investment-linked funds fund fact sheet booklet · investment-linked insurance products you are...

ManulifeInvestment-Linked Funds

Fund Fact Sheet Booklet

www.manulife.com.my

CONTENTIntroduction 3

Fund Key Information 4

Income Fund 5

Managed Fund 6

Manulife Dividend Fund 8

Manulife Flexi Invest Fund 9

Equity Fund 11

Dana Ekuiti Dinamik 13

Manulife Asia-Pacific REIT Fund 15

Manulife Progress Fund 16

Manulife Asian Small Cap Growth Fund 18

Manulife Emerging Eastern Europe Fund 19

Manulife China Value Fund 21

Other Information 23

Appendix - Risk 24

General Risks 25

Specific Risks associated with the Fund 26

Specific Risks associated with the Target Fund 28

Manulife Investment-Linked Fund Fact Sheet Booklet is designed to assist you in understanding the investment-linked fund(s)’ objective, strategy and risk associated, and to choose the right investment-linked fund(s) to suit your investment needs, objectives and risk appetites.

Manulife Insurance Berhad (“the Company”) offers a wide selection of professionally managed investment-linked funds from Fixed Income to Equity investing in both local and foreign markets. These funds are made available via our range of investment-linked insurance products. To find out more on our investment-linked insurance products, you can:

• call our Customer Careline at 03-2719 9112/ 1-300-13-2323, • get in touch with our professional Manulife advisor, or • drop us an email via our Contact Us page

The information in this booklet is for general information only and is not to be construed as a contract and no consideration has been given to the particular personal objectives, financial situation or needs. You should consult our advisor to obtain financial advice that is tailored to suit your personal circumstances. You should also read this booklet together with the Product Disclosure Sheet for the investment-linked insurance products you are considering to apply.

Manulife Insurance Berhad (200801013654 (814942-M)) is a company licensed under the Financial Services Act 2013 and regulated by Bank Negara Malaysia. It is located at 16th floor, Menara Manulife, 6, Jalan Gelenggang, Damansara Heights, 50490 Kuala Lumpur.

INTRODUCTION

MANULIFE INVESTMENT-LINKED FUND FACT SHEET BOOKLET 3

https://www.manulife.com.my/Customer-Service-Contact-Us

MANULIFE INVESTMENT-LINKED FUND FACT SHEET BOOKLET

Fund Key Information

No. Fund Category Geographical RiskProfile

1 Income Fund Bond Local Low

2 Managed Fund Balanced Local Moderate

3 Manulife Dividend Fund Equity – Feeder Fund Local and Foreign Moderate

4 Manulife Flexi Invest Fund Equity Local and Foreign Moderate to high

5 Equity Fund Equity Local Moderate to high

6 Dana Ekuiti Dinamik Equity Local Moderate to high

7 Manulife Asia-Pacific REIT Fund REIT – Feeder Fund Foreign Moderate to high

8 Manulife Progress Fund Equity – Feeder Fund Local High

9 Manulife Asian Small Cap Equity – Feeder Fund Foreign High Growth Fund

10 Manulife Emerging Eastern Equity – Feeder Fund Foreign High Europe Fund

11 Manulife China Value Fund Equity – Feeder Fund Foreign High

4


Year Actual Performance Benchmark 2010 3.29% 2.77% 2011 3.10% 3.05% 2012 2.96% 3.15% 2013 1.17% 3.15% 2014 2.95% 3.22% 2015 3.02% 3.30% 2016 3.30% 3.22% 2017 4.31% 3.10% 2018 3.97% 3.33% 2019 7.96% 3.20%

Income FundFeatures of Fund

Approach

Source: Bloomberg

This is strictly based on the performance of the investment-linked fund and not the returns earned on the actual premiums paid of the investment-linked plan.

Type of Asset Tactical Range (% of Fund’s NAV) Minimum (%) Maximum (%)Fixed Income 70 100Money Market 0 30(including Cash)

5

Investment Objective This Fund seeks to provide a steady return to investors through accumulation of capital over the long term.

Investment Strategy & The Fund will principally be invested in fixed income securities, treasury products, money market instruments, collective investment schemes and any other permissible instruments or investments allowed by Bank Negara Malaysia and/or relevant regulatory bodies. The fund invests only in Malaysian securities.

Asset Allocation

Performance Benchmark Maybank 12-months Fixed Deposit Rate Further information on the benchmark can be obtained from www.maybank2u.com Target Market This Fund is suitable for investors seeking stability of principal and a higher return compared

to bank deposits but with acceptable risk to capital invested.

Fund Manager Manulife Investment Management (M) Berhad (formerly known as Manulife Asset Management Services Berhad)

Launch Date 1 February 2002

Fees & ChargesFund Management Charge 0.75% per annum of Net Asset Value

Fund PerformanceNotice: Past performance of the fund is not an indication of its future performance

RisksPlease refer to the Appendix for the risks involved and the risk descriptions.

Risk Management The allocation mixes between fixed income instruments and liquid assets, and the profile of bonds in the portfolio are determined based on the Fund Manager’s assessment of the economic conditions and investment prospects. The Fund Manager structures the investments of the Fund so that they are well diversified across a range of corporate bonds in order to minimize single issuer risk caused by specific risk exposure to any one company or group of companies. The investments of the Fund are also diversified across a range of sectors/industries to reduce sector/industry specific risk.


Managed FundFeatures of Fund

Approach

6

Investment Objective Managed Fund is an investment vehicle that enables investors to participate in the long-term growth of equities and, yet have the protection from a spread of fixed income securities.

Investment Strategy & The Fund invests in equities and fixed income instruments based on its assessment of the respective market outlook. The Fund Manager uses a macro-economic ‘top-down’ approach to decide on strategic asset allocation. The Fund Manager constantly monitors and assesses the investment environment to identify emerging investment trends and themes. More importantly, the Fund Manager evaluates macroeconomic variables and its impact on the asset classes in the asset allocation process. The Fund Manager believes that given the increased interdependence among markets, a macro view of global financial markets is also critical to successful investment. In addition, any active and frequent trading strategy will depend on investment opportunities.

In equity stock selection process, the Fund Manager believes in a framework which emphasizes on superior growth profile, cashflow generative capabilities, management strength/track record and valuation. The Fund Manager emphasizes strongly on internal research. Frequent company visits are made in order to obtain local knowledge and corporate information. Besides using traditional valuation yardsticks such as growth rate, price earnings (P/E) ratio, price-to-book (P/BV) ratio and price/earnings to growth (PEG) ratio, the Fund Manager focuses on capital structure, intrinsic value, cash flow, replacement costs, revised net asset value (RNAV), management and potential growth and income trend.

When selecting fixed income investments, the Fund Manager adopts a prudent strategy in forming a portfolio of fixed income instruments, which is in accordance with the Fund’s investment objective and the Fund Manager’s assessment of investment prospects in line with the underlying interest rates and economic outlook.

Asset Allocation

Target Market It is suitable for investors who seek a risk-reward balance between equities and fixed income

securities.

Performance Benchmark 70% FTSE Bursa Malaysia Top 100 Index (Total Return Net of Tax) + 30% Maybank 12-months Fixed Deposit Rate

The composite benchmark is only used as a reference for performance gauge purpose. The Fund is not managed against the composite benchmark.

