Interim Report As of 30 June 2011 ETFs World Index Shares ETFs Fund Manager and Interim Report Issuer BOCI-Prudential Asset Management

Transcription

1 Interim Report As of 30 June 2011 ETFs World Index Shares ETFs Fund Manager and Interim Report Issuer BOCI-Prudential Asset Management

2 W.I.S.E.-CSI 300 CHINA TRACKER * ( * This is a synthetic ETF), W.I.S.E.-CSI HK 100 TRACKER TM, W.I.S.E.-SSE 50 CHINA TRACKER * ( * This is a synthetic ETF), W.I.S.E.-CSI HK LISTED MAINLAND CONSUMPTION TRACKER AND W.I.S.E.-CSI HK LISTED MAINLAND REAL ESTATE TRACKER (Sub-Funds of World Index Shares ETFs) 300 * * 100 TM 50 * * ETFs CONTENTS PAGE(S) MANAGEMENT AND ADMINISTRATION 1 REPORT OF THE MANAGER TO THE UNITHOLDERS 2 STATEMENTS OF COMPREHENSIVE INCOME 21 STATEMENTS OF FINANCIAL POSITION 26 STATEMENTS OF CHANGES IN EQUITY 31 STATEMENTS OF CASH FLOWS 36 W.I.S.E.-CSI 300 CHINA TRACKER * ( * This is a synthetic ETF) 300 * * INVESTMENT PORTFOLIO 41 STATEMENT OF MOVEMENTS IN PORTFOLIO HOLDINGS 48 HOLDINGS OF COLLATERAL 57 PERFORMANCE TABLE 58 W.I.S.E.-CSI HK 100 TRACKER TM 100 TM INVESTMENT PORTFOLIO 59 STATEMENT OF MOVEMENTS IN PORTFOLIO HOLDINGS 62 PERFORMANCE TABLE 67 W.I.S.E.-SSE 50 CHINA TRACKER * ( * This is a synthetic ETF) 50 * * INVESTMENT PORTFOLIO 68 STATEMENT OF MOVEMENTS IN PORTFOLIO HOLDINGS 71 HOLDINGS OF COLLATERAL 74 PERFORMANCE TABLE 75 W.I.S.E.-CSI HK LISTED MAINLAND CONSUMPTION TRACKER INVESTMENT PORTFOLIO 76 STATEMENT OF MOVEMENTS IN PORTFOLIO HOLDINGS 78 PERFORMANCE TABLE 80 W.I.S.E.-CSI HK LISTED MAINLAND REAL ESTATE TRACKER INVESTMENT PORTFOLIO 81 STATEMENT OF MOVEMENTS IN PORTFOLIO HOLDINGS 82 PERFORMANCE TABLE 83

3 W.I.S.E.-CSI 300 CHINA TRACKER * ( * This is a synthetic ETF), W.I.S.E.-CSI HK 100 TRACKER TM, W.I.S.E.-SSE 50 CHINA TRACKER * ( * This is a synthetic ETF), W.I.S.E.-CSI HK LISTED MAINLAND CONSUMPTION TRACKER AND W.I.S.E.-CSI HK LISTED MAINLAND REAL ESTATE TRACKER (Sub-Funds of World Index Shares ETFs) 300 * * 100 TM 50 * * ETFs MANAGEMENT AND ADMINISTRATION MANAGER AND LISTING AGENT BOCI-Prudential Asset Management Limited 27/F, Bank of China Tower 1 Garden Road Central Hong Kong DIRECTORS OF THE MANAGER AND LISTING AGENT Wang Zhongze Mak Tat Cheung Tse Yung Hoi Paul Brian Hancock Graham David Mason TRUSTEE AND CUSTODIAN BOCI-Prudential Trustee Limited 12/F & 25/F, Citicorp Centre 18 Whitfield Road Causeway Bay Hong Kong REGISTRAR Computershare Hong Kong Investor Services Limited 46/F, Hopewell Centre 183 Queen s Road East Wanchai Hong Kong CONVERSION AGENT HK Conversion Agency Services Limited 2nd Floor, Infinitus Plaza 199 Des Voeux Road Central Hong Kong LEGAL ADVISER TO THE MANAGER Baker & McKenzie 23/F, One Pacific Place 88 Queensway Hong Kong AUDITOR Deloitte Touche Tohmatsu 35/F, One Pacific Place 88 Queensway Hong Kong 1 27 Paul Brian Hancock Graham David Mason

4 REPORT OF THE MANAGER TO THE UNITHOLDERS OF W.I.S.E.-CSI 300 CHINA TRACKER * ( * This is a synthetic ETF) (SUB-FUND OF WORLD INDEX SHARES ETFs) 300 * * ETFs Fund Performance The W.I.S.E.-CSI 300 China Tracker * (*This is a synthetic ETF) ( WISE-CSI300 or the Sub-Fund ) is an indextracking fund which seeks to track the performance of the CSI 300 Price Index in RMB terms. As of 30 June 2011, the net asset value ( NAV ) per unit of the Sub-Fund was with a total of 243,200,000 units outstanding, aggregating a total asset under management ( AUM ) size of 7,918,416, * ,200,000AUM 7,918,416, A summary of the performance of the WISE-CSI300 is stated below Month 3-Month 6-Month 1-Year 3-Year 5-Year Since Inception (e) (e) CSI300 Price Index (a) 1.42% -5.56% -2.69% 18.77% 9.04% N/A % 300 (a) CSI300 Total Return Index (b) 2.23% -4.66% -1.75% 20.50% 12.72% N/A % 300 (b) WISE-CSI300 NAV-to-NAV (c) 2.07% -3.42% 0.10% 22.71% 10.58% N/A % 300 (c) WISE-CSI300 Market-to-Market (d) -1.75% -3.57% -3.57% 23.56% 17.77% N/A -4.58% 300 (d) (as of 30 Jun 2011) (a) Price Index in RMB. An Investor cannot invest directly in an index and the index preformance returns do not reflect management fees, transaction costs or other expenses, which would reduce performance returns. (b) Total Return Index in RMB (c) Unit s NAV in. Units in the Sub-Fund can be created and redeemed at their NAV in exchange for cash at the primary market. (d) Market closing price in. Market returns are calculated using historical market closing prices of the ETF in the secondary market. They do not represent the returns you would receive if you trade units at other times. (e) Sub-Fund inception date is 13 July (a) (b) (c) (d) (e) ETF Source: BOCI-Prudential Asset Management Ltd., Bloomberg 2

