fidelity retirement master trust · 2020-07-05 · european equites rose strongly in 2019, ......

Fidelity Retirement Master Trust

MPF 強積金

Annual ReportDecember 2019

FIDELITY RETIREMENT MASTER TRUST YEAR ENDED 31ST DECEMBER 2019

ANNUAL REPORT Contents Pages Scheme Report 1 – 2 Report of the Investment Manager 3 – 4 Investment Report 5 – 45 Independent Auditor’s Report 46 – 49 Master Trust Scheme

Statement of Net Assets Available for Benefits 50 Statement of Changes in Net Assets Available for Benefits 51 – 52 Statement of Cash Flows 53

Constituent Funds

Statement of Net Assets 54 – 61 Statement of Comprehensive Income 62 – 69 Statement of Changes in Equity 70 – 77

Statement of Cash Flows 78 – 85

Notes to the Financial Statements 86 – 173

FIDELITY RETIREMENT MASTER TRUST AS AT 31ST DECEMBER 2019

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SCHEME REPORT The Trustee hereby submits the scheme report together with the audited financial statements of the Fidelity Retirement Master Trust (the “Scheme”) for the year ended 31st December 2019. The Scheme The Scheme is a master trust scheme for the purpose of providing benefits to members in accordance with the Hong Kong Mandatory Provident Fund Schemes Ordinance (the “Ordinance”). The Scheme is established under the trust deed dated 31st January 2000, as amended, between FIL Investment Management (Hong Kong) Limited 富達基金（香港）有限公司 as investment manager (the “Investment Manager”) and HSBC Institutional Trust Services (Asia) Limited 滙豐機構信託服務(亞洲)有限公司 as trustee (the “Trustee”). The Scheme is registered under Section 21 of the Ordinance. Financial developments The Scheme commenced operations on 1st December 2000. The total contributions received and receivable including transfers in and benefits paid and payable including transfers out during the year were HK$5,095,011,961 (2018: HK$5,196,802,726) and HK$2,846,816,184 (2018: HK$2,848,198,871) respectively. The net asset value as at 31st December 2019 was HK$45,050,271,091 (2018: HK$37,356,748,967). The Scheme had 431,676 (2018: 409,415) members as at 31st December 2019. Changes to the governing rules There have been no changes to the governing rules of the Scheme during the year, except for the seventh supplemental deed executed on 8th April 2019. Particulars of the service providers Particulars of the Trustee and service providers engaged by the Trustee for the purposes of the Scheme during the year ended 31st December 2019 are set out below. Trustee, Custodian and Administrator HSBC Institutional Trust Services (Asia) Limited 1 Queen’s Road Central Hong Kong Investment Manager FIL Investment Management (Hong Kong) Limited Level 21, Two Pacific Place 88 Queensway, Admiralty Hong Kong Bank The Hongkong and Shanghai Banking Corporation Limited (holding company of the Trustee) HSBC Main Building 1 Queen’s Road Central Hong Kong


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SCHEME REPORT The Trustee hereby submits the scheme report together with the audited financial statements of the Fidelity Retirement Master Trust (the “Scheme”) for the year ended 31st December 2019. The Scheme The Scheme is a master trust scheme for the purpose of providing benefits to members in accordance with the Hong Kong Mandatory Provident Fund Schemes Ordinance (the “Ordinance”). The Scheme is established under the trust deed dated 31st January 2000, as amended, between FIL Investment Management (Hong Kong) Limited 富達基金（香港）有限公司 as investment manager (the “Investment Manager”) and HSBC Institutional Trust Services (Asia) Limited 滙豐機構信託服務(亞洲)有限公司 as trustee (the “Trustee”). The Scheme is registered under Section 21 of the Ordinance. Financial developments The Scheme commenced operations on 1st December 2000. The total contributions received and receivable including transfers in and benefits paid and payable including transfers out during the year were HK$5,095,011,961 (2018: HK$5,196,802,726) and HK$2,846,816,184 (2018: HK$2,848,198,871) respectively. The net asset value as at 31st December 2019 was HK$45,050,271,091 (2018: HK$37,356,748,967). The Scheme had 431,676 (2018: 409,415) members as at 31st December 2019. Changes to the governing rules There have been no changes to the governing rules of the Scheme during the year, except for the seventh supplemental deed executed on 8th April 2019. Particulars of the service providers Particulars of the Trustee and service providers engaged by the Trustee for the purposes of the Scheme during the year ended 31st December 2019 are set out below. Trustee, Custodian and Administrator HSBC Institutional Trust Services (Asia) Limited 1 Queen’s Road Central Hong Kong Investment Manager FIL Investment Management (Hong Kong) Limited Level 21, Two Pacific Place 88 Queensway, Admiralty Hong Kong Bank The Hongkong and Shanghai Banking Corporation Limited (holding company of the Trustee) HSBC Main Building 1 Queen’s Road Central Hong Kong


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SCHEME REPORT Particulars of the service providers (Continued) Legal Adviser Deacons 5th Floor, Alexandra House 18 Chater Road Central, Hong Kong Auditor PricewaterhouseCoopers 22nd Floor, Prince’s Building Central, Hong Kong Directors of the Trustee Gary Jones Mckinny Tsoi Hing Wai Stanley Wong Leong Hong (Independent non-executive director) Renny Ket Liong Lie Ken Jie Philip Andrew Tye (Independent non-executive director) Glenn Ronald Kennedy The business address of the above directors is HSBC Main Building, 1 Queen’s Road Central, Hong Kong. Directors of the Bank Dr Raymond Ch’ien Kuo Fung Victor Li Tzar Kuoi Marjorie Yang Mun Tak (resigned as Director on 4th April 2019) Laura Cha May Lung (appointed as Chairman on 6th December 2019) Peter Wong Tung Shun Mody Zia Graham John Bradley Francis Yeoh Sock Ping Christopher Cheng Wai Chee Irene Lee Yun-Lien Jennifer Li Xinzhe Kevin Anthony Westley Louisa Cheang Wai Wan Choi Yiu Kwan Bin Hwee Quek (née Chua) John Michael Flint (resigned as Director and Chairman on 5th August 2019) The business address of the above directors is HSBC Main Building, 1 Queen’s Road Central, Hong Kong. Further information Scheme members can obtain further information about the Scheme and its operations from the Trustee, the Scheme’s member hotline at 2629 2629 or website at http://www.fidelity.com.hk.


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REPORT OF THE INVESTMENT MANAGER

Annual Report As at 31st December 2019 2019 Global Market Review – Consolidated Manager Report United States Following a difficult 2018, 2019 proved to be a strong year for US equities, which meaningfully outperformed global equities as a whole. Bouts of volatility related to the US-China trade dispute and a slowdown in manufacturing activity held back sentiment intermittently. However, the economic outlook brightened as a trade truce between the US and China seemed increasingly likely, which led to record-breaking advances across major market indices. US President Donald Trump said he would sign a phase-one trade deal with China on January 15, effectively compelling both sides to stop adding to the economic damage they have sustained from the imposition of tariffs. An accommodative monetary policy stance by the US Federal Reserve (Fed) also supported market performance. The central bank implemented rate cuts at its July, September and October meetings. Interestingly, for the first time in over a decade, all the world’s major economic regions were in the throes of an easing monetary policy, with neutral to positive fiscal policy settings across the board. Overall, the US consumer remains a resilient anchor for growth in the region and is becoming increasingly correlated to the state of the economy. Black Friday and Cyber Monday are expected to be the centre of online sales for the holidays, with an estimated growth rate of close to 4% this year. Meanwhile, US politics was in the limelight in December given impeachment proceedings against Trump. The impact on the market was muted, though, as the majority consensus is that Trump will not be impeached by the Senate. In general, all 11 GICS sectors generated positive returns over the year, with sizeable outperformance from information technology (IT) stocks and notably weaker performance from energy. All major style indices benefited during the period, albeit with sizeable outperformance from growth and quality names. Europe European equites rose strongly in 2019, producing the best annual return of the last decade. Performance was broadly driven by the accommodative monetary policy stance adopted by most major global central banks and improving geopolitical conditions towards the end of the year. After the sharp fall in equities in the fourth quarter of 2018, the first four months of 2019 witnessed a strong rebound. Investor sentiment was supported by indications of monetary policy easing from the European Central Bank (ECB) and the US Fed. There was some volatility in the middle of the year, driven by weakening global economic data, uncertainty related to the UK’s exit from the European Union (EU), FY19 corporate earnings downgrades and ongoing trade tensions between the US and China. However, some of these fears reduced towards the end of the year on news of a ‘phase-one’ US-China trade deal, and reduced political uncertainty following the convincing majority secured by the Conservative Party in the UK general election. All sectors ended in positive territory, with IT and industrials among the biggest gainers. Japan Japanese equities rose strongly over the 12-month period, supported by a significant rally in the second half of the year. Signs of easing tensions between the US and China and an accommodative monetary policy stance by global central banks supported investor sentiment. Strength in US economic indicators and record highs for US equity indices in the later part of the year provided additional tailwinds. Market gains were also supported by Prime Minister Shinzo Abe’s announcement of a large fiscal stimulus package in early December to help the Japanese economy overcome the aftermath of recent natural disasters. Corporate earnings held up relatively well, supported by the non-manufacturing sector, which helped to partially offset the negative impact of weak external demand. From a sector perspective, technology, health care and communication services were the biggest gainers, while utilities was the only sector to record negative returns.


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REPORT OF THE INVESTMENT MANAGER

Annual Report As at 31st December 2019 2019 Global Market Review – Consolidated Manager Report United States Following a difficult 2018, 2019 proved to be a strong year for US equities, which meaningfully outperformed global equities as a whole. Bouts of volatility related to the US-China trade dispute and a slowdown in manufacturing activity held back sentiment intermittently. However, the economic outlook brightened as a trade truce between the US and China seemed increasingly likely, which led to record-breaking advances across major market indices. US President Donald Trump said he would sign a phase-one trade deal with China on January 15, effectively compelling both sides to stop adding to the economic damage they have sustained from the imposition of tariffs. An accommodative monetary policy stance by the US Federal Reserve (Fed) also supported market performance. The central bank implemented rate cuts at its July, September and October meetings. Interestingly, for the first time in over a decade, all the world’s major economic regions were in the throes of an easing monetary policy, with neutral to positive fiscal policy settings across the board. Overall, the US consumer remains a resilient anchor for growth in the region and is becoming increasingly correlated to the state of the economy. Black Friday and Cyber Monday are expected to be the centre of online sales for the holidays, with an estimated growth rate of close to 4% this year. Meanwhile, US politics was in the limelight in December given impeachment proceedings against Trump. The impact on the market was muted, though, as the majority consensus is that Trump will not be impeached by the Senate. In general, all 11 GICS sectors generated positive returns over the year, with sizeable outperformance from information technology (IT) stocks and notably weaker performance from energy. All major style indices benefited during the period, albeit with sizeable outperformance from growth and quality names. Europe European equites rose strongly in 2019, producing the best annual return of the last decade. Performance was broadly driven by the accommodative monetary policy stance adopted by most major global central banks and improving geopolitical conditions towards the end of the year. After the sharp fall in equities in the fourth quarter of 2018, the first four months of 2019 witnessed a strong rebound. Investor sentiment was supported by indications of monetary policy easing from the European Central Bank (ECB) and the US Fed. There was some volatility in the middle of the year, driven by weakening global economic data, uncertainty related to the UK’s exit from the European Union (EU), FY19 corporate earnings downgrades and ongoing trade tensions between the US and China. However, some of these fears reduced towards the end of the year on news of a ‘phase-one’ US-China trade deal, and reduced political uncertainty following the convincing majority secured by the Conservative Party in the UK general election. All sectors ended in positive territory, with IT and industrials among the biggest gainers. Japan Japanese equities rose strongly over the 12-month period, supported by a significant rally in the second half of the year. Signs of easing tensions between the US and China and an accommodative monetary policy stance by global central banks supported investor sentiment. Strength in US economic indicators and record highs for US equity indices in the later part of the year provided additional tailwinds. Market gains were also supported by Prime Minister Shinzo Abe’s announcement of a large fiscal stimulus package in early December to help the Japanese economy overcome the aftermath of recent natural disasters. Corporate earnings held up relatively well, supported by the non-manufacturing sector, which helped to partially offset the negative impact of weak external demand. From a sector perspective, technology, health care and communication services were the biggest gainers, while utilities was the only sector to record negative returns.


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REPORT OF THE INVESTMENT MANAGER 2019 Global Market Review – Consolidated Manager Report (Continued) Pacific ex Japan Asia Pacific ex Japan equities delivered strong performance in 2019. Uncertainty around progress on US-China trade talks dominated sentiment over the period. Nevertheless, investor confidence improved towards the end of the period amid monetary policy easing around the globe and optimism around the resumption of US-China trade talks. In key developments, both countries agreed on a ‘phase one’ trade deal that is likely to be signed in January 2020, easing tensions over their 18-month trade war that unnerved financial markets and hurt global economic sentiment. Chinese and Hong Kong equities advanced, primarily driven by growth stocks. Against the backdrop of slowing global economic activity and declining interest rates, investors were keen to find areas of growth, which led to high valuation levels for growth stocks. Chinese policymakers also maintained a pro-growth momentum, and various fiscal and monetary stimulus measures implemented through the year boosted domestic consumption and bolstered business confidence. However, shifting dynamics of US-China trade tensions and weaker domestic demand weighed on the Chinese economy, which grew at its slowest pace in nearly three decades in the third quarter. Taiwanese equities attracted investor interest amid advances in the IT sector. The Taiwanese technology rally was fuelled by an incrementally positive outlook for major technology companies that are exposed to fifth generation (5G) applications. Stock markets gained in Korea towards the end of the year, amid improved sentiment towards the memory chip market. Stock markets in Australia also posted robust returns. Meanwhile, Indian equities underperformed the broader market due to concerns over weak macroeconomic data. All sectors ended the year in positive territory. Of note, IT, consumer discretionary and real estate stocks led gains. Bonds Fixed income markets posted positive returns over a year that was characterised by a changing monetary policy regime as investors grew increasingly concerned over the health of the global economy. Government bond yields slumped to record lows, many of them below zero, as central banks across the world adopted a cautious monetary policy stance, reflecting a combination of weak economic data, tepid inflation forecasts, continued uncertainty over US-China trade negotiations and concerns that the UK may exit the EU without a trade deal. The US Fed cut its interest rate three times by 0.25% each in 2019. Consequently, the 10-year US Treasury yield posted its biggest decline in eight years. However, recessionary fears started to fade and US Treasury yields ended the year higher amid easing concerns over the US-China trade war and as Prime Minister Boris Johnson’s Conservative Party won the general election. The result boosted hopes that the UK will be able to win approval for a draft deal to leave the EU by the extended deadline of 31 January 2020. In credit markets, corporate bond spreads tightened amid investors’ search for yields. Emerging market bonds had a good year, with all three major sub-asset classes posting positive double-digit returns. Lower US Treasury yields along with tighter sovereign and corporate spreads supported hard currency returns. _______________________________________ Director of the Investment Manager For and behalf of FIL Investment Management (Hong Kong) Limited 23rd June 2020


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INVESTMENT REPORT Investment Policies The Scheme commenced operations on 1st December 2000. At 31st December 2019 and during the year, Fidelity Retirement Master Trust is a master trust scheme and offering the following twenty one constituent funds. 1. Asia Pacific Equity Fund 2. Balanced Fund 3. MPF Conservative Fund 4. Capital Stable Fund 5. Fidelity SaveEasy 2020 Fund 6. Fidelity SaveEasy 2025 Fund 7. Fidelity SaveEasy 2030 Fund 8. Fidelity SaveEasy 2035 Fund 9. Fidelity SaveEasy 2040 Fund 10. Fidelity SaveEasy 2045 Fund 11. Fidelity SaveEasy 2050 Fund

12. Global Equity Fund 13. Growth Fund 14. Hong Kong Bond Fund 15. Hong Kong Equity Fund 16. RMB Bond Fund 17. Stable Growth Fund 18. World Bond Fund 19. Fidelity Hong Kong Tracker Fund 20. Core Accumulation Fund 21. Age 65 Plus Fund

All constituent funds except for Fidelity Hong Kong Tracker Fund are feeder funds which invest in approved pooled investment funds managed by the Investment Manager. Fidelity Hong Kong Tracker Fund is a feeder fund which invests in a third party fund namely Tracker Fund of Hong Kong (TraHK) which is an approved index tracking fund structured as a unit trust. Each of the constituent funds is managed in accordance with separate and distinct investment policies reflecting the different risk profiles of the twenty one investment choices as set out below. There have been no changes to the investment objectives and policies during the year which would materially affect the risk attached to the investments of the Scheme. The investment objectives and policies of the constituent funds have been revised with effect from March 2020, please refer to the latest principal brochure for details. The Trustee of the Scheme confirmed that based on the information received from the Investment Manager of the Scheme during the year, to the best of the knowledge and belief of the Trustee, the investment objectives and policies for each constituent fund of the Scheme were complied with. 1. Asia Pacific Equity Fund to act as a feeder fund and invest all of its assets in the Asia Pacific Equity Fund (MPF) of

the Fidelity Global Investment Fund; to focus investment into the equity markets of Asia Pacific;

to produce returns that are related to those achieved on the major stock market indices of Asia Pacific;

to have the flexibility to invest in bonds in a limited manner; to manage the volatility of returns in the short-term. 2. Balanced Fund to act as a feeder fund and invest all of its assets in the Balanced Fund of the Fidelity

Global Investment Fund; to build capital value over the long term; to provide a degree of asset diversification within a predominantly equity portfolio; to maintain a broad geographic diversification with a bias towards Hong Kong; and to manage the volatility of returns in the short-term.


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INVESTMENT REPORT Investment Policies The Scheme commenced operations on 1st December 2000. At 31st December 2019 and during the year, Fidelity Retirement Master Trust is a master trust scheme and offering the following twenty one constituent funds. 1. Asia Pacific Equity Fund 2. Balanced Fund 3. MPF Conservative Fund 4. Capital Stable Fund 5. Fidelity SaveEasy 2020 Fund 6. Fidelity SaveEasy 2025 Fund 7. Fidelity SaveEasy 2030 Fund 8. Fidelity SaveEasy 2035 Fund 9. Fidelity SaveEasy 2040 Fund 10. Fidelity SaveEasy 2045 Fund 11. Fidelity SaveEasy 2050 Fund

12. Global Equity Fund 13. Growth Fund 14. Hong Kong Bond Fund 15. Hong Kong Equity Fund 16. RMB Bond Fund 17. Stable Growth Fund 18. World Bond Fund 19. Fidelity Hong Kong Tracker Fund 20. Core Accumulation Fund 21. Age 65 Plus Fund

All constituent funds except for Fidelity Hong Kong Tracker Fund are feeder funds which invest in approved pooled investment funds managed by the Investment Manager. Fidelity Hong Kong Tracker Fund is a feeder fund which invests in a third party fund namely Tracker Fund of Hong Kong (TraHK) which is an approved index tracking fund structured as a unit trust. Each of the constituent funds is managed in accordance with separate and distinct investment policies reflecting the different risk profiles of the twenty one investment choices as set out below. There have been no changes to the investment objectives and policies during the year which would materially affect the risk attached to the investments of the Scheme. The investment objectives and policies of the constituent funds have been revised with effect from March 2020, please refer to the latest principal brochure for details. The Trustee of the Scheme confirmed that based on the information received from the Investment Manager of the Scheme during the year, to the best of the knowledge and belief of the Trustee, the investment objectives and policies for each constituent fund of the Scheme were complied with. 1. Asia Pacific Equity Fund to act as a feeder fund and invest all of its assets in the Asia Pacific Equity Fund (MPF) of

the Fidelity Global Investment Fund; to focus investment into the equity markets of Asia Pacific;

to produce returns that are related to those achieved on the major stock market indices of Asia Pacific;

to have the flexibility to invest in bonds in a limited manner; to manage the volatility of returns in the short-term. 2. Balanced Fund to act as a feeder fund and invest all of its assets in the Balanced Fund of the Fidelity

Global Investment Fund; to build capital value over the long term; to provide a degree of asset diversification within a predominantly equity portfolio; to maintain a broad geographic diversification with a bias towards Hong Kong; and to manage the volatility of returns in the short-term.


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INVESTMENT REPORT (CONTINUED) 3. MPF Conservative Fund to act as a feeder fund and invest all of its assets in the HK$ Money Fund of the Fidelity

Global Investment Fund; to provide a positive return each month equal to or better than the HKD savings account

rate; to focus investment in HKD short-term instruments; to invest only into HKD securities; and to ensure that there is minimal risk to the capital. 4. Capital Stable Fund to act as a feeder fund and invest all of its assets in the Capital Stable Fund of the Fidelity

Global Investment Fund; to produce a positive return over the long-term; to focus investment towards less volatile assets of bonds and cash whilst retaining some

equity exposure; to maintain a broad geographic diversification with a bias towards Hong Kong; and to ensure that the risk to the capital base is limited in the short-term. 5. Fidelity SaveEasy 2020 Fund to act as a feeder fund and invest all of its assets in the Fidelity SaveEasy 2020 Fund of

the Fidelity Global Investment Fund; to achieve long-term capital growth for investors to 2020; to invest typically in a wide range of investments covering markets throughout the world,

initially with a greater exposure to equities and thereafter, as the year 2020 is approached, greater exposure to bonds and cash;

to maintain an asset allocation appropriate to achieve a combination of income and long-term capital growth as the year 2020 is approached; and

to manage the volatility of returns in the short-term. 6. Fidelity SaveEasy 2025 Fund to act as a feeder fund and invest all of its assets in the Fidelity SaveEasy 2025 Fund of








to manage the volatility of returns in the short-term.


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INVESTMENT REPORT (CONTINUED) 8. Fidelity SaveEasy 2035 Fund to act as a feeder fund and invest all of its assets in the Fidelity SaveEasy 2035 Fund of
















to manage the volatility of returns in the short-term. 12. Global Equity Fund to act as a feeder fund and invest all of its assets in the Global Equity Fund of the Fidelity

Global Investment Fund; to focus investment into the global equity markets; to produce returns that are related to those achieved on the major world stock market

indices; to have the flexibility to have limited investment into bonds; and to manage the volatility of returns in the short-term.


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INVESTMENT REPORT (CONTINUED) 8. Fidelity SaveEasy 2035 Fund to act as a feeder fund and invest all of its assets in the Fidelity SaveEasy 2035 Fund of
















to manage the volatility of returns in the short-term. 12. Global Equity Fund to act as a feeder fund and invest all of its assets in the Global Equity Fund of the Fidelity

Global Investment Fund; to focus investment into the global equity markets; to produce returns that are related to those achieved on the major world stock market



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INVESTMENT REPORT (CONTINUED) 13. Growth Fund to act as a feeder fund and invest all of its assets in the Growth Fund of the Fidelity Global

Investment Fund; to build real wealth over the long-term; to focus investment into the global equity markets; to have the flexibility to invest in global bonds; to maintain a broad geographic diversification with a bias towards Hong Kong; and to manage the volatility of returns in the short-term. 14. Hong Kong Bond Fund to act as a feeder fund and invest all of its assets in the Hong Kong Bond Fund of the

Fidelity Global Investment Fund; to invest in the world bond markets with a focus on HKD denominated bonds and issuers; to produce returns that are related to those achieved on the major bond market indices; to limit the volatility of returns in the short-term in HKD market terms; and to minimise currency volatility by implementing a HKD hedged strategy (where

investments are made other than in HKD). 15. Hong Kong Equity Fund to act as a feeder fund and invest all of its assets in the Hong Kong Equity Fund of the

Fidelity Global Investment Fund; to focus investment into the equity market of Hong Kong, namely equities of companies

listed in Hong Kong (including Greater China companies that are listed in Hong Kong) or companies which have a business connection with Hong Kong (including companies which are listed outside Hong Kong). Companies which have a business connection with Hong Kong include but are not limited to companies that are domiciled or incorporated in Hong Kong;

to produce returns that are related to those achieved on the major stock market indices of Hong Kong;

to have the flexibility to invest in bonds in a limited manner; and to accept a high level of return volatility in the short-term. 16. RMB Bond Fund to act as a feeder fund and invest all of its assets in the RMB Bond Fund (MPF) of the

Fidelity Global Investment Fund; to achieve income and capital appreciation primarily via indirect exposure to RMB

denominated fixed income/debt securities issued or distributed outside Mainland China as well as deposits (including but are not limited to, convertible bonds, corporate bonds, government bonds, commercial papers, medium term notes, floating rate notes, money market instruments, certificates of deposits, bank deposits and negotiated term deposits); and

to limit the volatility of returns in the short term. 17. Stable Growth Fund to act as a feeder fund and invest all of its assets in the Stable Growth Fund of the Fidelity

Global Investment Fund; to generate a positive return over the long-term; to broadly diversify the portfolio as to asset type as between equities and bonds; to maintain a broad geographic diversification with a bias towards Hong Kong; and to limit the volatility of returns in the short-term.


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INVESTMENT REPORT (CONTINUED) 18. World Bond Fund to act as a feeder fund and invest all of its assets in the World Bond Fund of the Fidelity

Global Investment Fund; to focus investment into the bond markets of the world; to produce returns that are related to those achieved on the major bond market indices;

and to limit the volatility of returns in the short-term. 19. Fidelity Hong Kong Tracker Fund to act as a feeder fund and invest all of its assets in the Tracker Fund of Hong Kong

(“TraHK”) to achieve long-term capital growth by investing all or substantially all of the fund assets

into TraHK. 20. Core Accumulation Fund to act as a feeder fund and invest all of its assets in the Core Accumulation Fund of the

Fidelity Global Investment Fund; to achieve capital growth by investing in a globally diversified manner; and to target to invest 60% of its Net Asset Value in higher risk assets (such as global

equities), with the remainder investing in lower risk assets (such as global debt securities, money market instruments and other permissible investments under the General Regulation). The asset allocation to higher risk assets may vary between 55% and 65% due to market movements.

21. Age 65 Plus Fund to act as a feeder fund and invest all of its assets in the Age 65 Plus Fund of the Fidelity

Global Investment Fund; to achieve stable growth by investing in a globally diversified manner; and to target to invest 20% of its Net Asset Value in higher risk assets (such as global



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INVESTMENT REPORT (CONTINUED) 18. World Bond Fund to act as a feeder fund and invest all of its assets in the World Bond Fund of the Fidelity

Global Investment Fund; to focus investment into the bond markets of the world; to produce returns that are related to those achieved on the major bond market indices;

and to limit the volatility of returns in the short-term. 19. Fidelity Hong Kong Tracker Fund to act as a feeder fund and invest all of its assets in the Tracker Fund of Hong Kong

(“TraHK”) to achieve long-term capital growth by investing all or substantially all of the fund assets

into TraHK. 20. Core Accumulation Fund to act as a feeder fund and invest all of its assets in the Core Accumulation Fund of the

Fidelity Global Investment Fund; to achieve capital growth by investing in a globally diversified manner; and to target to invest 60% of its Net Asset Value in higher risk assets (such as global


21. Age 65 Plus Fund to act as a feeder fund and invest all of its assets in the Age 65 Plus Fund of the Fidelity

Global Investment Fund; to achieve stable growth by investing in a globally diversified manner; and to target to invest 20% of its Net Asset Value in higher risk assets (such as global



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INVESTMENT REPORT (CONTINUED) Trustee's Commentary A. Trustee’s commentary on analysis of the investments held by the scheme and supporting information of its commentary

Annualized return (in terms of %) Note 1 1 year 5 years 10 years Since Launch

Asia Pacific Equity Fund Launch date: 07/08/2006

17.52% 6.55% 5.26% 7.57%

Market median (Note 3)

16.70% 5.50% 4.40% N/A (Note 2)

Deviation from the market median

Outperformed Outperformed Outperformed N/A

Trustee’s commentary The fund has outperformed the market median for the 1 year, 5 years and 10 years terms. The fund generated positive returns in 2019. Selected high-quality information technology and health care stocks contributed to the performance, while some of the gains have been offset by the poor performance of certain stocks in the China market. The position in a leading data services provider for artificial intelligence

in Australia has gained as the company’s management has upgraded its profit guidance, supported by its strong execution track record.

The holding in a semiconductor manufacturer has advanced as an improvement in its product mix, component cost declines and efficient cost controls resulted in upbeat earnings.

Balanced Fund Launch date: 01/12/2000

16.32% 4.95% 4.98% 5.36%


14.40% 4.40% 4.40% N/A (Note 2)



Trustee’s commentary The fund has outperformed the market median for the 1 year, 5 years and 10 years terms. The fund generated positive returns in 2019, primarily due to the strong performance of the equity segment. Global financial markets performed strongly, supported by the accommodative monetary policy stance adopted by most major global central banks. Investor sentiment improved further towards the end of the year as the US and China agreed to a “phase one” trade deal and as election results in the UK raised hopes for a smooth exit from the European Union. However, headwinds surrounding the global economy kept markets volatile. Given this backdrop, the underlying holdings in American, Hong Kong and European equity strategies added significant value. The allocation to Japan and other Asia Pacific equity markets also supported performance. Additionally, the exposure to bonds enhanced gains.


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INVESTMENT REPORT (CONTINUED) Trustee's Commentary (Continued) A. Trustee’s commentary on analysis of the investments held by the scheme and supporting information of its commentary


MPF Conservative Fund Launch date: 01/12/2000

0.87% 0.20% 0.10% 0.57%


1.13% 0.35% 0.18% N/A (Note 2)


Underperformed Underperformed Underperformed N/A

Trustee’s commentary While the fund has underperformed the market median in the 1 year, 5 years and 10 years terms, the fund posted positive absolute returns in 2019. The portfolio remains invested in a diversified range of short term, high grade and Hong Kong dollar denominated instruments, including commercial paper and certificates of deposit.

Capital Stable Fund Launch date: 01/12/2000

9.35% 2.85% 3.18% 4.15%


8.70% 2.50% 2.30% N/A (Note 2)





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MPF Conservative Fund Launch date: 01/12/2000

0.87% 0.20% 0.10% 0.57%


1.13% 0.35% 0.18% N/A (Note 2)



Trustee’s commentary While the fund has underperformed the market median in the 1 year, 5 years and 10 years terms, the fund posted positive absolute returns in 2019. The portfolio remains invested in a diversified range of short term, high grade and Hong Kong dollar denominated instruments, including commercial paper and certificates of deposit.

Capital Stable Fund Launch date: 01/12/2000

9.35% 2.85% 3.18% 4.15%


8.70% 2.50% 2.30% N/A (Note 2)





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Fidelity SaveEasy 2020 Fund Launch date: 27/10/2008

13.10% 5.30% 5.39% 8.93%

Benchmark (Note 3)

13.52% 6.59% 6.96% N/A (Note 2)

Deviation from the benchmark


Trustee’s commentary The fund has underperformed the benchmark for the 1 year, 5 years and 10 years terms. Although the fund has underperformed the benchmark, the fund generated positive returns in 2019, primarily due to the strong performance of the equity segment. Global financial markets performed strongly, supported by the accommodative monetary policy stance adopted by most major global central banks. Investor sentiment improved further towards the end of the year as the US and China agreed to a “phase one” trade deal and as election results in the UK raised hopes for a smooth exit from the European Union. However, headwinds surrounding the global economy kept markets volatile. Consequently, the underlying holdings in American, Hong Kong and European equities added significant value. The allocation to Japanese and Asia Pacific equity strategies also supported performance. Additionally, the exposure to bonds enhanced gains.


19.58% 5.95% 5.83% 9.43%

Benchmark (Note 3)

19.18% 7.51% N/A (Note 2) N/A (Note 2)


Outperformed Underperformed N/A N/A

Trustee’s commentary The fund has outperformed the benchmark for 1 year term but has underperformed the benchmark for the 5 years terms. The fund generated positive returns in 2019, primarily due to the strong performance of the equity segment. Global financial markets performed strongly, supported by the accommodative monetary policy stance adopted by most major global central banks. Investor sentiment improved further towards the end of the year as the US and China agreed to a “phase one” trade deal and as election results in the UK raised hopes for a smooth exit from the European Union. However, headwinds surrounding the global economy kept markets volatile. Consequently, the underlying holdings in American, Hong Kong and European equities added significant value. The allocation to Japanese and Asia Pacific equity strategies also supported performance. Additionally, the exposure to bonds enhanced gains.


13




20.79% 6.22% 5.99% 9.60%

Benchmark (Note 3)

20.15% 7.72% 7.60% N/A (Note 2)


Outperformed Underperformed Underperformed N/A

Trustee’s commentary The fund has outperformed the benchmark in 1 year and has underperformed the benchmark in 5 years and 10 years terms. The fund generated positive returns in 2019, primarily due to the strong performance of the equity segment. Global financial markets performed strongly, supported by the accommodative monetary policy stance adopted by most major global central banks. Investor sentiment improved further towards the end of the year as the US and China agreed to a “phase one” trade deal and as election results in the UK raised hopes for a smooth exit from the European Union. However, headwinds surrounding the global economy kept markets volatile. Consequently, the underlying holdings in American, Hong Kong and European equities added significant value. The allocation to Japanese and Asia Pacific equity strategies also supported performance. Additionally, the exposure to bonds enhanced gains.


21.20% 6.26% 6.02% 9.65%

Benchmark (Note 3)

20.57% 7.83% 7.68% N/A (Note 2)





13




20.79% 6.22% 5.99% 9.60%

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20.15% 7.72% 7.60% N/A (Note 2)





21.20% 6.26% 6.02% 9.65%

Benchmark (Note 3)

20.57% 7.83% 7.68% N/A (Note 2)





14




21.43% 6.31% 6.09% 9.78%

Benchmark (Note 3)

20.76% 7.89% 7.71% N/A (Note 2)





21.37% N/A N/A 7.36%

Benchmark (Note 3)

20.90% N/A N/A N/A (Note 2)


Outperformed N/A N/A N/A

Trustee’s commentary The fund has outperformed the benchmark in 1 year term. The fund generated positive returns in 2019, primarily as global equity markets performed strongly, supported by the accommodative monetary policy stance adopted by most major global central banks. Investor sentiment improved further towards the end of the year as the US and China agreed to a “phase one” trade deal and as election results in the UK raised hopes for a smooth exit from the European Union. However, headwinds surrounding the global economy kept markets volatile. Consequently, the underlying holdings in American, Hong Kong and European equities added significant value. The allocation to Japanese and Asia Pacific equity strategies also supported performance. Elsewhere, the marginal exposure to fixed income assets had a neutral impact on returns.


15




21.42% N/A N/A 6.99%

Benchmark (Note 3)

20.92% N/A N/A N/A (Note 2)



Trustee’s commentary The fund has outperformed the benchmark in 1 year term. The fund generated positive returns in 2019, primarily as global equity markets performed strongly, supported by the accommodative monetary policy stance adopted by most major global central banks. Investor sentiment improved further towards the end of the year as the US and China agreed to a “phase one” trade deal and as election results in the UK raised hopes for a smooth exit from the European Union. However, headwinds surrounding the global economy kept markets volatile. Consequently, the underlying holdings in American, Hong Kong and European equities added significant value. The allocation to Japanese and Asia Pacific equity strategies also supported performance.

Global Equity Fund Launch date: 02/07/2003

26.80% 6.53% 7.62% 6.77%


22.10% 6.00% 6.70% N/A (Note 2)



Trustee’s commentary The fund has outperformed the market median in 1 year, 5 years and 10 years terms. The fund generated positive returns in 2019 as global equity markets performed strongly, supported by the accommodative monetary policy stance adopted by most major global central banks. Investor sentiment improved further towards the end of the year as the US and China agreed to a “phase one” trade deal and as election results in the UK raised hopes for a smooth exit from the European Union. However, headwinds surrounding the global economy kept markets volatile. Given this backdrop, the underlying holdings in American and European equity strategies added significant value. The allocation to Japan, Hong Kong and Asia Pacific equity strategies also supported performance.


15




21.42% N/A N/A 6.99%

Benchmark (Note 3)

20.92% N/A N/A N/A (Note 2)



Trustee’s commentary The fund has outperformed the benchmark in 1 year term. The fund generated positive returns in 2019, primarily as global equity markets performed strongly, supported by the accommodative monetary policy stance adopted by most major global central banks. Investor sentiment improved further towards the end of the year as the US and China agreed to a “phase one” trade deal and as election results in the UK raised hopes for a smooth exit from the European Union. However, headwinds surrounding the global economy kept markets volatile. Consequently, the underlying holdings in American, Hong Kong and European equities added significant value. The allocation to Japanese and Asia Pacific equity strategies also supported performance.

Global Equity Fund Launch date: 02/07/2003

26.80% 6.53% 7.62% 6.77%


22.10% 6.00% 6.70% N/A (Note 2)



Trustee’s commentary The fund has outperformed the market median in 1 year, 5 years and 10 years terms. The fund generated positive returns in 2019 as global equity markets performed strongly, supported by the accommodative monetary policy stance adopted by most major global central banks. Investor sentiment improved further towards the end of the year as the US and China agreed to a “phase one” trade deal and as election results in the UK raised hopes for a smooth exit from the European Union. However, headwinds surrounding the global economy kept markets volatile. Given this backdrop, the underlying holdings in American and European equity strategies added significant value. The allocation to Japan, Hong Kong and Asia Pacific equity strategies also supported performance.


16



Growth Fund Launch date: 01/12/2000

19.94% 5.91% 5.79% 5.75%


17.60% 5.10% 4.80% N/A (Note 2)



Trustee’s commentary The fund has outperformed the market median in 1 year, 5 years and 10 years terms. The fund generated positive returns in 2019, primarily due to the strong performance of the equity segment. Global financial markets performed strongly, supported by the accommodative monetary policy stance adopted by most major global central banks. Investor sentiment improved further towards the end of the year as the US and China agreed to a “phase one” trade deal and as election results in the UK raised hopes for a smooth exit from the European Union. However, headwinds surrounding the global economy kept markets volatile. Given this backdrop, the underlying holdings in American, Hong Kong and European equity strategies added significant value. The allocation to Japan and other Asia Pacific equity markets also supported performance. Additionally, the exposure to bonds enhanced gains.

Hong Kong Bond Fund Launch date: 08/07/2003

5.06% 1.89% 2.23% 1.64%


3.00% 1.60% 1.80% N/A (Note 2)



Trustee’s commentary The fund has outperformed the market median in 1 year, 5 years and 10 years terms. The fund posted positive absolute returns in 2019. Coupon income and term structure positioning were the biggest drivers of performance, while credit selection weighed on returns. At a sector level, the allocation to quasi sovereigns and banks and brokers added value. Across the rating spectrum, the exposure to A rated bonds contributed the most to performance.


17



Hong Kong Equity Fund Launch date: 01/12/2000

15.55% 6.35% 4.57% 7.08%


14.40% 5.40% 4.30% N/A (Note 2)



Trustee’s commentary The fund has outperformed the market median in 1 year, 5 years and 10 years terms. The fund generated positive returns in 2019 which was contributed by the performance of the stock selection: Share price of a high-end baijiu maker rose on optimism towards its

earnings outlook, supported by price hikes, an enhanced product mix and growth in sales volumes.

Share price of an e-commerce giant also advanced due to robust e-commerce sales momentum from its strong platform power, efficiency gains in its ecosystem and potential margin expansion in its new retail business are likely to buoy its profitability.

