Shares Hong Kong Bonds South Korea Singapore 8 Cash Taiwan Red Chips Gold Indonesia 9 Others Sector exposure 6 7 Bonds REITs Consumer discretionary Banks Energy Real estate Information technology Telecom services 8 Cash Industrials Gold 9 Others Insurance Consumer staples 9% 7% 6% 10% 9% 7% 2% 22% 20% Portfolio characteristics As at 31 August 2012 2012 10 Price/earnings ratio 9.5 times Price/book ratio 1.3 times Dividend yield 5. Yield to maturity/put 11.2% Fund facts Fund manager: Value Partners Limited Custodian: HSBC Institutional Trust Services (Asia) Limited Minimum subscription: US$1,000/HK$10,000 Subscription fee: Up to of the issue price Management fee: 1.2 per annum Performance fee 11 : 1 of profit (high-on-high principle) Dealing and valuation date: Daily Launch date: 2 September 2002 Fund code: U62298 (DIST - Cash) U62285 (DIST - Unit) U62485 (HKD - DIST Cash) Value Partners Investment Team Chairman & Co-Chief Investment Officer: Cheah Cheng Hye Deputy Chairman & Co-Chief Investment Officer: Louis So Deputy Chief Investment Officer: Renee Hung Investment Director: Norman Ho, CFA Senior Fund Managers: Eric Chow; Fawaz Habel; Doris Ho; Ada Lau, CFA; Lien Ber Luen, CFA; Alan Wang, CFA; Michelle Yu, CFA Recent awards Lipper Fund Awards 2012 (Hong Kong) Best Asia Pacific (Ex-Japan) Equity 5 Years Category 3 ~ Lipper Top 100 Funds of the Year 2010 Asia Ex-Japan Equity 4 ~ Benchmark Magazine 6. Classification is based on Global Industry Classification Standard (GICS). 7. Exposure refers to net exposure (long exposure minus short exposure). 8. Cash refers to net cash on hand excluding cash for collaterals and margins. 9. Others include 0.01% cash for collaterals and margins. 10. The profile is based on market consensus forecast as derived from I/B/E/S and Bloomberg. Note that the manager s internal estimates may differ significantly from I/B/E/S and Bloomberg estimates. Investors should note that all yield figures are for reference only and do not represent the actual performance of the fund or the dividend yield received by investors, nor does a positive yield imply a positive return. Dividend yield is calculated based on the equity portion of the fund, whereas Yield to maturity/put is calculated based on the debt portion of the fund by taking the average of yields of individual holdings (being the higher of the yield to maturity and yield to put of each bond/convertible bond) after excluding event-driven investment with extremely high yield. 11. Performance fee will only be charged if the NAV at the end of the financial year exceeds the high watermark, which is the all-time year-end high of the fund s NAV. If in any one year, the fund suffers a loss, no performance fee can be charged in subsequent years until the loss is recovered fully (the high-on-high principle). Investors should note investment involves risk. The price of units may go down as well as up and past performance is not indicative of future results. Investors should read the explanatory memorandum for details and risk factors in particular those associated with investment in emerging markets. Information in this report has been obtained from sources believed to be reliable but Value Partners Limited does not guarantee the accuracy or completeness of the information provided by third parties. This report has not been reviewed by the Securities and Futures Commission. Issuer: Value Partners Limited.
PRODUCT KEY FACTS Value Partners High-Dividend Stocks Fund Issuer: Value Partners Limited June 2011 This statement provides you with key information about the Value Partners High-Dividend Stocks Fund (the Fund ). This statement is a part of the offering document. You should not invest in this product based on this statement alone. Quick facts Manager: Trustee: Custodian: Dealing frequency: Base currency: Dividend policy: Minimum investment: Financial year-end of this fund: Value Partners Limited Bank of Bermuda (Cayman) Limited HSBC Institutional Trust Services (Asia) Limited Daily (Hong Kong business days) US dollars (US$) At the Manager s discretion (if any, calculated once a year) US$10,000 initial, and US$5,000 subsequent 31 December What is this product? The Fund is a unit trust constituted under the laws of the Cayman Islands. Objectives and Investment Strategy Objectives The Fund aims to provide capital appreciation to Unitholders by investing primarily in a portfolio of relatively higher yielding debt and equity securities in the Asian region. The Fund will concentrate on investing in interest-bearing or dividend-distributing debt and equity securities of companies or issuers in the Asian markets. There are no fixed geographical or sectoral weightings in the allocation of assets and the Manager does not intend to follow benchmark indices in determining the geographical or sectoral weightings of the Fund. Strategy The Manager uses value investing strategies and a bottom-up research approach to select high income investments consistent with the Fund s investment objective. The Manager aims to follow a buy-and-hold strategy to lower portfolio turnover to maximize the yield from investments. The Manager may invest in debt and equity securities that are below investment grade and investors should be aware of the greater risks which may be involved in investing in these securities. In addition, the Fund s assets may from time to time include cash, deposits, short-term papers, such as treasury bills, certificates of deposit, banker s acceptances, short-term commercial paper and other fixed income instruments. The Manager may also place a substantial portion of the portfolio in cash or cash equivalents. The Fund does not currently have any direct or indirect exposure to China A Shares. The Fund intends to invest between 0% and 3 of the Fund s latest available net asset value ( NAV ) in China B Shares. 1