5 REPORT OF THE MANAGER (continued) TO THE UNITHOLDERS OF W.I.S.E.-CSI 300 CHINA TRACKER * ( * This is a synthetic ETF) (SUB-FUND OF WORLD INDEX SHARES ETFs) (continued) 300 * * ETFs Fund Activities In the first half of this year, the WISE-CSI300 (the Sub- Fund ) continued to attract wide interest from investors seeking to get exposure to A-share market. The units outstanding by the end of June stood at 243,200,000 units. As of 30 June 2011, the Sub-Fund had exposure to 168 stocks. 300 A 243,200, With effect from 28 March 2011, when obtaining collateral for the Sub-Fund in respect of AXPs issued by an AXP issuer, apart from constituent stocks of the Hang Seng Index and/ or Hang Seng China Enterprises Index, the Manager may also accept constituent stocks of the Hang Seng Composite Index. AXP AXP On 24 June 2011, the Manager announced that the Prospectus of the Sub-Fund was revised in compliance with the revised Code of Unit Trusts and Mutual Funds. Certain minor modifications and updates were made. Please refer to the corresponding public announcements on our company web-site ( for details. ( Index Activities The CSI300 Index underwent one regular semi-annual review in the first half of In particular, the details of the regular index review are summarized in Figure Figure 1 1 Deletion Addition Effective Date Stock Code Stock Name Stock Code Stock Name 1-Jul Oceanwide Real Estate Group Co.,Ltd CPT Technology (Group) Co., Ltd. 1-Jul Tianjin Teda Co.,Ltd Wanxiang Qianchao Co.,Ltd. 1-Jul Milord Real Estate Development Group Co.,Ltd Yantai Changyu Pioneer Wine Company Limited 1-Jul Xiandai Investment Co.,Ltd Dalian Zhangzidao Fishery Group Co., Ltd. 1-Jul Beijing Shougang Co., Ltd Mesnac Co.,Ltd 1-Jul Joyoung Co., Ltd Shenzhen Laibao Hi-Tech Co.,Ltd 3

6 REPORT OF THE MANAGER (continued) TO THE UNITHOLDERS OF W.I.S.E.-CSI 300 CHINA TRACKER * ( * This is a synthetic ETF) (SUB-FUND OF WORLD INDEX SHARES ETFs) (continued) 300 * * ETFs Index Activities (continued) Figure 1 (continued) 1 Deletion Addition Effective Date Stock Code Stock Name Stock Code Stock Name 1-Jul Dongfeng Automobile Co.,Ltd Beijing Orient Landscape Co.,Ltd. 1-Jul Rizhao Port Co.,Ltd Rongsheng Petro Chemical Co., Ltd. 1-Jul Fujian Expressway Development Co.,Ltd Qingdao Hanhe Cable Co., Ltd. 1-Jul Nanjing Tanker Corporation Shanxi Securities Company Limited 1-Jul Shanghai Zijiang Enterprise Group Co.,Ltd Zhejiang Hisun Pharmaceutical Co.,Ltd. 1-Jul Huafa Industrial Co.,Ltd.Zhuhai Beijing Wangfujing Department Store (Group)Co.,Ltd. 1-Jul Shandong Expressway Company Limited Anhui Hengyuan Coal Industry and Electricity Power Co.,Ltd 1-Jul Zhejiang Xinan Chemical Indusyrial Jointown Pharmaceutical Group Co., Ltd. Group Co.,Ltd 1-Jul Bright Dairy & Food Co.,Ltd Ningbo Port Company Limited 1-Jul Founder Technology Group Corp China South Publishing & Media Group Co., Ltd. 1-Jul Dazhong Transportation(Group)Co.,Ltd China Hainan Rubber Industry Group Co., Ltd 1-Jul Cinda Real Estate Co.,Ltd Industrial Securities Co.,Ltd. 1-Jul Shanghai Lujiazui Finance & Shanghai Great Wisdom Co., Ltd. Trade Zone Development Co.,Ltd. 1-Jul Shanghai Industrial Development Co.,Ltd Sinovel Wind Group Co., Ltd. 1-Jul The Pacific Securities Co.,Ltd Zhengzhou Coal Mining Machinery Group Co., Ltd 1-Jul Shenzhen Gas Corporation Ltd Jihua Group Corporation Limited 1-Jul Zhejiang Chint Electrics Co.,Ltd Yonghui Superstores Co., Ltd. Source:CSI CSI 4

7 REPORT OF THE MANAGER (continued) TO THE UNITHOLDERS OF W.I.S.E.-CSI 300 CHINA TRACKER * ( * This is a synthetic ETF) (SUB-FUND OF WORLD INDEX SHARES ETFs) (continued) 300 * * ETFs Market Review China A-share market performance was moderately weakened in the first half of 2011 (1H11), and some sectors experienced a significant drawdown. CSI 300 Index, representing a broad-based index, dropped by 2.69%. SSE 50 Index, which represents a large-cap index, rose by 0.61%. Among the sectors, the Health Care and Information Technology underperformed others with losses of 17.47% and 15.45% respectively; whereas the Consumer Discretionary registered a mild gain of 0.41%. A % % 17.47% 15.45% 0.41% Figure 1: CSI 300 Price Index & SSE 50 Price Index performance in 1H Dec-10 Source: Bloomberg CSI 300 Price Index & SSE 50 Price Index Month-on-Month Performance in 1H2011 (Rebase 100 on Dec 31, 2010) Jan-11 Feb-11 Mar-11 Apr-11 May-11 CSI 300 SSE 50 Jun-11 Figure 2: CSI 300 Sector Price Index & SSE 50 Price Index performance in 1H % -18% -16% -14% -12% -10% -8% -6% -4% -2% 0% 2% CSI 300 Sector Price Inex Performance in Source: Bloomberg Utilities Telecommunication Services Information Technology Financials Health Care Consumer Staples Consumer Discretionary Industrials Materials Energy CSI SSE On the economic front, Gross domestic product (GDP) grew by 9.5% year-on-year (YOY) in the second quarter (Q2), slowed slightly from 9.7% in the first quarter. Overall, the economy expanded by 9.6% year-on-year during the first half of this year. Industrial output grew 14.3% YOY in 1H11. All industries registered year-on-year growth in 1H11, with chemical materials and products sector up 15.1%, and general equipment manufacturing sector up 20.2%. Retail sales rose by 16.8% YOY. Fixed-asset investment soared by 25.6% YOY, and investment in property sector alone rose 32.9% YOY. 9.5%9.7% 9.6% 14.3% 15.1% 20.2% 16.8% 25.6% 32.9% 5