Further information on the benchmark components can be obtained from www.bursamalaysia.com

and www.maybank2u.com


Launch Date 10 July 2000


Minimum (%) Maximum (%)Tactical Range (% of Fund’s NAV)

Type of Asset Target Mix (%)

Equity 70 60 80 Fixed Income 30 20 40

MANULIFE INVESTMENT-LINKED FUND FACT SHEET BOOKLET 7

Managed Fund (continued)


Additional DisclosureDerivatives Contract • Investments in derivatives for the purpose of hedging of the risk exposures of the Fund are

permitted subject to the requirements stipulated in the Revised Guidelines on Derivatives for Licensed Insurers.

• Derivatives such as FTSE Bursa Malaysia KLCI Futures, FTSE Bursa Malaysia KLCI Options, warrants, transferable subscription rights, and call warrants listed on Bursa Malaysia may be used for hedging purposes.

• No borrowing or leveraging for non-hedging purposes without the prior approval of the Company.


Risk Management During times of adverse financial markets, economic and/or political conditions including extraordinary events, the Fund Manager may temporarily depart from the above Tactical Range by reallocating the Fund’s investments into more defensive instruments such as cash, money market and/or other fixed income instruments, provided always that the Fund Manager shall notify the Company of such tactic. This temporary defensive measure is to help mitigate adverse impact to the value of the Fund.

Year Actual Performance Benchmark* 2010 19.06% 16.60% 2011 3.33% 3.03% 2012 9.13% 8.01% 2013 17.89% 11.09% 2014 1.11% -1.46% 2015 -2.63% 1.11% 2016 -3.40% 0.47% 2017 12.04% 11.28% 2018 -12.02% -3.13% 2019 3.42% 1.20%

*Prior to 30 December 2015, the benchmark was 70% FBM 100 + 30% RAM QS MGS All. Source: Bloomberg



Manulife Dividend FundFeatures of Fund

8

Investment Objective Manulife Dividend Fund (“the Fund”) is a feeder fund investing in the Manulife Investment Dividend Fund (“the Target Fund”), which aims to provide a steady recurring income that is potentially higher than the prevailing fixed deposit rates. At the same time, the Target Fund also attempts to attain medium-to long-term capital appreciation.

Investment Strategy & The Target Fund invests in stocks which have good dividend payouts or have the potential to become dividend yielding stocks and reasonable medium- to long-term capital appreciation opportunities. Stocks with good dividend payouts are those that have been paying consistent dividends over the last three to five years, and are expected to be able to sustain this trend at least over the next one year. In addition, any active and frequent trading strategy will depend on investment opportunities.

The Target Fund may invest up to 25% of the Fund’s NAV in foreign equities of companies which are domiciled in/ listed in/ or have significant operations* in the Asia-Pacific region including but not limited to Australia, China, Hong Kong, India, Indonesia, Japan, New Zealand, the Philippines, Singapore, South Korea, Taiwan, Thailand and Vietnam.

*Significant operations means the revenue, earnings, production facilities, assets and/or investments of a company are based in/ derived from the Asia Pacific region. The level of significance will be determined by the Fund Manager on a case-by-case basis based on his/her research and judgement.

Asset Allocation

Target Market The Fund is designed for investors who prefer a regular income stream, stable investment returns and potential for medium-to long-term capital appreciation between 3 and 5 years. It is suitable for conservative investors who seek relatively higher returns than fixed deposits but are averse to higher risks associated with high equity exposure.

Performance Benchmark Manulife Investment Dividend Index, comprising of 90% FTSE Bursa Malaysia Top 100 Index + 10% Maybank 12-month fixed deposit rate

Further information on this benchmark can be obtained from monthly fund fact sheet via www.manulife.com.my

Fund Manager The fund manager for the Fund and Target Fund is Manulife Investment Management (M) Berhad (formerly known as Manulife Asset Management Services Berhad).




Year Actual Performance Benchmark

2017 2.82%* 2.72% 2018 -11.93% -8.03% 2019 1.34% -2.27%

Type of Asset Tactical Range (% of Fund’s NAV) Minimum (%) Maximum (%)Target Fund 95 100

Cash 0 5

Approach

*Fund Performance is from fund launch date until year end of the same year Source: BloombergThis is strictly based on the performance of the investment-linked fund and not the returns earned on the actual premiums paid of the investment-linked plan.


Risk Management The risk management strategies and techniques employed will be at the Target Fund level Investments of the Target Fund (i.e. Manulife Investment Dividend Fund) are managed in a way that is well diversified across a range of equities to minimize specific (unsystematic) risk exposure to any one company or group of companies. Investments of the Target Fund are also diversified across a range of sectors/industries to reduce sector/ industry specific risk.

Additionally, under adverse market conditions (due to economic, political or any other negative conditions for investments), the Target Fund’s equity exposure may be temporarily lowered to below 70% of the Target Fund’s NAV and the surplus cash be placed in liquid assets.


Manulife Flexi Invest FundFeatures of FundInvestment Objective The Fund aims to provide medium-to long-term capital appreciation.

Investment Strategy & Manulife Flexi Invest Fund may invest between 0 to 100% of the Fund’s NAV in equities and equity related instruments and/or fixed income securities (including but not limited to money market instruments and other liquid assets).

The Fund may invest up to 30% of the Fund’s NAV in foreign markets as and when opportunities arise.

The Fund’s equity investment strategy focuses on achieving superior long-term risk-adjusted returns by exploiting inefficiencies in the capital markets through intensive, disciplined and consistent research. The Fund adopts a combination of top-down and bottom-up approach with focus on earnings/cash generation capabilities, growth drivers/opportunities, scalability of business models, management’s strength/track record and valuation gaps. Emphasis is also given on proper risk management overlay to maximize risk-adjusted returns over the longer term.

The Fund’s fixed income investment strategy focuses on seeking the best possible risk-adjusted returns through in-depth market and proprietary credit research. This approach involves a combination of top-down and bottom-up approaches. The Investment Manager examines macroeconomic factors such as monetary policies, inflation rate and growth to form broad portfolio strategy and duration management purposes. Underlying credit risks and structure of individual securities are then assessed to identify investments with maximum risk-adjusted returns, while taking into account potential for capital appreciation due to improving credit or industry outlook.

Asset Allocation The Fund may invest between 0 to 100% of the Fund’s NAV in equities and equity related instruments and/or fixed income securities (including but not limited to money market instruments and other liquid assets).

Target Market The Fund is suitable for investors who seek capital appreciation and are willing to accept medium to high level of risk. The Fund is also suitable for investors who do not seek a regular income stream and ideally have a medium- to long-term investment horizon of between 3 and 5 years.

Performance Benchmark 50% FBM100 + 50% Maybank 12 - months Fixed Deposit Rate The composite benchmark is only used as a reference for performance gauge purpose. The

Fund is not managed against the composite benchmark. Further information on the benchmark components can be obtained from www.bursamalaysia.com

and www.maybank2u.com


Launch Date 17 February 2012


Approach

9



2012 6.17%* 4.78% 2013 12.29% 36.52% 2014 3.74% 6.45% 2015 15.79% 3.43% 2016 -0.90% -4.24% 2017 16.30% 7.86% 2018 -20.41% -3.00% 2019 6.91% 0.16%

Manulife Flexi Invest Fund (continued)

*Fund Performance is from fund launch date until year end of the same year Source: Bloomberg







Risk Management The Fund Manager actively monitors the investments to manage the risks of equity investments of the Fund. The level of equity investments changes as the Fund Manager purchases and/or sells equity investments. If the investment climate and the prospect of equity investments are unfavourable, the Fund Manager may sell down equity investments position in the Fund and reduce the Fund’s exposure in equity investments. This strategy will mitigate the potential loss which may arise when share prices decline. The Fund Manager also structures the investments of the Fund so that they are well diversified across a range of securities in order to reduce specific (unsystematic) risk exposure to any one company or group of companies. The investments of the Fund are also diversified across a range of sectors or industry to reduce sector or industry specific risk.

