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Hong Kong Authorized Unit Trusts

Ping An of China SIF - RMB Bond Fund

Risk Disclosure

Investment Risk
 

Ping An of China SIF – RMB Bond Fund (the "Fund") principally invest in RMB denominated income instruments which may fall in value and therefore your investment in the Fund may suffer loss.

The price of the Fund can be volatile and can go down substantially within a short period of time. In the worst case scenario, the value of the Fund may be worth substantially less than the original amount you have invested and in an extreme case could be worth nothing.

The Fund is an investment product and is NOT equivalent to bank deposits, therefore there is no guarantee in respect of repayment of principal.

There is no guaranteed dividend payment.

The investment decision is yours. You should not invest in the Fund unless the intermediary who sells it to you has explained to you that the product is suitable for you having regard to your financial situation, investment experience and investment objectives. Investors should not only base their decision on this website alone. The investor should refer to the Fund's explanatory memorandum (including the risk factors and charges stated therein) to get further details.


RMB Currency Risk

RMB is not a freely convertible currency and is subject to foreign exchange control policies and restrictions on the repatriation of funds out of mainland China. There is no guarantee that RMB will not depreciate. Investors have to understand that there is a limitation on the daily conversion amount of RMB in Hong Kong and this may have an adverse effect on the return for investors.

Credit Risk of Counterparties

The Fund is exposed to the credit/insolvency risk of the issuers of the RMB Income Instruments and bank deposits. RMB Income Instruments that the Fund invests in may or may not be of investment grade. The Fund is fully exposed to the credit/insolvency risk of its counterparties as an unsecured creditor.

Interest Rate Risk

An increase in interest rates may adversely affect the value of the RMB Income Instruments held by the Fund, causing the Fund to suffer a loss in its investments if it disposes of the RMB Income Instruments before their maturity.

Risk of Limited Pool of Investments

The quantity of RMB Income Instruments issued or distributed outside mainland China that is available to the Fund is currently limited. The Fund may hold a significant portion of assets in bank deposits if there are insufficient RMB Income Instruments for the Fund to invest in. This may adversely affect the Fund's return and performance.

Liquidity Risk

For RMB Income Instruments issued or listed outside mainland China, there may not be an active secondary market. The Manager may have to liquidate such investments at a discount to meet redemption requests. The bid and offer spread of the price of RMB Income Instruments may be large, so the Fund may incur significant trading and realization costs and may suffer losses when selling such investments.

Risks Associated With Distributions Out Of Capital

It is the current intention of the Manager to make distributions out of the net income (the income net expenses).  However, at the Manager's discretion, distributions may be paid (1) out of capital of the Fund; or (2) out of gross income while charging / paying all or part of the Fund's fees and expenses to / out of capital of the Fund.  Unitholders should note that the distributions paid out of capital or effectively out of capital amount to a return or withdrawal of part of a Unitholder's original investment or from any capital gains attributable to that original investment. Any distributions involving payment of distributions out of the Fund's capital or payment of distributions effectively out of the Fund's capital may result in an immediate reduction of the Net Asset Value per Unit. The Manager may amend the distribution policy subject to SFC's prior approval and by not giving less than one month's prior notice to Unitholders.

For the definition of RMB Income Instruments, please refer to the Explanatory Memorandum of the Fund.

Fund Information

Fund Manager Ping An of China Asset Management (Hong Kong) Co. Ltd.
Inception date 28-Apr-11
Fund size RMB 169.05 million (31-08-2019)
Base currency RMB
Unit priceRMB 105.90 per unit
 HKD 0.00 per unit
 USD 9.07 per unit
Dealing frequency Daily (1)
Dividend policy Semi-annual basis (2)

Fund Objective

Ping An of China SIF-RMB Bond Fund (the "Fund") seeks to provide total return comprised of interest income and capital growth by investing principally in RMB denominated fixed or floating rate debt securities.

Fund Strategy

The Manager seeks to achieve investment returns through active management of the major risks associated with RMB Income Instruments: duration, term structure, sector allocation, product selection and credit rating where applicable.

