Manulife Advanced Fund SPC Annual Report - Audited Financial … · 2020-03-21 · Statement of...

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Manulife Advanced Fund SPC


Annual Report Audited Financial Statementsfor the year ended 30 June 2019

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C o v e rP re v i e w

D o n ' t o u t p u t


Table of Contents

Company Information 1

Directors’ Report for the year ended 30 June 2019 2

Investment Manager’s Report for the year ended 30 June 2019 3

Report of the Custodian 16

Independent Auditors’ Report 17

Statement of Financial Position 20

Statement of Comprehensive Income 22

Statement of Changes in Net Assets Attributable to holders of Redeemable Participating Shares 24

Statement of Changes in Equity 24

Statement of Cash Flows 25

Statement of Distribution 28

Notes to Financial Statements 33

Portfolio of Investments

– China A Segregated Portfolio (the “China A Fund”) 88

– Renminbi Bond Segregated Portfolio (the “Bond Fund”) 90

– Asia Pacific Income and Growth Segregated Portfolio (the “Asia Pacific Income and Growth Fund”) 92

– U.S. Bank Equity Segregated Portfolio (the "U.S. Bank Equity Fund") 97

– Greater Bay Area Growth and Income Segregated Portfolio (the "Greater Bay Area Growth and Income Fund") 100

Statement of Movements in Investment Portfolios 104

Performance Table 107


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* Until 21 February 2019, CIBC Bank and Trust Company (Cayman) Limited address was as follow : P.O. Box 694, CIBC Financial Centre, 11 Dr. Roy's Drive, Grand Cayman KY1-1107, Cayman Islands.** Respectively effective from 29 July 2019 and 7 May 2019, Manulife Asset Management (Hong Kong) Limited and Manulife

Asset Management (US) LLC change their names to Manulife Investment Management (Hong Kong) Limited and Manulife Investment Management (US) LLC.

Company Information

Registered Office of the CompanyP.O. Box 309Ugland HouseGrand Cayman, KY1-1104Cayman Islands

Principal Office of the CompanyC/o CIBC Bank and Trust Company (Cayman) Limited*25 Main Street, 4th FloorGeorge Town, P.O. Box 694Grand Cayman, KY1-1107 Cayman Islands

General Adviser and Distributor of the CompanyManulife Investment Management (Hong Kong) Limited**16th Floor, Lee Garden One33 Hysan AvenueCauseway BayHong Kong SAR

Investment Manager of the CompanyManulife Investment Management (Hong Kong) Limited**16th Floor, Lee Garden One33 Hysan AvenueCauseway BayHong Kong SAR

Sub-Investment Manager of the U.S. BankEquity FundManulife Investment Management (US) LLC**197 Clarendon Street, Boston, MA02116United States of America

Investment Adviser of the China A FundManulife TEDA Fund Management Co., Ltd.3rd Floor, South BlockWinland Finance Center7 Financial StreetXicheng District, Beijing 100033People's Republic of China

Auditors of the CompanyErnst & Young Ltd.Suite 6401, 62 Forum LaneCamana BayP.O. Box 510, Grand Cayman, KY1-1106Cayman Islands

Legal Advisers to the Company(as to matters of Hong Kong law):Deacons5th Floor, Alexandra HouseChater Road, CentralHong Kong SAR

Legal Advisers to the Company(as to matters of Cayman Islands law):Maples and Calder (Hong Kong) LLP53rd Floor, The Center99 Queen's Road CentralHong Kong SAR

Directors of the Company

Bruno Lee

Endre Pedersen

Leo Zerilli

Custodian and Paying Agent of the CompanyCitibank Europe plc, Luxembourg Branch31, Z.A. BourmichtL-8070 BertrangeGrand Duchy of Luxembourg

Administrator of the CompanyCIBC Bank and Trust Company (Cayman) Limited*25 Main Street, 4th FloorGeorge Town, P.O. Box 694Grand Cayman, KY1-1107Cayman Islands

Sub-Administrator, Registrar and Transfer Agent of the CompanyCitibank Europe plc, Luxembourg Branch31, Z.A. BourmichtL-8070 BertrangeGrand Duchy of Luxembourg

Sub-Delegate of the Sub-Administrator, Registrar and Transfer Agent of the Company Citibank N.A., Hong Kong Branch50th Floor, Champion Tower3 Garden Road, CentralHong Kong SAR


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Director’s report for the year ended 30 June 2019

Year in Review

The China A Fund detracted over the past twelve-month period ending 30 June 2019 mainly due to stock selection with consumer discretionary being the primary detractor. The overweight to technology and industrials and the underweight to financials also dragged performance. Partly offsetting the detraction was the overweight in consumer staples.

The Bond Fund's overweight positioning in Chinese corporate and government-related bonds continued to be a positive contributor to performance, benefiting both from positive carry and a contraction in credit spreads.

The Greater Bay Area Growth and Income Fund's equity exposure recorded a slight loss mainly due to the technology, consumer discretionary and healthcare sectors amid US-China tensions coupled with weak consumption sentiment as well as policy headwinds in the healthcare industry. Partly offsetting the detraction were the financial and real estate sectors.

The Asia Pacific Income and Growth Fund's performance was broad-based as stock selection and asset allocation decisions at both the country and sector levels contributed positively to performance.

The U.S. Bank Equity Fund's overweight in small and mid-cap banks detracted from performance.

Outlook

Asian equity markets have been plagued by concerns surrounding trade wars and weakness in some emerging market debt markets. The near-term noise and uncertainties revolving around trade tensions may linger on-and-off, with market sentiment being very sensitive to news flows. We believe that there is 'no easy way out', but believe that investors will refocus on the fundamentals when the dust settles. We remain constructive on China’s full year growth of 6.0-6.5% and will maintain a long-duration bias with expectations for weakening global growth and a deteriorating domestic Chinese economy combined with mild inflationary pressure.

The Fed has been providing supportive messages to the market and has signalled that it will respond in a timely fashion to support growth. This will provide more room for China to implement easing policies if needed with less pressure on the Chinese renminbi.


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Investment Manager's Report for the year ended 30 June 2019

MAF China A Segregated Portfolio (the “China A Fund”)

Investment Objective: The objective of the China A sub-Fund is to achieve long-term capital appreciation by investing primarily in Mainland China’s capital markets. The China A sub-Fund seeks to achieve its investment objective by investing primarily (i.e. not less than 70% of its net assets) in companies listed on the A-Share markets of the Shanghai Stock Exchange and/or the Shenzhen Stock Exchange.

Performance Review as of 30 June 2019*:

Share Class AA (From 1 July 2018 to 30 June 2019) -3.35%

Share Class I (From 1 July 2018 to 30 June 2019) -3.11%

Benchmark** (From 1 July 2018 to 30 June 2019) 5.11%

Source: Manulife Investment Management (Hong Kong) Limited

Portfolio Review

The sub-Fund detracted over the past twelve-month period ending 30 June 2019 mainly due to stock selection with consumer discretionary being the primary detractor. The overweight to technology and industrials and the underweight to financials also dragged performance. Partly offsetting the detraction was the overweight in consumer staples.

The sub-Fund’s exposure to the consumer discretionary sector was the main drag on performance. Specifically, the holdings included a tourism service company, and two hotel operators. The companies detracted due to their inherent sensitivity to weakening consumption sentiment amid the trade tensions and tepid growth momentum of the Chinese economy, with lower tourist traffic volume and falling revenue per available room. However, these companies will likely recover should the economy and consumption sentiment recover with supportive government policies, as they are well-positioned to capture trends in consumption upgrades. Another detractor was a supplier of semiconductor products due to the sector downturn and solar subsidy cuts in China. On a positive note, the company is likely to recover with more efforts spent on sales and marketing as the sector goes through the down cycle.

Individual contributors came from consumer staples. The best performer was from a leading farmer of hogs. The company benefited from the increase in pork prices due to the sprawling swine flu in China, further supported by its capacity expansion. Similarly, another was a producer and distributor of feed products. With sophisticated technology and low-cost modern farms to gain market share, the company benefited from sector consolidation driven by the swine flu.

During the period, the sub-Fund has added more exposure to consumer staples after the sector delivered stellar returns, and trimmed the weights in consumer discretionary and healthcare stocks. The consumer staples and industrials sectors are now the largest overweight with financials being the largest underweight.

* The performance return is calculated in USD terms and includes dividends re-invested.** The return represents the performance of 70% CSI 300 Index + 30% MSCI Zhonghua Index until 9 February, 2011 and

thereafter CSI 300 Index.


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Market Review

In the second half of 2018, the Chinese stock market edged lower as a result of Sino-US trade tensions and early signs of a slowdown in China. Since the US imposed tariffs on a total of US$250 billion of Chinese imports, this dampened the country’s growth outlook, currency and market sentiment. And China started to show softness from its economic data, despite policy support from the authorities.

As 2019 approached, the Chinese stock market rallied on the positive developments in trade talks with further easing policy measures coming into play, recovering the previous losses. The market rebounded as US-China trade tensions eased with some progress made in the trade negotiations. At the annual National People’s Congress in March, the government enhanced its efforts to stabilise the economy by introducing broad-based tax cuts and providing more liquidity for private firms. Driven by these catalysts and the attractive valuations, the equity market saw a turnaround.

The stock market remained sideways recently as market uncertainties persisted due to the re-escalation of the trade war and sluggish economic data. As the US hiked tariffs on US$200 billion of Chinese imports, followed by the trade ban on a leading Chinese tech manufacturer, it raised concerns over the odds of reaching a trade deal between the two countries over the near-term. Meanwhile, China’s economic data continued to indicate tepid internal demand and investment. In response to the potential slowdown, the Chinese government further promoted the consumption of automobiles and electronics, and stimulated investments by allowing local governments to use bank loans and leverage the proceeds of special purpose bonds for infrastructure projects. However, it will take time for the market to assess the impact on the economy.

Outlook

The near-term noise and uncertainties revolving around trade tensions may linger on-and-off, with market sentiment being very sensitive to news flows. We will monitor developments from the meetings of US and Chinese trade officials. We believe that there is 'no easy way out', but we believe that investors will refocus on the fundamentals when the dust settles. That said, looking into the fundamentals, we remain positive about China A-shares.

Looking ahead, we may see more supportive policies from the Chinese government from economic/market perspectives.

In terms of investment strategy, we will continue to invest in opportunities that can benefit from the long-term structural trends in China. In particular, with the recent volatility, we took the opportunity to initiate companies across different segments – materials, capital goods, healthcare, information technology and capital goods related – as attractive valuations offer good timing for entry points. These include beneficiaries from research and development, innovation and consumption upgrades. Meanwhile, we exited positions for those lacking near-term catalysts as we find better opportunities elsewhere.

Investment Manager's Report (continued) for the year ended 30 June 2019

MAF China A Segregated Portfolio (the “China A Fund”) (continued)


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* The performance return is calculated in USD terms and includes dividends re-invested.** The return represents the performance of 70% Shanghai T-bond Index + 30% short end cash rate until 23 February 2011.

From then until 31 December 2013, it represents Shanghai T-bond Index, and from 1 January 2014 until 30 April 2016, it represents HSBC China Local Currency Government Bond (1-10 years) Index and thereafter Markit iBoxx ALBI China Onshore 1-10 Index.


MAF Renminbi Bond Segregated Portfolio (the “Bond Fund”)

Investment Objective: The investment objective of the Bond Fund is to provide capital appreciation and income generation by investing primarily in RMB-denominated debt instruments issued and listed in Mainland China or traded in the Mainland China interbank bond market, subject to applicable QFII regulations. The fund will invest primarily (i.e. not less than 70% of its net assets) in RMB-denominated debt instruments, including convertible bonds that are listed or transferred on either the Shanghai Stock Exchange or the Shenzhen Stock Exchange, or interbank bonds, and which are issued by the Mainland China Government as well as corporations in Mainland China.


Share Class AA (USD) (From 1 July 2018 to 30 June 2019) 0.21%

Share Class I (USD) (From 1 July 2018 to 30 June 2019) 0.46%



Portfolio Review

The portfolio’s overweight positioning in Chinese corporate and government-related bonds continued to be a positive contributor to performance over the period, benefiting both from positive carry and a contraction in credit spreads. The portfolio’s long duration positioning to the benchmark also helped performance as yields declined over the period.

Market Review

The global economic slowdown and Sino-US trade frictions have put pressure on China’s economy over this period. After a better than expected gross domestic product (GDP) reading earlier in the year, second quarter GDP growth was recorded at +6.2% year-on-year which was in-line with expectations but also the weakest reading since 1992. The Caixin Manufacturing Purchasing Managers’ Index was slightly ahead of expectations at 50.2 in May, showing a slight expansion in manufacturing activity. May’s trade balance was 279.12 billion yuan with exports growing +7.7% year-on-year while imports declined -2.5% year-on-year in Chinese yuan terms. Inflation trended higher as the consumer price index rose by +2.7% year-on-year in May.


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MAF Renminbi Bond Segregated Portfolio (the “Bond Fund”) (continued)

Market Review (continued)

China’s Premier Li Keqiang spoke at the annual Boao Forum and continued to reiterate China will not be adopting massive stimulus while efforts will be made to lower funding costs for smaller private companies. Trade talks between the US and China hit an impasse in early May as both countries failed to reach agreement in trade talks and the US lifted tariffs to 25% on an additional US$200 billion in goods from China while China announced retaliatory tariffs on about US$60 billion of US goods. The US applied further pressure by announcing restrictions on US companies doing business with Chinese company Huawei. Following from the abrupt US-China trade impasse in May, markets continued to have a cautious tone towards Chinese assets while the People’s Bank of China (PBoC) Governor, Yi Gang underplayed the importance of any specific US dollar-Chinese yuan level. Leading up to the important G-20 meeting in Osaka at the end of June, market sentiment improved on optimism that the meetings between Presidents Trump and Xi could result in a truce and trade tensions between the US and China were likely to de-escalate.

With the softening economic environment and the uncertain trade outlook, onshore Chinese government bond yields moved lower over the period. The Markit iBoxx China Onshore Bond (1 to 10 years) Index returned 1.15% in US dollar terms over the period. The renminbi declined by -3.58% against the US dollar over the period as the renminbi sold-off largely on trade concerns before finding some support in June. The onshore Chinese yuan fixing against the US dollar was 6.8747 at the end of June.

Outlook

The G20 meeting was slightly positive for markets but it remains difficult to form a firm view either way at this stage while the market waits for a more concrete outcome from China and US trade discussions. For now, the market is content with a truce between the two parties which means some stability for markets. With expectations for weakening global growth and a deteriorating domestic Chinese economy combined with mild inflationary pressure, the portfolio maintains its long-duration bias. The Fed has been providing supportive messages to the market and has signalled that it will respond in a timely fashion to support growth. This will provide more room for China to implement easing policies if needed with less pressure on the Chinese renminbi. The performance of the yuan vs the dollar and whether the 7 level will be breached remains a key focus for the market. It is not our base-case that US dollar-Chinese yuan will breach the 7 level in the near-term while trade negotiations are ongoing. PBoC Governor Yi Gang has also reiterated the importance of maintaining stability in the currency in recent media interviews. We maintain our view that the US dollar-Chinese yuan will remain in a trading range between 6.90 and 6.98 for now.


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Investment Manager's Report (continued) for the period ended 30 June 2019

MAF Asia Pacific Income and Growth Segregated Portfolio(the “Asia Pacific Income and Growth Fund”)

Investment Objective: The investment objective of the Asia Pacific Income and Growth Fund is to provide investors with income and capital appreciation over the medium to longer term by investing primarily in equity and fixed income-related securities in the Asia Pacific ex-Japan region (the “Region”).


Share Class AA (USD) Inc (From 1 July 2018 to 30 June 2019) 6.08%



Portfolio Review

During the reporting period, the Sub-Fund outperformed the benchmark. The performance was broad-based as stock selection and asset allocation decisions at both the country and sector levels contributed positively to performance. Stock selection in China, Australia, and South Korea, the underweight in South Korea and overweight in Singapore helped drive positive performance. Partially offsetting the performance was stock selection in Taiwan, Hong Kong and the underweight in India and Indonesia.

The main performance contributor was a New Zealand utility as downside risk to Australian bond yields have led to upside for utilities. Structurally, the sector remains attractive due to the balance of yield, growth and minimal regulatory risk. Another was a Singapore-listed data centre REIT that has performed strongly given the current US interest rate environment (moving from rate hikes to potential rate cuts) and the continued search for yield. Additionally, the REIT’s distribution growth has been supported by high quality acquisitions and a lower cost of financing.

The primary performance detractor was a Singaporean basic cable television operator. The company’s basic cable business was under pressure during the year which resulted in the company reducing its dividend payout rate. The sub-Fund exited its position due to the uncertainty of the company’s outlook. Another detractor was a Chinese automobile original equipment manufacturer (OEM). Although the company has a solid brand in China with growing electric vehicle contributions, the downturn in overall auto sales negatively impacted the company’s operating results and share price performance.

The portfolio’s overall security selection contributed to performance; the portfolio’s holdings in an Indonesian agricultural good producer and an Indonesian real estate developer were notable performers. The portfolio’s exposure to Indonesian and Indian local currency bonds also contributed to performance. However, the portfolio’s underweight interest rate duration positioning detracted from performance amid lower US Treasury yields.

* The performance return is calculated in USD terms and includes dividends re-invested.** The return represents the performance of 60% MSCI AC Asia Pacific ex Japan Index + 40% JP Morgan Asia Credit Index.


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MAF Asia Pacific Income and Growth Segregated Portfolio(the “Asia Pacific Income and Growth Fund”) (continued)

Market Review

Asia-Pacific equities were roughly flat for the year as the US Federal Reserve Board (Fed)’s gradual dovish tilt countered the negative impact of Sino-US trade tensions. Regional equities experienced a volatile ride in the second half of 2018. In July, August, and September, Sino-US trade tensions spiked as both countries placed tariffs on tranches of the other country’s imports leading to uncertainty over the conflict’s trajectory and increased market volatility. Currency crises in Turkey and Argentina further dented markets in August and September, leading to risk-off sentiment in emerging markets and significant capital outflows and weakening currencies in Southeast Asian markets. After a brief rebound, a potent cocktail of investor concerns over higher rates, slowing growth, and lofty valuations coalesced in a December global equities sell-off that led regional equity markets sharply lower.

The Fed’s dovish tilt in early 2019, coupled with consistent Sino-US trade negotiations, provided support for regional equities early in the New Year. After projecting two interest rate hikes for 2019 in December, the Fed abruptly announced that no interest rate hikes were likely in 2019 at its January meeting. The shift in expectations benefited Asian equity markets, particularly those hurt by receding global liquidity and increased scrutiny of current account deficits, as the Fed codified the interest rate “pause” in March and laid the foundation for potential rate cuts in May and June. Sino-US trade tensions remained largely contained in the first half of the year due to consistent negotiations until a series of tweets by US President Trump in May led to further bilateral tariffs, a halt in trade negotiations, and the placing of a prominent Chinese electronics manufacturer on a trade “black list” – sending markets sharply lower again. However, Asian markets rebounded on the back of diminished macro headwinds, including a weaker US dollar and moderate oil prices, and optimism over a potential restart to Sino-US trade talks.

In the US, the Fed increased the target rate range to between 2.25% and 2.50% during the December meeting and subsequently paused afterwards. Towards the latter part of the period, US Treasury yields began to trend lower amid escalated China-US trade tensions, concerns about slower global economic growth and building market expectations the Fed may cut interest rates. The 10-year US Treasury yield fell from 2.86% to 2.01% over the period. Asian corporate credit markets delivered positive returns, predominately driven by lower US Treasury yields and from the coupon component. The JP Morgan Asian Investment Grade Corporate Bond Index returned 8.49% and the JP Morgan Asian High Yield Corporate Bond Index returned 11.32% in US dollar terms.

Outlook

Asian equity markets have been plagued by concerns surrounding trade wars and weakness in some emerging market debt markets. However, in terms of fundamentals, we see limited impact to Asian economic growth and corporate earnings even assuming the worst case scenario on trade tariffs. That being said, we are seemingly closer to the finalisation of a new trade agreement which should help reduce uncertainty. The weakness in non-Asian emerging market currencies and debt markets needs to be put into context in relation to Asian sovereign debt which is underpinned by superior current account dynamics.


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Outlook (continued)

We are seeing some weakness in some sectors of late – namely smartphone supply chain technology stocks and domestic discretionary sectors in China such as autos and household goods. We had already foreseen this and as a consequence, the sub-Fund has limited exposure to these sectors but we will closely watch valuations as they are becoming increasingly attractive.

In 2019, we expect the pace of interest rate normalisation to slow compared to 2018 based on leading US economic leading and Fed commentary suggesting a much more dovish stance. This should result in less upward pressure in the US dollar which should support emerging markets relative to developed particularly as Asian equity market valuations are close to trough levels. Earnings growth has been downgraded for Asia on the back of weakness in some of the previously mentioned sectors (e.g. smartphone supply chain) and some slowdown in the sales outlook for some Chinese discretionary consumer sectors (autos and household goods). However, we still see positive earnings growth in 2019 and continue to favour equities over fixed income within our asset allocation mix.

The sell-off in Asian equities has resulted in many long-term growth stocks (which were never considered yield stocks) now offering attractive yields.

Within fixed income, we are looking to enhance yield by increasing our exposure to high-yield rather than stretching out duration. We see many opportunities for improvements in credit ratings as capital expenditures to sales in Asia is at historic lows and the subsequent corporate de-leveraging should lead to further yield spread contraction. We also see strong value in local currency sovereign debt which is now rated at investment grade but still offer very attractive yields.

The key yield enhancing sectors on the equity side come from our weights within real estate investment trusts and infrastructure investment trusts which offer attractive yields compared to global peers with relatively low gearing. These companies have stable and predictable cash flow streams suited to supporting regular income distribution. Given the recent correction, however, we are finding many more high yielding opportunities in some other sectors which previously did not offer attractive yields.

Interest rate risk is mitigated through our positioning in high yielding bank stocks in China and Hong Kong as well as insurance companies whose earnings are positively correlated to rising interest rates. As we expect global interest rates to slowly normalise, we are running shorter duration on the fixed income portion of the portfolio.

We have turned more cautious on the energy sector given its strong relative performance and we have since taken profits. Some of the supply constraints that were witnessed earlier this year have now started to dissipate. We are now finding more opportunities in other sectors such as information technology after the recent sell-down.

The sub-Fund is also well-positioned to capture growth through its investments in the information technology and consumer discretionary sector where we see opportunities for strong growth to augment the stable income generated from fixed income and investment trusts.


MAF Asia Pacific Income and Growth Segregated Portfolio(the “Asia Pacific Income and Growth Fund”) (continued)


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Investment Objective: The investment objective of U.S. Bank Equity Fund is to achieve medium to long-term growth of capital primarily through investing in equities (such as common, preferred and convertible preferred stocks) and equityrelated investments (such as depositary receipts and exchange traded funds (“ETF”)), of U.S. banks (including regional banks, commercial banks, industrial banks, savings and loan associations and bank holding companies incorporated in the United States of America and/or its territories, collectively“U.S. Banks”).


Share Class AA (USD) Inc (From 1 July 2018 to 30 June 2019) -12.02%

Share Class AA (HKD) Inc (From 1 July 2018 to 30 June 2019) -12.45%



Portfolio Review

The Fund underperformed its benchmark primarily due to the underperformance of the small- and mid-cap banks, where the Fund is overweight, versus their larger peers.

The Fund’s underweight of Wells Fargo & Company (WFC) was a positive contributor to performance. We exited our position in Wells Fargo Corporation in December 2018 as we believed the regulatory overhang affecting this bank would last longer than consensus expected. In the first half of 2019, WFC’s CEO resigned following pressure from regulators, and the company guided to lower-than-expected spread revenue for 2019. These issues combined with several sell-side analysts downgrades led to the stock’s underperformance.

Another positive contributor for the year was Cleveland, Ohio-based superregional bank. During the year, the company closed its acquisition of a Chicago-based commercial lender, with solid cost savings and potential revenue synergies expected from the combination. Further, management has been focused on controlling expenses, producing positive operating leverage and driving down its efficiency ratio. We continue to find the stock attractively valued.

A regional bank headquartered in West Virginia, also contributed positively to performance. This high-quality regional bank has a strong deposit base and a very efficient franchise. The company continued to report solid earnings growth, and the stock’s outperformance led us to sell our shares during the period. While we continue to admire the franchise, we found better relative value elsewhere.


MAF U.S. Bank Equity Segregated Portfolio(the “U.S. Bank Equity Fund”)

* The performance return is calculated in USD terms and includes dividends re-invested.** The return represents the performance of S&P Composite 1500 Banks Index.


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MAF U.S. Bank Equity Segregated Portfolio(the “U.S. Bank Equity Fund”) (continued)

Portfolio Review (continued)

The Fund’s underweight of money center banks negatively contributed to the performance versus the benchmark for the period. Although two of the banks are top positions in the Fund, our weight is below the outsized weighting in the benchmark. We do not hold another money center bank in the Fund as it gets about half its revenue outside of the United States. Overall, these stocks outperformed on solid earnings growth, significant capital returns and strong results from the CCAR exam.

Another group of detractors were some of our mid-cap banks that are considered asset sensitive – banks whose balance sheets are positioned to benefit from rising interest rates. This group fell out of favor as the Federal Reserve’s interest rate policy swung from increasing rates to flat rates to declining rates during the period.

Market Review

The U.S. stock market, as measured by the S&P 500, posted strong returns for the twelve months ended June 30, 2019 on continued economic expansion in the United States. Nevertheless, the period was marked by extreme volatility due to a partial shutdown of the U.S. government at the end of 2018, a slowing of the global economy, potential trade wars and tariffs, a flattening of the U.S. Treasury yield curve, and a shift to global Central Bank easing. The U.S. economy experienced solid growth during the 12-month period but worries of higher interest rates leading to a recession were pervasive. The Federal Reserve increased the Federal Funds rate in both September and December of 2018, with 25 basis point moves in both periods. Heightened uncertainty about the longevity U.S. expansion coupled with elevated trade tensions and an inversion of the yield curve led the Federal Reserve to first put future interest rate hikes on hold and then indicate the next rate moves would likely be lower.

In this environment, bank stocks significantly underperformed the market on worries of increasing credit costs due to a slowing economy and potential pressure on net interest margins from future interest rate cuts. However, fundamentals for the U.S. banks continued to be strong, with solid loan growth, improving net interest margins, low credit costs, positive operating leverage, and continued share buybacks leading to high-single-digit earnings growth. The 2019 Comprehensive Capital Analysis and Review (CCAR) was released by the Federal Reserve at the end of the period. The results exceeded market expectations and reflected the strong health and robust capitalization of the U.S. banking system.

The fund’s benchmark, the S&P 1500 Banks Composite, increased 0.49% for the period.


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Outlook

We continue to view the U.S. bank stocks favorably and do not believe current valuations reflect the industry’s solid fundamentals. The industry continues to trade several multiple points below its long-term average price/earnings level. Further, the group is trading well below historic levels versus the overall market.

We continue to expect solid U.S. GDP growth in 2019 even though recent economic data has shown a slowdown from earlier in the year. Our stance on interest rates has changed, along with Manulife Investment Management’s Head of Economic Strategy, and we believe that two rate cuts by the Federal Reserve are likely before the end of the year. Lower rates and an inverted yield curve will put some pressure on banks’ net interest margins, but we believe solid loan growth, stable credit, a focus on positive operating leverage and share buybacks will lead to mid-to-high single digit earnings growth for the U.S. banks in 2019 and 2020.

Lower rates do have some positive impacts. As the 10-year U.S. Treasury rate has dropped, there has been a pick up in mortgage banking activity both through home purchases and mortgage refinancings. In addition, if lower rates spur faster economic growth and avert a recession, banks will benefit from higher loan balances and still low credit costs. Bank merger activity continues, although it is at a slightly slower pace than 2018. Overall, we remain optimistic on the prospects for U.S. bank stocks.


MAF U.S. Bank Equity Segregated Portfolio(the “U.S. Bank Equity Fund”) (continued)


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MAF Greater Bay Area Growth and Income Segregated Portfolio (the “Greater Bay Area Growth and Income Fund”)

Investment Objective: The investment objective of the sub-Fund is to achieve capital growth and income generation by investing primarily in a diversified portfolio of equity and equity-related securities and fixed income securities of issuers which are connected to the region comprising Hong Kong, Macau and the Guangdong Province of China (Greater Bay Area).


Share Class AA (USD) (From 1 July 2018 to 30 June 2019) 0.39%

Share Class AA (USD) Inc (From 1 July 2018 to 30 June 2019) 0.39%

Class AA (AUD) Inc Hedged (From 1 July 2018 to 30 June 2019) -0.68%

Class AA (HKD) Inc (From 1 July 2018 to 30 June 2019) -0.10%


Portfolio Review

During the reporting period ending 30 June 2019, the sub-Fund’s equity exposure recorded a slight loss mainly due the technology, consumer discretionary and healthcare sectors amid US-China tensions coupled with the weak consumption sentiment as well as policy headwinds in the healthcare industry. Partly offsetting the losses were the financials and real estate sectors.

With regards to individual performance, a biopharmaceutical company which develops oncology drugs negatively impacted performance as it posted wider than expected losses. We believe the company is well positioned with a strong pipeline in the commercial stage and late clinical testing. Another was a digital advertising agency, which saw less demand than expected for its advertising service with the weak economic backdrop. However, its partnership with an e-commerce giant is regarded as a strong catalyst for future growth.