For fixed income securities and money market instruments, the Fund Manager focuses on managing credit risk where credit analysis will be conducted on the issuer(s) to determine its ability to service promised coupon and principal payments.


10


Equity FundFeatures of FundInvestment Objective The Fund is an investment vehicle that enables investors to capitalise on the dynamic broad-

based growth through equity investments in various sectors of the Malaysian economy that are listed on Bursa Malaysia.

Investment Strategy & To meet its investment objective, the Fund Manager will invest at least 50% of the Fund’s assets in equities and equity-related securities.

The Fund’s investment strategy aims at achieving long-term risk-adjusted returns by exploiting potential inefficiencies in the capital markets through intensive, disciplined and consistent research. The Fund adopts a combination of top-down and bottom-up approaches. The top-down approach examines global and local macro-economic factors such as interest rate trends, inflation rates, supply demand trends, commodities trends and industry outlook and trends. As for the bottom-up approach, the Fund Manager evaluates securities of the companies based on those companies individual attributes such as earnings/ cash generation capabilities, growth drivers/ opportunities, scalability of business models, management’s strengths/ track records and valuation gaps. Emphasis is also given to portfolio diversification and using proper risk management to maximize long term risk-adjusted returns. In addition, any active and frequent trading strategy will depend on investment opportunities.

The Fund may invest in collective investment schemes provided it is consistent with the

investment objective of the Fund.

Asset Allocation

Target Market It is suitable for investors who seek medium to long-term capital appreciation and are able to tolerate short-term volatility.

Performance Benchmark FTSE Bursa Malaysia Top 100 Index (Total Return Net of Tax)

The benchmark is only used as a reference for performance gauge purpose. The Fund is not managed against the composite benchmark.

Further information on benchmarks can be obtained from www.bursamalaysia.com




Approach

Type of Asset Tactical Range (% of Fund’s NAV)

Minimum (%) Maximum (%)Equity 50 95

11


Year Actual Performance Benchmark 2010 23.53% 21.76% 2011 4.70% 1.94% 2012 12.30% 9.60% 2013 19.92% 11.39% 2014 -1.18% -6.17% 2015 -3.31% 0.04% 2016 -4.65% -0.43% 2017 13.16% 14.94% 2018 -10.26% -5.92% 2019 0.73% 0.29%

Source: Bloomberg









12

Equity Fund (continued)


Year Actual Performance Benchmark 2010 21.44% 18.20% 2011 5.85% 4.28% 2012 15.77% 11.85% 2013 29.54% 13.29% 2014 0.13% -4.17% 2015 7.25% 4.71% 2016 -4.59% -3.76% 2017 15.13% 12.59% 2018 -16.43% -10.39% 2019 7.22% 5.95%

Source: BloombergThis is strictly based the performance of the investment-linked fund and not the returns earned on the actual premiums paid of the investment-linked plan.


Features of FundInvestment Objective The Fund is an investment vehicle that seeks to maximise medium to long term capital

appreciation by investing in Shariah-approved equity and equity-related securities listed on Bursa Malaysia.

Investment Strategy & The Fund aims to achieve its objective by investing a minimum of 80% up to a maximum of 100% of its NAV in Shariah-compliant equities and/or equity-related securities. The balance of the Fund’s NAV will be invested in Islamic money market instruments or placed in Islamic deposits.The Fund’s investment strategy aims at achieving long-term risk-adjusted returns by exploiting potential inefficiencies in the capital markets through intensive, disciplined and consistent research. The Fund adopts a combination of top-down and bottom-up approaches. The top-down approach examines global and local macro-economic factors such as interest rate trends, inflation rates, supply demand trends, commodities trends and industry outlook and trends. As for the bottom-up approach, the Fund Manager evaluates Shariah-compliant securities of companies based on those companies individual attributes such as earnings/ cash generation capabilities, growth drivers/ opportunities, scalability of business models, management’s strengths/ track records and valuation gaps. Emphasis is also given to portfolio diversification and using proper risk management to maximize long term risk-adjusted returns. In addition, any active and frequent trading strategy will depend on investment opportunities.

The Fund Manager may also invest in Shariah-compliant collective investment schemes provided it is consistent with the Fund’s investment objectives.

Asset Allocation

Target Market It is suitable for investors who seek medium to long-term capital appreciation Shariah-based investments and are able to tolerate short-term volatility.

Performance Benchmark FTSE Bursa Malaysia Emas Shariah Index (Total Return Net of Tax)

The benchmark is only used as a reference for performance gauge purpose. The Fund is not managed against the composite benchmark.

Further information on benchmarks can be obtained from www.bursamalaysia.com


Launch Date 6 October 2003


Approach

Minimum (%) Maximum (%)

Tactical Range (% of Fund’s NAV) Type of Asset Target Mix (%)

Shariah-approved equity 90 80 100 Islamic money market 10 0 20

Dana Ekuiti Dinamik

13




• Derivatives such as FTSE Bursa Malaysia KLCI Futures, FTSE Bursa Malaysia KLCI Options, warrants, transferable subscription rights, and call warrants listed on Bursa Malaysia may be used for hedging purposes provided it is Shariah-approved.




Important Note Although the Fund may invest in Shariah-approved securities, the investment-linked insurance plan that is tied to this fund is not a Shariah-compliant product.

14

Dana Ekuiti Dinamik (continued)


ManulifeAsia-PacificREITFundFeatures of Fund



Risk Management The risk management strategies and techniques employed will be at the Target Fund level. The fund manager of the Target Fund together with its central compliance personnel monitors daily market valuations closely to help manage the risks of the Target Fund. Although the Target Fund primarily invests in REITs and infrastructure funds/ trusts, the Target Fund’s fund manager may take a defensive view by increasing the cash exposure that may be inconsistent with the Target Fund’s principal strategy in attempting to respond to unfavourable market conditions. In addition, the Target Fund’s fund manager also adopts an active and frequent trading strategy to manage the Target Fund. This strategy will minimize the potential loss that may arise from such adverse conditions. The most prevalent risk would be associated with currencies given that the Target Fund is investment in several different countries. On a day-to-day basis, the Target Fund’s fund manager does not hedge their foreign currency exposure unless it will help mitigate adverse currency movements. The Target Fund’s fund manager also diversifies its investments across a range of funds to spread and minimize specific or unsystematic risk. Diversification across different Asia-Pacific markets also helps to mitigate any country risk that may arise.

Investment Objective Manulife Asia-Pacific REIT Fund (“the Fund”) is a feeder fund investing in the Manulife Investment Asia-Pacific REIT Fund (“the Target Fund”), which aims to provide long-term capital appreciation and sustainable income through a combined investment in other collective investment schemes, namely REITs and infrastructure funds/ trusts.