Position on a sportswear brand manufacturer also gained as the robust performance of its wholesale and e-commerce segments should enhance its profitability. Productivity gains and better operating leverage in its retail segment are further expected to support its earnings growth momentum.

Price of an integrated oilfield services provider also rose on expectations of higher utilisation levels at its drilling segment and new product launches in its well services segment.

Price of a construction equipment manufacturer gained in light of strength in its concrete machinery, truck crane, tower crane and excavator segments.

The positive returns was partially offset by the poor performance of a Chinese train manufacturer which share price fell amid concerns over subdued locomotive demand, increased warranty provisions and limited earnings contribution from its insulated-gate bipolar transistor business.

RMB Bond Fund Launch date: 16/05/2016

3.61% N/A N/A 1.38%


1.50% N/A N/A N/A (Note 2)



Trustee’s commentary The fund has outperformed the market median in 1 year term. The fund generated positive returns in 2019. Stable coupon income and term structure positioning supported performance. Specifically, coupon income from offshore renminbi denominated bonds enhanced gains. However, unfavourable currency movements weighed on returns. The offshore renminbi depreciated against the Hong Kong dollar, the fund’s reporting currency, which weighed on returns. At a sector level, the allocation to quasi-sovereign bonds and banks and brokers added value. From a credit perspective, the exposure to an Indian company and Chinese government bonds contributed the most to returns. The fund’s offshore renminbi and US dollar duration positioning supported performance. Across the rating spectrum, the allocation to BBB rated bonds added the most value.


17



Hong Kong Equity Fund Launch date: 01/12/2000

15.55% 6.35% 4.57% 7.08%


14.40% 5.40% 4.30% N/A (Note 2)



Trustee’s commentary The fund has outperformed the market median in 1 year, 5 years and 10 years terms. The fund generated positive returns in 2019 which was contributed by the performance of the stock selection: Share price of a high-end baijiu maker rose on optimism towards its

earnings outlook, supported by price hikes, an enhanced product mix and growth in sales volumes.

Share price of an e-commerce giant also advanced due to robust e-commerce sales momentum from its strong platform power, efficiency gains in its ecosystem and potential margin expansion in its new retail business are likely to buoy its profitability.

Position on a sportswear brand manufacturer also gained as the robust performance of its wholesale and e-commerce segments should enhance its profitability. Productivity gains and better operating leverage in its retail segment are further expected to support its earnings growth momentum.

Price of an integrated oilfield services provider also rose on expectations of higher utilisation levels at its drilling segment and new product launches in its well services segment.

Price of a construction equipment manufacturer gained in light of strength in its concrete machinery, truck crane, tower crane and excavator segments.

The positive returns was partially offset by the poor performance of a Chinese train manufacturer which share price fell amid concerns over subdued locomotive demand, increased warranty provisions and limited earnings contribution from its insulated-gate bipolar transistor business.

RMB Bond Fund Launch date: 16/05/2016

3.61% N/A N/A 1.38%


1.50% N/A N/A N/A (Note 2)



Trustee’s commentary The fund has outperformed the market median in 1 year term. The fund generated positive returns in 2019. Stable coupon income and term structure positioning supported performance. Specifically, coupon income from offshore renminbi denominated bonds enhanced gains. However, unfavourable currency movements weighed on returns. The offshore renminbi depreciated against the Hong Kong dollar, the fund’s reporting currency, which weighed on returns. At a sector level, the allocation to quasi-sovereign bonds and banks and brokers added value. From a credit perspective, the exposure to an Indian company and Chinese government bonds contributed the most to returns. The fund’s offshore renminbi and US dollar duration positioning supported performance. Across the rating spectrum, the allocation to BBB rated bonds added the most value.


18



Stable Growth Fund Launch date: 01/12/2000

12.89% 3.99% 4.21% 4.87%


11.60% 3.40% 3.50% N/A (Note 2)



Trustee’s commentary The fund has outperformed the market median in 1 year, 5 years and 10 years terms The fund generated positive returns in 2019, primarily due to the strong performance of the equity segment. Global financial markets performed strongly, supported by the accommodative monetary policy stance adopted by most major global central banks. Investor sentiment improved further towards the end of the year as the US and China agreed to a “phase one” trade deal and as election results in the UK raised hopes for a smooth exit from the European Union. However, headwinds surrounding the global economy kept markets volatile. Given this backdrop, the underlying holdings in American, Hong Kong and European equity strategies added significant value. The allocation to Japan and other Asia Pacific equity markets also supported performance. Additionally, the exposure to bonds enhanced gains.

World Bond Fund Launch date: 08/07/2003

4.75% 1.39% 2.15% 2.42%


5.00% 0.80% 1.30% N/A (Note 2)


Underperformed Outperformed Outperformed N/A

Trustee’s commentary The fund has underperformed the market median in 1 year term and has outperformed the market median in 5 years and 10 years terms. The fund posted positive returns in 2019. Interest rate risk exposure supported performance as core government bond yields fell to record lows in 2019. Against this backdrop, the skew towards US dollar duration (a measure of sensitivity to interest rate changes) was the most significant contributor to returns. The fund’s credit strategy also supported performance amid the broad-based tightening of global credit spreads as investors searched for yields. Global central banks adopted an accommodative monetary policy stance in response to deteriorating growth prospects, resulting in global government bond yields touching record lows. Consequently, the exposure to investment grade bonds benefited from positive correlation to rates and diminishing concerns regarding the fallen angel (bonds that were previously investment grade but have since been reduced to high yield status) cycle. The exposure to the consumer cyclicals, non-cyclicals and financials sectors added value.


19



Fidelity Hong Kong Tracker Fund Launch date: 28/06/2013

12.07% 6.12% N/A 6.45%

Benchmark (Note 3)

12.10% 6.10% N/A N/A (Note 2)


In-line In-line N/A N/A

Trustee’s commentary The performance of the fund was in-line with the performance of the underlying index for the 1 year and 5 years terms.

Core Accumulation Fund Launch date: 01/04/2017

17.19% N/A N/A 7.01%

Benchmark (Note 3)

17.03% N/A N/A 7.17%


Outperformed N/A N/A Underperformed

Trustee’s commentary The fund has outperformed the performance of the Reference Portfolio as recognised by the Authority in 1 year term but have underperformed when compared to performance since launch of the fund. The fund generated positive returns in 2019. The significant allocation to the underlying global equity strategy contributed to returns as accommodative monetary policies globally supported investor sentiment towards risk assets. Sentiment improved further towards the end of the year as the US and China agreed to a “phase one” trade deal and as election results in the UK raised hopes for a smooth exit from the European Union. The allocation to the underlying global government bond strategy also supported performance. Government bond yields fell to record lows, as central banks across the world adopted a cautious monetary policy stance amid concerns over risks surrounding the global economy.


19



Fidelity Hong Kong Tracker Fund Launch date: 28/06/2013

12.07% 6.12% N/A 6.45%

Benchmark (Note 3)

12.10% 6.10% N/A N/A (Note 2)


In-line In-line N/A N/A

Trustee’s commentary The performance of the fund was in-line with the performance of the underlying index for the 1 year and 5 years terms.

Core Accumulation Fund Launch date: 01/04/2017

17.19% N/A N/A 7.01%

Benchmark (Note 3)

17.03% N/A N/A 7.17%


Outperformed N/A N/A Underperformed

Trustee’s commentary The fund has outperformed the performance of the Reference Portfolio as recognised by the Authority in 1 year term but have underperformed when compared to performance since launch of the fund. The fund generated positive returns in 2019. The significant allocation to the underlying global equity strategy contributed to returns as accommodative monetary policies globally supported investor sentiment towards risk assets. Sentiment improved further towards the end of the year as the US and China agreed to a “phase one” trade deal and as election results in the UK raised hopes for a smooth exit from the European Union. The allocation to the underlying global government bond strategy also supported performance. Government bond yields fell to record lows, as central banks across the world adopted a cautious monetary policy stance amid concerns over risks surrounding the global economy.


20



Age 65 Plus Fund Launch date: 01/04/2017

9.63% N/A N/A 3.89%

Benchmark (Note 3)

9.63% N/A N/A 4.18%


In-line N/A N/A Underperformed

Trustee’s commentary The fund’s performance was in-line with the performance of the Reference Portfolio as recognised by the Authority in 1 year term but has underperformed the performance of the Reference Portfolio since launch. The fund generated positive returns in 2019. The significant allocation to the underlying global government bond strategy supported performance. Government bond yields fell to record lows, as central banks across the world adopted a cautious monetary policy stance amid concerns over risks surrounding the global economy. The holding in the underlying global equity strategy also contributed to returns as accommodative monetary policies globally supported investor sentiment towards risk assets. Sentiment improved further towards the end of the year as the US and China agreed to a “phase one” trade deal and as election results in the UK raised hopes for a smooth exit from the European Union.

B. Supporting information in relation to trustee’s assessment framework for deriving its commentary and trustee’s

action, if any, to address its concerns raised in its commentary in Section A

There is an Investment Committee in place to review the investment performance of the funds on a regular basis. The Investment Committee is a sub-committee of the Board of HSBC Institutional Trust Services (Asia) Limited where it is chaired by an independent director. The investment performance was being monitored and explanations will be obtained from managers if necessary. During the year ended 2019, all of the funds delivered positive returns. While some of the funds have under-performed the market median, most of the funds have out-performed the market median. Based on the performance of the funds, no change on the structure of the funds would be necessary. HTHK will continuously monitor the performance of the funds and will take proper action when necessary. Note 1: The annualized returns and the benchmark returns are obtained from the Willis Towers Watson MPF Performance Book. Note 2: No benchmark information was provided in the Willis Towers Watson MPF Performance Book. Note 3: For the constituent funds under the Default Investment Strategy that is, the Core Accumulation Fund and the Age 65 Plus Fund, the benchmark represented the performance of the Reference Portfolio. For the SaveEasy Fund series, the benchmarks were provided by Wills Towers Watson. For the remaining constituent funds, the information represented the performance of the market median provided by Wills Towers Watson.

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ne

t app

reci

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n/(d

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of i

nves

tmen

t (4

,272

,222

) (3

,983

,717

) (3

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,413

) (4

,413

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,016

,136

) (3

,598

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Cap

ital a

ppre

ciat

ion/

(dep

reci

atio

n) o

f in

vest

men

t - r

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ed a

nd u

nrea

lised

1 49

,342

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2,01

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03

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16

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682,

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65

,844

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Valu

e of

the

Sche

me

asse

ts d

eriv

ed fr

om

inve

stm

ents

39

6,67

7,41

9 33

7,08

0,52

1 34

1,18

7,15

0 34

9,67

7,64

2 26

7,74

8,27

0 29

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4,76

3

Net

ass

et v

alue

per

uni

t 26

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23

.003

24

.770

27

.387

22

.903

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.004

Tota

l net

ass

et v

alue

39

6,26

9,30

5 33

6,72

8,63

5 34

0,83

1,08

3 34

9,24

8,99

1 26

7,40

4,66

7 29

0,99

0,03

4

Hig

hest

issu

e pr

ice

per u

nit

26.0

63

26.2

81

24.7

72

27.4

06

28.0

60

26.0

06

Lo

wes

t red

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pric

e pe

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t 22

.867

22

.740

20

.071

22

.573

22

.492

20

.323

Net

ann

ualis

ed in

vest

men

t ret

urn2 (

%)

13.0

98

(7.1

34)

23.5

84

19.5

78

(11.

925)

28

.136

1

The

cons

titue

nt fu

nd is

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ch in

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an

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oved

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led

inve

stm

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g th

e ye

ar e

nded

31s

t D

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2019

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ere

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no

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ion

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me

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ent f

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Net

ann

ual i

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repr

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e un

it pr

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ar.

FID

ELIT

Y R

ETIR

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T M

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rd fo

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yea

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t Dec

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ontin

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lity

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203

0 Fu

nd

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lity

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203

5 Fu

nd

20

19

2018

20

17

2019

20

18

2017

HK$

H

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HK$

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K$

HK$

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N

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) (5

,321

,636

) (4

,693

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ital a

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ciat

ion/

(dep

reci

atio

n) o

f in

vest

men

t - r

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nrea

lised

1 77

,775

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(4

3,61

1,37

0)

84,3

81,4

46

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91

,023

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Valu

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the

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asse

ts d

eriv

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om

inve

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42

8,30

4,38

1 33

6,52

4,72

6 36

0,08

7,21

0 45

5,24

2,61

2 35

0,89

8,32

2 38

5,77

4,44

2

Net

ass

et v

alue

per

uni

t 27

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23

.078

26

.451

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.029

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.127

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.600

Tota

l net

ass

et v

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42

7,77

8,55

1 33

6,09

3,51

0 35

9,63

8,42

5 45

4,68

6,15

1 35

0,44

7,76

2 38

5,29

3,11

2

Hig

hest

issu

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per u

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27.8

96

28.6

37

26.4

53

28.0

33

28.8

23

26.6

02

Lo

wes

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r uni

t 22

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22

.636

20

.425

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.720

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.669

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.497

Net

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vest

men

t ret

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%)

20.7

95

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29

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1 Th

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19,

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FID

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yea

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t Dec

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9 (C

ontin

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lity

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204

0 Fu

nd

Fide

lity

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204

5 Fu

nd

20

19

2018

20

17

2019

20

18

2017

HK$

H

K$

HK$

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K$

HK$

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9,67

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C

apita

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236,

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Va

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6 1,

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1,13

4,56

5,18

3 10

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8 55

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Net

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23

.386

26

.952

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.388

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Tota

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260,

531,

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1,01

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6,46

9 1,

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102,

109,

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55,3

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H

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.955

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Low

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22.9

75

22.9

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20.7

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10.8

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Net

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21.4

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.215

21

.367

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8)

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1 Th

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FID

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t Dec

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9 (C

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205

0 Fu

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Glo

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quity

Fun

d

2019

20

18

2017

20

19

2018

20

17

H

K$

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Net

inco

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C

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Va

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186,

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68,5

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3,97

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6,98

3 2,

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9,47

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Net

ass

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uni

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.197

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.869

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.547

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.478

23

.248

26

.162

Tota

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18

6,55

8,34

7 10

3,14

1,98

1 68

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2,73

9,70

0,65

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H

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pric

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.199

13

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12

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.536

27

.967

26

.206

Low

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per u

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10.6

71

10.6

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9.67

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22

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21

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Net

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21.4

19

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.007

26

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1 Th

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.

FID

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RU

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ST D

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STM

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Gro

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Bon

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20

19

2018

20

17

2019

20

18

2017

HK$

H

K$

HK$

H

K$

HK$

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K$

N

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com

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stm

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(85,

584,

223)

(8

5,81

1,19

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(81,

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746)

(1

3,22

7,25

1)

(10,

765,

811)

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Cap

ital a

ppre

ciat

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(dep

reci

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f in

vest

men

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- r

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nd u

nrea

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1 1,

195,

173,

349

(688

,377

,277

) 1,

531,

590,

602

68,8

31,3

10

16,2

13,0

19

34,5

81,0

83

Va

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of th

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sets

der

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in

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men

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6,66

0,55

1,22

5 5,

563,

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399

6,52

5,73

2,19

7 1,

227,

433,

978

1,00

5,51

9,23

3 90

2,10

5,57

6

Net

ass

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alue

per

uni

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.066

24

.234

27

.636

13

.084

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.454

12

.393

Tota

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ass

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6,

651,

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5,55

6,26

9,64

1 6,

517,

066,

339

1,22

6,17

7,59

1 1,

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497,

757

901,

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296

H

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pric

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13

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12

.454

12

.620

Low

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per u

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23.8

65

23.7

79

21.5

75

12.4

45

12.0

78

11.9

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N

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inve

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3.42

2 1

The

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titue

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Net

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ual i

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tmen

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e un

it pr

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FID

ELIT

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9

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Hon

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Fun

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Fun

d

2019

20

18

2017

20

19

2018

20

17

H

K$

HK$

H

K$

HK$

H

K$

HK$

Net

inco

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) exc

ludi

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net a

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f inv

estm

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(92,

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(9

5,35

7,28

9)

(91,

251,

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,608

) (1

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28,9

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C

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stm

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- rea

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unr

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1,03

6,09

9,29

2 (8

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48,7

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2,35

7,21

9,80

5 8,

594,

625

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723

Va

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der

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men

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6,96

8,42

0,74

7 6,

134,

047,

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7,45

3,30

5,08

9 21

4,49

5,54

0 16

2,40

1,36

9 82

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Net

ass

et v

alue

per

uni

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.890

31

.926

36

.804

10

.508

10

.142

10

.174

Tota

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ass

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6,

959,

588,

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6,12

5,92

1,74

8 7,

443,

865,

304

214,

270,

532

162,

224,

262

82,6

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H

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.756

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.793

36

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.204

Low

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21.8

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21.7

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30,9

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14

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18.7

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204

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.397

17

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Lo

wes

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ion

pric

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.628

19

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19

.249

17

.357

14

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13

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13

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N

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nnua

lised

inve

stm

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etur

n1 (%

) 0.

818

(1.8

31)

1.56

9 17

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18

.246

(1

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8)

11.6

97

1 N

et a

nnua

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perc

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pric

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FID

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16

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2 20

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20

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H

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204

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.306

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n pr

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per u

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8.38

8 9.

537

- -

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-

N

et a

nnua

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stm

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n1 (%

) 0.

163

(2.1

40)

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delit

y Sa

veEa

sy 2

050

Fund

Hig

hest

issu

e pr

ice

per u

nit

10.1

38

10.0

10

- -

- -

-

Lo

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pric

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278

9.47

6 -

- -

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ann

ualis

ed in

vest

men

t ret

urn1 (

%)

(0.5

36)

(2.9

70)

- -

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loba

l Equ

ity F

und

H

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st is

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pric

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t 22

.099

23

.116

21

.939

20

.566

16

.630

16

.958

15

.850

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pric

e pe

r uni

t 18

.888

19

.909

19

.508

16

.806

14

.004

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.757

12

.638

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nnua

lised

inve

stm

ent r

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n1 (%

) 2.

361

(0.6

47)

4.46

9 24

.930

16

.595

(1

0.92

1)

12.0

85

1 N

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nnua

l inv

estm

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pres

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perc

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year

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the

first

fina

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l per

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of F

idel

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2045

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d an

d Fi

delit

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d (2

3rd

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embe

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5 to

31s

t Dec

embe

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5), t

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ctua

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inve

stm

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sho

wn.

2

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45 F

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and

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unch

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n 23

rd N

ovem

ber 2

015.

FID

ELIT

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EMEN

T M

ASTE

R T

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for t

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nded

/at 3

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20

16

2015

20

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20

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20

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wth

Fun

d

Hig

hest

issu

e pr

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per u

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22.5

91

24.6

77

22.6

71

21.4

84

18.4

21

19.2

39

18.4

89

Low

est r

edem

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per u

nit

18.5

81

20.0

59

20.1

62

18.2

74

15.4

63

14.4

45

14.7

63

Net

ann

ualis

ed in

vest

men

t ret

urn1 (

%)

0.68

2 (1

.894

) 1.

522

17.2

32

16.7

48

(14.

523)

10

.954

H

ong

Kon

g B

ond

Fund

Hig

hest

issu

e pr

ice

per u

nit

12.5

70

12.2

02

12.0

00

11.9

25

11.8

73

11.5

96

11.1

71

Low

est r

edem

ptio

n pr

ice

per u

nit

11.9

25

11.8

91

11.4

16

11.2

40

11.3

83

10.7

82

10.4

52

Net

ann

ualis

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vest

men

t ret

urn1 (

%)

(0.8

93)

1.49

4 3.

935

(3.3

64)

3.96

2 4.

988

3.56

4

H

ong

Kon

g Eq

uity

Fun

d

Hig

hest

issu

e pr

ice

per u

nit

28.5

97

33.1

99

28.3

06

26.8

37

24.4

27

27.2

27

27.7

28

Low

est r

edem

ptio

n pr

ice

per u

nit

21.2

43

23.9

54

24.0

56

22.0

80

19.6

83

18.2

19

20.2

01

Net

ann

ualis

ed in

vest

men

t ret

urn1 (

%)

0.68

6 (4

.891

) 3.

068

7.69

7 20

.654

(2

2.31

9)

10.4

01

1 N

et a

nnua

l inv

estm

ent r

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n re

pres

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the

perc

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hang

e in

the

unit

pric

e du

ring

the

year

.

FID

ELIT

Y R

ETIR

EMEN

T M

ASTE

R T

RU

ST

AS A

T 31

ST D

ECEM

BER

201

9

37

INVE

STM

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REP

OR

T (C

ON

TIN

UED

) Pe

rfor

man

ce re

cord

for t

he y

ear e

nded

/at 3

1st D

ecem

ber 2

019

20

16

2015

20

14

2013

2 20

12

2011

20

10

H

K$

HK$

H

K$

HK$

H

K$

HK$

H

K$

Stab

le G

row

th F

und

H

ighe

st is

sue

pric

e pe

r uni

t 21

.144

21

.845

21

.019

20

.098

18

.567

18

.473

18

.055

Lo

wes

t red

empt

ion

pric

e pe

r uni

t 18

.615

19

.273

19

.463

18

.146

16

.594

15

.907

15

.364

N

et a

nnua

lised

inve

stm

ent r

etur

n1 (%

) 1.

072

(2.5

80)

1.45

3 8.

597

11.5

08

(6.5

22)

8.11

1 W

orld

Bon

d Fu

nd

H

ighe

st is

sue

pric

e pe

r uni

t 14

.490

13

.910

14

.224

13

.918

13

.898

13

.479

13

.028

Lo

wes

t red

empt

ion

pric

e pe

r uni

t 13

.300

13

.208

13

.512

13

.191

13

.073

12

.322

11

.852

N

et a

nnua

lised

inve

stm

ent r

etur

n1 (%

) 1.

654

(3.9

08)

2.14

7 (2

.201

) 5.

264

5.07

6 4.

478

Fide

lity

Hon

g K

ong

Trac

ker F

und

H

ighe

st is

sue

pric

e pe

r uni

t 11

.895

13

.422

11

.907

11

.098

-

- -

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est r

edem

ptio

n pr

ice

per u

nit

8.85

3 9.

926

9.80

0 9.

951

- -

-

N

et a

nnua

lised

inve

stm

ent r

etur

n1 (%

) 2.

575

(5.3

75)

3.96

8 7.

360

- -

- 1

Net

ann

ual i

nves

tmen

t ret

urn

repr

esen

ts th

e pe

rcen

tage

cha

nge

in th

e un

it pr

ice

durin

g th

e ye

ar. F

or th

e fir

st fi

nanc

ial p

erio

d of

Fid

elity

Hon

g K

ong

Trac

ker F

und

(2

8th

June

201

3 to

31s

t Dec

embe

r 201

3), t

he a

ctua

l net

inve

stm

ent r

etur

n is

sho

wn.

2

Fide

lity

Hon

g Ko

ng T

rack

er F

und

was

laun

ched

on

28th

Jun

e 20

13.


38

INVESTMENT REPORT (CONTINUED) Distribution of constituent funds As at 31st December 2019, 2018 and 2017, the contributions received, net of expenses, were allocated to the Scheme’s constituent funds as follows: Net asset value 2019 2018 2017 HK$ HK$ HK$ Asia Pacific Equity Fund 3,567,935,850 2,918,144,393 3,342,695,966 Balanced Fund 4,388,694,697 3,737,025,741 4,223,420,967 MPF Conservative Fund 4,527,813,969 4,280,102,406 3,224,547,037 Capital Stable Fund 2,099,160,172 1,790,558,236 1,752,370,509 Fidelity SaveEasy 2020 Fund 396,269,305 336,728,635 340,831,083 Fidelity SaveEasy 2025 Fund 349,248,991 267,404,667 290,990,034 Fidelity SaveEasy 2030 Fund 427,778,551 336,093,510 359,638,425 Fidelity SaveEasy 2035 Fund 454,686,151 350,447,762 385,293,112 Fidelity SaveEasy 2040 Fund 1,260,531,730 1,012,516,469 1,133,160,861 Fidelity SaveEasy 2045 Fund 102,109,814 55,378,917 42,221,093 Fidelity SaveEasy 2050 Fund 186,558,347 103,141,981 68,435,280 Global Equity Fund 3,971,551,400 2,739,700,650 3,075,507,322 Growth Fund 6,651,845,340 5,556,269,641 6,517,066,339 Hong Kong Bond Fund 1,226,177,591 1,004,497,757 901,163,296 Hong Kong Equity Fund 6,959,588,023 6,125,921,748 7,443,865,304 RMB Bond Fund 214,270,532 162,224,262 82,639,190 Stable Growth Fund 3,641,980,936 3,070,550,862 3,199,908,149 World Bond Fund 1,342,750,138 1,030,633,890 874,059,175 Fidelity Hong Kong Tracker Fund 1,315,606,719 937,379,681 831,481,627 Core Accumulation Fund1 1,294,096,815 659,946,107 457,771,555 Age 65 Plus Fund1 370,223,071 175,852,428 86,199,111 ──────────── ──────────── ──────────── 44,748,878,142 36,650,519,743 38,633,265,435 ════════════ ════════════ ════════════ 1 The constituent funds were launched on 1st April 2017.


39

INVESTMENT REPORT (CONTINUED) Distribution of constituent funds (Continued) As at 31st December 2019, 2018 and 2017, the contributions received were allocated to the Scheme’s constituent funds as follows:

% of the total investments of the Scheme

2019 2018 2017 Asia Pacific Equity Fund 8.0% 8.0% 8.6% Balanced Fund 9.8% 10.2% 10.9% MPF Conservative Fund 10.1% 11.7% 8.3% Capital Stable Fund 4.7% 4.9% 4.5% Fidelity SaveEasy 2020 Fund 0.9% 0.9% 0.9% Fidelity SaveEasy 2025 Fund 0.8% 0.7% 0.8% Fidelity SaveEasy 2030 Fund 1.0% 0.9% 0.9% Fidelity SaveEasy 2035 Fund 1.0% 0.9% 1.0% Fidelity SaveEasy 2040 Fund 2.8% 2.8% 2.9% Fidelity SaveEasy 2045 Fund 0.2% 0.1% 0.1% Fidelity SaveEasy 2050 Fund 0.4% 0.3% 0.2% Global Equity Fund 8.9% 7.5% 8.0% Growth Fund 14.9% 15.2% 16.9% Hong Kong Bond Fund 2.7% 2.7% 2.3% Hong Kong Equity Fund 15.6% 16.7% 19.3% RMB Bond Fund 0.5% 0.4% 0.2% Stable Growth Fund 8.1% 8.4% 8.3% World Bond Fund 3.0% 2.8% 2.3% Fidelity Hong Kong Tracker Fund 2.9% 2.6% 2.2% Core Accumulation Fund1 2.9% 1.8% 1.2% Age 65 Plus Fund1 0.8% 0.5% 0.2% ────── ────── ────── 100.0% 100.0% 100.0% ══════ ══════ ══════ 1 The constituent funds were launched on 1st April 2017.


39

INVESTMENT REPORT (CONTINUED) Distribution of constituent funds (Continued) As at 31st December 2019, 2018 and 2017, the contributions received were allocated to the Scheme’s constituent funds as follows:

% of the total investments of the Scheme

2019 2018 2017 Asia Pacific Equity Fund 8.0% 8.0% 8.6% Balanced Fund 9.8% 10.2% 10.9% MPF Conservative Fund 10.1% 11.7% 8.3% Capital Stable Fund 4.7% 4.9% 4.5% Fidelity SaveEasy 2020 Fund 0.9% 0.9% 0.9% Fidelity SaveEasy 2025 Fund 0.8% 0.7% 0.8% Fidelity SaveEasy 2030 Fund 1.0% 0.9% 0.9% Fidelity SaveEasy 2035 Fund 1.0% 0.9% 1.0% Fidelity SaveEasy 2040 Fund 2.8% 2.8% 2.9% Fidelity SaveEasy 2045 Fund 0.2% 0.1% 0.1% Fidelity SaveEasy 2050 Fund 0.4% 0.3% 0.2% Global Equity Fund 8.9% 7.5% 8.0% Growth Fund 14.9% 15.2% 16.9% Hong Kong Bond Fund 2.7% 2.7% 2.3% Hong Kong Equity Fund 15.6% 16.7% 19.3% RMB Bond Fund 0.5% 0.4% 0.2% Stable Growth Fund 8.1% 8.4% 8.3% World Bond Fund 3.0% 2.8% 2.3% Fidelity Hong Kong Tracker Fund 2.9% 2.6% 2.2% Core Accumulation Fund1 2.9% 1.8% 1.2% Age 65 Plus Fund1 0.8% 0.5% 0.2% ────── ────── ────── 100.0% 100.0% 100.0% ══════ ══════ ══════ 1 The constituent funds were launched on 1st April 2017.

FID

ELIT

Y R

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T M

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R T

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ST

AS A

T 31

ST D

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BER

201

9

40

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STM

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T (C

ON

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) In

vest

men

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tfolio

at 3

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Nam

e of

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Q

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d in

vest

men

ts

Hol

ding

s U

nits

M

arke

t val

ue

HK

$ C

ost

HK

$ %

of n

et

asse

ts

Asia

Pac

ific

Equ

ity F

und

Fide

lity

Glo

bal I

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tmen

t Fun

d

- Asi

a Pa

cific

Equ

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und

(MPF

)

- Cla

ss B

20

2,05

2,01

5.47

9 3,

572,

279,

634

2,61

0,18

2,78

4 10

0.12

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Bala

nced

Fun

d Fi

delit

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255,

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7,87

9 3,

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13

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403,

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Cap

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d

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14

4,95

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1.88

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202

0 Fu

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22,3

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32.8

62

396,

677,

419

317,

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534

100.

10

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delit

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18

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9,67

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FID

ELIT

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T M

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R T

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ST

AS A

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ST D

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201

9

41

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STM

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vest

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at 3

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s U

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203

0 Fu

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22,6

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428,

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322,

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100.

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delit

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204

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66,3

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8,66

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204

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7,12

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5,96

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13

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G

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FID

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44

INVESTMENT REPORT (CONTINUED) Statement of movements in portfolio holdings

Year ended

31st December

2019

Year ended

31st December

2018

Name of the Fund Quoted investments % of net

assets % of net

assets Asia Pacific Equity Fund Fidelity Global Investment Fund

- Asia Pacific Equity Fund (MPF)

- Class B 100.12 100.13 Balanced Fund Fidelity Global Investment Fund - Balanced Fund - Class B 100.13 100.14 MPF Conservative Fund Fidelity Global Investment Fund - HK$ Money Fund - Class M 99.51 99.59 Capital Stable Fund Fidelity Global Investment Fund - Capital Stable Fund - Class B 100.13 100.13 Fidelity SaveEasy 2020 Fund Fidelity Global Investment Fund

- Fidelity SaveEasy 2020 Fund - Class B 100.10 100.10

Fidelity SaveEasy 2025 Fund Fidelity Global Investment Fund

- Fidelity SaveEasy 2025 Fund

- Class B 100.12 100.13 Fidelity SaveEasy 2030 Fund Fidelity Global Investment Fund


- Class B 100.12 100.13 Fidelity SaveEasy 2035 Fund Fidelity Global Investment Fund








Global Equity Fund Fidelity Global Investment Fund - Global Equity Fund - Class B 100.12 100.13 Growth Fund Fidelity Global Investment Fund - Growth Fund - Class B 100.13 100.14


45

INVESTMENT REPORT (CONTINUED) Statement of movements in portfolio holdings (Continued)

Year ended

31st December

2019

Year ended

31st December

2018


assets % of net

assets Hong Kong Bond Fund Fidelity Global Investment Fund - Hong Kong Bond Fund - Class B 100.10 100.10 Hong Kong Equity Fund Fidelity Global Investment Fund - Hong Kong Equity Fund - Class B 100.13 100.13 RMB Bond Fund Fidelity Global Investment Fund - RMB Bond Fund (MPF) - Class B 100.11 100.11 Stable Growth Fund Fidelity Global Investment Fund - Stable Growth Fund - Class B 100.13 100.13 World Bond Fund Fidelity Global Investment Fund - World Bond Fund - Class B 100.12 100.12 Fidelity Hong Kong Tracker Fund Tracker Fund of Hong Kong 99.92 99.77 - (TraHK) Core Accumulation Fund Fidelity Global Investment Fund - Core Accumulation Fund - Class A 100.06 100.06 Age 65 Plus Fund Fidelity Global Investment Fund - Age 65 Plus Fund - Class A 100.06 100.06


45

INVESTMENT REPORT (CONTINUED) Statement of movements in portfolio holdings (Continued)

Year ended

31st December

2019

Year ended

31st December

2018


assets % of net

assets Hong Kong Bond Fund Fidelity Global Investment Fund - Hong Kong Bond Fund - Class B 100.10 100.10 Hong Kong Equity Fund Fidelity Global Investment Fund - Hong Kong Equity Fund - Class B 100.13 100.13 RMB Bond Fund Fidelity Global Investment Fund - RMB Bond Fund (MPF) - Class B 100.11 100.11 Stable Growth Fund Fidelity Global Investment Fund - Stable Growth Fund - Class B 100.13 100.13 World Bond Fund Fidelity Global Investment Fund - World Bond Fund - Class B 100.12 100.12 Fidelity Hong Kong Tracker Fund Tracker Fund of Hong Kong 99.92 99.77 - (TraHK) Core Accumulation Fund Fidelity Global Investment Fund - Core Accumulation Fund - Class A 100.06 100.06 Age 65 Plus Fund Fidelity Global Investment Fund - Age 65 Plus Fund - Class A 100.06 100.06

46

INDEPENDENT AUDITOR’S REPORT TO THE TRUSTEE OF FIDELITY RETIREMENT MASTER TRUST (THE “SCHEME”) Report on the Audit of the Financial Statements Opinion What we have audited The financial statements of the Scheme and Age 65 Plus Fund, Asia Pacific Equity Fund, Balanced Fund, Capital Stable Fund, Core Accumulation Fund, Fidelity SaveEasy 2020 Fund, Fidelity SaveEasy 2025 Fund, Fidelity SaveEasy 2030 Fund, Fidelity SaveEasy 2035 Fund, Fidelity SaveEasy 2040 Fund, Fidelity SaveEasy 2045 Fund, Fidelity SaveEasy 2050 Fund, Global Equity Fund, Growth Fund, Hong Kong Bond Fund, Hong Kong Equity Fund, RMB Bond Fund, Stable Growth Fund, MPF Conservative Fund, World Bond Fund and Fidelity Hong Kong Tracker Fund (each a separate constituent fund of the Scheme and referred to individually or collectively as the “constituent funds”) set out on pages 50 to 173, which comprise: the Statement of Net Assets Available for Benefits of the Scheme and the Statement of

Net Assets of each of its constituent funds as at 31st December 2019;

the Statement of Comprehensive Income of each of the constituent funds and for the year then ended;

the Statement of Changes in Net Assets Available for Benefits of the Scheme and the Statement of Changes in Equity of each of the constituent funds for the year then ended;

the Statement of Cash Flows of the Scheme and each of the constituent funds for the year then ended; and

the notes to the financial statements, which include a summary of significant accounting

policies. Our opinion In our opinion, the financial statements give a true and fair view of the financial position of the Scheme and each of its constituent funds as at 31st December 2019, and of their financial transactions and cash flows for the year then ended in accordance with Hong Kong Financial Reporting Standards ("HKFRSs") issued by the Hong Kong Institute of Certified Public Accountants ("HKICPA"). Basis for Opinion We conducted our audit in accordance with Hong Kong Standards on Auditing ("HKSAs") and with reference to Practice Note 860.1 (Revised), “The Audit of Retirement Schemes” issued by the HKICPA. Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Independence We are independent of the Scheme and each of its constituent funds in accordance with the HKICPA's Code of Ethics for Professional Accountants (the “Code"), and we have fulfilled our other ethical responsibilities in accordance with the Code.

47

INDEPENDENT AUDITOR’S REPORT TO THE TRUSTEE OF FIDELITY RETIREMENT MASTER TRUST (THE “SCHEME”) (CONTINUED) Other Information The Trustee is responsible for the other information. The other information comprises all of the information included in the annual report other than the financial statements and our auditor’s report thereon. Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon. In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. Responsibilities of the Trustee for the Financial Statements The Trustee is responsible for the preparation of financial statements that give a true and fair view in accordance with HKFRSs issued by the HKICPA, and for such internal control as the Trustee determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the Trustee is responsible for assessing the Scheme’s and each of its constituent funds’ ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Trustee either intends to liquidate the Scheme and its constituent funds or to cease operations, or have no realistic alternative but to do so. In addition, the Trustee is required to ensure that the financial statements have been properly prepared in accordance with sections 80, 81, 83 and 84 of the Hong Kong Mandatory Provident Fund Schemes (General) Regulation (the "General Regulation").

47

INDEPENDENT AUDITOR’S REPORT TO THE TRUSTEE OF FIDELITY RETIREMENT MASTER TRUST (THE “SCHEME”) (CONTINUED) Other Information The Trustee is responsible for the other information. The other information comprises all of the information included in the annual report other than the financial statements and our auditor’s report thereon. Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon. In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. Responsibilities of the Trustee for the Financial Statements The Trustee is responsible for the preparation of financial statements that give a true and fair view in accordance with HKFRSs issued by the HKICPA, and for such internal control as the Trustee determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the Trustee is responsible for assessing the Scheme’s and each of its constituent funds’ ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Trustee either intends to liquidate the Scheme and its constituent funds or to cease operations, or have no realistic alternative but to do so. In addition, the Trustee is required to ensure that the financial statements have been properly prepared in accordance with sections 80, 81, 83 and 84 of the Hong Kong Mandatory Provident Fund Schemes (General) Regulation (the "General Regulation").

48

INDEPENDENT AUDITOR’S REPORT TO THE TRUSTEE OF FIDELITY RETIREMENT MASTER TRUST (THE “SCHEME”) (CONTINUED) Auditor’s Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. We report our opinion solely to you, as a body, in accordance with section 102 of the General Regulation, and for no other purpose. We do not assume responsibility towards or accept liability to any other person for the contents of this report. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with HKSAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. In addition, we are required to assess whether the financial statements of the Scheme and each of its constituent funds have been properly prepared, in all material respects, in accordance with sections 80, 81, 83 and 84 of the General Regulation. As part of an audit in accordance with HKSAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also: Identify and assess the risks of material misstatement of the financial statements, whether

due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Scheme's and its constituent funds’ internal control.

Evaluate the appropriateness of accounting policies used and the reasonableness of

accounting estimates and related disclosures made by the Trustee.

Conclude on the appropriateness of the Trustee's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Scheme's and its constituent funds’ ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Scheme and its constituent funds to cease to continue as a going concern.

Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

We communicate with the Trustee regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

49

INDEPENDENT AUDITOR’S REPORT TO THE TRUSTEE OF FIDELITY RETIREMENT MASTER TRUST (THE “SCHEME”) (CONTINUED) Report on Matters under the General Regulation a. In our opinion, the financial statements of the Scheme and each of its constituent funds

have been properly prepared, in all material respects, in accordance with sections 80, 81, 83 and 84 of the General Regulation.

b. We have obtained all the information and explanations which, to the best of our knowledge

and belief, are necessary for the purpose of our audit. PricewaterhouseCoopers Certified Public Accountants Hong Kong, 23rd June 2020

49

INDEPENDENT AUDITOR’S REPORT TO THE TRUSTEE OF FIDELITY RETIREMENT MASTER TRUST (THE “SCHEME”) (CONTINUED) Report on Matters under the General Regulation a. In our opinion, the financial statements of the Scheme and each of its constituent funds

have been properly prepared, in all material respects, in accordance with sections 80, 81, 83 and 84 of the General Regulation.

b. We have obtained all the information and explanations which, to the best of our knowledge

and belief, are necessary for the purpose of our audit. PricewaterhouseCoopers Certified Public Accountants Hong Kong, 23rd June 2020


50

STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS - MASTER TRUST SCHEME Note 2019 2018 HK$ HK$ Assets Current assets

Financial assets at fair value through profit or loss 8 44,748,878,142 36,650,519,743

Amounts receivable on redemption of units in constituent funds 31,088,686 18,041,097

Contributions receivable From employers 202,052,412 659,437,899 From members 197,267,265 131,148,380 Other receivables 4 418 Cash and cash equivalents 13 170,276,239 146,978,470

──────────── ──────────── Total assets 45,349,562,748 37,606,126,007 ---------------------- ---------------------- Liabilities Current liabilities

Other payables 14,599,230 12,906,663 Benefits payable 150,481,897 127,293,682 Forfeitures payable 134,210,530 109,176,695

──────────── ──────────── Total liabilities 299,291,657 249,377,040 ---------------------- ---------------------- Net assets available for benefits

attributable to members 45,050,271,091 37,356,748,967 ════════════ ════════════ On behalf of HSBC Institutional Trust Services (Asia) Limited 滙豐機構信託服務(亞洲)有限公司 ................................................. .................................................... Gary Jones - Director Glenn Ronald Kennedy - Director 23rd June 2020

The notes on page 86 to 173 are an integral part of these financial statements.


51

STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS - MASTER TRUST SCHEME Note 2019 2018 HK$ HK$ Income

Net realised gains on redemption of units in constituent funds 1,060,580,744 1,692,611,069

Change in unrealised gains/losses in value of constituent funds 4,455,940,274 (5,325,056,505)

Other income - 256,049 Interest on bank deposits 13 149,644 47,725

──────────── ──────────── Total income/(loss) 5,516,670,662 (3,632,141,662) Expenses

Administrative expenses 4,731 302,323 ──────────── ──────────── Total net income/(loss) 5,516,665,931 (3,632,443,985) ---------------------- ---------------------- Contributions received and receivable 6 From employers

Mandatory 1,702,953,845 1,549,064,050 Additional voluntary 783,006,855 718,479,441

From members


Contribution surcharge received and

receivable 310,393 408,107 Transfers in 797,997,824 1,290,644,764 ──────────── ──────────── 5,095,322,354 5,197,210,833 ---------------------- ---------------------- Benefits paid and payable 7

Retirement 240,045,537 211,439,825 Early retirement 94,749,767 100,843,736 Death 32,443,534 31,174,731 Permanent departure from Hong Kong 253,429,639 210,942,587 Total incapacity 2,639,920 6,855,427 Small balance (per S.165 of the General Regulation) 14,168 10,178

Terminal illness 633,796 1,442,981 Refund of additional voluntary contributions to leavers 189,330,885 162,775,808



51

STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS - MASTER TRUST SCHEME Note 2019 2018 HK$ HK$ Income

Net realised gains on redemption of units in constituent funds 1,060,580,744 1,692,611,069

Change in unrealised gains/losses in value of constituent funds 4,455,940,274 (5,325,056,505)

Other income - 256,049 Interest on bank deposits 13 149,644 47,725

──────────── ──────────── Total income/(loss) 5,516,670,662 (3,632,141,662) Expenses

Administrative expenses 4,731 302,323 ──────────── ──────────── Total net income/(loss) 5,516,665,931 (3,632,443,985) ---------------------- ---------------------- Contributions received and receivable 6 From employers


From members


Contribution surcharge received and

receivable 310,393 408,107 Transfers in 797,997,824 1,290,644,764 ──────────── ──────────── 5,095,322,354 5,197,210,833 ---------------------- ---------------------- Benefits paid and payable 7

Retirement 240,045,537 211,439,825 Early retirement 94,749,767 100,843,736 Death 32,443,534 31,174,731 Permanent departure from Hong Kong 253,429,639 210,942,587 Total incapacity 2,639,920 6,855,427 Small balance (per S.165 of the General Regulation) 14,168 10,178

Terminal illness 633,796 1,442,981 Refund of additional voluntary contributions to leavers 189,330,885 162,775,808



52

STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS - MASTER TRUST SCHEME (CONTINUED) 2019 2018 HK$ HK$ Transfers out 2,033,528,938 2,122,713,598 Forfeitures 71,649,977 79,723,117 ──────────── ──────────── 2,918,466,161 2,927,921,988 ---------------------- ---------------------- Increase/(decrease) in net assets

available for benefits attributable to members 7,693,522,124 (1,363,155,140)

Net assets available for benefits

attributable to members at the beginning of the year

– Members’ accounts 37,356,748,967 38,719,904,107 ──────────── ──────────── Net assets available for benefits attributable to members at the end

of the year – Members’ accounts 45,050,271,091 37,356,748,967

════════════ ════════════



53

STATEMENT OF CASH FLOWS - MASTER TRUST SCHEME 2019 2018 HK$ HK$ Cash flows from operating activities Net income/(loss) 5,516,665,931 (3,632,443,985)

Net change in investments in constituent funds (8,098,358,399) 1,982,745,692 Net change in amounts receivable on redemption of

units in constituent funds (13,047,589) 14,740,805 Net change in other receivables 414 (340) Net change in other payables 1,692,567 3,661,732 ──────────── ────────────

Net cash used in operating activities (2,593,047,076) (1,631,296,096) --------------------- --------------------- Cash flows from financing activities Contributions, transfers in and others received 5,486,588,956 4,701,368,549 Benefits, transfers out, forfeitures and others paid (2,870,244,111) (3,088,020,992) ──────────── ──────────── Net cash generated from financing activities 2,616,344,845 1,613,347,557 --------------------- --------------------- Net increase/(decrease) in cash and cash equivalents 23,297,769 (17,948,539) Cash and cash equivalents at beginning of the year 146,978,470 164,927,009 ──────────── ──────────── Cash and cash equivalents at end of the year 170,276,239 146,978,470 ════════════ ════════════ Analysis of cash and cash equivalents: Cash and bank deposits (representing cash and

bank deposits with original maturity of 3 months or less) 170,276,239 146,978,470

════════════ ════════════



53

STATEMENT OF CASH FLOWS - MASTER TRUST SCHEME 2019 2018 HK$ HK$ Cash flows from operating activities Net income/(loss) 5,516,665,931 (3,632,443,985)

Net change in investments in constituent funds (8,098,358,399) 1,982,745,692 Net change in amounts receivable on redemption of

units in constituent funds (13,047,589) 14,740,805 Net change in other receivables 414 (340) Net change in other payables 1,692,567 3,661,732 ──────────── ────────────

Net cash used in operating activities (2,593,047,076) (1,631,296,096) --------------------- --------------------- Cash flows from financing activities Contributions, transfers in and others received 5,486,588,956 4,701,368,549 Benefits, transfers out, forfeitures and others paid (2,870,244,111) (3,088,020,992) ──────────── ──────────── Net cash generated from financing activities 2,616,344,845 1,613,347,557 --------------------- --------------------- Net increase/(decrease) in cash and cash equivalents 23,297,769 (17,948,539) Cash and cash equivalents at beginning of the year 146,978,470 164,927,009 ──────────── ──────────── Cash and cash equivalents at end of the year 170,276,239 146,978,470 ════════════ ════════════ Analysis of cash and cash equivalents: Cash and bank deposits (representing cash and

bank deposits with original maturity of 3 months or less) 170,276,239 146,978,470

════════════ ════════════


FID

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Tota

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═════════════

═════════════

═════════════

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lenn

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ald

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edy

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ctor

23

rd J

une

2020

The

note

s on

pag

e 86

to 1

73 a

re a

n in

tegr

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se fi

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═════════════

═════════════

═════════════

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On

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edy

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23

rd J

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The

note

s on

pag

e 86

to 1

73 a

re a

n in

tegr

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se fi

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Tota

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═════════════

═════════════

═════════════

═════════════

═════════════

═════════════

On

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lf of

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lenn

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Kenn

edy

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23

rd J

une

2020

The

note

s on

pag

e 86

to 1

73 a

re a

n in

tegr

al p

art o

f the

se fi

nanc

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tate

men

ts.

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═════════════

═════════════

═════════════

═════════════

═════════════

═════════════

On

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lf of

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nes

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lenn

Ron

ald

Kenn

edy

- Dire

ctor

23

rd J

une

2020

The

note

s on

pag

e 86

to 1

73 a

re a

n in

tegr

al p

art o

f the

se fi

nanc

ial s

tate

men

ts.

FID

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─────────────

─────────────

─────────────

─────────────

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Tota

l lia

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ies

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Eq

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═════════════

═════════════

═════════════

═════════════

═════════════

═════════════

On

beha

lf of

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Inst

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vice

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Gar

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nes

- Dire

ctor

G

lenn

Ron

ald

Kenn

edy

- Dire

ctor

23

rd J

une

2020

The

note

s on

pag

e 86

to 1

73 a

re a

n in

tegr

al p

art o

f the

se fi

nanc

ial s

tate

men

ts.

FID

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─────────────

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Tota

l lia

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4,

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------

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Equi

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890

═════════════

═════════════

═════════════

═════════════

═════════════

═════════════

On

beha

lf of

HS

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Inst

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Ser

vice

s (A

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Gar

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nes

- Dire

ctor

G

lenn

Ron

ald

Kenn

edy

- Dire

ctor

23

rd J

une

2020

The

note

s on

pag

e 86

to 1

73 a

re a

n in

tegr

al p

art o

f the

se fi

nanc

ial s

tate

men

ts.

FID

ELIT

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ETIR

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5 Am

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ceiv

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on

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─────────────

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Tota

l ass

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1,

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2

---

-----

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Li

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Am

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─────────────

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─────────────

─────────────

─────────────

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Tota

l lia

bilit

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10

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------

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Equi

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N

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═════════════

═════════════

═════════════

═════════════

═════════════

═════════════

On

beha

lf of

HS

BC

Inst

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Ser

vice

s (A

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Gar

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nes

- Dire

ctor

G

lenn

Ron

ald

Kenn

edy

- Dire

ctor

23

rd J

une

2020

The

note

s on

pag

e 86

to 1

73 a

re a

n in

tegr

al p

art o

f the

se fi

nanc

ial s

tate

men

ts.

FID

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ETIR

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---

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═════════════

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On

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Gar

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nes

- Dire

ctor

G

lenn

Ron

ald

Kenn

edy

- Dire

ctor

23

rd J

une

2020

The

note

s on

pag

e 86

to 1

73 a

re a

n in

tegr

al p

art o

f the

se fi

nanc

ial s

tate

men

ts.

FID

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Tota

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567,

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------

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Expe

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───────────

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---

-----

-----

-----

--

------

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To

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═══════════

═══════════

═══════════

═══════════

═══════════

═══════════

The

note

s on

pag

e 86

to 1

73 a

re a

n in

tegr

al p

art o

f the

se fi

nanc

ial s

tate

men

ts.

FID

ELIT

Y R

ETIR

EMEN

T M

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RU

ST

YEAR

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DED

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BER

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loss

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221

212

112

105

98

101

───────────

───────────

───────────

───────────

───────────

───────────

Tota

l net

inco

me/

(loss

)

201,

008,

621

(63,

243,

697)

49

,342

,192

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2,01

9,43

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59,1

59,6

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---

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───────────

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───────────

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Tota

l ope

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To

tal c

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173,

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54,7

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═══════════

═══════════

═══════════

═══════════

═══════════

═══════════

Th

e no

tes

on p

age

86 to

173

are

an

inte

gral

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hese

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2 11

5 11

5 11

6 16

0 17

3

───────────

───────────

───────────

───────────

───────────

───────────

Tota

l net

inco

me/

(loss

)

77,7

75,6

74

(43,

611,

255)

82

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6,30

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───────────

───────────

───────────

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Tota

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To

tal c

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)

72,3

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59

(48,

692,

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76

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(5

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820

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)

═══════════

═══════════

═══════════

═══════════

═══════════

═══════════

The

note

s on

pag

e 86

to 1

73 a

re a

n in

tegr

al p

art o

f the

se fi

nanc

ial s

tate

men

ts.

FID

ELIT

Y R

ETIR

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T M

ASTE

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RU

ST

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DED

31S

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BER

201

9

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VE IN

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40

40

55

55

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380

───────────

───────────

───────────

───────────

───────────

───────────

Tota

l net

inco

me/

(loss

)

16,1

61,1

87

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85,6

87)

29,1

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02

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───────────

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═══════════

═══════════

═══════════

═══════════

═══════════

═══════════

Th

e no

tes

on p

age

86 to

173

are

an

inte

gral

par

t of t

hese

fina

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tem

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.

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───────────

───────────

───────────

───────────

───────────

───────────

Tota

l net

inco

me/

(loss

)

1,19

5,17

3,71

5 (6

88,3

76,9

04)

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To

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me/

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═══════════

═══════════

═══════════

═══════════

═══════════

═══════════

The

note

s on

pag

e 86

to 1

73 a

re a

n in

tegr

al p

art o

f the

se fi

nanc

ial s

tate

men

ts.

FID

ELIT

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RU

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───────────

───────────

───────────

───────────

───────────

───────────

Tota

l net

inco

me/

(loss

)

9,08

2,18

4 (2

97,4

23)

453,

983,

060

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-----

-----

-----

--

Expe

nses

Inve

stm

ent m

anag

emen

t fee

s 5

1,46

2,48

4 1,

227,

476

25,6

08,3

19

24,0

68,6

75

8,96

3,53

2 7,

400,

339

Lega

l and

oth

er p

rofe

ssio

nal f

ees

3,

468

399

62,2

30

7,72

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,085

2,

383

Inde

mni

ty in

sura

nce

59

6 29

6 11

,268

11

,452

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9 A

dmin

istra

tion

fees

5

1,16

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udito

r’s re

mun

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11

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25

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ount

ing

fees

5

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09

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dlin

g fe

es

5 57

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57

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59

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58

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er e

xpen

ses

57

,587

36

,709

79

5,13

5 57

6,16

8 26

6,78

2 17

7,35

0

───────────

───────────

───────────

───────────

───────────

───────────

Tota

l ope

ratin

g ex

pens

es

2,

758,

167

2,31

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7 47

,145

,218

44

,108

,224

16

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13

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---

-----

-----

-----

--

------

-----

-----

----

---

-----

-----

-----

--

------

-----

-----

----

---

-----

-----

-----

--

------

-----

-----

----

To

tal c

ompr

ehen

sive

inco

me/

(loss

)

6,32

4,01

7 (2

,611

,150

) 40

6,83

7,84

2 (2

40,3

60,1

94)

49,5

23,3

51

(8,7

47,1

03)

═══════════

═══════════

═══════════

═══════════

═══════════

═══════════

The

note

s on

pag

e 86

to 1

73 a

re a

n in

tegr

al p

art o

f the

se fi

nanc

ial s

tate

men

ts.

FID

ELIT

Y R

ETIR

EMEN

T M

ASTE

R T

RU

ST

YEAR

EN

DED

31S

T D

ECEM

BER

201

9

68

STAT

EMEN

T O

F C

OM

PREH

ENSI

VE IN

CO

ME

- CO

NST

ITU

ENT

FUN

DS

(CO

NTI

NU

ED)

Fide

lity

Hon

g K

ong

Trac

ker F

und

Cor

e A

ccum

ulat

ion

Fund

A

ge 6

5 P

lus

Fund

20

091

Not

e 20

19

2018

20

19

2018

20

19

2018

H

K$

HK

$ H

K$

HK

$ H

K$

HK

$

In

com

e

Inte

rest

on

bank

dep

osits

13

5,

769

2,07

2 8

2 3

1 D

ivid

ends

40,2

52,7

85

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71,2

50

- -

- -

Rea

lised

gai

ns/(l

osse

s) o

n sa

les

of fi

nanc

ial

asse

ts a

t fai

r val

ue th

roug

h pr

ofit

or lo

ss

9,

517,

108

18,6

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29

11,4

05,5

95

5,04

3,53

3 4,

577,

819

450,

553

Cha

nge

in u

nrea

lised

gai

ns/lo

sses

on

finan

cial

as

sets

at f

air v

alue

thro

ugh

prof

it or

loss

84,7

74,2

42

(150

,215

,304

) 14

9,10

5,67

8 (4

1,29

2,81

3)

20,5

21,5

75

(2,0

04,2

86)

Net

fore

ign

curre

ncy

gain

s/(lo

sses

)

(167

) (1

03)

- -

- -

Oth

er in

com

e

164

166

130

94

84

53

───────────

───────────

───────────

───────────

───────────

───────────

Tota

l net

inco

me/

(loss

)

134,

549,

901

(100

,433

,190

) 16

0,51

1,41

1 (3

6,24

9,18

4)

25,0

99,4

81

(1,5

53,6

79)

------

-----

-----

----

---

-----

-----

-----

--

------

-----

-----

----

---

-----

-----

-----

--

------

-----

-----

----

---

-----

-----

-----

--

Expe

nses

Lega

l and

oth

er p

rofe

ssio

nal f

ees

20

,699

2,

097

17,0

20

1,26

4 4,

548

294

Inde

mni

ty in

sura

nce

3,

435

2,97

8 2,

421

1,64

0 64

5 30

2 A

dmin

istra

tion

fees

5

7,01

9,95

2 5,

445,

299

6,15

0,85

7 3,

459,

038

1,67

2,21

7 81

8,78

9 A

udito

r’s re

mun

erat

ion

11

34,4

61

36,2

45

31,1

04

29,6

78

8,47

5 6,

145

Acc

ount

ing

fees

5

8,02

8 7,

542

7,25

4 7,

012

1,97

8 1,

458

Han

dlin

g fe

es

5 82

,747

81

,756

58

,440

58

,260

54

,360

49

,500

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ansa

ctio

n fe

es

13

1,25

7,67

4 1,

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todi

an fe

es

25

7,36

8 25

0,03

1 -

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-

Oth

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xpen

ses

64

1,79

6 62

0,31

4 21

0,83

1 81

,234

64

,230

28

,803

───────────

───────────

───────────

───────────

───────────

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Tota

l ope

ratin

g ex

pens

es

9,

326,

160

7,51

3,01

5 6,

477,

927

3,63

8,12

6 1,

806,

453

905,

291

───────────

───────────

───────────

───────────

───────────

───────────

Ope

ratin

g pr

ofits

125,

223,

741

(107

,946

,205

) 15

4,03

3,48

4 (3

9,88

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0)

23,2

93,0

28

(2,4

58,9

70)

------

-----

-----

----

---

-----

-----

-----

--

------

-----

-----

----

---

-----

-----

-----

--

------

-----

-----

----

---

-----

-----

-----

--

Fina

nce

cost

Inte

rest

exp

ense

13

1,

329

- -

- -

-

───────────

───────────

───────────

───────────

───────────

───────────

Tota

l com

preh

ensi

ve in

com

e/(lo

ss)

12

5,22

2,41

2 (1

07,9

46,2

05)

154,

033,

484

(39,

887,

310)

23

,293

,028

(2

,458

,970

)

═══════════

═══════════

═══════════

═══════════

═══════════

═══════════

The

note

s on

pag

e 86

to 1

73 a

re a

n in

tegr

al p

art o

f the

se fi

nanc

ial s

tate

men

ts.

FID

ELIT

Y R

ETIR

EMEN

T M

ASTE

R T

RU

ST

YEAR

EN

DED

31S

T D

ECEM

BER

201

9

69

STAT

EMEN

T O

F C

OM

PREH

ENSI

VE IN

CO

ME

- CO

NST

ITU

ENT

FUN

DS

(CO

NTI

NU

ED)

Tota

l 20

091

Not

e 20

19

2018

H

K$

HK

$

In

com

e

Inte

rest

on

bank

dep

osits

13

7,

948

2,77

5 D

ivid

ends

40,2

52,7

85

31,1

71,2

50

Rea

lised

gai

ns/(l

osse

s) o

n sa

les

of fi

nanc

ial a

sset

s at

fair

valu

e th

roug

h pr

ofit

or lo

ss

1,

300,

783,

733

1,89

7,45

4,37

2 C

hang

e in

unr

ealis

ed g

ains

/loss

es o

n fin

anci

al a

sset

s at

fair

valu

e th

roug

h pr

ofit

or lo

ss

4,

708,

490,

832

(5,0

45,8

73,5

70)

Net

fore

ign

curre

ncy

gain

s/(lo

sses

)

(167

) (1

03)

Rei

mbu

rsem

ent i

ncom

e

13

-

32,3

97

Reb

ate

inco

me

5,13

10

,137

,014

8,

650,

575

Oth

er in

com

e

4,11

6 4,

065

───────────

───────────

Tota

l net

inco

me/

(loss

)

6,05

9,67

6,26

1 (3

,108

,558

,239

)

---

-----

-----

-----

--

------

-----

-----

----

Ex

pens

es

In

vest

men

t man

agem

ent f

ees

5 27

5,67

7,28

1 26

7,26

4,35

3 Le

gal a

nd o

ther

pro

fess

iona

l fee

s

753,

201

95,0

80

Inde

mni

ty in

sura

nce

13

4,43

9 14

5,40

4 A

dmin

istra

tion

fees

5

252,

206,

172

244,

226,

308

Aud

itor’s

rem

uner

atio

n

11

1,

177,

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1,46

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7 A

ccou

ntin

g fe

es

5 27

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5 29

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2 H

andl

ing

fees

5

1,19

8,98

7 1,

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396

Tran

sact

ion

fees

13

1,

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3

Cus

todi

an fe

es

25

7,36

8 25

0,03

1

Oth

er e

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ses

10

,216

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7,

890,

523

───────────

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Tota

l ope

ratin

g ex

pens

es

54

3,15

3,91

4 52

3,88

7,19

7

───────────

───────────

Ope

ratin

g pr

ofits

5,51

6,52

2,34

7 (3

,632

,445

,436

)

---

-----

-----

-----

--

------

-----

-----

----

Fi

nanc

e co

st

In

tere

st e

xpen

se

13

1,32

9 -

───────────

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Tota

l com

preh

ensi

ve in

com

e/(lo

ss)

5,

516,

521,

018

(3,6

32,4

45,4

36)

═══════════

═══════════

Th

e no

tes

on p

age

86 to

173

are

an

inte

gral

par

t of t

hese

fina

ncia

l sta

tem

ents

.

FID

ELIT

Y R

ETIR

EMEN

T M

ASTE

R T

RU

ST

YEAR

EN

DED

31S

T D

ECEM

BER

201

9

70

STAT

EMEN

T O

F C

HAN

GES

IN E

QU

ITY

- CO

NST

ITU

ENT

FUN

DS

Asi

a P

acifi

c E

quity

Fun

d B

alan

ced

Fund

M

PF

Con

serv

ativ

e Fu

nd

2009

1 N

ote

2019

20

18

2019

20

18

2019

20

18

HK

$ H

K$

HK

$ H

K$

HK

$ H

K$

Bal

ance

at t

he b

egin

ning

of t

he y

ear

2,

918,

144,

393

3,34

2,69

5,96

6 3,

737,

025,

741

4,22

3,42

0,96

7 4,

280,

102,

406

3,22

4,54

7,03

7

P

roce

eds

from

sub

scrip

tion

of u

nits

3

607,

057,

902

573,

383,

392

460,

676,

979

470,

950,

960

2,20

0,01

9,15

8 3,

061,

942,

039

Pay

men

ts o

n re

dem

ptio

n of

uni

ts

3 (4

79,8

18,2

64)

(624

,228

,961

) (4

23,0

89,5

76)

(554

,305

,417

) (1

,991

,129

,132

) (2

,011

,051

,594

)

───────────

───────────

───────────

───────────

───────────

───────────

Net

incr

ease

/(dec

reas

e) fr

om u

nits

tr

ansa

ctio

ns

12

7,23

9,63

8 (5

0,84

5,56

9)

37,5

87,4

03

(83,

354,

457)

20

8,89

0,02

6 1,

050,

890,

445

------

-----

-----

----

---

-----

-----

-----

--

------

-----

-----

----

---

-----

-----

-----

--

------

-----

-----

----

---

-----

-----

-----

--

Tota

l com

preh

ensi

ve in

com

e/(lo

ss)

52

2,55

1,81

9 (3

73,7

06,0

04)

614,

081,

553

(403

,040

,769

) 38

,821

,537

4,

664,

924

------

-----

-----

----

---

-----

-----

-----

--

------

-----

-----

----

---

-----

-----

-----

--

------

-----

-----

----

---

-----

-----

-----

--

Bal

ance

at t

he e

nd o

f the

yea

r

3,56

7,93

5,85

0 2,

918,

144,

393

4,38

8,69

4,69

7 3,

737,

025,

741

4,52

7,81

3,96

9 4,

280,

102,

406

═══════════

═══════════

═══════════

═══════════

═══════════

═══════════

The

note

s on

pag

e 86

to 1

73 a

re a

n in

tegr

al p

art o

f the

se fi

nanc

ial s

tate

men

ts.

FID

ELIT

Y R

ETIR

EMEN

T M

ASTE

R T

RU

ST

YEAR

EN

DED

31S

T D

ECEM

BER

201

9

71

STAT

EMEN

T O

F C

HAN

GES

IN E

QU

ITY

- CO

NST

ITU

ENT

FUN

DS

(CO

NTI

NU

ED)

Cap

ital S

tabl

e Fu

nd

Fide

lity

Sav

eEas

y 20

20 F

und

Fide

lity

Sav

eEas

y 20

25 F

und

2009

1 N

ote

2019

20

18

2019

20

18

2019

20

18

HK

$ H

K$

HK

$ H

K$

HK

$ H

K$

Bal

ance

at t

he b

egin

ning

of t

he y

ear

1,

790,

558,

236

1,75

2,37

0,50

9 33

6,72

8,63

5 34

0,83

1,08

3 26

7,40

4,66

7 29

0,99

0,03

4

P

roce

eds

from

sub

scrip

tion

of u

nits

3

416,

960,

517

483,

742,

135

71,0

40,9

44

98,9

53,1

40

68,3

47,1

68

71,6

12,2

95

Pay

men

ts o

n re

dem

ptio

n of

uni

ts

3 (2

82,0

23,0

16)

(357

,343

,331

) (5

6,57

0,13

2)

(77,

052,

329)

(4

1,24

8,85

4)

(59,

499,

171)

───────────

───────────

───────────

───────────

───────────

───────────

Net

incr

ease

/(dec

reas

e) fr

om u

nits

tr

ansa

ctio

ns

13

4,93

7,50

1 12

6,39

8,80

4 14

,470

,812

21

,900

,811

27

,098

,314

12

,113

,124

---

-----

-----

-----

--

------

-----

-----

----

---

-----

-----

-----

--

------

-----

-----

----

---

-----

-----

-----

--

------

-----

-----

----

To

tal c

ompr

ehen

sive

inco

me/

(loss

)

173,

664,

435

(88,

211,

077)

45

,069

,858

(2

6,00

3,25

9)

54,7

46,0

10

(35,

698,

491)

---

-----

-----

-----

--

------

-----

-----

----

---

-----

-----

-----

--

------

-----

-----

----

---

-----

-----

-----

--

------

-----

-----

----

B

alan

ce a

t the

end

of t

he y

ear

2,

099,

160,

172

1,79

0,55

8,23

6 39

6,26

9,30

5 33

6,72

8,63

5 34

9,24

8,99

1 26

7,40

4,66

7

═══════════

═══════════

═══════════

═══════════

═══════════

═══════════

The

note

s on

pag

e 86

to 1

73 a

re a

n in

tegr

al p

art o

f the

se fi

nanc

ial s

tate

men

ts.

FID

ELIT

Y R

ETIR

EMEN

T M

ASTE

R T

RU

ST

YEAR

EN

DED

31S

T D

ECEM

BER

201

9

72

STAT

EMEN

T O

F C

HAN

GES

IN E

QU

ITY

- CO

NST

ITU

ENT

FUN

DS

(CO

NTI

NU

ED)

Fide

lity

Sav

eEas

y 20

30 F

und

Fide

lity

Sav

eEas

y 20

35 F

und

Fide

lity

Sav

eEas

y 20

40 F

und

2009

1 N

ote

2019

20

18

2019

20

18

2019

20

18

HK

$ H

K$

HK

$ H

K$

HK

$ H

K$

Bal

ance

at t

he b

egin

ning

of t

he y

ear

33

6,09

3,51

0 35

9,63

8,42

5 35

0,44

7,76

2 38

5,29

3,11

2 1,

012,

516,

469

1,13

3,16

0,86

1

P

roce

eds

from

sub

scrip

tion

of u

nits

3

77,3

65,8

74

80,2

63,8

34

79,5

71,3

57

79,0

95,0

21

167,

786,

201

198,

974,

616

Pay

men

ts o

n re

dem

ptio

n of

uni

ts

3 (5

8,00

2,89

2)

(55,

115,

816)

(5

2,20

0,26

3)

(62,

316,

670)

(1

39,9

14,7

60)

(165

,945

,510

)

───────────

───────────

───────────

───────────

───────────

───────────

Net

incr

ease

/(dec

reas

e) fr

om u

nits

tr

ansa

ctio

ns

19

,362

,982

25

,148

,018

27

,371

,094

16

,778

,351

27

,871

,441

33

,029

,106

---

-----

-----

-----

--

------

-----

-----

----

---

-----

-----

-----

--

------

-----

-----

----

---

-----

-----

-----

--

------

-----

-----

----

To

tal c

ompr

ehen

sive

inco

me/

(loss

)

72,3

22,0

59

(48,

692,

933)

76

,867

,295

(5

1,62

3,70

1)

220,

143,

820

(153

,673

,498

)

---

-----

-----

-----

--

------

-----

-----

----

---

-----

-----

-----

--

------

-----

-----

----

---

-----

-----

-----

--

------

-----

-----

----

B

alan

ce a

t the

end

of t

he y

ear

42

7,77

8,55

1 33

6,09

3,51

0 45

4,68

6,15

1 35

0,44

7,76

2 1,

260,

531,

730

1,01

2,51

6,46

9

═══════════

═══════════

═══════════

═══════════

═══════════

═══════════

The

note

s on

pag

e 86

to 1

73 a

re a

n in

tegr

al p

art o

f the

se fi

nanc

ial s

tate

men

ts.

FID

ELIT

Y R

ETIR

EMEN

T M

ASTE

R T

RU

ST

YEAR

EN

DED

31S

T D

ECEM

BER

201

9

73

STAT

EMEN

T O

F C

HAN

GES

IN E

QU

ITY

- CO

NST

ITU

ENT

FUN

DS

(CO

NTI

NU

ED)

Fide

lity

Sav

eEas

y 20

45 F

und

Fide

lity

Sav

eEas

y 20

50 F

und

Glo

bal E

quity

Fun

d 20

091

Not

e 20

19

2018

20

19

2018

20

19

2018

H

K$

HK

$ H

K$

HK

$ H

K$

HK

$

B

alan

ce a

t the

beg

inni

ng o

f the

yea

r

55,3

78,9

17

42,2

21,0

93

103,

141,

981

68,4

35,2

80

2,73

9,70

0,65

0 3,

075,

507,

322

Pro

ceed

s fro

m s

ubsc

riptio

n of

uni

ts

3 45

,522

,865

35

,492

,033

98

,142

,430

85

,977

,012

94

9,90

5,90

6 69

5,17

5,85

3 P

aym

ents

on

rede

mpt

ion

of u

nits

3

(13,

754,

556)

(1

3,96

5,78

4)

(41,

812,

442)

(3

6,53

1,62

4)

(500

,292

,886

) (6

86,3

87,2

35)

───────────

───────────

───────────

───────────

───────────

───────────

Net

incr

ease

/(dec

reas

e) fr

om u

nits

tr

ansa

ctio

ns

31

,768

,309

21

,526

,249

56

,329

,988

49

,445

,388

44

9,61

3,02

0 8,

788,

618

------

-----

-----

----

---

-----

-----

-----

--

------

-----

-----

----

---

-----

-----

-----

--

------

-----

-----

----

---

-----

-----

-----

--

Tota

l com

preh

ensi

ve in

com

e/(lo

ss)

14

,962

,588

(8

,368

,425

) 27

,086

,378

(1

4,73

8,68

7)

782,

237,

730

(344

,595

,290

)

---

-----

-----

-----

--

------

-----

-----

----

---

-----

-----

-----

--

------

-----

-----

----

---

-----

-----

-----

--

------

-----

-----

----

B

alan

ce a

t the

end

of t

he y

ear

10

2,10

9,81

4 55

,378

,917

18

6,55

8,34

7 10

3,14

1,98

1 3,

971,

551,

400

2,73

9,70

0,65

0

═══════════

═══════════

═══════════

═══════════

═══════════

═══════════

The

note

s on

pag

e 86

to 1

73 a

re a

n in

tegr

al p

art o

f the

se fi

nanc

ial s

tate

men

ts.

FID

ELIT

Y R

ETIR

EMEN

T M

ASTE

R T

RU

ST

YEAR

EN

DED

31S

T D

ECEM

BER

201

9

74

STAT

EMEN

T O

F C

HAN

GES

IN E

QU

ITY

- CO

NST

ITU

ENT

FUN

DS

(CO

NTI

NU

ED)

Gro

wth

Fun

d H

ong

Kon

g B

ond

Fund

H

ong

Kon

g E

quity

Fun

d 20

091

Not

e 20

19

2018

20

19

2018

20

19

2018

H

K$

HK

$ H

K$

HK

$ H

K$

HK

$

B

alan

ce a

t the

beg

inni

ng o

f the

yea

r

5,55

6,26

9,64

1 6,

517,

066,

339

1,00

4,49

7,75

7 90

1,16

3,29

6 6,

125,

921,

748

7,44

3,86

5,30

4

P

roce

eds

from

sub

scrip

tion

of u

nits

3

679,

829,

192

717,

298,

277

515,

328,

164

411,

392,

662

1,69

0,08

0,43

4 1,

883,

768,

370

Pay

men

ts o

n re

dem

ptio

n of

uni

ts

3 (6

93,8

42,6

19)

(903

,906

,506

) (3

49,2

52,3

89)

(313

,505

,409

) (1

,799

,952

,776

) (2

,283

,705

,893

)

───────────

───────────

───────────

───────────

───────────

───────────

Net

incr

ease

/(dec

reas

e) fr

om u

nits

tr

ansa

ctio

ns

(1

4,01

3,42

7)

(186

,608

,229

) 16

6,07

5,77

5 97

,887

,253

(1

09,8

72,3

42)

(399

,937

,523

)

---

-----

-----

-----

--

------

-----

-----

----

---

-----

-----

-----

--

------

-----

-----

----

---

-----

-----

-----

--

------

-----

-----

----

To

tal c

ompr

ehen

sive

inco

me/

(loss

)

1,10

9,58

9,12

6 (7

74,1

88,4

69)

55,6

04,0

59

5,44

7,20

8 94

3,53

8,61

7 (9

18,0

06,0

33)

------

-----

-----

----

---

-----

-----

-----

--

------

-----

-----

----

---

-----

-----

-----

--

------

-----

-----

----

---

-----

-----

-----

--

Bal

ance

at t

he e

nd o

f the

yea

r

6,65

1,84

5,34

0 5,

556,

269,

641

1,22

6,17

7,59

1 1,

004,

497,

757

6,95

9,58

8,02

3 6,

125,

921,

748

═══════════

═══════════

═══════════

═══════════

═══════════

═══════════

The

note

s on

pag

e 86

to 1

73 a

re a

n in

tegr

al p

art o

f the

se fi

nanc

ial s

tate

men

ts.

FID

ELIT

Y R

ETIR

EMEN

T M

ASTE

R T

RU

ST

YEAR

EN

DED

31S

T D

ECEM

BER

201

9

75

STAT

EMEN

T O

F C

HAN

GES

IN E

QU

ITY

- CO

NST

ITU

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FUN

DS

(CO

NTI

NU

ED)

RM

B B

ond

Fund

S

tabl

e G

row

th F

und

Wor

ld B

ond

Fund

20

091

Not

e 20

19

2018

20

19

2018

20

19

2018

H

K$

HK

$ H

K$

HK

$ H

K$

HK

$

B

alan

ce a

t the

beg

inni

ng o

f the

yea

r

162,

224,

262

82,6

39,1

90

3,07

0,55

0,86

2 3,

199,

908,

149

1,03

0,63

3,89

0 87

4,05

9,17

5

P

roce

eds

from

sub

scrip

tion

of u

nits

3

128,

179,

033

227,

845,

751

577,

404,

062

576,

633,

549

562,

932,

884

494,

759,

366

Pay

men

ts o

n re

dem

ptio

n of

uni

ts

3 (8

2,45

6,78

0)

(145

,649

,529

) (4

12,8

11,8

30)

(465

,630

,642

) (3

00,3

39,9

87)

(329

,437

,548

)

───────────

───────────

───────────

───────────

───────────

───────────

Net

incr

ease

/(dec

reas

e) fr

om u

nits

tr

ansa

ctio

ns

45

,722

,253

82

,196

,222

16

4,59

2,23

2 11

1,00

2,90

7 26

2,59

2,89

7 16

5,32

1,81

8

---

-----

-----

-----

--

------

-----

-----

----

---

-----

-----

-----

--

------

-----

-----

----

---

-----

-----

-----

--

------

-----

-----

----

To

tal c

ompr

ehen

sive

inco

me/

(loss

)

6,32

4,01

7 (2

,611

,150

) 40

6,83

7,84

2 (2

40,3

60,1

94)

49,5

23,3

51

(8,7

47,1

03)

------

-----

-----

----

---

-----

-----

-----

--

------

-----

-----

----

---

-----

-----

-----

--

------

-----

-----

----

---

-----

-----

-----

--

Bal

ance

at t

he e

nd o

f the

yea

r

214,

270,

532

162,

224,

262

3,64

1,98

0,93

6 3,

070,

550,

862

1,34

2,75

0,13

8 1,

030,

633,

890

═══════════

═══════════

═══════════

═══════════

═══════════

═══════════

The

note

s on

pag

e 86

to 1

73 a

re a

n in

tegr

al p

art o

f the

se fi

nanc

ial s

tate

men

ts.

