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Hong Kong Baptist University Seminar on INVESCO “Strategic MPF Scheme” (Cantonese ) Date:26 September 2002 (Thursday) Time:1:00pm - 2:00pm Venue:RRS905, SIR RUN RUN SHAW BLDG., HSH Campus. MPF Performance Review. 26 September 2002. Table of Contents. Page Portfolio Review 3 - PowerPoint PPT Presentation
Citation preview
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Hong Kong Baptist University Seminar on INVESCO “Strategic MPF Scheme”
(Cantonese)
Date : 26 September 2002 (Thursday)
Time : 1:00pm - 2:00pm
Venue: RRS905, SIR RUN RUN SHAW BLDG., HSH Campus
- 3 -
Table of Contents
Page
Portfolio Review 3
Performance Review 5
Investment Outlook & Strategy 11
Guaranteed Fund 22
Investment Tips 27
Managing Your MPF Accounts 31
Member Services 34
- 5 -
Fund Choices
INVESCO Strategic MPF Scheme(Class A)
High Risk / High ReturnLow Risk / Low Return
* Net contributions will receive a guarantee of capital and at least 4.5% p.a. interest over the investment period into the Guaranteed Fund if accrued benefits are withdrawn upon qualifying events.
Growth Fund
100% Equities
Balanced Fund
70% Equities30% Bonds
Capital StableFund
30% Equities70% Bonds
GuaranteedFund*
20%-80% Equities15%-75% Bonds
3%-20% Money Market Instruments
CapitalPreservation
Fund
100%Money Market Instruments
- 7 -
-21.1
-19.5
-19.9
-29.3
6.6
-1.0
-32.6
-12.7
-14.1
-0.1
-19.3
2.6
12.9
-13.1
-40 -30 -20 -10 0 10 20
NASDAQ
Hong Kong (90% FT HK + 10%HSBC)
Europe (FT)
Japan (FT)
N America (FT)
Other Asia (MSCI)
Bonds (SSB)
HKD (%)
YTD Aug 2002
Calendar Year 2001
Market Performance Review
Source: Standard & Poor’s Micropal, Datastream
- 8 -
Inception Date: 26 February 2001Source: INVESCO Strategic MPF Scheme (Class A & G)Data as of 31 August 2002 (% in HKD)
MPF Performance Review
* Calculation is based on the assumption that a fixed amount is invested in the various constituent funds on the actual dealing dates of contributions made by Hong Kong Baptist University.
* Calculation is based on the assumption that a fixed amount is invested in the various constituent funds on the actual dealing dates of contributions made by Hong Kong Baptist University.
YTD to31 Aug 02
Since inception to 31 Aug 02
Dollar Cost Average*
Growth Fund -12.1% -28.6% -13.5%
Balanced Fund -6.7% -19.5% -8.1%
Capital Stable Fund 2.5% -3.4% 1.3%
Guaranteed Fund -8.2% -11.9% -6.7%
Capital Preservation Fund 0.5% 2.5% 0.8%
- 9 -
MPF 1-Year Performance to 31 August 2002MPF 1-Year Performance to 31 August 2002
Source: INVESCO Strategic MPF Scheme (Class A & G), HKIFA
MPF Performance Review – 1 Year to 31 August 2002
-7.2%
0.9% 0.9%
-6.6%
-11.8%
-0.6%-0.7%-0.2%
-7.3%
-10.9%
-16%
-12%
-8%
-4%
0%
4%
Growth Fund Balanced Fund Capital StableFund
GuaranteedFund
CapitalPreservation
Fund
Cum
ulat
ive
Ret
urn
(HKD
)
INVESCO
Industry Median
- 10 -
Source: INVESCO Strategic MPF Scheme (Class A & G), HKIFA
MPF Performance Review – Q2 2002
MPF Q2 Performance up to 30 June 2002MPF Q2 Performance up to 30 June 2002
- 11 -
Source: INVESCO Strategic MPF Scheme (Class A & G), HKIFA
MPF Performance Review – 6-month to 31 August 2002
MPF 6-month Performance up to 31 August 2002MPF 6-month Performance up to 31 August 2002
- 13 -
Global Economic Outlook
The global economic recovery will be moderate and non-inflationary in the foreseeable future.
The US economy and corporate earnings have bottomed but recent stock market weakness may affect the prevailing recovery.
Economic indictors in Europe continue to slow down. It is increasingly apparent that economic and corporate woes are the reasons behind the current market malaise.
In Hong Kong, deflation and rising unemployment rates are expected to dampen sentiment in the near term.