Investment Strategy & The Target Fund invests in REITs and infrastructure funds/ trusts and related instruments attached to the invested REITs and infrastructure funds/ trusts that are listed on approved Asia-Pacific stock exchanges. The Target Fund focuses on REITs and infrastructure funds/ trusts that display a potential for capital appreciation via asset growth.

The underlying assets of infrastructure funds/ trusts will comprise of listed equities of companies which focus primarily on but are not limited to utilities, transportation/ logistics and communications:

• Utilities include facilities for the recycling, treatment, distribution and supply of water, as well as facilities for the generation, transmission, distribution and supply of electricity and gas.

• Transportation/ logistics include toll roads, railways, storage terminals, airports and seaports. • Communications comprise broadcast transmission infrastructures, satellite systems and

terrestrial wireline and wireless network infrastructures. The Target Fund Manager focuses primarily on Australia, China, Hong Kong, Indonesia,

Malaysia, the Philippines, Singapore, South Korea, Taiwan and Thailand.

Asset Allocation

Target Market The Fund is suitable for investors who wish to have investment exposure through a diversified portfolio of REITs and infrastructure funds/ trusts within the Asia-Pacific region. The Fund may also appeal to investors who are seeking a sustainable distribution of income and long-term capital growth with medium- to long-term investment horizon of between 3 and 5 years.

Performance Benchmark Manulife Investment Asia REIT Ex Japan Index Further information on the benchmark can be obtained from monthly fund fact sheet

via www.manulife.com.my

Fund Manager The fund manager for the Fund and the Target Fund is Manulife Investment Management(M) Berhad (formerly known as Manulife Asset Management Services Berhad).

Prior to 1 October 2017, Manulife Investment Management (Singapore) Pte. Ltd. (formerly known as Manulife Asset Management (Singapore) Pte. Ltd.) was the investment manager of the Target Fund.




The Fund is suitable for investors who wish to have investment exposure through a diversified portfolio of REITs and infrastructure funds/ trusts within the Asia-Pacific region. The Fund may also appeal to investors who are seeking a sustainable distribution of income and long-term capital growth with medium- to long-term investment horizon of between 3 and 5 years.

Type of Asset Tactical Range (% of Fund’s NAV) Minimum (%) Maximum (%)Target Fund 95 100Cash 0 5

15


2017 2.42%* 4.81% 2018 -0.35% -2.75% 2019 14.43% 13.75%

Approach


Manulife Progress FundFeatures of Fund

Approach

16


2015 21.73%* 3.43% 2016 -3.42% -4.24% 2017 15.03% 19.65% 2018 -20.6% -26.49% 2019 8.99% 16.86%

*Fund Performance is from fund launch date until year end of the same year Source: Bloomberg


Investment Objective Manulife Progress Fund (“the Fund”) is a feeder fund investing in the Manulife Investment Progress Fund (“the Target Fund”), which seeks to provide investors with steady long-term capital growth at a reasonable level of risk by investing in a diversified portfolio of small to medium size public-listed companies listed on the Bursa Malaysia.

Investment Strategy & The Target Fund invests in a diversified portfolio of small to medium size companies listed in Bursa Malaysia which are not part of the FTSE Bursa Malaysia KLCI Index (“FBM KLCI”) constituents (at the point of purchase). The Fund Manager adopts a bottom-up approach in identifying companies with exceptional growth and visible earnings prospects during the stock selection process. Its value-based approach, on the other hand, seeks out companies which the Fund Manager considers are undervalued relative to their assessed true value. The primary focus is on the underlying growth fundamental of the company and its valuation relative to its intrinsic value although other factors such as macroeconomic variables, liquidity conditions and political risk factors are also considered important.

The Fund Manager emphasizes strongly on internal research. Frequent company visits are made in order to obtain local knowledge and corporate information. Besides using traditional valuation yardsticks such as growth rate, price earnings (P/E) ratio, price to book (P/B) ratio and price/earnings to growth (PEG) ratio, the Fund Manager focuses on the company’s capital structure, intrinsic value, cash flow, replacement costs, revised net asset value (RNAV), management and potential growth trend. In addition, any active trading strategy will depend on investment opportunities or valuations.

Asset Allocation

Target Market The Fund is designed for investors who are willing to accept a higher level of risk and for investors who seek capital appreciation from their investments. These investors should also have low income range and ideally have a medium to long term investment horizon of between 3 and 5 years.

Performance Benchmark 50% FTSE Bursa Malaysia Mid 70 Index + 50% FTSE Bursa Malaysia Small Cap Index Further information on the benchmark components can be obtained from www.bursamalaysia.com

Fund Manager The fund manager for the Fund and Target Fund is Manulife Investment Management (M) Berhad (formerly known as Manulife Asset Management Services Berhad).

Launch Date 12 January 2015



Type of Asset Tactical Range (% of Fund’s NAV) Minimum (%) Maximum (%)Target Fund 95 100Cash 0 5



Risk Management The risk management strategies and techniques employed will be at the Target Fund level. Investments of the Target Fund are actively monitored by the Target Fund’s fund manager to manage the risks of the Target Fund’s equity investments. Although the Target Fund primarily invests in Malaysian equities, the level of equity investments changes as its fund manager purchases and/or sells equities. If the investment climate is unfavourable and the prospectus of equity investments is not promising, the fund manager may sell equities of the Target Fund and temporarily reduce the Target Fund’s exposure in equity investments to below 70% of the Target Fund’s NAV. This strategy will minimize the potential loss which may arise when share prices decline. Investments of the Target Fund are managed in a way that is well diversified across a range of equities to minimize specific (unsystematic) risk exposure to any one company or group of companies. Investments of the Target Fund are also diversified across a range of sectors/industries to reduce sector/industry specific risk.

Manulife Progress Fund (continued)

17


Year Actual Performance Benchmark 2015 -0.35%* 14.85% 2016 -1.61% 5.20% 2017 26.01% 19.56% 2018 -21.63% -16.16% 2019 6.89% 9.44%

Manulife Asian Small Cap Growth FundFeatures of FundInvestment Objective Manulife Asian Small Cap Growth Fund (“the Fund”) is a feeder fund investing in the Manulife

Global Fund - Asian Small Cap Equity Fund (institutional share class) (“the Target Fund”), which aims to provide long-term capital growth for those investors who hold a long term investment view and are prepared to accept significant fluctuations in the value of their investments. The Target Fund’s investment portfolio will be made on a diversified basis, for which at least 70% of its net assets will be invested in equity and equity related investments of smaller capitalisation companies in the Asian and/ or Pacific region. Such equity and equity related securities include common stocks, preferred stocks and depositary receipts.

Investment Strategy & While the Target Fund will invest in accordance with its investment objective and strategy, subject to applicable laws and regulations, the Target Fund is not otherwise subject to any limitation on the portion of its net assets that may be invested in any one country or sector. Hence, the Target Fund may invest more than 30% of its net assets in issuers located in any of the People’s Republic of China (“PRC”), South Korea, Australia, Taiwan and Hong Kong. The Target Fund’s investments may be denominated in any currency.

The Target Fund may invest directly in certain China A-Shares listed on the Shanghai Stock Exchange (“SSE”) or the Shenzhen Stock Exchange (“SZSE”) via Shanghai-Hong Kong Stock Connect or Shenzhen-Hong Kong Stock Connect respectively (collectively, “Stock Connect”). In any event where the Target Fund invests in China A-Shares, it is expected that the Target Fund will not hold more than 30% of its net assets in China A-Shares.