FID

ELIT

Y R

ETIR

EMEN

T M

ASTE

R T

RU

ST

YEAR

EN

DED

31S

T D

ECEM

BER

201

9

76

STAT

EMEN

T O

F C

HAN

GES

IN E

QU

ITY

- CO

NST

ITU

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FUN

DS

(CO

NTI

NU

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Fide

lity

Hon

g K

ong

Trac

ker F

und

Cor

e A

ccum

ulat

ion

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ge 6

5 P

lus

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20

091

Not

e 20

19

2018

20

19

2018

20

19

2018

H

K$

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$ H

K$

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$ H

K$

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alan

ce a

t the

beg

inni

ng o

f the

yea

r

937,

379,

681

831,

481,

627

659,

946,

107

457,

771,

555

175,

852,

428

86,1

99,1

11

Pro

ceed

s fro

m s

ubsc

riptio

n of

uni

ts

3 83

6,27

7,76

6 75

3,75

6,58

1 64

7,53

0,46

6 36

7,35

7,50

1 26

3,55

6,27

9 14

7,74

9,04

8 P

aym

ents

on

rede

mpt

ion

of u

nits

3

(583

,273

,140

) (5

39,9

12,3

22)

(167

,413

,242

) (1

25,2

95,6

39)

(92,

478,

664)

(5

5,63

6,76

1)

────────────

────────────

────────────

────────────

────────────

────────────

N

et in

crea

se/(d

ecre

ase)

from

uni

ts

tran

sact

ions

253,

004,

626

213,

844,

259

480,

117,

224

242,

061,

862

171,

077,

615

92,1

12,2

87

------

-----

-----

-----

---

-----

-----

-----

---

------

-----

-----

-----

---

-----

-----

-----

---

------

-----

-----

-----

---

-----

-----

-----

---

Tota

l com

preh

ensi

ve in

com

e/(lo

ss)

12

5,22

2,41

2 (1

07,9

46,2

05)

154,

033,

484

(39,

887,

310)

23

,293

,028

(2

,458

,970

)

---

-----

-----

-----

---

------

-----

-----

-----

---

-----

-----

-----

---

------

-----

-----

-----

---

-----

-----

-----

---

------

-----

-----

-----

B

alan

ce a

t the

end

of t

he y

ear

1,

315,

606,

719

937,

379,

681

1,29

4,09

6,81

5 65

9,94

6,10

7 37

0,22

3,07

1 17

5,85

2,42

8

════════════

════════════

════════════

════════════

════════════

════════════

The

note

s on

pag

e 86

to 1

73 a

re a

n in

tegr

al p

art o

f the

se fi

nanc

ial s

tate

men

ts.

FID

ELIT

Y R

ETIR

EMEN

T M

ASTE

R T

RU

ST

YEAR

EN

DED

31S

T D

ECEM

BER

201

9

77

STAT

EMEN

T O

F C

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IN E

QU

ITY

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l

20

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e 20

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H

K$

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alan

ce a

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36,6

50,5

19,7

43

38,6

33,2

65,4

35

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ceed

s fro

m s

ubsc

riptio

n of

uni

ts

3 11

,143

,515

,581

11

,516

,123

,435

P

aym

ents

on

rede

mpt

ion

of u

nits

3

(8,5

61,6

78,2

00)

(9,8

66,4

23,6

91)

────────────

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N

et in

crea

se/(d

ecre

ase)

from

uni

ts

tran

sact

ions

2,58

1,83

7,38

1 1,

649,

699,

744

------

-----

-----

-----

---

-----

-----

-----

---

Tota

l com

preh

ensi

ve in

com

e/(lo

ss)

5,

516,

521,

018

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32,4

45,4

36)

------

-----

-----

-----

---

-----

-----

-----

---

Bal

ance

at t

he e

nd o

f the

yea

r

44,7

48,8

78,1

42

36,6

50,5

19,7

43

════════════

════════════

The

note

s on

pag

e 86

to 1

73 a

re a

n in

tegr

al p

art o

f the

se fi

nanc

ial s

tate

men

ts.

FID

ELIT

Y R

ETIR

EMEN

T M

ASTE

R T

RU

ST

YEAR

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DED

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T D

ECEM

BER

201

9

77

STAT

EMEN

T O

F C

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l

20

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e 20

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ce a

t the

beg

inni

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36,6

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19,7

43

38,6

33,2

65,4

35

Pro

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s fro

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n of

uni

ts

3 11

,143

,515

,581

11

,516

,123

,435

P

aym

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on

rede

mpt

ion

of u

nits

3

(8,5

61,6

78,2

00)

(9,8

66,4

23,6

91)

────────────

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et in

crea

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ecre

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from

uni

ts

tran

sact

ions

2,58

1,83

7,38

1 1,

649,

699,

744

------

-----

-----

-----

---

-----

-----

-----

---

Tota

l com

preh

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com

e/(lo

ss)

5,

516,

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32,4

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36)

------

-----

-----

-----

---

-----

-----

-----

---

Bal

ance

at t

he e

nd o

f the

yea

r

44,7

48,8

78,1

42

36,6

50,5

19,7

43

════════════

════════════

The

note

s on

pag

e 86

to 1

73 a

re a

n in

tegr

al p

art o

f the

se fi

nanc

ial s

tate

men

ts.

FID

ELIT

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d B

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PF

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2009

1

2019

20

18

2019

20

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$ H

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$ H

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h flo

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1,55

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4,66

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4 A

djus

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:

In

tere

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0)

(5)

(2)

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(658

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et c

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e in

fina

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at fa

ir va

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(650

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am

ount

s re

ceiv

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on

sale

s of

in

vest

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ayab

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of in

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men

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929,

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763,

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in o

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4 2,

619,

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cha

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in o

ther

pay

able

s 67

7,66

8 (4

17,8

07)

660,

620

(545

,886

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06,4

55)

2,07

3,31

6

───────────

───────────

───────────

───────────

───────────

───────────

Cas

h fr

om/(u

sed

in) o

pera

tions

(1

26,3

10,5

42)

51,6

29,2

30

(36,

445,

822)

85

,929

,742

(2

23,6

37,4

38)

(1,0

35,7

95,4

38)

---

-----

-----

-----

--

------

-----

-----

----

---

-----

-----

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--

------

-----

-----

----

---

-----

-----

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--

------

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-----

----

In

tere

st re

ceiv

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34

20

5 2

2,08

1 65

8

───────────

───────────

───────────

───────────

───────────

───────────

Net

cas

h fr

om/(u

sed

in) o

pera

ting

activ

ities

(1

26,3

10,5

08)

51,6

29,2

50

(36,

445,

817)

85

,929

,744

(2

23,6

35,3

57)

(1,0

35,7

94,7

80)

---

-----

-----

-----

--

------

-----

-----

----

---

-----

-----

-----

--

------

-----

-----

----

---

-----

-----

-----

--

------

-----

-----

----

Cas

h flo

ws

from

fina

ncin

g ac

tiviti

es

Pro

ceed

s fro

m s

ubsc

riptio

n of

uni

ts

603,

017,

035

574,

905,

248

459,

298,

390

472,

027,

377

2,19

6,61

4,50

9 3,

052,

393,

107

Pay

men

ts o

n re

dem

ptio

n of

uni

ts

(476

,706

,487

) (6

26,5

14,4

20)

(422

,852

,564

) (5

57,9

55,1

12)

(1,9

72,5

08,0

41)

(2,0

15,7

34,6

18)

───────────

───────────

───────────

───────────

───────────

───────────

Net

cas

h fr

om/(u

sed

in) f

inan

cing

act

iviti

es

126,

310,

548

(51,

609,

172)

36

,445

,826

(8

5,92

7,73

5)

224,

106,

468

1,03

6,65

8,48

9

------

-----

-----

----

---

-----

-----

-----

--

------

-----

-----

----

---

-----

-----

-----

--

------

-----

-----

----

---

-----

-----

-----

--

N

et in

crea

se/(d

ecre

ase)

in c

ash

and

cash

equ

ival

ents

40

20

,078

9

2,00

9 47

1,11

1 86

3,70

9 C

ash

and

cash

equ

ival

ents

at b

egin

ning

of y

ear

32,2

50

12,1

72

4,50

4 2,

495

1,26

8,58

8 40

4,87

9

───────────

───────────

───────────

───────────

───────────

───────────

Cas

h an

d ca

sh e

quiv

alen

ts a

t end

of y

ear

32,2

90

32,2

50

4,51

3 4,

504

1,73

9,69

9 1,

268,

588

═══════════

═══════════

═══════════

═══════════

═══════════

═══════════

An

alys

is o

f bal

ance

s of

cas

h an

d ca

sh e

quiv

alen

ts:

Cas

h an

d ba

nk d

epos

its (r

epre

sent

ing

cash

and

ban

k de

posi

ts w

ith o

rigin

al m

atur

ity o

f 3 m

onth

s or

less

) 32

,290

32

,250

4,

513

4,50

4 1,

739,

699

1,26

8,58

8

═══════════

═══════════

═══════════

═══════════

═══════════

═══════════

The

note

s on

pag

e 86

to 1

73 a

re a

n in

tegr

al p

art o

f the

se fi

nanc

ial s

tate

men

ts.

FID

ELIT

Y R

ETIR

EMEN

T M

ASTE

R T

RU

ST

YEAR

EN

DED

31S

T D

ECEM

BER

201

9

79

STAT

EMEN

T O

F C

ASH

FLO

WS

- CO

NST

ITU

ENT

FUN

DS

(CO

NTI

NU

ED)

Cap

ital S

tabl

e Fu

nd

Fide

lity

Sav

eEas

y 20

20 F

und

Fide

lity

Sav

eEas

y 20

25 F

und

2009

1

2019

20

18

2019

20

18

2019

20

18

HK

$ H

K$

HK

$ H

K$

HK

$ H

K$

Cas

h flo

ws

from

ope

ratin

g ac

tiviti

es

Tota

l com

preh

ensi

ve in

com

e/(lo

ss)

173,

664,

435

(88,

211,

077)

45

,069

,858

(2

6,00

3,25

9)

54,7

46,0

10

(35,

698,

491)

A

djus

tmen

t for

:

N

et c

hang

e in

fina

ncia

l ass

ets

at fa

ir va

lue

thro

ugh

prof

it or

lo

ss

(308

,966

,640

) (3

8,21

6,44

6)

(59,

596,

898)

4,

106,

629

(81,

929,

372)

23

,606

,493

N

et c

hang

e in

am

ount

s re

ceiv

able

on

sale

s of

in

vest

men

ts/p

ayab

le o

n pu

rcha

ses

of in

vest

men

ts

(5,2

54,2

04)

2,45

8,60

9 57

,671

25

4,72

0 (1

43,3

67)

(104

,357

) N

et c

hang

e in

oth

er p

ayab

les

364,

710

29,3

30

56,2

32

(3,2

99)

85,0

51

(21,

302)

───────────

───────────

───────────

───────────

───────────

───────────

Net

cas

h fr

om/(u

sed

in) o

pera

ting

activ

ities

(1

40,1

91,6

99)

(123

,939

,584

) (1

4,41

3,13

7)

(21,

645,

209)

(2

7,24

1,67

8)

(12,

217,

657)

------

-----

-----

----

---

-----

-----

-----

--

------

-----

-----

----

---

-----

-----

-----

--

------

-----

-----

----

---

-----

-----

-----

--

C

ash

flow

s fr

om fi

nanc

ing

activ

ities

P

roce

eds

from

sub

scrip

tion

of u

nits

41

7,15

7,86

1 48

1,62

4,94

6 70

,968

,050

98

,845

,680

67

,860

,939

71

,678

,249

P

aym

ents

on

rede

mpt

ion

of u

nits

(2

76,9

66,1

56)

(357

,684

,751

) (5

6,55

4,90

9)

(77,

199,

589)

(4

0,61

9,25

8)

(59,

460,

768)

───────────

───────────

───────────

───────────

───────────

───────────

Net

cas

h fr

om/(u

sed

in) f

inan

cing

act

iviti

es

140,

191,

705

123,

940,

195

14,4

13,1

41

21,6

46,0

91

27,2

41,6

81

12,2

17,4

81

---

-----

-----

-----

--

------

-----

-----

----

---

-----

-----

-----

--

------

-----

-----

----

---

-----

-----

-----

--

------

-----

-----

----

Net

incr

ease

/(dec

reas

e) in

cas

h an

d ca

sh e

quiv

alen

ts

6 61

1 4

882

3 (1

76)

Cas

h an

d ca

sh e

quiv

alen

ts a

t beg

inni

ng o

f yea

r 1,

186

575

3,11

0 2,

228

2,06

4 2,

240

───────────

───────────

───────────

───────────

───────────

───────────

Cas

h an

d ca

sh e

quiv

alen

ts a

t end

of y

ear

1,19

2 1,

186

3,11

4 3,

110

2,06

7 2,

064

═══════════

═══════════

═══════════

═══════════

═══════════

═══════════

An

alys

is o

f bal

ance

s of

cas

h an

d ca

sh e

quiv

alen

ts:

Cas

h an

d ba

nk d

epos

its (r

epre

sent

ing

cash

and

ban

k de

posi

ts w

ith o

rigin

al m

atur

ity o

f 3 m

onth

s or

less

) 1,

192

1,18

6 3,

114

3,11

0 2,

067

2,06

4

═══════════

═══════════

═══════════

═══════════

═══════════

═══════════

The

note

s on

pag

e 86

to 1

73 a

re a

n in

tegr

al p

art o

f the

se fi

nanc

ial s

tate

men

ts.

FID

ELIT

Y R

ETIR

EMEN

T M

ASTE

R T

RU

ST

YEAR

EN

DED

31S

T D

ECEM

BER

201

9

80

STAT

EMEN

T O

F C

ASH

FLO

WS

- CO

NST

ITU

ENT

FUN

DS

(CO

NTI

NU

ED)

Fide

lity

Sav

eEas

y 20

30 F

und

Fide

lity

Sav

eEas

y 20

35 F

und

Fide

lity

Sav

eEas

y 20

40 F

und

2009

1

2019

20

18

2019

20

18

2019

20

18

HK

$ H

K$

HK

$ H

K$

HK

$ H

K$

Cas

h flo

ws

from

ope

ratin

g ac

tiviti

es

Tota

l com

preh

ensi

ve in

com

e/(lo

ss)

72,3

22,0

59

(48,

692,

933)

76

,867

,295

(5

1,62

3,70

1)

220,

143,

820

(153

,673

,498

) A

djus

tmen

t for

:

N

et c

hang

e in

fina

ncia

l ass

ets

at fa

ir va

lue

thro

ugh

prof

it or

lo

ss

(91,

779,

655)

23

,562

,484

(1

04,3

44,2

90)

34,8

76,1

20

(248

,260

,370

) 12

0,75

3,93

7 N

et c

hang

e in

am

ount

s re

ceiv

able

on

sale

s of

in

vest

men

ts/p

ayab

le o

n pu

rcha

ses

of in

vest

men

ts

(39,

380)

(1

58,6

39)

221,

855

62,3

97

751,

470

443,

728

Net

cha

nge

in o

ther

pay

able

s 94

,616

(1

7,38

3)

105,

903

(30,

704)

24

5,11

5 (1

09,5

87)

───────────

───────────

───────────

───────────

───────────

───────────

Net

cas

h fr

om/(u

sed

in) o

pera

ting

activ

ities

(1

9,40

2,36

0)

(25,

306,

471)

(2

7,14

9,23

7)

(16,

715,

888)

(2

7,11

9,96

5)

(32,

585,

420)

------

-----

-----

----

---

-----

-----

-----

--

------

-----

-----

----

---

-----

-----

-----

--

------

-----

-----

----

---

-----

-----

-----

--

C

ash

flow

s fr

om fi

nanc

ing

activ

ities

P

roce

eds

from

sub

scrip

tion

of u

nits

77

,249

,849

80

,362

,516

79

,436

,741

79

,064

,768

16

5,42

4,06

7 19

9,09

1,79

6 P

aym

ents

on

rede

mpt

ion

of u

nits

(5

7,84

7,48

7)

(55,

055,

859)

(5

2,28

7,50

2)

(62,

348,

814)

(1

38,3

04,0

96)

(166

,506

,418

)

───────────

───────────

───────────

───────────

───────────

───────────

Net

cas

h fr

om/(u

sed

in) f

inan

cing

act

iviti

es

19,4

02,3

62

25,3

06,6

57

27,1

49,2

39

16,7

15,9

54

27,1

19,9

71

32,5

85,3

78

---

-----

-----

-----

--

------

-----

-----

----

---

-----

-----

-----

--

------

-----

-----

----

---

-----

-----

-----

--

------

-----

-----

----

Net

incr

ease

/(dec

reas

e) in

cas

h an

d ca

sh e

quiv

alen

ts

2 18

6 2

66

6 (4

2)

Cas

h an

d ca

sh e

quiv

alen

ts a

t beg

inni

ng o

f yea

r 1,

874

1,68

8 2,

178

2,11

2 5,

092

5,13

4

───────────

───────────

───────────

───────────

───────────

───────────

Cas

h an

d ca

sh e

quiv

alen

ts a

t end

of y

ear

1,87

6 1,

874

2,18

0 2,

178

5,09

8 5,

092

═══════════

═══════════

═══════════

═══════════

═══════════

═══════════

An

alys

is o

f bal

ance

s of

cas

h an

d ca

sh e

quiv

alen

ts:

Cas

h an

d ba

nk d

epos

its (r

epre

sent

ing

cash

and

ban

k de

posi

ts w

ith o

rigin

al m

atur

ity o

f 3 m

onth

s or

less

) 1,

876

1,87

4 2,

180

2,17

8 5,

098

5,09

2

═══════════

═══════════

═══════════

═══════════

═══════════

═══════════

The

note

s on

pag

e 86

to 1

73 a

re a

n in

tegr

al p

art o

f the

se fi

nanc

ial s

tate

men

ts.

FID

ELIT

Y R

ETIR

EMEN

T M

ASTE

R T

RU

ST

YEAR

EN

DED

31S

T D

ECEM

BER

201

9

81

STAT

EMEN

T O

F C

ASH

FLO

WS

- CO

NST

ITU

ENT

FUN

DS

(CO

NTI

NU

ED)

Fide

lity

Sav

eEas

y 20

45 F

und

Fide

lity

Sav

eEas

y 20

50 F

und

Glo

bal E

quity

Fun

d 20

091

20

19

2018

20

19

2018

20

19

2018

H

K$

HK

$ H

K$

HK

$ H

K$

HK

$

C

ash

flow

s fr

om o

pera

ting

activ

ities

To

tal c

ompr

ehen

sive

inco

me/

(loss

) 14

,962

,588

(8

,368

,425

) 27

,086

,378

(1

4,73

8,68

7)

782,

237,

730

(344

,595

,290

) A

djus

tmen

t for

:

In

tere

st o

n ba

nk d

epos

its

(5)

(1)

(5)

(1)

(2)

(1)

Net

cha

nge

in fi

nanc

ial a

sset

s at

fair

valu

e th

roug

h pr

ofit

or

loss

(4

6,55

5,42

4)

(13,

175,

780)

(8

3,13

3,03

5)

(34,

751,

520)

(1

,233

,122

,526

) 33

6,15

5,01

5 N

et c

hang

e in

am

ount

s re

ceiv

able

on

sale

s of

in

vest

men

ts/p

ayab

le o

n pu

rcha

ses

of in

vest

men

ts

(120

,757

) (6

7,13

7)

(232

,492

) 5,

417

20,8

01,0

79

(5,8

49,9

16)

Net

cha

nge

in o

ther

rece

ivab

les

(225

,850

) 1,

202

(374

,018

) 1,

202

- -

Net

cha

nge

in o

ther

pay

able

s 51

,583

19

,300

91

,893

46

,018

1,

272,

297

(351

,391

)

───────────

───────────

───────────

───────────

───────────

───────────

Cas

h fr

om/(u

sed

in) o

pera

tions

(3

1,88

7,86

5)

(21,

590,

841)

(5

6,56

1,27

9)

(49,

437,

571)

(4

28,8

11,4

22)

(14,

641,

583)

------

-----

-----

----

---

-----

-----

-----

--

------

-----

-----

----

---

-----

-----

-----

--

------

-----

-----

----

---

-----

-----

-----

--

Inte

rest

rece

ived

5

1 5

1 2

1

───────────

───────────

───────────

───────────

───────────

───────────

Net

cas

h fr

om/(u

sed

in) o

pera

ting

activ

ities

(3

1,88

7,86

0)

(21,

590,

840)

(5

6,56

1,27

4)

(49,

437,

570)

(4

28,8

11,4

20)

(14,

641,

582)

------

-----

-----

----

---

-----

-----

-----

--

------

-----

-----

----

---

-----

-----

-----

--

------

-----

-----

----

---

-----

-----

-----

--

C

ash

flow

s fr

om fi

nanc

ing

activ

ities

P

roce

eds

from

sub

scrip

tion

of u

nits

45

,381

,898

35

,550

,495

98

,025

,285

85

,980

,586

93

2,30

9,42

7 69

6,41

5,91

0 P

aym

ents

on

rede

mpt

ion

of u

nits

(1

3,49

2,83

2)

(13,

957,

109)

(4

1,46

2,80

5)

(36,

540,

615)

(5

03,4

97,4

86)

(681

,777

,376

)

───────────

───────────

───────────

───────────

───────────

───────────

Net

cas

h fr

om/(u

sed

in) f

inan

cing

act

iviti

es

31,8

89,0

66

21,5

93,3

86

56,5

62,4

80

49,4

39,9

71

428,

811,

941

14,6

38,5

34

---

-----

-----

-----

--

------

-----

-----

----

---

-----

-----

-----

--

------

-----

-----

----

---

-----

-----

-----

--

------

-----

-----

----

Net

incr

ease

/(dec

reas

e) in

cas

h an

d ca

sh e

quiv

alen

ts

1,20

6 2,

546

1,20

6 2,

401

521

(3,0

48)

Cas

h an

d ca

sh e

quiv

alen

ts a

t beg

inni

ng o

f yea

r 3,

746

1,20

0 3,

601

1,20

0 1,

987

5,03

5

───────────

───────────

───────────

───────────

───────────

───────────

Cas

h an

d ca

sh e

quiv

alen

ts a

t end

of y

ear

4,95

2 3,

746

4,80

7 3,

601

2,50

8 1,

987

═══════════

═══════════

═══════════

═══════════

═══════════

═══════════

An

alys

is o

f bal

ance

s of

cas

h an

d ca

sh e

quiv

alen

ts:

Cas

h an

d ba

nk d

epos

its (r

epre

sent

ing

cash

and

ban

k de

posi

ts w

ith o

rigin

al m

atur

ity o

f 3 m

onth

s or

less

) 4,

952

3,74

6 4,

807

3,60

1 2,

508

1,98

7

═══════════

═══════════

═══════════

═══════════

═══════════

═══════════

The

note

s on

pag

e 86

to 1

73 a

re a

n in

tegr

al p

art o

f the

se fi

nanc

ial s

tate

men

ts.

FID

ELIT

Y R

ETIR

EMEN

T M

ASTE

R T

RU

ST

YEAR

EN

DED

31S

T D

ECEM

BER

201

9

82

STAT

EMEN

T O

F C

ASH

FLO

WS

- CO

NST

ITU

ENT

FUN

DS

(CO

NTI

NU

ED)

Gro

wth

Fun

d H

ong

Kon

g B

ond

Fund

H

ong

Kon

g E

quity

Fun

d 20

091

20

19

2018

20

19

2018

20

19

2018

H

K$

HK

$ H

K$

HK

$ H

K$

HK

$

C

ash

flow

s fr

om o

pera

ting

activ

ities

To

tal c

ompr

ehen

sive

inco

me/

(loss

) 1,

109,

589,

126

(774

,188

,469

) 55

,604

,059

5,

447,

208

943,

538,

617

(918

,006

,033

) A

djus

tmen

t for

:

In

tere

st o

n ba

nk d

epos

its

- -

(1)

- (2

9)

(15)

N

et c

hang

e in

fina

ncia

l ass

ets

at fa

ir va

lue

thro

ugh

prof

it or

lo

ss

(1,0

96,6

32,8

26)

961,

813,

798

(221

,914

,745

) (1

03,4

13,6

57)

(834

,373

,721

) 1,

319,

258,

063

Net

cha

nge

in a

mou

nts

rece

ivab

le o

n sa

les

of

inve

stm

ents

/pay

able

on

purc

hase

s of

inve

stm

ents

5,

654,

880

2,54

9,81

7 (2

,655

,177

) 1,

498,

751

(13,

030,

574)

3,

336,

664

Net

cha

nge

in o

ther

pay

able

s 1,

057,

193

(1,0

08,7

85)

234,

935

79,9

83

707,

483

(1,2

97,3

89)

───────────

───────────

───────────

───────────

───────────

───────────

Cas

h fr

om/(u

sed

in) o

pera

tions

19

,668

,373

18

9,16

6,36

1 (1

68,7

30,9

29)

(96,

387,

715)

96

,841

,776

40

3,29

1,29

0

------

-----

-----

----

---

-----

-----

-----

--

------

-----

-----

----

---

-----

-----

-----

--

------

-----

-----

----

---

-----

-----

-----

--

Inte

rest

rece

ived

-

- 1

- 29

15

───────────

───────────

───────────

───────────

───────────

───────────

Net

cas

h fr

om/(u

sed

in) o

pera

ting

activ

ities

19

,668

,373

18

9,16

6,36

1 (1

68,7

30,9

28)

(96,

387,

715)

96

,841

,805

40

3,29

1,30

5

------

-----

-----

----

---

-----

-----

-----

--

------

-----

-----

----

---

-----

-----

-----

--

------

-----

-----

----

---

-----

-----

-----

--

C

ash

flow

s fr

om fi

nanc

ing

activ

ities

P

roce

eds

from

sub

scrip

tion

of u

nits

67

4,87

4,02

5 71

6,34

0,53

3 51

3,50

9,43

5 41

1,79

7,61

3 1,

687,

221,

418

1,88

4,38

9,48

5

Pay

men

ts o

n re

dem

ptio

n of

uni

ts

(694

,542

,337

) (9

05,4

98,5

79)

(344

,778

,483

) (3

15,4

09,1

11)

(1,7

84,0

63,1

89)

(2,2

87,6

63,6

77)

───────────

───────────

───────────

───────────

───────────

───────────

Net

cas

h fr

om/(u

sed

in) f

inan

cing

act

iviti

es

(19,

668,

312)

(1

89,1

58,0

46)

168,

730,

952

96,3

88,5

02

(96,

841,

771)

(4

03,2

74,1

92)

---

-----

-----

-----

--

------

-----

-----

----

---

-----

-----

-----

--

------

-----

-----

----

---

-----

-----

-----

--

------

-----

-----

----

Net

incr

ease

/(dec

reas

e) in

cas

h an

d ca

sh e

quiv

alen

ts

61

8,31

5 24

78

7 34

17

,113

C

ash

and

cash

equ

ival

ents

at b

egin

ning

of y

ear

9,86

1 1,

546

1,41

9 63

2 27

,153

10

,040

───────────

───────────

───────────

───────────

───────────

───────────

Cas

h an

d ca

sh e

quiv

alen

ts a

t end

of y

ear

9,92

2 9,

861

1,44

3 1,

419

27,1

87

27,1

53

═══════════

═══════════

═══════════

═══════════

═══════════

═══════════

An

alys

is o

f bal

ance

s of

cas

h an

d ca

sh e

quiv

alen

ts:

Cas

h an

d ba

nk d

epos

its (r

epre

sent

ing

cash

and

ban

k de

posi

ts w

ith o

rigin

al m

atur

ity o

f 3 m

onth

s or

less

) 9,

922

9,86

1 1,

443

1,41

9 27

,187

27

,153

═══════════

═══════════

═══════════

═══════════

═══════════

═══════════

The

note

s on

pag

e 86

to 1

73 a

re a

n in

tegr

al p

art o

f the

se fi

nanc

ial s

tate

men

ts.

FID

ELIT

Y R

ETIR

EMEN

T M

ASTE

R T

RU

ST

YEAR

EN

DED

31S

T D

ECEM

BER

201

9

83

STAT

EMEN

T O

F C

ASH

FLO

WS

- CO

NST

ITU

ENT

FUN

DS

(CO

NTI

NU

ED)

RM

B B

ond

Fund

S

tabl

e G

row

th F

und

Wor

ld B

ond

Fund

20

091

20

19

2018

20

19

2018

20

19

2018

H

K$

HK

$ H

K$

HK

$ H

K$

HK

$

C

ash

flow

s fr

om o

pera

ting

activ

ities

To

tal c

ompr

ehen

sive

inco

me/

(loss

) 6,

324,

017

(2,6

11,1

50)

406,

837,

842

(240

,360

,194

) 49

,523

,351

(8

,747

,103

) A

djus

tmen

t for

:

In

tere

st o

n ba

nk d

epos

its

(1)

- (1

) (1

) (4

) (1

) N

et c

hang

e in

fina

ncia

l ass

ets

at fa

ir va

lue

thro

ugh

prof

it or

lo

ss

(52,

094,

171)

(7

9,68

0,55

9)

(572

,060

,908

) 12

9,51

1,39

2 (3

12,4

98,8

40)

(156

,742

,946

) N

et c

hang

e in

am

ount

s re

ceiv

able

on

sale

s of

in

vest

men

ts/p

ayab

le o

n pu

rcha

ses

of in

vest

men

ts

(887

,227

) (1

,936

,341

) (2

57,2

03)

2,02

2,70

1 (3

,439

,206

) (2

,126

,942

) N

et c

hang

e in

oth

er re

ceiv

able

s -

2,39

9 -

- -

- N

et c

hang

e in

oth

er p

ayab

les

47,9

04

93,2

08

630,

850

(154

,478

) 38

2,60

0 17

0,37

4

───────────

───────────

───────────

───────────

───────────

───────────

Cas

h fr

om/(u

sed

in) o

pera

tions

(4

6,60

9,47

8)

(84,

132,

443)

(1

64,8

49,4

20)

(108

,980

,580

) (2

66,0

32,0

99)

(167

,446

,618

)

------

-----

-----

----

---

-----

-----

-----

--

------

-----

-----

----

---

-----

-----

-----

--

------

-----

-----

----

---

-----

-----

-----

--

Inte

rest

rece

ived

1

- 1

1 4

1

───────────

───────────

───────────

───────────

───────────

───────────

Net

cas

h fr

om/(u

sed

in) o

pera

ting

activ

ities

(4

6,60

9,47

7)

(84,

132,

443)

(1

64,8

49,4

19)

(108

,980

,579

) (2

66,0

32,0

95)

(167

,446

,617

)

------

-----

-----

----

---

-----

-----

-----

--

------

-----

-----

----

---

-----

-----

-----

--

------

-----

-----

----

---

-----

-----

-----

--

C

ash

flow

s fr

om fi

nanc

ing

activ

ities

P

roce

eds

from

sub

scrip

tion

of u

nits

12

7,70

1,20

5 22

8,38

2,86

6 57

6,72

9,28

5 57

6,35

7,06

6 56

1,33

6,26

5 49

6,45

4,92

3 P

aym

ents

on

rede

mpt

ion

of u

nits

(8

1,09

1,72

5)

(144

,250

,303

) (4

11,8

79,8

50)

(467

,376

,860

) (2

95,3

04,1

62)

(329

,006

,163

)

───────────

───────────

───────────

───────────

───────────

───────────

Net

cas

h fr

om/(u

sed

in) f

inan

cing

act

iviti

es

46,6

09,4

80

84,1

32,5

63

164,

849,

435

108,

980,

206

266,

032,

103

167,

448,

760

---

-----

-----

-----

--

------

-----

-----

----

---

-----

-----

-----

--

------

-----

-----

----

---

-----

-----

-----

--

------

-----

-----

----

Net

incr

ease

/(dec

reas

e) in

cas

h an

d ca

sh e

quiv

alen

ts

3 12

0 16

(3

73)

8 2,

143

Cas

h an

d ca

sh e

quiv

alen

ts a

t beg

inni

ng o

f yea

r 1,

320

1,20

0 69

1 1,

064

3,77

4 1,

631

───────────

───────────

───────────

───────────

───────────

───────────

Cas

h an

d ca

sh e

quiv

alen

ts a

t end

of y

ear

1,32

3 1,

320

707

691

3,78

2 3,

774

═══════════

═══════════

═══════════

═══════════

═══════════

═══════════

An

alys

is o

f bal

ance

s of

cas

h an

d ca

sh e

quiv

alen

ts:

Cas

h an

d ba

nk d

epos

its (r

epre

sent

ing

cash

and

ban

k de

posi

ts w

ith o

rigin

al m

atur

ity o

f 3 m

onth

s or

less

) 1,

323

1,32

0 70

7 69

1 3,

782

3,77

4

═══════════

═══════════

═══════════

═══════════

═══════════

═══════════

The

note

s on

pag

e 86

to 1

73 a

re a

n in

tegr

al p

art o

f the

se fi

nanc

ial s

tate

men

ts.

FID

ELIT

Y R

ETIR

EMEN

T M

ASTE

R T

RU

ST

YEAR

EN

DED

31S

T D

ECEM

BER

201

9

84

STAT

EMEN

T O

F C

ASH

FLO

WS

- CO

NST

ITU

ENT

FUN

DS

(CO

NTI

NU

ED)

Fide

lity

Hon

g K

ong

Trac

ker F

und

Cor

e A

ccum

ulat

ion

Fund

A

ge 6

5 P

lus

Fund

20

091

20

19

2018

20

19

2018

20

19

2018

H

K$

HK

$ H

K$

HK

$ H

K$

HK

$

C

ash

flow

s fr

om o

pera

ting

activ

ities

To

tal c

ompr

ehen

sive

inco

me/

(loss

) 12

5,22

2,41

2 (1

07,9

46,2

05)

154,

033,

484

(39,

887,

310)

23

,293

,028

(2

,458

,970

) A

djus

tmen

t for

:

In

tere

st o

n ba

nk d

epos

its

(5,7

69)

(2,0

72)

(8)

(2)

(3)

(1)

Div

iden

ds

(40,

252,

785)

(3

1,17

1,25

0)

- -

- -

Inte

rest

exp

ense

1,

329

- -

- -

- N

et c

hang

e in

fina

ncia

l ass

ets

at fa

ir va

lue

thro

ugh

prof

it or

loss

(3

79,3

07,6

00)

(105

,576

,600

) (6

34,4

88,4

82)

(202

,315

,635

) (1

94,4

73,0

65)

(89,

708,

800)

N

et c

hang

e in

am

ount

s re

ceiv

able

on

sale

s of

in

vest

men

ts/p

ayab

le o

n pu

rcha

ses

of in

vest

men

ts

94,4

87

(4,1

12,6

65)

106,

890

411,

601

1,48

3,98

3 (2

,745

,000

) N

et c

hang

e in

oth

er re

ceiv

able

s 58

,758

58

,759

-

- -

- N

et c

hang

e in

oth

er p

ayab

les

222,

708

86,7

67

337,

786

148,

912

103,

417

57,2

79

───────────

───────────

───────────

───────────

───────────

───────────

Cas

h fr

om/(u

sed

in) o

pera

tions

(2

93,9

66,4

60)

(248

,663

,266

) (4

80,0

10,3

30)

(241

,642

,434

) (1

69,5

92,6

40)

(94,

855,

492)

------

-----

-----

----

---

-----

-----

-----

--

------

-----

-----

----

---

-----

-----

-----

--

------

-----

-----

----

---

-----

-----

-----

--

D

ivid

ends

rece

ived

40

,252

,785

31

,171

,250

-

- -

- In

tere

st re

ceiv

ed

5,77

0 2,

071

8 2

3 1

───────────

───────────

───────────

───────────

───────────

───────────

Net

cas

h fr

om/(u

sed

in) o

pera

ting

activ

ities

(2

53,7

07,9

05)

(217

,489

,945

) (4

80,0

10,3

22)

(241

,642

,432

) (1

69,5

92,6

37)

(94,

855,

491)

------

-----

-----

----

---

-----

-----

-----

--

------

-----

-----

----

---

-----

-----

-----

--

------

-----

-----

----

---

-----

-----

-----

--

Cas

h flo

ws

from

fina

ncin

g ac

tiviti

es

Inte

rest

exp

ense

pai

d (1

,329

) -

- -

- -

Pro

ceed

s fro

m s

ubsc

riptio

n of

uni

ts

835,

219,

006

755,

097,

461

644,

670,

638

367,

131,

553

259,

516,

754

149,

348,

861

Pay

men

ts o

n re

dem

ptio

n of

uni

ts

(579

,294

,322

) (5

38,3

69,0

85)

(164

,660

,304

) (1

25,4

81,2

92)

(89,

923,

122)

(5

4,49

1,57

4)

───────────

───────────

───────────

───────────

───────────

───────────

Net

cas

h fr

om/(u

sed

in) f

inan

cing

act

iviti

es

255,

923,

355

216,

728,

376

480,

010,

334

241,

650,

261

169,

593,

632

94,8

57,2

87

---

-----

-----

-----

--

------

-----

-----

----

---

-----

-----

-----

--

------

-----

-----

----

---

-----

-----

-----

--

------

-----

-----

----

Net

incr

ease

/(dec

reas

e) in

cas

h an

d ca

sh e

quiv

alen

ts

2,21

5,45

0 (7

61,5

69)

12

7,82

9 99

5 1,

796

Cas

h an

d ca

sh e

quiv

alen

ts a

t beg

inni

ng o

f yea

r 36

6,92

9 1,

128,

498

7,83

7 8

1,79

6 -

───────────

───────────

───────────

───────────

───────────

───────────

Cas

h an

d ca

sh e

quiv

alen

ts a

t end

of y

ear

2,58

2,37

9 36

6,92

9 7,

849

7,83

7 2,

791

1,79

6

═══════════

═══════════

═══════════

═══════════

═══════════

═══════════

An

alys

is o

f bal

ance

s of

cas

h an

d ca

sh e

quiv

alen

ts:

Cas

h an

d ba

nk d

epos

its (r

epre

sent

ing

cash

and

ban

k de

posi

ts w

ith o

rigin

al m

atur

ity o

f 3 m

onth

s or

less

) 2,

582,

379

366,

929

7,84

9 7,

837

2,79

1 1,

796

═══════════

═══════════

═══════════

═══════════

═══════════

═══════════

The

note

s on

pag

e 86

to 1

73 a

re a

n in

tegr

al p

art o

f the

se fi

nanc

ial s

tate

men

ts.