Pick-up in domestic consumption reduces Asia’s reliance on exports.
- 14 -
Global Equity Strategy
Asia Pacific ex Japan : Overweight
Japan : Underweight
Weightings Relative to Benchmark
Europe : Neutral
US : Mildly Underweight
Factors such as corporate malfeasances, weak US economic growth and corporate earnings growth will limit upside for global equities in the near term.
Hong Kong : Neutral
Data as of 31 August 2002Data as of 31 August 2002
- 15 -
Hong Kong
Rising unemployment rates.
Domestic consumption remains weak as consumer sentiment stays low.
Asset deflation limits increase in property prices.
Companies enjoy healthy cashflow after deleveraging and should be able to survive in the downturn.
Value begins to emerge but growth rate remains low.
- 16 -
US
Mixed signals on the economy.
Favorable Auto sales were up again in July. Refinancing continued to rise due to low short rates. Core CPI deflator was up just 1.1% - no inflationary pressure.
Unfavorable GDP growth rose 5.0% in Q1 and 1.1% in Q2. The unemployment rate edged up to 5.9%. Corporate capital expenditure isn’t recovering as companies
resize themselves for profitability. Stocks and the USD remained weak.
- 17 -
Europe
Monetary policies remain restrictive.
Recent strength of the Euro may slow down economic growth.
Strong Euro vs USD may erode export competitiveness but reduce inflationary pressure.
Capital expenditure rebound will be critical but high debt levels of European telcos may delay corporate capital expenditure.
We remain cautious in Technology & Telecoms and prefer Cyclicals.
- 18 -
Japan
Domestic consumption is likely to stay weak.
The strong Yen may erode export competitiveness.
Deflationary pressure remains.
Bankruptcies are still rising and will continue to hit consumer sentiment.
- 19 -
Other Asia
Asian markets are still attractively valued relative to developed markets.
Pre-emptive rate hikes in Korea & Australia are favorable to a more sustainable economic upturn.
Consumer balance sheet are healthy:
Nominal interest rates are at historically low levels.
Demographics are favorable.
Banking sector has undergone massive consolidation and clean up, especially in Korea and Malaysia.
Trimmed technology holdings and focus on domestic consumption related companies.
- 20 -
Global Bonds Strategy
Europe (ex-UK) : Overweight
Duration-adjusted Weightings Relative to Benchmark
Hong Kong : Neutral
Data as of 31 August 2002Data as of 31 August 2002
UK : Neutral
Japan : Neutral
US Dollar : Overweight
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* Benchmark asset allocation used for INVESCO internally only.Data as of 31 December 2001 & 31 August 2002
Aug 02 Dec 01 Bmk* Aug 02 Dec 01 Bmk* Aug 02 Dec 01 Bmk*(%) (%) (%) (%) (%) (%) (%) (%) (%)
Equities
HK 31.8 32.8 35 22.3 24.4 24.5 9.6 10.3 10.5
N. America 19.2 22.1 20 13.5 16.5 14 5.8 7.0 6
Europe 17.5 18.2 20 12.3 13.6 14 5.3 5.7 6
Japan 11.1 10.0 12 7.7 7.4 8.4 3.3 3.2 3.6
Asia Pacific 15.4 12.8 13 10.8 9.5 9.1 4.6 4.0 3.9
Total Equities 95.0 95.9 100 66.6 71.4 70 28.6 30.2 30
Bonds 0 0 0 27.6 22.7 30 64.5 60.6 70
Cash 5.0 4.1 0 5.8 5.9 0 6.9 9.2 0
Total 100 100 100 100 100 100 100 100 100
Growth Fund Balanced Fund Capital Stable Fund
Asset Allocation
- 22 -
Global Equity – Sector Breakdown
0
5
10
15
20
25
30
35
Perc
ent
Portfolio
Benchmark
31 Dec 2001 31 Aug 2002
0
5
10
15
20
25
30
35
Basic
Ind
ustrie
s
Cyclical
Con
sum
er G
oods
Cyclical
Ser
vice
sFi
nanc
ials
Gen
eral
Ind
ustrials
Info
rmat
ion
Tech
nolo
gy
Non
Cyc
lical
Con
sum
er G
oods
Non
Cyc
lical
Ser
vice
sRe
sour
ces
Util
ities
Cash
Perc
ent
Portfolio
Benchmark
- 24 -
Guaranteed Fund
Investment Objective: Provides average guaranteed return of 4.5% per year over the career of employee while seeking long-term capital appreciation
Expected Risk/Return: Low Invests in balanced portfolio of equities, bonds and cash
Global EquitiesGlobal Bonds & Cash
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You will be qualified for the guaranteed return if you claim your accrued benefit immediately when any one of the following reasons is met:
* Termination of employment AND invested for a continuous period of at least 36 months;
Early retirement;
Retirement;
Permanent departure from Hong Kong;
Total incapacity;
Death;
Small balance account.