8 REPORT OF THE MANAGER (continued) TO THE UNITHOLDERS OF W.I.S.E.-CSI 300 CHINA TRACKER * ( * This is a synthetic ETF) (SUB-FUND OF WORLD INDEX SHARES ETFs) (continued) 300 * * ETFs Market Review (continued) Inflation remained the top concern for the central government. Consumer price index (CPI) jumped 6.4% YOY in June, the highest level in three years. As a whole, the CPI growth climbed to 5.4% YOY in 1H11, accelerated from the five-percent increase for the first quarter of this year (Q1). Food prices, which account for around one third of the basket of goods in CPI calculation, soared by 11.8% YOY in 1H11. The figure was significantly higher than the eleven-percent rise in Q1. 6.4% 5.4% 5% 11.8% 11% To counter the excessive liquidity issue, the People s Bank of China (PBoC) raised reserve requirement ratio for six times in 1H11; however, the effectiveness was undesirable in the aspect of inflation control. In order to curb inflation pressure, the PBoC raised benchmark interest rates for two times during the period. Amid tightening monetary policies, companies suffered from higher borrowing costs and faced different levels of difficulty in raising their capitals. In the rest of this year, China tended to continue all-round measures to contain both inflation pressure and overspeculation in real estate markets. There may be inherent risks behind the policy stance of the central government. Investor should assess their risk tolerance and the risk level of the investment product before investing. 6

9 REPORT OF THE MANAGER (continued) TO THE UNITHOLDERS OF W.I.S.E.-CSI HK 100 TRACKER TM (SUB-FUND OF WORLD INDEX SHARES ETFs) 100 TM ETFs Fund Performance The W.I.S.E.-CSI HK 100 Tracker ( WISE-CSIHK100 or the Sub-Fund ) is an index-tracking fund which seeks to track the performance of the CSI HK 100 Price Index in Hong Kong dollar ( ) terms. As of 30 June 2011, the net asset value ( NAV ) per unit of the Sub-Fund was with a total of 5,000,000 units outstanding, aggregating a total asset under management ( AUM ) size of 96,360, TM ,000,000AUM 96,360, A summary of the performance of the WISE-CSIHK100 is stated below Month 3-Month 6-Month 1-Year 3-Year 5-Year Since Inception (e) (e) CSI HK100 Price Index (a) -5.11% -3.89% -2.22% 12.04% 4.74% N/A -9.92% 100 (a) CSI HK100 Total Return Index (b) -4.40% -2.19% -0.28% 15.29% 15.34% N/A -0.11% 100 (b) WISE-CSIHK100 NAV-to-NAV (c) -4.59% -2.27% -0.42% 13.82% 7.58% N/A -6.98% 100 (c) WISE-CSIHK100 Market-to-Market (d) -3.36% -3.26% -2.06% 11.91% 5.44% N/A -8.39% 100 (d) (as of 30 Jun 2011) (a) Price Index in. An Investor cannot invest directly in an index and the index preformance returns do not reflect management fees, transaction costs or other expenses, which would reduce performance returns. (b) Total Return Index in. (c) Unit s NAV in. Units in the Sub-Fund can be created and redeemed at their NAV in exchange for cash at the primary market. (d) Market Closing Price in. Market returns are calculated using historical market closing prices of the ETF in the secondary market. They do not represent the returns you would receive if you trade units at other times. (e) Sub-Fund inception date is 13 May (a) (b) (c) (d) (e) ETF Source: BOCI-Prudential Asset Management Ltd., Bloomberg 7

10 REPORT OF THE MANAGER (continued) TO THE UNITHOLDERS OF W.I.S.E.-CSI HK 100 TRACKER TM (SUB-FUND OF WORLD INDEX SHARES ETFs) (continued) 100 TM ETFs Fund Activities In the first half of 2011, there were 5,000,000 units outstanding. As of 30 June 2011, the WISE-CSIHK100 (the Sub-Fund ) had exposure to 75 stocks. 5,000, On 24 June 2011, the Manager announced that the Prospectus and the Product Key Facts Statement of the Sub- Fund were revised in compliance with the revised Code of Unit Trusts and Mutual Funds. Certain minor modifications and updates were made. Please refer to the corresponding public announcements on our company web-site ( for details. ( Index Activities The CSI HK 100 Index underwent one regular semi-annual review in the first half of In particular, the details of the regular index review are summarized in Figure Figure 1 Deletion 1 Addition Effective Date Stock Code Stock Name Stock Code Stock Name 4-Jul China Railway Group Limited 1299 AIA Group Limtied 4-Jul China Dongxiang (Group) Co., Ltd 11 Hang Seng Bank, Limited 4-Jul China COSCO Holdings Company Limited 880 SJM Holdings Limited 4-Jul Chaoda Modern Agriculture (Holdings) Limited 69 Shangri-La Asia Limited 4-Jul China Railway Construction Corporation Limited 1101 China Rongsheng Heavy Industries Group Holdings Limited 4-Jul Mongolia Energy Corporation Limited 3800 GCL-Poly Energy Holdings Limited Source: CSI, HKEx CSI 8

11 REPORT OF THE MANAGER (continued) TO THE UNITHOLDERS OF W.I.S.E.-CSI HK 100 TRACKER TM (SUB-FUND OF WORLD INDEX SHARES ETFs) (continued) 100 TM ETFs Market Review Hong Kong equity market went on a roller coaster ride amid uncertainties in China s tightening measures and global market volatility triggered by the European sovereign debt crisis. During the six-month period ended 30 June 2011, the CSI HK 100 Price Index recorded a slump of 2.22% % On the economy front, Hong Kong s GDP expanded 7.2% year-on-year (YOY) for the first quarter of year 2011, marking the fifth consecutive quarter that growth was distinctly above the average annual growth (7%) over the past 10 years. Exports for the first five months as a whole sustained the upward momentum as it advanced 17.0% from a year earlier. Concurrently, the value of imports rose by 15.8% YOY, resulting in a trade deficit of billion. Recovery signs were also shown in labour market, where the seasonally adjusted unemployment rate during January-March slid to 3.4%, the lowest level in 31 months, although it slightly picked up in April-June to 3.5% YOY, probably due to recent graduates who entered the job market. Taking the first five months of 2011, local consumption demand together with tourist spending boosted consumer spending and brought retail sales to a YOY growth of 23.6% in value. The combination of expanding economy and the persistent low interest rate environment added inflationary risk as Consumer Price Index (CPI) in June came in at 5.6% YOY. 7.2%10 7%5 17.0% 15.8% 1, %31 3.5% 23.6% 5.6% Despite of the encouraging economic indicators, local asset prices have been volatile, subject to China s tightening policy and contagion effect of euro-zone debt crisis. Going into the second half of 2011, rising uncertainty in external environment would continue to affect household and business sentiment in the near term. Investors should assess their risk tolerance and the risk level of the investment product before investing. 9