The Manager will construct the portfolio to take advantage of the expected change in the general level of RMB interest rates based on expectations of global and China's macroeconomic cycle, fiscal policy and monetary policy. The portfolio will consist of RMB Income Instruments of different maturities and credit quality and bank deposits, and each instrument in the portfolio will be selected based on extensive in-house and external fundamental research.

The Fund will not invest in any derivatives or structured deposits or products.

The Manager currently does not intend to enter into any securities lending or repurchase transactions in respect of the Fund.


General Information

Minimum investment amount RMB10,000 (initial), RMB10,000 (additional)
Minimum holding Units of aggregate minimum value of RMB10,000
Minimum redemption mount Units of aggregate minimum value of RMB10,000
Subscription fee Up to 5%
Switching fee 1% (Switching of Units is subject to the limitations as set out in the Explanatory Memorandum and that no switching is allowed to be made between Units denominated in RMB of the Sub-Fund and Units denominated in another currency of the Sub-Fund or other Sub-Funds (if any).)
Management fee 1% p.a.
Financial year end 30 June
Trustee BOCI-Prudential Trustee Limited

Codes

ISIN Code (RMB Class) HK0000079084; (HKD Class) HK0000096476; (USD Class) HK0000096484
Bloomberg Code (RMB Class) PARRMBA HK; (HKD Class) PARAHKD HK ; (USD Class) PARAUSD HK
Reuters Code (RMB Class) LP68090801; (HKD Class) LP68180641; (USD Class) LP68180642
Lipper ID (RMB Class) 68090801; (HKD Class) 68180641; (USD Class) 68180642

Dividend Record

Fund Inception Date: 2011-04-28

Record DateEx-DatePayment DateDividend Distribution (per unit)
RMBHKDUSD
2019-06-242019-06-252019-07-053.24N/A0.23
2018-12-282018-12-312019-01-211N/A0.06
2018-06-082018-06-112018-07-061.60N/A0.15
2017-12-142017-12-152017-07-052.40N/A0.22
2017-06-092015-06-122017-07-051.70N/A0.15
2016-12-152016-12-162017-01-132.40N/A0.21
2016-06-102016-06-132016-07-071.601.480.15
2015-12-162015-12-172016-01-132.302.140.21
2015-06-122015-06-152015-07-091.551.520.15
2014-12-112014-12-122015-01-072.302.260.22
2014-06-132014-06-162014-07-102.202.150.21
2013-12-122013-12-132014-01-081.801.810.18
2013-06-132013-06-142013-07-102.453.100.40
2012-12-132012-12-142013-01-091.10N/AN/A
2012-06-142012-06-152012-07-101.80N/AN/A
2011-12-142011-12-152012-01-091.00N/AN/A

Distribution figures represent past distributions declared and paid for by the fund. There is no guarantee that any distributions will be declared in the future, or that if declared, the amount of any distribution will remain constant or increase over time.

       

 - Dividend (ex-date)


RMB share class: Calendar Year Performance (%)

20102011*2012201320142015201620172018 Since Fund Launch
N/A-3.84%7.45%4.93%2.83%4.56%6.98%5.86%3.57% 42.9%

* Since fund inception on 28 April 2011 to 31 December 2018.

HKD share class: Calendar Year Performance (%)

2010201120122013*201420152016** Since Fund Launch
N/AN/AN/A5.32%0.03%-0.97%5.17% 9.7%

* Since 1 Mar 2013 to 31 December 2016.
** Performance data of Share Class A HKD is as of 28 September 2016, as Share Class A HKD was fully redeemed on 28 September 2016.

USD share class: Calendar Year Performance (%)

201020112012201320142015201620172018 Since Fund Launch
N/AN/AN/A5.25%0.10%-1.01%0.94%13.24%-1.96% 18.7%

* Since 1 Mar 2013 to 31 December 2018.