It is not the intention of the Target Fund to invest more than 10% of its net assets in securities issued, or guaranteed, by any single sovereign (including the relevant government, public or local authority) which has a credit rating that is below investment grade (i.e. below Baa3 by Moody’s or BBB- Standard & Poor’s or Fitch).

Asset Allocation

Target Market Investors who hold a long term investment view and are prepared to accept significant

fluctuations in the value of their investments.

Performance Benchmark MSCI AC Asia Pacific ex Japan Small Cap Index Further information on benchmarks can be obtained from monthly fund fact sheet


Fund Manager The Fund Manager of the Feeder Fund is Manulife Investment Management (M) Berhad (formerly known as Manulife Asset Management Services Berhad).

The Fund Manager of the Target Fund is Manulife Investment Management (Hong Kong) Limited (formerly known as Manulife Asset Management (Hong Kong) Limited).

Launch Date 12 January 2015

Fees & ChargesFund Management Charge 1.50% per annum of the Net Asset Value


Approach


Cash 0 5

18



Risk Management The risk management strategies and techniques employed will be at the Target Fund level.The management company of the Target Fund will implement a risk management process which enables it to monitor and measure at any time, the risk of its investment positions and their contribution to the overall risk profile. It shall cover the global exposure of the Target Fund on general and specific market risks, the counterparty risks, as well as the concentration risk associated with all positions.


Manulife Emerging Eastern Europe FundFeatures of Fund

19

Investment Objective Manulife Emerging Eastern Europe Fund aims to achieve capital growth through investing at least 70% of its net assets in equity and equity related securities which are listed or traded on the stock exchanges of Central and Eastern European countries, including, without limitation, those in Austria, Bulgaria, Croatia, Czech Republic, Estonia, Greece, Hungary, Latvia, Lithuania, Poland, Romania, Russia, Slovak Republic, Slovenia, and Turkey. Such equity and equity related securities include common stocks, preferred stocks and depositary receipts. It is intended that the Manulife Emerging Eastern Europe Fund is a feeder fund that invests in Manulife Global Fund-Emerging Eastern Europe A Share (“the Target Fund”).

Investment Strategy & The Target Fund’s investment in Russian securities which are traded only in Russia (other than those listed or traded on regulated markets) will, at no time, represent more than 10% of the Target Fund’s net assets, and in accordance with its prospectus. While the Target Fund will invest in accordance with its investment objective and strategy, subject to applicable laws and regulations, the Target Fund is not otherwise subject to any limitation on the portion of its net assets that may be invested in any one country or sector and in issuers of any market capitalization. Hence, the Target Fund may invest more than 30% of its net assets in issuers located in any of Russia and Turkey, and due to the nature of the Target Fund’s investment portfolio, securities of small and medium sized companies may represent, at times, more than 30% of the Target Fund’s net assets. The Target Fund’s investments may be denominated in any currency.

It is not the intention of the Target Fund to investment more than 10% of its net assets in securities issued, or guaranteed, by any single sovereign (including the relevant government, public or local authority) which has a credit rating that is below investment grade (i.e. below Baa3 by Moody’s or BBB- by S&P or Fitch).

Asset Allocation

Target Market The Fund is suitable for investors who seek capital appreciation over long term and are willing to accept higher level of risk. The Fund is also suitable for investors who have a long term investment horizon of at least 5 years.

Performance Benchmark MSCI Emerging Europe 10/40 Index Further information on benchmarks can be obtained from monthly fund fact sheet


Fund Manager The Fund Manager for the Fund is Manulife Investment Management (M) Berhad (formerly known as Manulife Asset Management Services Berhad).

The Fund Manager for the Target fund is Fiera Capital (UK) Limited (formerly known as Charlemagne Capital (UK) Limited).

Launch Date 12 November 2007



Cash 0 5

Approach



2010 -4.57% 1.19% 2011 -22.92% -20.87% 2012 14.33% 9.15% 2013 12.11% 4.46% 2014 -27.34% -35.96% 2015 7.13% 12.81% 2016 23.99% 38.92% 2017 9.39% 1.81% 2018 -15.04% -6.38% 2019 26.71% 25.58%

Manulife Emerging Eastern Europe Fund (continued)

Risks

Please refer to the Appendix for the risks involved and the risk descriptions.

Risk Management The risk management strategies and techniques employed will be at the Target Fund level.

The management company of the Target Fund will implement a risk management process which enables it to monitor and measure at any time, the risk of its investment positions and their contribution to the overall risk profile. It shall cover the global exposure of the Target Fund on general and specific market risks, the counterparty risks, as well as the concentration risk associated with all positions and include, if applicable, a process for accurate and independent assessment of the value of any over-the-counter derivative instruments.

The Target Fund adopts a commitment approach for its global exposure calculation, and does not expect to leverage. The commitment approach is a methodology used to determine global risk exposure of the Target Fund, whereby financial derivative instruments (FDIs) position of the Target Fund is converted into the market value of the equivalent position in the underlying asset(s) of the FDI.

20

Source: Bloomberg




Manulife China Value FundFeatures of Fund

21

Investment Objective Manulife China Value Fund (“the Fund”) is a feeder fund investing in the Manulife Investment Greater China Fund (“the Target Fund”), which aims to provide capital growth over the medium to long term by investing in larger capitalized companies in the Greater China region namely China, Hong Kong and Taiwan markets, as well as China-based companies listed on approved overseas markets1.

1 Foreign markets where the regulatory authority is an ordinary or associate member of International Organization of Securities Commissions (IOSCO).

Investment Strategy & The Target Fund invests mainly in large capitalized companies to achieve capital growth over the medium to long-term. The Target Fund focuses on the Greater China region, namely China, Hong Kong and Taiwan markets, as well as China-based companies (companies that derive more than 50% of assets and/or earnings from China) listed on approved overseas markets1.

The Target Fund may also invest in collective investment schemes as well as unlisted equities with attractive potential returns, particularly companies that are seeking a listing within one year.

The Target Fund Manager focuses on large capitalised companies with exceptional growth and visible earnings prospects and/or companies which are undervalued relative to their assess true values and/or net asset backing. The Target Fund Manager also emphasises on companies with good management, strong niche and those that are leaders with a dominant market share in their respective countries. In addition, any active and frequent trading strategy will depend on investment opportunities.

Asset Allocation

Target Market The Fund is suitable for investors who seek capital appreciation over long term and are willing to accept higher level of risk. The Fund is also suitable for investors who have a medium to long term investment horizon of between 3 and 5 years.

Performance Benchmark MSCI Golden Dragon Index (effective 17 November 2017). Further information on the benchmark can be obtained from monthly fund fact sheet


Fund Manager The Fund Manager for the Fund is Manulife Investment Management (M) Berhad (formerly known as Manulife Asset Management Services Berhad).

MAMSB is also the Manager for the Target Fund, and has appointed Manulife Investment Management (Hong Kong) Limited (formerly known as Manulife Asset Management (Hong Kong) Limited) as the Fund Manager for the Target Fund.

