Luen Fung Hang Life Pension Fund Growth Fund Investment Objective and Policy The Growth Fund will be actively managed to take advantage of both

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鹤杀江
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2016 2 聯豐亨人壽退休基金 Luen Fung Hang Life Pension Fund Management Company Luen Fung Hang Life Limited Advisory Body BOCI-Prudential Asset Management Limited Currency HKD # 2 4 10 1.94% 4 6 6 5 10 1.

1 聯豐亨人壽退休基金 Luen Fung Hang Life Pension Fund Management Company Luen Fung Hang Life Limited Advisory Body BOCI-Prudential Asset Management Limited Currency HKD # % % % % Market Commentary # arket sentiment improved as we entered the second quarter. US Treasury traded weaker on risk Massets rally, strong US employment report and hawkish April FOMC minutes. 10-year US Treasury yield hit the high of the quarter at 1.94%. The April FOMC minutes surprised the market by leaving open the possibility of an increase in the federal funds rate at the June FOMC meeting. Amidst rising expectation of June rate hike, US Treasury sold off with yield curve flattened. Later on, as we approach the UK s referendum, market volatility rose and US Treasury strengthened. The weaker-than-expected May employment report prompted market to scale back expectation of rate hike. The rising global risk added to the strength of US Treasury as the UK voted to leave EU. The Leave decision shocked the market. Risk assets were being sold off aggressively and global bond yields reached historical low. US Treasury benefitted from safe haven flows with 10-year US Treasury yield falling to 1.4%, the lowest since July As global risk continued to overshadow the market, US Treasury yields remain at their low. All in all, 10-year US Treasury yield fell by 30 basis points on a quarter-on-quarter basis and concluded the quarter at 1.47% with flattening yield curve. In the Eurozone, overall macro developments were consistent with a scenario of moderate recovery in low inflation environment. European bond markets traded in diverted patterns with idiosyncratic factors at work. Core markets, thanks to European Central Bank s relentless buying, stayed firm and the yields trended lower consistently to sub-zero level. In June, the shock to global financial market from the unexpected voting result of UK s EU referendum manifested the safe haven status of German bund and sent the 10-year yield deeper into negative territory. 10-Year bund yield, in quarter-onquarter basis, fell 28 bps and closed at -0.13%. In peripheral space, 10-year Spanish bond yield recorded similar extend of decline despite higher volatility. Italian bond, however, underperformed owing to its vulnerable banking system and deterioration in growth prospect. The 10-year bond yield went up by 4 bps in last quarter. Mixed economic data from around the world had global equity market trading in range during the second quarter. Rising oil price had been a temporary positive factor for the equity market. However, net long speculative position in oil future market reached a high point and positive news are priced in. Oil price began rolling over towards quarter end as supply was expected to increase. UK s decision to leave EU had also brought a round of risk-off during end of June. Global equity market ended the quarter flat. In the near term, market sentiment would likely remain fragile as the risk of more countries voting against its EU membership has risen. Central bank s stimulus measures, such as more quantitative easing, would have limit impact on the market. # # The market commentary and manager s comment above solely reflects the opinion, view and interpretation of the fund managers as of the date of issuance of this document. Investors should not solely rely on such information to make any Investment involves risks and the Sub-Funds are subject to market and exchange rate fluctuations and to the risks inherent in all investments. Past performance is not indicative of future performance. Price of units and the income from The information herein is based on sources believed to be reliable and the opinions contained herein are for reference only. Fund performance is calculated in HK$ on NAV-to-NAV basis with gross dividend reinvested.