12 REPORT OF THE MANAGER (continued) TO THE UNITHOLDERS OF W.I.S.E.-SSE 50 CHINA TRACKER * ( * This is a synthetic ETF) (SUB-FUND OF WORLD INDEX SHARES ETFs) 50 * * ETFs Fund Performance The W.I.S.E. - SSE 50 China Tracker * (*This is a synthetic ETF) ( WISE-SSE50 or the Sub-Fund ) is an index-tracking fund which seeks to track the performance of the SSE 50 Price Index in RMB terms. As of 30 June 2011, the net asset value ( NAV ) per unit of the Sub-Fund was with a total of 12,000,000 units outstanding, aggregating a total asset under management ( AUM ) size of 219,577, * * ,000,000AUM 219,577, A summary of the performance of the WISE-SSE50 is stated below Month 3-Month 6-Month 1-Year 3-Year 5-Year Since Inception (e) (e) SSE50 Price Index (a) -1.05% -4.53% 0.61% 9.36% N/A N/A 7.70% 50 (a) SSE50 Total Return Index (b) 0.36% -3.12% 2.09% 11.74% N/A N/A 12.10% 50 (b) WISE-SSE50 NAV-to-NAV (c) 0.30% -2.62% -6.17% 4.12% N/A N/A -0.94% 50 (c) WISE-SSE50 Market-to-Market (d) -2.38% -7.48% % -5.54% N/A N/A -2.23% 50 (d) (as of 30 Jun 2011) (a) Price Index in RMB. An Investor cannot invest directly in an index and the index preformance returns do not reflect management fees, transaction costs or other expenses, which would reduce performance returns. (b) Total Return Index in RMB (c) Unit s NAV in. Units in the Sub-Fund can be created and redeemed at their NAV in exchange for cash at the primary market. (d) Market closing price in. Market returns are calculated using historical market closing prices of the ETF in the secondary market. They do not represent the returns you would receive if you trade units at other times. (e) Sub-Fund inception date is 9 April (a) (b) (c) (d) (e) ETF Source: BOCI-Prudential Asset Management Ltd., Bloomberg Fund Activities In the first half of this year, the WISE-SSE50 (the Sub- Fund ) continued to attract wide interest from investors seeking to get exposure to A-share market. The units outstanding by the end of June stood at 12,000,000 units. As of 30 June 2011, the Sub-Fund had exposure to 50 stocks. 50 A 12,000,

13 REPORT OF THE MANAGER (continued) TO THE UNITHOLDERS OF W.I.S.E.-SSE 50 CHINA TRACKER * ( * This is a synthetic ETF) (SUB-FUND OF WORLD INDEX SHARES ETFs) (continued) 50 * * ETFs Fund Activities (continued) With effect from 25 January 2011, when obtaining collateral or credit support for the Sub-Fund in respect of AXPs issued by an AXP issuer, apart from constituent stocks of the Hang Seng Index and/or Hang Seng China Enterprises Index, the Manager may also accept constituent stocks of the Hang Seng Composite Index and/or cash as collateral. AXP AXP In July 2010, the Manager was informed by one of the Participating Dealers of the Sub-Fund, KBC Financial Products Trading Hong Kong Limited ( KBCFPTHK ) that KBCFPTHK was contemplated to be acquired by Daiwa Capital Markets and the transaction was expected to be completed in the fourth quarter of The Manager received a letter issued by KBCFPTHK and KBC Investments Cayman Islands Limited ( KBCIC ) indicating, inter alia, that: (a) KBCFPTHK would cease to be a Participating Dealer upon the earlier of (i) six months after the completion of the Transaction and (ii) the end of the first quarter of 2011 (the Proposed Termination Date ); and (b) all outstanding AXPs issued by KBCIC will be redeemed or bought back by KBCIC or any of its affiliates on or before the Proposed Termination Date from the Sub-Fund. KBC Financial Products Trading Hong Kong LimitedKBCFPTHK KBCFPTHK KBCFPTHK KBC Investments Cayman Islands LimitedKBCIC (a) KBCFPTHK (i) (ii) (b) KBCIC KBCIC AXP In view of the above, the Manager decided on certain transitional arrangements (the Transitional Arrangements ) commencing on or after 28 February 2011, such arrangements included: i) working with KBCIC in relation to the Sub-Fund selling back the outstanding AXPs to KBCIC in an orderly manner; (i) KBCIC AXPs KBCIC ii) the Sub-Fund purchasing new AXPs from other AXP (ii) AXP AXPs issuers. 11

14 REPORT OF THE MANAGER (continued) TO THE UNITHOLDERS OF W.I.S.E.-SSE 50 CHINA TRACKER * ( * This is a synthetic ETF) (SUB-FUND OF WORLD INDEX SHARES ETFs) (continued) 50 * * ETFs Fund Activities (continued) On 1 April 2011, the Transitional Arrangements was announced to be completed. The additional costs and expenses, such as hedging cost of acquiring new AXPs from other AXP issuers, were borne by the Sub-Fund. AXP AXPs On 24 June 2011, the Manager announced that the Prospectus of the Sub-Fund was revised in compliance with the revised Code of Unit Trusts and Mutual Funds. Certain minor modifications and updates have also been made. Please refer to the corresponding public announcement on our company web-site ( for details. ( Index Activities The SSE50 Index underwent one regular semi-annual review in the first half of In particular, the details of the regular index review are summarized in Figure Figure 1 Deletion 1 Addition Effective Date Stock Code Stock Name Stock Code Stock Name 1-Jul Wuhan Iron and Steel Company Limited Yanzhou Coal Mining Company Limited 1-Jul Metallurgical Corporation of China Ltd Anhui Conch Cement Company Limited 1-Jul Everbright Securities Company Limited China Hainan Rubber Industry Group Co., Ltd 1-Jul Bank of China Limited CSR Corporation Limited 1-Jul China CITIC Bank Corporation Limited China Shipbuilding Industry Company Limited Source: CSI CSI 12

15 REPORT OF THE MANAGER (continued) TO THE UNITHOLDERS OF W.I.S.E.-SSE 50 CHINA TRACKER * ( * This is a synthetic ETF) (SUB-FUND OF WORLD INDEX SHARES ETFs) (continued) 50 * * ETFs Market Review China A-share market performance was moderately weakened in the first half of 2011 (1H11), and some sectors experienced a significant drawdown. CSI 300 Index, representing a broad-based index, dropped by 2.69%. SSE 50 Index, which represents a large-cap index, rose by 0.61%. Among the sectors, the Health Care and Information Technology underperformed others with losses of 17.47% and 15.45% respectively; whereas the Consumer Discretionary registered a mild gain of 0.41%. A % % 17.47% 15.45% 0.41% Figure 1: CSI 300 Price Index & SSE 50 Price Index performance in 1H CSI 300 Price Index & SSE 50 Price Index Month-on-Month Performance in 1H2011 (Rebase 100 on Dec 31, 2010) Dec-10 Jan-11 Source: Bloomberg Feb-11 Mar-11 Apr-11 May-11 CSI 300 SSE 50 Jun-11 Figure 2: CSI 300 Sector Price Index & SSE 50 Price Index performance in 1H % -18% -16% -14% -12% -10% -8% -6% -4% -2% 0% 2% CSI 300 Sector Price Inex Performance in Source: Bloomberg Utilities Telecommunication Services Information Technology Financials Health Care Consumer Staples Consumer Discretionary Industrials Materials Energy CSI SSE On the economic front, Gross domestic product (GDP) grew by 9.5% year-on-year (YOY) in the second quarter (Q2), slowed slightly from 9.7% in the first quarter. Overall, the economy expanded by 9.6% year-on-year during the first half of this year. Industrial output grew 14.3% YOY in 1H11. All industries registered year-on-year growth in 1H11, with chemical materials and products sector up 15.1%, and general equipment manufacturing sector up 20.2%. Retail sales rose by 16.8% YOY. Fixed-asset investment soared by 25.6% YOY, and investment in property sector alone rose 32.9% YOY. 9.5%9.7% 9.6% 14.3% 15.1% 20.2% 16.8% 25.6% 32.9% 13