The top contributor was a Hong Kong securities and commodities exchange, which rallied on the back of a potential high profile listing which should be positive for long-term average daily turnover growth. Additionally, the strong northbound volume due to the MSCI inclusion and the introduction of A-share futures should also provide future growth opportunities for the company. Another contributor was a property developer with a strong presence in the Pearl River Delta region that rallied on the back of strong sales momentum as well as more lenient and city-specific policy support, especially in the Greater Bay Area.

On the fixed income side, the portfolio’s exposure to gas and electricity utility names were among the key contributors to performance while yield curve positioning also helped as yields declined.

* The performance return is calculated in USD terms and includes dividend re-invested. There is no representative benchmark for this sub-fund.


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MAF Greater Bay Area Growth and Income Segregated Portfolio (the “Greater Bay Area Growth and Income Fund”) (continued)

Market Review

China and Hong Kong equity markets were higher during the period amidst the volatility, with US-China trade tensions being the dominant factor. At the beginning of the reporting period, the sell-offs were driven by the US tariffs on a total of US$250 billion of Chinese imports and the soft economic data in China. In the first half of 2019, the market rallied on the positive developments in the US-China trade dispute and strengthened fiscal stimulus in response to the looming economic slowdown, such as tax cuts and encouraging investments funded by bank loans and special local government bonds. Recently, the re-escalation in trade tensions as well as the sustained weakness in economic data reversed part of the gains, despite the dovish turn of the US Federal Reserve Board (Fed).

China’s corporate bonds performed strongly over the period driven by a decline in treasury yields and the positive carry from credit over sovereign bonds. Over the period, US 10-year Treasury bond yields declined from 2.86% at the beginning of the review period to 2.01% by the end of June after the Fed’s comments that a potential rate cut was now justified as downside risks to the US economy had increased. China’s credit spreads widened over the first half of the period before staging a rally at the beginning of 2019. Spreads further widened in May during the US-China trade impasse before contracting again in June on optimism that a trade truce could be reached. China’s credit spreads finished the period at 313 basis points, marginally wider than where they began.

Outlook

While there are remaining uncertainties due to the trade frictions between China and the US, our preliminary analysis suggests that tariffs are unlikely to have a significant economic impact to both economies, in particular China’s economic growth driver, which has changed to domestic demand. We remain constructive on China’s full year growth of 6.0-6.5% and remain confident that the key regions of the Greater Bay Area should sustain above average momentum over that of China’s national growth. The infrastructure enhancements are progressing rapidly and there were already signs of a healthy recovery in Chinese tourist arrivals to Hong Kong.

Despite all of the external driven disruptions, we believe much of the potential negative impact in gross domestic product and earnings should have largely been priced-in. However, if 25% tariffs are implemented, it would inevitably hurt all parties, especially US consumers and importers as this last batch of import goods are irreplaceable and would see tariff costs being passed on to US buyers. All in all, China has long started the transformation from an export-oriented to a domestic demand-driven economic growth model. We believe the impact from US tariffs on China will not be as severe compared to five or ten years ago given the much established domestic demand-driven growth model and more diversified export portfolio.

With new challenges arising, the role of the Greater Bay Area is expected to become more important. We expect that the formalisation of the Greater Bay Area development plan will be announced soon which should provide a concrete outline to drive growth.


15


MAF Greater Bay Area Growth and Income Segregated Portfolio (the “Greater Bay Area Growth and Income Fund”) (continued)

Outlook (continued)

In the fixed income market, as Greater China’s regional economies remain robust as many of them now have much stronger fundamentals compared to previous cycles, US dollar strength is not expected to hammer Greater China currencies as much as those of other emerging market currencies. China has been publicly stated that the renminbi (RMB) is not a tool for the trade war, previous RMB weakness was largely driven by US dollar strength. Macro developments and the outcome of trade negotiations will be key determinants in the RMB’s trend in 2019.

To cushion the impact of a potential escalation in Sino-US trade conflicts, we expect an eventual loosening in liquidity. All in all, we will continue to closely monitor the credit and liquidity risk of our bonds and stay away from over-leveraged US dollar high-yield issuers with weak fundamentals. We will be more selective in new issues and focus more on those from good quality issuers.


16

Report of the Custodian

In our opinion, the Investment Manager, Manulife Investment Management (Hong Kong) Limited, has, in all material respects, managed the Manulife Advanced Fund SPC for the year ended 30 June 2019 in accordance with the provisions of the constitutive documents and the Memorandum and Articles of Association dated 14 July 2008, as amended.

For and on behalf of Citibank Europe plc, Luxembourg Branch

Date: 17 October 2019 Date: 17 October 2019

Ulrich WITTVice President

Patrick WATELETDirector

A member firm of Ernst & Young Global Limited

Independent Auditors’ Report

The Board of DirectorsManulife Advanced Fund SPC

Report on the Audit of the Financial Statements

Opinion

We have audited the financial statements of Manulife Advanced Fund SPC and each of its sub-funds, comprisingChina A Segregated Portfolio, Renminbi Bond Segregated Portfolio, Asia Pacific Income and Growth SegregatedPortfolio, U.S. Bank Equity Segregated Portfolio and Greater Bay Area Growth and Income Segregated Portfolio(collectively, the “Company”) which comprise the statement of financial position as at 30 June 2019, and the statementof comprehensive income, statement of changes in net assets attributable to holders of redeemable participating shares,statement of changes in equity, statement of distribution and statement of cash flows for the year then ended, and notesto the financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position ofManulife Advanced Fund SPC and each of its sub-funds, comprising China A Segregated Portfolio, Renminbi BondSegregated Portfolio, Asia Pacific Income and Growth Segregated Portfolio, U.S. Bank Equity Segregated Portfolioand Greater Bay Area Growth and Income Segregated Portfolio as at 30 June 2019 and its financial performance andits cash flows for the year then ended in accordance with International Financial Reporting Standards.

Report on Other Legal and Regulatory Disclosure Requirements

We report that the financial statements have been properly prepared in accordance with the relevant disclosureprovisions of the Memorandum and Articles of Association of the Company and the disclosure requirements ofAppendix E of the Code.

Basis for Opinion

We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities underthose standards are further described in the Auditors’ responsibilities for the audit of the financial statements sectionof our report. We are independent of the Company in accordance with the International Ethics Standards Board forAccountants’ Code of Ethics for Professional Accountants (IESBA Code), and we have fulfilled our other ethicalresponsibilities in accordance with the IESBA Code. We believe that the audit evidence we have obtained is sufficientand appropriate to provide a basis for our opinion.

Ernst & Young Ltd.62 Forum LaneCamana BayP.O. Box 510Grand Cayman KY1-1106CAYMAN ISLANDS

Tel: +1 345 949 8444Fax: +1 345 949 8529ey.com

17


Other Information

Other information consists of the Company Information, Director’s Report, Investment Manager’s Report, Report ofthe Custodian, Statement of Movements in Investment Portfolios and Performance Table. Management is responsiblefor the other information.

Our opinion on the financial statements does not cover the other information and we do not express any form ofassurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, indoing so, consider whether the other information is materially inconsistent with the financial statements or ourknowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we haveperformed, we conclude that there is a material misstatement of this other information, we are required to report thatfact. We have nothing to report in this regard.

Responsibilities of Management and the Board of Directors for the Financial Statements

Management is responsible for the preparation and fair presentation of the financial statements in accordance withInternational Financial Reporting Standards, the relevant disclosure provisions of the Memorandum and Articles ofAssociation of the Company and the relevant disclosure requirements set out in Appendix E to the Hong Kong Codeon Unit Trusts and Mutual Funds of the Securities and Futures Commission of Hong Kong (the “Code”), and for suchinternal control as management determines is necessary to enable the preparation of financial statements that are freefrom material misstatement, whether due to fraud or error.

In preparing the financial statements, management is responsible for assessing the Company’s ability to continue as agoing concern, disclosing, as applicable, matters related to going concern and using the going concern basis ofaccounting unless management either intends to liquidate the Company or to cease operations, or has no realisticalternative but to do so.

The Board of Directors is responsible for overseeing the Company’s financial reporting process.

Auditors’ Responsibilities for the Audit of the Financial Statements

Our report is made solely to you, as a body, and for no other purpose. We do not assume responsibility towards oraccept liability to any other person for the contents of this report.

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free frommaterial misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion.Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance withISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and areconsidered material if, individually or in the aggregate, they could reasonably be expected to influence the economicdecisions of users taken on the basis of these financial statements.

As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional skepticismthroughout the audit. We also:

18


- Identify and assess the risks of material misstatement of the financial statements, whether due to fraud orerror, design and perform audit procedures responsive to those risks, and obtain audit evidence that issufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatementresulting 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 areappropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of theCompany’s internal control.

- Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates andrelated disclosures made by management.

- Conclude on the appropriateness of management’s use of the going concern basis of accounting and, basedon the audit evidence obtained, whether a material uncertainty exists related to events or conditions that maycast significant doubt on Manulife Advanced Fund SPC and each of its sub-funds, comprising China ASegregated Portfolio, Renminbi Bond Segregated Portfolio, Asia Pacific Income and Growth SegregatedPortfolio, U.S. Bank Equity Segregated Portfolio and Greater Bay Area Growth and Income SegregatedPortfolio ability to continue as a going concern. If we conclude that a material uncertainty exists, we arerequired to draw attention in our auditors’ report to the related disclosures in the financial statements or, ifsuch disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidenceobtained up to the date of our auditors’ report. However, future events or conditions may cause the Companyto 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 thatachieves fair presentation.

We communicate with the Board of Directors regarding, among other matters, the planned scope and timing of theaudit and significant audit findings, including any significant deficiencies in internal control that we identify duringour audit.

17 October 2019

19

Man

ulife

Adv

ance

d Fu

nd S

PC

20

Stat

emen

t of F

inan

cial

Pos

ition

As

at 3

0 Ju

ne 2

019

China

A Fu

ndBo

nd Fu

ndAs

ia Pa

cific I

ncom

e and

Gr

owth

Fund

U.S. B

ank E

quity

Fund

Grea

ter Ba

y Area

Grow

th an

d Inc

ome F

und

Comb

ined

Notes

30 Ju

ne 20

1930

June

2018

30 Ju

ne 20

1930

June

2018

30 Ju

ne 20

1930

June

2018

30 Ju

ne 20

1930

June

2018

30 Ju

ne 20

1930

June

2018

30 Ju

ne 20

1930

June

2018

USD

USD

USD

USD

USD

USD

USD

USD

USD

USD

USD

USD

Asse

tsFin

ancia

l asset

s at co

st40

,349,5

2150

,537,4

7352

,235,4

5430

,595,4

7715

,190,1

8915

,563,8

6856

,281,3

6760

,586,7

7820

,207,0

25 10

,884,6

73 1

84,26

3,556

168,1

68,26

9Un

realise

d app

reciati

on/(d

eprec

iation

)1,7

97,56

11,5

58,73

2(1,

365,6

11)

(697,7

58)

906,6

2423

5,042

(6,04

9,387

)2,4

74,10

458

9,809

(398

,604)

(4,12

1,004

)3,1

71,51

6Fin

ancia

l asset

s at fa

ir valu

e thro

ugh p

rofit o

r loss

3, 4

42,14

7,082

52,09

6,205

50,86

9,843

29,89

7,719

16,09

6,813

15,79

8,910

50,23

1,980

63,06

0,882

20,79

6,834

10,48

6,069

180

,142,5

5217

1,339

,785

Cash

and c

ash eq

uivale

nt5

296,7

0616

6,567

262,8

2114

9,845

532,1

9146

1,647

144,5

2654

8,921

261,6

00 56

3,586

1,4

97,84

41,8

90,56

6Re

ceivab

le on s

ubscr

iption

s3,7

0891

,404

– 7,

698

32,25

316

,359

6,989

3,64

7,423

–

328,1

31

42,95

04,0

91,01

5Re

ceivab

le on M

anag

emen

t Sha

re Ca

pital

8 –

– –

– –

– –

– –

–10

010

0Oth

er rec

eivab

les an

d prep

aymen

ts6

198

2,426

795,1

8336

0,300

172,5

6818

4,303

67,01

984

9,601

211,7

80 13

9,833

1,2

46,74

81,5

36,46

3Du

e from

broke

rs –

– –

2,766

,787

– –

–1,6

1073

,757

–73

,757

2,768

,397

Total

asse

ts42

,447,6

9452

,356,6

0251

,927,8

4733

,182,3

4916

,833,8

2516

,461,2

1950

,450,5

1468

,108,4

3721

,343,9

71 11

,517,6

19 1

83,00

3,951

181,6

26,32

6Lia

bilitie

sFin

ancia

l liabili

ties at

fair v

alue t

hroug

h profi

t or lo

ss3,

4 –

– –

– –

220

25

–10

2 1

127

221

Accou

nts pa

yable a

nd ac

crued

expe

nses

7 14

7,741

20

8,122

628,8

15

572,2

67 40

,973

63,79

1 10

6,635

92

8,501

55,29

1 10

3,257

97

9,455

1,875

,938

Payab

le on r

edem

ptions

66,02

883

5,987

620,9

8016

3,084

367

48,63

533

2,995

199,5

91

– –

1,020

,370

1,247

,297

Due t

o brok

ers –

– –

1,18

4,059

–

– –

14,75

976

,694

131,2

43

76,69

41,3

30,06

1To

tal lia

bilitie

s (ex

cludin

g net

asse

ts att

ributa

ble to

ho

lders

of Re

deem

able

Partic

ipatin

g Sha

res)

213,7

691,0

44,10

91,2

49,79

51,9

19,41

041

,340

112,6

4643

9,655

1,142

,851

132,0

87 23

4,501

2,0

76,64

64,4

53,51

7Eq

uity

Mana

geme

nt Sh

are Ca

pital

8 –

– –

– –

– –

– –

–10

010

0To

tal eq

uity

– –

– –

– –

– –

– –

100

100

Total

liabil

ites a

nd eq

uity

213,7

691,0

44,10

91,2

49,79

51,9

19,41

041

,340

112,6

4643

9,655

1,142

,851

132,0

87 23

4,501

2,0

76,74

64,4

53,61

7Ne

t ass

ets at

tributa

ble to

holde

rs of

Rede

emab

le Pa

rticipa

ting S

hares

1542

,233,9

2551

,312,4

9350

,678,0

5231

,262,9

3916

,792,4

8516

,348,5

7350

,010,8

5966

,965,5

8621

,211,8

84 11

,283,1

18 1

80,92

7,205

177,1

72,70

9

The

acco

mpa

nyin

g no

tes

form

an

inte

gral

par

t of t

hese

fina

ncia

l sta

tem

ents

.

Man

ulife

Adv

ance

d Fu

nd S

PC

21

Stat

emen

t of F

inan

cial

Pos

ition

(con

tinue

d)

Num

ber o

f sha

res

in is

sue

China

A Fu

ndBo

nd Fu

ndAs

ia Pa

cific I

ncom

e and

Gr

owth

Fund

U.S. B

ank E

quity

Fund

Grea

ter Ba

y Area

Grow

th an

d Inc

ome F

und

Mana

geme

nt Sh

are30

June

2019

30 Ju

ne 20

1830

June

2019

30 Ju

ne 20

1830

June

2019

30 Ju

ne 20

1830

June

2019

30 Ju

ne 20

1830

June

2019

30 Ju

ne 20

1830

June

2019

30 Ju

ne 20

18

Mana

geme

nt Sh

are –

– –

– –

– –

– –

– 10

010

0Cl

ass A

A (US

D)4,3

57,85

14,8

95,43

62,0

55,93

02,1

70,16

0 –

– –

– 50

0,000

50

0,000

–

– Cl

ass A

A (US

D) In

c –

– –

– 84

0,533

832,2

833,5

22,90

0 4,

277,9

28

735,6

67

412,3

90

– –

Clas

s I (U

SD)

4,059

197,3

4134

5,168

396,9

52 –

– –

– –

– –

– Cl

ass I

3 (US

D) –

– 2,

051,6

02

– –

– –

– –

– –

– Cl

ass A

A (AU

D) In

c Hed

ged

– –

– –

192,3

18 20

9,384

–

– 42

6,088

37,56

6 –

– Cl

ass A

A (HK

D) In

c –

– –

– 49

7,802

471,0

55

980,6

83 1,

098,4

80

576,8

75 18

8,847

–

– Cl

ass A

A (CA

D) In

c Hed

ged

– –

– –

247,5

30 22

7,219

–

– –

– –

– Cl

ass I

2 (RM

B) H

edge

d –

– –

– –

– 29

,610

– –

– –

–

Net

ass

et v

alue

per

Sha

re

China

A Fu

ndBo

nd Fu

ndAs

ia Pa

cific I

ncom

e and

Gr

owth

Fund

U.S. B

ank E

quity

Fund

Grea

ter Ba

y Area

Grow

th an

d Inc

ome F

und

Mana

geme

nt Sh

areCu

rrenc

y30

June

2019

30 Ju

ne 20

1830

June

2019

30 Ju

ne 20

1830

June

2019

30 Ju

ne 20

1830

June

2019

30 Ju

ne 20

1830

June

2019

30 Ju

ne 20

1830

June

2019

30 Ju

ne 20

18

Mana

geme

nt Sh

areUS

D –

– –

– –

– –

– –

– 1.0

000

1.000

0Cl

ass A

A (US

D)US

D9.6

811

10.01

7112

.1667

12.14

08 –

– –

– 9.5

691

9.556

6 –

– Cl

ass A

A (US

D) In

cUS

D –

– –

– 9.3

433

9.281

010

.3638

11.77

419.3

015

9.554

3 –

– Cl

ass I

(USD

)US

D11

.1673

11.52

6312

.4406

12.38

32 –

– –

– –

– –

– Cl

ass I

3 (US

D)US

D –

– 10

.4163

–

– –

– –

– –

– –

Clas

s AA (

AUD)

Inc H

edge

dAU

D –

– –

– 9.1

958

9.228

9 –

– 9.1

858

9.538

5 –

– Cl

ass A

A (HK

D) In

cHK

D –

– –

– 94

.1014

93.90

0310

3.838

711

8.545

892

.5788

95.56

12 –

– Cl

ass A

A (CA

D) In

c Hed

ged

CAD

– –

– –

8.991

99.0

507

– –

– –

– –

Clas

s I2 (

RMB)

Hed

ged

RMB

– –

– –

– –

106.2

890

– –

– –

–

The

acco

mpa

nyin

g no

tes

form

an

inte

gral

par

t of t

hese

fina

ncia

l sta

tem

ents

.

Man

ulife

Adv

ance

d Fu

nd S

PC

22

Stat

emen

t of C

ompr

ehen

sive

Inco

me

For t

he y

ear e

nded

30

June

201

9

China

A Fu

ndBo

nd Fu

ndAs

ia Pa

cific I

ncom

e and

Gr

owth

Fund

U.S. B

ank E

quity

Fund

Grea

ter Ba

y Area

Grow

th an

d Inc

ome F

und

Comb

ined

Notes

For th

e yea

r en

ded 3

0 Jun

e 20

19

For th

e yea

r en

ded 3

0 Jun

e 20

18

For th

e yea

r en

ded 3

0 Jun

e 20

19

For th

e yea

r en

ded 3

0 Jun

e 20

18

For th

e yea

r en

ded 3

0 Jun

e 20

19

For th

e yea

r en

ded 3

0 Jun

e 20

18

For th

e yea

r en

ded 3

0 Jun

e 20

19

For th

e yea

r en

ded 3

0 Jun

e 20

18

For th

e yea

r en

ded 3

0 Jun

e 20

19

For th

e peri

od

ende

d 30 J

une

2018

1

For th

e yea

r en

ded 3

0 Jun

e 20

19

For th

e yea

r en

ded 3

0 Jun

e 20

18US

DUS

DUS

DUS

DUS

DUS

DUS

DUS

DUS

DUS

DUS

DUS

DInc

ome

Divide

nd inc

ome

983

0,609

1,082

,869

– –

530,1

14

415,9

69

1,71

9,563

61

7,982

37

4,375

21

,497

3,45

4,661

2,

138,3

17

Interes

t incom

e10

2,869

3,688

1,628

,015

1,312

,330

295,5

02 25

1,415

–

– 34

4,314

5,

417

2,27

0,700

1,

572,8

50

Other i

ncome

1025

,674

68,74

6 6,

842

13,87

9 –

– –

– –

– 32

,516

82,62

5 Ne

t gains

/ (loss

es) on

financ

ial ass

ets an

d liab

ilitiesat

fair va

lue thr

ough p

rofit or

loss

3(1,

451,1

76)

4,70

3,290

(56

1,444

)96

3,719

527,5

4213

0,027

(11,92

2,109

) 2,

907,0

63

108,5

93

(429

,461)

(13,2

98,59

4) 8,

274,6

38

Net fo

reign e

xchang

e gain

s / (los

ses)

(50,8

73)

(43,1

02)

(49,8

39)

(28,26

1)(86

,340)

(106

,704)

(16,6

10)

(6,85

2) (1

03,75

6) (2

,577)

(307

,418)

(187

,496)

Total o

peratin

g incom

e (6

42,89

7) 5,

815,4

91

1,02

3,574

2,

261,6

67

1,26

6,818

69

0,707

(1

0,219

,156)

3,51

8,193

72

3,526

(4

05,12

4) (7

,848,1

35)

11,88

0,934

Expens

esMa

nagem

ent fee

s12.

1, 16

(751

,566)

(1,12

0,959

) (3

65,09

0) (4

02,00

9) (2

43,09

5) (2

31,75

6) (1

,031,2

62)

(489

,814)

(273

,412)

(7,04

2) (2

,664,4

25)

(2,25

1,580

)Re

gistrar

and tr

ansfer

agent f

ees12.

2 (5

3,541

) (9

8,070

) (3

9,718

) (5

0,100

) (2

7,749

) (3

6,813

) (7

6,907

) (3

2,562

) (2

9,693

) (6

81)

(227

,608)

(218

,226)

Custo

dian a

nd pay

ing ag

ent fee

s12.

2 (3

7,147

) (3

9,014

) (2

1,963

) (1

4,987

) (6

,038)

(11,8

20)

(36,4

93)

(43,1

73)

(13,2

19)

(153

) (1

14,86

0) (1

09,14

7)Ad

ministr

ation fe

e12.

2 (2

9,295

) (4

8,023

) (3

0,296

) (2

5,488

) (2

7,773

) (2

8,370

) (4

4,989

) (2

5,662

) (1

4,904

) (9

67)

(147

,257)

(128

,510)

Broker

age fee

s (3

85,02

7) (4

70,38

4) (2

,887)

(280

) (3

,016)

(15,9

47)

(46,5

41)

(47,1

12)

(122

,596)

(9,04

0) (5

60,06

7) (5

42,76

3)Au

ditors'

remune

ration

(19,7

03)

(51,7

48)

(30,4

85)

(26,8

28)

(13,5

13)

(8,16

0) (2

8,051

) (1

4,992

) (1

3,840

) (3

,656)

(105

,592)

(105

,384)

Legal a

nd pro

fessio

nal fee

s (1

7,273

) (2

5,183

) (2

2,256

) (1

7,953

) (1

4,091

) (2

2,056

) (3

0,363

) (1

4,574

) (1

4,389

) (5

00)

(98,3

72)

(80,2

66)

Public

ation a

nd prin

ting fee

s (1

2,894

) (8

,773)

(10,5

79)

(4,52

4) (3

,923)

(3,10

4) (1

3,561

) (9

,387)

(7,07

9) (4

71)

(48,0

36)

(26,2

59)

Other o

peratin

g expe

nses

(1,10

7) (1

11)

– (2

,946)

(2,14

6) (1

,407)

– (4

8,273

) (7

1,518

) –

(74,7

71)

(52,7

37)

1 For

the

perio

d fro

m 1

2 Ju

ne 2

018

(laun

ch d

ate)

to 3

0 Ju

ne 2

018.

The

acco

mpa

nyin

g no

tes

form

an

inte

gral

par

t of t

hese

fina

ncia

l sta

tem

ents

.

Man

ulife

Adv

ance

d Fu

nd S

PC

23

China

A Fu

ndBo

nd Fu

ndAs

ia Pa

cific I

ncom

e and

Gr

owth

Fund

U.S. B

ank E

quity

Fund

Grea

ter Ba

y Area

Grow

th an

d Inc

ome F

und

Comb

ined

Notes

For th

e yea

r en

ded 3

0 Jun

e 20

19

For th

e yea

r en

ded 3

0 Jun

e 20

18

For th

e yea

r en

ded 3

0 Jun

e 20

19

For th

e yea

r en

ded 3

0 Jun

e 20

18

For th

e yea

r en

ded 3

0 Jun

e 20

19

For th

e yea

r en

ded 3

0 Jun

e 20

18

For th

e yea

r en

ded 3

0 Jun

e 20

19

For th

e yea

r en

ded 3

0 Jun

e 20

18

For th

e yea

r en

ded 3

0 Jun

e 20

19

For th

e peri

od

ende

d 30 J

une

2018

1

For th

e yea

r en

ded 3

0 Jun

e 20

19

For th

e yea

r en

ded 3

0 Jun

e 20

18US

DUS

DUS

DUS

DUS

DUS

DUS

DUS

DUS

DUS

DUS

DUS

DTot

al oper

ating e

xpense

s (1

,307,5

53)

(1,86

2,265

) (5

23,27

4) (5

45,11

5) (3

41,34

4) (3

59,43

3) (1

,308,1

67)

(725

,549)

(560

,650)

(22,5

10)

(4,04

0,988

) (3

,514,8

72)

Opera

ting pr

ofit / (l

oss) be

fore ta

x and

distrib

ution

(1,95

0,450

) 3,

953,2

26

500,3

00

1,71

6,552

92

5,474

33

1,274

(1

1,527

,323)

2,79

2,644

16

2,876

(4

27,63

4) (1

1,889

,123)

8,36

6,062

Tax2.3

, 11 (8

3,047

) (1

11,11

6) (7

1,580

) (8

,564)

(47,3

82)

(32,3

42)

(515

,869)

(185

,395)

(8,77

7) (1

,405)

(726

,655)

(338

,822)

Distrib

ution to

holde

rs of R

edeem

able

Partic

ipating

Share

s20

– –

– –

(856

,906)

(720

,586)

– –

(420

,760)

– (1

,277,6

66)

(720

,586)

(Decre

ase) / i

ncreas

e in ne

t asset

s attri

butabl

e to h

olders

of Red

eemabl

e Parti

cipatin

g Sha

res fro

m oper

ations

–being

total

compre

hensiv

e incom

e / (los

s) (2

,033,4

97)

3,84

2,110

42

8,720

1,

707,9

88

21,18

6 (4

21,65

4) (1

2,043

,192)

2,60

7,249

(2

66,66

1) (4

29,03

9) (1

3,893

,444)

7,30

6,654

Stat

emen

t of C

ompr

ehen

sive

Inco

me

(con

tinue

d)

1 For

the

perio

d fro

m 1

2 Ju

ne 2

018

(laun

ch d

ate)

to 3

0 Ju

ne 2

018.

The

acco

mpa

nyin

g no

tes

form

an

inte

gral

par

t of t

hese

fina

ncia

l sta

tem

ents

.

Man

ulife

Adv

ance

d Fu

nd S

PC

24

Stat

emen

t of C

hang

es in

Net

Ass

ets

Attr

ibut

able

to h

olde

rs o

f Red

eem

able

Par

ticip

atin

g Sh

ares

For t

he y

ear e

nded

30

June

201

9

China

A Fu

ndBo

nd Fu

ndAs

ia Pa

cific I

ncom

e and

Gr

owth

Fund

U.S. B

ank E

quity

Fund

Grea

ter Ba

y Area

Grow

th an

d Inc

ome F

und

Comb

ined

Notes

For th

e yea

r en

ded 3

0 Jun

e 20

19

For th

e yea

r en

ded 3

0 Jun

e 20

18

For th

e yea

r en

ded 3

0 Jun

e 20

19

For th

e yea

r en

ded 3

0 Jun

e 20

18

For th

e yea

r en

ded 3

0 Jun

e 20

19

For th

e yea

r en

ded 3

0 Jun

e 20

18

For th

e yea

r en

ded 3

0 Jun

e 20

19

For th

e yea

r en

ded 3

0 Jun

e 20

18

For th

e yea

r en

ded 3

0 Jun

e 20

19

For th

e peri

od

ende

d 30 J

une

2018

1

For th

e yea

r en

ded 3

0 Jun

e 20

19

For th

e yea

r en

ded 3

0 Jun

e 20

18US

DUS

DUS

DUS

DUS

DUS

DUS

DUS

DUS

DUS

DUS

DUS

DOp

ening

balanc

e 51

,312,4

93

65,61

8,362

31

,262,9

39

33,99

2,075

16

,348,5

73

13,34

8,109

66

,965,5

86

5,62

7,593

11

,283,1

18

– 17

7,172

,709

118,5

86,13

9 (De

crease

) / incre

ase in n

et asse

ts attrib

utable

to holde

rs of

Redeem

able Pa

rticipat

ing Sha

res –b

eing tota

l comp

rehens

ive inco

me / (lo

ss) (2

,033,4

97)

3,84

2,110

42

8,720

1,

707,9

88

21,18

6 (4

21,65

4) (1

2,043

,192)

2,60

7,249

(2

66,66

1) (4

29,03

9) (1

3,893

,444)

7,30

6,654

Issu

e of Re

deema

ble Pa

rticipa

ting Sh

ares

8 1,

602,1

58

4,79

3,532

21

,267,1

01

184,9

23

3,31

0,842

6,

493,2

57

54,11

3,890

10

4,361

,706

21,85

5,277

11

,712,1

57

102,1

49,26

8 12

7,545

,575

Redem

ption o

f Redee

mable

Partic

ipating

Share

s8

(8,64

7,229

) (2

2,941

,511)

(2,28

0,708

) (4

,622,0

47)

(2,88

8,116

) (3

,071,1

39)

(59,0

25,42

5) (4

5,630

,962)

(11,6

59,85

0) –

(84,5

01,32

8) (7

6,265

,659)

Net as

sets a

ttribut

able to

holde

rs of R

edeem

able

Partici

pating

Share

s at en

d of ye

ar/perio

d 42

,233,9

25

51,31

2,493

50

,678,0

52

31,26

2,939

16

,792,4

85

16,34

8,573

50

,010,8

59

66,96

5,586

21

,211,8

84

11,28

3,118

18

0,927

,205

177,1

72,70

9

Stat

emen

t of C

hang

es in

Equ

ityFo

r the

yea

r end

ed 3

0 Ju

ne 2

019

Comb

ined

Notes

For t

he ye

aren

ded 3

0 Jun

e 20

19

For t

he ye

aren

ded 3

0 Jun

e 20

18

USD

USD

Open

ing ba

lance

8 10

0 10

0 Iss

ue of

Man

agem

ent S

hares

– –

Clos

ing ba

lance

at en

d of y

ear

100

100

1 For

the

perio

d fro

m 1

2 Ju

ne 2

018

(laun

ch d

ate)

to 3

0 Ju

ne 2

018.