The Fund may also, on an ancillary basis, invest in commodities, futures contracts, options, depository receipts, warrants, convertible bonds and units in any unit trust or shares in any mutual fund corporation or any other collective investment scheme. For the purposes of hedging market and currency risks, the Fund may invest in index and currency swaps. What are the key risks? Investment involves risks. Please refer to the offering document for details including the risk factors. 1. Investment risk The Fund is an investment fund. There is no guarantee of the repayment of principal. The Fund s investment portfolio may fall in value and you may lose a substantial proportion or all of your investment in the Fund. 2. Dividend Risk There is no guarantee that the underlying securities in the Fund will pay out dividends. Therefore, there is no guarantee that the Fund s investment strategies will succeed. There is also no guarantee of dividend or distribution payments during the period an investor holds units in the Fund. 3. Risk of investing in China and other emerging markets Investing in China-related companies and emerging markets involves certain risks and special considerations not typically associated with investment in more developed economies or markets, such as greater political, tax, economic, foreign exchange, liquidity and regulatory risk. 4. Geographical concentration risk The concentration of the Fund s investments in Asian markets particularly China-related companies may result in greater volatility than portfolios which comprise broad-based global investments. 5. PRC tax risk The Fund may be exposed to risks associated with changes in current Chinese tax laws, regulations and practice, which may have retrospective effect. In particular, there are still uncertainties as to the withholding tax treatment on capital gains ( CGT ) (currently equal to 10% of any gain) derived from China B Shares. The Manager does not presently propose to accrue for the 10% withholding tax on China B Shares but is keeping the matter under review and which position may be subject to change. 6. Credit Risk The Fund may invest in securities which are rated below investment grade. The Fund may be subject to additional risks due to the speculative nature of investing in securities with a rating below investment grade such as high yield debt securities, which may be considered speculative and can include securities that are unrated and/or in default. 7. Currency exchange risk The Fund is denominated in US dollars. Its performance will be affected by movements in the exchange rates between the currencies in which the assets are held and US dollars, and any changes in exchange control regulations which may cause difficulties in the repatriation of funds. 8. Performance fee risk There is no adjustment of equalisation credit or equalisation losses on an individual unitholder basis. A unitholder redeeming units may still incur performance fee in respect of the units, even though a loss in investment capital has been suffered by the redeeming unitholder. Value Partners High-Dividend Stocks Fund Product Key Facts 2
Is there any guarantee? This 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 Fund. Fee Subscription fee (Preliminary Charge) Switching fee Redemption fee What you pay Up to of the amount you buy Not applicable Nil Ongoing fees payable by the Fund The following expenses will be paid out of the Fund. They affect you because they reduce the return you get on your investments. Management fee 1.2* Trustee fees (including fees of the Custodian and Registrar s Agent) Annual rate (as a % of the Fund s NAV) First US$100 million of the Fund s NAV. 0.20%* Next US$100 million of the Fund s NAV... 0.1 Thereafter... 0.16 The trustee fees are subject to a monthly minimum of US$4,000. Under the terms of the Trust Deed, the Trustee is also entitled to a fixed annual fee of US$3,000. Performance fee 1 of the appreciation in the NAV per unit during a performance period above the high watermark per unit. The high watermark was initially set at US$10.00. Each performance period corresponds to the financial year of the Fund. Where a performance fee is payable to the Manager for a performance period, the NAV per unit on the last valuation day of that performance period will be set as the high watermark for the next performance period. For details please refer to the section headed Performance Fee in the Fund s offering document. Other fees You may have to pay other fees when dealing in the units of the Fund. *Please note that some fees may be increased up to a specified permitted maximum on giving unitholders at least one month s prior notice. Please refer to the section of the offering document entitled Fees and Expenses for further details of the fees and charges payable and the permitted maximum of such fees, as well as other ongoing expenses that may be borne by the Fund. Value Partners High-Dividend Stocks Fund Product Key Facts 3
Additional Information You generally buy and redeem units at the Fund s next-determined NAV after the Manager receives your request, directly or via a distributor, in good order at or before 5:00 p.m. (Hong Kong time), being the Fund s dealing cut-off time on each dealing day of the Fund. Before placing your subscription or redemption orders, please check with your distributor for the distributor s internal dealing cut-off time (which may be earlier than the Fund s dealing cut-off time). The NAV of the Fund is calculated and the price of units is published each business day in the South China Morning Post, the Hong Kong Economic Times and the Hong Kong Economic Journal. Unit prices are available online at www.valuepartners.com.hk. Investors may obtain information on the distributor(s) appointed in respect of the Fund by making a telephone enquiry with the Manager on (852) 2880 9263. 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. Value Partners High-Dividend Stocks Fund Product Key Facts 4