16 REPORT OF THE MANAGER (continued) TO THE UNITHOLDERS OF W.I.S.E.-SSE 50 CHINA TRACKER * ( * This is a synthetic ETF) (SUB-FUND OF WORLD INDEX SHARES ETFs) (continued) 50 * * ETFs Market Review (continued) Inflation remained the top concern for the central government. Consumer price index (CPI) jumped 6.4% YOY in June, the highest level in three years. As a whole, the CPI growth climbed to 5.4% YOY in 1H11, accelerated from the five-percent increase for the first quarter of this year (Q1). Food prices, which account for around one third of the basket of goods in CPI calculation, soared by 11.8% YOY in 1H11. The figure was significantly higher than the eleven-percent rise in Q1. 6.4% 5.4% 5% 11.8% 11% To counter the excessive liquidity issue, the People s Bank of China (PBoC) raised reserve requirement ratio for six times in 1H11; however, the effectiveness was undesirable in the aspect of inflation control. In order to curb inflation pressure, the PBoC raised benchmark interest rates for two times during the period. Amid tightening monetary policies, companies suffered from higher borrowing costs and faced different levels of difficulty in raising their capitals. In the rest of this year, China tended to continue all-round measures to contain both inflation pressure and overspeculation in real estate markets. There may be inherent risks behind the policy stance of the central government. Investor should assess their risk tolerance and the risk level of the investment product before investing. 14

17 REPORT OF THE MANAGER (continued) TO THE UNITHOLDERS OF W.I.S.E.-CSI HK LISTED MAINLAND CONSUMPTION TRACKER (SUB-FUND OF WORLD INDEX SHARES ETFs) ETFs Fund Performance The W.I.S.E.-CSI HK Listed Mainland Consumption Tracker ( WISE-CSIMLCT or the Sub-Fund ) is an index-tracking fund which seeks to track the performance of the CSI Hong Kong Listed Tradable Mainland Consumption Index in Hong Kong dollar ( ) terms. As of 30 June 2011, the net asset value ( NAV ) per unit of the Sub-Fund was with a total of 12,000,000 units outstanding, aggregating a total asset under management ( AUM ) size of 118,390, WISE- CSIMLCT ,000,000 AUM118,390, The WISE-CSIMLCT uses a Representative Sampling Strategy and seeks to construct a portfolio with its overall capitalization, industry and fundamental investment characteristics similar to those of the CSI Hong Kong Listed Tradable Mainland Consumption Price Index. A summary of the performance of the WISE-CSIMLCT is stated below. WISE-CSIMLCT WISE-CSIMLCT 1-Month 3-Month 6-Month 1-Year 3-Year 5-Year Since Inception (e) (e) CSI Hong Kong Listed Tradable Mainland 1.14% 8.39% N/A N/A N/A N/A -0.05% Consumption Price Index (a) (a) CSI Hong Kong Listed Tradable Mainland 1.34% 9.54% N/A N/A N/A N/A 1.07% Consumption Total Return Index (b) (b) WISE-CSI HK Listed Mainland Consumption 1.12% 8.94% N/A N/A N/A N/A 0.26% Tracker NAV-to-NAV (c) (c) WISE-CSI HK Listed Mainland Consumption 0.81% 9.51% N/A N/A N/A N/A 0.61% Tracker Market-to-Market (d) (d) (as of 30 Jun 2011) (a) Price Index in. An Investor cannot invest directly in an index and the index preformance returns do not reflect management fees, transaction costs or other expenses, which would reduce performance returns. (b) Total Return Index in. (c) Unit s NAV in. Units in the Sub-Fund can be created and redeemed at their NAV in exchange for cash at the primary market. (d) Market Closing Price in. Market returns are calculated using historical market closing prices of the ETF in the secondary market. They do not represent the returns you would receive if you trade units at other times. (e) Sub-Fund inception date is 7 Jan (a) (b) (c) (d) (e) ETF Source: BOCI-Prudential Asset Management Ltd., Bloomberg 15

18 REPORT OF THE MANAGER (continued) TO THE UNITHOLDERS OF W.I.S.E.-CSI HK LISTED MAINLAND CONSUMPTION TRACKER (SUB-FUND OF WORLD INDEX SHARES ETFs) (continued) ETFs Fund Activities As of 30 June 2011, the WISE-CSIMLCT (the Sub-Fund ) had exposure to 33 stocks and 12,000,000 units outstanding. WISE-CSIMLCT 3312,000,000 Effective from 5 May 2011, Citigroup Global Markets Asia Limited ( CGMAL ) was appointed as a new Participating Dealer of the Sub-Fund. On 24 June 2011, the Manager announced that the Prospectus and the Product Key Facts Statement of the Sub- Fund were revised in compliance with the revised Code of Unit Trusts and Mutual Funds. Certain minor modifications and updates were made. Please refer to the corresponding public announcements on our company web-site ( for details. Index Activities The CSI Hong Kong Listed Tradable Mainland Consumption Index underwent one regular semi-annual review during the first half year of In particular, the details of the regular index review are summarized in Figure 1. Figure 1 Deletion ( 1 1 Addition Effective Date Stock Code Stock Name Stock Code Stock Name 4-Jul Maoye International Holdings Limited 210 Daphne International Holdings Limited 4-Jul Coslight Technology International Group Limited 493 GOME Electrical Appliances Holding Limited 4-Jul Ajisen (China) Holdings Limited 4-Jul Zhongsheng Group Holdings Limited 4-Jul China Green (Holdings) Limited 4-Jul Boshiwa International Holding Limited 4-Jul Intime Department Store (Group) Company Limited 4-Jul Belle International Holdings Limited 4-Jul Guangzhou Automobile Group Co., Ltd. 4-Jul Bosideng International Holdings Limited Source: CSI, HKEx CSI 16