The

acco

mpa

nyin

g no

tes

form

an

inte

gral

par

t of t

hese

fina

ncia

l sta

tem

ents

.

Man

ulife

Adv

ance

d Fu

nd S

PC

25

Stat

emen

t of C

ash

Flow

s

For t

he y

ear e

nded

30

June

201

9

China

A Fu

ndBo

nd Fu

ndAs

ia Pa

cific I

ncom

e and

Gr

owth

Fund

U.S. B

ank E

quity

Fund

Grea

ter Ba

y Area

Grow

th an

d Inc

ome F

und

Comb

ined

Notes

For th

e yea

r en

ded 3

0 Jun

e 20

19

For th

e yea

r en

ded 3

0 Jun

e 20

18

For th

e yea

r en

ded 3

0 Jun

e 20

19

For th

e yea

r en

ded 3

0 Jun

e 20

18

For th

e yea

r en

ded 3

0 Jun

e 20

19

For th

e yea

r en

ded 3

0 Jun

e 20

18

For th

e yea

r en

ded 3

0 Jun

e 20

19

For th

e yea

r en

ded 3

0 Jun

e 20

18

For th

e yea

r en

ded 3

0 Jun

e 20

19

For th

e peri

od

ende

d 30 J

une

2018

1

For th

e yea

r en

ded 3

0 Jun

e 20

19

For th

e yea

r en

ded 3

0 Jun

e 20

18US

DUS

DUS

DUS

DUS

DUS

DUS

DUS

DUS

DUS

DUS

DUS

DCa

sh flow

s from

opera

ting ac

tivities

(Decre

ase) / i

ncreas

e in ne

t asset

s attrib

utable

to hol

ders o

f Rede

emabl

e Parti

cipatin

g Shar

es –

distrib

ution e

xclude

d(2,

033,4

97)

3,842

,110

428,7

201,7

07,98

887

8,092

298,9

32(12

,043,1

92)

2,60

7,249

15

4,099

(429

,039)

(12,61

5,778

)8,0

27,24

0

Net ch

anges

in oper

ating a

ssets a

nd liab

ilities

Decre

ase / (i

ncreas

e) in fi

nancia

l asset

s and

liabilitie

s at fa

ir valu

e throu

gh pro

fit or lo

ss9,9

49,12

314

,116,7

51(20

,972,1

24)

3,927

,234

(298

,123)

(2,84

6,300

) 12

,828,9

27

(57,59

3,346

) (1

0,310

,664)

(10,4

86,06

8)(8,

802,8

61)

(52,88

1,729

)De

crease

/ (incr

ease) i

n othe

r recei

vables

and

prepay

ments

2,228

(831)

2,331

,904

(2,19

8,093

)11

,735

139,4

94 78

4,192

(8

48,14

9) (1

45,70

4) (1

39,83

3)2,9

84,35

5(3,

047,4

12)

Increa

se / (d

ecreas

e) in a

ccount

s paya

ble an

d acc

rued e

xpense

s(60

,381)

(76,74

8)(1,

127,5

11)

1,177

,321

(22,81

8)(19

6,726

) (8

36,62

5) 81

8,900

(1

02,51

5) 23

4,500

(2,

149,8

50)

1,957

,247

Net ca

sh pro

vided

by / (u

sed in)

opera

ting

activit

ies 7,

857,4

73

17,88

1,282

(1

9,339

,011)

4,61

4,450

56

8,886

(2

,604,6

00)

733,3

02

(55,01

5,346

) (1

0,404

,784)

(10,8

20,44

0) (2

0,584

,134)

(45,9

44,65

4)

Cash

flows fr

om fin

ancing

activi

tiesIss

ue of R

edeem

able P

articip

ating S

hares

1,689

,854

4,739

,168

21,27

4,799

177,2

253,2

94,94

86,4

77,04

3 57

,754,3

24

100,7

14,28

3 22

,183,4

08

11,38

4,026

10

6,197

,333

123,4

91,74

5Re

demptio

n of R

edeem

able P

articip

ating S

hares

(9,41

7,188

) (2

2,656

,579)

(1,82

2,812

) (4

,755,6

30)

(2,93

6,384

) (3

,187,1

09)

(58,8

92,02

1) (4

5,431

,371)

(11,6

59,85

0) –

(84,72

8,255

)(76

,030,6

89)

Distrib

utions

paid to

holde

rs of R

edeem

able

Partic

ipating

Share

s –

– –

– (8

56,90

6) (7

20,58

6) –

– (4

20,76

0) –

(1,27

7,666

)(72

0,586

)Ne

t cash

flow pr

ovided

by / (u

sed in)

financ

ing

activit

ies (7

,727,3

34)

(17,9

17,41

1) 19

,451,9

87

(4,57

8,405

) (4

98,34

2) 2,

569,3

48

(1,13

7,697

) 55

,282,9

12

10,10

2,798

11

,384,0

26

20,19

1,412

46

,740,4

70

1 For

the

perio

d fro

m 1

2 Ju

ne 2

018

(laun

ch d

ate)

to 3

0 Ju

ne 2

018.

The

acco

mpa

nyin

g no

tes

form

an

inte

gral

par

t of t

hese

fina

ncia

l sta

tem

ents

.

Man

ulife

Adv

ance

d Fu

nd S

PC

26

China

A Fu

ndBo

nd Fu

ndAs

ia Pa

cific I

ncom

e and

Gr

owth

Fund

U.S. B

ank E

quity

Fund

Grea

ter Ba

y Area

Grow

th an

d Inc

ome F

und

Comb

ined

Notes

For th

e yea

r en

ded 3

0 Jun

e 20

19

For th

e yea

r en

ded 3

0 Jun

e 20

18

For th

e yea

r en

ded 3

0 Jun

e 20

19

For th

e yea

r en

ded 3

0 Jun

e 20

18

For th

e yea

r en

ded 3

0 Jun

e 20

19

For th

e yea

r en

ded 3

0 Jun

e 20

18

For th

e yea

r en

ded 3

0 Jun

e 20

19

For th

e yea

r en

ded 3

0 Jun

e 20

18

For th

e yea

r en

ded 3

0 Jun

e 20

19

For th

e peri

od

ende

d 30 J

une

2018

1

For th

e yea

r en

ded 3

0 Jun

e 20

19

For th

e yea

r en

ded 3

0 Jun

e 20

18US

DUS

DUS

DUS

DUS

DUS

DUS

DUS

DUS

DUS

DUS

DUS

DNe

t incre

ase / (d

ecreas

e) in c

ash an

d cash

equ

ivalen

ts13

0,139

(36,12

9)11

2,976

36,04

570

,544

(35,25

2) (4

04,39

5) 26

7,566

(3

01,98

6) 56

3,586

(39

2,722

)79

5,816

Cash

and ca

sh equ

ivalen

t at be

ginnin

g of th

e yea

r/perio

d 16

6,567

20

2,696

14

9,845

11

3,800

46

1,647

49

6,899

54

8,921

28

1,355

56

3,586

–

1,89

0,566

1,

094,7

50

Cash

and ca

sh equ

ivalen

t at en

d of th

e year

/per

iod5

296,7

06

166,5

67

262,8

21

149,8

45

532,1

91

461,6

47

144,5

26

548,9

21

261,6

00

563,5

86

1,49

7,844

1,

890,5

66

Stat

emen

t of C

ash

Flow

s (c

ontin

ued)

1 For

the

perio

d fro

m 1

2 Ju

ne 2

018

(laun

ch d

ate)

to 3

0 Ju

ne 2

018.

The

acco

mpa

nyin

g no

tes

form

an

inte

gral

par

t of t

hese

fina

ncia

l sta

tem

ents

.

Man

ulife

Adv

ance

d Fu

nd S

PC

27

Net

cas

h us

ed in

ope

ratin

g ac

tiviti

es in

clud

es:

Stat

emen

t of C

ash

Flow

s (c

ontin

ued)

China

A Fu

ndBo

nd Fu

ndAs

ia Pa

cific I

ncom

e and

Gr

owth

Fund

U.S. B

ank E

quity

Fund

Grea

ter Ba

y Area

Grow

th an

d Inc

ome F

und

Comb

ined

Notes

For th

e yea

r en

ded 3

0 Jun

e 20

19

For th

e yea

r en

ded 3

0 Jun

e 20

18

For th

e yea

r en

ded 3

0 Jun

e 20

19

For th

e yea

r en

ded 3

0 Jun

e 20

18

For th

e yea

r en

ded 3

0 Jun

e 20

19

For th

e yea

r en

ded 3

0 Jun

e 20

18

For th

e yea

r en

ded 3

0 Jun

e 20

19

For th

e yea

r en

ded 3

0 Jun

e 20

18

For th

e yea

r en

ded 3

0 Jun

e 20

19

For th

e peri

od

ende

d 30 J

une

2018

1

For th

e yea

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28

Statement of Distribution

For the year ended 30 June 2019

CurrencyDistribution Per Share

Total Distribution

Distribution Date

Asia Pacific Income and Growth FundMonthly DividendClass AA (USD) Inc USD 0.0410 34,123.59 10-Jul-18

Class AA (USD) Inc USD 0.0410 35,485.10 8-Aug-18

Class AA (USD) Inc USD 0.0410 36,476.11 10-Sep-18

Class AA (USD) Inc USD 0.0410 34,505.38 9-Oct-18

Class AA (USD) Inc USD 0.0410 36,198.92 8-Nov-18

Class AA (USD) Inc USD 0.0410 35,014.68 10-Dec-18

Class AA (USD) Inc USD 0.0410 35,161.07 9-Jan-19

Class AA (USD) Inc USD 0.0410 35,799.78 13-Feb-19

Class AA (USD) Inc USD 0.0370 32,366.90 8-Mar-19

Class AA (USD) Inc USD 0.0370 30,578.57 9-Apr-19

Class AA (USD) Inc USD 0.0370 30,731.65 9-May-19

Class AA (USD) Inc USD 0.0370 30,772.21 11-Jun-19

407,213.96

Class AA (AUD) Inc Hedged AUD 0.0410 8,584.73 10-Jul-18

Class AA (AUD) Inc Hedged AUD 0.0410 8,543.02 8-Aug-18

Class AA (AUD) Inc Hedged AUD 0.0410 8,576.91 10-Sep-18

Class AA (AUD) Inc Hedged AUD 0.0410 8,787.07 9-Oct-18

Class AA (AUD) Inc Hedged AUD 0.0410 8,445.98 8-Nov-18

Class AA (AUD) Inc Hedged AUD 0.0410 7,580.22 10-Dec-18

Class AA (AUD) Inc Hedged AUD 0.0410 7,567.88 9-Jan-19

Class AA (AUD) Inc Hedged AUD 0.0410 7,603.92 13-Feb-19

Class AA (AUD) Inc Hedged AUD 0.0360 6,707.28 8-Mar-19

Class AA (AUD) Inc Hedged AUD 0.0360 6,925.16 9-Apr-19

Class AA (AUD) Inc Hedged AUD 0.0360 6,952.25 9-May-19

Class AA (AUD) Inc Hedged AUD 0.0360 6,895.83 11-Jun-19

93,170.25

Class AA (HKD) Inc HKD 0.4130 194,545.80 10-Jul-18

Class AA (HKD) Inc HKD 0.4130 195,276.13 8-Aug-18

Class AA (HKD) Inc HKD 0.4130 196,093.34 10-Sep-18

Class AA (HKD) Inc HKD 0.4130 200,560.94 9-Oct-18

The accompanying notes form an integral part of these financial statements.


29

Statement of Distribution (continued)



Total Distribution

Distribution Date

Asia Pacific Income and Growth Fund (continued)Monthly Dividend (continued)Class AA (HKD) Inc HKD 0.4130 205,266.07 8-Nov-18

Class AA (HKD) Inc HKD 0.4130 205,599.18 10-Dec-18

Class AA (HKD) Inc HKD 0.4130 205,337.52 9-Jan-19

Class AA (HKD) Inc HKD 0.4130 206,133.88 13-Feb-19

Class AA (HKD) Inc HKD 0.3700 180,637.11 8-Mar-19

Class AA (HKD) Inc HKD 0.3700 181,594.04 9-Apr-19

Class AA (HKD) Inc HKD 0.3700 182,918.30 9-May-19

Class AA (HKD) Inc HKD 0.3700 183,553.26 11-Jun-19

2,337,515.57

Class AA (CAD) Inc Hedged CAD 0.0403 9,156.91 10-Jul-18

Class AA (CAD) Inc Hedged CAD 0.0403 9,197.16 8-Aug-18

Class AA (CAD) Inc Hedged CAD 0.0403 9,678.68 10-Sep-18

Class AA (CAD) Inc Hedged CAD 0.0403 9,722.56 9-Oct-18

Class AA (CAD) Inc Hedged CAD 0.0403 9,767.46 8-Nov-18

Class AA (CAD) Inc Hedged CAD 0.0403 9,812.87 10-Dec-18

Class AA (CAD) Inc Hedged CAD 0.0403 9,722.72 9-Jan-19

Class AA (CAD) Inc Hedged CAD 0.0403 9,769.21 13-Feb-19

Class AA (CAD) Inc Hedged CAD 0.0360 8,767.12 8-Mar-19

Class AA (CAD) Inc Hedged CAD 0.0360 8,803.22 9-Apr-19

Class AA (CAD) Inc Hedged CAD 0.0360 8,838.46 9-May-19

Class AA (CAD) Inc Hedged CAD 0.0360 8,874.77 11-Jun-19

112,111.14

Greater Bay Area Growth and Income FundMonthly Dividend Class AA (USD) Inc USD 0.0280 27,101.95 9-Oct-18









30




Total Distribution

Distribution Date

Greater Bay Area Growth and Income Fund (continued)Monthly Dividend (continued)Class AA (USD) Inc USD 0.0280 23,696.20 9-May-19


228,291.67










56,908.19


Class AA (HKD) Inc HKD 0.2800 99,693.54 8-Nov-18








1,193,441.22



31





Total Distribution

Distribution Date

Asia Pacific Income and Growth FundMonthly DividendClass AA (USD) Inc USD 0.0310 17,353.67 10-Jul-17

Class AA (USD) Inc USD 0.0310 17,605.64 8-Aug-17

Class AA (USD) Inc USD 0.0310 17,984.86 8-Sep-17

Class AA (USD) Inc USD 0.0310 18,061.55 11-Oct-17







Class AA (USD) Inc USD 0.0410 34,444.54 9-May-18


314,347.43

Class AA (AUD) Inc Hedged AUD 0.0312 5,747.20 10-Jul-17

Class AA (AUD) Inc Hedged AUD 0.0312 5,742.82 8-Aug-17

Class AA (AUD) Inc Hedged AUD 0.0312 5,761.46 8-Sep-17










87,039.05

Class AA (HKD) Inc HKD 0.3120 133,663.00 10-Jul-17

Class AA (HKD) Inc HKD 0.3120 134,066.99 8-Aug-17

Class AA (HKD) Inc HKD 0.3120 134,457.90 8-Sep-17



32





Total Distribution

Distribution Date

Asia Pacific Income and Growth Fund (continued)Monthly Dividend (continued)Class AA (HKD) Inc HKD 0.4130 177,310.64 8-Nov-17








2,005,425.80

Class AA (CAD) Inc Hedged CAD 0.0310 7,169.73 10-Jul-17

Class AA (CAD) Inc Hedged CAD 0.0310 7,584.84 8-Aug-17

Class AA (CAD) Inc Hedged CAD 0.0310 7,609.30 8-Sep-17

Class AA (CAD) Inc Hedged CAD 0.0310 7,649.75 11-Oct-17

Class AA (CAD) Inc Hedged CAD 0.0403 9,678.99 8-Nov-17

Class AA (CAD) Inc Hedged CAD 0.0403 9,718.83 8-Dec-17

Class AA (CAD) Inc Hedged CAD 0.0403 9,759.60 9-Jan-18

Class AA (CAD) Inc Hedged CAD 0.0403 9,469.92 8-Feb-18

Class AA (CAD) Inc Hedged CAD 0.0403 9,005.03 8-Mar-18

Class AA (CAD) Inc Hedged CAD 0.0403 9,042.21 11-Apr-18

Class AA (CAD) Inc Hedged CAD 0.0403 9,079.87 9-May-18

Class AA (CAD) Inc Hedged CAD 0.0403 9,118.41 8-Jun-18

104,886.48

Notes to Financial Statements


33

1. Corporate information

Manulife Advanced Fund SPC (the “Company”) is an exempted segregated portfolio company with limited liability incorporated on 14 July 2008 in the Cayman Islands under the Companies Law of the Cayman Islands. The Company is incorporated and established for an unlimited duration. The Company commenced operations on 21 September 2010. The Company’s registered office is at Ugland House (P.O. Box 309), Grand Cayman, Cayman Islands.

The Company is registered under the Mutual Funds Law of the Cayman Islands, governed by the laws of the Cayman Islands and regulated by the Cayman Islands Monetary Authority (“CIMA”). In connection with all Class AA Shares of the Company available for offer to the public in Hong Kong, the Company is authorized by the Securities and Futures Commission of Hong Kong (“SFC”) and is required to comply with the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong) and the Code on Unit Trusts and Mutual Funds established by the SFC (the “Code”). Authorizations have been given by the Monetary Authority of Macao to the Company to market selected Segregated Portfolios in Macau. Notifications have been made to the Monetary Authority of Singapore for the Company to offer selected Segregated Portfolios as restricted foreign schemes in Singapore.

The investment activities of the Company are managed by Manulife Investment Management (Hong Kong) Limited.

The Company may establish and maintain one or more funds (“Segregated Portfolios”) in order to segregate the assets and liabilities of the Company held within or on behalf of a Segregated Portfolio from the assets and liabilities of the Company held within or on behalf of any other Segregated Portfolio or from the assets and liabilities of the Company which are not held within or on behalf of any Segregated Portfolio (those being the “General Assets” of the Company and “General Liabilities” of the Company, respectively). As a matter of Cayman Islands law, assets within a Segregated Portfolio are only available and can only be used to meet liabilities to the creditors in respect of that particular Segregated Portfolio and are not available to meet liabilities to creditors in respect of other Segregated Portfolios or to the “General Creditors” of the Company. Notwithstanding the foregoing, the Company is a single legal entity and none of the Segregated Portfolios constitutes a legal entity separate from the Company.

As at 30 June 2019, the Company has five active Segregated Portfolios:

– China A Segregated Portfolio (this fund is presented in United States Dollars) (the “China A Fund”)

– Renminbi Bond Segregated Portfolio (this fund is presented in United States Dollars only and not in Renminbi) (the “Bond Fund”)

– Asia Pacific Income and Growth Segregated Portfolio (this fund is presented in United States Dollars) (the “Asia Pacific Income and Growth Fund”)

– U.S. Bank Equity Segregated Portfolio (this fund is presented in United States Dollars) (the "U.S. Bank Equity Fund")

– Greater Bay Area Growth and Income Segregated Portfolio (this fund is presented in United States Dollars) (the "Greater Bay Area Growth and Income Fund")



34

1. Corporate information (continued)

The objective of the China A Fund is to achieve long term capital appreciation by investing primarily in Mainland China (People’s Republic of China, excluding Hong Kong, Macau and Taiwan) capital markets. The objective of the Bond Fund is to provide capital appreciation and income generation by investing primarily in Renminbi (RMB)-denominated debt instruments issued and listed in Mainland China or traded in the Mainland China interbank bond market in accordance with applicable QFII regulations. The objective of the Asia Pacific Income and Growth Fund is to provide investors with income and capital appreciation over the medium to longer term by investing primarily in equity and fixed income-related securities in the Asia Pacific ex-Japan region. The objective of the U.S. Bank Equity Fund is to achieve medium to long term growth of capital primarily through investing in equities and equity-related investments of U.S. banks (including regional banks, commercial banks, industrial banks, savings and loan associations and bank holding companies incorporated in the United States of America and/or its territories, collectively “U.S. Banks”). The objective of the Greater Bay Area Growth and Income Fund is to achieve capital growth and income generation by investing primarily in a diversified portfolio of equity and equity-related securities and fixed income securities of companies which are connected to the region comprising Hong Kong, Macau and the Guangdong Province of China (“Greater Bay Area”).

The Company may establish other Segregated Portfolios.

Note: Capitalized words and phrases used in these financial statements of the Company shall, unless otherwise defined, have the same meanings as are ascribed to them in the prospectus of the Company (as may be amended and supplemented from time to time).

2. Significant accounting policies

2.1 Basis of preparation and Statement of Compliance

The financial statements of the Company and of each of its funds, comprising China A Segregated Portfolio, Renminbi Bond Segregated Portfolio, Asia Pacific Income and Growth Segregated Portfolio, U.S. Bank Equity Segregated Portfolio and Greater Bay Area Growth and Income Segregated Portfolio have been prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board (“IASB”), the relevant disclosure provisions of the Memorandum and Articles of Association of the Company and the relevant disclosure requirements set out in Appendix E to the Code.

The financial statements have been prepared on a historical cost basis, except for financial assets and financial liabilities held at fair value through profit or loss, which have been measured at fair value.

The financial statements of the China A Fund, the Bond Fund, the Asia Pacific Income and Growth Fund, U.S. Bank Equity Fund and the Greater Bay Area Growth and Income Fund are presented in US dollars (“USD”), which is the functional currency of the funds. The combined financial statements of the Company are presented in USD.



35

2. Significant accounting policies (continued)

2.2 Summary of significant accounting policies

(A) Financial instruments

(i) Classification

The Company classifies its financial assets and financial liabilities into the categories below in accordance with IFRS 9.

To determine their classification and measurement category, IFRS 9 requires all financial assets, except equity instruments and derivatives, to be assessed based on a combination of the entity’s business model for managing the assets and the instruments’ contractual cash flow characteristics.

Financial assets and liabilities at fair value through profit or loss

This category represents financial assets and liabilities that are measured at fair value through the profit or loss. These assets and liabilities are acquired principally for the purpose of generating a profit from short-term fluctuation in price.

The Company includes in this category equity securities, investments in managed funds, debt instruments and derivatives.

Financial assets at amortized cost

This category includes loans and receivables which are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. The Company includes in this category amounts relating to other receivables.

Other financial liabilities

This category includes all financial liabilities, other than those classified as at fair value through profit or loss. The Company includes in this category amounts relating to accounts payable and accrued expenses, and consists in particular of Chinese tax, management fees and redemptions payables.

The Company accounting policy regarding the Redeemable Participating Shares is described in section (G) below.

(ii) Recognition

The Company recognizes a financial asset or a financial liability only when it becomes a party to the contractual provisions of the instrument.

Purchases or sales of financial assets that require delivery of assets within the time frame generally established by regulation or convention in the market place are recognized on the trade date, i.e., the date that the Company purchases or sells the asset.



36


2.2 Summary of significant accounting policies (continued)

(A) Financial instruments (continued)

(iii) Initial measurement

Financial assets and financial liabilities at fair value through profit or loss are recorded in the Statement of Financial Position at fair value. All transaction costs for such instruments are recognized directly in the statement of comprehensive income as brokerage fees.

Financial assets at amortized cost and financial liabilities (other than those classified as at fair value through profit or loss) are measured initially at their fair value plus any directly attributable incremental costs of acquisition or issue.

(iv) Subsequent measurement

After initial measurement, the Company measures financial instruments which are classified as at fair value through profit or loss at fair value (see (B) below). Subsequent changes in the fair value of those financial instruments are recorded in “Net gains / (losses) on financial assets and liabilities at fair value through profit or loss”. Interest earned and dividend revenue elements of such instruments are recorded separately in “Interest income” and “Dividend income”, respectively.

Financial assets at amortized cost are carried at amortized cost using the effective interest method less any allowance for impairment. Gains and losses are recognized in profit or loss when the assets are derecognized or impaired, as well as through the amortization process.

Financial liabilities, other than those classified as at fair value through profit or loss, are measured at amortized cost using the effective interest method. Gains and losses are recognized in profit or loss when the liabilities are derecognized as well as through the amortization process.

The effective interest method is a method of calculating the amortized cost of a financial asset or a financial liability and of allocating the interest income or interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments or receipts through the expected life of the financial instrument or, when appropriate, a shorter period to the net carrying amount of the financial asset or financial liability. When calculating the effective interest rate, the Company estimates cash flows considering all contractual terms of the financial instruments but does not consider future credit losses. The calculation includes all fees paid or received between parties to the contract that are an integral part of the effective interest rate, transaction costs and all other premiums or discounts.



37



(A) Financial instruments (continued)

(v) Derecognition

A financial asset (or, where applicable a part of a financial asset or part of a group of similar financial assets) is derecognized where:

– The rights to receive cash flows from the asset have expired; or

– The Company has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a “passthrough” arrangement; and

– Either (a) the Company has transferred substantially all the risks and rewards of the asset, or (b) the Company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.

When the Company has transferred its rights to receive cash flows from an asset or has entered into a pass-through arrangement, and has neither transferred nor retained substantially all the risks and rewards of the asset nor transferred control of the asset, the asset is recognised to the extent of the Company’s continuing involvement in the asset.

The Company derecognizes a financial liability when the obligation under the liability is discharged, cancelled or expires.

(B) Determination of fair value

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.

The fair value for financial instruments traded in active markets at the reporting date is based on their closing quoted price or binding dealer price quotations, without any deduction for transaction costs.

For all other financial instruments not traded in an active market, the fair value is determined by using appropriate valuation techniques. Valuation techniques include: using recent arm’s length market transactions; reference to the current market value of another instrument that is substantially the same; discounted cash flow analysis and option pricing models making as much use of available and supportable market data as possible.

An analysis of fair values of financial instruments and further details as to how they are measured are provided in Note 4.



38



(C) Impairmentoffinancialassets

The Company’s impairment policy has been updated to align with the requirements of the IFRS 9 expected credit loss model. At each reporting date, the Company shall measure the loss allowance, on all amounts reported at amortised cost, at an amount equal to the lifetime expected credit losses, if the credit risk has increased significantly since initial recognition. If at reporting date, the credit risk has not increased significantly since initial recognition, the Company shall measure the loss allowance at an amount equal to 12-month expected credit losses.

The Company measures credit risk and expected credit losses using probability of default, exposure at default and loss given default. The Company considers both historical analysis and forward looking information in determining any expected credit losses.

The Company holds only trade receivables with no financing component and which have maturities of less than 12 months at amortised cost and, as such, has chosen to apply an approach similar to the simplified approach for expected credit losses (ECL) under IFRS 9 to all its trade receivables.

(D) Offsettingfinancialinstruments

Financial assets and financial liabilities are offset and the net amount reported in the statement of financial position if, and only if, there is a currently enforceable legal right to offset the recognized amounts and there is an intention to settle on a net basis, or to realize the asset and settle the liability simultaneously. This is generally not the case with master-netting agreements, and the related assets and liabilities are presented gross in the statement of financial position.

(E) Functional and presentation currencies

Liquidity of Company is managed on a day-to-day basis in USD for the China A Fund, the Bond Fund, the Asia Pacific Income and Growth Fund, the U.S. Bank Equity Fund and the Greater Bay Area Growth and Income Fund in order to handle the issuance and redemptions of each segregated portfolios’ redeemable preference shares. This currency is also used to evaluate the segregated portfolios’ performance. Management therefore considers USD as the currency that most faithfully represent the economic effects of the underlying transactions, events and conditions.

(F) Foreign currency translations

Transactions during the year, including purchases and sales of securities, income and expenses, are translated at the rate of exchange prevailing on the date of the transaction.

