The investment objective of the US & Hong Kong Equity Portfolio is to achieve long term capital appreciation. The asset allocation (taking into account its investments in the underlying APIFs and/ or approved ITCISs) is 90-100% equities and 0-10% cash or cash equivalents. It is considered high risk.

Latest Fund Expense Ratio: 1.21%

Launch Date(dd/mm/yyyy): 17/02/2014

Unit Price: HKD 13.36

Fund Size: HKD 95.4M

Over Q1 2020, the Hang Seng Index (“HSI”) dropped -15.9%*, with a total return of -15.9%* and the Hang Seng China Enterprises Index (“HSCEI”) fell -13.6%* (price) and -14.1%* (total return). The best performing stocks in the HSCEI was Hengan International (+5.7%) and BYD Company (+4.8%). And the best performing stocks in HSI were Hengan International (+5.7%) and Tencent (+1.8%). On the other hand, the worst performer was Sinopharm (-38.4%) and AAC Technologies (-40.6%) for HSCEI and HSI, respectively. (* US dollar term) Following a stellar 2019, global equities began January in negative territory with MSCI World returning -0.6%. Investor sentiment was buoyed by encouraging economic data and the settlement of the Phase one trade deal between the US and China. However, concerns were raised over the economic growth from the impact of the coronavirus outbreak in Wuhan, China and Brexit happened on 31 January 2020. MSCI USA was up 0.2%, however, MSCI Europe ended with -2.5%. Emerging markets lost value in January with MSCI EM returning -4.7%. Hang Seng Index posted a total return of -6.7% (local) during January. All the sectors ended in negative territory. Relatively, Utilities (-1.3%), Communication Services (-1.4%) and Health Care (-5.7%) were the top performers. Consumer Discretionary (-11.0%), Real Estate (-10.7%) and Energy (-10.7%) were at the bottom. At the stock level, Hengan International (+2.7%), HK Exchanges & Clearing (+2.3%) led the board, while Country Garden (-20.2%) and AAC Technologies (-18.0%) were at the bottom. Hong Kong's average seasonally adjusted unemployment rate came in at 3.3% in December. Composite CPI inflation rate was at 2.9% YoY in December compared to 3% in November. Hong Kong's retail sales volume growth contracted 25.4% YoY in November compared to a contraction of 26.4% YoY in October. Exports expanded 3.3% YoY in December; compared to a contraction of 1.4% YoY in November. Imports contracted 1.9% YoY in December; compared to a contraction of 5.8% YoY in November. The trade deficit increased to HK$32.5 billion in December from HK$26.2 billion in November. February saw global equity markets turn sharply negative with increasing concerns surrounding coronavirus and its impact on global economic growth cancelling out any optimism that was present on the back of an improving global economic profile. Previous expectations that the coronavirus impact would be short lived with the global economy expected to bounce back quickly evaporated with the market pricing in a more prolonged malaise. During the month, global equity markets were negative with Europe (MSCI Europe Net total return USD) down -10.6%, Japan (MSCI Japan Net total return USD) down -9.3% whilst the US (MSCI US Net total return USD) was down -9.5%. Emerging markets (MSCI EM Index Net total return USD) had a negative month returning -8.3% outperforming developed markets on a relative basis. China’s equity market surprisingly was the only market returned gains (MSCI China Net total return USD, +1.0%), even reported cases of the virus peaked on the mainland. Hang Seng Index posted a total return of -0.4% (local) during February. Most sectors ended in negative territory. Relatively, Health Care (+5.3%) and Communication Services (+1.0%) were the top performers. Energy (-7.8%) and IT (-5.5%) were at the bottom. At the stock level, Geely (+10.5%), China Resources (+9.9%) and Sino Biopharmaceutical (+8.3%) led the board, while Wharf Real Estate (-12.7%), PetroChina (-12.5%) and CNOOC (-10.0%) were at the bottom. Hong Kong's average seasonally adjusted unemployment rate came in at 3.4% in January. Composite CPI inflation rate was at 1.4% oya in January compared to 2.9% in December. Hong Kong's retail sales volume growth contracted 21% oya in December compared to a contraction of 25.5% oya in November. Exports contracted 22.7% oya in January; compared to an expansion of 3.3% oya in December. Imports contracted 16.4% oya in January; compared to a contraction of 1.9% oya in December. The trade deficit decreased to HK$30.6 billion in January from HK$32.5 billion in December. Global markets dropped sharply in March, with MSCI AC World fell -13.5%. At the beginning of March, the markets in the US responded positively to supportive monetary policy in reaction to the economic concerns caused by the expanding virus. In addition, Joe Biden’s “Super Tuesday” performance in the Democratic nomination process also boosted markets, but by the first weekend, news of a disagreement between OPEC and Russia on oil production broke, after which WTI dropped by close to 25% on Monday, March 9th. This, combined with escalating concerns over the spread of the virus, the beginning of social distancing and worries over the economic fallout, sent markets careening. By