19 REPORT OF THE MANAGER (continued) TO THE UNITHOLDERS OF W.I.S.E.-CSI HK LISTED MAINLAND CONSUMPTION TRACKER (SUB-FUND OF WORLD INDEX SHARES ETFs) (continued) ETFs Market Review The Hong Kong stock market was weighted down by uncertainties in both local and external development. However, on the back of robust consumption growth in China, the Hong Kong listed mainland consumer stocks ended up with gains in the first half of 2011, with the CSI HK Listed Mainland Consumption Index advancing by 3.03%. 3.03% Consumption is playing a more significant role in supporting China s economy. According to the National Bureau of Statistics of China (NBS) data, although investment remained the biggest driver of Gross Domestic Product (GDP) growth in the first half of 2011 making up 5.1 percentage points of the 9.6% year-on-year (YOY) expansion, consumption contributed 4.6 percentage points while foreign trade dragged down the growth by 0.1 percentage points. In June, retail sales growth hit its highest level of 17.7% YOY since January, reversing the downward trend of the past two months. Meanwhile, auto sales growth also rebounded significantly in June from the consecutive declines of growth in recent months. As the latest effort to reduce people s tax burden and boost domestic consumption, National People s Congress passed an amendment in June to individual income tax law, which raises the monthly income tax exemption threshold from RMB 2,000 to RMB 3, % % 2,000 3,500 Looking forward, with investment and export growth in China both decelerating on the back of tightening policies, consumption will become a key component that helps aggregate demand maintain solid growth. Furthermore, the potential pause in China s monetary tightening and peaking out of inflation going into the second half of 2011 will also be positive for sustainable consumption growth. However, concerns on downside risks like weakening growth momentum in China and deepening debt crisis in European as well as US, would continue to affect overall market sentiment in the near term. Investors should assess their risk tolerance and the risk level of the investment product before investing. 17

20 REPORT OF THE MANAGER (continued) TO THE UNITHOLDERS OF W.I.S.E.-CSI HK LISTED MAINLAND REAL ESTATE TRACKER (SUB-FUND OF WORLD INDEX SHARES ETFs) ETFs Fund Performance The W.I.S.E. CSI HK Listed Mainland Real Estate Tracker ( WISE-CSIMLRET or the Sub-Fund ) is an index-tracking fund which seeks to track the performance of the CSI Hong Kong Listed Tradable Mainland Real Estate Price Index in Hong Kong dollar ( ) terms. As of 30 June 2011, the net asset value ( NAV ) per unit of the Sub-Fund was with a total of 15,000,000 units outstanding, aggregating a total asset under management ( AUM ) size of 89,577, WISE- CSIMLRET ,000,000 AUM89,577, The WISE-CSIMLRET uses a Representative Sampling Strategy and seeks to construct a portfolio with its overall capitalization, industry and fundamental investment characteristics similar to those of the CSI Hong Kong Listed Tradable Mainland Real Estate Price Index. A summary of the performance of the WISE-CSIMLRET is stated below. WISE-CSIMLRET WISE-CSIMLRET 1-Month 3-Month 6-Month 1-Year 3-Year 5-Year Since Inception (e) (e) CSI Hong Kong Listed Tradable Mainland Real -1.19% -4.80% N/A N/A N/A N/A % Estate Price Index (a) (a) CSI Hong Kong Listed Tradable Mainland Real -0.63% -2.77% N/A N/A N/A N/A -8.52% Estate Total Return Index (b) (b) WISE-CSI HK Listed Mainland Real Estate -1.08% -3.45% N/A N/A N/A N/A -9.42% Tracker NAV-to-NAV (c) (c) WISE-CSI HK Listed Mainland Real Estate -0.33% -1.16% N/A N/A N/A N/A -9.60% Tracker Market-to-Market (d) (d) (as of 30 Jun 2011) (a) Price Index in. An Investor cannot invest directly in an index and the index preformance returns do not reflect management fees, transaction costs or other expenses, which would reduce performance returns. (b) Total Return Index in. (c) Unit s NAV in. Units in the Sub-Fund can be created and redeemed at their NAV in exchange for cash at the primary market. (d) Market Closing Price in. Market returns are calculated using historical market closing prices of the ETF in the secondary market. They do not represent the returns you would receive if you trade units at other times. (e) Sub-Fund inception date is 7 Jan (a) (b) (c) (d) (e) ETF Source: BOCI-Prudential Asset Management Ltd., Bloomberg 18

21 REPORT OF THE MANAGER (continued) TO THE UNITHOLDERS OF W.I.S.E.-CSI HK LISTED MAINLAND REAL ESTATE TRACKER (SUB-FUND OF WORLD INDEX SHARES ETFs) (continued) ETFs Fund Activities As of 30 June 2011, the WISE-CSIMLRET (the Sub-Fund ) had exposure to 15 stocks and 15,000,000 units outstanding. WISE-CSIMLRET 1515,000,000 Effective from 5 May 2011, Citigroup Global Markets Asia Limited ( CGMAL ) was appointed as a new Participating Dealer of the Sub-Fund. On 24 June 2011, the Manager announced that the Prospectus and the Product Key Facts Statement of the Sub- Fund were revised in compliance with the revised Code of Unit Trusts and Mutual Funds. Certain minor modifications and updates were made. Please refer to the corresponding public announcements on our company web-site ( for details. ( Index Activities The CSI Hong Kong Listed Tradable Mainland Real Estate Index underwent one regular semi-annual review in the first half of In particular, the details of the regular index review are summarized in Figure 1. 1 Figure 1 Deletion 1 Addition Effective Date Stock Code Stock Name Stock Code Stock Name 4-Jul SRE Group Limited 960 Longfor Properties Co. Ltd. 4-Jul Evergrande Real Estate Group Limited Source: CSI, HKEx CSI Market Review The China Real Estate Market has been overshadowed by the policy tightening in the first half of 2011, over the concerns on overheating property market and stubborn inflationary pressure. Despite some signs of stabilization in property price and sales volume in first tier cities, however, price pressure stayed fairly strong in second and third their cities, while property investment growth remained robust. Subject to the policy measures, equities in real estate sector experienced a choppy session with notable selloffs and rebounds. 19