Launch Date 12 November 2007



Cash 0 5

Approach


Year Actual Performance Benchmark*

2010 3.20% 0.11% 2011 -16.65% -18.05% 2012 5.53% 15.03% 2013 15.75% 11.30% 2014 12.06% 11.80% 2015 13.47% 10.60% 2016 -0.90% 7.10% 2017 18.81% 21.39% 2018 -14.96% -15.06% 2019 18.87% 19.42%

*Prior to 17 November 2017, the benchmark was FTSE All World Greater China Index. Source: Lipper IM and Manulife Investment Management (M) Berhad



Risk Management The risk management strategies and techniques employed will be at the Target Fund level. Risks faced by the Target Fund are managed by employing asset allocation, liquidity management and diversification strategies. The Target Fund’s fund manager may reduce equity exposures when a severe downturn in the equity markets is expected and liquidity risks are high. Investments of the Target Fund are monitored closely to ensure potential returns are maximized in spite of political risk, regulatory risk, foreign exchange risk and liquidity risk as a result of foreign market investments. The Target Fund focuses on markets where the prospects are promising and where political and regulatory risks are anticipated to be within acceptable levels.


Manulife China Value Fund (continued)

22


Other Information

1. Basis & Frequency of Unit Valuation

Under normal circumstances, the valuation of the assets of the Fund shall be made daily to determine the Net Asset Value. However, Manulife Insurance Berhad (“the Company”) may value the Fund less frequently due to circumstances that make it impossible to value the Fund daily, including but not limited to temporary trading suspension of the exchanges, in which the Fund are invested. In any event, the Fund shall be valued at least once a week. Whenever appropriate, the Company may seek the services of external persons and/or firms to obtain the valuation of the Fund’s assets, and shall comply with the applicable laws and practices.

The value of the Funds shall be equal to the following:(a) the fair market value of all the Fund’s assets at the close of the business day immediately preceding the Valuation Date, or where appropriate, such value as determined by the Company at its absolute discretion, or where necessary after considering advice from external consultants; LESS(b) the amount which the Company shall determine to be the Liabilities of the Funds on the Business Day immediately preceding the Valuation Date; LESS(c) Fund Management Charge (evenly distributed throughout the year).

To recoup the transaction costs of acquiring and disposing of assets, the Company will impose a dilution fee or transaction cost which is due at the same time payment is made for the sale and repurchase of units. The dilution fee or transaction cost charged will be allocated back to the unit fund.

For the Net Asset Value per unit of each Investment-linked Fund, please visit www.manulife.com.my. In addition, this is also being published on Berita Harian and New Straits Times on the last business day of every quarter.

2. Basis of Calculation of Past Performances

Past Performance =

3. Exceptional Circumstances

In the event of circumstances beyond the Company’s control, such as stock market volatility or lack of liquidity or temporary trading suspension, or other events that the Company considers cancellation of units to be detrimental to the interests of policy owners as a whole, the payment of benefits from the policy (other than Death Benefit and Disability Benefit) may be deferred for a period not exceeding six (6) months from the date the payment would have taken place under normal circumstances. In the event of exceptional circumstances, such as high volume of sales of investment in a short period of time, the Company reserves the right to defer or suspend the issuance or redemption of units. The Company also reserves the right to split or combine existing units or make any changes that may be required due to legislation and regulatory requirements.

( ) Net Asset Value for Year nNet Asset Value for Year n _ 1

_ 1 × 100%

23


Appendix - Risk:

24

3 3 3 3

3 3 3 3

3 3 3 3 3 3

3 3 3 3 3 3

3 3 3 3 3 3 3 3

3 3 3

3 3 3 3

3

TypeofRisk

Inco

me

Fund

Man

aged

Fun

d

Man

ulife

Div

iden

d Fu

nd

Equi

ty F

und

Dan

a Ek

uiti

Din

amik

Man

ulife

Fle

xiIn

vest

Fun

d

Man

ulife

Prog

ress

Fun

d

Man

ulife

Asi

an S

mal

lCa

p Gr

owth

Fun

d

Man

ulife

Chi

naVa

lue

Fund

Man

ulife

Asi

a -

Paci

fic R

EIT

Fund

Man

ulife

Em

ergi

ngEa

ster

n Eu

rope

Fun

d

3 3

3 3

3

3

3

3

3 3 3 3 3 3 3 3 3 3 3

3 3 3 3 3 3 3 3 3 3 3

3 3 3 3 3 3 3 3 3 3 3

The table sets out the risks of investing in each of the funds. Do note that this list is not exhaustive.

A. General Risk

1. Market Risk

2. Manager’s Risk

3. Liquidity Risk

B.SpecificRisksassociatedwiththeFund

1. Credit and Default Risk

2. Interest Rate Risk

3. Country Risk

4. Currency Risk

5. Stock Specific Risk

6. Small -to-Medium-Size Companies Risk

7. Derivatives Risk

8. Reclassification of Shariah Status Risk

C. Specific Risks associated with the Target Fund

1. Emerging Markets Risk

2. Natural Resources Sector Risk

3. Mainland China Investment Risks

4. Mainland China Tax Risk

5. Risks Associated with Investments via Stock Connect

6. Risks Associated with Investments in REITs


1 Market Risk Market risk refers to the possibility that an investment will lose its value because of a general decline in financial markets, due to economic, political and/or other factors, which will result in a decline in the Funds’ Net Asset Value.

2 Manager’s Risk This risk refers to the day-to-day management of the Funds by the Manager which will impact the performance of the Funds. For example, investment decisions undertaken by the Manager as a result of an incorrect view of the market or any non-compliance with internal policies, investment mandate, the deed, relevant law or guidelines due to factors such as human error or weaknesses in operational process and systems, may adversely affect the performance of the Funds.

3 Liquidity Risk Liquidity risk refers to the ease of liquidating an asset depending on the asset’s volume traded in the market. If the Fund holds assets that are illiquid, or are difficult to dispose of, the value of the Fund will be negatively affected when it has to sell such assets at unfavourable prices.

For the respective Target Fund of Manulife Asian Small Cap Growth Fund and Manulife Emerging Eastern Europe Fund, the trading volume on some of the markets through which the Target Fund may invest may be substantially less than that in the world’s leading stock markets. Accordingly, the accumulation and disposal of holdings in some investments may be time-consuming and may need to be conducted at unfavourable prices. Liquidity may also be less and volatility of prices greater than in the leading markets as a result of a high degree of concentration of market capitalization and trading volume in a small number of companies.

The Target Fund may invest in companies which are less well established in their early stages of development. These companies may often experience significant price volatility and potential lack of liquidity due to the low trading volume of their securities.

The absence of adequate liquidity may also arise when a particular security is difficult to sell at the desired moment during particular periods or in particular market conditions. In a down market, higher-risk securities and derivatives could become harder to value or sell at a fair price. Liquidity risk tends to compound other risks. For example, if the Target Fund has a position in an illiquid asset, its limited ability to liquidate that position at short notice will compound its market risk.

Where the Target Fund focuses on a specific geographic region, or market/industry sector, it may be subject to greater concentration risks than funds which have broadly diversified investments.

As such, investors should note that investment in the Target Fund is not a bank deposit and is not insured or guaranteed by any deposit insurance or government agency. Prices may fall in value as rapidly as they may rise and it may not always be possible to dispose of such securities during such falls.

25

General Risks


1 Credit and Default Risk Credit risk relates to the creditworthiness of the issuers of the fixed income instruments and their expected ability to make timely payment of interest/ profit and/or principal. Any adverse situations faced by the issuer may impact the value as well as liquidity of the fixed income instrument. In the case of rated debt instruments, this may lead to a credit downgrade.