2 Luen Fung Hang Life Pension Fund Growth Fund Investment Objective and Policy The Growth Fund will be actively managed to take advantage of both short-term market opportunities and long-term growth potential that exist around the world. Under normal circumstances, the Fund will invest a substantial portion in global equities. The balance will be invested in global debt securities. The risk profile of the Growth Fund is generally regarded as high. Manager s Comment # The Fund posted a positive return over the quarter. Equity investments in US outperformed. Global fixed income also posted a gain led by the decline in global government bond yields. We started reducing exposure in European equities after the surprised Brexit vote due to a more modest economic outlook for Eurozone and heightened political uncertainty. In the near term, we expect volatility in markets to remain elevated due to renewed global growth concerns. Fund Information As of 30 / 6 / 2016 Fund Size (Million) HK$ Inception Date 17 / 01 / 2003 Management Fee (p.a.) % NAV per unit HK$ Composition As of 30 / 6 / 2016 Unit Trust 1.9% 26.6% Bond 8.1% Australian Dollar Bond 0.1% Renminbi Bond 0.2% Euro Dollar Bond 0.6% UK Sterling Bond 0.2% Hong Kong Dollar Bond 1.6% Japanese Yen Bond 0.4% US Dollar Bond 4.9% Norwegian Krone Bond 0.1% Equities 63.4% Japan 7.3% Asia (ex Japan ex HK ex China) 5.8% North America 15.1% Europe (ex UK) 7.7% United Kingdom 4.5% Hong Kong and China 21.8% Others 1.2% Performance in HK$ As of 30 / 6 / Calendar Year Performance in HK$ As of 30 / 6 / Luen Fung Hang Life Pension Fund Balanced Fund Investment Objective and Policy The Balanced Fund will be actively managed to take advantage of both short-term market opportunities and long-term growth potential that exist around the world. The Fund will seek to achieve a long-term capital growth. Under normal circumstances, the Fund will invest in global equities and global debt securities in a balanced manner. The risk profile of the Balanced Fund is generally regarded as moderate to high. Manager s Comment # The Fund posted a positive return over the quarter. Equity investments in US outperformed. Global fixed income also posted a gain led by the decline in global government bond yields. We started reducing exposure in European equities after the surprised Brexit vote due to a more modest economic outlook for Eurozone and heightened political uncertainty. In the near term, we expect volatility in markets to remain elevated due to renewed global growth concerns. Fund Information As of 30 / 6 / 2016 Fund Size (Million) HK$ Inception Date 17 / 01 / 2003 Management Fee (p.a.) % NAV per unit HK$ Composition As of 30 / 6 / 2016 Unit Trust 1.5% 36.6% Bond 13.2% Australian Dollar Bond 0.2% Canadian Dollar Bond 0.1% Renminbi Bond 0.3% Euro Dollar Bond 1.3% UK Sterling Bond 0.3% Hong Kong Dollar Bond 2.4% Japanese Yen Bond 0.9% US Dollar Bond 7.5% Norwegian Krone Bond 0.2% Equities 48.7% Japan 5.5% Asia (ex Japan ex HK ex China) 4.6% North America 12.8% Europe (ex UK) 5.6% United Kingdom 3.2% Hong Kong and China 16.1% Others 0.9% Performance in HK$ As of 30 / 6 / Calendar Year Performance in HK$ As of 30 / 6 / % 9.16% 6.86% 0.71% -2.45% # The Inception Date stated herein is defined by the Manager for the purpose of fund performance calculation % 1.50%The standard annual management fee of 1.80% was reduced to 1.50% started from 1 January 2007.