FID

ELIT

Y R

ETIR

EMEN

T M

ASTE

R T

RU

ST

YEAR

EN

DED

31S

T D

ECEM

BER

201

9

85

STAT

EMEN

T O

F C

ASH

FLO

WS

- CO

NST

ITU

ENT

FUN

DS

(CO

NTI

NU

ED)

Tota

l

20

091

20

19

2018

H

K$

HK

$

C

ash

flow

s fr

om o

pera

ting

activ

ities

To

tal c

ompr

ehen

sive

inco

me/

(loss

) 5,

516,

521,

018

(3,6

32,4

45,4

36)

Adj

ustm

ent f

or:

Inte

rest

on

bank

dep

osits

(7

,948

) (2

,775

)

D

ivid

ends

(4

0,25

2,78

5)

(31,

171,

250)

In

tere

st e

xpen

se

1,32

9 -

Net

cha

nge

in fi

nanc

ial a

sset

s at

fair

valu

e th

roug

h pr

ofit

or lo

ss

(8,1

01,6

60,5

72)

1,99

2,15

8,86

6

N

et c

hang

e in

am

ount

s re

ceiv

able

on

sale

s of

in

vest

men

ts/p

ayab

le o

n pu

rcha

ses

of in

vest

men

ts

(13,

437,

696)

3,

963,

313

Net

cha

nge

in o

ther

rece

ivab

les

(541

,106

) 2,

683,

219

Net

cha

nge

in o

ther

pay

able

s 6,

924,

109

(1,1

53,5

24)

───────────

───────────

Cas

h fr

om/(u

sed

in) o

pera

tions

(2

,632

,453

,651

) (1

,665

,967

,587

)

------

-----

-----

----

---

-----

-----

-----

--

D

ivid

ends

rece

ived

40

,252

,785

31

,171

,250

In

tere

st re

ceiv

ed

7,94

9 2,

774

───────────

───────────

Net

cas

h fr

om/(u

sed

in) o

pera

ting

activ

ities

(2

,592

,192

,917

) (1

,634

,793

,563

)

------

-----

-----

----

---

-----

-----

-----

--

Cas

h flo

ws

from

fina

ncin

g ac

tiviti

es

Inte

rest

exp

ense

pai

d (1

,329

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Pro

ceed

s fro

m s

ubsc

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n of

uni

ts

11,0

93,5

22,0

82

11,5

13,2

41,0

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dem

ptio

n of

uni

ts

(8,4

98,6

37,1

17)

(9,8

78,2

82,0

93)

───────────

───────────

Net

cas

h fr

om/(u

sed

in) f

inan

cing

act

iviti

es

2,59

4,88

3,63

6 1,

634,

958,

946

---

-----

-----

-----

--

------

-----

-----

----

Net

incr

ease

/(dec

reas

e) in

cas

h an

d ca

sh e

quiv

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2,69

0,71

9 16

5,38

3

C

ash

and

cash

equ

ival

ents

at b

egin

ning

of y

ear

1,75

0,96

0 1,

585,

577

═══════════

═══════════

Cas

h an

d ca

sh e

quiv

alen

ts a

t end

of y

ear

4,44

1,67

9 1,

750,

960

═══════════

═══════════

An

alys

is o

f bal

ance

s of

cas

h an

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sh e

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Cas

h an

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its (r

epre

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cash

and

ban

k de

posi

ts w

ith o

rigin

al m

atur

ity o

f 3 m

onth

s or

less

) 4,

441,

679

1,75

0,96

0

═══════════

═══════════

The

note

s on

pag

e 86

to 1

73 a

re a

n in

tegr

al p

art o

f the

se fi

nanc

ial s

tate

men

ts.


86

NOTES TO THE FINANCIAL STATEMENTS

1 The Scheme

Fidelity Retirement Master Trust (the “Scheme”) is established and governed by its Trust Deed dated 31st January 2000, as amended. The Scheme is registered under Section 21 of the Hong Kong Mandatory Provident Fund Schemes Ordinance (the “Ordinance”) and is required to comply with the Ordinance and the relevant regulations, guidelines and codes issued by the Mandatory Provident Fund Schemes Authority (“MPFA”). The Scheme invests in, Asia Pacific Equity Fund, Balanced Fund, MPF Conservative Fund, Capital Stable Fund, Fidelity SaveEasy 2020 Fund, Fidelity SaveEasy 2025 Fund, Fidelity SaveEasy 2030 Fund, Fidelity SaveEasy 2035 Fund, Fidelity SaveEasy 2040 Fund, Fidelity SaveEasy 2045 Fund, Fidelity SaveEasy 2050 Fund, Global Equity Fund, Growth Fund, Hong Kong Bond Fund, Hong Kong Equity Fund, RMB Bond Fund, Stable Growth Fund, World Bond Fund, Fidelity Hong Kong Tracker Fund, Core Accumulation Fund and Age 65 Plus Fund (each a separate constituent fund of the Scheme and referred to individually or collectively as the “constituent funds”) as at 31st December 2019 and 2018. Each of the constituent funds is approved by the MPFA and has its own investment policy and predetermined fees and charges. Contributions and benefits are dealt with at the scheme level whereas investments in approved pooled investment funds and listed unit trusts dealt with at the constituent funds level. Two new constituent funds were introduced in 2017, namely Core Accumulation Fund and Age 65 Plus Fund, with effect on 1st April 2017 in relation to the Default Investment Scheme (the “DIS”), a new initiative by MPFA to aim to offer standardised and low fee investment solution to scheme members. In accordance with the Ordinance, the payments charged to the DIS constituent funds are disclosed in note 14. These financial information are in respect of the Scheme and its 21 constituent funds, which comprises (i) the Statement of Net Assets Available for Benefits as at 31st December 2019, and the Statement of Changes in Net Assets Available for Benefits and Statement of Cash Flows for the year ended 31st December 2019 of the Scheme on a standalone basis; and (ii) the Statement of Net Assets as at 31st December 2019, and the Statement of Comprehensive Income, Statement of Changes in Equity and Statement of Cash Flows for the year ended 31st December 2019 of each of its constituent funds.

2 Summary of significant accounting policies

The principal accounting policies applied in the preparation of financial statements of the Scheme and its constituent funds are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.

(a) Basis of preparation

The financial statements have been prepared in accordance with Hong Kong Financial Reporting Standards (“HKFRS”) issued by the Hong Kong Institute of Certified Public Accountants. The financial statements have been prepared under the historical cost convention, as modified by the revaluation of financial assets at fair value through profit or loss.


87


2 Summary of significant accounting policies (Continued) (a) Basis of preparation (Continued)

The preparation of financial statements in conformity with HKFRS requires the Trustee to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgements about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates. All references to net assets throughout the financial statements refer to net assets attributable to members unless otherwise stated. All the assets and liabilities are held for the purpose of being traded or are expected to be realised within one year. Standards and amendments to existing standards effective 1st January 2019 There are no standards, amendment to standards or interpretations that are effective for annual periods beginning on 1st January 2019 that have a material effect on the financial statements of the Scheme and each of its constituent funds. New standards, amendments and interpretations effective after 1st January 2019 and have not been early adopted A number of new standards, amendments to standards and interpretations are effective for annual periods beginning after 1st January 2019, and have not been early adopted in preparing these financial statements. None of these are expected to have a material effect on the financial statements of the Scheme and each of its constituent funds.

(b) Foreign currency translation

(i) Functional and presentation currency

Items included in the financial statements of the Scheme and its constituent funds are measured using the currency of the primary economic environment in which they operate (the “functional currency”). This is the Hong Kong Dollar (“HKD”). The Scheme and its constituent funds have adopted the HKD as their presentation currency.

(ii) Transaction and balances

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign currency assets and liabilities are translated into the functional currency using the exchange rate prevailing at year end date. Foreign exchange gains and losses arising from translation are included in the Statement of Changes in Net Assets Available for Benefits for the Scheme and the Statement of Comprehensive Income for the constituent funds. Foreign exchange gains and losses relating to cash and cash equivalents are presented in the Statement of Changes in Net Assets Available for Benefits for the Scheme and the Statement of Comprehensive Income for the constituent funds within “Net foreign currency gains/(losses)”.


87


2 Summary of significant accounting policies (Continued) (a) Basis of preparation (Continued)

The preparation of financial statements in conformity with HKFRS requires the Trustee to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgements about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates. All references to net assets throughout the financial statements refer to net assets attributable to members unless otherwise stated. All the assets and liabilities are held for the purpose of being traded or are expected to be realised within one year. Standards and amendments to existing standards effective 1st January 2019 There are no standards, amendment to standards or interpretations that are effective for annual periods beginning on 1st January 2019 that have a material effect on the financial statements of the Scheme and each of its constituent funds. New standards, amendments and interpretations effective after 1st January 2019 and have not been early adopted A number of new standards, amendments to standards and interpretations are effective for annual periods beginning after 1st January 2019, and have not been early adopted in preparing these financial statements. None of these are expected to have a material effect on the financial statements of the Scheme and each of its constituent funds.

(b) Foreign currency translation

(i) Functional and presentation currency

Items included in the financial statements of the Scheme and its constituent funds are measured using the currency of the primary economic environment in which they operate (the “functional currency”). This is the Hong Kong Dollar (“HKD”). The Scheme and its constituent funds have adopted the HKD as their presentation currency.

(ii) Transaction and balances

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign currency assets and liabilities are translated into the functional currency using the exchange rate prevailing at year end date. Foreign exchange gains and losses arising from translation are included in the Statement of Changes in Net Assets Available for Benefits for the Scheme and the Statement of Comprehensive Income for the constituent funds. Foreign exchange gains and losses relating to cash and cash equivalents are presented in the Statement of Changes in Net Assets Available for Benefits for the Scheme and the Statement of Comprehensive Income for the constituent funds within “Net foreign currency gains/(losses)”.


88

NOTES TO THE FINANCIAL STATEMENTS 2 Summary of significant accounting policies (Continued) (b) Foreign currency translation (Continued)

(ii) Transaction and balances (Continued) Foreign exchange gains and losses relating to the financial assets carried at fair value through profit or loss are presented in the Statement of Changes in Net Assets Available for Benefits within “Net realised gains/(losses) on redemption of units in constituent funds” and “Change in unrealised gains/losses in value of constituent funds” for the Scheme and the Statement of Comprehensive Income within “Realised gains/(losses) on sales of financial assets at fair value through profit or loss” and “Change in unrealised gains/losses on financial assets at fair value through profit or loss” for the constituent funds.

(c) Income

Dividend income is recognised when the right to receive payment is established. Other income is accounted for on an accruals basis. Reimbursement income and rebate income are recognised when the right to receive payment is established.

(d) Expenses

All expenses are accounted for on an accruals basis. (e) Contributions

Contributions are accounted for on an accruals basis. (f) Benefits

Benefits are accounted for on an accruals basis. (g) Transfers in

Transfers in amounts are recognised when the right to receive payment is established. (h) Transfers out

Transfers out amounts are accounted for when the obligation to make payment is established.

(i) Forfeitures

If a member ceases to be a member, the part of the employer’s voluntary balance not otherwise disposed of in accordance with the rules of the Scheme may be applied in reducing the future contributions of the employer, or in such other manner as the Trustee may determine, having consulted the employers (including payment to the employers). Forfeitures arising from such cases which have not been designated for the benefit of existing members and which have not been returned to the employers would be treated as liabilities of the Scheme.

(j) Cash and cash equivalents Cash and cash equivalents include cash at bank, bank deposits with original maturities of 3 months or less from the date of placement net of bank overdrafts, if any.


89

NOTES TO THE FINANCIAL STATEMENTS 2 Summary of significant accounting policies (Continued)

(k) Financial assets at fair value through profit or loss

(i) Classification

Assets The Scheme and its constituent funds classifies its investments based on both the Scheme and its constituent funds’ business model for managing those financial assets and the contractual cash flow characteristics of the financial assets. The portfolio of financial assets is managed and performance is evaluated on a fair value basis. The Scheme and its constituent funds are primarily focused on fair value information and uses that information to assess the assets’ performance and to make decisions. The Scheme and its constituent funds have not taken the option to irrevocably designate any equity securities as fair value through other comprehensive income. The contractual cash flows of the Scheme and its constituent funds debt securities are solely principal and interest, however, these securities are neither held for the purpose of collecting contractual cash flows nor held both for collecting contractual cash flows and for sale. The collection of contractual cash flows is only incidental to achieving the Scheme and its constituent funds’ business model’s objective. Consequently, all investments are measured at fair value through profit or loss. The Scheme and each of its constituent funds’ policy requires the Investment Manager and the Trustee to evaluate the information about these financial assets and liabilities on a fair value basis together with other related financial information.

(ii) Recognition, derecognition and measurement

Regular purchases and sales of investments are recognised on the trade date - the date on which the Scheme and its constituent funds commit to purchase or sell the investment. Financial assets at fair value through profit or loss are initially recognised at fair value, excluding transaction costs which are expensed as incurred.

Financial assets are derecognised when the rights to receive cash flows from the investments have expired or have been transferred and the Scheme and its constituent funds have transferred substantially all risks and rewards of ownership. Subsequent to initial recognition, all financial assets at fair value through profit or loss are measured at fair value. Gains and losses arising from changes in the fair value of the “Financial assets at fair value through profit or loss” category are presented in the Statement of Changes in Net Assets Available for Benefits of the Scheme within “Net realised gains/(losses) on redemption of units in constituent funds” and “Change in unrealised gains/losses in value of constituent funds”; and in the Statement of Comprehensive Income of the constituent funds within “Change in unrealised gains/losses on financial assets at fair value through profit or loss” and “Realised gains/(losses) on sales of financial assets at fair value through profit or loss” in the period in which they arise.


89

NOTES TO THE FINANCIAL STATEMENTS 2 Summary of significant accounting policies (Continued)

(k) Financial assets at fair value through profit or loss

(i) Classification

Assets The Scheme and its constituent funds classifies its investments based on both the Scheme and its constituent funds’ business model for managing those financial assets and the contractual cash flow characteristics of the financial assets. The portfolio of financial assets is managed and performance is evaluated on a fair value basis. The Scheme and its constituent funds are primarily focused on fair value information and uses that information to assess the assets’ performance and to make decisions. The Scheme and its constituent funds have not taken the option to irrevocably designate any equity securities as fair value through other comprehensive income. The contractual cash flows of the Scheme and its constituent funds debt securities are solely principal and interest, however, these securities are neither held for the purpose of collecting contractual cash flows nor held both for collecting contractual cash flows and for sale. The collection of contractual cash flows is only incidental to achieving the Scheme and its constituent funds’ business model’s objective. Consequently, all investments are measured at fair value through profit or loss. The Scheme and each of its constituent funds’ policy requires the Investment Manager and the Trustee to evaluate the information about these financial assets and liabilities on a fair value basis together with other related financial information.

(ii) Recognition, derecognition and measurement

Regular purchases and sales of investments are recognised on the trade date - the date on which the Scheme and its constituent funds commit to purchase or sell the investment. Financial assets at fair value through profit or loss are initially recognised at fair value, excluding transaction costs which are expensed as incurred.

Financial assets are derecognised when the rights to receive cash flows from the investments have expired or have been transferred and the Scheme and its constituent funds have transferred substantially all risks and rewards of ownership. Subsequent to initial recognition, all financial assets at fair value through profit or loss are measured at fair value. Gains and losses arising from changes in the fair value of the “Financial assets at fair value through profit or loss” category are presented in the Statement of Changes in Net Assets Available for Benefits of the Scheme within “Net realised gains/(losses) on redemption of units in constituent funds” and “Change in unrealised gains/losses in value of constituent funds”; and in the Statement of Comprehensive Income of the constituent funds within “Change in unrealised gains/losses on financial assets at fair value through profit or loss” and “Realised gains/(losses) on sales of financial assets at fair value through profit or loss” in the period in which they arise.


90

NOTES TO THE FINANCIAL STATEMENTS 2 Summary of significant accounting policies (Continued) (k) Financial assets at fair value through profit or loss (Continued)

(iii) Fair value estimation

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Investments in constituent funds are valued at their respective closing net asset value per unit.

Investments in approved pooled investment funds and listed unit trusts are valued at their respective last traded prices as provided by the administrators of such funds. Where last traded prices were not available, investments in approved pooled investment funds and listed unit trusts are valued at their closing net assets value per unit as provided by the administrators of such funds.

(iv) Transfers between levels of the fair value hierarchy Transfers between levels of the fair value hierarchy are deemed to have occurred at the beginning of the reporting period.

(l) Amounts receivable on sales of investments/payable on purchases of investments

Amounts receivable on sales of investments/payable on purchases of investments represent receivables for investments sold and payables for investments purchased that have been contracted for but not yet settled or delivered on the year end date respectively. Amounts receivable on sales of investments balance is held for collection. These amounts are recognised initially at fair value and subsequently measured at amortised cost. At each reporting date, the constituent funds shall measure the loss allowance on amounts receivable on sale of investments at an amount equal to the lifetime expected credit losses if the credit risk has increased significantly since initial recognition. If, at the reporting date, the credit risk has not increased significantly since initial recognition, the constituent funds shall measure the loss allowance at an amount equal to 12-month expected credit losses. Significant financial difficulties of the broker, probability that the broker will enter bankruptcy or financial reorganisation, and default in payments are all considered indicators that a loss allowance may be required. If the credit risk increases to the point that it is considered to be credit impaired, interest income will be calculated based on the gross carrying amount adjusted for the loss allowance. A significant increase in credit risk is defined by management as any contractual payment which is more than 30 days past due. Any contractual payment which is more than 90 days past due is considered credit impaired.


91

NOTES TO THE FINANCIAL STATEMENTS 2 Summary of significant accounting policies (Continued) (m) Accrued expenses

Accrued expenses are recognised initially at fair value and subsequently stated at amortised cost using the effective interest method.

(n) Other receivables

Other receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method, less provision for impairment.

(o) Proceeds and payments on subscription and redemption of units

Proceeds and payments on subscription and redemption of units are shown as movements in the Statement of Changes in Equity of the respective constituent funds. The net asset value of the constituent funds is computed on each business day. Prices for subscriptions and redemptions on each business day are based on the net asset value per unit as at the close of business on the relevant business day.

(p) Structured entities

A structured entity is an entity that has been designed so that voting or similar rights are not the dominant factor in deciding who controls the entity, such as when any voting rights relate to administrative tasks only and the relevant activities are directed by means of contractual arrangements. A structured entity often has some or all of the following features or attributes; (a) restricted activities, (b) a narrow and well-defined objective, such as to provide investment opportunities for investors by passing on risks and rewards associated with the assets of the structured entity to investors, (c) insufficient equity to permit the structured entity to finance its activities without subordinated financial support and (d) financing in the form of multiple contractually linked instruments to investors that create concentrations of credit or other risks (tranches). The constituent funds consider all of their investments in other funds (‘‘underlying funds’’) to be investments in unconsolidated structured entities. The constituent funds invest in underlying funds whose objectives range from achieving medium to long term capital growth and whose investment strategy does not include the use of leverage. The underlying funds are managed by the Investment Manager except for Fidelity Hong Kong Tracker Fund where that is managed by third party managers, and apply various investment strategies to accomplish their respective investment objectives. The underlying funds finance their operations by issuing redeemable units which are puttable at the holder’s option and entitle the holder to a proportional stake in the respective fund’s net assets. The constituent funds hold redeemable units in each of its underlying funds. The change in fair value of each underlying fund is included in the Statement of Comprehensive Income in “Change in unrealised gains/losses on financial assets at fair value through profit or loss”.


91

NOTES TO THE FINANCIAL STATEMENTS 2 Summary of significant accounting policies (Continued) (m) Accrued expenses

Accrued expenses are recognised initially at fair value and subsequently stated at amortised cost using the effective interest method.

(n) Other receivables

Other receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method, less provision for impairment.

(o) Proceeds and payments on subscription and redemption of units

Proceeds and payments on subscription and redemption of units are shown as movements in the Statement of Changes in Equity of the respective constituent funds. The net asset value of the constituent funds is computed on each business day. Prices for subscriptions and redemptions on each business day are based on the net asset value per unit as at the close of business on the relevant business day.

(p) Structured entities

A structured entity is an entity that has been designed so that voting or similar rights are not the dominant factor in deciding who controls the entity, such as when any voting rights relate to administrative tasks only and the relevant activities are directed by means of contractual arrangements. A structured entity often has some or all of the following features or attributes; (a) restricted activities, (b) a narrow and well-defined objective, such as to provide investment opportunities for investors by passing on risks and rewards associated with the assets of the structured entity to investors, (c) insufficient equity to permit the structured entity to finance its activities without subordinated financial support and (d) financing in the form of multiple contractually linked instruments to investors that create concentrations of credit or other risks (tranches). The constituent funds consider all of their investments in other funds (‘‘underlying funds’’) to be investments in unconsolidated structured entities. The constituent funds invest in underlying funds whose objectives range from achieving medium to long term capital growth and whose investment strategy does not include the use of leverage. The underlying funds are managed by the Investment Manager except for Fidelity Hong Kong Tracker Fund where that is managed by third party managers, and apply various investment strategies to accomplish their respective investment objectives. The underlying funds finance their operations by issuing redeemable units which are puttable at the holder’s option and entitle the holder to a proportional stake in the respective fund’s net assets. The constituent funds hold redeemable units in each of its underlying funds. The change in fair value of each underlying fund is included in the Statement of Comprehensive Income in “Change in unrealised gains/losses on financial assets at fair value through profit or loss”.

FID

ELIT

Y R

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T M

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RU

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YEAR

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DED

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T D

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201

9

92

NO

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by d

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the

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s at

tribu

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by

the

num

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th

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nd. T

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f the

num

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and

the

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s at

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A

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2019

20

18

2019

20

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128,

839,

660.

836

130,

660,

432.

507

160,

489,

380.

803

163,

603,

189.

233

387,

582,

904.

083

292,

317,

166.

519

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24,6

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198,

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477)

(1

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(182

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)

─────────────

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U

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134,

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489,

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406,

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═════════════

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FID

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96,6

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12,7

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═════════════

═════════════

═════════════

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349,

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991

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═════════════

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═════════════

═════════════

═════════════

═════════════

═════════════

═════════════

FID

ELIT

Y R

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20

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20.4

93)

(5,3

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05)

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57,1

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81)

─────────────

─────────────

─────────────

─────────────

─────────────

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U

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═════════════

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═════════════

═════════════

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FID

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20

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─────────────

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U

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═════════════

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═════════════

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FID

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537)

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418)

─────────────

─────────────

─────────────

─────────────

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U

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228,

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29.0

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═════════════

═════════════

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FID

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(23,

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─────────────

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U

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═════════════

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FID

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═════════════

═════════════

═════════════

═════════════

═════════════

═════════════


99


4 Financial risk management

Strategy in using financial instruments

The constituent funds’ activities expose them to a variety of financial risks: market risk (including price risk, cash flow and fair value interest rate risk and foreign exchange risk), credit risk and liquidity risk. The constituent funds are also exposed to operational risks such as custody risk. Custody risk is the risk of loss of securities held in custody occasioned by the insolvency or negligence of the custodian. Although an appropriate legal framework is in place that eliminates the risk of loss of value of the securities held by the custodian, in the event of its failure, the ability of the constituent funds to transfer securities might be temporarily impaired. The constituent funds’ overall risk management programme seeks to minimise potential adverse effects on the constituent funds’ financial performance. The constituent funds may use financial futures contracts, financial options contracts and/or spot/forward exchange contracts subject to the requirements of the Hong Kong Mandatory Provident Fund Schemes (General) Regulation (the “General Regulation”) and the terms of the Trust Deed to moderate certain risk exposures.

The Investment Manager believes that fundamental research can uncover investment opportunities. A bottom up investment process drives investment decision making and portfolio implementation.

Except for Fidelity Hong Kong Tracker Fund, all constituent funds’ assets principally consist of unit trusts that are authorised as Approved Pooled Investment Funds for MPF Schemes. They are held in accordance with the published investment policies of each constituent fund. The allocations of assets between the various types of unit trusts are determined by Investment Manager to achieve their investment objectives. Fidelity Hong Kong Tracker Fund is a feeder fund which invests in a third party fund namely Tracker Fund of Hong Kong (the “TraHK”) which is an approved index tracking fund structured as a unit trust. The investment objectives and policies of the constituent funds have been revised with effect from March 2020, please refer to the latest principal brochure for details. The investment objectives of the constituent funds of the Scheme as at 31st December 2019 are detailed below:

Asia Pacific Equity Fund to act as a feeder fund and invest all of its assets in the Asia Pacific Equity Fund

(MPF) of the Fidelity Global Investment Fund; to focus investment into the equity markets of Asia Pacific; to produce returns that are related to those achieved on the major stock market

indices of Asia Pacific; to have the flexibility to invest in bonds in a limited manner; to manage the volatility of returns in the short-term.

Balanced Fund to act as a feeder fund and invest all of its assets in the Balanced Fund of the Fidelity

Global Investment Fund; to build capital value over the long-term; to provide a degree of asset diversification within a predominantly equity portfolio; to maintain a broad geographic diversification with a bias towards Hong Kong; and to manage the volatility of returns in the short-term.


99


4 Financial risk management

Strategy in using financial instruments

The constituent funds’ activities expose them to a variety of financial risks: market risk (including price risk, cash flow and fair value interest rate risk and foreign exchange risk), credit risk and liquidity risk. The constituent funds are also exposed to operational risks such as custody risk. Custody risk is the risk of loss of securities held in custody occasioned by the insolvency or negligence of the custodian. Although an appropriate legal framework is in place that eliminates the risk of loss of value of the securities held by the custodian, in the event of its failure, the ability of the constituent funds to transfer securities might be temporarily impaired. The constituent funds’ overall risk management programme seeks to minimise potential adverse effects on the constituent funds’ financial performance. The constituent funds may use financial futures contracts, financial options contracts and/or spot/forward exchange contracts subject to the requirements of the Hong Kong Mandatory Provident Fund Schemes (General) Regulation (the “General Regulation”) and the terms of the Trust Deed to moderate certain risk exposures.

The Investment Manager believes that fundamental research can uncover investment opportunities. A bottom up investment process drives investment decision making and portfolio implementation.

Except for Fidelity Hong Kong Tracker Fund, all constituent funds’ assets principally consist of unit trusts that are authorised as Approved Pooled Investment Funds for MPF Schemes. They are held in accordance with the published investment policies of each constituent fund. The allocations of assets between the various types of unit trusts are determined by Investment Manager to achieve their investment objectives. Fidelity Hong Kong Tracker Fund is a feeder fund which invests in a third party fund namely Tracker Fund of Hong Kong (the “TraHK”) which is an approved index tracking fund structured as a unit trust. The investment objectives and policies of the constituent funds have been revised with effect from March 2020, please refer to the latest principal brochure for details. The investment objectives of the constituent funds of the Scheme as at 31st December 2019 are detailed below:

Asia Pacific Equity Fund to act as a feeder fund and invest all of its assets in the Asia Pacific Equity Fund

(MPF) of the Fidelity Global Investment Fund; to focus investment into the equity markets of Asia Pacific; to produce returns that are related to those achieved on the major stock market

indices of Asia Pacific; to have the flexibility to invest in bonds in a limited manner; to manage the volatility of returns in the short-term.

Balanced Fund to act as a feeder fund and invest all of its assets in the Balanced Fund of the Fidelity

Global Investment Fund; to build capital value over the long-term; to provide a degree of asset diversification within a predominantly equity portfolio; to maintain a broad geographic diversification with a bias towards Hong Kong; and to manage the volatility of returns in the short-term.


100


4 Financial risk management (Continued)

Strategy in using financial instruments (Continued)

MPF Conservative Fund to act as a feeder fund and invest all of its assets in the HK$ Money Fund of the

Fidelity Global Investment Fund; to provide a positive return each month equal to or better than the HKD savings

account rate; to focus investments in HKD short-term instruments; to invest only into HKD securities; and to ensure that there is minimal risk to the capital. Capital Stable Fund to act as a feeder fund and invest all of its assets in the Capital Stable Fund of the

Fidelity Global Investment Fund; to produce a positive return over the long-term; to focus investments towards less volatile assets of bonds and cash whilst retaining

some equity exposure; to maintain a broad geographic diversification with a bias towards Hong Kong; and to ensure that the risk to the capital base is limited in the short-term.

Fidelity SaveEasy 2020 Fund to act as a feeder fund and invest all of its assets in the Fidelity SaveEasy 2020 Fund

of the Fidelity Global Investment Fund; to achieve long term capital growth for investors to 2020; to invest typically in a wide range of investments covering markets throughout the

world, initially with a greater exposure to equities and thereafter, as the year 2020 is approached, greater exposure to bonds and cash;




of the Fidelity Global Investment Fund; to achieve long-term capital growth for investors to 2025; to invest typically in a wide range of investments covering markets throughout the



to manage the volatility of returns in the short-term. Fidelity SaveEasy 2030 Fund to act as a feeder fund and invest all of its assets in the Fidelity SaveEasy 2030 Fund






101






















101






















102




Global Equity Fund to act as a feeder fund and invest all of its assets in the Global Equity Fund of the

Fidelity Global Investment Fund; to focus investments into the global equity markets; to produce returns that are related to those achieved on the major world stock market


Growth Fund to act as a feeder fund and invest all of its assets in the Growth Fund of the Fidelity

Global Investment Fund; to build real wealth over the long-term; to focus investments into the global equity markets; to have the flexibility to invest in global bonds; to maintain a broad geographic diversification with a bias towards Hong Kong; and to manage the volatility of returns in the short-term. Hong Kong Bond Fund to act as a feeder fund and invest all of its assets in the Hong Kong Bond Fund of the

Fidelity Global Investment Fund; to invest in the world bond markets with a focus on HKD denominated bonds and

issuers; to produce returns that are related to those achieved on the major bond market

indices. to limit the volatility of returns in the short-term in HKD market terms; and to minimise currency volatility by implementing a HKD hedged strategy (where

investments are made other than in HKD).

Hong Kong Equity Fund to act as a feeder fund and invest all of its assets in the Hong Kong Equity Fund of

the Fidelity Global Investment Fund; to focus investment into the equity market of Hong Kong, namely equities of

companies listed in Hong Kong (including Greater China companies that are listed in Hong Kong) or companies which have a business connection with Hong Kong (including companies which are listed outside Hong Kong). Companies which have a business connection with Hong Kong include but are not limited to companies that are domiciled or incorporated in Hong Kong;

to produce returns that are related to those achieved on the major stock market indices of Hong Kong;

to have the flexibility to invest in bonds in a limited manner; and to accept a high level of return volatility in the short-term.


103




RMB Bond Fund to act as a feeder fund and invest all of its assets in the RMB Bond Fund (MPF) of the


denominated fixed income/debt securities issued or distributed outside Mainland China as well as deposits (including but are not limited to, convertible bonds, corporate bonds, government bonds, commercial papers, medium term notes, floating rate notes, money market instruments, certificates of deposits, bank deposits and negotiated term deposits), and

to limit the volatility of returns in the short term. Stable Growth Fund to act as a feeder fund and invest all of its assets in the Stable Growth Fund of the

Fidelity Global Investment Fund; to generate a positive return over the long-term; to broadly diversify the portfolio as to asset type as between equities and bonds; to maintain a broad geographic diversification with a bias towards Hong Kong; and to limit the volatility of returns in the short-term.

World Bond Fund to act as a feeder fund and invest all of its assets in the World Bond Fund of the

Fidelity Global Investment Fund; to focus investments into the bond markets of the world; to produce returns that are related to those achieved on the major bond market

indices; and to limit the volatility of returns in the short-term.

Fidelity Hong Kong Tracker Fund to act as a feeder fund and invest all of its assets in the Tracker Fund of Hong Kong

(“TraHK”) to achieve long-term capital growth by investing all or substantially all of the fund

assets into TraHK.

Core Accumulation Fund to act as a feeder fund and invest all of its assets in the Core Accumulation Fund of

the Fidelity Global Investment Fund; to achieve capital growth by investing in a globally diversified manner; to target to invest 60% of its Net Asset Value in higher risk assets (such as global



103




RMB Bond Fund to act as a feeder fund and invest all of its assets in the RMB Bond Fund (MPF) of the


denominated fixed income/debt securities issued or distributed outside Mainland China as well as deposits (including but are not limited to, convertible bonds, corporate bonds, government bonds, commercial papers, medium term notes, floating rate notes, money market instruments, certificates of deposits, bank deposits and negotiated term deposits), and

to limit the volatility of returns in the short term. Stable Growth Fund to act as a feeder fund and invest all of its assets in the Stable Growth Fund of the

Fidelity Global Investment Fund; to generate a positive return over the long-term; to broadly diversify the portfolio as to asset type as between equities and bonds; to maintain a broad geographic diversification with a bias towards Hong Kong; and to limit the volatility of returns in the short-term.

World Bond Fund to act as a feeder fund and invest all of its assets in the World Bond Fund of the

Fidelity Global Investment Fund; to focus investments into the bond markets of the world; to produce returns that are related to those achieved on the major bond market

indices; and to limit the volatility of returns in the short-term.

Fidelity Hong Kong Tracker Fund to act as a feeder fund and invest all of its assets in the Tracker Fund of Hong Kong

(“TraHK”) to achieve long-term capital growth by investing all or substantially all of the fund

assets into TraHK.

Core Accumulation Fund to act as a feeder fund and invest all of its assets in the Core Accumulation Fund of

the Fidelity Global Investment Fund; to achieve capital growth by investing in a globally diversified manner; to target to invest 60% of its Net Asset Value in higher risk assets (such as global



104




Age 65 Plus Fund to act as a feeder fund and invest all of its assets in the Age 65 Plus Fund of the

Fidelity Global Investment Fund; to achieve stable growth by investing in a globally diversified manner; and to target to invest 20% of its Net Asset Value in higher risk assets (such as global


(a) Market risk

(i) Price risk

Market price risk is the risk that the value of a financial instrument will fluctuate as a result of changes in market prices, whether those changes are caused by factors specific to the individual instrument or factors affecting all instruments in the market.

The constituent funds are subject to market price risk in relation to their investments in the underlying funds, for prices in the future are uncertain. The constituent funds’ market price risk is managed through (i) deliberate investment funds selection and (ii) diversification of the investment portfolio of the underlying funds. The market risks are managed at the underlying fund level. The constituent funds’ investments in underlying funds are subject to the terms and conditions of the respective underlying fund’s offering documents and are susceptible to market price risk arising from uncertainties about future values of those underlying funds. The investment manager makes investment decisions after extensive due diligence of the underlying fund and their strategy. The right of the constituent funds to request redemption of their investments in underlying funds is on a daily basis. These investments are included in financial assets at fair value through profit or loss in the Statement of Net Assets.


105


4 Financial risk management (Continued) (a) Market risk (Continued)

(i) Price risk (Continued)

As at year end, the overall market exposures of the constituent funds were as follows:

Asia Pacific Equity Fund

At 31st December 2019 2018 Fair value Cost % of net Fair value Cost % of net HK$ HK$ assets HK$ HK$ assets Approved Pooled

Investment Funds 3,572,279,634 2,610,182,784 100.12 2,921,810,549 2,409,626,327 100.13 ═══════════ ═══════════ ════════ ═══════════ ═══════════ ════════

Asia Pacific Equity Fund invests in Fidelity Global Investment Fund - Asia Pacific Equity Fund (MPF) which in turn invests in Fidelity Global Investment Fund - Asia Pacific Equity Fund. The following table shows the net market exposure the underlying fund has to the market:

Net asset value of underlying fund

HK$ 2019


HK$ 2018

% of investments

2019

% of investments

2018 Fidelity Global Investment Fund


Fidelity Global Investment Fund - Asia Pacific Equity Fund - Class

B (Note ii) 14,715,114,361 11,505,586,147 100.00 100.00 ══════ ══════


105




As at year end, the overall market exposures of the constituent funds were as follows:

Asia Pacific Equity Fund



Asia Pacific Equity Fund invests in Fidelity Global Investment Fund - Asia Pacific Equity Fund (MPF) which in turn invests in Fidelity Global Investment Fund - Asia Pacific Equity Fund. The following table shows the net market exposure the underlying fund has to the market:


HK$ 2019


HK$ 2018

% of investments

2019

% of investments



Fidelity Global Investment Fund - Asia Pacific Equity Fund - Class

B (Note ii) 14,715,114,361 11,505,586,147 100.00 100.00 ══════ ══════


106

NOTES TO THE FINANCIAL STATEMENTS 4 Financial risk management (Continued) (a) Market risk (Continued)


Balanced Fund At 31st December 2019 2018 Fair value Cost % of net Fair value Cost % of net HK$ HK$ assets HK$ HK$ assets Approved Pooled


Balanced Fund invests in Fidelity Global Investment Fund - Balanced Fund which in turn invests in a portfolio of approved pooled investment funds. The following table shows the net market exposure the underlying fund has to various markets:


HK$ 2019


HK$ 2018

% of investments

2019

% of investments


- Balanced Fund

Fidelity Global Investment Fund - Americas Equity Fund - Class B

(Note i) 17,418,469,498 13,655,534,411 15.07 14.36 - Asia Pacific Equity Fund - Class

B (Note ii) 14,715,114,361 11,505,586,147 9.49 8.57 - European Equity Fund - Class B

(Note iii) 13,676,450,518 10,564,900,756 14.60 13.46 - Global Bond Fund - Class B

(Note iv) 20,314,240,892 17,542,266,732 13.89 14.37 - Global Bond HK$ Hedged Fund -

Class B (Note xii) 4,902,900,285 4,025,585,427 8.77 9.29 - HK$ Money Fund - Class B

(Note v) 8,069,772,069 8,788,054,628 1.95 5.08 - Hong Kong Bond Fund - Class B

(Note vi) 3,291,985,435 2,708,594,595 1.52 1.47 - Hong Kong Equity Fund - Class

B (Note vii) 30,746,672,713 25,937,934,456 25.03 24.29 - Japanese Equity Fund - Class B

(Note viii) 8,719,892,448 6,996,866,286 9.68 9.11 ────── ────── 100.00 100.00 ══════ ══════


107




MPF Conservative Fund



MPF Conservative Fund invests in Fidelity Global Investment Fund - HK$ Money Fund. The investments of the underlying fund are not subject to market price risk.

Capital Stable Fund




107




MPF Conservative Fund



MPF Conservative Fund invests in Fidelity Global Investment Fund - HK$ Money Fund. The investments of the underlying fund are not subject to market price risk.