Default risk relates to the risk that an issuer of a fixed income instrument either defaulting on payments or failing to make payments in a timely manner which will in turn adversely affect the value of the fixed income instruments. This could adversely affect the value of the Funds. Such risk could be mitigated through vigorous credit analysis and having regular updates on the business profile and the financial position of the issuer or counterparty of the fixed income instruments.

2 Interest Rate Risk Interest rate risk refers to the impact of interest rate changes on the valuation of fixed income instruments. When interest rates rise, fixed income instruments prices generally decline and this may lower the market value of the Fund’s investment in fixed income instruments. The reverse may apply when interest rates fall. In order to mitigate interest rate risk, the Fund Manager will need to manage the fixed income portfolio taking into account the coupon rate and time to maturity of the fixed income instruments.

The rates for deposits are normally fixed during the specific and agreed tenure. Hence, any changes in the prevailing level of interest rates will not impact the earlier deposit rates that have been agreed between the Fund Manager and the financial institutions. However, in the event of rising interest rates, the Fund will lose the opportunity to earn higher interest during the specific tenure.

The above interest rate is a general economic indicator that will have an impact on the management of the Funds regardless of whether it is Shariah-compliant. It does not in any way suggest that an Islamic Fund will invest in conventional financial instruments. All the investments carried out for the Islamic Funds are in accordance with Shariah requirements.

3 Country Risk Investments of the Funds in any country may be affected by changes in the economic and political climate, restriction on currency repatriation or other developments in the law or regulations of the countries in which the Funds invest in. For example, the deteriorating economic condition of such countries may adversely affect the value of the investments undertaken by the Funds in those affected countries. This in turn may cause the NAV of the Funds or prices of Units to fall.

4 Currency Risk As the investments of the Fund may be denominated in currencies other than Ringgit Malaysia (RM), any fluctuation in the exchange rate between the RM and the currencies in which the investments are denominated may have an impact on the value of these investments. Investors should be aware that if the currencies in which the investments are denominated depreciate against the RM, this will have an adverse effect on the NAV of the Fund in RM and vice versa. Investors should note that any gains or losses arising from the fluctuation in the exchange rate may further increase or decrease the returns of the investment. Hedging may be applied to mitigate the currency risk. However, investors are unable to enjoy upside from any currency appreciation.

For the respective Target Fund of Manulife Asian Small Cap Growth Fund and Manulife Emerging Eastern Europe Fund, the Target Fund’s assets may be invested primarily in securities denominated in currencies other than its relevant currency of account and any income or realization proceeds received by the Target Fund from these investments will be received in those currencies, some of which may fall in value against the currency of account. The Target Fund will compute its net asset value and make any distributions in the relevant currency of account and there is, therefore, a currency exchange risk, which may affect the value of the shares to the extent that the Target Fund makes such investments, as a result of fluctuations in exchange rates between the currency of account of the relevant Target Fund and any other currency. In addition, foreign exchange control in any country may cause difficulties in the repatriation of funds from such countries.

5 Stock Specific Risk Prices of a particular stock may fluctuate in response to the circumstances affecting individual companies such as adverse financial performance, news of a possible merger or loss of key personnel of a company. Any adverse price movements of such stock will adversely affect the Fund’s NAV.

6 Small-to-Medium-Size The Fund may be exposed to the risk of investing in small and medium market capitalisation companies. Generally, the smaller the market capitalisation of a company, the less liquid are its shares being traded. Such companies’ stocks are also usually more volatile than their larger counterparts, and hence more risky. The risk is managed through carefully selecting and diversifying investments within the Funds’ portfolio.

For the respective Target Fund of Manulife Asian Small Cap Growth Fund and Manulife Emerging Eastern Europe Fund, the Target Fund may invest in, but is not restricted to, the securities of small and medium sized companies in the relevant markets. This can involve greater risk than is customarily associated with investment in larger and more established companies. In particular, smaller companies often have limited product lines, markets or financial resources, with less research information available about the company, and their management may be dependent on a few key individuals.

26

SpecificRisksassociatedwiththeFund

Companies Risk


Specific Risks associated with the Fund (continued)

27

7 Derivatives Risk The Fund Manager may use derivatives such as futures and options, to hedge against adverse movements in currency exchange rates. This involves special risks, including but not limited to:

• the risk of loss from default by the counterparty, typically as a consequence of insolvency or failed settlement; and

• the risk of the supply and demand factors in the derivatives market and in other related markets impacting the liquidity of the derivatives market adversely, which in turn would adversely affect derivatives pricing and the Fund.

The Fund Manager will only enter into hedging transactions where the counterparty is a financial institution with minimum long-term credit rating by any domestic or global rating agency which indicates strong capacity for timely payment of financial obligations. In the event were the counterparty or issuer’s rating falls below the minimum required or it ceases to be rated, the Fund Manager will liquidate its position within 6 months or sooner, unless the Trustee considers it to be in the best interest of investors to do otherwise.

To mitigate these risks, all investment in derivatives will be closely monitored or efforts will be taken to unwind such positions if there is material adverse change to an issuer.

8 Reclassification of Shariah This is the risk that the currently held Shariah-compliant securities in the portfolio of Islamic Funds may be reclassified to be Shariah non-compliant in the periodic review of the securities by the Shariah Advisory Council of the Securities Commission Malaysia, the Shariah Adviser or the Shariah boards of the relevant Islamic indices. If this occurs, the Fund Manager will take the necessary steps to dispose of such securities. There may be opportunity loss to the Funds due to the Funds not being allowed to retain the excess capital gains derived from the disposal of the Shariah non-compliant securities. The value of the Funds may also be adversely affected in the event of a disposal of Shariah non-compliant securities at a price lower than the investment cost.

Status Risk


1 Emerging Markets Risk Investors should note that the portfolio of Target Funds may be invested in what are commonly referred to as emerging economies or markets, where special risks (including higher stock price volatility, lower liquidity of stocks, political and social uncertainties, and currency risks) may be substantially higher than the risks normally associated with the world’s mature economies or major stock markets. Further, certain emerging economies are exposed to the risks of high inflation and interest rates, large amount of external debt; and such factors may affect the overall economy stability.

In respect of certain emerging economies or markets in which the Target Funds may invest,

the Target Funds may be exposed to higher risks than in developed economies or markets, in particular for the acts or omissions of its service providers, agents, correspondents or delegates as a result of the protection against liquidation, bankruptcy or insolvency of such persons. Information collected and received from such service providers, agents, correspondents or delegates may be less reliable than similar information on agents, correspondents or delegates in more developed economies or markets where reporting standards and requirements may be more stringent.

Investors should note that accounting, auditing and financial reporting standards, practices

and disclosure requirements applicable to some companies in the emerging economies or markets in which the Target Funds may invest may differ from countries with more developed financial markets, and less information may be available to investors, which may also be out of date.

The value of a Target Fund’s assets may be affected by uncertainties such as changes in

government policies, taxation legislation, currency repatriation restrictions and other developments in politics, law or regulations of the emerging economies or markets in which the Target Fund may invest and, in particular, by changes in legislation relating to the level of foreign ownership in the companies in these economies or markets, possible nationalization of their industries, expropriation of assets and confiscatory taxation.