Note:

  • Past performance information is not indicative of future performance. Investors may not get back the full amount invested
  • The computation basis of the performance is based on the calendar year end, NAV-To-NAV, with dividend reinvested
  • These figures show by how much the Sub-Fund increased or decreased in value during the calendar year being shown. Performance data has been calculated in RMB including ongoing charges and excluding subscription fee and redemption fee you might have to pay
  • Where no past performance is shown there was insufficient data available in that year to provide performance

RMB share class: Cumulative Performance (%)

1 month 3 months 6 months YTD 1 year 3 years 5 years
0.2% 0.6% 1.8% 4.5% 5.8% 14.4% 28.2%

Total return performance is based on NAV-to-NAV with dividend invested (if any), in RMB.

HKD share class: Cumulative Performance (%)

1 month 3 months 6 months YTD 1 year 3 years 5 years
N/A N/A N/A N/A N/A N/A N/A

Total return performance is based on NAV-to-NAV with dividend invested (if any), in HKD.

USD share class: Cumulative Performance (%)

1 month 3 months 6 months YTD 1 year 3 years 5 years
0.8% -2.3% -3.4% 1.6% 3.8% 9.6% 11.1%

Total return performance is based on NAV-to-NAV with dividend invested (if any), in USD.

Note:
The performance quoted represents past performance of the Fund. Investment return and principal value of an investment will fluctuate so that an investor's units, when sold or redeemed, may be worth more or less than the original cost. Current performance may be lower or higher than the performance quoted. Past performance may not be repeated and is no guide for future returns.

Date

NAV/Unit (RMB)

Dividend payout (ex-date)

2019-10-17105.900.00
2019-10-16105.870.00
2019-10-15105.860.00
2019-10-14105.850.00
2019-10-11105.880.00
2019-10-10105.890.00
2019-10-09105.880.00
2019-10-08105.870.00
2019-10-04105.810.00
2019-10-03105.790.00

Fund Manager Commentary

Aug Review

 

The RMB denominated bonds continued to deliver stable return of +0.41% in the month of August. Our Fund is contributed mostly by its relatively high income, and a 4.13% total return YTD. Dim sum corporate bonds in general were a touch weaker in price term due to softer demand amid weaker CNY and economic uncertainties. Onshore CNY bond however, particularly the longer end of the curve have outperformed and rallied circa 10bps in a bull flattening fashion in Aug, in view of the probability of monetary easing. High grade onshore credit spread tightened 15bps on average in Aug. Our strategy diversified into the onshore China bond market helped to maximize the yield and return.

 

Despite the overall easing bias of the PBOC for boosting economy, liquidity condition remained tight to certain sector of the economy. For example, liquidity to certain property corporate could be constraint by specific policies which were announced aiming to restrain credit growth of developers as well as home buyers. New bond issuances are limited to the purpose of loan repayment and caps are applied to banks on mortgages and construction loans. High Yield property corporate names which have high gearing such as Fantasia widened by more than 140 bps during the month of August. Investment grade corporate credit names such as Vanke and Jinmao spreads outperformed alongside with the rates rally. Our strategy in higher quality credits paid off in August at the expense of yield carry, and thus reduced volatility during the month.

 

The Fund extended duration in August by switching into high grade onshore State Owned Enterprise for example, Ministry of Railway and China Orient Asset Management at tenors. We also took the opportunity to reduce exposure in consumer names such as CAR Inc. in view of slower domestic demand and gradually higher refinancing risk, despite the corporate announced decent first half earnings results.

 

Outlook

 

Since the last couple months, the Ping An RMB Bond Fund has positioned towards longer onshore duration and higher quality credits in order to benefit from the easing policy amid slower growth trend and it will remain very selective in terms of onshore or offshore corporate credits selection.

 

We favor sectors such as infrastructure, utilities and construction materials industrial sectors which could potentially benefit from any fiscal policy support. Our strategy is being cautious on consumption related industries and LGFVs sector due to weaker sector outlook and we expected bank and financial have tight valuation.

 

China’s growth could be facing headwinds in medium term, especially when trade war impact started to filter through economies including U.S. and global economies. We expected that international trade and business sentiment, not just in China but also in U.S. and other global economies will be affected.