3 Luen Fung Hang Life Pension Fund Stable Fund Investment Objective and Policy The Stable Fund will be actively managed to take advantage of both short-term market opportunities and long-term growth potential that exist around the world. The Fund will be invested in a conservative manner to reduce the risk of capital losses while attempting to achieve a reasonable level of capital gains. Under normal circumstances, the Fund will invest a substantial portion in global debt securities. The balance will be invested in global equities. The risk profile of the Stable Fund is generally regarded as low to moderate. Manager s Comment # The Fund posted a positive return over the quarter. Equity investments in US outperformed. Global fixed income also posted a gain led by the decline in global government bond yields. We started reducing exposure in European equities after the surprised Brexit vote due to a more modest economic outlook for Eurozone and heightened political uncertainty. In the near term, we expect volatility in markets to remain elevated due to renewed global growth concerns. Fund Information As of 30 / 6 / 2016 Fund Size (Million) HK$ Inception Date 17 / 01 / 2003 Management Fee (p.a.) % NAV per unit HK$ Composition As of 30 / 6 / % Bond 24.9% Australian Dollar Bond 0.5% Hong Kong Dollar Bond 3.1% Canadian Dollar Bond 0.2% Japanese Yen Bond 2.3% Renminbi Bond 0.9% US Dollar Bond 13.2% Euro Dollar Bond 3.3% Norwegian Krone Bond 0.5% UK Sterling Bond 0.9% Equities 30.7% Asia (ex Japan ex HK ex China) 2.5% Europe (ex UK) 3.3% Hong Kong and China 9.9% Unit Trust 1.2% Japan 3.5% North America 8.9% United Kingdom 1.9% Others 0.7% Performance in HK$ As of 30 / 6 / Calendar Year Performance in HK$ As of 30 / 6 / % 6.36% 3.60% 0.45% -2.24% Luen Fung Hang Life Pension Fund China Equity Fund Investment Objective and Policy The China Equity Fund aims to provide investors with long-term capital growth through investment mainly in the listed equities and equity related securities (including convertible securities) of companies whose activities are closely related to the economic development and growth of the economy of the People s Republic of China. The risk profile of the China Equity Fund is generally regarded as very high. Manager s Comment # % 1 5.8% % % 3 1.0% 2 W MSCI 5 6 A MSCI Industrial output rose 6.0% year-on-year during April and May, up from 5.8% in the first quarter this year. The second quarter GDP growth will likely improve slightly from the 6.7% growth recorded in the first quarter. Industrial output growth improved as exports fell less; domestic demand, on the other hand, remained uninspiring. Against this backdrop, loosening policies remained in place. Brexit heightened volatility across the globe; this shook investment sentiment. Consumer Price Index inflation remained in check, nothing alarming here. Market s perception on RMB outlook has weakened slightly: at end June, the onshore market suggested RMB to depreciate 1.3% against USD in 12 months, vs a 1.0% depreciation expectation at end March. This was probably due to the continued weakness in domestic demand. Most Chinese equities were roughly trading in a W-shape pattern in the second quarter. Relatively soothing economic releases in the first half of April only briefly extended the rebound from March, as optimism tapered after rebound of short-term interbank offering rates and disappointed first quarter results of various index heavyweights in late April. Renewed disappointment of several economic releases and another lowering of CNY daily fixing by People s Bank of China weighted further on Chinese equities in May, but a sizable lost ground was recovered on the last trading day of May, probably driven by fund flows that track and/or leverage on the latest reshuffle of the MSCI Index. In June, the exclusion of A-share from the MSCI annual review and the global fallout of Brexit referendum only caused short-lived disturbance to Chinese equities, as the market sentiment wobbly improved by end June, likely due to the better-than-expected loan growth data in May, and the rumored launch of Shenzhen-Hong Kong Stock Connect in July. The Fund slightly underperformed the reference index in the second quarter, mainly caused by the deviation of Consumption related exposure of the Fund. In the coming months, the Fund would maintain a watchful stance against the increased market volatility in China and closely monitor the impact of interest rate differential on RMB with reference to the latest trajectory of rate hike cycle in US after the Brexit referendum. Meanwhile, the Fund would also focus on sectors with high beneficial likelihood from government stimulus and capitalize on market weakness to optimize its stockholdings. Fund Information As of 30 / 6 / 2016 Fund Size (Million) HK$ Inception Date 01 / 04 / 2008 Management Fee (p.a.) 1.50% NAV per unit HK$ Composition** As of 30 / 6 / % Bond 3.1% Financial Services 0.7% Government 2.2% Industrials 0.2% Equities 67.9% Basic Materials 1.3% Consumption related 6.6% Energy related 4.9% Financial Services 19.1% Health Care & Pharmaceuticals 1.3% Industrials 5.1% Information Technology 18.1% Property 3.0% Telecom 6.0% Utilities 2.5% ** ** With effect from 1 September 2012, new sector classification methodology is applied. As a result, the following changes are made in the Sector Allocation. Financials was divided into Financial Services and Property; Materials was changed to Basic Materials Consumer Discretionary and Consumer Staple were grouped together as Consumption related ; Energy was changed to Energy related ; Health Care was changed to Health Care & Pharmaceuticals. Performance in HK$ As of 30 / 6 / Calendar Year Performance in HK$ As of 30 / 6 / % 11.75% 1.10% 3.39% # The Inception Date stated herein is defined by the Manager for the purpose of fund performance calculation % 1.50%The standard annual management fee of 1.80% was reduced to 1.50% started from 1 January 2007.