2 Natural Resources The Target Funds may carry a much greater risk of adverse developments than a fund that invests in a wider variety of industries. The securities of companies in the natural resources sector may experience more price volatility than securities of companies in other industries. Some of the commodities used as raw materials or produced by these companies are subject to broad price fluctuations as a result of industry wide supply and demand factors. As a result, companies in the natural resources sector often have limited pricing power over supplies or for the products that they sell which can affect their profitability. Concentration in the securities of companies with substantial natural resources assets will expose the Target Fund to price movements of natural resources to a greater extent than a more broadly diversified mutual fund. There is a risk that the Target Funds will perform poorly during an economic downturn or a slump in demand for natural resources.

3 Mainland China Investing in the securities markets in Mainland China is subject to the risks of investing in emerging markets generally as well as to specific risks relating to the Mainland China market.

Investors should note that the legal system and regulatory framework of Mainland China are still developing, making it more difficult to obtain and/or enforce judgments and such could limit the legal protection available to investors. Military conflicts, either internal or with other countries, are also a risk. In addition, currency fluctuations, currency convertibility and fluctuations in inflation and interest rates have had, and may continue to have, negative effects on the economy and securities markets of Mainland China. Mainland China’s economic growth has historically been driven in a large degree by exports to the U.S. and other major export markets. Therefore, a slow-down in the global economy may have a negative impact on the continued growth of the Chinese economy.

For further information on Mainland China Investment Risk, please refer to the Target Fund’s

latest prospectus available in www.manulifefunds.com.hk

4 Mainland China Tax Risk Please refer to the Target Fund’s latest prospectus available in www.manulifefunds.com.hk for general information relating to Mainland China Tax Risk.

The Fund Manager of the Target Fund does not currently make any tax provision in respect of any potential PRC withholding income tax, enterprise income tax, value-added tax and surtaxes; however, the Fund Manager reserves the right to do so when it thinks appropriate. The amount of any such tax provision will be disclosed in the accounts of the Target Fund.

The tax laws, regulations and practice in Mainland China are constantly changing, and they may be changed with retrospective effect. In this connection, the Target Fund may be subject to additional taxation that is not anticipated as at the date hereof or when the relevant investments are made, valued or disposed of. The income from and/or the value of the relevant investments in the Target Fund may be reduced by any of those changes.

Sector Risk

28

SpecificRisksassociatedwiththeTargetFund

Investment Risk


Specific Risks associated with the Target Fund (continued)

5 Risks Associated with The Target Fund may also seek to implement its investment program through investing in the SSE or the SZSE via the Hong Kong Exchanges and Clearing Limited (“HKEx”). Under the “northbound trading link” of Shanghai-Hong Kong Stock Connect or Shenzhen-Hong Kong Stock Connect respectively, Hong Kong and international investors (including the Target Fund) are able to trade certain eligible SSE-listed stocks (the “SSE Securities”) or SZSE-listed stocks (the “SZSE Securities”) (the list of eligible securities being subject to review from time to time) through Hong Kong brokers, who route the transactions through the HKEx to the SSE or the SZSE, as the case may be. For each of Shanghai-Hong Kong Stock Connect and Shenzhen-Hong Kong Stock Connect, investors are able to trade China A-Shares subject to a daily maximum of RMB13 billion.

Investment in Stock Connect securities is subject to various risks associated with the legal

and technical framework of Stock Connect. Investors should note that Stock Connect is a pilot program and the two-way stock trading

link between the Stock Exchange of Hong Kong Limited (“SEHK”) and the SSE or the SZSE is relatively new. The application and interpretation of the relevant regulations are therefore relatively untested and there is no certainty as to how they will be applied. The current Stock Connect regulations are subject to change, which may take retrospective effect. In addition, there can be no assurance that the Stock Connect regulations will not be abolished. Accordingly, there can be no assurance that the Target Fund will be able to obtain investment opportunities through the two-way stock trading link.

Under Stock Connect, trading in SSE Securities and SZSE Securities is subject to market rules and disclosure requirements in the PRC stock market. Any changes in laws, regulations and policies of the A-Shares market or rules in relation to Stock Connect may affect share prices.

Although certain aspects of the Stock Connect trading process are subject to Hong Kong law, PRC rules applicable to share ownership will apply. In addition, transactions using Stock Connect are neither subject to the Hong Kong Investor Compensation Fund nor the China Securities Investor Protection Fund.

Investment via Stock Connect is premised on the functioning of the operational systems of the relevant market participants. In turn, the ability of such market participants to participate in the Stock Connect is subject to meeting certain information technology capability, risk management and other requirements as may be specified by the relevant exchange and/or clearing house. Further, Stock Connect program requires routing of orders across the border. Although the SEHK and market participants endeavour to develop new information technology systems to facilitate routing of orders across the border, there is no assurance that the systems of the SEHK and market participants will function properly or will continue to be adapted to changes and developments in both the PRC and Hong Kong markets, and therefore trading via the Stock Connect could be disrupted. This may, in turn, affect the Target Fund’s ability to access the A-Share market (and hence to pursue their investment strategy).

The Target Fund, whose base currency is not RMB, may also be exposed to currency risk due to the need for the conversion into RMB for investments in SSE Securities and SZSE Securities via Stock Connect. During any such conversion, the Target Fund may also incur currency conversion costs. The currency exchange rate may be subject to fluctuation and where RMB has depreciated, the Target Fund may incur a loss when it converts the sale proceeds of SSE Securities and SZSE Securities into its base currency.

For further information on Risks Associated with Investments via Stock Connect, please refer to the Target Fund’s latest prospectus available in www.manulifefunds.com.hk

Investments viaStock Connect

29


Specific Risks associated with the Target Fund (continued)

6 Risk Associated with • Property Taxes Risk Any increase in property taxes law or requirement could have an adverse impact to income

gained from sales of any property. This risk is mitigated by diversifying the portfolio across various property sub-segments and lessened further by investments in multiple countries to minimise concentration in any single market or economy.

• Rental Risk Any material changes in the regulatory limits on rent could have an adverse impact on

the rental income which may reduce dividend payout. This risk is mitigated by investing in a wide range of property sub-segments across different countries in the permissible region of investments. A close monitoring of rental rates via channel checks by the Fund Manager is regularly required to ensure timely portfolio decision-making.

• REIT Management Risk REIT’s performance depends, in part, upon the continued service and performance of

REIT’s manager. For example, the key personnel of REIT’s manager may leave the employment and affect results in the duties which such personnel are responsible for. The loss of key personnel, or the inability of the relevant businesses REIT’s manager to retain or replace qualified employees, could have a n adverse effect on its operating results, affect its ability to generate cash and make distributions to the REIT’s investors. The REIT’s performance will have an impact on the investments of the Fund.

The list of risks as shown above is not exhaustive for potential investors’ considerations before investing in the Fund. Potential investors should be aware that an investment in the Fund may be exposed to other risks of exceptional nature from time to time.

30

Investment in REITs

Manulife Insurance Berhad (200801013654 (814942-M))

16th Floor, Menara Manulife, 6, Jalan Gelenggang,Damansara Heights, 50490 Kuala LumpurTel: 03 - 2719 9228 / 2719 9112 Fax: 03 - 2092 2960

www.manulife.com.my

ManulifeMalaysiamanulife.malaysia

02/2

020

investment-linked funds fund fact sheet booklet · investment-linked insurance products you are...

Documents