 

China’s Manufacturing PMI posted 49.5 in August, the 4th consecutive months of slowing.  Export and import both softened. U.S. dollar strengthen versus major currencies including Renminbi which weakened by 3.8% in August against the U.S. dollar. CNY traded through exchange rate 7.0 against U.S. dollar but stabilized in the range of 7.1-7.2 level. From here we expected downside to be limited.

 

Global benchmarks inclusion of China onshore bonds continues making good progress. With yield pick-up of circa 150bps over USD denominated papers, we believe CNY denominated fixed income will continue to attract international real money demand, and present itself as a decent yielding vehicle with relatively low volatility. Now would be a good opportunity to add to China bond investment strategy over the short to medium term.


Note: CNH is the currency symbol for offshore RMB. Offshore RMB bonds are also known as dim sum bonds.


Top Ten Holdings

OCEAN WEALTH II LTD 6.5% S/A 27FEB20207.2%
INDUSTRIAL & COMMERCIAL BANK OF CHINA LTD 6% A PERP REGS (PREFERENCE SHARES)7.14%
SHIMAO PROPERTY HLDGS LTD 5.75% S/A 15MAR20216.05%
CHINA STATE RAILWAY GROUP CO LTD 4.1% A 25JUL2039 CDC5.96%
AGRICULTURAL DEVELOPMENT BANK OF CHINA CO LTD 3.75% A 25JAN2029 CDC5.94%
CHINA ORIENT ASSET MANAGEMENT CO LTD 4.33% A 23AUG2029 SHCH5.93%
CHINA GRAND AUTOMOTIVE SERVICES CO LTD 4.78% A 25OCT2019 SHCH5.87%
FRANSHION BRILLIANT LTD 5.2% S/A 08MAR20215.45%
BANK OF CHINA LTD/JOHANNESBURG 4.88% S/A 20APR20204.78%
LENOVO GROUP LTD 4.95% S/A 10JUN20204.77%

As of 31 July 2019

Ping An of China SIF - RMB Bond Fund

1.Monthly Fund Factsheet (08-2019)DownloadFile Size: 230.24KB
2.Fund Dividend Composition InformationDownloadFile Size: 372.78KB
3.Explanatory MemorandumDownloadFile Size: 3.3MB
4.Announcement and AddendumDownloadFile Size: 301.71KB
5.Product Key FactsDownloadFile Size: 274.13KB
6.Interim Report 1 July to 31 Dec 2018DownloadFile Size: 153.98KB
7.Annual Report (06-2018)DownloadFile Size: 1.2MB
8.RMB Bond Fund – Notice – Change of Investment Objective and Policy and Other UpdatesDownloadFile Size: 249.11KB
9.Announcement - Clarification on Performance Information on Monthly Fund Factsheet of the Sub-FundDownloadFile Size: 179.42KB

(1) The Fund will have dealing on any Business Day.
(2) Currently June and December. Dividend distribution is subject to the manager's discretion, and there is no guarantee on any minimum dividend payment amount.

Ping An of China SIF– RMB Bond Fund (“the Fund”), a sub-fund of Ping An of China Select Investment Fund Series, has been authorized by the Securities and Futures Commission in Hong Kong (“SFC”) (SFC authorization is not an official recommendation or endorsement of the Fund nor does it guarantee the commercial merits of the Fund or its performance. It does not mean the Fund is suitable for all investors nor is it an endorsement of its suitability for any particular investor or class of investors). Certain information contained in this website is obtained and prepared from sources which Ping An of China Asset Management (HK) Co. Ltd (“PAAMC HK”) believes to be reliable. For information sourced externally (as disclosed), PAAMC HK believes that such information is accurate and complete. Information provided is for reference only and does not constitute any offer. Investment involves risks. Investors should not only base investment decisions on this website alone. The past performance is not indicative of future performance. The unit price of the Fund may rise or fall and investors may lose some or all of their investment. The investor should refer to the Fund’s explanatory memorandum (including the risk factors and charges stated therein) and product key facts statement to get further details and where necessary seek professional advice before making any investment decision and should not only base it on this website alone. This website is hosted by Ping An of China Asset Management (Hong Kong) Co. Ltd. and has not been reviewed by the SFC.