Monetary assets and liabilities denominated in foreign currencies are retranslated at the functional currency rate of exchange ruling at the end of each reporting period.

Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates as at the dates of the initial transactions. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined.



39



(F) Foreign currency translations (continued)

Foreign currency transaction gains and losses on financial instruments classified as at fair value through profit or loss are included in the statement of comprehensive income as part of the “Net gains / (losses)on financial assets and liabilities at fair value through profit or loss”. Foreign exchange differences on other financial instruments are included in the statement of comprehensive income as “Net foreign exchange gains/ (losses)”.

(G) Redeemable Participating Shares

Redeemable Participating Shares are redeemable at the shareholders’ option and are classified as financial liabilities. The Company continuously assesses the classification of Redeemable Participating Shares.

Redeemable Participating Shares are measured at their redemption amounts.

No distribution of dividend or capital has been made since the inception of the China A Fund and the Bond Fund up to 30 June 2019. It is not the intention of the Company to make any distribution out of the China A Fund and the Bond Fund, although this policy may change in the future with prior written notice to Shareholders of the Company. For the Asia Pacific Income and Growth Fund, it is currently intended that dividends are declared after the end of each month and which, subject to applicable law, may be paid out of capital or gross income of the relevant Class of the Segregated Portfolio while charging/paying all or part of the Classes fees and expenses to/out of the capital of the relevant Class of the Segregated Portfolio and (unless otherwise determined by the Company) are in the respective currency of denomination of the relevant Class of the Segregated Portfolio. The dividends declared (if any) are paid within three weeks of such declaration. For the U.S. Bank Equity Fund, it is currently intended that dividends are declared on a semi-annual basis and which, subject to applicable law, may be paid out of capital or gross income of the relevant Class of the Segregated Portfolio while charging/paying all or part of the Classes fees and expenses to/out of the capital of the relevant Class of the Segregated Portfolio and (unless otherwise determined by the Company) are in the respective currency of denomination of the relevant Class of the Segregated Portfolio. The dividends declared (if any) are paid within three weeks of such declaration. For the Greater Bay Area Growth and Income Fund, in respect of Class AA (USD) Inc, Class AA (HKD) Inc, Class AA (AUD) Inc Hedged, it is currently intended that dividends are declared on a monthly basis and which, subject to applicable law, may be paid out of capital or gross income of the relevant Class of the Segregated Portfolio while charging/paying all or part of the Classes fees and expenses to/out of the capital of the relevant Class of the Segregated Portfolio and (unless otherwise determined by the Company) are in the respective currency of denomination of the relevant Class of the Segregated Portfolio. The dividends declared (if any) are paid within three weeks of such declaration. In respect of Class AA, it is not the intention of the Company to make any distributions in respect of such Classes (which are accumulation Classes) of the Greater Bay Area Growth and Income Fund, although this policy may change with prior written notice to Shareholders.

(H) Cash and cash equivalents

Cash and cash equivalents in the statement of financial position consist of cash balances on deposit with international financial institutions with original maturities of three months or less.



40



(I) Interest income and expense

Interest income and expense are recognized in the statement of comprehensive income for all interest bearing financial instruments on an accrual basis.

(J) Dividend income

Dividend income is accounted for on an ex-dividend basis gross of any irrecoverable withholding taxes, which are disclosed separately in the statement of comprehensive income.

(K) Netgains/(losses)onfinancialassetsandliabilitiesatfairvaluethroughprofitorloss

This item includes changes in the fair value of financial assets and liabilities held for trading or designated upon initial recognition as “at fair value through profit or loss” and excludes interest and dividend income and expense.

Unrealized gains and losses comprise changes in the fair value of financial instruments for the year.

Realized gains and losses on disposals of financial instruments classified as “at fair value through profit or loss” are determined on the basis of the weighted average cost method. They represent the difference between an instrument’s initial carrying amount and disposal amount, or cash payments or receipts made on derivative contracts (excluding payments or receipts on collateral margin accounts for such instruments).

(L) Income taxes

There is currently no taxation imposed on income or capital gains by the Government of the Cayman Islands. The only taxes payable by the Company are withholding taxes of other countries applicable to certain investment income and a 10% tax on capital gains when the Company trades securities in China.

Further details on taxation are provided in Note 11.

(M) Formation expenses

The costs of establishing the China A Fund and applying for the authorization of the Class AA Shares in Hong Kong by the SFC and the authorization of the Class I Shares and Class P Shares in the Cayman Islands by the CIMA amounted to approximately USD 345,000 in aggregate and was borne by the China A Fund and deducted from its assets for the account of each of the relevant Class and/or Series (as the case may be) in proportion to their respective Net Asset Values (“NAV”).

The costs of establishing the Bond Fund and applying for the authorization of the Class AA Shares in Hong Kong by the SFC and the authorization of the Class I Shares by the CIMA amounted to approximately USD 220,000 in aggregate and was borne by the Bond Fund and deducted from its assets for the account of each of the relevant Class and/or Series (as the case may be) in proportion to their respective Net Asset Values.



41



(M) Formation expenses (continued)

The costs of establishing the Asia Pacific Income and Growth Fund and the authorization of the Class AA (including the USD, AUD, HKD and CAD denominated Share classes), Class C, Class D and Class I Shares in the Cayman Islands by CIMA and with the SFC in Hong Kong amounted to approximately USD 50,000 in aggregate and was borne by the Asia Pacific Income and Growth Fund and deducted from its assets for the account of each of the relevant Class and/or Series (as the case may be) in proportion to their respective Net Asset Values.

The costs of establishing the U.S. Bank Equity Fund and related Cayman Islands formalities with CIMA amounted to approximately USD 188,000 (subsequently reduced to USD 140,000) in aggregate and was borne by the U.S. Bank Equity Fund and deducted from its assets for the account of each of the relevant Class and/or Series (as the case may be) in proportion to their respective Net Asset Values.

The costs of establishing the Greater Bay Area Growth and Income Fund and related Cayman Islands formalities with CIMA amounted to approximately USD 70,000 in aggregate and was borne by the Greater Bay Area Growth and Income Fund and deducted from its assets for the account of each of the relevant Class and/or Series (as the case may be) in proportion to their respective Net Asset Values.

In accordance with the Prospectus, the above mentioned expenses are amortised over the first five financial years of the Company commencing from the first business day following the inception date of the respective Segregated Portfolio. However, the accounting policy of the Segregated Portfolios for reporting purpose is to record the costs incurred in the formation of the Segregated Portfolios in the statement of comprehensive income in the period in which they arise.

The effect of the adjustment on expensing previously capitalized formation expenses to the published NAV is detailed in Note 15.

2.3 Significant accounting judgments, estimates and assumptions

The preparation of the Company’s financial statements requires management to make judgments, estimates and assumptions that affect the amounts recognized in the financial statements. However, uncertainty about these assumptions and estimates could result in outcomes that could require a material adjustment to the carrying amount of the asset or liability affected in the future.

Judgments

In the process of applying the Company’s accounting policies, management has made the following judgments, which have the most significant effect on the amounts recognized in the financial statements:

Going Concern

The Company’s management has made an assessment of the Company’s ability to continue as a going concern and is satisfied that the Company has the resources to continue in business for the foreseeable future. Furthermore, management is not aware of any material uncertainties that may cast significant doubt upon the Company’s ability to continue as a going concern. Therefore, the combined financial statements are prepared on the going concern basis.



42


2.3 Significant accounting judgments, estimates and assumptions (continued)

Functional currency

Liquidity of Company is managed on a day-to-day basis in USD for the China A Fund, the Bond Fund, the Asia Pacific Income and Growth Fund, the U.S. Bank Equity Fund and the Greater Bay Area Growth and Income Fund in order to handle the issuance and redemptions of each segregated portfolios’ Redeemable Participating shares. This currency is also used to evaluate the segregated portfolios’ performance. Management therefore considers USD as the currency that most faithfully represent the economic effects of the underlying transactions, events and conditions.

Estimates and assumptions

The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are discussed below. The Company based its assumptions and estimates on parameters available when the combined financial statements were prepared. However, existing circumstances and assumptions about future developments may change due to market changes or circumstances arising beyond the control of the Company. Such changes are reflected in the assumptions when they occur.

Fair value of financial instruments

When the fair value of financial assets and liabilities recorded in the statement of financial position cannot be derived from active markets, their fair value is determined using a variety of valuation techniques that include the use of pricing models. The inputs to these models are taken from observable markets where possible, but where this is not feasible, estimation is required in establishing fair values. The estimates include considerations of liquidity and model inputs such as credit risk (both own and the counterparty’s), correlation and volatility. Changes in assumptions about these factors could affect the reported fair value of financial instruments in the statement of financial position and the level where the instruments are disclosed in the fair value hierarchy. The models are calibrated regularly and tested for validity using prices from any observable current market transactions in the same instrument (without modification or repackaging) or based on any available observable market data.

Taxes

Enterprise Income tax (“EIT”) on capital gains arising from the trading of securities in the PRC

Prior to 17 November 2014, PRC EIT on the gross capital gains derived from trading PRC securities was unclear as to: (a) whether the PRC would enforce EIT on gains derived from the trading of PRC securities by a QFII; and (b) if the PRC were to enforce EIT, it is uncertain from which date EIT would be calculated and payable. Given the above uncertainty, the Investment Manager made a 10% withholding tax provision on realized and unrealized gains derived from the trading of PRC securities.

Pursuant to the issuance of the Circular CaiShui [2014] No. 79, which were jointly issued by the Ministry of Finance (“MOF”), China Securities Regulatory Commission and the State Administration of Taxation of PRC (“SAT”) on 17 November 2014, the Investment Manager ceased to provide 10% withholding tax provision on realized and unrealized gains derived from the trading of A-shares.



43


2.3 Significant accounting judgments, estimates and assumptions (continued)

Taxes (continued)

The Investment Manager will generally continue to provide for the 10% withholding tax on capital gains arising from the trading of PRC non-equity investments assets, including fixed income investments. The Investment Manager may consider the applicability of relevant double tax agreements to reduce the withholding tax rate as appropriate.

Further details on taxation are provided in Note 11.

2.4 Standards adopted during the year with no material effect on the Financial Statements

The accounting policies adopted are consistent with those of the previous year, except that the Company has adopted the following new and revised accounting standards (for the avoidance of doubt, only the new standards and amendments to standards which may have an effect on the Company’s accounts are mentioned below):

IFRS 9 Financial Instruments: Classification and Measurement

The standard introduces new requirements for classification and measurement, impairment, and hedge accounting. IFRS 9 is effective for annual periods beginning on or after 1 January 2018, with early application permitted. Retrospective application is required, but comparative information is not compulsory. In line with the characteristics of the Company’s financial instruments as well as its approach to their management, the Company neither revoked nor made any new designations on the date of initial application. IFRS 9 has not resulted in changes in the carrying amount of the Company’s financial instruments due to changes in measurement categories.

All financial assets that were classified as FVPL under IAS 39 are still classified as FVPL under IFRS 9. All financial assets that were classified as loans and receivables and measured at amortised cost continue to be. The adoption of IFRS 9 has no material effect on the classification and measurement of the Company’s financial assets and liabilities.

IFRS 15 Revenue from Contracts with Customers

IFRS 15 specifies how and when an IFRS reporter recognizes revenue as well as requiring such entities to provide users of financial statements with more informative, relevant disclosures. The standard provides a single, principles based five-step model to be applied to all contracts with customers. IFRS 15 was issued in May 2014 and applies to annual periods beginning on or after 1 January 2018. On 12 April 2016, clarifying amendments were issued that have the same effective date as the standard itself. The adoption of IFRS 15 has no impact on the Company’s financial position or performance.

IFRIC 22 Foreign Currency Transactions and Advance Consideration

IFRIC 22 clarifies the accounting for transactions that include the receipt or payment of advance consideration in a foreign currency. This standard is effective for periods beginning on or after 1 January2018 and has no impact on the Company’s financial position or performance.

Improvements to IFRS

The International Accounting Standards Board (IASB) issued annual improvements to IFRS, incorporating amendments to the following International Financial Reporting Standards:



44


2.4 Standards adopted during the year with no material effect on the Financial Statements (continued)

– Amendments to IFRS 1 First-time Adoption of International Financial Reporting Standards (effective for annual periods beginning on or after 1 January 2018)

– Amendments to IAS 28 Investments in Associates and Joint Ventures (effective for annual periods beginning on or after 1 January 2018)

2.5 Standards, interpretations and amendments issued but not yet effective

Standards issued but not yet effective at the date of issuance of the Company’s financial statements are listed below.

Amendments to references to the Conceptual Framework in IFRS Standards

This amendment revise the definitions of an asset and a liability and provide a new guidance on measurement and derecognition, presentation and disclosure. It is effective for periods beginning on or after 1 January 2020 and is not expected to have impact on the Company’s financial position or performance.

This standard has not been adopted by the Company as at 30 June 2019.

Amendments to IAS 1 and IAS 8 : Definition of Material

These amendments clarify the definition of “material” and align the definition used in the Conceptual Framework and the standards themselves. They are effective for periods beginning on or after 1 January 2020 and are not expected to have impact on the Company’s financial position or performance.

These amendments have not been adopted by the Company as at 30 June 2019.

Improvements to IFRS

The International Accounting Standards Board (IASB) issued annual improvements to IFRS, incorporating amendments to the following International Financial Reporting Standards:

– Amendments to IFRS 3 Business Combinations and IFRS 11 Joint Arrangements (effective for annual periods beginning on or after 1 January 2019)

– Amendments to IAS 12 Income Taxes (effective for annual periods beginning on or after 1 January 2019)

– Amendments to IAS 23 Borrowing Costs (effective for annual periods beginning on or after 1 Jan-uary 2019)

The Company expects no impact from the adoption of the amendments on its financial position or performance.

Man

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Adv

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d Fu

nd S

PCN

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to F

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Sta

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For t

he y

ear e

nded

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June

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9

45

3.

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130

June

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46

4. Fair value of financial instruments

The following table shows financial instruments recognised at fair value, analysed between those whose fair value is based on:

– Quoted prices in active markets for identical assets or liabilities (Level 1);

– Those involving inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (as prices) or indirectly (derived from prices) (Level 2); and

– Those with inputs for the asset or liability that are not based on observable market data (unobservable inputs) (Level 3).

Fair value hierarchy

As at 30 June 2019 Level 1 Level 2 Level 3 Total

Financial assets at fair value through profit or loss

China A Fund (in USD) 42,147,082 – – 42,147,082 Equities 42,147,082 – – 42,147,082

Bond Fund (in USD) 49,359,519 1,510,324 – 50,869,843 Bonds 26,436,467 1,510,324 – 27,946,791 Supranationals, Governments and Local Public Authorities, Debt Instruments 22,923,052 – – 22,923,052

Asia Pacific Income and Growth Fund (in USD) 16,083,714 13,099 – 16,096,813 Equities 10,164,891 – – 10,164,891 Bonds 4,962,832 – – 4,962,832 Supranationals, Governments and Local Public Authorities, Debt Instruments 827,324 – – 827,324 Funds 128,667 – – 128,667 Forward currency contracts – 13,099 – 13,099

U.S. Bank Equity Fund (in USD) 50,231,163 817 – 50,231,980 Equities 50,231,163 – – 50,231,163 Forward currency contracts – 817 – 817

Greater Bay Area Growth and Income Fund (in USD) 20,585,020 211,814 – 20,796,834 Equities 10,934,090 – – 10,934,090 Bonds 9,346,757 200,267 – 9,547,024 Supranationals, Governments and Local Public Authorities, Debt Instruments 304,173 – – 304,173 Forward currency contracts – 11,547 – 11,547

Total financial assets at fair value through profit or loss (in USD) 178,406,498 1,736,054 - 180,142,552

Financial liabilities at fair value through profit or loss

U.S. Bank Equity Fund (in USD) – (25) – (25)Forward currency contracts – (25) – (25)

Greater Bay Area Growth and Income Fund (in USD) – (102) – (102)Forward currency contracts – (102) – (102)

Total financial liabilities at fair value through profit or loss (in USD) – (127) – (127)



47

4. Fair value of financial instruments (continued)

Fair value hierarchy (continued)

As at 30 June 2018 Level 1 Level 2 Level 3 Total

Financial assets at fair value through profit or loss

China A Fund (in USD) 52,096,205 – – 52,096,205 Equities 52,096,205 – – 52,096,205

Bond Fund (in USD) 26,848,643 3,049,076 – 29,897,719 Bonds 6,021,602 3,049,076 – 9,070,678 Supranationals, Governments and Local Public Authorities, Debt Instruments 20,827,041 – – 20,827,041

Asia Pacific Income and Growth Fund (in USD) 15,780,049 18,861 – 15,798,910 Equities 10,155,674 – – 10,155,674 Bonds 4,512,119 – – 4,512,119 Supranationals, Governments and Local Public Authorities, Debt Instruments 991,646 – – 991,646 Funds 120,610 – – 120,610Forward currency contracts – 18,861 – 18,861

U.S. Bank Equity Fund (in USD) 63,060,882 – – 63,060,882 Equities 63,060,882 – – 63,060,882

Greater Bay Area Growth and Income Fund (in USD) 10,485,417 652 – 10,486,069 Equities 6,136,625 – – 6,136,625 Bonds 3,137,279 – – 3,137,279 Supranationals, Governments and Local Public Authorities, Debt Instruments 1,211,513 – – 1,211,513Forward currency contracts – 652 – 652

Total financial assets at fair value through profit or loss (in USD) 168,271,196 3,068,589 – 171,339,785

Financial liabilities at fair value through profit or loss

Asia Pacific Income and Growth Fund (in USD) – (220) – (220)Forward currency contracts – (220) – (220)

Greater Bay Area Growth and Income Fund (in USD) – (1) – (1)Forward currency contracts – (1) – (1)

Total financial liabilities at fair value through profit or loss (in USD) – (221) – (221)



48

4. Fair value of financial instruments (continued)

Fair value hierarchy (continued)

Level 1 financial assets at fair value through profit or loss are marketable securities. Equities and bonds are valued at stock exchange last traded prices and quoted mid prices at the close of business on 30 June 2019 respectively. Level 2 financial assets at fair value through profit or loss are securities that are brokers’ quoted prices or those not actively traded at the close of business on 30 June 2019 which are valued at the last traded price for the identical instruments.

The financial liabilities at fair value through profit or loss are forward currency contracts and are valued by using valuation techniques and models.

The following table presents the transfer between levels for the year ended 30 June 2019.

As at 30 June 2019 Level 1 Level 2 Level 3

Bond FundTransfer between levels 1 and 2 USD USD USDBonds 1,497,003 (1,497,003) –

The securities transferred in Level 1 relate to positions whose trading was inactive as at 30 June 2018 but was actively traded on 30 June 2019.

The following table presents the transfer between levels for the year ended 30 June 2018.

As at 30 June 2018 Level 1 Level 2 Level 3

Bond FundTransfer between levels 1 and 2 USD USD USDBonds 1,476,896 (1,476,896) –

The securities transferred in Level 1 relate to positions whose trading was inactive as at 30 June 2017 but was actively traded on 30 June 2018.

Other than the above, there were no other transfers between levels for the years ended 30 June 2019 and 2018.

All fair value measurements disclosed are recurring fair value measurements.

For assets and liabilities carried at amortized cost, their carrying values are a reasonable approximation of fair value due to their short-term nature.

5. Cash and cash equivalents

Cash and cash equivalents as at 30 June 2019 represent cash held at banks. As at 30 June 2019 and 30 June 2018, there were no bank overdrafts and no cash equivalents were given or received as collateral.

Man

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50

8. Share Capital

Authorized and issued capital

The authorized share capital of the Company is USD 1,000,000 divided into 100 Management Shares of USD 1 par value each and 999,900,000 Participating Shares of USD 0.001 par value each.

Management Shares are non–participating and may only be issued to a member of the Manulife Group, and are issued for the purpose of enabling all the Participating Shares to be redeemed without liquidating the Company. All Management Shares have been issued to Manulife Investment Management (Hong Kong) Limited (“MIMHK”), the Investment Manager.

Participating Shares and Management Shares carry equal voting rights. The holder of a Management Share has the right to receive notice of, attend at and vote as a Shareholder at any general meeting of the Company. The holder of a Participating Share has the right to receive notice of, attend at or vote as a Shareholder at any general meeting of the Company and may vote at a separate Class meeting.

As at 30 June 2019, the below Classes of Participating Shares are available for subscription in each Segregated Portfolio:

China A Fund– Class AA, for investment by retail investors

– Class I, for investment by institutional investors only

– Class P, for investment by institutional investors only

Bond Fund– Class AA, for investment by retail investors

– Class I, for investment by institutional investors only

– Class I3, for investment by institutional investors only

– Class P, for investment by institutional investors only

Asia Pacific Income and Growth Fund– Class AA (USD) Inc, for investment by retail investors

– Class AA (AUD) Inc Hedged, for investment by retail investors

– Class AA (CAD) Inc Hedged, for investment by retail investors

– Class AA (HKD) Inc, for investment by retail investors

– Class C (USD) Inc, for investment by non–retail investors who meet the minimum investment amounts required for this Class only

– Class D (USD) Inc, for investment by non–retail investors who meet the minimum investment amounts required for this Class only

– Class I (USD) Inc, for investment by institutional investors only



51

8. Share Capital (continued)

Authorized and issued capital (continued)

U.S. Bank Equity Fund– Class AA (USD) Inc, for investment by retail investors


– Class I2 (RMB) Hedged, for investment by institutional investors only

Greater Bay Area Growth and Income Fund

– Class AA (USD) Inc, for investment by retail investors


– Class AA, for investment by retail investors

– Class AA (HKD), for investment by retail investors

– Class AA (AUD) Hedged, for investment by retail investors

– Class AA (AUD) Inc Hedged, for investment by retail investors

The proceeds from the issue of each Class of Participating Shares are applied to the Segregated Portfolio to which that Class relates. The proceeds from the issue of the Management Shares shall be applied to the General Assets of the Company.

Man

ulife

Adv

ance

d Fu

nd S

PCN

otes

to F

inan

cial

Sta

tem

ents

For t

he y

ear e

nded

30

June

201

9

52

8.

Shar

e C

apita

l (co

ntin

ued)

Aut

horiz

ed a

nd is

sued

cap

ital (

cont

inue

d)

Dur

ing

the

year

/per

iod

ende

d 30

Jun

e 20

19 a

nd 3

0 Ju

ne 2

018,

the

num

ber o

f Sha

res

issu

ed, r

edee

med

and

out

stan

ding

was

as

follo

ws:

China

A Fu

ndBo

nd Fu

ndAs

ia Pa

cific I

ncom

e and

Grow

th Fu

ndU.S

. Ban

k Equ

ity Fu

ndGr

eater

Bay A

rea Gr

owth

and I

ncom

e Fun

d

Mana

geme

ntSh

areCla

ss AA

(USD)

Class

I(US

D)Cla

ss AA

(USD)

Class

I(US

D)Cla

ss I3

(USD)

Class

AA

(USD) Inc

Class

AA

(AUD) Inc

He

dged

Class

AA

(HKD) Inc

Class

AA

(CAD) Inc

He

dged

Class

AA

(USD) Inc

Class

AA

(HKD) Inc

Class

I2

(RMB)

Hedg

edCla

ss AA

(US

D)Cla

ss AA

(US

D) Inc

Class

AA

(AUD) Inc

He

dged

Class

AA

(HKD) Inc

Balan

ce as

at 30

June

2017

6,541,

790199

,713

2,525,

642409

,431

– 558

,744

184,15

3428

,407

231,28

1 26

0,347

214,0

00 –

– –

– –

100

Issue

of S

hares

of th

e yea

r/peri

od 44

7,115

– 14

,894

– –

512,4

96 47

,623

69,89

6 27

,324

7,019,

590

1,555,

867

– 50

0,000

412,3

90 37

,566

188,8

47 –

Rede

mptio

n of S

hares

of th

e yea

r/pe

riod

(2,09

3,469)

(2,37

2) (3

70,376

) (1

2,479)

– (2

38,957

) (2

2,392)

(27,2

48) (3

1,386)

(3,00

2,009)

(671,

387)

– –

– –

– –

Balan

ce as

at 30

June

2018

4,895,

436197

,341

2,170,

160396

,952

– 832

,283

209,38

4471

,055

227,21

94,2

77,928

1,098,

480 –

500,0

00 41

2,390

37,56

6 18

8,847

100

Issue

of S

hares

of th

e yea

r/peri

od 16

8,359

– 21

,719

– 2,0

51,602

26

4,878

20,69

7 53

,306

23,70

7 3,1

53,134

1,1

44,914

29

,610

– 95

6,416

646,5

53 75

6,514

–

Rede

mptio

n of S

hares

of th

e yea

r/pe

riod

(705,

944)

(193,

282)

(135,

949)

(51,7

84) –

(256,

628)

(37,7

63) (2

6,559)

(3,39

6) (3

,908,1

62) (1

,262,7

11) –

– (6

33,139

) (2

58,031

) (3

68,486

) –

Balan

ce as

at 30

June

2019

4,357,

8514,0

592,0

55,930

345,16

82,0

51,602

840,53

3192

,318

497,80

2247

,530

3,522,

900980

,683

29,610

500,00

0735

,667

426,08

8576

,875

100

The

Man

agem

ent S

hare

s of

the

Com

pany

wer

e is

sued

on

14 J

uly

2008

.



53


Authorized and issued capital (continued)

No distribution of dividend or capital has been made since the inception of the China A Fund and the Bond Fund up to 30 June 2019. It is not the intention of the Company to make any distribution out of the China A Fund and the Bond Fund, although this policy may change in the future with prior written notice to Shareholders of the Company. For the Asia Pacific Income and Growth Fund, it is currently intended that dividends are declared after the end of each month and which, subject to applicable law, may be paid out of capital or gross income of the relevant Class of the Segregated Portfolio while charging/paying all or part of the Classes fees and expenses to/out of the capital of the relevant Class of the Segregated Portfolio and (unless otherwise determined by the Company) are in the respective currency of denomination of the relevant Class of the Segregated Portfolio. The dividends declared (if any) are paid within three weeks of such declaration. For the U.S. Bank Equity Fund, it is currently intended that dividends are declared on a semi-annual basis and which, subject to applicable law, may be paid out of capital or gross income of the relevant Class of the Segregated Portfolio while charging/paying all or part of the Classes fees and expenses to/out of the capital of the relevant Class of the Segregated Portfolio and (unless otherwise determined by the Company) are in the respective currency of denomination of the relevant Class of the Segregated Portfolio. The dividends declared (if any) are paid within three weeks of such declaration. For the Greater Bay Area Growth and Income Fund, in respect of Class AA (USD) Inc, Class AA (HKD) Inc, Class AA (AUD) Inc Hedged, it is currently intended that dividends are declared on a monthly basis and which, subject to applicable law, may be paid out of capital or gross income of the relevant Class of the Segregated Portfolio while charging/paying all or part of the Classes fees and expenses to/out of the capital of the relevant Class of the Segregated Portfolio and (unless otherwise determined by the Company) are in the respective currency of denomination of the relevant Class of the Segregated Portfolio. The dividends declared (if any) are paid within three weeks of such declaration. In respect of Class AA, it is not the intention of the Company to make any distributions in respect of such Classes (which are accumulation Classes) of the Greater Bay Area Growth and Income Fund, although this policy may change with prior written notice to Shareholders.

For further details on dividend distribution, please refer to the Statement of Distribution on pages 28–32.

Capital Management

As a result of the ability to issue and redeem shares, the capital of the Company can vary depending on the demand for subscriptions and redemptions to the Company. The Company is not subject to externally imposed capital requirements and has no legal restrictions on the issue or redemption of Participating Shares beyond those included in the Company’s constitution.

With a view to protecting the interests of Shareholders, the Company may limit the number of Participating Shares of any Class and/or Series which are redeemed on any Dealing Day to 10% in aggregate of the total number of Participating Shares in issue of the relevant Class and/or Series. Such limitation is applied pro rata to all Shareholders who have requested such redemption. If the redemption requests received on such Dealing Day are in excess of this limit, the Company is entitled (but not obliged) to carry out only sufficient redemptions which, in aggregate, amount to 10% of the Participating Shares in issue of the relevant Class and/or Series at the relevant time. Redemption requests for Participating Shares which are not redeemed but which would otherwise have been redeemed are deferred until the next Dealing Day and are dealt with (subject to further deferral if the deferred requests themselves exceed 10% of the Participating Shares in issue of the relevant Class and/or Series) in priority to later redemption requests. Where there is more than one Class and/or Series of Participating Shares in relation to a Segregated Portfolio, the same restriction applies to all such Classes and Series of Participating Shares.



54


Capital Management (continued)

For the China A Fund, the Asia Pacific Income and Growth Fund, the U.S. Bank Equity Fund and the Greater Bay Area Growth and Income Fund subscriptions and redemptions to the Participating Shares are dealt on each Business Day.

For the Bond Fund, subscriptions and redemptions to the Participating Shares are only dealt on the last Business Day of every month.

Man

ulife

Adv

ance

d Fu

nd S

PCN

otes

to F

inan

cial

Sta

tem

ents

For t

he y

ear e

nded

30

June

201

9

55

9.