* In this case, you are qualifying for the guaranteed return when you choose to transfer the accrued benefits to preserved account or other MPF account.
Guaranteed
Return
Features of Guaranteed Fund
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Assumption:
1. Qualifying condition based on termination of employment only.
2. Initial contribution = $1,000. Net return = 7.5%, 1%, 3% & 8% in respective years
3. Guaranteed rate = 4.5% p.a.
Year Market Value Guaranteed
Balance
1 1,075 1,045
2 1,086 1,092
3 1,118 1,141
4 1,208 1,193
Each member has 2 accounts:
- Normal balance (market value) & qualifying balance (guaranteed value)
Each member has 2 accounts:
- Normal balance (market value) & qualifying balance (guaranteed value)
Features of Guaranteed Fund
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Fund switching will be based on market value 36 months of qualifying period will be recounted when there is fund switches When the member changes his or her account from active to preserved
account without meeting the qualifying events , the guaranteed interest will be reset.
No partial withdrawals is allowed
Features of Guaranteed Fund
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Dollar-Cost Averaging – How Does It Work?
020406080
100120140
1 2 3 4 5 6 7 8 9 10
Month
Uni
ts P
urch
ased
$0
$5
$10
$15
$20
$25
Uni
t P
rice
No. of Units Purchased Unit Price
020406080
100120140
1 2 3 4 5 6 7 8 9 10
Month
Uni
ts P
urch
ased
$0
$5
$10
$15
$20
$25
Uni
t P
rice
No. of Units Purchased Unit Price
0204060
80100120140
1 2 3 4 5 6 7 8 9 10
Month
Uni
ts P
urch
ased
$0
$5
$10
$15
$20
$25
Uni
t P
rice
No. of Units Purchased Unit Price
Fund A Fund B Fund C
Dollar-cost averaging is a systematic approach to long-term investment.
When markets go down, your monthly contribution can buy you more units.
- 30 -
Cut loss.
Sell and buy back at lower prices.
Increase your holdings as the market is on sale.
Very difficult to catch bottom prices.
SellSell
“Should I Sell On Falling Prices?”
HoldHold
Short-term trading is profitable.
Long-term investment help you meet your goals.
- 31 -
What Should I Consider Before Making Switches?
Consider the latest fund performance?
Market timing?
Wrong investment decisions in the
past?
Change of investment horizon?
Increased/reduced financial burden?
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Operating Cycle Operating Cycle
New contract New MPF accountNew contract New MPF account
Accrued benefits will be transferred to preserved account upon receipt of your instruction* or 3 months after the termination of contract automatically
Accrued benefits will be transferred to preserved account upon receipt of your instruction* or 3 months after the termination of contract automatically
Make contributions until the termination of contract
Make contributions until the termination of contract
* You can also transfer the accrued benefits to other registered master trust scheme.
- 34 -
You may have more than one MPF accounts with INVESCO at one time
Retain your Membership Certificates and PINs
Remember to submit “Fund Transfer Form” after the termination of contract
Synchronize PINs so that you can manage your MPF accounts easily
Advices for Handling your MPF accounts
Each member should only have
ONE Preserved Account with INVESCO.
Each member should only have
ONE Preserved Account with INVESCO.
- 36 -
How Are You Using Our Service?
By Service ChannelsBy Service Channels
Cumulative Data from Scheme inception to 31 August 2002Total Number of Hits: 3,041 Cumulative Data from Scheme inception to 31 August 2002Total Number of Hits: 3,041
Web83%
Call Center10%
IVRS7%
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How Are You Using Our Service?
By FunctionsBy Functions
Balance / Transaction
Enquiry71.8%
Others1.8%
PIN Change5.1%Personal Details
Change / Enquiry8.0%
Transactions0.9%
Scheme Enquiry2.4%
Fund Price Enquiry 10.1%
Cumulative Data from Scheme inception to 31 August 2002Total Number of Hits: 3,041 Cumulative Data from Scheme inception to 31 August 2002Total Number of Hits: 3,041
- 38 -
IVRS
INVESCall Hotline
Member Services
Factsheet, Newsletter& Member Statement
INVESCO Strategic MPF
Scheme
1st Quarter Report
2001
Informative, Convenient, Multi-Media
INVESNet