March 11th, the WHO declared the COVID-19 outbreak a global pandemic and the Dow Jones Industrial index had fallen by 20%, technically entering a bear market. Although significant monetary and fiscal policies would be announced boosting sentiment, and quarterly rebalancing would contribute as investors sold bonds to buy equities, it would not be enough to prevent equities from posting some of the worst returns in recent memory. Europe returns were also quite negative, with MSCI Europe ended -14.4% (USD). The countries in the Emerging Market region were also pressured, with MSCI EM index down -15.4% in USD terms. Hang Seng Index posted a total return of -9.5% (local) during March. All sectors ended in negative territory. Relatively, Communication Services (-3.5%) and Consumer Staples (-4.8%) were the top performers. Consumer Discretionary (-18.3%) and Industrials (-17.4%) were at the bottom. At the stock level, China Shen Hua Energy (+9.2%), Hengan International (+0.9%) and China Construction Bank (+0.6%) led the board, while Swire Pacific (-28.8%), China Unicom (-27.3%) and CNOOC (-23.9%) were at the bottom. Hong Kong’s average seasonally adjusted unemployment rate came in at 3.7% in February. Composite CPI inflation rate was at 2.2% oya in February compared to 1.4% in January. Hong Kong’s retail sales volume growth contracted by 46.7% oya in February compared to a contraction of 23.1% oya in January. Exports expanded 4.3% oya in February; compared to a contraction of 22.7% oya in January. Imports contracted by 0.1% oya in February, compared to a contraction of 16.4% oya in January. The trade deficit increased to HK$38.6 billion in February from HK$30.6 billion in January. In summary, the HSI dropped 576* points to 3,044* through Q1 2020 and the HSCEI fell 195* points to close at 1,238* over the same period. (*USD Currency, source Factset) US Equities For the first quarter the S&P 500 was down 19.69%, the S&P Midcap was down 29.70%, and small cap stocks as represented by the Russell 2000 were down 30.61%. Canadian Markets were not spared, with MSCI Canada down 27.53% in US dollar terms. Equity markets were able to build on their late-2019 momentum in the first half of January. Rising geopolitical conflict between the United States and Iran temporarily caused US stocks to falter, but some relatively upbeat information on fourth quarter earnings alongside improved macro data helped lift US large cap equities to new highs in the middle of the month. Also, rebounding December retail sales, a surge in housing starts as well as a big positive surprise from the Philly Fed Business Outlook Survey contributed to the optimistic growth backdrop. However, that optimism was derailed in the latter part of January amidst increased risk-aversion over concerns surrounding the spreading coronavirus. In the US, equity markets rebounded at the beginning of February following weak performance at the end of January. While continued positive economic news and earnings information continued into the month, ultimately COVID-19 concerns would go on to dictate the direction of US and global stock markets. At the beginning of March, the markets in the US responded positively to supportive monetary policy in reaction to the economic concerns caused by the expanding virus. In addition, Joe Biden’s “Super Tuesday” performance in the Democratic nomination process also boosted markets, but by the first weekend, news of a disagreement between OPEC and Russia on oil production broke, after which WTI dropped by close to 25% on Monday, March 9th. This, combined with escalating concerns over the spread of the virus, the beginning of social distancing and worries over the economic fallout, sent markets careening. By March 11th, the WHO declared the COVID-19 outbreak a global pandemic and the Dow Jones Industrial index had fallen by 20%, technically entering a bear market. Although significant monetary and fiscal policies would be announced boosting sentiment, and quarterly rebalancing would contribute as investors sold bonds to buy equities, it would not be enough to prevent equities from posting some of the worst returns in recent memory. US Sector View Given the significant pressure on equities markets, it was perhaps no surprise that all sectors posted negative returns for the quarter, with a dispersion of 38.52% between the top and bottom performing sector. Information Technology posted the “strongest” return of -11.93% while Energy returned a dismal -50.45% return on the back of the sell-off in oil and the consternation between OPEC and Russia. Although news broke in early April of a possible agreement to cut production, it was too little and too late to support the returns in March. Financials also faltered significantly, down just shy of 32% on concerns related to lower interest rates, capitalization and exposure to the Energy sector. On the less negative side, Health Care and Consumer Staples held up reasonably well on a relative basis, returning -12.67% and -12.74%, respectively. All performance cited is calculated in US dollars unless otherwise stated. Sources: Bloomberg, FactSet, J.P. Morgan, Barclays, Wall Street Journal, MSCL as of March 31 2020.