Div

iden

d in

com

e

China

A Fu

ndBo

nd Fu

ndAs

ia Pa

cific I

ncom

e and

Gr

owth

Fund

U.S. B

ank E

quity

Fund

Grea

ter Ba

y Area

Grow

th an

d Inc

ome F

und

Comb

ined

For th

e yea

r en

ded 3

0 Jun

e 20

19

For th

e yea

r en

ded 3

0 Jun

e 20

18

For th

e yea

r en

ded 3

0 Jun

e 20

19

For th

e yea

r en

ded 3

0 Jun

e 20

18

For th

e yea

r en

ded 3

0 Jun

e 20

19

For th

e yea

r en

ded 3

0 Jun

e 20

18

For th

e yea

r en

ded 3

0 Jun

e 20

19

For th

e yea

r en

ded 3

0 Jun

e 20

18

For th

e yea

r en

ded 3

0 Jun

e 20

19

For th

e peri

od

ende

d 30 J

une

2018

1

For th

e yea

r en

ded 3

0 Jun

e 20

19

For th

e yea

r en

ded 3

0 Jun

e 20

18US

DUS

DUS

DUS

DUS

DUS

DUS

DUS

DUS

DUS

DUS

DUS

D

Equit

y sec

uritie

s des

ignate

d at fa

ir valu

e thr

ough

profi

t or lo

ss 83

0,609

1,

082,8

69

– –

530,1

14

415,9

69

1,71

9,563

61

7,982

37

4,375

21

,497

3,45

4,661

2,

138,3

17

830,6

09

1,08

2,869

–

– 53

0,114

41

5,969

1,

719,5

63

617,9

82

374,3

75

21,49

7 3,

454,6

61

2,13

8,317

10.

Inte

rest

and

oth

er in

com

e

China

A Fu

ndBo

nd Fu

ndAs

ia Pa

cific I

ncom

e and

Gr

owth

Fund

U.S. B

ank E

quity

Fund

Grea

ter Ba

y Area

Grow

th an

d Inc

ome F

und

Comb

ined

Intere

st inc

ome

For th

e yea

r en

ded 3

0 Jun

e 20

19

For th

e yea

r en

ded 3

0 Jun

e 20

18

For th

e yea

r en

ded 3

0 Jun

e 20

19

For th

e yea

r en

ded 3

0 Jun

e 20

18

For th

e yea

r en

ded 3

0 Jun

e 20

19

For th

e yea

r en

ded 3

0 Jun

e 20

18

For th

e yea

r en

ded 3

0 Jun

e 20

19

For th

e yea

r en

ded 3

0 Jun

e 20

18

For th

e yea

r en

ded 3

0 Jun

e 20

19

For th

e peri

od

ende

d 30 J

une

2018

1

For th

e yea

r en

ded 3

0 Jun

e 20

19

For th

e yea

r en

ded 3

0 Jun

e 20

18US

DUS

DUS

DUS

DUS

DUS

DUS

DUS

DUS

DUS

DUS

DUS

D

Cash

2,86

9 3,

688

5,00

7 3,

911

– 8

– –

– –

7,87

6 7,

607

Debt

secu

rities

desig

nated

at fa

ir valu

e thr

ough

profi

t or lo

ss –

– 1,

623,0

08

1,30

8,419

29

5,502

25

1,407

–

– 34

4,314

5,

417

2,26

2,824

1,

565,2

43

2,86

9 3,

688

1,62

8,015

1,

312,3

30

295,5

02

251,4

15

– –

344,3

14

5,41

7 2,

270,7

00

1,57

2,850

1 For

the

perio

d fro

m 1

2 Ju

ne 2

018

(laun

ch d

ate)

to 3

0 Ju

ne 2

018.

Man

ulife

Adv

ance

d Fu

nd S

PCN

otes

to F

inan

cial

Sta

tem

ents

For t

he y

ear e

nded

30

June

201

9

56

10.

Inte

rest

and

oth

er in

com

e (c

ontin

ued)

China

A Fu

ndBo

nd Fu

ndAs

ia Pa

cific I

ncom

e and

Gr

owth

Fund

U.S. B

ank E

quity

Fund

Grea

ter Ba

y Area

Grow

th an

d Inc

ome F

und

Comb

ined

Othe

r inco

me

For th

e yea

r en

ded 3

0 Jun

e 20

19

For th

e yea

r en

ded 3

0 Jun

e 20

18

For th

e yea

r en

ded 3

0 Jun

e 20

19

For th

e yea

r en

ded 3

0 Jun

e 20

18

For th

e yea

r en

ded 3

0 Jun

e 20

19

For th

e yea

r en

ded 3

0 Jun

e 20

18

For th

e yea

r en

ded 3

0 Jun

e 20

19

For th

e yea

r en

ded 3

0 Jun

e 20

18

For th

e yea

r en

ded 3

0 Jun

e 20

19

For th

e peri

od

ende

d 30 J

une

2018

1

For th

e yea

r en

ded 3

0 Jun

e 20

19

For th

e yea

r en

ded 3

0 Jun

e 20

18US

DUS

DUS

DUS

DUS

DUS

DUS

DUS

DUS

DUS

DUS

DUS

D

Comm

ission

on su

bscri

ption

s / re

demp

tions

25,67

4 68

,746

6,84

2 13

,879

– –

– –

– –

32,51

6 82

,625

25,67

4 68

,746

6,84

2 13

,879

– –

– –

– –

32,51

6 82

,625

11.

Taxa

tion

China

A Fu

ndBo

nd Fu

ndAs

ia Pa

cific I

ncom

e and

Gr

owth

Fund

U.S. B

ank E

quity

Fund

Grea

ter Ba

y Area

Grow

th an

d Inc

ome F

und

Comb

ined

For th

e yea

r en

ded 3

0 Jun

e 20

19

For th

e yea

r en

ded 3

0 Jun

e 20

18

For th

e yea

r en

ded 3

0 Jun

e 20

19

For th

e yea

r en

ded 3

0 Jun

e 20

18

For th

e yea

r en

ded 3

0 Jun

e 20

19

For th

e yea

r en

ded 3

0 Jun

e 20

18

For th

e yea

r en

ded 3

0 Jun

e 20

19

For th

e yea

r en

ded 3

0 Jun

e 20

18

For th

e yea

r en

ded 3

0 Jun

e 20

19

For th

e peri

od

ende

d 30 J

une

2018

1

For th

e yea

r en

ded 3

0 Jun

e 20

19

For th

e yea

r en

ded 3

0 Jun

e 20

18US

DUS

DUS

DUS

DUS

DUS

DUS

DUS

DUS

DUS

DUS

DUS

D

With

holdi

ng ta

xes

(83,0

47)

(111

,116)

4,81

8 (3

,425)

(47,3

82)

(32,3

42)

(515

,869)

(185

,395)

(8,77

7) (1

,405)

(650

,257)

(333

,683)

PRC

tax on

capit

al ga

ins –

– (7

6,398

) (5

,139)

– –

– –

– –

(76,3

98)

(5,13

9) (8

3,047

) (1

11,11

6) (7

1,580

) (8

,564)

(47,3

82)

(32,3

42)

(515

,869)

(185

,395)

(8,77

7) (1

,405)

(726

,655)

(338

,822)

1 For

the

perio

d fro

m 1

2 Ju

ne 2

018

(laun

ch d

ate)

to 3

0 Ju

ne 2

018.



57

11. Taxation (continued)

Cayman Islands

The Government of the Cayman Islands does not, under existing legislation, impose any income, corporate or capital gains tax, estate duty, inheritance tax, gift tax or withholding tax upon the Company or the Shareholders. The Cayman Islands are not party to a double tax treaty with any country that is applicable to any payments made to or by the Company.

Hong Kong

No provision for Hong Kong profits tax has been made as the Company was authorized as a collective investment scheme under section 104 of the Hong Kong Securities and Futures Ordinance and is therefore exempt from Hong Kong profits tax under Section 26A(1A) of the Hong Kong Inland Revenue Ordinance.

Mainland China

PRC EIT of 10% is charged on PRC sourced dividends and interest on a withholding basis, subject to Caishui [2018] No. 108, according to which foreign institutional investors are exempt from EIT on bond interest income derived November 7, 2018 to November 6, 2021. In addition, the withholding tax rate may be reduced subject to the applicability of relevant double tax agreements.

On 17 November 2014, Mainland China issued the Circular CaiShui [2014] No. 79 (“Circular 79”) which clarified the PRC withholding tax treatment with respect to realized gains derived by QFIIs and RQFIIs from the trading of shares in PRC resident enterprises. QFIIs and RQFIIs are temporarily exempt from withholding tax in respect of capital gains derived from the trading of equity investments assets (including shares) starting from 17 November 2014. Realized capital gains derived prior to 17 November 2014 would be subject to withholding tax and are required to be reported to the State Taxation Bureaus in Beijing or Shanghai.

In view of the issuance of Circular 79 on 14 November 2014, the China A Fund has ceased to make provision for 10% withholding tax on realized gains derived from the trading of A-shares with effect from 17 November 2014.

The Investment Manager will continue to provide for the 10% withholding tax on capital gains arising from the trading of PRC non-equity investments assets, including fixed income investments.

As at 30 June 2019, the withholding tax provision on gross unrealized gains is USD 57,404 for the Bond Fund (30 June 2018: USD 14,995).

As at 30 June 2019, the Bond Fund’s withholding tax provision on gross realized gains is USD 473,348 (30 June 2018: USD 456,179).



58

11. Taxation (continued)

The tax law and regulations of Mainland China are constantly changing, and they may be changed with retrospective effect to the advantage or disadvantage of shareholders. The interpretation and applicability of the tax law and regulations by tax authorities may not be consistent and transparent; and may vary from region to region. It should also be noted that any provision for taxation made by the Investment Manager may be excessive or inadequate to meet final Mainland China tax liabilities. Consequently, shareholders may be advantaged or disadvantaged depending upon the final tax liabilities.

United States

A United States withholding tax of 30% is charged on United States sourced dividends. The withholding tax rate may be reduced subject to the applicability of relevant double tax agreements.

12. Fees and Charges

12.1 Management fees

MIMHK, the General Adviser and Distributor and the Investment Manager, is entitled to receive management fees at the percentage specified below per annum on the NAV of the relevant class of Participating Shares in the relevant Segregated Portfolio, accrued and calculated monthly and payable monthly in arrears.

China A Fund Bond Fund Asia Pacific Income and Growth Fund U.S. Bank Equity Fund

Greater Bay Area Growth and Income

Fund

Class AA Class I Class AA Class I Class I3

Class AA Inc(USD, AUD, HKD &

CAD)

Class AA Inc(USD & HKD)

Class I2(RMB)

Class AA & Class AA Inc

(USD, AUD & HKD)

1.75% Up to 1.5% 1.25% Up to 1%

Separately agreed with the relevant Manulife

entity.

1.50% 1.50% 0.43% 1.50%

Manulife TEDA Fund Management Co. Ltd. (the “Investment Adviser”) has been appointed by the Investment Manager to provide non–binding investment advice in connection with the China A Fund’s investments through conducting market research, gathering data, making of recommendations and provision of other related advisory services.

The day–to–day investment management activities of the China A Fund have not been delegated to the Investment Adviser and the Investment Manager has sole overall responsibility for ensuring that the investment objectives, strategies, guidelines and restrictions of the China A Fund are observed and complied with in all aspects.

12.2 Custodian and Paying Agent, Administration, Registrar and Transfer Agent fees

Citibank Europe plc, Luxembourg Branch, in relation to its duties as the custodian and paying agent (including as the sub–administrator, registrar and transfer agent), is entitled to a maximum fee of 0.50% per annum of the NAV of the Segregated Portfolios, accrued and calculated on each valuation day of the Segregated Portfolios and payable monthly in arrears.

For the period from 1 July 2016 to 20 May 2017, SS&C Fund Services (Cayman) Limited, in relation to its duties as the administrator and principal office, was entitled to an annual fee of USD 5,000 per Segregated Portfolio.



59

12. Fees and Charges (continued)

12.2 Custodian and Paying Agent, Administration, Registrar and Transfer Agent fees (continued)

Starting 21 May 2017, CIBC Bank and Trust Company (Cayman) Limited, in relation to its duties as the administrator and principal office, is entitled to an annual fee of 0.004% of the NAV of each Segregated Portfolio (subject to an annual minimum fee of USD 8,000 per Segregated Portfolio).

12.3 Initial, Redemption, Administrative and Switching Charges

(a) Initial Charge

The Company may, at its absolute discretion, impose an initial charge (and subsequently, at its absolute discretion, in relation to different investors increase, reduce or waive in whole or in part such initial charge) of up to the below defined maximums of the NAV per Participating Share on an investor subscribing for Participating Shares of the relevant Segregated Portfolio. Subscriptions of the units of the Segregated Portfolios are recorded net of initial charge.

China A Fund Bond Fund Asia Pacific Income and Growth Fund U.S. Bank Equity Fund

Greater Bay Area Growth and

Income Fund

Class AA Class I Class AA Class I Class I3 Class AA Inc

(USD, AUD, HKD & CAD)

Class AA Inc

(USD & HKD)

Class I2(RMB)

Class AA & Class AA Inc

(USD, AUD & HKD)

Currently up to 5% of the

NAV. The Directors

reserve the right to charge

up to 6% of the NAV per Participating

Share.

Up to 6% of the NAV per Participating

Share.


NAV. The Directors

reserve the right to charge

up to 6% of the NAV per Participating

Share.

Up to 6% of the NAV per Participating

Share.

not applicable

Currently up to 5% of the NAV. The Directors

reserve the right to charge up to 6% of the NAV per Participating

Share.


NAV. The Directors reserve

the right to charge up

to 6% of the NAV per

ParticipatingShare.

not applicable

Currently up to 5% of the NAV. The

Directors reserve the right to charge up to 6% of the NAV per

ParticipatingShare.

(b) Redemption Charge (inclusive of Administrative Charge)

The Company may, at its absolute discretion, impose a redemption charge (and subsequently, at its absolute discretion, in relation to different investors increase, reduce or waive in whole or in part such redemption charge) of up to a maximum of 7% (inclusive of the administrative charge set out below) of the relevant redemption proceeds on a Shareholder applying to redeem all or any of his/her Participating Shares of the relevant Segregated Portfolio.

The administrative charge is intended to cover all or part of the dealing and transaction costs (including any requisite governmental tax, stamp duty, registration fee, fiscal or currency repatriation charges, marketspreads) relating to the liquidation or disposal of the underlying investments. All redemption charges are retained in the relevant Segregated Portfolio for the benefit of continuing Shareholders as it seeks to preserve the value of the underlying assets of the relevant Segregated Portfolio against the effects of liquidation or disposal caused by redeeming Shareholders. There is no redemption charge for the Asia Pacific Income and Growth Fund, the U.S. Bank Equity Fund and the Greater Bay Area Growth and Income Fund.



60

12. Fees and Charges (continued)

(b) Redemption Charge (inclusive of Administrative Charge) (continued)

The redemption charge applicable to the China A Fund and the Bond Fund for the shares AA, I and P was 5.3% of the redemption proceeds during the lock–up period which expired on 9 February 2011 and 23 February 2011 respectively. It is reduced to 0.3% for the share AA after the lock–up period.

(c) Switching Charge (if any)

The Company may also impose a switching charge of up to 1% of NAV per Participating Share on switching requests (if any).

13. Financial risk and management objectives and policies

Introduction

The Company’s objective in managing risk is to achieve the investment objectives of each of the Segregated Portfolios. Risk is inherent in the activities of the Company, but it is managed through a process of ongoing identification, measurement and monitoring, subject to risk limits and other controls. The Company is exposed to market risk (which includes price risk, interest rate risk and foreign currency risk), credit risk and liquidity risk.

The Company monitors and manages the risks of each of the Segregated Portfolios separately.

China A Fund

The objective of the China A Fund is to achieve long term capital appreciation by investing primarily in Mainland China capital markets. The China A Fund seeks to achieve its investment objective by investing primarily (i.e. not less than 70% of its net assets) in companies listed on the A–Share markets of the Shanghai Stock Exchange and/or Shenzhen Stock Exchange.

Bond Fund

The objective of the Bond Fund is to provide capital appreciation and income generation by investing primarily in RMB–denominated debt instruments issued and listed in Mainland China or traded in the Mainland China interbank bond market, in accordance with applicable QFII regulations. The Bond Fund invests primarily (i.e. not less than 70% of its net assets) in RMB–denominated debt instruments, including convertible bonds, that are listed or transferred on either the Shanghai Stock Exchange or the Shenzhen Stock Exchange, or interbank bonds, and which are issued by the Mainland China Government as well as corporations in Mainland China.

Asia Pacific Income and Growth Fund

The investment objective of the Asia Pacific Income and Growth Fund is to provide income and capital appreciation over the medium to longer term by investing primarily in equity and fixed income–related securities in the Asia Pacific ex–Japan region. The Asia Pacific Income and Growth Fund targets an asset allocation of 60% in equity securities and 40% in fixed income securities in that region. However the Asia Pacific Income and Growth Fund may hold between 25% and 75% in either equity securities or fixed income securities in that region in pursuance of its investment objective.



61

13. Financial risk and management objectives and policies (continued)

Introduction (continued)

U.S. Bank Equity Fund

The investment objective of the U.S. Bank Equity Fund is to achieve medium to long term growth of capital primarily through investing in equities and equity-related investments of U.S. banks. The U.S. Bank Equity Fund (i) shall invest at least 80% and up to 100% of its net assets in (a) equity securities of U.S. banks, such as publicly traded common, preferred and convertible preferred stocks; and (b) other U.S. banks focused equity-related investments such as American depositary receipts, European depositary receipts, global depositary receipts and ETFs; (ii) may invest up to 20% of its net assets in equity securities of other U.S. and foreign financial services companies and/or in cash, short term securities and money markets instruments such as bank deposits, certificates of deposits, discount notes, treasury and agency debt, or collateralised and/or securitised products; and (iii) may invest up to 5% of its net assets in equity securities of companies outside the financial services sector.


The investment objective of the Greater Bay Area Growth and Income Fund is to achieve capital growth and income generation by investing primarily in a diversified portfolio of equity and equity-related securities and fixed income securities of issuers which are connected to the region comprising Hong Kong, Macau and the Guangdong Province of China (“Greater Bay Area”). The Greater Bay Area Growth and Income Fund shall invest at least 70% of its net assets in equity and equity-related securities (which are listed on any stock exchange) and fixed income securities of governments or corporate issuers established and/or with substantial business interests in the Greater Bay Area. Equity and equity-related securities include common stocks, preferred stocks, depositary receipts and real estate investment trusts.

(a) Market risk

Market risk is the risk that changes in market variables, such as in interest rates, equity prices, and foreign currency rates will affect the fair value or future cash flows of financial instruments of the Segregated Portfolios of the Company. The market risk arising from changes in foreign currency rates is discussed in a separate section. The primary market variable to which each portfolio is exposed is the benchmark index for that portfolio. The Investment Manager manages market risk relative to that benchmark by closely monitoring all portfolio holdings of each Segregated Portfolio of the Company and attempting to maintain a high degree of diversification.

China A Fund

The Investment Manager of the China A Fund monitors its Tracking Error and Beta on an ex–post (realized) and ex–ante basis. Tracking Error is a measure of how closely a portfolio follows the index to which it is benchmarked. Beta is a number that describes the relation of portfolio returns with those of the benchmark index returns. The Investment Manager uses the Shanghai Shenzhen CSI 300 Index (“CSI 300”) as its Benchmark for both Tracking Error and Beta. As at 30 June 2019, the portfolio of the China A Fund had an ex–post Tracking Error of 5.46% (30 June 2018: 6.71%) and an ex–post Beta of 1.05 (30 June 2018: 0.78).

As at 30 June 2019, it is estimated using an industry standard risk model with ex–post Beta that had the CSI 300 increased by 5% with all other variables held constant, net assets attributable to holders of redeemable participating shares and profit would have increased by USD 2,212,722 (30 June 2018: 2,020,243).

Bond Fund

The Bond Fund is exposed to market risk from changes in interest rates and foreign currency rates. The Bond Fund does not have direct market risk exposure from changes in equity prices. The market risk arising from changes in foreign currency rates is discussed in a separate section.



62


(a) Market risk (continued)

Bond Fund (continued)

Interest rate risk arises from the possibility that changes in interest rates will affect future cash flows or the fair values of financial instruments. The majority of the direct interest rate exposure of the Bond Fund arises from investments in debt securities denominated in RMB. As at 30 June 2019, most of the investments of the Bond Fund carry fixed interest rates and have an average maturity of 5.31 years (30 June 2018: 4.12 years).

The following table analyses the interest rate exposure of the Bond Fund, with assets and liabilities shown at their carrying value and categorized by the earlier of contractual re–pricing or maturity dates:

As at 30 June 2019Less than

1 year1 to 5 years

5 to 10 years

Over 10 years

Non–interest bearing Total

USD USD USD USD USD USDFinancial assets at fair value through profit or loss – 28,559,075 22,310,768 – – 50,869,843 Cash and cash equivalent 262,821 – – – – 262,821 Other receivables and prepayments – – – – 795,183 795,183 Accounts payable and accrued expenses – – – – (628,815) (628,815)Payable on redemptions – – – – (620,980) (620,980)

262,821 28,559,075 22,310,768 – (454,612) 50,678,052


1 year1 to 5 years

5 to 10 years

Over 10 years


USD USD USD USD USD USDFinancial assets at fair value through profit or loss – 25,318,059 4,579,660 – – 29,897,719 Cash and cash equivalent 149,845 – – – – 149,845 Receivable on subscriptions – – – – 7,698 7,698 Other receivables and prepayments – – – – 360,300 360,300 Due from broker – – – – 2,766,787 2,766,787 Accounts payable and accrued expenses – – – – (572,267) (572,267)Payable on redemptions – – – – (163,084) (163,084)Due to broker – – – – (1,184,059) (1,184,059)

149,845 25,318,059 4,579,660 – 1,215,375 31,262,939

As at 30 June 2019, an increase of the interest rate on RMB–denominated assets by 100 bps, with all other variables held constant, would have resulted to a decrease in net assets attributable to holders of Redeemable Participating Shares of USD 2,271,135 (30 June 2018: decrease of USD 1,092,164). A decrease of the interest rates on RMB denominated assets by 100 bps would have an equal but opposite effect. This arises substantially from the increase in the fair value of fixed interest securities.


The Asia Pacific Income and Growth Fund is exposed to market risk from changes in interest rates, foreign currency rates and equity prices. The market risk arising from changes in foreign currency rates is discussed in a separate section.



63



Asia Pacific Income and Growth Fund (Equity securities)

Regarding the market risk from changes in equity prices, the Investment Manager of the Asia Pacific Income and Growth Fund monitors its Tracking Error and Beta on an ex–post (realized) and ex–ante basis. Tracking Error is a measure of how closely a portfolio follows the index to which it is benchmarked. Beta is a number that describes the relation of portfolio returns with those of the benchmark index returns. The Investment Manager uses the MSCI AC Asia Pacific ex Japan index (“MSCI AC Asia Pacific ex Japan”) as its Benchmark for both Tracking Error and Beta. As at 30 June 2019, the portfolio of the Asia Pacific Income and Growth Fund had an ex–post Tracking Error of 1.27% (30 June 2018: 1.48%) and an ex–post Beta of 0.95 (30 June 2018: 1.07).

As at 30 June 2019, it is estimated with an industry standard risk model with ex–post beta that had the MSCI AC Asia Pacific ex Japan increased by 5% with all other variables held constant, net assets attributable to holders of redeemable participating shares and profit would have increased by USD 487,370 (30 June 2018: USD 549,781).

Neither MSCI nor any other party involved in or related to compiling, computing or creating the MSCI data makes any express or implied warranties or representations with respect to such data (or the results to be obtained by the use thereof), and all such parties hereby expressly disclaim all warranties of originality, accuracy, completeness, merchantability or fitness for a particular purpose with respect to any of such data. Without limiting any of the foregoing, in no event shall MSCI, any of its affiliates or any third party involved in or related to compiling, computing or creating the data have any liability for any direct, indirect, special, punitive, consequential or any other damages (including lost profits) even if notified of the possibility of such damages. No further distribution or dissemination of the MSCI data is permitted without MSCI’s express written consent.

Asia Pacific Income and Growth Fund (Debt securities)

Interest rate risk arises from the possibility that changes in interest rates will affect future cash flows or the fair values of financial instruments. The majority of the direct interest rate exposure of the Asia Pacific Income and Growth Fund arises from investments in debt securities denominated in USD. As at 30 June 2019, most of the investments of the Asia Pacific Income and Growth Fund carry fixed interest rates and have an average maturity of 3.98 years (30 June 2018: 3.94 years).

The following table analyses the interest rate exposure of the Asia Pacific Income and Growth Fund, with assets and liabilities shown at their carrying value and categorized by the earlier of contractual re–pricing or maturity dates:



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Asia Pacific Income and Growth Fund (Debt securities) (continued)


1 year1 to 5 years

5 to 10 years

Over 10 years


USD USD USD USD USD USDFinancial assets at fair value through profit or loss – 3,334,690 1,673,943 781,523 10,306,657 16,096,813 Cash and cash equivalent 532,191 – – – – 532,191 Receivable on subscriptions – – – – 32,253 32,253 Other receivables and prepayments – – – – 172,568 172,568 Accounts payable and accrued expenses – – – – (40,973) (40,973)Payable on redemptions – – – – (367) (367)

532,191 3,334,690 1,673,943 781,523 10,470,138 16,792,485


1 year1 to 5 years

5 to 10 years

Over 10 years


USD USD USD USD USD USDFinancial assets at fair value through profit or loss 199,715 3,195,248 1,369,260 739,542 10,295,145 15,798,910 Cash and cash equivalent 461,647 – – – – 461,647 Receivable on subscriptions – – – – 16,359 16,359 Other receivables and prepayments – – – – 184,303 184,303 Financial liabilities at fair value through profit or

loss (220) – – – – (220)

Accounts payable and accrued expenses – – – – (63,791) (63,791)Payable on redemptions – – – – (48,635) (48,635)

661,142 3,195,248 1,369,260 739,542 10,383,381 16,348,573

As at 30 June 2019, an increase of the interest rate on USD–denominated assets by 100 bps, with all other variables held constant, would have resulted to a decrease in net assets attributable to holders of Redeemable Participating Shares of USD 173,803 (30 June 2018: USD 196,996). A decrease of the interest rates on USD denominated assets by 100 bps would have an equal but opposite effect. This arises substantially from the increase in the fair value of fixed interest securities.


The Investment Manager of the U.S. Bank Equity Fund monitors its Tracking Error and Beta on an ex–post (realized) and ex–ante basis. Tracking Error is a measure of how closely a portfolio follows the index to which it is benchmarked. Beta is a number that describes the relation of portfolio returns with those of the benchmark index returns. The Investment Manager uses the Standard & Poor’s Composite 1500 Banks index (“S&P Composite 1500 Banks”) as its Benchmark for both Tracking Error and Beta. As at 30 June 2019, the portfolio of the U.S. Bank Equity Fund had an ex–post Tracking Error of 7.18% (30 June 2018: 6.05%) and an ex–post Beta of 0.97 (30 June 2018: 0.80).



65



U.S. Bank Equity Fund (continued)

As at 30 June 2019, it is estimated using an industry standard risk model with ex–post Beta that had the S&P Composite 1500 Banks increased by 5% with all other variables held constant, net assets attributable to holders of redeemable participating shares and profit would have increased by USD 2,436,211 (30 June 2018: USD 2,509,221).

Greater Bay Area Growth and Income Fund (Equity securities)

Regarding the market risk from changes in equity prices, the Investment Manager of the Greater Bay Area Growth and Income Fund monitors its Tracking Error and Beta on an ex–post (realized) and ex–ante basis. Tracking Error is a measure of how closely a portfolio follows the index to which it is benchmarked. Beta is a number that describes the relation of portfolio returns with those of the benchmark index returns. The Investment Manager uses 50% Hang Seng index and 50% CSI 300 index as its Benchmark for both Tracking Error and Beta. As at 30 June 2019, the portfolio of the Greater Bay Area Growth and Income Fund had an ex–post Tracking Error of 3.92% and an ex–post Beta of 0.96 (30 June 2018: insufficient data points for calculation, due to the launch of the Fund during the year).

As at 30 June 2019, it is estimated using an industry standard risk model with ex–post Beta that had the Hang Seng index and the CSI 300 index increased by 5% with all other variables held constant, net assets attributable to holders of redeemable participating shares and profit would have increased by USD 524,836 (30 June 2018: sensitivity analysis was not presented, due to the launch of the Fund during the year).

Greater Bay Area Growth and Income Fund (Debt securities)

Interest rate risk arises from the possibility that changes in interest rates will affect future cash flows or the fair values of financial instruments. The majority of the direct interest rate exposure of the Greater Bay Area Growth and Income Fund arises from investments in debt securities denominated in USD. As at 30 June 2019, most of the investments of the Greater Bay Area Growth and Income Fund carry fixed interest rates and have an average maturity of 4.28 years (30 June 2018: 2.40 years).