22 REPORT OF THE MANAGER (continued) TO THE UNITHOLDERS OF W.I.S.E.-CSI HK LISTED MAINLAND REAL ESTATE TRACKER (SUB-FUND OF WORLD INDEX SHARES ETFs) (continued) ETFs Market Review (continued) China s economy sustained its resilient growth momentum in the first half of Gross domestic product (GDP) for the period came in at 20,445.9 billion yuan, a 9.6% yearon-year (YOY) increase at comparable prices. Investment in real estate development reached 2,625.0 billion yuan and grew 32.9% YOY, lower than the 35% recorded in the January-May period. Investment in residential buildings was printed at 1,864.1 billion yuan, up by 36.1%. The floor space of commercial buildings sold in the first half of 2011 climbed 12.9% YOY, while that of residential buildings was up by 12.1% YOY. The national real estate climate index saw an upward trend and peaked in May at in the year and moderated to in June. According in the latest reading from National Bureau of Statistics of China, among the 70 medium and large-sized cities, sales prices of newly constructed residential buildings declined in 12 cities, while that of 14 cities remained at general level over May. Specifically, the increase was largely contributed by second and third tier cities. 204, % 26, % 35%18, % 12.9% 12.1% On the policy front, a series of cooling measures has been implemented to curb property sales. It includes the introduction of higher tax rates and financing costs, implementation of home-purchase restrictions in 41 major cities, requirements on developers on setting fixed prices for all private property, establishment of public housing system compromising mainly of public and low rental housing, as well as reduction of home price control target to a below GDP growth level in major cities. Monetary policy measures concurrently have been adopted to rein in the overheating economy, including two interest rate hikes and six required reserve ratio hikes during the six-month period ended 30 June Going forward, more tightening is well-anticipated as the central government may launch a new round of control measures to curb rising housing price and expand the scope of the home-purchase restrictions to third tier cities. We expect the implementation of tightening measures and accelerating public housing construction would contribute to the long-term economic and social stability. Meanwhile, concerns over policy tightening and softening economic growth on the back of weaker global demand recovery may dampen market sentiment. Investor should assess their risk tolerance and the risk level of the investment product before investing. 20

23 Sub-Funds of World Index Shares ETFs ETFs STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) FOR THE PERIOD FROM 1ST JANUARY 2011 TO 30TH JUNE 2011 W.I.S.E. - CSI 300 China Tracker * (*This is a synthetic ETF) 300 * * to to INCOME Dividend income 67,674,806 60,378,287 Interest income 5,171 5,635 Other income 59 67,680,036 60,383,922 EXPENSE Auditor s remuneration 128, ,500 Legal and professional fee 1,661, ,498 Formation costs Maintenance fee 9,905,411 15,489,329 Management fee 34,484,816 57,592,224 Trustee fee Custodian and bank charges 834,212 1,916,408 Transaction costs on investments 4,031,533 22,118,565 Transaction handling fee 90,000 69,900 Other expenses 18,302,976 19,577,170 69,439, ,148,594 NET GAIN (LOSS) BEFORE INVESTMENT AND EXCHANGE GAIN (LOSS) (1,759,675) (56,764,672) NET INVESTMENT AND EXCHANGE GAIN (LOSS) Net exchange gain (loss) 67,988 (17,969) Realised gain (loss) on sale of investments 56,210, ,896,300 Unrealised appreciation (diminution) in value of investments 16,556,403 (744,702,619) 72,834,989 (615,824,288) PROFIT (LOSS) FOR THE PERIOD AND TOTAL COMPREHENSIVE INCOME AND EXPENSE FOR THE PERIOD 71,075,314 (672,588,960) 21

24 Sub-Funds of World Index Shares ETFs ETFs STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)(continued) FOR THE PERIOD FROM 1ST JANUARY 2011 TO 30TH JUNE 2011 (continued) W.I.S.E.-CSI HK 100 Tracker TM 100 TM to to INCOME Dividend income 2,232,389 3,838,560 Interest income Other income 2,232,446 3,838,672 EXPENSE Auditor s remuneration Legal and professional fee 2,085 7,923 Formation costs Maintenance fee Management fee 680,474 1,429,905 Trustee fee Custodian and bank charges Transaction costs on investments Transaction handling fee 65, ,362 Other expenses 747,895 1,559,190 NET GAIN (LOSS) BEFORE INVESTMENT AND EXCHANGE GAIN (LOSS) 1,484,551 2,279,482 NET INVESTMENT AND EXCHANGE GAIN (LOSS) Net exchange gain (loss) Realised gain (loss) on sale of investments 6,903,751 7,154,238 Unrealised (diminution) appreciation in value of investments (7,737,976) 3,984,967 (833,915) 11,139,400 PROFIT (LOSS) FOR THE PERIOD AND TOTAL COMPREHENSIVE INCOME AND EXPENSE FOR THE PERIOD 650,636 13,418,882 22

25 Sub-Funds of World Index Shares ETFs ETFs STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)(continued) FOR THE PERIOD FROM 1ST JANUARY 2011 TO 30TH JUNE 2011 (continued) W.I.S.E.-SSE 50 China Tracker * (*This is a synthetic ETF) 50 * * to to INCOME Dividend income 2,952,952 6,015,632 Interest income Other income 2,953,244 6,015,945 EXPENSE Auditor s remuneration Legal and professional fee 169, ,749 Formation costs Maintenance fee 559,630 2,058,817 Management fee 1,258,418 4,025,008 Trustee fee Custodian and bank charges Transaction costs on investments 21,943,937 1,772,543 Transaction handling fee 14,900 12,900 Other expenses 169,614 70,251 24,116,068 8,360,268 NET GAIN (LOSS) BEFORE INVESTMENT AND EXCHANGE GAIN (LOSS) (21,162,824) (2,344,323) NET INVESTMENT AND EXCHANGE GAIN (LOSS) Net exchange gain (loss) 3,524 5,083 Realised gain (loss) on sale of investments (5,254,866) (5,562,127) Unrealised appreciation (diminution) in value of investments 20,610,653 (97,769,777) 15,359,311 (103,326,821) PROFIT (LOSS) FOR THE PERIOD AND TOTAL COMPREHENSIVE INCOME AND EXPENSE FOR THE PERIOD (5,803,513) (105,671,144) 23

26 Sub-Funds of World Index Shares ETFs ETFs STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)(continued) FOR THE PERIOD FROM 7TH JANUARY 2011 (DATE OF INCEPTION) TO 30TH JUNE 2011 W.I.S.E.-CSI HK Listed Mainland Consumption Tracker (Date of inception) to INCOME Dividend income 1,271,308 Interest income 31 Other income 1,271,339 EXPENSE Auditor s remuneration 91,521 Legal and professional fee 347 Formation costs 240,845 Maintenance fee Management fee 267,958 Trustee fee 48,232 Custodian and bank charges 18,985 Transaction costs on investments Transaction handling fee Other expenses 145, ,050 NET GAIN (LOSS) BEFORE INVESTMENT AND EXCHANGE (LOSS) GAIN 458,289 NET INVESTMENT AND EXCHANGE (LOSS) GAIN Net exchange gain (loss) 753 Realised gain (loss) on sale of investments (953,505) Unrealised (diminution) appreciation in value of investments (157,420) (1,110,172) PROFIT (LOSS) FOR THE PERIOD AND TOTAL COMPREHENSIVE INCOME AND EXPENSE FOR THE PERIOD (651,883) 24