Capital Stable Fund




108




Capital Stable Fund (Continued)

Capital Stable Fund invests in Fidelity Global Investment Fund - Capital Stable Fund which in turn invests in a portfolio of approved pooled investment funds. The following table shows the net market exposure the underlying fund has to various markets:


HK$ 2019


HK$ 2018

% of investments

2019

% of investments


- Capital Stable Fund










(Note viii) 8,719,892,448 6,996,866,286 4.74 4.18 ────── ────── 100.00 100.00 ══════ ══════


109




Fidelity SaveEasy 2020 Fund


Investment Funds 396,677,419 317,152,534 100.10 337,080,521 296,394,712 100.10 ═══════════ ═══════════ ════════ ═══════════ ═══════════ ════════

Fidelity SaveEasy 2020 Fund invests in Fidelity Global Investment Fund - Fidelity SaveEasy 2020 Fund which in turn invests in a portfolio of approved pooled investment funds. The following table shows the net market exposure the underlying fund has to various markets:


HK$ 2019


HK$ 2018

% of investments

2019

% of investments







(Note iv) N/A 17,542,266,732 - 0.71 - Global Bond HK$ Hedged Fund -


(Note v) 8,069,772,069 8,788,054,628 0.77 0.73 - Hong Kong Equity Fund - Class


(Note viii) 8,719,892,448 6,996,866,286 6.05 6.51 ────── ────── 100.00 100.00 ══════ ══════


109









HK$ 2019


HK$ 2018

% of investments

2019

% of investments









(Note v) 8,069,772,069 8,788,054,628 0.77 0.73 - Hong Kong Equity Fund - Class


(Note viii) 8,719,892,448 6,996,866,286 6.05 6.51 ────── ────── 100.00 100.00 ══════ ══════


110









HK$ 2019


HK$ 2018

% of investments

2019

% of investments








Class B (Note xii) 4,902,900,285 4,025,585,427 12.01 11.56 - Hong Kong Equity Fund - Class


(Note viii) 8,719,892,448 6,996,866,286 11.57 11.55 ────── ────── 100.00 100.00 ══════ ══════


111




Fidelity SaveEasy 2030 Fund At 31st December 2019 2018 Fair value Cost % of net Fair value Cost % of net HK$ HK$ assets HK$ HK$ assets Approved Pooled




HK$ 2019


HK$ 2018

% of investments

2019

% of investments






(Note iii) 13,676,450,518 10,564,900,756 19.26 18.20 - Global Bond HK$ Hedged Fund -



(Note viii) 8,719,892,448 6,996,866,286 12.51 12.40 ────── ────── 100.00 100.00 ══════ ══════


111








HK$ 2019


HK$ 2018

% of investments

2019

% of investments









(Note viii) 8,719,892,448 6,996,866,286 12.51 12.40 ────── ────── 100.00 100.00 ══════ ══════


112









HK$ 2019


HK$ 2018

% of investments

2019

% of investments









(Note viii) 8,719,892,448 6,996,866,286 12.79 12.83 ────── ────── 100.00 100.00 ══════ ══════


113




Investment Funds 1,262,071,616 928,668,008 100.12 1,013,811,246 883,876,906 100.13 ═══════════ ═══════════ ════════ ═══════════ ═══════════ ════════



HK$ 2019


HK$ 2018

% of investments

2019

% of investments









(Note viii) 8,719,892,448 6,996,866,286 12.87 13.00 ────── ────── 100.00 100.00 ══════ ══════


113




Investment Funds 1,262,071,616 928,668,008 100.12 1,013,811,246 883,876,906 100.13 ═══════════ ═══════════ ════════ ═══════════ ═══════════ ════════



HK$ 2019


HK$ 2018

% of investments

2019

% of investments









(Note viii) 8,719,892,448 6,996,866,286 12.87 13.00 ────── ────── 100.00 100.00 ══════ ══════


114


4 Financial risk management (Continued) (a) Market risk (Continued) (i) Price risk (Continued)






HK$ 2019


HK$ 2018

% of investments

2019

% of investments









(Note viii) 8,719,892,448 6,996,866,286 12.88 13.16 ────── ────── 100.00 100.00 ══════ ══════


115









HK$ 2019


HK$ 2018

% of investments

2019

% of investments






(Note iii) 13,676,450,518 10,564,900,756 19.94 19.31 - Hong Kong Equity Fund - Class


(Note viii) 8,719,892,448 6,996,866,286 12.99 12.78 ────── ────── 100.00 100.00 ══════ ══════


115









HK$ 2019


HK$ 2018

% of investments

2019

% of investments






(Note iii) 13,676,450,518 10,564,900,756 19.94 19.31 - Hong Kong Equity Fund - Class


(Note viii) 8,719,892,448 6,996,866,286 12.99 12.78 ────── ────── 100.00 100.00 ══════ ══════


116




Global Equity Fund



Global Equity Fund invests in Fidelity Global Investment Fund - Global Equity Fund which in turn invests in a portfolio of approved pooled investment funds. The following table shows the net market exposure the underlying fund has to various markets:


2019


2018

% of investments

2019

% of investments

2018 Fidelity Global Investment

Fund - Global Equity Fund

Fidelity Global Investment Fund - Americas Equity Fund - Class

B (Note i) HK$17,418,469,498 HK$13,655,534,411 63.06 61.87 - Asia Pacific Equity Fund -

Class B (Note ii) HK$14,715,114,361 HK$11,505,586,147 6.93 6.16 - European Equity Fund - Class

B (Note iii) HK$13,676,450,518 HK$10,564,900,756 21.04 21.20 - Hong Kong Equity Fund - Class

B (Note vii) HK$30,746,672,713 HK$25,937,934,456 0.75 1.70 - Japanese Equity Fund - Class

B (Note viii) HK$8,719,892,448 HK$6,996,866,286 8.22 8.99 - US$ Money Fund - Class B

(Note xi) N/A US$618,940,999 - 0.08 ────── ────── 100.00 100.00 ══════ ══════


117




Growth Fund



Growth Fund invests in Fidelity Global Investment Fund - Growth Fund which in turn invests in a portfolio of approved pooled investment funds. The following table shows the net market exposure the underlying fund has to various markets:


HK$ 2019


HK$ 2018

% of investments

2019

% of investments


- Growth Fund










(Note viii) 8,719,892,448 6,996,866,286 12.58 12.11 ────── ────── 100.00 100.00 ══════ ══════


117




Growth Fund



Growth Fund invests in Fidelity Global Investment Fund - Growth Fund which in turn invests in a portfolio of approved pooled investment funds. The following table shows the net market exposure the underlying fund has to various markets:


HK$ 2019


HK$ 2018

% of investments

2019

% of investments


- Growth Fund










(Note viii) 8,719,892,448 6,996,866,286 12.58 12.11 ────── ────── 100.00 100.00 ══════ ══════


118




Hong Kong Bond Fund


Investment Funds 1,227,433,978 1,137,762,689 100.10 1,005,519,233 959,382,763 100.10 ═══════════ ═══════════ ════════ ═══════════ ═══════════ ════════

Hong Kong Bond Fund invests in Fidelity Global Investment Fund - Hong Kong Bond Fund. The following table shows the net market exposure the underlying fund has to various markets:


HK$ 2019


HK$ 2018

% of investments

2019

% of investments


- Hong Kong Bond Fund

Fidelity Global Investment Fund - Hong Kong Bond Fund - Class B

(Note vi) 3,291,985,435 2,708,594,595 100.00 100.00 ══════ ══════


119




Hong Kong Equity Fund



Hong Kong Equity Fund invests in Fidelity Global Investment Fund - Hong Kong Equity Fund. The following table shows the net market exposure the underlying fund has to various markets:


HK$ 2019


HK$ 2018

% of investments

2019

% of investments


- Hong Kong Equity Fund

Fidelity Global Investment Fund - Hong Kong Equity Fund - Class B

(Note vii) 30,746,672,713 25,937,934,456 100.00 100.00 ══════ ══════


119




Hong Kong Equity Fund



Hong Kong Equity Fund invests in Fidelity Global Investment Fund - Hong Kong Equity Fund. The following table shows the net market exposure the underlying fund has to various markets:


HK$ 2019


HK$ 2018

% of investments

2019

% of investments


- Hong Kong Equity Fund

Fidelity Global Investment Fund - Hong Kong Equity Fund - Class B

(Note vii) 30,746,672,713 25,937,934,456 100.00 100.00 ══════ ══════


120




RMB Bond Fund



RMB Bond Fund invests in Fidelity Global Investment Fund - RMB Bond Fund (MPF) which in turn invests in Fidelity Global Investment Fund - RMB Bond Fund. The following table shows the net market exposure the underlying fund has to the market:


HK$ 2019


HK$ 2018

% of investments

2019

% of investments


- RMB Bond Fund (MPF)

Fidelity Global Investment Fund

- RMB Bond Fund - Class B (Note x) 264,985,731 191,983,917 100.00 100.00

══════ ══════


121




Stable Growth Fund



Stable Growth Fund invests in Fidelity Global Investment Fund - Stable Growth Fund which in turn invests in a portfolio of approved pooled investment funds. The following table shows the net market exposure the underlying fund has to various markets:


HK$ 2019


HK$ 2018

% of investments

2019

% of investments


- Stable Growth Fund










(Note viii) 8,719,892,448 6,996,866,286 7.21 6.63 ────── ────── 100.00 100.00 ══════ ══════


121




Stable Growth Fund



Stable Growth Fund invests in Fidelity Global Investment Fund - Stable Growth Fund which in turn invests in a portfolio of approved pooled investment funds. The following table shows the net market exposure the underlying fund has to various markets:


HK$ 2019


HK$ 2018

% of investments

2019

% of investments


- Stable Growth Fund










(Note viii) 8,719,892,448 6,996,866,286 7.21 6.63 ────── ────── 100.00 100.00 ══════ ══════


122




World Bond Fund


Investment Funds 1,344,399,439 1,253,670,333 100.12 1,031,900,599 985,067,270 100.12 ═══════════ ═══════════ ════════ ═══════════ ═══════════ ════════

World Bond Fund invests in Fidelity Global Investment Fund - World Bond Fund which in turn invests in a portfolio of approved pooled investment funds. The following table shows the net market exposure the underlying fund has to various markets:


HK$ 2019


HK$ 2018

% of investments

2019

% of investments


- World Bond Fund

Fidelity Global Investment Fund - Global Bond Fund - Class B


Class B (Note xii) 4,902,900,285 4,025,585,427 35.76 35.71 ────── ────── 100.00 100.00 ══════ ══════

Fidelity Hong Kong Tracker Fund At 31st December 2019 2018 Fair value Cost % of net Fair value Cost % of net HK$ HK$ assets HK$ HK$ assets Listed unit trusts 1,314,489,575 1,227,790,546 99.92 935,181,975 932,645,441 99.77 ═══════════ ═══════════ ════════ ═══════════ ═══════════ ════════


123




Fidelity Hong Kong Tracker Fund (Continued)

Fidelity Hong Kong Tracker Fund invests in the Tracker Fund of Hong Kong (TraHK), an approved index tracking fund which invests all, or substantially all, of TraHK’s assets in the shares in the constituent companies of the Hang Seng Index in substantially the same weightings as they appear in the Hang Seng Index of Hong Kong.


HK$ 2019


HK$ 2018

% of investments

2019

% of investments

2018 Tracker Fund of Hong Kong

(TraHK) (Note ix) 89,670,534,762 82,171,452,000 100.00 100.00 ══════ ══════

Core Accumulation Fund At 31st December 2019 2018 Fair value Cost % of net Fair value Cost % of net HK$ HK$ assets HK$ HK$ assets Approved Pooled

Investment Funds 1,294,815,980 1,160,049,867 100.06 660,327,498 674,667,063 100.06 ═══════════ ═══════════ ════════ ═══════════ ═══════════ ════════

Core Accumulation Fund invests in Fidelity Global Investment Fund - Core Accumulation Fund. The following table shows the net market exposure the underlying fund has to various markets:


HK$ 2019


HK$ 2018

% of investments

2019

% of investments


- Core Accumulation Fund

iShares Premier Funds - iShares World Equity Index Fund

- Class X 1,789,531,169 970,988,419 62.07 62.34 - iShares World Government Bond

Index Fund - Class X 2,868,563,242 1,766,464,638 37.93 37.66 ────── ────── 100.00 100.00 ══════ ══════


123




Fidelity Hong Kong Tracker Fund (Continued)

Fidelity Hong Kong Tracker Fund invests in the Tracker Fund of Hong Kong (TraHK), an approved index tracking fund which invests all, or substantially all, of TraHK’s assets in the shares in the constituent companies of the Hang Seng Index in substantially the same weightings as they appear in the Hang Seng Index of Hong Kong.


HK$ 2019


HK$ 2018

% of investments

2019

% of investments

2018 Tracker Fund of Hong Kong

(TraHK) (Note ix) 89,670,534,762 82,171,452,000 100.00 100.00 ══════ ══════

Core Accumulation Fund At 31st December 2019 2018 Fair value Cost % of net Fair value Cost % of net HK$ HK$ assets HK$ HK$ assets Approved Pooled

Investment Funds 1,294,815,980 1,160,049,867 100.06 660,327,498 674,667,063 100.06 ═══════════ ═══════════ ════════ ═══════════ ═══════════ ════════

Core Accumulation Fund invests in Fidelity Global Investment Fund - Core Accumulation Fund. The following table shows the net market exposure the underlying fund has to various markets:


HK$ 2019


HK$ 2018

% of investments

2019

% of investments


- Core Accumulation Fund





124




Age 65 Plus Fund



Age 65 Plus Fund invests in Fidelity Global Investment Fund - Age 65 Plus Fund. The following table shows the net market exposure the underlying fund has to various markets:


HK$ 2019


HK$ 2018

% of investments

2019

% of investments


- Age 65 Plus Fund




Except Core Accumulation Fund and Age 65 Plus Fund, the investment portfolios of the underlying funds by country as at 31st December 2019 and 2018 are as follows: Note: (i) Fidelity Global Investment Fund - Americas Equity Fund

% of investments

2019 % of investments

2018 CANADA 0.85 2.53 NETHERLANDS 1.97 0.49 UNITED STATES OF AMERICA 97.18 96.98 ────── ────── 100.00 100.00 ══════ ══════


125




(ii) Fidelity Global Investment Fund - Asia Pacific Equity Fund

% of investments 2019


AUSTRALIA 14.70 19.70 CHINA 30.37 27.03 HONG KONG 10.47 7.80 INDIA 10.60 12.02 INDONESIA 1.47 2.38 MACAU - 0.39 MALAYSIA 0.67 1.37 NEW ZEALAND 1.09 0.76 PHILIPPINES 1.54 1.38 SINGAPORE 4.20 2.07 SOUTH KOREA 12.11 10.44 TAIWAN 11.44 12.81 THAILAND 1.34 1.85 ────── ────── 100.00 100.00 ══════ ══════

(iii) Fidelity Global Investment Fund - European Equity Fund



DENMARK - 0.95

FINLAND - 0.74 FRANCE 19.16 17.63 GERMANY 14.94 17.24 GREAT BRITAIN 19.16 22.79 IRELAND 5.12 2.83 JORDAN - 0.46 LUXEMBOURG 0.94 0.72 NETHERLANDS 10.88 10.30 NORWAY 2.42 1.44 RUSSIA 2.15 2.33 SPAIN 5.08 4.94 SWEDEN 4.42 2.25 SWITZERLAND 15.73 15.38 ────── ────── 100.00 100.00 ══════ ══════


125




(ii) Fidelity Global Investment Fund - Asia Pacific Equity Fund



AUSTRALIA 14.70 19.70 CHINA 30.37 27.03 HONG KONG 10.47 7.80 INDIA 10.60 12.02 INDONESIA 1.47 2.38 MACAU - 0.39 MALAYSIA 0.67 1.37 NEW ZEALAND 1.09 0.76 PHILIPPINES 1.54 1.38 SINGAPORE 4.20 2.07 SOUTH KOREA 12.11 10.44 TAIWAN 11.44 12.81 THAILAND 1.34 1.85 ────── ────── 100.00 100.00 ══════ ══════

(iii) Fidelity Global Investment Fund - European Equity Fund



DENMARK - 0.95

FINLAND - 0.74 FRANCE 19.16 17.63 GERMANY 14.94 17.24 GREAT BRITAIN 19.16 22.79 IRELAND 5.12 2.83 JORDAN - 0.46 LUXEMBOURG 0.94 0.72 NETHERLANDS 10.88 10.30 NORWAY 2.42 1.44 RUSSIA 2.15 2.33 SPAIN 5.08 4.94 SWEDEN 4.42 2.25 SWITZERLAND 15.73 15.38 ────── ────── 100.00 100.00 ══════ ══════


126




(iv) Fidelity Global Investment Fund - Global Bond Fund



AUSTRALIA 2.44 1.84 AUSTRIA - 0.57 CANADA 1.87 3.33 FRANCE 0.36 - GERMANY 29.29 22.15 GREAT BRITAIN 5.13 6.68 INDONESIA 0.48 0.53 IRELAND - 0.40 ITALY 4.07 6.99 JAPAN 8.72 7.77 LUXEMBOURG 0.21 3.11 MALAYSIA 0.25 0.30 MEXICO 0.62 0.82 NETHERLANDS 1.83 2.19 NORWAY 3.28 2.40 POLAND 0.31 0.37 SAUDI ARABIA 0.06 -

SOUTH AFRICA 0.41 0.46 SWEDEN 0.23 0.47 UNITED STATES OF AMERICA 40.44 39.62 ────── ────── 100.00 100.00 ══════ ══════

(v) Fidelity Global Investment Fund - HK$ Money Fund The investments of HK$ Money Fund are not subject to market price risk.


127




(vi) Fidelity Global Investment Fund - Hong Kong Bond Fund



AUSTRALIA 9.41 12.38 BERMUDA - 0.55 BRITISH VIRGIN 6.78 9.98 CANADA 2.39 1.91 CAYMAN ISLANDS 3.08 20.45 CHINA 7.93 6.30

GREAT BRITAIN 3.52 0.53 HONG KONG 39.40 19.71 INDIA 1.82 -

JAPAN 0.51 4.30 LUXEMBOURG 1.94 0.89 MACAU 1.57 -

MALAYSIA 1.60 1.92 NETHERLANDS 2.22 - NEW ZEALAND 1.62 1.92 SINGAPORE 4.97 3.98 SOUTH KOREA 5.94 10.05 SWITZERLAND - 3.61 THAILAND 1.05 0.64 UNITED ARAB EMIRATES 1.57 - UNITED STATES OF AMERICA 2.68 0.88 ────── ────── 100.00 100.00 ══════ ══════

(vii) Fidelity Global Investment Fund - Hong Kong Equity Fund



CHINA 61.35 55.06 GREAT BRITAIN 7.22 9.34 HONG KONG 30.58 34.15 MACAU 0.85 1.31 SINGAPORE - 0.14 ────── ────── 100.00 100.00 ══════ ══════

(viii) Fidelity Global Investment Fund - Japanese Equity Fund



JAPAN 100.00 100.00 ══════ ══════


127




(vi) Fidelity Global Investment Fund - Hong Kong Bond Fund



AUSTRALIA 9.41 12.38 BERMUDA - 0.55 BRITISH VIRGIN 6.78 9.98 CANADA 2.39 1.91 CAYMAN ISLANDS 3.08 20.45 CHINA 7.93 6.30

GREAT BRITAIN 3.52 0.53 HONG KONG 39.40 19.71 INDIA 1.82 -

JAPAN 0.51 4.30 LUXEMBOURG 1.94 0.89 MACAU 1.57 -

MALAYSIA 1.60 1.92 NETHERLANDS 2.22 - NEW ZEALAND 1.62 1.92 SINGAPORE 4.97 3.98 SOUTH KOREA 5.94 10.05 SWITZERLAND - 3.61 THAILAND 1.05 0.64 UNITED ARAB EMIRATES 1.57 - UNITED STATES OF AMERICA 2.68 0.88 ────── ────── 100.00 100.00 ══════ ══════

(vii) Fidelity Global Investment Fund - Hong Kong Equity Fund



CHINA 61.35 55.06 GREAT BRITAIN 7.22 9.34 HONG KONG 30.58 34.15 MACAU 0.85 1.31 SINGAPORE - 0.14 ────── ────── 100.00 100.00 ══════ ══════

(viii) Fidelity Global Investment Fund - Japanese Equity Fund



JAPAN 100.00 100.00 ══════ ══════


128




(ix) Tracker Fund of Hong Kong



HONG KONG 100.00 100.00 ══════ ══════

(x) Fidelity Global Investment Fund - RMB Bond Fund



AUSTRALIA 13.80 6.32 BRITISH VIRGIN 9.15 13.61 CANADA 1.30 - CAYMAN ISLANDS 4.34 4.85 CHINA 14.32 27.26 FRANCE 0.86 - GERMANY - 1.27 GREAT BRITAIN 3.90 3.82 HONG KONG 22.46 15.64 INDIA 5.34 - IRELAND - 3.16 JAPAN 0.44 - LUXEMBOURG 0.61 0.87 NETHERLANDS 2.62 5.10 NEW ZEALAND - 2.53 SINGAPORE 6.82 - SOUTH AFRICA 1.29 - SOUTH KOREA 4.80 9.38 SUPRANATIONAL - 0.63 THAILAND 4.31 3.81 UNITED ARAB EMIRATES 0.88 - UNITED STATES OF AMERICA 2.76 1.75 ────── ────── 100.00 100.00 ══════ ══════

(xi) Fidelity Global Investment Fund – US$ Money Fund The investments of US$ Money Fund are not subject to market price risk. (xii) Fidelity Global Investment Fund – Global Bond HK$ Hedged Fund

% of investments

2019 % of investments

2018 Fidelity Global Investment Fund - Global Bond Fund

(Note iv) 100.00 100.00 ══════ ══════


129



The constituent funds’ maximum exposure to loss from their interests in underlying funds is equal to the total fair value of their investments in the underlying fund. Once the constituent funds have disposed of their units in underlying funds the constituent funds cease to be exposed to any risk from those underlying funds. The constituent funds’ investment strategy entails trading in other underlying funds on a regular basis. Total purchases in underlying funds during the years ended 31st December 2019 and 2018 are disclosed in the following table.

2019 2018 HK$ HK$

Asia Pacific Equity Fund 607,058,218 573,362,888 Balanced Fund 460,677,255 470,944,959 MPF Conservative Fund 2,196,145,665 3,051,432,406 Capital Stable Fund 416,960,731 483,742,089 Fidelity SaveEasy 2020 Fund 71,041,051 98,952,459 Fidelity SaveEasy 2025 Fund 68,347,265 71,612,393 Fidelity SaveEasy 2030 Fund 77,365,982 80,263,947 Fidelity SaveEasy 2035 Fund 79,571,470 79,095,136 Fidelity SaveEasy 2040 Fund 167,786,356 198,974,785 Fidelity SaveEasy 2045 Fund 45,522,905 35,491,928 Fidelity SaveEasy 2050 Fund 98,142,483 85,977,066 Global Equity Fund 949,905,840 695,174,418 Growth Fund 679,829,498 717,284,492 Hong Kong Bond Fund 515,328,272 411,392,387 Hong Kong Equity Fund 1,690,081,001 1,883,748,788 RMB Bond Fund 128,179,094 227,845,698 Stable Growth Fund 577,404,343 576,633,478 World Bond Fund 562,933,041 494,759,500 Fidelity Hong Kong Tracker Fund 446,195,001 376,172,591 Core Accumulation Fund 647,530,592 367,357,534 Age 65 Plus Fund 263,555,370 147,749,100 The net gains/(losses) incurred on investments in underlying funds during the years ended 31st December 2019 and 2018 are stated in the respective constituent funds’ Statement of Comprehensive Income.


129



The constituent funds’ maximum exposure to loss from their interests in underlying funds is equal to the total fair value of their investments in the underlying fund. Once the constituent funds have disposed of their units in underlying funds the constituent funds cease to be exposed to any risk from those underlying funds. The constituent funds’ investment strategy entails trading in other underlying funds on a regular basis. Total purchases in underlying funds during the years ended 31st December 2019 and 2018 are disclosed in the following table.

2019 2018 HK$ HK$

Asia Pacific Equity Fund 607,058,218 573,362,888 Balanced Fund 460,677,255 470,944,959 MPF Conservative Fund 2,196,145,665 3,051,432,406 Capital Stable Fund 416,960,731 483,742,089 Fidelity SaveEasy 2020 Fund 71,041,051 98,952,459 Fidelity SaveEasy 2025 Fund 68,347,265 71,612,393 Fidelity SaveEasy 2030 Fund 77,365,982 80,263,947 Fidelity SaveEasy 2035 Fund 79,571,470 79,095,136 Fidelity SaveEasy 2040 Fund 167,786,356 198,974,785 Fidelity SaveEasy 2045 Fund 45,522,905 35,491,928 Fidelity SaveEasy 2050 Fund 98,142,483 85,977,066 Global Equity Fund 949,905,840 695,174,418 Growth Fund 679,829,498 717,284,492 Hong Kong Bond Fund 515,328,272 411,392,387 Hong Kong Equity Fund 1,690,081,001 1,883,748,788 RMB Bond Fund 128,179,094 227,845,698 Stable Growth Fund 577,404,343 576,633,478 World Bond Fund 562,933,041 494,759,500 Fidelity Hong Kong Tracker Fund 446,195,001 376,172,591 Core Accumulation Fund 647,530,592 367,357,534 Age 65 Plus Fund 263,555,370 147,749,100 The net gains/(losses) incurred on investments in underlying funds during the years ended 31st December 2019 and 2018 are stated in the respective constituent funds’ Statement of Comprehensive Income.


130



(a) Market risk (Continued)

(i) Price risk (Continued) The table below summarises the impact of increases/decreases from the constituent funds’ underlying benchmark on the constituent funds’ net assets attributable to members at 31st December 2019 and 2018, other than RMB Bond Fund. The analysis is based on the assumption that the index component within the benchmark increased/decreased by a possible reasonable shift, with all other variables held constant and that the fair value of the constituent funds’ investments moved according to the historical correlation with the index.

Constituent

Funds Benchmark

Components Possible reasonable shift Impact on net assets

attributable to members 2019 2018 2019 2018 Asia Pacific Equity Fund

FTSE AW Asia Pacific ex Japan ex Hong Kong Index

13% 14% HK$429,563,054 HK$368,533,808

Balanced

Fund FTSE AW North America Index

9% 9% HK$385,038,868 HK$328,264,759


FTSE AW Europe Index

FTSE MPF HK FTSE AW Japan

Index FTSE World

Government Bond Index

1 month HIBOR MPF

Conservative Fund

1 month HIBOR 0.19% 0.16% HK$3,937,961 HK$954,766


131





Constituent Funds

Benchmark Components

Possible reasonable shift Impact on net assets attributable to members

2019 2018 2019 2018 Capital Stable


4% 5% HK$90,935,360 HK$86,061,756


FTSE AW Europe

Index


Index

FTSE World


1 month HIBOR Fidelity

SaveEasy 2020 Fund

FTSE AW North America Index

7% 8% HK$27,877,696 HK$29,482,748


FTSE AW Europe

Index


Index

FTSE World


1 month HIBOR


131





Constituent Funds



2019 2018 2019 2018 Capital Stable


4% 5% HK$90,935,360 HK$86,061,756


FTSE AW Europe

Index


Index

FTSE World


1 month HIBOR Fidelity

SaveEasy 2020 Fund


7% 8% HK$27,877,696 HK$29,482,748


FTSE AW Europe

Index


Index

FTSE World


1 month HIBOR


132





Constituent Funds



2019 2018 2019 2018 Fidelity

SaveEasy 2025 Fund

FTSE AW North America

Index

11% 11% HK$37,593,144 HK$29,563,693


FTSE AW Europe

Index


Index

FTSE World


Fidelity

SaveEasy 2030 Fund


11% 11% HK$49,314,966 HK$39,062,444


FTSE AW Europe

Index


Index

FTSE World Government Bond Index


133




Constituent

Funds Benchmark


attributable to members 2019 2018 2019 2018 Fidelity

SaveEasy 2035 Fund


Index

12% 12% HK$53,627,580 HK$41,394,773




Index FTSE World


Fidelity

SaveEasy 2040 Fund


12% 12% HK$151,069,972 HK$120,136,633




Index FTSE World



133




Constituent

Funds Benchmark


attributable to members 2019 2018 2019 2018 Fidelity

SaveEasy 2035 Fund


Index

12% 12% HK$53,627,580 HK$41,394,773




Index FTSE World


Fidelity

SaveEasy 2040 Fund


12% 12% HK$151,069,972 HK$120,136,633




Index FTSE World



134





Constituent Funds



2019 2018 2019 2018 Fidelity

SaveEasy 2045 Fund


12% 12% HK$12,332,522 HK$6,620,795




Index

FTSE World Government Bond Index

Fidelity

SaveEasy 2050 Fund


12% 12% HK$22,554,976 HK$12,453,951




Index


135





Constituent Funds



2019 2018 2019 2018 Global Equity

Fund FTSE World Index 11% 10% HK$416,957,647 HK$273,461,823

Growth Fund FTSE AW North

America Index 11% 11% HK$739,840,709 HK$617,784,116




Index FTSE World


1 month HIBOR Hong Kong

Bond Fund Markit iBoxx ALBI 2% 3% HK$27,169,251 HK$26,931,827

Hong Kong

Equity Fund FTSE MPF HK 16% 16% HK$1,089,164,163 HK$975,313,477


135





Constituent Funds



2019 2018 2019 2018 Global Equity

Fund FTSE World Index 11% 10% HK$416,957,647 HK$273,461,823

Growth Fund FTSE AW North

America Index 11% 11% HK$739,840,709 HK$617,784,116




Index FTSE World


1 month HIBOR Hong Kong

Bond Fund Markit iBoxx ALBI 2% 3% HK$27,169,251 HK$26,931,827

Hong Kong

Equity Fund FTSE MPF HK 16% 16% HK$1,089,164,163 HK$975,313,477


136





Constituent Funds



2019 2018 2019 2018 Stable Growth


6% 7% HK$234,988,002 HK$208,382,638




Index FTSE World


1 month HIBOR World Bond

Fund FTSE World Government Bond Index

4% 4% HK$43,660,716 HK$44,165,346

Fidelity Hong

Kong Tracker Fund

Hang Seng Index 16% 15% HK$207,295,006 HK$144,579,133

Core

Accumulation Fund

MPF DIS CAF Reference Portfolio

3% 3% HK$43,198,946 HK$21,807,976

Age 65 Plus

Fund MPF DIS A65 Reference Portfolio

2% 2% HK$7,147,851 HK$3,253,828

The Investment Manager has used their view of what would be a “possible reasonable shift” in each key market to estimate the change for use in the market sensitivity analysis above. Disclosures above are shown in absolute terms, changes and impacts could be positive or negative. Changes in market index % are revised annually depending on Investment Manager’s current view of market volatility and other relevant factors. The percentage of possible reasonable shift is based on the actual historical change in the relevant indices in the past 12 months and does not include remote or “worst case” scenarios or “stress tests” nor represent the Investment Manager’s forecast of the constituent funds’ future returns.


137

NOTES TO THE FINANCIAL STATEMENTS 4 Financial risk management (Continued) (a) Market risk (Continued) (ii) Cash flow and fair value interest rate risk

Interest rate risk arises from the effects of fluctuations in the prevailing levels of market interest rates on the fair value of interest-bearing assets and liabilities and future cash flow.

For the Asia Pacific Equity Fund, Hong Kong Equity Fund, Fidelity SaveEasy 2050 Fund and Fidelity Hong Kong Tracker Fund, the majority of these constituent funds’ financial assets are non-interest bearing, as these constituent funds invest primarily in equity funds. As a result, these constituent funds are not subject to significant amounts of risk due to fluctuations in the prevailing levels of market interest rates. Any excess cash and cash equivalents are invested at short-term market interest rates.

For the Balanced Fund, MPF Conservative Fund, Capital Stable Fund, Fidelity SaveEasy 2020 Fund, Fidelity SaveEasy 2025 Fund, Fidelity SaveEasy 2030 Fund, Fidelity SaveEasy 2035 Fund, Fidelity SaveEasy 2040 Fund, Fidelity SaveEasy 2045 Fund, Global Equity Fund, Growth Fund, Hong Kong Bond Fund, RMB Bond Fund, Stable Growth Fund, World Bond Fund, Core Accumulation Fund and Age 65 Plus Fund, the financial assets of these constituent funds include investments in bond funds and money funds which are exposed to risk due to fluctuations in the prevailing levels of market interest rates. The Scheme and its constituent funds are exposed to risks associated with the effects of fluctuations in the prevailing levels of market interest rates on their cash deposits. However, this is relatively immaterial to the size of the net assets of the Scheme and its constituent funds.


137

NOTES TO THE FINANCIAL STATEMENTS 4 Financial risk management (Continued) (a) Market risk (Continued) (ii) Cash flow and fair value interest rate risk

Interest rate risk arises from the effects of fluctuations in the prevailing levels of market interest rates on the fair value of interest-bearing assets and liabilities and future cash flow.

For the Asia Pacific Equity Fund, Hong Kong Equity Fund, Fidelity SaveEasy 2050 Fund and Fidelity Hong Kong Tracker Fund, the majority of these constituent funds’ financial assets are non-interest bearing, as these constituent funds invest primarily in equity funds. As a result, these constituent funds are not subject to significant amounts of risk due to fluctuations in the prevailing levels of market interest rates. Any excess cash and cash equivalents are invested at short-term market interest rates.

For the Balanced Fund, MPF Conservative Fund, Capital Stable Fund, Fidelity SaveEasy 2020 Fund, Fidelity SaveEasy 2025 Fund, Fidelity SaveEasy 2030 Fund, Fidelity SaveEasy 2035 Fund, Fidelity SaveEasy 2040 Fund, Fidelity SaveEasy 2045 Fund, Global Equity Fund, Growth Fund, Hong Kong Bond Fund, RMB Bond Fund, Stable Growth Fund, World Bond Fund, Core Accumulation Fund and Age 65 Plus Fund, the financial assets of these constituent funds include investments in bond funds and money funds which are exposed to risk due to fluctuations in the prevailing levels of market interest rates. The Scheme and its constituent funds are exposed to risks associated with the effects of fluctuations in the prevailing levels of market interest rates on their cash deposits. However, this is relatively immaterial to the size of the net assets of the Scheme and its constituent funds.


138

NOTES TO THE FINANCIAL STATEMENTS 4 Financial risk management (Continued) (a) Market risk (Continued) (ii) Cash flow and fair value interest rate risk (Continued)

At 31st December 2019 and 2018, for each 25 basis points (“bps”) increase or decrease in interest rates with all other variables remaining constant, the decrease or increase in net assets attributable to unit holders for the following constituent funds are as follows:

Interest rates raised/lowered by

25 bps

Constituent Funds Exposure to debt securities Decrease/increase in net assets

attributable to members

31st December 2019

31st December 2018

31st December 2019

31st December 2018

HK$ HK$ HK$ HK$ Balanced Fund 4,394,517,879 3,742,188,312 17,797,422 15,683,017 MPF Conservative

Fund 4,505,676,675 4,262,347,323 923,059 1,186,762 Capital Stable Fund 2,101,919,882 1,792,953,242 20,888,187 18,041,075 Fidelity SaveEasy

2020 Fund 396,677,419 337,080,521 3,671,009 2,929,163 Fidelity SaveEasy

2025 Fund 349,677,642 267,748,270 720,742 555,815 Fidelity SaveEasy



2040 Fund 1,262,071,616 1,013,811,246 108,048 160,710 Fidelity SaveEasy

2045 Fund 102,005,968 55,450,544 2,201 1,085 Global Equity Fund - 2,743,204,457 - 545 Growth Fund 6,660,551,225 5,563,918,399 6,815,385 6,134,925 Hong Kong Bond

Fund 1,227,433,978 1,005,519,233 13,276,499 10,775,802 RMB Bond Fund 214,495,540 162,401,369 1,345,221 572,093 Stable Growth Fund 3,646,730,225 3,074,669,317 26,748,277 23,074,780 World Bond Fund 1,344,399,439 1,031,900,599 23,029,862 17,520,742 Core Accumulation

Fund 1,294,815,980 660,327,498 9,489,512 4,509,441 Age 65 Plus Fund 370,431,760 175,958,695 5,657,589 2,516,565

The Investment Manager has used their view of what would be a “possible reasonable shift” in the market interest rates to estimate the change for use in the interest rate risk sensitivity analysis above. Disclosures above are shown in absolute terms, changes and impacts could be positive or negative. Changes in basis points are revised annually depending on the Investment Manager’s current view of market interest rate sensitivity and other relevant factors.


139




(iii) Foreign exchange risk

The Scheme and its constituent funds hold assets which are mainly denominated in HKD, the functional currency. As such, there is no currency risk at the Scheme and its constituent fund level.

(b) Credit and counterparty risk

Credit risk is the risk that an issuer or counterparty will be unable or unwilling to meet a commitment that it has entered into with the Scheme and its constituent funds.

The financial assets of the Scheme and its constituent funds which are potentially subject to concentrations of credit risk consist principally of bank deposits and assets held with the custodian. As at 31st December 2019, the safe keeping of the investments of the Scheme and its constituent funds is the responsibility of the Trustee. The Scheme and its constituent funds placed bank deposits with The Hongkong and Shanghai Banking Corporation Limited, the holding company of the Trustee. The credit rating for the Trustee and the bank is A-1+ (2018: A-1+) assigned by Standard and Poor’s.

The underlying investment funds of the constituent funds also hold debt securities and are therefore exposed to risk that the issuers may not be able to repay the principal amount at maturity and interest. This risk is mitigated as the debt securities held are subject to the requirements of (i) minimum credit rating, (ii) maximum holding of 10% of net asset value for any single issuer other than an exempt authority as defined in section 7(1) of Schedule 1 to the Mandatory Provident Fund Schemes (General) Regulation ("Exempt Authority"), and/or (iii) maximum holding of 30% of net asset value for any single issuer that is an Exempt Authority (or unconditionally guaranteed by an Exempt Authority).

The table below summarises the credit rating of the investment portfolio of the underlying funds with direct exposures to bonds and money market instruments by Standard and Poor’s/Moody’s/Fitch’s:

Fidelity Global Investment Fund - Hong Kong Bond Fund Portfolio by rating category Rating 2019 2018 AAA1/Aaa2/AAA3 3% 1% AA1/Aa2/AA3 15% 30% A1/A2/A3 55% 61% BBB1/Baa2/BBB3 19% 8% BB1 1% - NR 7% - ─────── ─────── Total 100% 100%

═══════ ═══════

Fidelity Global Investment Fund - HK$ Money Fund Portfolio by rating category Rating 2019 2018 P-12 91% 100% F23 9% - ─────── ─────── Total 100% 100%

═══════ ═══════


139




(iii) Foreign exchange risk

The Scheme and its constituent funds hold assets which are mainly denominated in HKD, the functional currency. As such, there is no currency risk at the Scheme and its constituent fund level.

(b) Credit and counterparty risk

Credit risk is the risk that an issuer or counterparty will be unable or unwilling to meet a commitment that it has entered into with the Scheme and its constituent funds.

The financial assets of the Scheme and its constituent funds which are potentially subject to concentrations of credit risk consist principally of bank deposits and assets held with the custodian. As at 31st December 2019, the safe keeping of the investments of the Scheme and its constituent funds is the responsibility of the Trustee. The Scheme and its constituent funds placed bank deposits with The Hongkong and Shanghai Banking Corporation Limited, the holding company of the Trustee. The credit rating for the Trustee and the bank is A-1+ (2018: A-1+) assigned by Standard and Poor’s.

The underlying investment funds of the constituent funds also hold debt securities and are therefore exposed to risk that the issuers may not be able to repay the principal amount at maturity and interest. This risk is mitigated as the debt securities held are subject to the requirements of (i) minimum credit rating, (ii) maximum holding of 10% of net asset value for any single issuer other than an exempt authority as defined in section 7(1) of Schedule 1 to the Mandatory Provident Fund Schemes (General) Regulation ("Exempt Authority"), and/or (iii) maximum holding of 30% of net asset value for any single issuer that is an Exempt Authority (or unconditionally guaranteed by an Exempt Authority).

The table below summarises the credit rating of the investment portfolio of the underlying funds with direct exposures to bonds and money market instruments by Standard and Poor’s/Moody’s/Fitch’s:

Fidelity Global Investment Fund - Hong Kong Bond Fund Portfolio by rating category Rating 2019 2018 AAA1/Aaa2/AAA3 3% 1% AA1/Aa2/AA3 15% 30% A1/A2/A3 55% 61% BBB1/Baa2/BBB3 19% 8% BB1 1% - NR 7% - ─────── ─────── Total 100% 100%

═══════ ═══════

Fidelity Global Investment Fund - HK$ Money Fund Portfolio by rating category Rating 2019 2018 P-12 91% 100% F23 9% - ─────── ─────── Total 100% 100%

═══════ ═══════


140

NOTES TO THE FINANCIAL STATEMENTS 4 Financial risk management (Continued)

(b) Credit and counterparty risk (Continued)

Fidelity Global Investment Fund - Global Bond Fund

Portfolio by rating category Rating 2019 2018 AAA1/Aaa2/AAA3 72% 66% AA1/Aa2/AA3 5% 9% A1/A2/A3 12% 12% BBB1/Baa2/BBB3 10% 13% BB1 1% - ─────── ─────── Total 100% 100%

═══════ ═══════

Fidelity Global Investment Fund - RMB Bond Fund

Portfolio by rating category Rating 2019 2018 AAA1/Aaa2/AAA3 1% 2% AA1/Aa2/AA3 9% 14% A1/A2/A3 41% 53% BBB1/Baa2/BBB3 47% 31% P-12 1% - NR 1% - ─────── ─────── Total 100% 100%

═══════ ═══════

Fidelity Global Investment Fund - US$ Money Fund Portfolio by rating category Rating 2019 2018 P-12 100% 100% ─────── ─────── Total 100% 100%

═══════ ═══════

1 Standard and Poor’s

2 Moody’s 3 Fitch’s

The Investment Manager has a dedicated Counterparty Research Group (“CRG”) which is responsible for conducting fundamental due diligence on all banks and brokers with which the Scheme trades. CRG performs due diligence, which frequently includes onsite meetings with senior management, financial statement modelling, publishing of formal written research notes and ratings, and monitoring of news flow. It also requires that, with exception, all securities transactions be executed with counterparties which are on the “Approved Trading Counterparty List” which has been formulated internally by the Investment Manager through analysis of independent fundamental credit reviews of all counterparties.