The following table analyses the interest rate exposure of the Greater Bay Area Growth and Income Fund, with assets and liabilities shown at their carrying value and categorized by the earlier of contractual re–pricing or maturity dates:


1 year1 to 5 years

5 to 10 years

Over 10 years


USD USD USD USD USD USDFinancial assets at fair value through profit or loss 104,719 5,806,502 2,401,526 1,538,450 10,945,637 20,796,834 Cash and cash equivalent 261,600 – – – – 261,600 Other receivables and prepayments – – – – 211,780 211,780 Due from broker – – – – 73,757 73,757 Financial liabilities at fair value through profit or

loss (102) – – – – (102)

Accounts payable and accrued expenses – – – – (55,291) (55,291)Due to broker – – – – (76,694) (76,694)

366,217 5,806,502 2,401,526 1,538,450 11,099,189 21,211,884



66



Greater Bay Area Growth and Income Fund (Debt securities) (continued)


1 year1 to 5 years

5 to 10 years

Over 10 years


USD USD USD USD USD USDFinancial assets at fair value through profit or loss – 2,970,780 594,025 783,987 6,137,277 10,486,069 Cash and cash equivalent 563,586 – – – – 563,586 Receivable on subscriptions – – – – 328,131 328,131 Other receivables and prepayments – – – – 139,833 139,833 Financial liabilities at fair value through profit or

loss (1) – – – – (1)

Accounts payable and accrued expenses – – – – (103,257) (103,257)Due to broker – – – – (131,243) (131,243)

563,585 2,970,780 594,025 783,987 6,370,741 11,283,118

As at 30 June 2019, an increase of the interest rate on USD–denominated assets by 100 bps, with all other variables held constant, would have resulted to a decrease in net assets attributable to holders of Redeemable Participating Shares of USD 319,070 (30 June 2018: USD 147,602). A decrease of the interest rates on USD denominated assets by 100 bps would have an equal but opposite effect. This arises substantially from the increase in the fair value of fixed interest securities.

(b) Credit risk

Credit risk is the risk that a counterparty to a financial instrument will cause a financial loss for a Segregated Portfolio by failing to discharge an obligation. The Investment Manager of the Segregated Portfolio has a process in place to confirm that counterparties to financial instruments, including brokers, are reputable. The creditworthiness of counterparties is reviewed on an annual basis.

None of the Segregated Portfolio hold financial assets which are past due or which are considered to be impaired.

The maximum credit risk exposure of the Company and of each Segregated Portfolio as at 30 June 2019 and 30 June 2018 is represented by the respective carrying amounts of the relevant financial assets in the statement of financial position.

The cash and cash equivalents of the Company and each of its Segregated Portfolios are held mainly with Citibank Europe plc, Luxembourg Branch and Citibank N.A. (Hong Kong Branch), are both wholly owned indirect subsidiaries of Citigroup Inc. which had credit rating of A3 from Moody’s and BBB+ from Standard & Poor’s for long term and a rating of P-2 and A-2 respectively, for short term debt from those agencies.

China A Fund and U.S. Bank Equity Fund

The China A Fund and the U.S. Bank Equity Fund do not have investment in debt securities which exposes them to credit risk.

The cash and cash equivalents of the China A Fund and the U.S. Bank Equity Fund are held mainly with Citibank Europe plc, Luxembourg Branch.



67


(b) Credit risk (continued)

Bond Fund

The investment strategy of the Bond Fund requires that at least 85% of its investment to be in bonds issued by the Mainland China Government or by international corporations in Mainland China that carry a rating of at least BBB-/Baa3. The Bond Fund is exposed to credit risk arising from its investments in debt securities. 45.06% of the portfolio of the Bond Fund comprise of sovereign debt issued by the Mainland China Government, which are rated Aa3/AA-, by S&P, Moody’s and Fitch as at 30 June 2019 (30 June 2018: 69.66%).

As at 30 June 2019 and 30 June 2018, the Bond Fund invested in debt securities with the following credit quality, as per S&P, Moody’s and Fitch:

Credit Rating – Bond Fund 30 June 2019 30 June 2018USD USD

A 41,917,013 28,381,099

BBB 1,461,451 –

Unrated 7,491,379 1,516,620

Total Debt Security 50,869,843 29,897,719

Due to the investment objectives and strategy of the Bond Fund, it has concentration of credit risk by geographical distribution, with 100% of its investment in debt securities issued by an issuer domiciled in Mainland China as at 30 June 2019 (30 June 2018: 100%).

The following table analyses the concentration of credit risk of the investments in debt securities of Bond Fund by industrial distribution:

Concentration of credit risk – Bond Fund 30 June 2019 30 June 2018USD USD

Government 22,923,052 20,827,041

Corporate 27,946,791 9,070,678


Except for debt securities issued by the Mainland China Government, which accounted for 45.23% of the net assets attributable to holders of Redeemable Participating Shares of the Bond Fund as at 30 June 2019 (30 June 2018: 66.62%), there were no significant concentrations in the portfolio of credit risk to any individual issuer or group of issuers.

Asia Pacific Income and Growth Fund (Debt securities)

The Asia Pacific Income and Growth Fund is exposed to credit risk arising from its investments in debt securities. As at 30 June 2019 and 30 June 2018, the Asia Pacific Income and Growth Fund invested in debt securities with the following credit quality, as per S&P, Moody’s and Fitch:



68



Asia Pacific Income and Growth Fund (Debt securities) (continued)

Credit Rating – Asia Pacific Income and Growth Fund 30 June 2019 30 June 2018USD USD

AAA 171,731 163,622

AA 387,640 807,488

A 919,666 881,480

BBB 1,852,895 1,335,980

BB 936,933 731,264

B 411,907 539,615

Unrated 1,109,384 1,044,316


The following table analyses the concentration of credit risk of the investments in debt securities of Asia Pacific Income and Growth Fund by industrial distribution:

Concentration of credit risk – Asia Pacific Income and Growth Fund 30 June 2019 30 June 2018USD USD

Government 827,324 991,646

Corporate 4,962,832 4,512,119


As at 30 June 2019 and 30 June 2018, there were no significant concentrations in the portfolio of credit risk to any individual issuer or group of issuers.



69



Greater Bay Area Growth and Income Fund (Debt securities)

The Greater Bay Area Growth and Income Fund is exposed to credit risk arising from its investments in debt securities. As at 30 June 2019 and 30 June 2018, the Greater Bay Area Growth and Income Fund invested in debt securities with the following credit quality, as per S&P, Moody’s and Fitch:

Credit Rating –Greater Bay Area Growth and Income Fund 30 June 2019 30 June 2018USD USD

AA 304,173 1,420,671

A 2,493,778 397,991

BBB 660,411 199,179

BB 2,708,926 1,351,492

B 1,147,654 –

Unrated 2,536,255 979,459


Due to the investment objectives and strategy of the Greater Bay Area Growth and Income Fund, it has concentration of credit risk by geographical distribution, with 25.29% of its investment in debt securities issued by an issuer domiciled in Greater Bay Area as at 30 June 2019 (30 June 2018: 22.52%).

The following table analyses the concentration of credit risk of the investments in debt securities of the Greater Bay Area Growth and Income Fund by industrial distribution:

Concentration of credit risk –Greater Bay Area Growth and Income Fund 30 June 2019 30 June 2018USD USD

Government 304,173 1,211,513

Corporate 9,547,024 3,137,279


Except for debt securities issued by an issuer domiciled in Greater Bay Area, which accounted for 11.75% of the net assets attributable to holders of Redeemable Participating Shares of the Greater Bay Area Growth and Income Fund as at 30 June 2019 (30 June 2018: 8.68%), there were no significant concentrations in the portfolio of credit risk to any individual issuer or group of issuers.



70


(c) Liquidity risk

Liquidity risk is defined as the risk that the Segregated Portfolios will encounter difficulties in meeting obligations associated with financial liabilities that are settled by delivering cash or another financial asset.

Each Segregated Portfolio is exposed to the liquidity risk of meeting shareholder redemptions at each dealing date.

With a view of protecting the interest of shareholders, the Company is not bound to redeem more than 10% in aggregate of the total number of participating shares in issue of each share class of each of the Segregated Portfolios.

China A Fund

The China A Fund monitors the liquidity of its investments in equity securities through the number of Days Trade for individual equity instruments. Days Trade represents the number of days it would require to sell the entire position in an equity instrument, based on historical trading volumes and market liquidity of the equity instrument. Calculations are based on the assumption of trading 10% of average daily volume of a security in order not to impact the market price. The following table below lists the liquidity of the portfolio of the China A Fund as at 30 June 2019 and 30 June 2018:

Days Trade% of total portfolio of investments

30 June 2019 30 June 20181 Day 99.63% 100.002 Days 99.63% 100.005 Days 99.63% 100.00

The cash and cash equivalents of the China A Fund as at 30 June 2019 constituted 0.7% of the fund (30 June 2018: 0.32%).

The maturity profile of the China A Fund’s financial liabilities as at the balance sheet date, based on the contracted undiscounted payments, was as follows:

As at 30 June 2019 On demandLess than

1 year 1 to 5 years Over 5 years TotalUSD USD USD USD USD

Accounts payable and accrued expenses – 147,741 – – 147,741

Payable on redemptions – 66,028 – – 66,028

Redeemable Participating Shares 42,233,925 – – – 42,233,925








71


(c) Liquidity risk (continued)

Bond Fund

Due to legal restrictions, the Bond Fund may only invest in bonds listed on an exchange in Mainland China. There may not be a liquid or active market for the trading of bonds in the exchanges in Mainland China. The Investment Manager is aware of the liquidity risk associated with the investments of the Bond Fund.

The maturity profile of the Bond Fund’s financial liabilities as at the balance sheet date, based on the contracted undiscounted payments, was as follows:










Due to broker – 1,184,059 – – 1,184,059



The Asia Pacific Income and Growth Fund monitors the liquidity of its investments in equity securities through the number of Days Trade for individual equity instruments. Days Trade represents the number of days it would require to sell the entire position in an equity instrument, based on historical trading volumes and market liquidity of the equity instrument. Calculations are based on the assumption of trading 10% of average daily volume of a security in order not to impact the market price. The following table below lists the liquidity of the portfolio of the Asia Pacific Income and Growth Fund as at 30 June 2019 and 30 June 2018.

The cash and cash equivalents of the Asia Pacific Income and Growth Fund as at 30 June 2019 constituted 3.17% of the fund (30 June 2018: 2.82%).

Days Trade% of portfolio of investments % of portfolio of investments


The maturity profile of the Asia Pacific Income and Growth Fund’s financial liabilities as at the balance sheet date, based on the contracted undiscounted payments, was as follows:



72



Asia Pacific Income and Growth Fund (continued)

As at 30 June 2019 On demand Less than 1 year 1 to 5 years Over 5 years TotalUSD USD USD USD USD


Payable on redemptions – 367 – – 367



Financial liabilities at fair value through profit or loss – 220 – – 220





The U.S. Bank Equity Fund monitors the liquidity of its investments in equity securities through the number of Days Trade for individual equity instruments. Days Trade represents the number of days it would require to sell the entire position in an equity instrument, based on historical trading volumes and market liquidity of the equity instrument. Calculations are based on the assumption of trading 10% of average daily volume of a security in order not to impact the market price. The following table below lists the liquidity of the portfolio of the U.S. Bank Equity Fund as at 30 June 2019 and 30 June 2018.

The cash and cash equivalents of the U.S. Bank Equity Fund as at 30 June 2019 constituted 0.29% of the fund (30 June 2018: 0.82%).



The maturity profile of the U.S Bank Equity Fund’s financial liabilities as at the balance sheet date, based on the contracted undiscounted payments, was as follows:








73







Due to broker – 14,759 – – 14,759



The Greater Bay Area Growth and Income Fund monitors the liquidity of its investments in equity securities through the number of Days Trade for individual equity instruments. Days Trade represents the number of days it would require to sell the entire position in an equity instrument, based on historical trading volumes and market liquidity of the equity instrument. Calculations are based on the assumption of trading 10% of average daily volume of a security in order not to impact the market price. The following table below lists the liquidity of the portfolio of the Greater Bay Area Growth and Income Fund as at 30 June 2019 and 30 June 2018.

The cash and cash equivalents of the Greater Bay Area Growth and Income Fund as at 30 June 2019 constituted 1.23% of the fund (30 June 2018: 4.99%)



The Greater Bay Area Growth and Income Fund may invest in RMB denominated instruments and in Mainland China A-Share securities which may not be listed on an exchange or for which trading may not be conducted on a regular basis. There is also no guarantee that market making arrangements will be in place to make a market and quote a price available for this type of instruments. In the absence of an active secondary market, the Greater Bay Area Growth and Income Fund may need to hold some instruments until their maturity date. The investment Manager is aware of the liquidity risk associated with the investments of the Greater Bay Area Growth and Income Fund.

The maturity profile of Greater Bay Area Growth and Income Fund’s financial liabilities as at the balance sheet date, based on the contracted undiscounted payments, was as follows:





Due to broker – 76,694 – – 76,694




74



Greater Bay Area Growth and Income Fund (continued)





Due to broker – 131,243 – – 131,243


(d) Currency risk

Currency risk is the risk that the value of a financial instrument will fluctuate due to changes in foreign exchange rates.

The China A Fund, the Bond Fund and the Greater Bay Area Growth and Income Fund use a USD QFII Quota to invest primarily in the equity and debt instruments issued and listed in Mainland China. The functional currency of these Segregated Portfolios is the USD, while the investments of each of these both Segregated Portfolios are primarily denominated in other currencies, primarily RMB and HKD. The RMB is not, as yet, a freely convertible currency and is subject to exchange controls and restrictions. Consequently, the Company is exposed to the risk that the exchange rate of USD relative to other foreign currencies may change in a manner that has an adverse effect on the fair value or future cash flows of financial assets and liabilities denominated in currencies other than the USD.

The functional currency of the Asia Pacific Income and Growth Fund is the USD, while the investments of this Segregated Portfolio are primarily denominated in other currencies than USD. Consequently, the Company is exposed to the risk that the exchange rate of USD relative to other foreign currencies may change in a manner that has an adverse effect on the fair value or future cash flows of financial assets and liabilities denominated in currencies other than the USD.

The functional currency of U.S. Bank Equity Fund is USD and it invests primarily in USD denominated equity securities. Any devaluation of the USD could affect the value of the U.S. Bank Equity Fund’s investments. Investors whose investment in the U.S. Bank Equity Fund is via a class that is not denominated in USD may be affected by changes in the exchange rates of the USD.

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e and

Gr

owth

Fund

U.S.

Bank

Equit

y Fun

dGr

eater

Bay

Area

Gro

wth a

nd

Incom

e Fun

dCu

rrenc

y30

June

2019

30 Ju

ne 20

1830

June

2019

30 Ju

ne 20

1830

June

2019

30 Ju

ne 20

1830

June

2019

30 Ju

ne 20

1830

June

2019

30 Ju

ne 20

18US

DUS

DUS

DUS

DUS

DUS

DUS

DUS

DUS

DUS

DAU

D –

– –

– 10

7,250

111,5

59

– –

(114

) –

CAD

– –

– –

8 11

–

– –

– HK

D –

– 1

– 17

3,959

175,5

15

6 –

460,8

39

227,4

89

IDR

– –

– –

29,74

8 21

,409

– –

– –

INR

– –

– –

8,587

8,18

1 –

– –

– KR

W –

– –

– 24

,283

27,41

9 –

– –

– MY

R –

– –

– 9,0

57 9,

725

– –

– –

NZD

– –

– –

18,44

4 13

,343

– –

– –

RMB

2,12

1,196

2,

613,0

95

2,529

,109

1,554

,266

7,096

9,53

1 –

– 81

,371

58,52

1 SG

D –

– –

– 73

,151

56,60

8 –

– –

– TH

B –

– –

– 17

,965

16,62

2 –

– –

– TW

D –

– –

– 55

,971

71,64

0 –

– –

–

A 5%

wea

keni

ng o

f the

US

D a

gain

st th

e ab

ove

curr

enci

es w

ould

hav

e re

sulte

d in

an

equa

l but

opp

osite

effe

ct o

n th

e fin

anci

al s

tate

men

t am

ount

s to

5%

of

the

amou

nts

show

n ab

ove,

on

the

basi

s th

at a

ll ot

her v

aria

bles

rem

ain

cons

tant

.



76

14. Derivatives contracts

Forwards

Forward contracts are contractual agreements to buy or sell a specified financial instrument at a specific price and date in the future. Forwards are customized contracts transacted in the OTC market. The Company has credit exposure to the counterparties of forward contracts.

The following tables set out the fair value and the notional amount of forward contracts held by the Company as at 30 June 2019 and 30 June 2018:

As at 30 June 2019

Purchased Amount Currency Sold Amount Currency Maturity Date Counterparty

Financial assets/(liabilities) at fair value through profit

or loss NotionalUSD USD

Asia Pacific Income and Growth Fund 10 AUD 7 USD 31-Jul-19 Citibank London – 7

1,757,024 AUD 1,228,281 USD 31-Jul-19 Citibank London 5,187 1,232,025

2,210,953 CAD 1,681,594 USD 31-Jul-19 Citibank London 7,912 1,688,202

13,099 2,920,234

U.S. Bank Equity Fund 3,097,077 CNH 449,897 USD 31-Jul-19 Citibank London 817 450,752

45,949 CNH 6,687 USD 31-Jul-19 Citibank London – 6,687

29,270 CNH 4,263 USD 31-Jul-19 Citibank London (3) 4,260

8,312 USD 57,272 CNH 31-Jul-19 Citibank London (22) 8,335

792 470,034

Greater Bay Area Growth and Income Fund 32,277 AUD 22,654 USD 31-Jul-19 Citibank London 5 22,633

3,909,745 AUD 2,733,182 USD 31-Jul-19 Citibank London 11,542 2,741,513

598,824 HKD 76,722 USD 03-Jul-19 Citibank London (24) 76,694

14,016 USD 20,063 AUD 31-Jul-19 Citibank London (68) 14,068

73,750 USD 575,888 HKD 03-Jul-19 Citibank London (10) 73,757

11,445 2,928,665



77

14. Derivatives contracts (continued)

Forwards (continued)

As at 30 June 2018

Purchased Amount Currency Sold Amount Currency Maturity Date Counterparty

Financial assets/(liabilities) at fair value through profit

or loss NotionalUSD USD

Asia-Pacific Equity Income Fund 1,957,763 AUD 1,442,856 USD 31-Jul-18 Citibank London 3,410 1,446,102

2,084,508 CAD 1,566,052 USD 31-Jul-18 Citibank London 15,439 1,580,609

13,913 USD 18,817 AUD 31-Jul-18 Citibank London 12 13,899

14,275 USD 19,354 AUD 31-Jul-18 Citibank London (22) 14,296

15,165 USD 20,040 CAD 31-Jul-18 Citibank London (39) 15,196

15,986 USD 21,281 CAD 31-Jul-18 Citibank London (159) 16,137

18,641 3,086,239

Greater Bay Area Growth and Income Fund 367,815 AUD 271,077 USD 31-Jul-18 Citibank London 640 271,687

200,235 HKD 25,520 USD 03-Jul-18 Citibank London 1 25,520

401,233 HKD 51,140 USD 03-Jul-18 Citibank London (1) 51,138

219,167 HKD 27,933 USD 03-Jul-18 Citibank London 1 27,933

11,371 USD 15,379 AUD 31-Jul-18 Citibank London 10 11,360

651 387,638

Man

ulife

Adv

ance

d Fu

nd S

PCN

otes

to F

inan

cial

Sta

tem

ents

For t

he y

ear e

nded

30

June

201

9

78

15.

Rec

onci

liatio

n of

Net

Ass

ets

and

Net

Ass

et V

alue

per

Sha

re

The

effe

ct o

f adj

ustm

ent t

o ot

her

rece

ivab

les

and

prep

aym

ents

afte

r ex

pens

ing

prev

ious

ly c

apita

lized

form

atio

n ex

pens

es a

nd o

ther

adj

ustm

ents

to th

e pu

blis

hed

NAV

is s

et o

ut in

the

follo

win

g ta

bles

:

Net a

sset

value

in ac

cord

ance

with

IFRS

China

A Fu

ndBo

nd Fu

ndAs

ia Pa

cific I

ncom

e and

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owth

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Bank

Equit

y Fun

dGr

eater

Bay

Area

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wth a

nd

Incom

e Fun

dCo

mbine

d30

June

2019

30 Ju

ne 20

1830

June

2019

30 Ju

ne 20

1830

June

2019

30 Ju

ne 20

1830

June

2019

30 Ju

ne 20

1830

June

2019

30 Ju

ne 20

1830

June

2019

30 Ju

ne 20

18US

DUS

DUS

DUS

DUS

DUS

DUS

DUS

DUS

DUS

DUS

DUS

DPu

blish

ed N

AV 42

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25

51,32

7,064

50

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52

31,26

2,939

16

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79

16,38

5,068

50

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01

66,78

5,634

21

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04

11,28

2,389

18

1,130

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177,0

43,09

4 Ad

justm

ent fo

r form

ation

expe

nses

– –

– –

– (6

,438)

9,23

4 (1

8,689

) (5

3,120

) 72

9 (4

3,886

) (2

4,398

)Ad

justm

ent fo

r sub

scrip

tions

/rede

mptio

n wi

th tra

de da

te at

year-

end

– (1

4,571

) –

– 6

(30,0

57)

(159

,476)

198,6

41

– –

(159

,470)

154,0

13

NAV a

s per

finan

cial re

porti

ng 42

,233,9

25

51,31

2,493

50

,678,0

52

31,26

2,939

16

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85

16,34

8,573

50

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59

66,96

5,586

21

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84

11,28

3,118

18

0,927

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177,1

72,70

9 Th

e im

pact

on

the

NAV

per

sha

re a

t 30

June

201

9 an

d 30

Jun

e 20

18 is

as

follo

ws:

Net a

sset

value

per S

hare

in ac

corda

nce w

ith IF

RSCh

ina A

Fund

Bond

Fund

Asia

Pacifi

c Inc

ome a

nd

Grow

th Fu

ndU.

S. Ba

nk Eq

uity F

und

Grea

ter B

ay A

rea G

rowt

h and

Inc

ome F

und

30 Ju

ne 20

1930

June

2018

30 Ju

ne 20

1930

June

2018

30 Ju

ne 20

1930

June

2018

30 Ju

ne 20

1930

June

2018

30 Ju

ne 20

1930

June

2018

Clas

s AA

(USD

)Pu

blish

ed N

AV pe

r Sha

re9.6

811

10.01

7112

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12.14

08 –

– –

– 9.5

931

9.556

0Ad

justm

ents

– –

– –

– –

– –

(0.02

40)

0.000

6 NA

V per

share

as pe

r fina

ncial

repo

rting

9.681

110

.0171

12.16

6712

.1408

– –

– –

9.569

19.5

566

Clas

s AA

(USD

) Inc

Publi

shed

NAV

per S

hare

– –

– –

9.343

39.2

846

10.36

1911

.7774

9.324

89.5

537

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tmen

ts –

– –

– –

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er sh

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porti

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– –

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010

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3

Man

ulife

Adv

ance

d Fu

nd S

PCN

otes

to F

inan

cial

Sta

tem

ents

For t

he y

ear e

nded

30

June

201

9

79

Net a

sset

value

per S

hare

in ac

corda

nce w

ith IF

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ina A

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c Inc

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nd

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th Fu

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nk Eq

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und

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ter B

ay A

rea G

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Inc

ome F

und

30 Ju

ne 20

1930

June

2018

30 Ju

ne 20

1930

June

2018

30 Ju

ne 20

1930

June

2018

30 Ju

ne 20

1930

June

2018

30 Ju

ne 20

1930

June

2018

Clas

s I (U

SD)

Publi

shed

NAV

per S

hare

11.16

7311

.5263

12.44

0612

.3832

– –

– –

– –

Adjus

tmen

ts –

– –

– –

– –

– –

– NA

V per

share

as pe

r fina

ncial

repo

rting

11.16

7311

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0612

.3832

– –

– –

– –

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s I3 (

USD)

Publi

shed

NAV

per S

hare

– –

10.41

63 –

– –

– –

– –

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tmen

ts –

– –

– –

– –

– –

– NA

V per

share

as pe

r fina

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repo

rting

– –

10.41

63 –

– –

– –

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Clas

s AA

(AUD

) Inc H

edge

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blish

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AV pe

r Sha

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– –

– 9.

1958

9.

2325

–

– 9.

2088

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5379

Ad

justm

ents

– –

– –

– (0

.0036

) –

– (0

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) 0.

0006

NA

V per

share

as pe

r fina

ncial

repo

rting

– –

– –

9.19

58

9.22

89

– –

9.18

58

9.53

85

Clas

s AA

(HKD

) Inc

Publi

shed

NAV

per S

hare

– –

– –

94.10

14

93.93

72

103.8

196

118.5

790

92.81

06 95

.5551

Ad

justm

ents

– –

– –

– (0

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) 0.

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(0.

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) (0

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) 0.

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NA

V per

share

as pe

r fina

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repo

rting

– –

– –

94.10

14

93.90

03

103.8

387

118.5

458

92.57

88

95.56

12

Clas

s AA

(CAD

) Inc H

edge

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blish

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AV pe

r Sha

re –

– –

– 8.

9919

9.

0542

–

– –

– Ad

justm

ents

– –

– –

– (0

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) –

– –

– NA

V per

share

as pe

r fina

ncial

repo

rting

– –

– –

8.99

19

9.05

07

– –

– –

Clas

s I2 (

RMB)

Hed

ged

Publi

shed

NAV

per S

hare

– –

– –

– –

106.2

694

– –

– Ad

justm

ents

– –

– –

– –

0.01

96

– –

– NA

V per

share

as pe

r fina

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repo

rting

– –

– –

– –

106.2

89 –

– –

15.

Rec

onci

liatio

n of

Net

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ets

and

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et V

alue

per

Sha

re (c

ontin

ued)



80

16. Related party disclosures

The following is a summary of significant related party transactions entered into during the years between the Company and the Board of Directors, the General Adviser and Distributor, Investment Managers or any entities in which those parties or their Connected Persons have a material interest. Connected persons of the Investment Manager are those as defined in the Code on Unit Trust and Mutual Funds established by SFC. All such transactions were entered into in the ordinary course of business and under normal commercial terms.

For the years ended 30 June 2019 and 30 June 2018, the major related party to the Company is MIMHK in its capacities as the General Adviser and Distributor cum the Investment Manager.

The General Adviser and Distributor, any distributor, Investment Manager and investment adviser may be members of the Manulife Group.

(a) Subscription and redemption of units of the Segregated Portfolios

As at 30 June 2019 and 30 June 2018, no Director held share of the Company.

Investment transactions with the Investment Manager and its Connected Persons are set out below:

Number of shares

Opening Balance Subscription Redemption Balance as at

year end

2019China A FundClass AA (USD) 1,665,736 81,529 (270,611) 1,476,654

Bond FundClass AA (USD) 388,662 3,582 (76,305) 315,939

Asia Pacific Income and Growth FundClass AA (USD) Inc 139,224 122,179 (112,636) 148,767

U.S. Bank Equity FundClass AA (USD) Inc 394,674 907,802 (846,632) 455,844

2018China A FundClass AA (USD) 2,090,632 180,478 (605,374) 1,665,736

Bond FundClass AA (USD) 610,530 11,493 (233,361) 388,662

Asia Pacific Income and Growth FundClass AA (USD) Inc 79,466 193,266 (133,508) 139,224

U.S. Bank Equity FundClass AA (USD) Inc – 555,730 (161,056) 394,674

Apart from the above, there were no other subscriptions and redemptions of Shares of the Segregated Portfolios by the Directors, the General Adviser and Distributor, the Investment Manager, or other Connected Persons during the years ended 30 June 2019 and 2018.



81

16. Related party disclosures (continued)

(b) Directors’ remuneration

The Directors are entitled to such remuneration (if any) as may be voted at the general meeting. Each Director may be paid reasonable travel, hotel and other out–of–pocket expenses reasonably and properly incurred in the performance of his/her duties. The Directors may by resolution approve additional remuneration to any Director for any services other than such Director’s ordinary routine work as a Director. Any fees that may be paid to a Director who is also counsel to the Company, or otherwise serves it in a professional capacity, shall be in addition to such Director’s remuneration as a Director.

Notwithstanding the above, there are no existing or proposed service contracts between any of the Directors and the Company. No Director received any remuneration from the Company during the year ended 30 June 2019 (2018: Nil).

Man

ulife

Adv

ance

d Fu

nd S

PCN

otes

to F

inan

cial

Sta

tem

ents

For t

he y

ear e

nded

30

June

201

9

82

(c)

Fees

cha

rged

by

the

Gen

eral

Adv

iser

and

Dis

trib

utor

cum

the

Inve

stm

ent M

anag

er

The

Gen

eral

Adv

iser

and

Dis

tribu

tor r

ecei

ved

man

agem

ent f

ees

(as

set o

ut in

Not

e 12

), ou

t of w

hich

the

amou

nts

due

to it

self

as th

e In

vest

men

t Man

ager

as

at b

alan

ce s

heet

dat

e ar

e se

t out

bel

ow:

China

A Fu

ndBo

nd Fu

ndAs

ia-Pa

cific I

ncom

e and

Gr

owth

Fund

U.S.