27 Sub-Funds of World Index Shares ETFs ETFs STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)(continued) FOR THE PERIOD FROM 7TH JANUARY 2011 (DATE OF INCEPTION) TO 30TH JUNE 2011 (continued) W.I.S.E.-CSI HK Listed Mainland Real Estate Tracker (Date of inception) to INCOME Dividend income 1,813,954 Interest income 23 Other income 1,813,977 EXPENSE Auditor s remuneration 91,521 Legal and professional fee 347 Formation costs 240,845 Maintenance fee Management fee 209,935 Trustee fee 37,788 Custodian and bank charges 24,829 Transaction costs on investments Transaction handling fee Other expenses 143, ,388 NET GAIN (LOSS) BEFORE INVESTMENT AND EXCHANGE GAIN (LOSS) 1,065,589 NET INVESTMENT AND EXCHANGE (LOSS) GAIN Net exchange gain (loss) 214 Realised gain (loss) on sale of investments (1,411,018) Unrealised (diminution) appreciation in value of investments (10,394,751) (11,805,555) PROFIT (LOSS) FOR THE PERIOD AND TOTAL COMPREHENSIVE INCOME AND EXPENSE FOR THE PERIOD (10,739,966) 25

28 Sub-Funds of World Index Shares ETFs ETFs STATEMENTS OF FINANCIAL POSITION (UNAUDITED) AS AT 30TH JUNE 2011 W.I.S.E.-CSI 300 China Tracker * (*This is a synthetic ETF) 300 * * CURRENT ASSETS Bank balances 109,616, ,853,778 Investments 7,825,234,672 6,087,513,629 Dividends and other receivables 11,028,784 Prepayments 13,825 18,778 Total current assets 7,945,894,064 6,239,386,185 CURRENT LIABILITIES Amount due to broker Distributions payable Management fee payable 7,265,065 7,279,184 Other accounts payable and accruals 20,212,120 39,261,276 Trustee fee payable Total current liabilities 27,477,185 46,540,460 Net current assets 7,918,416,879 6,192,845,725 Capital 7,747,765,120 6,093,269,280 Retained earnings 170,651,759 99,576,445 TOTAL EQUITY 7,918,416,879 6,192,845,725 Units in issue 243,200, ,400,000 Net asset value per unit

29 Sub-Funds of World Index Shares ETFs ETFs STATEMENTS OF FINANCIAL POSITION (UNAUDITED)(continued) AS AT 30TH JUNE 2011 (continued) W.I.S.E.-CSI HK 100 Tracker TM 100 TM CURRENT ASSETS Bank balances 1,128, ,524 Investments 94,789, ,544,850 Dividends and other receivables 688, ,467 Prepayments 12,941 17,891 Total current assets 96,620, ,447,732 CURRENT LIABILITIES Amount due to broker 52,130 Distributions payable 2,240,000 Management fee payable 196, ,224 Other accounts payable and accruals 10,896 10,110 Trustee fee payable Total current liabilities 259,788 2,615,334 Net current assets 96,360, ,832,398 Capital 106,620, ,743,200 Retained earnings (10,260,166) (10,910,802) TOTAL EQUITY 96,360, ,832,398 Units in issue 5,000,000 8,000,000 Net asset value per unit

30 Sub-Funds of World Index Shares ETFs ETFs STATEMENTS OF FINANCIAL POSITION (UNAUDITED)(continued) AS AT 30TH JUNE 2011 (continued) W.I.S.E.-SSE 50 China Tracker * (*This is a synthetic ETF) 50 * * CURRENT ASSETS Bank balances 1,803,644 5,799,475 Investments 217,712, ,149,752 Dividends and other receivables 769,691 Prepayments 12,511 17,459 Total current assets 220,298, ,966,686 CURRENT LIABILITIES Amount due to broker Distributions payable Management fee payable 277, ,607 Other accounts payable and accruals 443, ,651 Trustee fee payable Total current liabilities 720,889 1,148,258 Net current assets 219,577, ,818,428 Capital 248,981, ,419,120 Retained earnings (29,404,205) (23,600,692) TOTAL EQUITY 219,577, ,818,428 Units in issue 12,000,000 22,400,000 Net asset value per unit

31 Sub-Funds of World Index Shares ETFs ETFs STATEMENTS OF FINANCIAL POSITION (UNAUDITED)(continued) AS AT 30TH JUNE 2011 (continued) W.I.S.E-CSI HK Listed Mainland Consumption Tracker CURRENT ASSETS Bank balances 972,536 Investments 117,091,360 Dividends and other receivables 293,026 Prepayments 205,882 Total current assets 118,562,804 CURRENT LIABILITIES Amount due to broker Distributions payable Management fee payable 47,287 Other accounts payable and accruals 116,188 Trustee fee payable 8,512 Total current liabilities 171,987 Net current assets 118,390,817 Capital 119,042,700 Retained earnings (651,883) TOTAL EQUITY 118,390,817 Units in issue 12,000,000 Net asset value per unit

32 Sub-Funds of World Index Shares ETFs ETFs STATEMENTS OF FINANCIAL POSITION (UNAUDITED)(continued) AS AT 30TH JUNE 2011 (continued) W.I.S.E-CSI HK Listed Mainland Real Estate Tracker CURRENT ASSETS Bank balances 1,202,700 Investments 87,715,917 Dividends and other receivables 608,101 Prepayments 205,883 Total current assets 89,732,601 CURRENT LIABILITIES Amount due to broker Distributions payable Management fee payable 35,099 Other accounts payable and accruals 114,150 Trustee fee payable 6,318 Total current liabilities 155,567 Net current assets 89,577,034 Capital 100,317,000 Retained earnings (10,739,966) TOTAL EQUITY 89,577,034 Units in issue 15,000,000 Net asset value per unit

33 Sub-Funds of World Index Shares ETFs ETFs STATEMENTS OF CHANGES IN EQUITY (UNAUDITED) FOR THE PERIOD FROM 1ST JANUARY 2011 TO 30TH JUNE 2011 W.I.S.E.-CSI 300 China Tracker * (*This is a synthetic ETF) 300 * * Retained Units earnings Total Balance as at 1 January ,923,016, ,165,405 6,695,182,205 Profit (Loss) for the year and total comprehensive income (expense) (672,588,960) (672,588,960) Proceeds on issue of units 1,497,096,000 1,497,096,000 Payments on redemption of units (1,326,843,520) (1,326,843,520) Distributions Balance as at 31 December ,093,269,280 99,576,445 6,192,845,725 Balance as at 1 January 2011/Date of inception 6,093,269,280 99,576,445 6,192,845,725 Profit (Loss) for the period and total comprehensive income (expense) 71,075,314 71,075,314 Proceeds on issue of units 2,172,197,760 2,172,197,760 Payments on redemption of units (517,701,920) (517,701,920) Distributions Balance as at 30 June ,747,765, ,651,759 7,918,416,879 Number of units in issue W.I.S.E.-CSI 300 China Tracker * (*This is a synthetic ETF) 300 * * to to Units Units Units in issue at the beginning of the period 190,400, ,000,000 Issue of units 68,000,000 48,000,000 Redemption of units (15,200,000) (41,600,000) Units in issue at the end of the period 243,200, ,400,000 31