All transactions in quoted securities are settled/paid for upon delivery using approved brokers. The probable loss in the event of default is considered minimal, since nearly all delivery of securities sold is only made when the broker has received payment. Payment is made on a purchase when the securities have been received by the broker. The trade will fail if either party fails to meet its obligation.


141

NOTES TO THE FINANCIAL STATEMENTS 4 Financial risk management (Continued) (b) Credit and counterparty risk (Continued)

The constituent funds limit their exposure to credit risk by transacting the majority of their investments and contractual commitment activities with broker-dealers, banks and regulated exchanges with acceptable credit ratings for such instruments and that the constituent funds consider to be well established. The Investment Manager monitors the constituent funds’ credit position on a daily basis and these are reviewed on a quarterly basis by a risk oversight committee.

The Scheme and each of its constituent funds measure credit risk and expected credit losses using probability of default, exposure at default and loss given default. Management consider both historical analysis and forward looking information in determining any expected credit loss. The maximum exposure to credit risk at year end is the carrying amount of the financial assets as shown on the Statement of Net Assets Available for Benefits for the Scheme and the Statement of Net Assets for each of the constituent funds.

At 31st December 2019 and 2018, amounts receivable on sales of investments, cash and cash equivalents are due to be settled within 1 month. Investment Management consider the probability of default to be close to zero as the counterparties have a strong capacity to meet their contractual obligations in the near term. As a result, no loss allowance has been recognised as any such impairment would be insignificant to the Scheme and each of its constituent funds.

(c) Liquidity risk

Liquidity risk is the risk that the Scheme and its constituent funds may not be able to generate sufficient cash resources to settle their obligations in full as they fall due or can only do so on terms that are materially disadvantageous.

The constituent funds are exposed to daily cash redemptions of units in the constituent funds. The constituent funds invest the majority of their assets in underlying approved pooled investment funds that are traded in an active market and can be readily disposed of. Other investments which are neither listed nor quoted are restricted to a maximum of 15% of the net asset value of the respective constituent funds.

If the Investment Manager received aggregate request for the redemption of units more than 10% of the net asset value of the respective constituent funds, on any redemption date, the Investment Manager may elect to restrict the redemption to 10% of the net asset value. In this case all requests will be scaled down on a pro-rata basis to ensure redemptions remain below 10%. The remaining balance will be redeemed in priority to subsequent redemption requests on the next redemption day. This procedure is in place to manage liquidity risk in the constituent funds and to protect the interests of the remaining members. The Investment Manager did not restrict any redemptions during 2019 and 2018. The table below assumes no use of the 10% redemption restriction.

The Investment Manager monitors the constituent funds’ liquidity position on a daily basis, and reviewed on a quarterly basis by a risk oversight committee.


141

NOTES TO THE FINANCIAL STATEMENTS 4 Financial risk management (Continued) (b) Credit and counterparty risk (Continued)

The constituent funds limit their exposure to credit risk by transacting the majority of their investments and contractual commitment activities with broker-dealers, banks and regulated exchanges with acceptable credit ratings for such instruments and that the constituent funds consider to be well established. The Investment Manager monitors the constituent funds’ credit position on a daily basis and these are reviewed on a quarterly basis by a risk oversight committee.

The Scheme and each of its constituent funds measure credit risk and expected credit losses using probability of default, exposure at default and loss given default. Management consider both historical analysis and forward looking information in determining any expected credit loss. The maximum exposure to credit risk at year end is the carrying amount of the financial assets as shown on the Statement of Net Assets Available for Benefits for the Scheme and the Statement of Net Assets for each of the constituent funds.

At 31st December 2019 and 2018, amounts receivable on sales of investments, cash and cash equivalents are due to be settled within 1 month. Investment Management consider the probability of default to be close to zero as the counterparties have a strong capacity to meet their contractual obligations in the near term. As a result, no loss allowance has been recognised as any such impairment would be insignificant to the Scheme and each of its constituent funds.

(c) Liquidity risk

Liquidity risk is the risk that the Scheme and its constituent funds may not be able to generate sufficient cash resources to settle their obligations in full as they fall due or can only do so on terms that are materially disadvantageous.

The constituent funds are exposed to daily cash redemptions of units in the constituent funds. The constituent funds invest the majority of their assets in underlying approved pooled investment funds that are traded in an active market and can be readily disposed of. Other investments which are neither listed nor quoted are restricted to a maximum of 15% of the net asset value of the respective constituent funds.

If the Investment Manager received aggregate request for the redemption of units more than 10% of the net asset value of the respective constituent funds, on any redemption date, the Investment Manager may elect to restrict the redemption to 10% of the net asset value. In this case all requests will be scaled down on a pro-rata basis to ensure redemptions remain below 10%. The remaining balance will be redeemed in priority to subsequent redemption requests on the next redemption day. This procedure is in place to manage liquidity risk in the constituent funds and to protect the interests of the remaining members. The Investment Manager did not restrict any redemptions during 2019 and 2018. The table below assumes no use of the 10% redemption restriction.

The Investment Manager monitors the constituent funds’ liquidity position on a daily basis, and reviewed on a quarterly basis by a risk oversight committee.


142

NOTES TO THE FINANCIAL STATEMENTS 4 Financial risk management (Continued) (c) Liquidity risk (Continued)

The tables below analyse the constituent funds’ non-derivative financial liabilities into relevant maturity groupings based on the remaining period at the year end date to the contractual maturity date. The amounts in the table are the undiscounted cash flows. Balances due within 12 months equal their carrying balances, as the impact of discounting is not significant. Asia Pacific Equity Fund Less than 1 month 1-3 months At 31st December 2019 HK$ HK$ Amounts payable on fund switching 4,096,351 - Amounts payable on purchases of investments 4,730,146 - Amounts payable on redemption of units 2,513,089 - Other payables 4,261,731 114,343 ─────────── ──────── Financial liabilities 15,601,317 114,343 ═══════════ ════════ At 31st December 2018 Amounts payable on fund switching 1,371,392 - Amounts payable on purchases of investments 689,279 - Amounts payable on redemption of units 2,126,271 - Other payables 3,576,073 122,333 ─────────── ──────── Financial liabilities 7,763,015 122,333 ═══════════ ════════

Balanced Fund Less than 1 month 1-3 months At 31st December 2019 HK$ HK$ Amounts payable on fund switching 1,624,651 - Amounts payable on purchases of investments 1,824,341 - Amounts payable on redemption of units 1,905,786 - Other payables 5,686,568 141,127 ─────────── ──────── Financial liabilities 11,041,346 141,127 ═══════════ ════════ At 31st December 2018 Amounts payable on fund switching 1,821,093 - Amounts payable on purchases of investments 445,752 - Amounts payable on redemption of units 1,472,332 - Other payables 5,015,749 151,326 ─────────── ──────── Financial liabilities 8,754,926 151,326 ═══════════ ════════


143


(c) Liquidity risk (Continued)

MPF Conservative Fund Less than 1 month 1-3 months At 31st December 2019 HK$ HK$ Amounts payable on fund switching 24,897,701 - Amounts payable on redemption of units 6,469,648 - Other payables 4,464,169 162,007 ────────── ──────── Financial liabilities 35,831,518 162,007 ═══════════ ════════ At 31st December 2018 Amounts payable on fund switching 11,303,894 - Amounts payable on redemption of units 1,442,364 - Other payables 4,990,935 141,696 ─────────── ──────── Financial liabilities 17,737,193 141,696 ═══════════ ════════

Capital Stable Fund Less than 1 month 1-3 months At 31st December 2019 HK$ HK$ Amounts payable on fund switching 4,033,298 - Amounts payable on purchases of investments 2,911,896 - Amounts payable on redemption of units 3,747,733 - Other payables 2,694,401 66,501 ─────────── ──────── Financial liabilities 13,387,328 66,501 ═══════════ ════════ At 31st December 2018 Amounts payable on fund switching 1,026,232 - Amounts payable on purchases of investments 3,109,240 - Amounts payable on redemption of units 1,697,939 - Other payables 2,330,191 66,001 ─────────── ──────── Financial liabilities 8,163,602 66,001 ═══════════ ════════


143



MPF Conservative Fund Less than 1 month 1-3 months At 31st December 2019 HK$ HK$ Amounts payable on fund switching 24,897,701 - Amounts payable on redemption of units 6,469,648 - Other payables 4,464,169 162,007 ────────── ──────── Financial liabilities 35,831,518 162,007 ═══════════ ════════ At 31st December 2018 Amounts payable on fund switching 11,303,894 - Amounts payable on redemption of units 1,442,364 - Other payables 4,990,935 141,696 ─────────── ──────── Financial liabilities 17,737,193 141,696 ═══════════ ════════

Capital Stable Fund Less than 1 month 1-3 months At 31st December 2019 HK$ HK$ Amounts payable on fund switching 4,033,298 - Amounts payable on purchases of investments 2,911,896 - Amounts payable on redemption of units 3,747,733 - Other payables 2,694,401 66,501 ─────────── ──────── Financial liabilities 13,387,328 66,501 ═══════════ ════════ At 31st December 2018 Amounts payable on fund switching 1,026,232 - Amounts payable on purchases of investments 3,109,240 - Amounts payable on redemption of units 1,697,939 - Other payables 2,330,191 66,001 ─────────── ──────── Financial liabilities 8,163,602 66,001 ═══════════ ════════


144



Fidelity SaveEasy 2020 Fund Less than 1 month 1-3 months At 31st December 2019 HK$ HK$ Amounts payable on fund switching 175,509 - Amounts payable on purchases of investments 180,354 - Amounts payable on redemption of units 112,228 - Other payables 398,599 12,629 ─────────── ──────── Financial liabilities 866,690 12,629 ═══════════ ════════ At 31st December 2018 Amounts payable on fund switching 114,855 - Amounts payable on purchases of investments 107,460 - Amounts payable on redemption of units 157,659 - Other payables 342,208 12,788 ─────────── ──────── Financial liabilities 722,182 12,788 ═══════════ ════════

Fidelity SaveEasy 2025 Fund Less than 1 month 1-3 months At 31st December 2019 HK$ HK$ Amounts payable on fund switching 473,097 - Amounts payable on purchases of investments 486,229 - Amounts payable on redemption of units 383,773 - Other payables 420,074 10,644 ─────────── ──────── Financial liabilities 1,763,173 10,644 ═══════════ ════════ At 31st December 2018 Amounts payable on fund switching 205,236 - Amounts payable on redemption of units 22,038 - Other payables 334,891 10,776 ─────────── ──────── Financial liabilities 562,165 10,776 ═══════════ ════════


145



Fidelity SaveEasy 2030 Fund Less than 1 month 1-3 months At 31st December 2019 HK$ HK$ Amounts payable on fund switching 157,272 - Amounts payable on purchases of investments 170,272 - Amounts payable on redemption of units 197,145 - Other payables 514,299 13,407 ─────────── ──────── Financial liabilities 1,038,988 13,407 ═══════════ ════════ At 31st December 2018 Amounts payable on fund switching 886 - Amounts payable on purchases of investments 54,247 - Amounts payable on redemption of units 198,126 - Other payables 419,214 13,876 ─────────── ──────── Financial liabilities 672,473 13,876 ═══════════ ════════

Fidelity SaveEasy 2035 Fund Less than 1 month 1-3 months At 31st December 2019 HK$ HK$ Amounts payable on fund switching 283,886 - Amounts payable on purchases of investments 186,193 - Amounts payable on redemption of units 101,856 - Other payables 544,692 13,949 ─────────── ──────── Financial liabilities 1,116,627 13,949 ═══════════ ════════ At 31st December 2018 Amounts payable on fund switching 340,802 - Amounts payable on purchases of investments 51,577 - Amounts payable on redemption of units 132,179 - Other payables 438,286 14,452 ─────────── ──────── Financial liabilities 962,844 14,452 ═══════════ ════════


145



Fidelity SaveEasy 2030 Fund Less than 1 month 1-3 months At 31st December 2019 HK$ HK$ Amounts payable on fund switching 157,272 - Amounts payable on purchases of investments 170,272 - Amounts payable on redemption of units 197,145 - Other payables 514,299 13,407 ─────────── ──────── Financial liabilities 1,038,988 13,407 ═══════════ ════════ At 31st December 2018 Amounts payable on fund switching 886 - Amounts payable on purchases of investments 54,247 - Amounts payable on redemption of units 198,126 - Other payables 419,214 13,876 ─────────── ──────── Financial liabilities 672,473 13,876 ═══════════ ════════



146



Fidelity SaveEasy 2040 Fund Less than 1 month 1-3 months At 31st December 2019 HK$ HK$ Amounts payable on fund switching 154,856 - Amounts payable on purchases of investments 2,407,746 - Amounts payable on redemption of units 2,279,732 - Other payables 1,505,454 39,530 ─────────── ──────── Financial liabilities 6,347,788 39,530 ═══════════ ════════ At 31st December 2018 Amounts payable on fund switching 193,073 - Amounts payable on purchases of investments 45,612 - Amounts payable on redemption of units 630,851 - Other payables 1,257,267 42,602 ─────────── ──────── Financial liabilities 2,126,803 42,602 ═══════════ ════════

Fidelity SaveEasy 2045 Fund Less than 1 month 1-3 months At 31st December 2019 HK$ HK$ Amounts payable on fund switching 213,678 - Amounts payable on purchases of investments 141,552 - Amounts payable on redemption of units 69,368 - Other payables 125,582 2,574 ─────────── ──────── Financial liabilities 550,180 2,574 ═══════════ ════════ At 31st December 2018 Amounts payable on fund switching 21,322 - Amounts payable on purchases of investments 585 - Other payables 74,582 1,991 ─────────── ──────── Financial liabilities 96,489 1,991 ═══════════ ════════


147




Global Equity Fund Less than 1 month 1-3 months At 31st December 2019 HK$ HK$ Amounts payable on fund switching 3,084,473 - Amounts payable on purchases of investments 19,296,016 - Amounts payable on redemption of units 1,949,171 - Other payables 4,668,940 109,151 ─────────── ──────── Financial liabilities 28,998,600 109,151 ═══════════ ════════ At 31st December 2018 Amounts payable on fund switching 6,920,381 - Amounts payable on purchases of investments 1,699,537 - Amounts payable on redemption of units 1,317,863 - Other payables 3,396,904 108,890 ─────────── ──────── Financial liabilities 13,334,685 108,890 ═══════════ ════════


147




Global Equity Fund Less than 1 month 1-3 months At 31st December 2019 HK$ HK$ Amounts payable on fund switching 3,084,473 - Amounts payable on purchases of investments 19,296,016 - Amounts payable on redemption of units 1,949,171 - Other payables 4,668,940 109,151 ─────────── ──────── Financial liabilities 28,998,600 109,151 ═══════════ ════════ At 31st December 2018 Amounts payable on fund switching 6,920,381 - Amounts payable on purchases of investments 1,699,537 - Amounts payable on redemption of units 1,317,863 - Other payables 3,396,904 108,890 ─────────── ──────── Financial liabilities 13,334,685 108,890 ═══════════ ════════


148



Growth Fund Less than 1 month 1-3 months At 31st December 2019 HK$ HK$ Amounts payable on fund switching 2,109,295 - Amounts payable on purchases of investments 8,175,211 - Amounts payable on redemption of units 3,014,423 - Other payables 8,502,594 213,218 ─────────── ──────── Financial liabilities 21,801,523 213,218 ═══════════ ════════ At 31st December 2018 Amounts payable on fund switching 3,214,139 - Amounts payable on purchases of investments 3,220,044 - Amounts payable on redemption of units 2,609,297 - Other payables 7,423,935 234,684 ─────────── ──────── Financial liabilities 16,467,415 234,684 ═══════════ ════════

Hong Kong Bond Fund Less than 1 month 1-3 months At 31st December 2019 HK$ HK$ Amounts payable on fund switching 5,120,738 - Amounts payable on purchases of investments 2,809,902 - Amounts payable on redemption of units 507,202 - Other payables 1,219,579 38,251 ─────────── ──────── Financial liabilities 9,657,421 38,251 ═══════════ ════════ At 31st December 2018 Amounts payable on fund switching 563,180 - Amounts payable on purchases of investments 991,173 - Amounts payable on redemption of units 590,854 - Other payables 989,266 33,629 ─────────── ──────── Financial liabilities 3,134,473 33,629 ═══════════ ════════


149



Hong Kong Equity Fund Less than 1 month 1-3 months At 31st December 2019 HK$ HK$ Amounts payable on fund switching 23,968,654 - Amounts payable on purchases of investments 12,050,740 - Amounts payable on redemption of units 3,351,910 - Other payables 8,621,185 238,734 ─────────── ──────── Financial liabilities 47,992,489 238,734 ═══════════ ════════ At 31st December 2018 Amounts payable on fund switching 9,513,025 - Amounts payable on purchases of investments 9,191,724 - Amounts payable on redemption of units 1,917,952 - Other payables 7,879,000 273,436 ─────────── ──────── Financial liabilities 28,501,701 273,436 ═══════════ ════════

RMB Bond Fund Less than 1 month 1-3 months At 31st December 2019 HK$ HK$ Amounts payable on fund switching 3,423,459 - Amounts payable on purchases of investments 528,383 - Amounts payable on redemption of units 68,200 - Other payables 219,835 6,496 ─────────── ──────── Financial liabilities 4,239,877 6,496 ═══════════ ════════ At 31st December 2018 Amounts payable on fund switching 2,113,519 - Amounts payable on purchases of investments 50,555 - Amounts payable on redemption of units 13,085 - Other payables 171,496 6,931 ─────────── ──────── Financial liabilities 2,348,655 6,931 ═══════════ ════════


149



Hong Kong Equity Fund Less than 1 month 1-3 months At 31st December 2019 HK$ HK$ Amounts payable on fund switching 23,968,654 - Amounts payable on purchases of investments 12,050,740 - Amounts payable on redemption of units 3,351,910 - Other payables 8,621,185 238,734 ─────────── ──────── Financial liabilities 47,992,489 238,734 ═══════════ ════════ At 31st December 2018 Amounts payable on fund switching 9,513,025 - Amounts payable on purchases of investments 9,191,724 - Amounts payable on redemption of units 1,917,952 - Other payables 7,879,000 273,436 ─────────── ──────── Financial liabilities 28,501,701 273,436 ═══════════ ════════

RMB Bond Fund Less than 1 month 1-3 months At 31st December 2019 HK$ HK$ Amounts payable on fund switching 3,423,459 - Amounts payable on purchases of investments 528,383 - Amounts payable on redemption of units 68,200 - Other payables 219,835 6,496 ─────────── ──────── Financial liabilities 4,239,877 6,496 ═══════════ ════════ At 31st December 2018 Amounts payable on fund switching 2,113,519 - Amounts payable on purchases of investments 50,555 - Amounts payable on redemption of units 13,085 - Other payables 171,496 6,931 ─────────── ──────── Financial liabilities 2,348,655 6,931 ═══════════ ════════


150



Stable Growth Fund Less than 1 month 1-3 months At 31st December 2019 HK$ HK$ Amounts payable on fund switching 3,163,565 - Amounts payable on purchases of investments 2,560,168 - Amounts payable on redemption of units 1,934,115 - Other payables 4,633,972 116,024 ─────────── ──────── Financial liabilities 12,291,820 116,024 ═══════════ ════════ At 31st December 2018 Amounts payable on fund switching 1,894,310 - Amounts payable on purchases of investments 1,885,391 - Amounts payable on redemption of units 2,271,390 - Other payables 4,001,434 117,712 ─────────── ──────── Financial liabilities 10,052,525 117,712 ═══════════ ════════

World Bond Fund Less than 1 month 1-3 months At 31st December 2019 HK$ HK$ Amounts payable on fund switching 6,956,191 - Amounts payable on purchases of investments 2,402,810 - Amounts payable on redemption of units 750,843 - Other payables 1,615,555 37,528 ─────────── ──────── Financial liabilities 11,725,399 37,528 ═══════════ ════════ At 31st December 2018 Amounts payable on fund switching 2,025,485 - Amounts payable on purchases of investments 806,191 - Amounts payable on redemption of units 645,724 - Other payables 1,235,001 35,482 ─────────── ──────── Financial liabilities 4,712,401 35,482 ═══════════ ════════

Fidelity Hong Kong Tracker Fund Less than 1 month 1-3 months At 31st December 2019 HK$ HK$ Amounts payable on fund switching 7,696,408 - Amounts payable on purchases of investments 940,800 - Amounts payable on redemption of units 813,258 - Other payables 818,335 39,167 ─────────── ──────── Financial liabilities 10,268,801 39,167 ═══════════ ════════


151



Fidelity Hong Kong Tracker Fund (Continued) Less than 1 month 1-3 months At 31st December 2018 HK$ HK$ Amounts payable on fund switching 4,226,605 - Amounts payable on redemption of units 304,243 - Other payables 600,194 34,600 ─────────── ──────── Financial liabilities 5,131,042 34,600 ═══════════ ════════

Core Accumulation Fund Less than 1 month 1-3 months At 31st December 2019 HK$ HK$ Amounts payable on fund switching 3,248,567 - Amounts payable on purchases of investments 3,403,565 - Amounts payable on redemption of units 524,086 - Other payables 695,307 31,707 ─────────── ──────── Financial liabilities 7,871,525 31,707 ═══════════ ════════ At 31st December 2018 Amounts payable on fund switching 875,913 - Amounts payable on purchases of investments 543,737 - Amounts payable on redemption of units 143,802 - Other payables 369,159 20,069 ─────────── ──────── Financial liabilities 1,932,611 20,069 ═══════════ ════════

Age 65 Plus Fund Less than 1 month 1-3 months At 31st December 2019 HK$ HK$ Amounts payable on fund switching 3,660,720 - Amounts payable on purchases of investments 4,667,575 - Amounts payable on redemption of units 137,553 - Other payables 203,548 7,932 ─────────── ──────── Financial liabilities 8,669,396 7,932 ═══════════ ════════


151



Fidelity Hong Kong Tracker Fund (Continued) Less than 1 month 1-3 months At 31st December 2018 HK$ HK$ Amounts payable on fund switching 4,226,605 - Amounts payable on redemption of units 304,243 - Other payables 600,194 34,600 ─────────── ──────── Financial liabilities 5,131,042 34,600 ═══════════ ════════

Core Accumulation Fund Less than 1 month 1-3 months At 31st December 2019 HK$ HK$ Amounts payable on fund switching 3,248,567 - Amounts payable on purchases of investments 3,403,565 - Amounts payable on redemption of units 524,086 - Other payables 695,307 31,707 ─────────── ──────── Financial liabilities 7,871,525 31,707 ═══════════ ════════ At 31st December 2018 Amounts payable on fund switching 875,913 - Amounts payable on purchases of investments 543,737 - Amounts payable on redemption of units 143,802 - Other payables 369,159 20,069 ─────────── ──────── Financial liabilities 1,932,611 20,069 ═══════════ ════════

Age 65 Plus Fund Less than 1 month 1-3 months At 31st December 2019 HK$ HK$ Amounts payable on fund switching 3,660,720 - Amounts payable on purchases of investments 4,667,575 - Amounts payable on redemption of units 137,553 - Other payables 203,548 7,932 ─────────── ──────── Financial liabilities 8,669,396 7,932 ═══════════ ════════


152



Age 65 Plus Fund (Continued) Less than 1 month 1-3 months At 31st December 2018 HK$ HK$ Amounts payable on fund switching 971,770 - Amounts payable on purchases of investments 628,050 - Amounts payable on redemption of units 270,961 - Other payables 103,466 4,597 ─────────── ──────── Financial liabilities 1,974,247 4,597 ═══════════ ════════

The constituent funds manage their liquidity risk by investing predominantly in investment funds that they expect to be able to liquidate within 7 days or less. The following tables illustrate the expected liquidity of assets held by each of the constituent funds:

Asia Pacific Equity Fund Less than 7 days 7 days to < 1

month 1 - < 3 months 3 - 12 months At 31st December 2019 HK$ HK$ HK$ HK$ Total assets 3,583,651,510 - - - At 31st December 2018 Total assets 2,926,029,741 - - -

Balanced Fund Less than 7 days 7 days to < 1


MPF Conservative Fund Less than 7 days 7 days to < 1

month 1 - < 3 months 3 - 12 months At 31st December 2019 HK$ HK$ HK$ HK$ Total assets 4,563,807,494 - - - At 31st December 2018 Total assets 4,297,981,291 - 4 -

Capital Stable Fund Less than 7 days 7 days to < 1



153



Fidelity SaveEasy 2020 Fund Less than 7 days 7 days to < 1

month 1 - < 3 months 3 - 12 months At 31st December 2019 HK$ HK$ HK$ HK$ Total assets 397,148,624 - - - At 31st December 2018 Total assets 337,463,605 - - -










month 1 - < 3 months 3 - 12 months At 31st December 2019 HK$ HK$ HK$ HK$ Total assets 102,435,518 - - 227,050 At 31st December 2018 Total assets 55,476,197 - - 1,200


153
















154





Global Equity Fund Less than 7 days 7 days to < 1


Growth Fund Less than 7 days 7 days to < 1


Hong Kong Bond Fund Less than 7 days 7 days to < 1


Hong Kong Equity Fund Less than 7 days 7 days to < 1


RMB Bond Fund Less than 7 days 7 days to < 1



155



Stable Growth Fund Less than 7 days 7 days to < 1


World Bond Fund Less than 7 days 7 days to < 1


Fidelity Hong Kong Tracker Fund Less than 7 days 7 days to < 1

month 1 - < 3 months 3 - 12 months At 31st December 2019 HK$ HK$ HK$ HK$ Total assets 1,325,771,247 - - 143,440 At 31st December 2018 Total assets 942,343,124 - - 202,199

Core Accumulation Fund Less than 7 days 7 days to < 1

month 1 - < 3 months 3 - 12 months At 31st December 2019 HK$ HK$ HK$ HK$ Total assets 1,302,000,047 - - - At 31st December 2018 Total assets 661,898,787 - - -

Age 65 Plus Fund Less than 7 days 7 days to < 1



155



Stable Growth Fund Less than 7 days 7 days to < 1


World Bond Fund Less than 7 days 7 days to < 1


Fidelity Hong Kong Tracker Fund Less than 7 days 7 days to < 1

month 1 - < 3 months 3 - 12 months At 31st December 2019 HK$ HK$ HK$ HK$ Total assets 1,325,771,247 - - 143,440 At 31st December 2018 Total assets 942,343,124 - - 202,199

Core Accumulation Fund Less than 7 days 7 days to < 1

month 1 - < 3 months 3 - 12 months At 31st December 2019 HK$ HK$ HK$ HK$ Total assets 1,302,000,047 - - - At 31st December 2018 Total assets 661,898,787 - - -

Age 65 Plus Fund Less than 7 days 7 days to < 1



156



Except for the below, there were no individual members or employers who held more than 10% of the respective constituent fund’s units as at 31st December 2019 and 2018: 2019 2018 Number of Number of members members Fidelity SaveEasy 2050 Fund 1 1 Fidelity Hong Kong Tracker Fund 1 -

(d) Fair value estimation

The fair value of financial assets and liabilities traded in active markets (such as trading securities) are based on quoted market prices at the close of trading on the year end date. The constituent funds utilise the last traded market price as their fair valuation inputs for both financial assets and financial liabilities. An active market is a market in which transactions for the asset or liability take place with sufficient frequency and volume to provide pricing information on an ongoing basis. A financial instrument is regarded as quoted in an active market if quoted prices are readily and regularly available from an exchange, dealer, broker, industry group, pricing service, or regulatory agency, and those prices represent actual and regularly occurring market transaction on an arm’s length basis.


157


(d) Fair value estimation (Continued)

The carrying value less impairment provision of other receivables and payables are assumed to approximate their fair values. The fair value of financial liabilities for disclosure purposes is estimated by discounting the future contractual cash flows at the current market interest rate that is available to the constituent funds for similar financial instruments. The fair value hierarchy has the following levels:

Quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1).

Inputs other than quoted prices included within level 1 that are observable for the

asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices) (level 2).

Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs) (level 3).

The level in the fair value hierarchy within which the fair value measurement is categorised in its entirety is determined on the basis of the lowest level input that is significant to the fair value measurement in its entirety. For this purpose, the significance of an input is assessed against the fair value measurement in its entirety. If a fair value measurement uses observable inputs that require significant adjustment based on unobservable inputs, that measurement is a level 3 measurement. Assessing the significance of a particular input to the fair value measurement in its entirety requires judgement, considering factors specific to the asset or liability.

The determination of what constitutes ‘observable’ requires significant judgement by the constituent funds. The constituent funds consider observable data to be that market data that is readily available, regularly distributed or updated, reliable and verifiable, not proprietary, and provided by independent sources that are actively involved in the relevant market.

The carrying amount of all investments held by the Scheme and its constituent funds are based on quoted market prices in active markets, and therefore classified as level 1 investments, which include approved pooled investment funds and listed unit trusts. The Scheme and its constituent funds do not adjust the quoted price for these instruments. Financial instruments that trade in markets that are not considered to be active but are valued based on quoted market prices, dealer quotations or alternative pricing sources supported by observable inputs are classified within level 2. As of 31st December 2019, and 2018 the Scheme and its constituent funds did not hold any investments classified in level 2.


157


(d) Fair value estimation (Continued)

The carrying value less impairment provision of other receivables and payables are assumed to approximate their fair values. The fair value of financial liabilities for disclosure purposes is estimated by discounting the future contractual cash flows at the current market interest rate that is available to the constituent funds for similar financial instruments. The fair value hierarchy has the following levels:

Quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1).

Inputs other than quoted prices included within level 1 that are observable for the

asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices) (level 2).

Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs) (level 3).

The level in the fair value hierarchy within which the fair value measurement is categorised in its entirety is determined on the basis of the lowest level input that is significant to the fair value measurement in its entirety. For this purpose, the significance of an input is assessed against the fair value measurement in its entirety. If a fair value measurement uses observable inputs that require significant adjustment based on unobservable inputs, that measurement is a level 3 measurement. Assessing the significance of a particular input to the fair value measurement in its entirety requires judgement, considering factors specific to the asset or liability.

The determination of what constitutes ‘observable’ requires significant judgement by the constituent funds. The constituent funds consider observable data to be that market data that is readily available, regularly distributed or updated, reliable and verifiable, not proprietary, and provided by independent sources that are actively involved in the relevant market.

The carrying amount of all investments held by the Scheme and its constituent funds are based on quoted market prices in active markets, and therefore classified as level 1 investments, which include approved pooled investment funds and listed unit trusts. The Scheme and its constituent funds do not adjust the quoted price for these instruments. Financial instruments that trade in markets that are not considered to be active but are valued based on quoted market prices, dealer quotations or alternative pricing sources supported by observable inputs are classified within level 2. As of 31st December 2019, and 2018 the Scheme and its constituent funds did not hold any investments classified in level 2.


158


4 Financial risk management (Continued) (d) Fair value estimation (Continued)

Investments classified within level 3 have significant unobservable inputs, as they trade infrequently. As of 31st December 2019, the constituent funds did not hold any investments classified in level 3 (2018: Nil). As at 31st December 2019 and 2018, there were no transfers between levels of investments held by the constituent funds. The assets and liabilities of the constituent funds in the Statement of Net Assets excluding financial assets at fair value through profit or loss at 31st December 2019, are carried at amortised cost; their carrying values are a reasonable approximation of fair value.

(e) Capital risk management

The capital of the constituent funds is represented by the units in the constituent funds, and shown as net assets attributable to members in the Statement of Net Assets. The amount of net assets attributable to members for each constituent fund can change significantly on a daily basis as the constituent funds are subject to daily subscriptions and redemptions at the discretion of members. Subscriptions and redemptions of units during the year are shown in the Statement of Changes in Equity. The constituent funds’ objective when managing capital is to safeguard their ability to continue as a going concern in order to provide retirement benefits to members and benefits for other stakeholders and to maintain a strong capital base to support the development of the investment activities of the constituent funds.

In order to maintain or adjust the capital structure, the policy of the constituent funds is to perform the following: - monitor the level of daily subscriptions and redemptions relative to the liquid assets;

and - redeem and issue units in accordance with the trust deed of the Scheme. The Trustee and Investment Manager monitor capital on the basis of the value of net assets attributable to members.


159

NOTES TO THE FINANCIAL STATEMENTS 5 Fees

The investment management fee of 0.75% (2018: 0.75%) per annum is charged to the constituent funds by the Investment Manager other than the MPF Conservative Fund, Fidelity SaveEasy 2020 Fund, Fidelity Hong Kong Tracker Fund, Core Accumulation Fund and Age 65 Plus Fund. The investment management fee of 0.40% (2018: 0.40%) per annum for the MPF Conservative Fund and 0.50% (2018: 0.50%) per annum for the Fidelity SaveEasy 2020 Fund are charged by the Investment Manager. No investment management fee is charged by the Investment Manager for Fidelity Hong Kong Tracker Fund, Core Accumulation Fund and Age 65 Plus Fund. The administration fee of 0.60% (2018: 0.60%) per annum is charged to the constituent funds by the Investment Manager and the Trustee other than the MPF Conservative Fund. The administration fee of 0.68% (2018: 0.68%) per annum for the MPF Conservative Fund is charged by the Investment Manager and the Trustee. The administration fee for MPF Conservative Fund is deducted in accordance with section 37 of the Hong Kong mandatory Provident Fund Scheme (General) Regulation. The administration fee is calculated and accrued daily and payable monthly in arrears. Please refer to Note 21 for more details. Effective 16th May 2016, certain rebates are credited to MPF Conservative Fund, Hong Kong Bond Fund and RMB Bond Fund to maintain the current level of Management fees1 at 0.93% per annum for MPF Conservative Fund and 1.20% per annum for Hong Kong Bond Fund and RMB Bond Fund. The total of the investment management fee and the administration fee is subject to a maximum of 3.75% (2018: 3.75%) per annum of the net asset value of the respective constituent funds other than Core Accumulation Fund and Age 65 Plus Fund. The total of the investment management fee and the administration fee is subject to a maximum of 0.75% per annum of the net asset value of the respective constituent funds for the Core Accumulation Fund and Age 65 Plus Fund. Refer to Note 14 for more details. 1 “Management fees” include fees paid to the Trustee, custodian, administrator, Investment Manager

(including fees based on fund performance, if any) and sponsor or promoter of the Scheme for providing their services to the relevant constituent funds. Management fees are usually charged as a percentage of the net asset value of the relevant constituent funds.


159

NOTES TO THE FINANCIAL STATEMENTS 5 Fees

The investment management fee of 0.75% (2018: 0.75%) per annum is charged to the constituent funds by the Investment Manager other than the MPF Conservative Fund, Fidelity SaveEasy 2020 Fund, Fidelity Hong Kong Tracker Fund, Core Accumulation Fund and Age 65 Plus Fund. The investment management fee of 0.40% (2018: 0.40%) per annum for the MPF Conservative Fund and 0.50% (2018: 0.50%) per annum for the Fidelity SaveEasy 2020 Fund are charged by the Investment Manager. No investment management fee is charged by the Investment Manager for Fidelity Hong Kong Tracker Fund, Core Accumulation Fund and Age 65 Plus Fund. The administration fee of 0.60% (2018: 0.60%) per annum is charged to the constituent funds by the Investment Manager and the Trustee other than the MPF Conservative Fund. The administration fee of 0.68% (2018: 0.68%) per annum for the MPF Conservative Fund is charged by the Investment Manager and the Trustee. The administration fee for MPF Conservative Fund is deducted in accordance with section 37 of the Hong Kong mandatory Provident Fund Scheme (General) Regulation. The administration fee is calculated and accrued daily and payable monthly in arrears. Please refer to Note 21 for more details. Effective 16th May 2016, certain rebates are credited to MPF Conservative Fund, Hong Kong Bond Fund and RMB Bond Fund to maintain the current level of Management fees1 at 0.93% per annum for MPF Conservative Fund and 1.20% per annum for Hong Kong Bond Fund and RMB Bond Fund. The total of the investment management fee and the administration fee is subject to a maximum of 3.75% (2018: 3.75%) per annum of the net asset value of the respective constituent funds other than Core Accumulation Fund and Age 65 Plus Fund. The total of the investment management fee and the administration fee is subject to a maximum of 0.75% per annum of the net asset value of the respective constituent funds for the Core Accumulation Fund and Age 65 Plus Fund. Refer to Note 14 for more details. 1 “Management fees” include fees paid to the Trustee, custodian, administrator, Investment Manager

(including fees based on fund performance, if any) and sponsor or promoter of the Scheme for providing their services to the relevant constituent funds. Management fees are usually charged as a percentage of the net asset value of the relevant constituent funds.


160

NOTES TO THE FINANCIAL STATEMENTS 5 Fees (Continued)

(a) Investment management fees

The investment management fees payables as at year end were as follows: 2019 2018 HK$ HK$ Asia Pacific Equity Fund 2,228,994 1,866,542 ═════════ ═════════ Balanced Fund 2,752,941 2,398,695 ═════════ ═════════ MPF Conservative Fund 959,654 906,983 ═════════ ═════════ Capital Stable Fund 1,331,048 1,136,863 ═════════ ═════════ Fidelity SaveEasy 2020 Fund 166,960 142,480 ═════════ ═════════ Fidelity SaveEasy 2025 Fund 217,769 171,719 ═════════ ═════════ Fidelity SaveEasy 2030 Fund 267,406 216,276 ═════════ ═════════ Fidelity SaveEasy 2035 Fund 283,485 226,150 ═════════ ═════════ Fidelity SaveEasy 2040 Fund 786,397 653,735 ═════════ ═════════ Fidelity SaveEasy 2045 Fund 63,394 35,559 ═════════ ═════════ Fidelity SaveEasy 2050 Fund 115,348 65,768 ═════════ ═════════ Global Equity Fund 2,470,559 1,777,926 ═════════ ═════════ Growth Fund 4,155,496 3,584,127 ═════════ ═════════ Hong Kong Bond Fund 522,170 421,224 ═════════ ═════════ Hong Kong Equity Fund 4,309,591 3,934,650 ═════════ ═════════ RMB Bond Fund 91,091 69,132 ═════════ ═════════


161


(a) Investment management fees (Continued) 2019 2018 HK$ HK$ Stable Growth Fund 2,294,952 1,959,368 ═════════ ═════════ World Bond Fund 858,490 649,363 ═════════ ═════════

As at 31st December 2019 and 2018, no investment management fee was payable for Fidelity Hong Kong Tracker Fund, Core Accumulation Fund and Age 65 Plus fund.