Bank

Equit

y Fun

dGr

eater

Bay

Area

Gro

wth a

nd

Incom

e Fun

d

Total

ma

nage

ment

fee

charg

ed du

ring

the ye

ar

Amou

nt du

e to

itself

as th

e Inv

estm

ent

Mana

ger a

s at

year

end

Total

ma

nage

ment

fee

charg

ed du

ring

the ye

ar

Amou

nt du

e to

itself

as th

e Inv

estm

ent

Mana

ger a

s at

year

end

Total

ma

nage

ment

fee

charg

ed du

ring

the ye

ar

Amou

nt du

e to

itself

as th

e Inv

estm

ent

Mana

ger a

s at

year

end

Total

ma

nage

ment

fee

charg

ed du

ring

the ye

ar

Amou

nt du

e to

itself

as th

e Inv

estm

ent

Mana

ger a

s at

year

end

Total

ma

nage

ment

fee

charg

ed du

ring

the ye

ar/pe

riod1

Amou

nt du

e to

itself

as th

e Inv

estm

ent

Mana

ger a

s at

year

end

USD

USD

USD

USD

USD

USD

USD

USD

USD

USD

For th

e yea

r end

ed 30

June

2019

751,5

66

54,54

1 36

5,090

27

,567

243,0

95

18,72

6 1,

031,2

62

57,64

9 27

3,412

24

,172

For th

e yea

r/peri

od en

ded 3

0 Jun

e 201

8 1,

120,9

59

76,61

8 40

2,009

30

,894

231,7

56

20,12

5 48

9,814

72

,279

7,04

2 7,

042

16.

Rel

ated

par

ty d

iscl

osur

es (c

ontin

ued)

1 For

the

perio

d fro

m 1

2 Ju

ne 2

018

(laun

ch d

ate)

to 3

0 Ju

ne 2

018.



83

17. Soft commission arrangements

MIMHK when acting as the Investment Manager of any Segregated Portfolio, has a fiduciary role in that it has an overriding duty to put the interests of its clients (including the Company, whose ultimate beneficiaries are the Shareholders) above its own corporate interests and personal interests in every transaction conducted.

MIMHK and MAMUS will not engage in any investment practice where its interests may be in conflict with the portfolios under their management. During the year covered by this financial report, no soft commission arrangements were entered into in respect of the Company’s transactions with brokers, except that of Manulife Investment Management (US) LLC, as stated below:

Investment Manager(s)/Sub-Investment Manager(s)/Investment Adviser(s) Name of the sub-funds



USD USD

Manulife Investment Management (US) LLC U.S. Bank Equity Fund 72 329

18. Financial instruments by category

As at 30 June 2019

Assets/Liabilities

at fair value through

profit or loss CashLoans and

receivablesOther financial

liabilities Total

China A Fund (in USD)AssetsFinancial assets at fair value through profit or loss 42,147,082 – – – 42,147,082 Cash – 296,706 – – 296,706 Receivable on subscriptions – – 3,708 – 3,708 Other receivables and prepayments – – 198 – 198 LiabilitiesAccounts payable and accrued expenses – – – (147,741) (147,741)Payable on redemptions – – – (66,028) (66,028)

Total 42,147,082 296,706 3,906 (213,769) 42,233,925

Bond Fund (in USD)AssetsFinancial assets at fair value through profit or loss 50,869,843 – – – 50,869,843 Cash – 262,821 – – 262,821 Other receivables and prepayments – – 795,183 – 795,183 LiabilitiesAccounts payable and accrued expenses – – – (628,815) (628,815)Payable on redemptions – – – (620,980) (620,980)

Total 50,869,843 262,821 795,183 (1,249,795) 50,678,052



84

As at 30 June 2019

Assets/Liabilities




liabilities Total

Asia Pacific Income and Growth Fund (in USD)AssetsFinancial assets at fair value through profit or loss 16,096,813 – – – 16,096,813 Cash – 532,191 – – 532,191 Receivable on subscriptions – – 32,253 – 32,253 Other receivables and prepayments – – 172,568 – 172,568 LiabilitiesAccounts payable and accrued expenses – – – (40,973) (40,973)Payable on redemptions – – – (367) (367)

Total 16,096,813 532,191 204,821 (41,340) 16,792,485

U.S. Bank Equity Fund (in USD)AssetsFinancial assets at fair value through profit or loss 50,231,980 – – – 50,231,980 Cash – 144,526 – – 144,526 Receivable on subscriptions – – 6,989 – 6,989 Other receivables and prepayments – – 67,019 – 67,019 LiabilitiesFinancial liabilities at fair value through profit or loss (25) – – – (25)Accounts payable and accrued expenses – – – (106,635) (106,635)Payable on redemptions – – – (332,995) (332,995)

Total 50,231,955 144,526 74,008 (439,630) 50,010,859

Greater Bay Area Growth and Income Fund (in USD)AssetsFinancial assets at fair value through profit or loss 20,796,834 – – – 20,796,834 Cash – 261,600 – – 261,600 Other receivables and prepayments – – 211,780 – 211,780 Due from broker – – 73,757 – 73,757 LiabilitiesFinancial liabilities at fair value through profit or loss (102) – – – (102)Accounts payable and accrued expenses – – – (55,291) (55,291)Due to broker – – – (76,694) (76,694)

Total 20,796,732 261,600 285,537 (131,985) 21,211,884

18. Financial instruments by category (continued)



85

As at 30 June 2018

Assets/Liabilities




liabilities Total

China A Fund (in USD)AssetsFinancial assets at fair value through profit or loss 52,096,205 – – – 52,096,205 Cash – 166,567 – – 166,567 Receivable on subscriptions – – 91,404 – 91,404 Other receivables and prepayments – – 2,426 – 2,426 LiabilitiesAccounts payable and accrued expenses – – – (208,122) (208,122)Payable on redemptions – – – (835,987) (835,987)

Total 52,096,205 166,567 93,830 (1,044,109) 51,312,493

Bond Fund (in USD)AssetsFinancial assets at fair value through profit or loss 29,897,719 – – – 29,897,719 Cash – 149,845 – – 149,845 Receivable on subscriptions – – 7,698 – 7,698 Other receivables and prepayments – – 360,300 – 360,300 Due from broker – – 2,766,787 – 2,766,787 LiabilitiesAccounts payable and accrued expenses – – – (572,267) (572,267)Payable on redemptions – – – (163,084) (163,084)Due to broker – – – (1,184,059) (1,184,059)

Total 29,897,719 149,845 3,134,785 (1,919,410) 31,262,939

Asia Pacific Income and Growth Fund (in USD)AssetsFinancial assets at fair value through profit or loss 15,798,910 – – – 15,798,910 Cash – 461,647 – – 461,647 Receivable on subscriptions – – 16,359 – 16,359 Other receivables and prepayments – – 184,303 – 184,303 LiabilitiesFinancial liabilities at fair value through profit or loss (220) – – – (220)Accounts payable and accrued expenses – – – (63,791) (63,791)Payable on redemptions – – – (48,635) (48,635)

Total 15,798,690 461,647 200,662 (112,426) 16,348,573




86

As at 30 June 2018

Assets/Liabilities




liabilities Total

U.S. Bank Equity Fund (in USD)AssetsFinancial assets at fair value through profit or loss 63,060,882 – – – 63,060,882 Cash – 548,921 – – 548,921 Receivable on subscriptions – – 3,647,423 – 3,647,423 Other receivables and prepayments – – 849,601 – 849,601 Due from broker – – 1,610 – 1,610 LiabilitiesAccounts payable and accrued expenses – – – (928,501) (928,501)Payable on redemptions – – – (199,591) (199,591)Due to broker – – – (14,759) (14,759)

Total 63,060,882 548,921 4,498,634 (1,142,851) 66,965,586

Greater Bay Area Growth and Income Fund (in USD)AssetsFinancial assets at fair value through profit or loss 10,486,069 – – – 10,486,069 Cash – 563,586 – – 563,586 Receivable on subscriptions – – 328,131 – 328,131 Other receivables and prepayments – – 139,833 – 139,833 LiabilitiesFinancial liabilities at fair value through profit or loss (1) – – – (1)Accounts payable and accrued expenses – – – (103,257) (103,257)Due to broker – – – (131,243) (131,243)

Total 10,486,068 563,586 467,964 (234,500) 11,283,118




87

19. Important events

Two additional share classes were launched during the year: the class I3 (USD) in the Bond Fund and the class I2 (RMB) Hedged in the U.S. Bank Equity Fund, respectively launched in August 2018 and January 2019.

20. Subsequent events

Subsequent to year end, the Company resolved to declare the dividend distributions of the Asia Pacific Income and the Growth Fund and the Greater Bay Area Growth and Income Fund. Please refer to below for details:

CurrencyDistribution per Share

Total Distribution

Distribution Date

Asia Pacific Income and Growth FundClass AA (USD) Inc USD 0.0370 31,099.72 10-Jul-19Class AA (USD) Inc USD 0.0370 31,262.95 8-Aug-19Class AA (USD) Inc USD 0.0370 31,357.46 9-Sep-19Class AA (USD) Inc USD 0.0370 33,499.94 10-Oct-19Class AA (AUD) Inc Hedged AUD 0.0360 6,923.45 10-Jul-19Class AA (AUD) Inc Hedged AUD 0.0360 6,950.73 8-Aug-19Class AA (AUD) Inc Hedged AUD 0.0360 6,856.52 9-Sep-19Class AA (AUD) Inc Hedged AUD 0.0360 6,884.08 10-Oct-19Class AA (HKD) Inc HKD 0.3700 184,186.62 10-Jul-19Class AA (HKD) Inc HKD 0.3700 184,177.07 8-Aug-19Class AA (HKD) Inc HKD 0.3700 184,823.44 9-Sep-19Class AA (HKD) Inc HKD 0.3700 185,461.62 10-Oct-19Class AA (CAD) Inc Hedged CAD 0.0360 8,911.07 10-Jul-19Class AA (CAD) Inc Hedged CAD 0.0360 8,946.95 8-Aug-19Class AA (CAD) Inc Hedged CAD 0.0360 8,984.27 9-Sep-19Class AA (CAD) Inc Hedged CAD 0.0360 9,021.13 10-Oct-19

Greater Bay Area Growth and Income FundClass AA (USD) Inc USD 0.0280 20,598.67 10-Jul-19Class AA (USD) Inc USD 0.0280 16,745.55 8-Aug-19Class AA (USD) Inc USD 0.0280 16,328.62 9-Sep-19Class AA (USD) Inc USD 0.0280 15,321.95 10-Oct-19Class AA (AUD) Inc Hedged AUD 0.0280 11,930.47 10-Jul-19Class AA (AUD) Inc Hedged AUD 0.0280 11,670.71 8-Aug-19Class AA (AUD) Inc Hedged AUD 0.0280 10,798.80 9-Sep-19Class AA (AUD) Inc Hedged AUD 0.0280 7,823.63 10-Oct-19Class AA (HKD) Inc HKD 0.2800 161,525.05 10-Jul-19Class AA (HKD) Inc HKD 0.2800 169,810.53 8-Aug-19Class AA (HKD) Inc HKD 0.2800 162,916.05 9-Sep-19Class AA (HKD) Inc HKD 0.2800 156,535.40 10-Oct-19

21. Approval of the combined financial statements

The financial statements of the Company for the year ended 30 June 2019 were authorized for issue in accordance with a resolution of the Board of Directors on 17 October 2019.


88

China A Segregated Portfolio

Portfolio of Investments As at 30 June 2019

Quantity/ Par Value Description

Cost USD

Market Value USD

% of Net Assets

Listed Equities

China1,930,700 Agricultural Bank of China Limited – A 1,002,135 1,011,968 2.40

155,500 Angel Yeast Company Limited – A 689,758 716,109 1.70 1,025,600 Bank of Communications Company Limited – A 1,018,446 913,858 2.16 1,423,800 BBMG Corp. – A 881,293 779,446 1.85

256,800 BTG Hotels Group Company Limited – A 714,877 672,255 1.59 200,000 China CSSC Holdings Limited – A 440,164 687,213 1.63

1,065,600 China Merchants Energy Shipping Company Limited – A 681,370 676,441 1.60 1,312,282 China Minsheng Banking Corp. Limited – A 1,558,634 1,213,250 2.87 1,139,770 China Petroleum Engineering Corp. – A 708,400 700,292 1.66

740,400 China Railway Tielong Container Logistics – A 892,533 695,305 1.65 93,600 Chongqing Brewery Company Limited – A 339,329 642,686 1.52

132,452 Fu Jian Anjoy Foods Company Limited – A 859,454 991,223 2.35 380,700 Haitong Securities Company Limited – A 733,268 786,529 1.86 259,653 Hangzhou Chang Chuan Technology Company Limited – A 723,403 712,614 1.69 412,000 Hangzhou Hangyang Company Limited – A 726,049 723,426 1.71 100,000 Han's Laser Technology Industry Group Company Limited – A 336,749 500,559 1.19 242,266 Hongfa Technology Company Limited – A 744,154 857,134 2.03 129,000 Hualan Biological Engineering Inc. – A 524,933 572,660 1.36 351,600 Huatai Securities Company Limited – A 987,530 1,142,595 2.71 441,200 Industrial Bank Company Limited – A 1,196,216 1,174,894 2.78 877,600 Industrial Securities Company Limited – A 691,900 861,204 2.04 201,500 Inner Mongolia Yili Industrial Group Company Limited – A 881,218 980,169 2.32 234,080 Jiangsu Hengli Hydraulic Company Limited – A 388,283 1,069,465 2.53

39,612 Jiangsu Yanghe Brewery JSC Limited – A 746,681 701,079 1.66 192,539 Jonjee High-Tech Industrial and Commercial Group – A 945,485 1,200,649 2.84

84,522 Lao Feng Xiang Company Limited – A 565,077 550,081 1.30 197,400 Nari Technology Development Company Limited – A 628,081 535,726 1.27 167,900 New China Life Insurance Company Limited – A 1,439,693 1,345,240 3.18 168,400 Ninestar Corp. – A 611,226 554,115 1.31 190,000 Perfect World Company Limited – A 688,367 713,988 1.69

93,922 Ping an Insurance Group Company of China Limited – A 311,205 1,211,712 2.87 169,880 Shanghai Fosun Pharmaceutical Group Company Limited – A 740,719 625,766 1.48 384,800 Shanghai Maling Aquarius Company Limited – A 659,385 515,433 1.22 410,000 Shanghai Phichem Material Company Limited – A 803,854 740,807 1.75 411,800 Shenzhen YSSTech Information Technology Company Limited – A 733,240 678,707 1.61 173,100 Sichuan Kelun Pharmaceutical Company Limited – A 736,168 749,275 1.78 502,900 Sinolink Securities Company Limited – A 683,445 711,701 1.69 121,207 Skshu Paint Company Limited – A 747,745 768,361 1.82 290,600 Sunwoda Electronics Company Limited – A 513,407 487,413 1.15


89

Quantity/ Par Value Description

Cost USD

Market Value USD

% of Net Assets

Listed Equities (continued)China (continued)

201,800 Suzhou Dongshan Precision Manufacturing Company Limited – A 586,700 428,085 1.01 130,000 Tsingtao Brewery Company Limited – A 927,289 945,049 2.24 414,748 Unilumin Group Company Limited – A 587,684 584,533 1.38 400,000 Universal Scientific Industrial Company Limited – A 761,621 701,773 1.66 193,500 Wens Foodstuffs Group Company Limited – A 1,007,340 1,010,278 2.39 115,700 Will Semiconductor Company Limited – A 684,814 924,984 2.19 45,303 Wuxi Apptec Company Limited – A 624,341 571,736 1.35

282,063 Yangzhou Yangjie Electronic Technology Company Limited – A 653,400 615,598 1.46 246,565 Yantai Eddie Precision Machinery Company Limited – A 769,956 807,725 1.91 210,000 Yantai Jereh Oilfiel Services Group Company Limited – A 718,495 706,286 1.67 617,400 Yonghui Superstores Company Limited – A 861,040 917,787 2.17 142,600 Yunnan Hongxiang Yixintang Pharmaceutical Company Limited – A 541,642 591,509 1.40 318,900 Zhejiang Dahua Technology Company Limited – A 577,112 674,172 1.60 130,900 Zhongji Innolight Company Limited – A 659,933 647,799 1.53

1,498,000 Zhuzhou Kibing Group Company Limited – A 1,114,280 848,420 2.01 40,349,521 42,147,082 99.79

Listed Equities Total 40,349,521 42,147,082 99.79Portfolio of Investments 40,349,521 42,147,082 99.79Other Net Assets 86,843 0.21Net Assets 42,233,925 100.00

China A Segregated Portfolio (continued)

Portfolio of Investments (continued) As at 30 June 2019


90

Quantity / Par Value Description

Cost USD

Market Value USD

% of Net Assets

Listed Supranationals, Governments and Local Public Authorities, Debt Instruments

China10,000,000* Agricultural Development Bank of China 4.650% 11/May/28 1,543,178 1,545,401 3.05 10,000,000* China (Govt of) 2.750% 17/Mar/2023 1,501,833 1,443,388 2.85 10,000,000* China (Govt of) 2.950% 16/Jun/2023 1,516,349 1,453,733 2.87 20,000,000* China (Govt of) 3.220% 6/Dec/2025 2,929,554 2,913,730 5.75 20,000,000* China (Govt of) 3.250% 22/Nov/2028 3,006,091 2,917,881 5.76

9,270,000* China (Govt of) 3.400% 17/Apr/2023 1,394,205 1,369,790 2.70 15,000,000* China (Govt of) 3.540% 16/Apr/2022 2,444,691 2,220,139 4.38 30,000,000* China (Govt of) 3.770% 8/Mar/2025 4,790,991 4,509,654 8.89 20,000,000* China (Govt of) 4.020% 3/Jul/2021 3,142,752 2,978,347 5.88 10,000,000* Export-Import Bank of China 4.890% 26/Mar/2028 1,569,549 1,570,989 3.10

23,839,193 22,923,052 45.23 Listed Supranationals, Governments and Local Public Authorities, Debt Instruments Total 23,839,193 22,923,052 45.23

Listed BondsChina

20,000,000* Agricultural Bank of China Limited 4.280% 19/Mar/2029 2,979,600 2,881,633 5.69 10,000,000* Baoshan Iron & Steel 3.640% 26/Mar/2022 1,487,760 1,452,144 2.87 10,000,000* Central Huijin Investment 4.230% 23/Aug/2023 1,465,890 1,471,741 2.90 10,000,000* CGN 3.550% 20/Mar/2022 1,492,720 1,458,646 2.88 10,000,000* China Great Wall Asset Management 3.650% 01/Apr/2022 1,488,050 1,461,772 2.88 10,000,000* China Life Insurance 4.280% 22/Mar/2029 1,491,200 1,462,144 2.89 10,000,000* China National Chemical 3.890% 25/Mar/2022 1,486,100 1,461,451 2.88 10,000,000* China Petroleum & Chemical Corp. 4.900% 1/Jun/2022 1,579,164 1,510,324 2.98 20,000,000* China Railway Corp. 4.530% 23/Aug/2028 2,928,848 3,044,057 6.01 20,000,000* China Southern Power 3.750% 14/Jan/2024 2,959,461 2,901,889 5.72 10,000,000* China State Grid Corp. 5.140% 08/Dec/2021 1,651,638 1,497,003 2.95 10,000,000* Citic Group Corp. 3.850% 18/Apr/2022 1,489,710 1,465,256 2.90 20,000,000* HSBC Bank (China) Company Limited 4.230% 14/Sep/2021 2,913,500 2,944,389 5.81 10,000,000* ICBC 4.260% 25/Mar/2029 1,491,200 1,465,278 2.89 10,000,000* State Power Investment Group 3.940% 18/Apr/2022 1,491,420 1,469,064 2.90

28,396,261 27,946,791 55.15

Renminbi Bond Segregated Portfolio


* Par value is in RMB.


91

Renminbi Bond Segregated Portfolio (continued)



Cost USD

Market Value USD

% of Net Assets

Listed Bonds Total 28,396,261 27,946,791 55.15 Portfolio of Investments 52,235,454 50,869,843 100.38Other Net Liabilities (191,791) (0.38)Net Assets 50,678,052 100.00


92

Asia Pacific Income and Growth Segregated Portfolio



Cost USD

Market Value USD

% of Net Assets


Indonesia3,700,000,000* Indonesia Treasury Bond 8.250% 15/Jul/2021 293,010 269,353 1.61

293,010 269,353 1.61 Republic of Korea (South)

2,500,000,000* Export-Import Bank of Korea 7.250% 07/Dec/2024 195,771 176,791 1.05 200,000 Korea Resources Corp. 4.000% 18/Apr/2023 198,916 209,449 1.25

394,687 386,240 2.30 Supranational

12,000,000** International Finance Corp. 6.300% 25/Nov/2024 189,768 171,731 1.02 189,768 171,731 1.02

Listed Supranationals, Governments and Local Public Authorities, Debt Instruments Total

877,465 827,324 4.93

Listed BondsAustralia

200,000 Australia & New Zealand Banking Group 4.400% 19/May/2026 199,904 210,848 1.25 200,000 Shandong Energy Australia Pty Limited 4.550% 26/Jul/2020 203,230 199,543 1.19

403,134 410,391 2.44 Cayman Islands

200,000 Fufeng Group Limited 5.875% 28/Aug/2021 199,772 207,717 1.24 157,000 Health and Happiness International Holdings Limited 7.250%

21/Jun/2021157,000 160,116 0.95

200,000 Times China Holdings Limited 6.250% 17/Jan/2021 200,000 201,621 1.21 200,000 Yuzhou Properties Company FRN 29/Mar/2166 199,700 183,859 1.09

756,472 753,313 4.49China

200,000 China Minmetals FRN 13/May/2166 200,000 198,878 1.19 200,000 198,878 1.19

Hong Kong200,000 Bank of East Asia Limited (The) FRN 3/Nov/2026 201,024 202,422 1.21 300,000 CNAC (HK) Finbridge Company Limited 4.125% 19/Jul/2027 300,039 308,993 1.83 200,000 Weichai International Hong Kong Energy Group FRN 14/

Mar/2166186,160 197,125 1.17

200,000 Yancoal International Resources Development Company Limited FRN 29/Dec/2049

204,700 201,662 1.20

891,923 910,202 5.41

* Par value is in IDR.** Par value is in INR.


93


Cost USD

Market Value USD

% of Net Assets

Listed Bonds (continued) Indonesia

200,000 ABM Investama Tbk Pt 7.125% 1/Aug/2022 209,750 190,333 1.13 200,000 Pertamina Pt 4.875% 3/May/2022 213,750 210,940 1.26

423,500 401,273 2.39 Malaysia

300,000 IOI Investment Bhd 4.375% 27/Jun/2022 298,431 309,322 1.84 300,000 SSG Resources Limited 4.250% 4/Oct/2022 299,454 310,696 1.86

597,885 620,018 3.70 Mauritius

200,000 UPL Corp. Limited 4.500% 8/Mar/2028 190,052 204,105 1.22 190,052 204,105 1.22

Republic of Korea (South)200,000 Busan Bank 3.625% 25/Jul/2026 199,170 197,100 1.17

199,170 197,100 1.17 Singapore

200,000 ONGC Videsh Vankorneft Pte Limited 3.750% 27/Jul/2026 199,106 201,952 1.20 200,000 TBLA International Pte Limited 7.000% 24/Jan/2023 201,490 201,004 1.20

400,596 402,956 2.40 Virgin Islands (British)

250,000 Charming Light Investments 3.763% 21/Dec/2020 250,500 250,629 1.49 200,000 Huarong Finance II 3.625% 22/Nov/2021 202,438 202,060 1.20 200,000 Studio City Finance 7.250% 22/Feb/2024 200,000 208,800 1.24 200,000 Yingde Gases Investment 6.250% 19/Jan/2023 201,480 203,107 1.21

854,418 864,596 5.14

Listed Bonds Total 4,917,150 4,962,832 29.55

Listed EquitiesAustralia

10,378 Amcor Limited 100,762 117,816 0.70 29,610 AMP Limited 133,901 44,017 0.26

5,699 BHP Billiton Limited 142,012 164,481 0.98 12,743 IPH Limited 56,031 66,658 0.40

1,505 Macquarie Group Limited 90,966 132,324 0.78 12,061 National Australia Bank Limited 330,729 225,976 1.35 22,896 QBE Insurance Group Limited 202,588 189,927 1.13

3,359 Rio Tinto Limited 178,109 244,389 1.45 31,950 Sydney Airport Holdings Limited 173,620 180,123 1.07 26,864 Transurban Group Limited 234,198 277,658 1.66 36,985 Viva Energy REIT 64,452 67,428 0.40

Asia Pacific Income and Growth Segregated Portfolio (continued)



94


Cost USD

Market Value USD

% of Net Assets

Listed Equities (continued)Australia (continued)

10,433 Westpac Banking Corp. 291,489 207,471 1.24 6,774 Woodside Petroleum Limited 152,913 172,707 1.03

2,151,770 2,090,975 12.45Bermuda

246,200 Valuetronics Holdings Limited 145,616 124,624 0.74 10,300 Vtech Holdings Limited 144,259 92,210 0.55

289,875 216,834 1.29 Cayman Islands

1,989 Alibaba Group Holding Limited 303,296 336,499 2.00 116,000 HKBN Limited 131,932 209,183 1.24 136,000 HKT Limited 171,731 215,986 1.29 101,500 KWG Property Holdings Limited 76,569 103,087 0.61

21,200 Sands China Limited 107,790 101,412 0.60 7,700 Tencent Holdings Limited 167,249 347,726 2.07

958,567 1,313,893 7.81China

216,000 Anhui Expressway Company Limited – H 176,166 133,065 0.79 403,000 China Construction Bank Corp. 321,941 347,363 2.06

70,000 China Petroleum & Chemical Corp. 64,873 47,605 0.28 423,000 Industrial & Commercial Bank of China 286,153 308,802 1.84

8,500 Ping An Insurance 74,281 102,114 0.61 34,500 SAIC Motor Corporation Limited – A 166,817 128,040 0.76

186,000 Shenzhen Expressway Company Limited 185,229 223,688 1.33 1,275,460 1,290,677 7.67

Hong Kong33,500 BOC Hong Kong Holdings Limited 108,424 131,933 0.79 17,000 China Mobile Hong Kong Limited 188,153 154,913 0.92

115,000 Cnooc Limited 165,240 196,774 1.17 88,000 Guangdong Investment Limited 102,256 174,243 1.04

8,500 Link REIT 69,015 104,509 0.62 330,000 Yuexiu Transport Infrastructure Limited 238,885 269,649 1.61

871,973 1,032,021 6.15India

7,288 Infosys Technologies Limited – ADR 65,349 77,581 0.46 65,349 77,581 0.46

Indonesia325,300 Telekomunikasi Indonesia Tbk Pt 78,753 95,322 0.57

26,800 United Tractors Tbk Pt 51,001 53,493 0.32 129,754 148,815 0.89




95


Cost USD

Market Value USD

% of Net Assets

Listed Equities (continued)Malaysia

84,300 Malayan Banking Bhd 182,579 181,145 1.08 182,579 181,145 1.08

New Zealand29,644 Contact Energy Limited Npv 119,062 159,176 0.95 88,596 Genesis Energy Limited Npv 158,326 206,346 1.23

277,388 365,522 2.18 Republic of Korea (South)

1,635 Coway Company Limited 128,255 109,599 0.65 1,760 KB Financial Group Inc. 68,283 69,888 0.42 9,150 Samsung Electronics Company Limited Pfd 275,162 303,110 1.81

471,700 482,597 2.88Singapore

129,400 AIMS AMP Capital Industrial REIT 142,650 138,651 0.83 49,600 Ascendas REIT 95,526 114,356 0.68 59,300 Frasers Commercial Trust REIT 59,768 73,180 0.44

181,830 Frasers Logistics & Industrial Trust 139,241 162,582 0.97 255,017 Keppel DC REIT 217,255 314,709 1.88 102,500 Mapletree Commercial Trust REIT 115,651 158,304 0.94 160,100 Mapletree Greater China Commercial Trust REIT 123,779 172,729 1.03

5,300 United Overseas Bank Limited 104,651 102,338 0.61 8,400 Venture Corp. Limited 109,806 101,117 0.60

1,108,327 1,337,966 7.98Taiwan

98,000 Cathay Financial Holding Company Limited 153,730 135,674 0.81 43,000 Formosa Plastics Corp. 138,195 158,517 0.94

9,000 GlobalWafers Company Limited 115,075 91,131 0.54 20,000 Hon Hai Precision Industry Company Limited 94,059 49,839 0.30

194,000 Inventec Company Limited 155,845 154,277 0.92 57,000 Micro-Star International Company Limited 175,220 161,495 0.96 46,000 Taiwan Semiconductor Manufacturing Company Limited 206,983 353,963 2.10

1,039,107 1,104,896 6.57Thailand

443,700 Land & Houses pcl nvdr 134,524 160,597 0.96 125,000 PTT pcl nvdr 141,336 198,706 1.19

275,860 359,303 2.15 United Kingdom

19,600 HSBC Holdings plc 189,990 162,666 0.97 189,990 162,666 0.97




96




Cost USD

Market Value USD

% of Net Assets

Listed Equities Total 9,287,699 10,164,891 60.53

Listed FundsUnited States

3,646 iShares MSCI India ETF 107,875 128,667 0.77 107,875 128,667 0.77

Listed Funds Total 107,875 128,667 0.77 Portfolio of Investments 15,190,189 16,083,714 95.78

Forward contractsAUD/USD – 0.00AUD/USD 5,187 0.03CAD/USD 7,912 0.05Forward contracts Total 13,099 0.08