4 Luen Fung Hang Life Pension Fund 70 European Index Tracker 70 Fund Investment Objective and Policy The European Index Tracker 70 Fund seeks to achieve long term capital growth by investing primarily in one or more underlying index fund(s), which in turn invest(s) in portfolio of securities traded on the stock exchanges in the United Kingdom and in other continental European countries. The Fund may also invest, directly or indirectly, in cash, time deposits and money market instruments. The risk profile of the European Index Tracker 70 Fund is generally regarded as high. Manager s Comment # Fund Information As of 30 / 6 / 2016 Fund Size HK$ Inception Date 04 / 05 / 2015 Management Fee (p.a.) 1.00% NAV per unit HK$ Composition As of 30 / 6 / % Bond 3.4% Hong Kong Dollar Bond 3.4% Equities 66.9% Belgium 2.1% Denmark 2.2% Finland 1.1% France 10.5% Germany 9.4% Italy 2.5% Netherlands 2.2% Norway 1.0% Spain 2.7% Sweden 3.1% Switzerland 9.7% United Kingdom 20.4% ^ Performance^ in HK$ As of 30 / 6 / % -3.72% -6.94% -8.84% ^ Calendar Year Performance^ in HK$ As of 30 / 6 / 2016 ^ 4/5/2015 Fund Performance is calculated from 4/5/2015, the inception of the Fund Year Performance of the Fund will be shown starting from the second quarter of % Luen Fung Hang Life Pension Fund 70 North America Index Tracker 70 Fund Investment Objective and Policy The North America Index Tracker 70 Fund seeks to achieve long term capital growth by investing primarily in one or more underlying index fund(s), which in turn invest(s) in portfolio of securities traded on the stock exchanges in North America. The Fund may also invest, directly or indirectly, in cash, time deposits and money market instruments. The risk profile of the North America Index Tracker 70 Fund is generally regarded as high. Manager s Comment # Fund Information As of 30 / 6 / 2016 Fund Size HK$ 20, Inception Date 04 / 05 / 2015 Management Fee (p.a.) 1.00% NAV per unit HK$ Composition As of 30 / 6 / % Bond 3.0% Hong Kong Dollar Bond 3.0% Equities 68.8% Canada 3.5% United States 65.3% ^ Performance^ in HK$ As of 30 / 6 / % 2.50% 1.32% 0.52% ^ Calendar Year Performance^ in HK$ As of 30 / 6 / 2016 ^ 4/5/2015 Fund Performance is calculated from 4/5/2015, the inception of the Fund Year Performance of the Fund will be shown starting from the second quarter of % # The Inception Date stated herein is defined by the Manager for the purpose of fund performance calculation.