(b) Administration fees

The administration fees payables as at year end were as follows: 2019 2018 HK$ HK$ Asia Pacific Equity Fund 1,783,195 1,493,234 ═════════ ═════════ Balanced Fund 2,202,353 1,918,956 ═════════ ═════════ MPF Conservative Fund 2,610,260 2,466,995 ═════════ ═════════ Capital Stable Fund 1,064,838 909,490 ═════════ ═════════ Fidelity SaveEasy 2020 Fund 200,352 170,976 ═════════ ═════════ Fidelity SaveEasy 2025 Fund 174,215 137,375 ═════════ ═════════ Fidelity SaveEasy 2030 Fund 213,925 173,020 ═════════ ═════════ Fidelity SaveEasy 2035 Fund 226,788 180,920 ═════════ ═════════ Fidelity SaveEasy 2040 Fund 629,117 522,988 ═════════ ═════════ Fidelity SaveEasy 2045 Fund 50,715 28,447 ═════════ ═════════


161


(a) Investment management fees (Continued) 2019 2018 HK$ HK$ Stable Growth Fund 2,294,952 1,959,368 ═════════ ═════════ World Bond Fund 858,490 649,363 ═════════ ═════════

As at 31st December 2019 and 2018, no investment management fee was payable for Fidelity Hong Kong Tracker Fund, Core Accumulation Fund and Age 65 Plus fund.

(b) Administration fees

The administration fees payables as at year end were as follows: 2019 2018 HK$ HK$ Asia Pacific Equity Fund 1,783,195 1,493,234 ═════════ ═════════ Balanced Fund 2,202,353 1,918,956 ═════════ ═════════ MPF Conservative Fund 2,610,260 2,466,995 ═════════ ═════════ Capital Stable Fund 1,064,838 909,490 ═════════ ═════════ Fidelity SaveEasy 2020 Fund 200,352 170,976 ═════════ ═════════ Fidelity SaveEasy 2025 Fund 174,215 137,375 ═════════ ═════════ Fidelity SaveEasy 2030 Fund 213,925 173,020 ═════════ ═════════ Fidelity SaveEasy 2035 Fund 226,788 180,920 ═════════ ═════════ Fidelity SaveEasy 2040 Fund 629,117 522,988 ═════════ ═════════ Fidelity SaveEasy 2045 Fund 50,715 28,447 ═════════ ═════════


162

NOTES TO THE FINANCIAL STATEMENTS 5 Fees (Continued) (b) Administration fees (Continued) 2019 2018 HK$ HK$ Fidelity SaveEasy 2050 Fund 92,278 52,615 ═════════ ═════════ Global Equity Fund 1,976,448 1,422,341 ═════════ ═════════ Growth Fund 3,324,397 2,867,301 ═════════ ═════════ Hong Kong Bond Fund 626,604 505,469 ═════════ ═════════ Hong Kong Equity Fund 3,447,673 3,147,720 ═════════ ═════════ RMB Bond Fund 109,309 82,958 ═════════ ═════════ Stable Growth Fund 1,835,961 1,567,495 ═════════ ═════════ World Bond Fund 686,792 519,491 ═════════ ═════════ Fidelity Hong Kong Tracker Fund 653,924 478,185 ═════════ ═════════ Core Accumulation Fund 646,536 336,200 ═════════ ═════════ Age 65 Plus Fund 186,111 89,279 ═════════ ═════════ (c) Handling fees

Transaction handling fees on purchases and sales of investments are charged by the Trustee. The transaction handling fees payables as at year end were as follows:

2019 2018 HK$ HK$ Asia Pacific Equity Fund 5,580 5,340 ═════════ ═════════ Balanced Fund 5,580 5,400 ═════════ ═════════ MPF Conservative Fund 5,400 5,160 ═════════ ═════════ Capital Stable Fund 5,580 5,400 ═════════ ═════════


163

NOTES TO THE FINANCIAL STATEMENTS 5 Fees (Continued) (c) Handling fees (Continued) 2019 2018 HK$ HK$ Fidelity SaveEasy 2020 Fund 5,040 4,380 ═════════ ═════════ Fidelity SaveEasy 2025 Fund 4,680 3,960 ═════════ ═════════ Fidelity SaveEasy 2030 Fund 4,560 4,080 ═════════ ═════════ Fidelity SaveEasy 2035 Fund 4,800 3,900 ═════════ ═════════ Fidelity SaveEasy 2040 Fund 5,400 4,620 ═════════ ═════════ Fidelity SaveEasy 2045 Fund 4,440 3,300 ═════════ ═════════ Fidelity SaveEasy 2050 Fund 5,340 4,560 ═════════ ═════════ Global Equity Fund 5,580 5,340 ═════════ ═════════ Growth Fund 5,580 5,400 ═════════ ═════════ Hong Kong Bond Fund 5,580 5,340 ═════════ ═════════ Hong Kong Equity Fund 5,580 5,340 ═════════ ═════════ RMB Bond Fund 5,400 5,100 ═════════ ═════════ Stable Growth Fund 5,520 5,340 ═════════ ═════════ World Bond Fund 5,580 5,280 ═════════ ═════════ Fidelity Hong Kong Tracker Fund 14,011 7,195 ═════════ ═════════ Core Accumulation Fund 5,580 5,280 ═════════ ═════════ Age 65 Plus Fund 4,860 4,500 ═════════ ═════════


163

NOTES TO THE FINANCIAL STATEMENTS 5 Fees (Continued) (c) Handling fees (Continued) 2019 2018 HK$ HK$ Fidelity SaveEasy 2020 Fund 5,040 4,380 ═════════ ═════════ Fidelity SaveEasy 2025 Fund 4,680 3,960 ═════════ ═════════ Fidelity SaveEasy 2030 Fund 4,560 4,080 ═════════ ═════════ Fidelity SaveEasy 2035 Fund 4,800 3,900 ═════════ ═════════ Fidelity SaveEasy 2040 Fund 5,400 4,620 ═════════ ═════════ Fidelity SaveEasy 2045 Fund 4,440 3,300 ═════════ ═════════ Fidelity SaveEasy 2050 Fund 5,340 4,560 ═════════ ═════════ Global Equity Fund 5,580 5,340 ═════════ ═════════ Growth Fund 5,580 5,400 ═════════ ═════════ Hong Kong Bond Fund 5,580 5,340 ═════════ ═════════ Hong Kong Equity Fund 5,580 5,340 ═════════ ═════════ RMB Bond Fund 5,400 5,100 ═════════ ═════════ Stable Growth Fund 5,520 5,340 ═════════ ═════════ World Bond Fund 5,580 5,280 ═════════ ═════════ Fidelity Hong Kong Tracker Fund 14,011 7,195 ═════════ ═════════ Core Accumulation Fund 5,580 5,280 ═════════ ═════════ Age 65 Plus Fund 4,860 4,500 ═════════ ═════════


164

NOTES TO THE FINANCIAL STATEMENTS 5 Fees (Continued) (d) Accounting fees

Accounting fees for additional services rendered in the preparation of annual reports are charged by the Trustee. The accounting fees payables as at year end were as follows:

2019 2018 HK$ HK$ Asia Pacific Equity Fund 22,077 23,055 ═════════ ═════════ Balanced Fund 27,291 28,526 ═════════ ═════════ MPF Conservative Fund 32,159 26,713 ═════════ ═════════ Capital Stable Fund 12,871 12,435 ═════════ ═════════ Fidelity SaveEasy 2020 Fund 2,441 2,409 ═════════ ═════════ Fidelity SaveEasy 2025 Fund 2,056 2,031 ═════════ ═════════ Fidelity SaveEasy 2030 Fund 2,588 2,613 ═════════ ═════════ Fidelity SaveEasy 2035 Fund 2,695 2,724 ═════════ ═════════ Fidelity SaveEasy 2040 Fund 7,637 8,026 ═════════ ═════════ Fidelity SaveEasy 2045 Fund 496 374 ═════════ ═════════ Fidelity SaveEasy 2050 Fund 881 629 ═════════ ═════════ Global Equity Fund 21,086 20,530 ═════════ ═════════ Growth Fund 41,269 44,237 ═════════ ═════════ Hong Kong Bond Fund 7,398 6,336 ═════════ ═════════ Hong Kong Equity Fund 46,228 51,529 ═════════ ═════════


165

NOTES TO THE FINANCIAL STATEMENTS 5 Fees (Continued) (d) Accounting fees (Continued) 2019 2018 HK$ HK$ RMB Bond Fund 1,254 1,299 ═════════ ═════════ Stable Growth Fund 22,447 22,182 ═════════ ═════════ World Bond Fund 7,259 6,679 ═════════ ═════════ Fidelity Hong Kong Tracker Fund 7,563 6,511 ═════════ ═════════ Core Accumulation Fund 6,114 3,775 ═════════ ═════════ Age 65 Plus Fund 1,532 863 ═════════ ═════════ 6 Contributions received and receivable

Mandatory contributions for both the employers and members are equal to 5% of the employees’ relevant income up to HK$30,000 per month but in respect of members earning less than HK$7,100 per month, the members’ mandatory contribution is nil.

Self-employed persons must contribute 5% of their relevant income subject to a maximum mandatory contribution of HK$1,500 per month or HK$18,000 per year to the Scheme unless their relevant income is less than HK$7,100 per month or HK$85,200 per year respectively.

Any contributions made to the Scheme by the employers or members in excess of their mandatory contributions are additional voluntary contributions.

7 Benefits paid and payable

Members will become entitled to benefits in respect of mandatory contributions to the Scheme in the circumstances set out in the Ordinance. Currently, these circumstances include where the members (i) reach the age of 65; (ii) permanently cease employment after reaching the age of 60; (iii) become totally incapacitated; (iv) permanently depart from Hong Kong; (v) die; (vi) terminal illness or (vii) have the right to claim a small balance pursuant to the Ordinance.

Members will become entitled to benefits in respect of voluntary contributions to the Scheme in circumstances set out in the Trust Deed and the relevant participation agreement.


165

NOTES TO THE FINANCIAL STATEMENTS 5 Fees (Continued) (d) Accounting fees (Continued) 2019 2018 HK$ HK$ RMB Bond Fund 1,254 1,299 ═════════ ═════════ Stable Growth Fund 22,447 22,182 ═════════ ═════════ World Bond Fund 7,259 6,679 ═════════ ═════════ Fidelity Hong Kong Tracker Fund 7,563 6,511 ═════════ ═════════ Core Accumulation Fund 6,114 3,775 ═════════ ═════════ Age 65 Plus Fund 1,532 863 ═════════ ═════════ 6 Contributions received and receivable

Mandatory contributions for both the employers and members are equal to 5% of the employees’ relevant income up to HK$30,000 per month but in respect of members earning less than HK$7,100 per month, the members’ mandatory contribution is nil.

Self-employed persons must contribute 5% of their relevant income subject to a maximum mandatory contribution of HK$1,500 per month or HK$18,000 per year to the Scheme unless their relevant income is less than HK$7,100 per month or HK$85,200 per year respectively.

Any contributions made to the Scheme by the employers or members in excess of their mandatory contributions are additional voluntary contributions.

7 Benefits paid and payable

Members will become entitled to benefits in respect of mandatory contributions to the Scheme in the circumstances set out in the Ordinance. Currently, these circumstances include where the members (i) reach the age of 65; (ii) permanently cease employment after reaching the age of 60; (iii) become totally incapacitated; (iv) permanently depart from Hong Kong; (v) die; (vi) terminal illness or (vii) have the right to claim a small balance pursuant to the Ordinance.

Members will become entitled to benefits in respect of voluntary contributions to the Scheme in circumstances set out in the Trust Deed and the relevant participation agreement.


166


8 Financial assets at fair value through profit or loss

The following table shows the financial assets at fair value through profit or loss held by the Scheme as at the reporting date, which comprised of its investments in constituent funds.

2019 2018 HK$ HK$

The Scheme Investments in constituent funds

Asia Pacific Equity Fund 3,567,935,850 2,918,144,393 Balanced Fund 4,388,694,697 3,737,025,741 MPF Conservative Fund 4,527,813,969 4,280,102,406 Capital Stable Fund 2,099,160,172 1,790,558,236 Fidelity SaveEasy 2020 Fund 396,269,305 336,728,635 Fidelity SaveEasy 2025 Fund 349,248,991 267,404,667 Fidelity SaveEasy 2030 Fund 427,778,551 336,093,510 Fidelity SaveEasy 2035 Fund 454,686,151 350,447,762 Fidelity SaveEasy 2040 Fund 1,260,531,730 1,012,516,469 Fidelity SaveEasy 2045 Fund 102,109,814 55,378,917 Fidelity SaveEasy 2050 Fund 186,558,347 103,141,981 Global Equity Fund 3,971,551,400 2,739,700,650 Growth Fund 6,651,845,340 5,556,269,641 Hong Kong Bond Fund 1,226,177,591 1,004,497,757 Hong Kong Equity Fund 6,959,588,023 6,125,921,748 RMB Bond Fund 214,270,532 162,224,262 Stable Growth Fund 3,641,980,936 3,070,550,862 World Bond Fund 1,342,750,138 1,030,633,890 Fidelity Hong Kong Tracker Fund 1,315,606,719 937,379,681 Core Accumulation Fund 1,294,096,815 659,946,107 Age 65 Plus Fund 370,223,071 175,852,428

Total investments in constituent funds 44,748,878,142 36,650,519,743

The following table shows the financial assets at fair value through profit or loss held by the constituent funds as at the reporting date:

Type of investment 2019

2018

Constituent Funds HK$ HK$ Asia Pacific Equity Fund Approved pooled investment fund 3,572,279,634 2,921,810,549 Balanced Fund Approved pooled investment fund 4,394,517,879 3,742,188,312 MPF Conservative Fund Approved pooled investment fund 4,505,676,675 4,262,347,323 Capital Stable Fund Approved pooled investment fund 2,101,919,882 1,792,953,242 Fidelity SaveEasy 2020 Fund Approved pooled investment fund 396,677,419 337,080,521 Fidelity SaveEasy 2025 Fund Approved pooled investment fund 349,677,642 267,748,270 Fidelity SaveEasy 2030 Fund Approved pooled investment fund 428,304,381 336,524,726 Fidelity SaveEasy 2035 Fund Approved pooled investment fund 455,242,612 350,898,322 Fidelity SaveEasy 2040 Fund Approved pooled investment fund 1,262,071,616 1,013,811,246 Fidelity SaveEasy 2045 Fund Approved pooled investment fund 102,005,968 55,450,544 Fidelity SaveEasy 2050 Fund Approved pooled investment fund 186,404,764 103,271,729 Global Equity Fund Approved pooled investment fund 3,976,326,983 2,743,204,457 Growth Fund Approved pooled investment fund 6,660,551,225 5,563,918,399 Hong Kong Bond Fund Approved pooled investment fund 1,227,433,978 1,005,519,233 Hong Kong Equity Fund Approved pooled investment fund 6,968,420,747 6,134,047,026 RMB Bond Fund Approved pooled investment fund 214,495,540 162,401,369 Stable Growth Fund Approved pooled investment fund 3,646,730,225 3,074,669,317 World Bond Fund Approved pooled investment fund 1,344,399,439 1,031,900,599 Fidelity Hong Kong Tracker Fund Listed unit trust 1,314,489,575 935,181,975 Core Accumulation Fund Approved pooled investment fund 1,294,815,980 660,327,498 Age 65 Plus Fund Approved pooled investment fund 370,431,760 175,958,695


167

NOTES TO THE FINANCIAL STATEMENTS 9 Bank loans, overdrafts and other borrowings

The Scheme and its constituent funds had no bank loans, overdrafts and other borrowings as at 31st December 2019 and 2018.

10 Accrued benefits

The total accrued benefits vested in the members’ accounts amounted to HK$44,763,724,148 as at 31st December 2019 (2018: HK$36,200,816,472).

11 Auditor's remuneration

The auditor's remuneration is allocated by the Investment Manager and Trustee to each constituent fund based on the net asset value of each individual constituent fund and accrued on a daily basis.

12 Taxation

The Scheme is registered under the Ordinance and is therefore a recognised scheme for purposes of the Hong Kong Profits Tax. The policy of the Hong Kong Inland Revenue Department (“IRD”), as set out in the IRD Practice Note No. 23, is that the “recognised retirement schemes and their trustees are not considered to be subject to profits tax on their investment income”. Accordingly, no provision for Hong Kong Profits Tax has been made in the Scheme’s financial statements.

13 Transactions with related parties

In addition to the fees disclosed in note 5, the constituent funds had the following transactions with related parties, including the Trustee and its related parties, the Investment Manager and their associates or delegates during the years ended 31st December 2019 and 2018. For the year ended 31st December 2018, the Investment Manager subsidised certain out-of-pocket expenses for the Fidelity SaveEasy 2045 Fund, Fidelity SaveEasy 2050 Fund and RMB Bond Fund. For the year ended 31st December 2019, the Investment Manager has not subsidised any out-of-pocket expenses. For the years ended 31st December 2019 and 2018, the Investment Manager provided rebate to certain fees for MPF Conservative Fund, Hong Kong Bond Fund and RMB Bond Fund. These were disclosed as reimbursement income and rebate income respectively in the Statement of Comprehensive Income and their receivables were disclosed as other receivables in the Statement of Net Assets.


167

NOTES TO THE FINANCIAL STATEMENTS 9 Bank loans, overdrafts and other borrowings

The Scheme and its constituent funds had no bank loans, overdrafts and other borrowings as at 31st December 2019 and 2018.

10 Accrued benefits

The total accrued benefits vested in the members’ accounts amounted to HK$44,763,724,148 as at 31st December 2019 (2018: HK$36,200,816,472).

11 Auditor's remuneration

The auditor's remuneration is allocated by the Investment Manager and Trustee to each constituent fund based on the net asset value of each individual constituent fund and accrued on a daily basis.

12 Taxation

The Scheme is registered under the Ordinance and is therefore a recognised scheme for purposes of the Hong Kong Profits Tax. The policy of the Hong Kong Inland Revenue Department (“IRD”), as set out in the IRD Practice Note No. 23, is that the “recognised retirement schemes and their trustees are not considered to be subject to profits tax on their investment income”. Accordingly, no provision for Hong Kong Profits Tax has been made in the Scheme’s financial statements.

13 Transactions with related parties

In addition to the fees disclosed in note 5, the constituent funds had the following transactions with related parties, including the Trustee and its related parties, the Investment Manager and their associates or delegates during the years ended 31st December 2019 and 2018. For the year ended 31st December 2018, the Investment Manager subsidised certain out-of-pocket expenses for the Fidelity SaveEasy 2045 Fund, Fidelity SaveEasy 2050 Fund and RMB Bond Fund. For the year ended 31st December 2019, the Investment Manager has not subsidised any out-of-pocket expenses. For the years ended 31st December 2019 and 2018, the Investment Manager provided rebate to certain fees for MPF Conservative Fund, Hong Kong Bond Fund and RMB Bond Fund. These were disclosed as reimbursement income and rebate income respectively in the Statement of Comprehensive Income and their receivables were disclosed as other receivables in the Statement of Net Assets.


168

NOTES TO THE FINANCIAL STATEMENTS 13 Transactions with related parties (Continued)

As at 31st December 2019 and 2018, the Scheme and its constituent funds placed all bank deposits with the holding company of the Trustee. The following table summarises the bank deposits placed by the constituent funds with the holding company of the Trustee as at 31st December 2019 and 2018: 2019 2018 HK$ HK$ Asia Pacific Equity Fund 32,290 32,250 Balanced Fund 4,513 4,504 MPF Conservative Fund 1,739,699 1,268,588 Capital Stable Fund 1,192 1,186 Fidelity SaveEasy 2020 Fund 3,114 3,110 Fidelity SaveEasy 2025 Fund 2,067 2,064 Fidelity SaveEasy 2030 Fund 1,876 1,874 Fidelity SaveEasy 2035 Fund 2,180 2,178 Fidelity SaveEasy 2040 Fund 5,098 5,092 Fidelity SaveEasy 2045 Fund 4,952 3,746 Fidelity SaveEasy 2050 Fund 4,807 3,601 Global Equity Fund 2,508 1,987 Growth Fund 9,922 9,861 Hong Kong Bond Fund 1,443 1,419 Hong Kong Equity Fund 27,187 27,153 RMB Bond Fund 1,323 1,320 Stable Growth Fund 707 691 World Bond Fund 3,782 3,774 Fidelity Hong Kong Tracker Fund 2,582,379 366,929 Core Accumulation Fund 7,849 7,837 Age 65 Plus Fund 2,791 1,796


169


Interest income on bank deposits has been earned by the Scheme and its constituent funds. The following table summarises the interest income on bank deposits received from the holding company of the Trustee for the years ended 31st December 2019 and 2018: 2019 2018 HK$ HK$ Asia Pacific Equity Fund 34 20 Balanced Fund 5 2 MPF Conservative Fund 2,081 658 Fidelity SaveEasy 2045 Fund 5 1 Fidelity SaveEasy 2050 Fund 5 1 Global Equity Fund 2 1 Hong Kong Bond Fund 1 - Hong Kong Equity Fund 29 15 RMB Bond Fund 1 - Stable Growth Fund 1 1 World Bond Fund 4 1 Fidelity Hong Kong Tracker Fund 5,769 2,072 Core Accumulation Fund 8 2 Age 65 Plus Fund 3 1

During the year ended 31st December 2019, Fidelity Hong Kong Tracker Fund paid interest expense of HK$1,329 (2018: HK$nil) on bank overdrafts to the holding company of the Trustee. For the years ended 31st December 2019 and 2018, handling fees, accounting fee and custodian fee as stated in the Statement of Comprehensive Income are paid to the Trustee or the holding company of the Trustee. They relate to transaction handling fees on purchases and sales of investments, the preparation of annual and interim reports and payment for the provision of custodian services. The constituent funds utilise the trading services of brokers who are related parties of the Trustee in their purchase and sale of investments. The details of such transactions and the brokerage commission, under transaction fees, are shown below: Fidelity Hong Kong Tracker Fund 2019

Broker name Total transaction

value (HK$)

% of total transaction value of the constituent

fund Total brokerage

commission (HK$) Average rate of

commission HSBC Securities Brokers (Asia) Limited 606,116,079 100.00 1,211,048 0.20

Fidelity Hong Kong Tracker Fund 2018


value (HK$)






169


Interest income on bank deposits has been earned by the Scheme and its constituent funds. The following table summarises the interest income on bank deposits received from the holding company of the Trustee for the years ended 31st December 2019 and 2018: 2019 2018 HK$ HK$ Asia Pacific Equity Fund 34 20 Balanced Fund 5 2 MPF Conservative Fund 2,081 658 Fidelity SaveEasy 2045 Fund 5 1 Fidelity SaveEasy 2050 Fund 5 1 Global Equity Fund 2 1 Hong Kong Bond Fund 1 - Hong Kong Equity Fund 29 15 RMB Bond Fund 1 - Stable Growth Fund 1 1 World Bond Fund 4 1 Fidelity Hong Kong Tracker Fund 5,769 2,072 Core Accumulation Fund 8 2 Age 65 Plus Fund 3 1

During the year ended 31st December 2019, Fidelity Hong Kong Tracker Fund paid interest expense of HK$1,329 (2018: HK$nil) on bank overdrafts to the holding company of the Trustee. For the years ended 31st December 2019 and 2018, handling fees, accounting fee and custodian fee as stated in the Statement of Comprehensive Income are paid to the Trustee or the holding company of the Trustee. They relate to transaction handling fees on purchases and sales of investments, the preparation of annual and interim reports and payment for the provision of custodian services. The constituent funds utilise the trading services of brokers who are related parties of the Trustee in their purchase and sale of investments. The details of such transactions and the brokerage commission, under transaction fees, are shown below: Fidelity Hong Kong Tracker Fund 2019


value (HK$)





Fidelity Hong Kong Tracker Fund 2018


value (HK$)






170


13 Transactions with related parties (Continued) As at 31st December 2019 and 2018, the constituent funds invested in approved pooled investment funds which are also managed by the Investment Manager. As at 31st December 2019 and 2018, a related party of the Investment Manager held units of the constituent funds. The Scheme and its constituent-funds allow the Manager and its Connected Persons to subscribe for, and redeem, units of the funds and all such transactions are entered into in the ordinary course of business and are on normal commercial terms.

14 Payments charged to default investments strategy (“DIS”) constituent funds or scheme or members who invest in the constituent funds

In accordance with the Mandatory Provident Fund legislation, the aggregate of the payments for services of the Core Accumulation Fund and Age 65 Plus Fund must not, in a single day, exceed a daily rate of 0.75% per annum of the net asset value of each of the Core Accumulation Fund and Age 65 Plus Fund divided by the number of days in the year. The above aggregate payments for services include, but is not limited to, the fees paid or payable for the services provided by the Trustee, the Administrator, the Investment Manager, the Custodian and the Sponsor and/or promoter (if any) of each of the Core Accumulation Fund and Age 65 Plus Fund and its underlying investment fund(s), and any of the delegates from these parties and such fees are calculated as a percentage -of the net asset value of each of the Core Accumulation Fund and Age 65 Plus Fund and its underlying investment fund(s), but do not include any out-of-pocket expenses incurred by each of the Core Accumulation Fund and Age 65 Plus Fund and their underlying investment fund(s). In accordance with the Mandatory Provident Fund legislation, the total amount of all payments that are charged to or imposed on a DIS constituent fund or members who invest in a DIS constituent fund, for out-of-pocket expenses incurred by the Trustee on a recurrent basis in the discharge of the Trustee's duties to provide services in relation to a DIS constituent fund, shall not in a single year exceed 0.2% of the net asset value of each of the Core Accumulation Fund and Age 65 Plus Fund. For this purpose, out-of-pocket expenses include, for example, annual audit expenses, printing or postage expenses relating to recurrent activities (such as issuing annual benefit statements), recurrent legal and professional expenses, safe custody charges which are customarily not calculated as a percentage of the net asset value and transaction costs incurred by a DIS constituent fund in connection with recurrent acquisition of investments for the DIS constituent fund (including, for example, costs incurred in acquiring underlying funds) and annual statutory expenses (such as compensation fund levy where relevant) of the DIS constituent fund. Out-of-pocket expenses that are not incurred on a recurrent basis may still be charged to or imposed on a DIS constituent fund and such out-of-pocket expenses are not subject to the above statutory limit. Payment for services, out-of-pocket expenses and other payment charged to the DIS constituent funds, Core Accumulation Fund and Age 65 Plus Fund are disclosed below. Payments for services and out-of-pocket expenses are those defined in the MPF Ordinance.


171

NOTES TO THE FINANCIAL STATEMENTS 14 Payments charged to default investments strategy (“DIS”) constituent funds or

scheme or members who invest in the constituent funds (Continued)

For the year ended 31st December 2019

Core Accumulation

Fund Age 65 Plus

Fund HK$ HK$ Payments for services

- Administration fee 6,150,857 1,672,217 Total payments for services 6,150,857 1,672,217 Out-of-pocket expenses

- Legal and other professional fees 17,020 4,548 - Indemnity insurance 2,421 645 - Auditor’s remuneration 31,104 8,475 - Accounting fees 7,254 1,978 - Handling fees 58,440 54,360 - Other expenses 210,831 64,230

Total out-of-pocket expenses 327,070 134,236 Total payments 6,477,927 1,806,453 Out-of-pocket expenses expressed as

a percentage of average net asset value as at the last dealing day of each month of the DIS constituent funds 0.03% 0.05%


171

NOTES TO THE FINANCIAL STATEMENTS 14 Payments charged to default investments strategy (“DIS”) constituent funds or

scheme or members who invest in the constituent funds (Continued)

For the year ended 31st December 2019

Core Accumulation

Fund Age 65 Plus


- Administration fee 6,150,857 1,672,217 Total payments for services 6,150,857 1,672,217 Out-of-pocket expenses

- Legal and other professional fees 17,020 4,548 - Indemnity insurance 2,421 645 - Auditor’s remuneration 31,104 8,475 - Accounting fees 7,254 1,978 - Handling fees 58,440 54,360 - Other expenses 210,831 64,230

Total out-of-pocket expenses 327,070 134,236 Total payments 6,477,927 1,806,453 Out-of-pocket expenses expressed as



172


14 Payments charged to default investments strategy (“DIS”) constituent funds or scheme or members who invest in the constituent funds (Continued) For the year ended 31st December 2018

Core Accumulation

Fund Age 65 Plus


- Administration fee 3,459,038 818,789 Total payments for services 3,459,038 818,789 Out-of-pocket expenses

- Legal and other professional fees 1,264 294 - Indemnity insurance 1,640 302 - Auditor’s remuneration 29,678 6,145 - Accounting fees 7,012 1,458 - Handling fees 58,260 49,500 - Other expenses 81,234 28,803

Total out-of-pocket expenses 179,088 86,502 Total payments 3,638,126 905,291 Out-of-pocket expenses expressed as



173


15 Soft commission arrangements

For the years ended 31st December 2019 and 2018, the Investment Manager and its associates did not enter into any soft commission sharing arrangements with brokers in relation to dealings in the assets of the Scheme and its constituent funds.

16 Security lending arrangements

The Scheme and its constituent funds did not enter into any security lending arrangements during the years ended 31st December 2019 and 2018.

17 Negotiability of assets

As at 31st December 2019 and 2018, there was no statutory or contractual requirement restricting the negotiability of the assets of the Scheme and its constituent funds.

18 Commitments

The Scheme and its constituent funds had no commitments as at 31st December 2019 and 2018.

19 Contingent liabilities

The Scheme and its constituent funds had no contingent liabilities as at 31st December 2019 and 2018.

20 Marketing expenses

There have been no advertising expenses, promotional expenses or commissions or brokerage fees paid and payable to the MPF intermediaries deducted from the Scheme or its constituent funds during the years ended 31st December 2019 and 2018.

21 Deferred Expenses

In accordance with section 37 of the General Regulation, administrative expenses for the MPF Conservative Fund which have not been deducted in the respective months may be deducted in the following twelve months. During the year ended 31st December 2019, HK$5,722,924 of deferred administrative expenses has been recovered (2018: HK$15,046,872) and included in the respective line of expenses as shown in the statement of comprehensive income. As at 31st December 2019, the deferred administrative expenses amounted to HK$593,054 (2018: HK$779,307).

22 Approval of financial statements

The financial statements were approved by the Trustee on 23rd June 2020.


173


15 Soft commission arrangements

For the years ended 31st December 2019 and 2018, the Investment Manager and its associates did not enter into any soft commission sharing arrangements with brokers in relation to dealings in the assets of the Scheme and its constituent funds.

16 Security lending arrangements

The Scheme and its constituent funds did not enter into any security lending arrangements during the years ended 31st December 2019 and 2018.

17 Negotiability of assets

As at 31st December 2019 and 2018, there was no statutory or contractual requirement restricting the negotiability of the assets of the Scheme and its constituent funds.

18 Commitments

The Scheme and its constituent funds had no commitments as at 31st December 2019 and 2018.

19 Contingent liabilities

The Scheme and its constituent funds had no contingent liabilities as at 31st December 2019 and 2018.

20 Marketing expenses

There have been no advertising expenses, promotional expenses or commissions or brokerage fees paid and payable to the MPF intermediaries deducted from the Scheme or its constituent funds during the years ended 31st December 2019 and 2018.

21 Deferred Expenses

In accordance with section 37 of the General Regulation, administrative expenses for the MPF Conservative Fund which have not been deducted in the respective months may be deducted in the following twelve months. During the year ended 31st December 2019, HK$5,722,924 of deferred administrative expenses has been recovered (2018: HK$15,046,872) and included in the respective line of expenses as shown in the statement of comprehensive income. As at 31st December 2019, the deferred administrative expenses amounted to HK$593,054 (2018: HK$779,307).

22 Approval of financial statements

The financial statements were approved by the Trustee on 23rd June 2020.

FIDELITY RETIREMENT MASTER TRUST

FUND EXPENSE RATIO REPORT

FOR THE YEAR ENDED

31ST DECEMBER 2019

Fidelity Retirement Master Trust – Fund Expense Ratio Report For the year ended 31st December 2019

Average Net Asset Consolidated Total Fund Expense

Sub-Fund Name Value Expenses Ratio

HK$ HK$ (%)

Asia Pacific Equity Fund 3,305,257,900.16 49,950,348.32 1.51

Balanced Fund 4,137,896,651.66 61,596,945.66 1.49

MPF Conservative Fund 4,491,589,097.62 43,913,154.69 0.98

Capital Stable Fund 1,988,973,129.09 29,568,522.36 1.49

Global Equity Fund 3,401,766,729.91 50,091,089.64 1.47

Growth Fund 6,235,765,452.06 92,842,760.74 1.49

Hong Kong Bond Fund 1,173,992,096.15 14,555,259.31 1.24

Hong Kong Equity Fund 6,719,583,377.61 100,382,205.03 1.49

RMB Bond Fund 196,549,500.27 2,687,573.51 1.37

Stable Growth Fund 3,434,202,261.76 51,029,239.86 1.49

World Bond Fund 1,206,378,718.38 17,861,709.80 1.48

Fidelity - SaveEasy 2020 Fund 374,398,686.99 4,718,218.54 1.26




Fidelity - SaveEasy 2040 Fund 1,165,204,626.98 17,422,006.25 1.50

Fidelity - SaveEasy 2045 Fund 83,611,987.51 1,341,536.51 1.60 Fidelity - SaveEasy 2050 Fund 149,707,059.94 2,309,459.05 1.54

Fidelity Hong Kong Tracker Fund 1,178,183,564.17 9,126,172.63 0.77

Core Accumulation Fund 1,044,298,786.75 8,647,347.16 0.83

Age 65 Plus Fund 284,745,709.12 2,436,360.24 0.86

Basis of calculation and assumptions used

1. Average Net Asset Value (NAV) is the sum of the NAV of the Sub-Funds at the pricing points

divided by the number of pricing points. The NAV at each pricing point is directly extracted

from the accounting and valuation system used by HSBC Institutional Trust Services (Asia)

Limited.

2. Pricing point represents a valuation date, which for the purpose of this FER calculation is the

last day of each month for the Sub-Funds.

3. The Fund Expense Ratio (FER) for each sub-fund has been calculated to two decimal places.

FER = Consolidated Total Expenses/Average Net Asset Value

4. Consolidated total expenses exclude any transaction costs involved in the purchase and sale

of investments.

5. Pursuant to the MPFA Circular letter dated 1 November 2019, an investment in a listed REIT

may be treated in the same way as an investment in shares of a listed company. Thus,

effective 1 November 2019, the expenses incurred by a listed REIT is not required to be

applied when calculating the fund expense ratio (FER). This change in treatment of listed

REIT may result in a reduction in the FER calculated in current year as compared with the

FER calculated in last year.

1

FIDELITY RETIREMENT MASTER TRUST COMPLIANCE REPORT FOR THE YEAR ENDED 31ST DECEMBER 2019

2

INDEPENDENT AUDITOR’S ASSURANCE REPORT TO THE TRUSTEE OF FIDELITY RETIREMENT MASTER TRUST We have audited the financial statements of the Scheme and each of its constituent funds (hereafter referred to as the “Scheme”) for the year ended 31st December 2019 in accordance with Hong Kong Standards on Auditing and with reference to Practice Note 860.1 (Revised) “The Audit of Retirement Schemes” issued by the Hong Kong Institute of Certified Public Accountants (the “HKICPA”), and have issued an unqualified auditor’s report thereon dated 23rd June 2020. Pursuant to section 102 of the Hong Kong Mandatory Provident Fund Schemes (General) Regulation (the “General Regulation”), we are required to report whether the Scheme complied with certain requirements of the Hong Kong Mandatory Provident Fund Schemes Ordinance (the “Ordinance”) and the General Regulation. T rustee’s Responsibility The General Regulation requires the Trustee to ensure that: (a) proper accounting and other records are kept in respect of the constituent funds of the

Scheme, the Scheme assets and all financial transactions entered into in relation to the Scheme;

(b) the requirements specified in the guidelines made by the Mandatory Provident Fund

Schemes Authority (the “MPFA”) under section 28 of the Ordinance with respect to forbidden investment practices and the requirements of sections 37(2), 51 and 52 and Part X of, and Schedule 1 to, the General Regulation are complied with;

(c) the requirements under sections 34DB(1)(a), (b), (c) and (d), 34DC(1), 34DD(1) and (4)

of the Ordinance are complied with; and (d) the Scheme assets are not subject to any encumbrance, otherwise than as permitted by

the General Regulation. Our Independence and Quality Control We have complied with the independence and other ethical requirements of the Code of Ethics for Professional Accountants issued by the HKICPA, which is founded on fundamental principles of integrity, objectivity, professional competence and due care, confidentiality and professional behavior. Our firm applies Hong Kong Standard on Quality Control 1 issued by the HKICPA and accordingly maintains a comprehensive system of quality control including documented policies and procedures regarding compliance with ethical requirements, professional standards and applicable legal and regulatory requirements. Auditor’s Responsibility Our responsibility is to report solely to the Trustee, in accordance with section 102 of the General Regulation, on the Scheme’s compliance with the above requirements based on the results of the procedures performed by us, and for no other purpose. We do not assume responsibility towards or accept liability to any other person for the contents of this report.

3

INDEPENDENT AUDITOR’S ASSURANCE REPORT TO THE TRUSTEE OF FIDELITY RETIREMENT MASTER TRUST (Continued) Auditor’s Responsibility (Continued) We conducted our engagement in accordance with Hong Kong Standard on Assurance Engagements 3000 (Revised), "Assurance Engagements Other Than Audits or Reviews of Historical Financial Information" and with reference to Practice Note 860.1, (Revised) “The Audit of Retirement Schemes” issued by the HKICPA. We have planned and performed our work to obtain reasonable assurance on whether the Scheme has complied with the above requirements. We have planned and performed such procedures as we considered necessary with reference to the procedures recommended in Practice Note 860.1 (Revised), which included reviewing, on a test basis, evidence obtained from the Trustee regarding the Scheme's compliance with the above requirements. We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Opinion Based on the foregoing: (a) in our opinion:

(i) proper accounting and other records have been kept during the year ended 31st December 2019 in respect of the constituent funds of the Scheme, the Scheme assets and all financial transactions entered into in relation to the Scheme; and

(ii) the requirements specified in the guidelines made by the MPFA under section

28 of the Ordinance with respect to forbidden investment practices and the requirements of sections 37(2), 51 and 52 and Part X of, and Schedule 1 to, the General Regulation have been complied with, in all material respects, as at 31st December 2019, 3rd April 2019 and 14th August 2019; and

(iii) the requirements specified in the Ordinance under sections 34DB(1)(a), (b), (c)

and (d), 34DC(1) and 34DD(1) and (4)(a) with respect to the investment of accrued benefits and control of payment for services relating to Fidelity Retirement Master Trust – Core Accumulation Fund and Fidelity Retirement Master Trust – Age 65 Plus Fund have been complied with, in all material respects, as at 31st December 2019, 3rd April 2019 and 14th August 2019; and

(iv) the requirements specified in section 34DD(4)(b) of the Ordinance with respect

to the controls of out-of-pocket expenses of the Fidelity Retirement Master Trust – Core Accumulation Fund and Fidelity Retirement Master Trust – Age 65 Plus Fund have been complied with, in all material respects, as at 31st December 2019.

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