Investment Objective

The BOC-Prudential North America Index Tracking Fund is an equity fund which aims to achieve long-term capital growth by investing primarily in an ITCIS† selected by the Investment Manager. Currently, the BOC-Prudential North America Index Tracking Fund invests exclusively in the ITCIS† – the BOC-Prudential North America Index Fund, a subfund of the BOC-Prudential Index Fund Series, which invests in a portfolio of securities traded on the stock exchanges in North America. The BOC-Prudential North America Index Fund seeks to provide investment performance (before fees and expenses) that tracks the performance of the FTSE MPF North America Index (unhedged) primarily by adopting a representative sampling strategy. Under such strategy, assets of the BOC-Prudential North America Index Fund will be invested in a representative sample of constituent securities of the FTSE MPF North America Index (unhedged) selected by the manager of the BOC-Prudential North America Index Fund using quantitative analytical models, under which each stock is considered for inclusion in the BOC-Prudential North America Index Fund based on its capitalisation, industry and fundamental investment characteristics. The risk level of the BOC-Prudential North America Index Tracking Fund is generally regarded as high2 .

Fund Details

Latest Fund Expense Ratio: 1.04%

Launch Date(dd/mm/yyyy): 03/09/2012

Unit Price: HKD 17.6432

Fund Size: HKD 1,704.66M

Fund Commentary

President Trump signed $2 trillion stimulus package to offer assistance to tens of millions of American households affected by the Coronavirus pandemic. The package includes stimulus payments to individuals, expanded unemployment coverage, student loan changes, different retirement account rules and more. The one-month and three-month Treasury bill yields turned negative on March 25, a week and a half after the Federal Reserve cut its benchmark rate to near zero and as investors flocked to the safety of fixed income amid general market turmoil. On data front during the quarter, Dow Jones Industrial Average, S&P 500 and NASDAQ fell by 23.20%, 20.00% and 14.18% respectively. On the economic front, U.S. year-on-year inflation rate was at 2.3% in February and 2.5% in January. The Manufacturing Purchasing Managers’ Index dropped to 48.5 in March from 50.7 in February and 51.5 in January. In the first quarter of 2020, the Fund reported a negative return with underperformance comparing to the market. For country selection, the underperformance was contributed by underweighting in United States. In regard to sector selection, overweighting in Technology sector contributed to the underperformance, while underweighting in Oil & Gas sector generated positive active return against the market.

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