5 Luen Fung Hang Life Pension Fund Great Wall Fund Investment Objective and Policy The Great Wall Fund seeks to provide investors with long-term capital appreciation through investing in a diversified portfolio consisting of Renminbi denominated and settled debt instruments and a minor portion of debt instruments denominated and settled in other currencies, cash, term deposits with authorized financial institutions in Hong Kong or Macau or other money market instruments. The risk profile of the Great Wall Fund is generally regarded as low to moderate. Manager s Comment # 2 The Fund registered a negative return in the second quarter as offshore Renminbi depreciated against HKD. Mild rally in Dim Sum bond and stable income helped to offset the loss. Going forward, the Fund would look for opportunity to add quality Dim Sum bond in a way to optimize yield and enhance return. Fund Information As of 30 / 6 / 2016 Fund Size HK$ 177, Inception Date 15 / 08 / 2014 Management Fee (p.a.) 0.80% NAV per unit HK$ Composition As of 30 / 6 / % Bond 70.7% Renminbi Bond 67.6% Hong Kong Dollar Bond 3.1% ^ Performance^ in HK$ As of 30 / 6 / % 1.42% -2.35% -1.19% ^ Calendar Year Performance^ in HK$ As of 30 / 6 / 2016 ^ 15/8/2014 Fund Performance is calculated from 15/8/2014, the inception of the Fund % -2.20% Luen Fung Hang Life Pension Fund Maintenance Fund Investment Objective and Policy The Maintenance Fund mainly invests in deposits and debt securities. The risk profile of the Maintenance Fund is generally regarded as very low. Manager s Comment # The Fund posted a small positive return in the quarter as money market yields remained low. The Fund would maintain the current maturity profile in the low interest rate environment. Fund Information As of 30 / 6 / 2016 Fund Size (Million) HK$ Inception Date 17 / 01 / 2003 Management Fee (p.a.) % NAV per unit HK$ Composition As of 30 / 6 / 2016 Bond 11.4% Hong Kong Dollar Bond 11.4% 88.6% Performance in HK$ As of 30 / 6 / Calendar Year Performance in HK$ As of 30 / 6 / % 1.38% 0.89% 0.98% 0.51% # The Inception Date stated herein is defined by the Manager for the purpose of fund performance calculation % 0.80% The standard annual management fee of 1.00% was reduced to 0.80% started from 1 January 2007.

2016 2 Luen Fung Hang Life Pension Fund Conservative Fund Investment Objective and Policy The main objective of the Conservative Fund is to preserve capital, and seek to achieve stable capital growth

6 Luen Fung Hang Life Pension Fund Conservative Fund Investment Objective and Policy The main objective of the Conservative Fund is to preserve capital, and seek to achieve stable capital growth by systematically utilizing assets of the Fund. The Fund will adopt a medium to longterm investment policy. The Fund is a managed fund where assets of the Fund will be invested either directly or indirectly through investment funds (unit trusts, mutual funds or pooled investment portfolios) in a diversified portfolio that may consist of debt securities including those of the governments, corporate and financial institutions, deposit, money market instrument or other investment vehicles. Under normal circumstances, the Fund will mainly invest in underlying fund which seeks to preserve capital. The risk profile of the Conservative Fund is generally regarded as relatively low. Fund Information As of 30 / 6 / 2016 Fund Size (Million) HK$ Inception Date 28 / 06 / 2013 Management Fee (p.a.) 1.00% NAV per unit HK$ Note: Commencing from 19 November 2014, the performance fee has been waived. Composition As of 30 / 6 / % * BOCIP Global Balanced Fund 99.2% Manager s Comment # The Fund registered a positive return in the quarter as bonds generated stable income. Going forward, the Fund would remain defensive in low interest rate environment. It would continue to seek for relative value in credit market as a way to add value. * BOCIP Global Balanced Fund ^ 28/06/2013 Fund performance is calculated from 28/06/2013, the inception of the Fund. ^ Performance^ in HK$ As of 30 / 6 / ^ Calendar Year Performance^ in HK$ As of 30 / 6 / % 1.02% 0.81% The Inception Date stated herein is defined by the Manager for the purpose of fund performance calculation. Luen Fung Hang Life Limited pfund@luenfunghang.com Websitehttp:// Hotline(853) or (853) Business hours: Monday to Friday 9:00am - 7:00pm Saturday 9:00am - 1:00pm (Closed on Sundays and Bank holidays)

Luen Fung Hang Life Pension Fund Growth Fund Investment Objective and Policy The Growth Fund will be actively managed to take advantage of both

2016 3 聯豐亨人壽退休基金 Luen Fung Hang Life Pension Fund Management Company Luen Fung Hang Life Limited Advisory Body BOCI-Prudential Asset Management Limited Currency HKD # 9 12 10 13 2 18 10 10 7 28 3 3 7 9