Other Net Assets 695,672 4.14Net Assets 16,792,485 100.00


97




Cost USD

Market Value USD

% of Net Assets

Listed EquitiesUnited States

5,990 1st Source Corp. 313,894 273,264 0.55 59,017 5th Third Bancorp. 1,661,566 1,616,181 3.23

4,761 American Business Bank 188,442 161,112 0.32 15,048 Ameris Bancorp. 750,760 589,129 1.18 10,908 Atlantic Capital Bancshares Inc. 203,026 183,582 0.37 20,128 Atlantic Union Bankshares Corp. 762,779 712,732 1.43 56,143 Bank of America Corp. 1,587,518 1,626,463 3.25

5,921 Bank of Commerce Holdings 69,849 62,763 0.13 7,230 Bank of Hawaii Corp. 607,609 593,800 1.19 5,582 Bank of Marin Bancorp. 207,396 236,509 0.47 7,572 Bar Harbor Bankshares 226,721 196,872 0.39 6,534 BayCom Corp. 152,989 143,748 0.29

16,825 Berkshire Hills Bancorp. Inc. 659,572 517,369 1.03 9,485 BOK Financial Corporation 883,743 719,437 1.44

12,366 Bryn Mawr Bank Corp. 561,809 459,706 0.92 3,179 Business First Bancshares 78,221 80,906 0.16

27,760 Cadence Bancorp. 723,538 575,742 1.15 3,157 California Bancorp Inc. 69,701 61,562 0.12

466 Cambridge Bancorp. 39,185 37,336 0.07 3,864 Camden National Corp. 170,593 174,730 0.35 3,573 Carolina Financial Corp. 138,506 124,984 0.25 6,684 Centerstate Banks of Florida 170,773 153,298 0.31

17,811 Chemical Financial Corp. 964,517 728,648 1.46 4,150 Citizens Community Bancorp. Inc. 58,066 46,397 0.09

50,285 Citizens Financial Group 2,018,969 1,769,025 3.54 2,343 City Holding Company 170,304 178,466 0.36 9,066 Civista Bancshares Inc. 207,524 196,551 0.39 7,423 Coastal Financial Corp. 111,807 113,498 0.23

18,329 Columbia Banking System Inc. 759,330 659,294 1.32 21,468 Comerica Inc. 1,894,765 1,545,481 3.09

3,738 Community Financial Corp. (The) 122,500 122,681 0.25 2,750 County Bancorp. Inc. 78,312 47,245 0.09

11,534 Cullen Frost Bankers Inc. 1,198,404 1,074,623 2.15 42,212 DNB Financial Corp. 576,009 490,503 0.98

3,731 Eagle Bancorp. Montana Inc. 71,668 62,718 0.13 11,733 East West Bancorp. 756,420 547,579 1.09 7,730 Equity Bancshares Inc – Class A 292,503 207,628 0.42 2,542 Evans Bancorp. Inc. 113,410 89,733 0.18


98




Cost USD

Market Value USD

% of Net Assets

Listed Equities (continued)United States (continued)

3,130 First Bancorp. Inc. 91,925 80,253 0.16 4,516 First Bancshares Inc. 151,661 135,480 0.27 5,314 First Business Financial Services Inc. 126,519 124,879 0.25 4,629 First Community Corp. 107,871 83,322 0.17

12,447 First Defiance Financial Corp. 364,250 349,512 0.70 23,850 First Financial Bancorp.. 681,317 574,904 1.15 24,321 First Hawaiian Inc. 705,000 628,698 1.26 54,702 First Horizon National Corp. 1,000,534 815,060 1.63 12,403 First Merchants Corp. 550,032 461,144 0.92

2,218 First Mid-Illinois Bancshares 87,876 76,100 0.15 2,025 First of Long Island Corp. 55,596 42,404 0.08 7,230 Flushing Financial Corp. 198,363 159,783 0.32 7,638 German American Bancorp. 269,398 226,085 0.45 8,445 Glacier Bancorp. Inc. 328,042 341,178 0.68 2,641 Great Southern Bancorp. Inc. 146,347 157,140 0.31

13,511 Great Western Bancorp. Inc. 562,079 480,721 0.96 21,009 Hancock Holding Company 1,043,670 828,070 1.66 25,326 Heritage Commerce Corp. 399,839 310,244 0.62

7,111 Heritage Financial Corp. 225,065 209,846 0.42 23,539 Horizon Bancorp. Indiana 458,788 386,040 0.77 10,360 Howard Bancorp. Inc. 198,533 154,157 0.31 81,299 Huntington Bancshares Inc. 1,205,119 1,112,170 2.22

5,299 Independent Bank Michigan Corp. 125,423 114,723 0.23 11,218 Independent Bank Massachussetts Corp. 846,102 845,613 1.69 13,289 JP Morgan Chase 1,385,965 1,485,179 2.97

103,324 Keycorp 2,022,912 1,813,335 3.63 4,716 Level One Bancorp. Inc. 132,866 110,354 0.22

10,128 M&T Bank Corp. 1,719,161 1,706,668 3.41 8,481 Mackinac Financial Corp. 135,343 134,339 0.27 3,539 Midwestone Financial Group 120,892 98,632 0.20 4,877 Mutualfirst Financial Inc. 182,621 163,428 0.33 2,858 Nicolet Bankshares Inc. 158,371 178,625 0.36 3,136 Northrim Bancorp. Inc. 115,462 109,321 0.22

47,627 Old National Bancorp. 884,216 793,466 1.59 18,004 Old Second Bancorp. Inc. 256,805 232,432 0.46 10,123 Open Bank Bancorp. 99,004 102,546 0.21 19,345 Pacific Premier Bancorp. Inc. 692,049 598,534 1.20 14,789 Pacwest Bancorp. 736,651 569,968 1.14

4,669 Park National Corp. 505,461 459,196 0.92 6,388 Peoples Bancorp. Inc. 224,495 207,227 0.41


99




Cost USD

Market Value USD

% of Net Assets

Listed Equities (continued)United States (continued)

22,336 Pinnacle Financial Partners 1,412,011 1,280,746 2.56 10,802 PNC Financial Services Group 1,499,250 1,471,448 2.93

4,530 Presidio Bank 115,964 132,503 0.26 4,484 Provident Financial Holdings 85,010 92,326 0.18 8,191 Provident Financial Services 220,647 198,222 0.40 4,948 QCR Holdings Inc. 211,079 171,399 0.34

582 Red River Bancshares Inc. 26,190 27,936 0.06 101,722 Regions Financial Corp. 1,783,041 1,496,839 2.98

13,356 Renasant Corp. 568,806 479,080 0.96 1,605 SB Financial Group Inc. 30,164 26,643 0.05 6,706 Shore Bancshares Inc. 120,807 106,022 0.21 5,646 Southern First Bancshares Inc. 234,078 215,508 0.43 7,779 Southern Missouri Bancorp. 289,496 264,797 0.53 9,952 Stock Yards Bancorp. Inc. 368,857 360,561 0.72

26,910 Suntrust Banks Inc. 1,750,317 1,679,990 3.36 4,769 SVB Financial Group 1,210,668 1,062,247 2.12

21,004 Synovus Financial Corp. 1,012,715 727,789 1.46 5,489 Towne Bank 178,780 149,575 0.30

15,839 Trico Bancshares 616,378 598,081 1.20 27,379 United Community Financial 271,604 260,237 0.52 25,886 US Bancorp. 1,359,250 1,356,944 2.71

6,980 Washington Trust Bancorp. 397,232 364,914 0.73 18,809 Wells Fargo & Company 941,975 774,743 1.55

2,725 Westbury Bancorp. Inc. 59,155 68,125 0.14 19,773 Western Alliance Bancorp. 1,094,497 884,051 1.77 29,447 Zions Bancorp. 1,499,075 1,338,366 2.68

56,281,367 50,231,163 100.44

Listed Equities Total 56,281,367 50,231,163 100.44 Portfolio of Investments 56,281,367 50,231,163 100.44

Forward contractsCNH/USD 817 0.00CNH/USD – 0.00CNH/USD (3) 0.00USD/CNH (22) 0.00Forward contracts Total 792 0.00

Other Net Liabilities (221,096) (0.44)Net Assets 50,010,859 100.00


100

Greater Bay Area Growth and Income Segregated Portfolio



Cost USD

Market Value USD

% of Net Assets


Hong Kong200,000 Hong Kong Government International Bond 2.500% 28/

May/2024 199,486 204,417 0.95 199,486 204,417 0.95

United States80,000 Treasury Bill 0.000% 26/Sep/2019 79,581 79,590 0.38 20,000 US Treasury 2.250% 30/Apr/2021 19,987 20,166 0.10

99,568 99,756 0.48

Listed Supranationals, Governments and Local Public Authorities, Debt Instruments Total

299,054 304,173 1.43

Listed BondsAustralia

300,000 Shandong Energy Australia Pty Limited 4.550% 26/Jul/2020 287,850 299,314 1.41 287,850 299,314 1.41

Bermuda200,000 China Oil & Gas Group Limited 4.625% 20/Apr/2022 185,500 198,017 0.93 200,000 Concord New Energy Group 7.900% 23/Jan/2021 192,000 201,074 0.95 200,000 Hopson Development Holdings 7.500% 27/Jun/2022 199,860 200,153 0.94

577,360 599,244 2.82Cayman Islands

200,000 21Vianet Group Inc. 7.875% 15/Oct/2021 202,300 205,844 0.97 200,000 CDBL Funding 2 3.75% 11/Mar/2022 200,916 204,266 0.96 200,000 Country Garden Holdings 8.000% 27/Jan/2024 204,200 217,564 1.03 200,000 Golden Eagle Retail Group Limited 4.625% 21/May/2023 189,000 190,331 0.90 153,000 Health and Happiness International Holdings Limited 7.250%

21/Jun/2021156,443 156,037 0.74

300,000 Melco Resorts Finance 4.875% 6/Jun/25 294,450 299,250 1.41 200,000 MGM China Holdings 5.875% 15/May/2026 200,000 205,750 0.97 300,000 OVPH Limited 5.875% perp. 302,550 306,358 1.44 300,000 Shimao Property Holdings 6.125% 21/Feb/2024 305,099 316,779 1.49 250,000 WTT Investment Hong Kong 5.500% 21/Nov/2022 250,250 259,500 1.22 200,000 Yuzhou Properties Company Limited 8.500% 26/Feb/2024 200,000 204,821 0.97 200,000 Zhenro Properties Group 9.150% 08/Mar/2022 205,000 203,068 0.96

2,710,208 2,769,568 13.06


101


Cost USD

Market Value USD

% of Net Assets

Listed Bonds (continued)China

200,000 Bank of China Limited (Macau Branch) 3.395% 22/Nov/2021 200,000 200,267 0.94 200,000 Shougang Group 4.000% 23/May/2024 198,702 204,463 0.96

398,702 404,730 1.90 Hong Kong

231,000 Anhui Transportation Holding Group 4.875% 13/Sep/2021 230,205 236,576 1.12 200,000 Bank of China (Hong Kong) FRN perp. 199,500 213,604 1.01 200,000 Bank of East Asia Limited (The) FRN 3/Nov/2026 195,400 202,422 0.95 250,000 China Railway Resources Huitung 3.850% 05/Feb/23 247,293 258,626 1.22 200,000 CNAC (HK) Finbridge 3.875% 19/Jun/2029 200,960 200,940 0.95 250,000 King Power Capital Limited 5.625% 03/Nov/2024 273,045 281,369 1.33 250,000 Nanyang Commercial Bank Limited 5.000% perp. 239,675 243,621 1.15 250,000 Shanghai Commercial Bank 3.75% 29/Nov/2027 244,273 251,059 1.18 200,000 Weichai International Hong Kong Energy Group FRN 14/

Mar/2166185,500 197,125 0.93

200,000 Yancoal International Resources Development Company Limited FRN 29/Dec/2049

198,480 201,662 0.95

2,214,331 2,287,004 10.79Jersey –Channel Islands

25,000 West China Cement Limited 6.500% 11/Sep/2019 25,300 25,129 0.12 25,300 25,129 0.12

Virgin Islands (British)

200,000 NWS Holdings 5.75% perp. 200,000 210,051 0.99 200,000 China Cinda Finance 4.750% 21/Feb/2029 199,826 216,182 1.02 200,000 China Huadian Overseas Development Management 4.000%

perp.200,000 201,438 0.95

250,000 China Shenhua Overseas Capital 3.875% 20/Jan/2025 249,685 260,283 1.23 200,000 Chinalco Capital Holdings Limited 4.000% 25/Aug/2021 193,900 199,221 0.94 200,000 CMHI Finance Bvi 5.000% 6/Aug/2028 206,116 222,895 1.05 250,000 IFC Development Corp. 3.625% 17/Apr/2029 245,250 261,376 1.23 200,000 Road King Infrastucture 7.750% 18/Apr/2021 201,200 209,192 0.99 250,000 Shandong Iron and Steel 6.500% 14/Jun/2021 246,875 249,563 1.18 200,000 Shenzhen Investment Holdings Company 4.350% 26/Sep/2023 198,926 209,482 0.99 200,000 Studio City Finance 7.250% 22/Feb/2024 207,562 208,800 0.98 200,000 Towngas Finance Limited 4.750% perp. 200,000 208,212 0.98 200,000 Guangdong Yudean Group 3.000% 12/Jun/2024 198,338 200,680 0.95 300,000 Yingde Gases Investment 6.250% 19/Jan/2023 299,100 304,660 1.43

3,046,778 3,162,035 14.91

Greater Bay Area Growth and Income Segregated Portfolio (continued)



102




Cost USD

Market Value USD

% of Net Assets

Listed Bonds Total 9,260,529 9,547,024 45.01

Listed EquitiesCayman Islands

100,000 China Education Group Holdings Limited 163,780 156,252 0.74 200,000 China Lesso Group Holdings Limited 136,644 160,862 0.76

70,000 China Resources Land Limited 285,114 308,405 1.45 16,000 CK Asset Holdings Limited 124,735 125,309 0.59

160,000 HKBN Limited 277,422 288,527 1.36 200,000 HKT Limited 308,569 317,626 1.50

60,000 Sands China Limited 318,080 287,016 1.35 14,000 Tencent Holdings Limited 640,884 632,229 2.98

2,255,228 2,276,226 10.73China

280,000 A-Living Services Company Limited 467,077 474,081 2.23 150,000 BYD Electronic (International) Company Limited 222,526 214,398 1.01

50,000 By-Health Company Limited 139,882 141,175 0.67 50,000 China Merchants Bank Company Limited –H 253,552 249,426 1.18

150,000 China Merchants Shekou Industrial Company Limited – A 472,551 456,271 2.15 200,000 Guangzhou Automobile Group Company Limited 193,477 213,629 1.01

50,000 Guangzhou Baiyunshan Pharmaceutical Holding 231,879 225,732 1.06 33,963 Jonjee High-Tech Industrial and Commercial Group – A 176,897 211,709 1.00 50,000 Ping An Insurance 501,064 600,672 2.84 11,600 Shennan Circuits Company Limited 155,145 172,069 0.81

200,000 Shenzhen Airport Company Limited 262,599 258,772 1.22 216,000 Shenzhen Expressway Company Limited 257,816 259,767 1.22 256,730 Shenzhen Gas Corporation Limited 222,941 212,605 1.00

99,964 Sunwoda Electronics Company Limited – A 173,393 167,603 0.79 160,000 Times China Holdings Limited 289,745 320,495 1.51

4,020,544 4,178,404 19.70

Hong Kong50,000 AIA Group Limited 463,528 539,516 2.54 24,000 ASM Pacific Techology 236,133 245,904 1.16 60,000 BOC Hong Kong Holdings Limited 260,945 236,298 1.11

800,000 CITIC Telecom International Holdings Limited 316,428 317,626 1.50 20,000 Galaxy Entertainment Group Limited 123,578 134,863 0.64 90,000 Guangdong Investment Limited 166,823 178,204 0.84 13,000 Hang Seng Bank 326,199 323,838 1.53 14,000 Hong Kong Exchanges & Clearing Limited 445,736 494,523 2.33


103


Cost USD

Market Value USD

% of Net Assets

Listed Equities (continued)Hong Kong (continued)

462,000 Hopewell Highway Infrastructure Limited 243,956 239,049 1.13 26,000 Link REIT 301,220 319,676 1.51

100,000 New World Development Company 153,947 156,508 0.74 110,000 NWS Holdings Limited 263,809 226,257 1.07 100,000 Sunlight REIT 76,540 76,717 0.36

35,000 Techtronic Industries Company Limited 258,515 268,061 1.26 800,000 Yuexiu Property Company Limited 184,295 181,354 0.85 400,000 Yuexiu Real Estate Investment Trust 274,802 273,568 1.29

4,096,454 4,211,962 19.86Singapore

110,000 Fortune REIT 152,243 151,308 0.71 152,243 151,308 0.71

United Kingdom14,000 HSBC Holdings plc 122,973 116,190 0.55

122,973 116,190 0.55

Listed Equities Total 10,647,442 10,934,090 51.55Portfolio of Investments 20,207,025 20,785,287 97.99

Forward contractsAUD/USD 5 0.00AUD/USD 11,542 0.05HKD/USD (24) 0.00USD/AUD (68) 0.00USD/HKD (10) 0.00Forward contracts Total 11,445 0.05

Other Net Assets 415,152 1.96Net Assets 21,211,884 100.00



Man

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104

Stat

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– –

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– –

– –

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– –

– –

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– –

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– –

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– –

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– –

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– –

– –

410,3

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– –

– –

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– –

– 75

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0,142

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ies

Deriv

ative

s –

– –

– –

(220

) (2

5) –

(102

) (1

) (1

27)

(221

)Fo

rward

curre

ncy c

ontra

cts –

– –

– –

(220

) (2

5) –

(102

) (1

) (1

27)

(221

)To

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l liab

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at fa

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profi

t or lo

ss –

– –

– –

(220

) (2

5) –

(102

) (1

) (1

27)

(221

)

Man

ulife

Adv

ance

d Fu

nd S

PC

107

Perf

orm

ance

Tab

le

As

at 3

0 Ju

ne 2

019

and

30 J

une

2018

(Per

form

ance

reco

rd s

ince

ince

ptio

n)

China

A Fu

ndBo

nd Fu

ndAs

ia Pa

cific I

ncom

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Gr

owth

Fund

U.S.Ba

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Equit

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dGr

eater

Bay A

rea G

rowth

and

Incom

e Fun

d

Class

Class

AA

Class

ICla

ss P

Class

AA

Class

ICla

ss I3

Class

AA

Inc

Class

AA

Inc

Hedg

edCla

ss AA

Inc

Class

AA

Inc

Hedg

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ss AA

Inc

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AA

IncCla

ss I2

He

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Cla

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Cla

ss AA

Inc

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IncUS

DUS

DUS

DUS

DUS

DUS

DUS

DAU

DHK

DCA

DUS

DHK

DRM

BUS

DUS

DAU

DHK

DAs

at 30

June

2019

Total

Net

Asse

t Valu

e42

,188,6

0145

,324

– 2

5,013

,911

4,294

,116

21,37

0,024

7,853

,360

1,768

,520

46,84

3,852

2,225

,765

36,51

0,568

101,8

32,85

93,1

47,20

74,7

84,56

76,8

42,83

23,9

13,94

853

,406,3

95

Net A

sset

Value

per S

hare

9.6811

11.16

73 –

12

.1667

12.44

0610

.4163

9.343

39.1

958

94.10

148.9

919

10.36

3810

3.838

710

6.289

09.5

691

9.301

59.1

858

92.57

88

As at

30 Ju

ne 20

18To

tal N

et As

set V

alue

49,03

7,881

2,274

,612

– 2

6,347

,407

4,915

,531

– 7,7

24,38

31,9

32,37

844

,232,2

152,0

56,47

950

,368,7

5413

0,220

,258

– 4,7

78,28

83,9

40,10

035

8,321

18,04

6,445

Net A

sset

Value

per S

hare

10.01

7111.

5263

–

12.14

0812

.3832

– 9.2

810

9.228

993

.9003

9.050

711.

7741

118.54

58 –

9.556

69.5

543

9.538

595

.5612

As at

30 Ju

ne 20

17To

tal N

et As

set V

alue

63,39

6,864

2,221

,498

– 2

9,179

,522

4,812

,553

– 5,2

20,56

81,7

20,39

340

,289,5

592,1

30,60

32,7

38,58

522

,552,4

02 –

– –

– –

Net A

sset

Value

per S

hare

9.6911

11.12

35 –

11.

5533

11.75

42 –

9.343

49.3

422

94.04

509.2

122

10.51

9010

5.385

1 –

– –

– –

As at

30 Ju

ne 20

16To

tal N

et As

set V

alue

88,15

2,856

1,986

,557

– 3

6,367

,956

6,137

,784

– 4,7

92,07

21,3

58,93

936

,841,8

731,7

53,07

2 –

– –

– –

– –

Net A

sset

Value

per S

hare

8.687

89.9

471

–

11.83

1912

.0076

– 8.7

548

8.7811

87.60

58.7

094

– –

– –

– –

–

As at

30 Ju

ne 20

15To

tal N

et As

set V

alue

149,99

3,132

3,900

,421

– 4

2,725

,195

10,43

6,280

– 5,2

33,11

31,3

67,89

339

,957,1

301,9

94,47

2 –

– –

– –

– –

Net A

sset

Value

per S

hare

12.31

3614

.0613

–

12.04

9512

.1964

– 9.7

043

9.769

97.02

839.7

204

– –

– –

– –

–

Man

ulife

Adv

ance

d Fu

nd S

PC

108

Perf

orm

ance

Tab

le (c

ontin

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As

at 3

0 Ju

ne 2

019

and

30 J

une

2018

(Per

form

ance

reco

rd s

ince

ince

ptio

n) (c

ontin

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China

A Fu

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Gr

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Fund

U.S.Ba

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Bay A

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and

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d

Class

Class

AA

Class

ICla

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Class

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Class

ICla

ss I3

Class

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Inc

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Cla

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Cla

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Inc

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dged

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AA

IncUS

DUS

DUS

DUS

DUS

DUS

DUS

DAU

DHK

DCA

DUS

DHK

DRM

BUS

DUS

DAU

DHK

DAs

at 30

June

2014

Total

Net

Asse

t Valu

e96

,989,4

459,6

06,42

0 –

51,24

1,444

14,24

6,464

– 4,3

79,53

31,0

58,49

657

5,548

978,1

23 –

– –

– –

– –

Net A

sset

Value

per S

hare

6.622

87.5

438

– 11.

3180

11.42

53 –

10.12

8210

.1423

101.2

458

10.12

93 –

– –

– –

– –

As at

30 Ju

ne 20

13To

tal N

et As

set V

alue

110,96

9,464

9,740

,060

31,90

5,003

61,28

0,837

36,86

8,938

– –

– –

– –

– –

– –

– –

Net A

sset

Value

per S

hare

6.720

07.6

349

7.976

311.

4435

11.51

62 –

– –

– –

– –

– –

– –

–

As at

30 Ju

ne 20

12To

tal N

et As

set V

alue

79,87

4,341

212,6

9635

,069,4

2828

,785,4

4050

,241,1

02 –

– –

– –

– –

– –

– –

–

Net A

sset

Value

per S

hare

7.516

58.5

187

8.767

410

.9262

10.97

33 –

– –

– –

– –

– –

– –

–

As at

30 Ju

ne 20

11To

tal N

et As

set V

alue

100,86

1,197

2,429

,832

41,87

2,284

26,83

4,794

41,05

3,302

– –

– –

– –

– –

– –

– –

Net A

sset

Value

per S

hare

9.129

010

.3203

10.46

8110

.2728

10.28

76 –

– –

– –

– –

– –

– –

–

Man

ulife

Adv

ance

d Fu

nd S

PC

109

China

A Fu

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nd Fu

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cific I

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Gr

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dGr

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Bay A

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and

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Class

AA

Class

ICla

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Class

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Class

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DUS

DUS

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DUS

DUS

DUS

DAU

DHK

DCA

DUS

DHK

DRM

BUS

DUS

DAU

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DFo

r the y

ear e

nded

30 Ju

ne

2019

Highe

st iss

ue pr

ice pe

r sha

re11.

0648

n/a (1)

– 12

.4161

n/a (1)

10.59

629.3

892

9.215

794

.2229

9.035

312

.2324

123.2

161

100.0

000

n/a (1)

9.583

69.4

909

95.94

53

Lowe

st red

empti

on pr

ice pe

r sh

are7.8

647

9.828

2 –

11.71

3811.

9801

n/a (1)

8.459

68.5

396

86.38

968.3

493

8.777

688

.2457

n/a (1)

n/a (1)

8.355

68.4

369

82.28

42

For th

e yea

r end

ed 30

June

20

18Hig

hest

issue

price

per s

hare

12.13

82n/a

(1) –

12.77

71n/a

(1) –

10.34

9210

.0247

101.2

805

9.849

812

.3717

124.5

570

– 10

.0000

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0010

.0000

100.0

312

Lowe

st red

empti

on pr

ice pe

r sh

are9.6

325

12.65

21 –

11.51

4511.

7354

– 9.2

199

9.388

997

.0600

9.192

410

.5574

108.3

187

– n/a

(1)n/a

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(1)

For th

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r end

ed 30

June

20

17Hig

hest

issue

price

per s

hare

9.6911

n/a (1)

– 11.

8504

n/a (1)

– 9.4

041

9.370

694

.1913

9.245

310

.5245

102.5

134

– –

– –

–

Lowe

st red

empti

on pr

ice pe

r sh

are8.3

774

n/a (1)

– 11.

2286

11.59

58 –

8.566

3n/a

(1)86

.9623

n/a (1)

n/a (1)

n/a (1)

– –

– –

–

Perf

orm

ance

Tab

le (c

ontin

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As

at 3

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ne 2

019

and

30 J

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(Per

form

ance

reco

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ptio

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(1)

No

trans

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the

year

/per

iod

Man

ulife

Adv

ance

d Fu

nd S

PC

110

Perf

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Tab

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As

at 3

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and

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(Per

form

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n) (c

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China

A Fu

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Fund

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d

Class

Class

AA

Class

ICla

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Class

AA

Class

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ss I3

Class

AA

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AA

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Hedg

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ss AA

Inc

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AA

Inc

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edCla

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Inc

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AA

IncCla

ss I2

He

dged

Cla

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Cla

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Inc

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IncUS

DUS

DUS

DUS

DUS

DUS

DUS

DAU

DHK

DCA

DUS

DHK

DRM

BUS

DUS

DAU

DHK

DFo

r the y

ear e

nded

30 Ju

ne

2016

Highe

st iss

ue pr

ice pe

r sha

re11.

9164

n/a (1)

– 12

.1531

n/a (1)

– 9.7

153

9.486

995

.6770

9.438

9 –

– –

– –

– –

Lowe

st red

empti

on pr

ice pe

r sh

are7.8

778

12.11

49 –

11.78

7211.

9882

– 7.9

852

8.787

785

.7627

8.630

1 –

– –

– –

– –

For th

e yea

r end

ed 30

June

20

15Hig

hest

issue

price

per s

hare

15.54

7616

.8015

– 12

.0484

n/a (1)

– 10

.4435

10.41

0010

4.080

010

.4400

– –

– –

– –

–

Lowe

st red

empti

on pr

ice pe

r sh

are6.3

900

7.541

6 –

11.35

2111.

4632

– 9.4

578

8.612

199

.7846

9.726

9 –

– –

– –

– –

For th

e yea

r end

ed 30

June

20

14Hig

hest

issue

price

per s

hare

7.520

4n/a

(1)n/a

(1)11.

4220

n/a (1)

– 10

.1520

10.14

0010

1.210

010

.1300

– –

– –

– –

–

Lowe

st red

empti

on pr

ice pe

r sh

are6.1

964

7.316

87.8

478

11.06

6611.

1679

– 10

.0851

n/a (1)

n/a (1)

9.069

2 –

– –

– –

– –

(1)

No

trans

actio

n du

ring

the

year

/per

iod

Man

ulife

Adv

ance

d Fu

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PC

111

Perf

orm

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Tab

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at 3

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n) (c

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China

A Fu

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AA

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ICla

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AA

Class

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ss I3

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AA

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ss AA

Inc

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DUS

DUS

DUS

DUS

DUS

DUS

DAU

DHK

DCA

DUS

DHK

DRM

BUS

DUS

DAU

DHK

DFo

r the y

ear e

nded

30 Ju

ne

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Highe

st iss

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ice pe

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496

8.819

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(1)11.

5309

11.23

01 –

– –

– –

– –

– –

– –

–

Lowe

st red

empti

on pr

ice pe

r sh

are6.4

197

8.373

5n/a

(1)10

.9744

11.02

59 –

– –

– –

– –

– –

– –

–

For th

e yea

r end

ed 30

June

20

12Hig

hest

issue

price

per s

hare

8.006

1n/a

(1)n/a

(1)10

.9018

10.93

34 –

– –

– –

– –

– –

– –

–

Lowe

st red

empti

on pr

ice pe

r sh

are7.4

985

9.733

6n/a

(1)10

.2956

10.31

31 –

– –

– –

– –

– –

– –

–

For th

e Peri

od fro

m 21

Se

ptemb

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10(D

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Comm

ence

ment)

to 30

Ju

ne 20

11Hig

hest

issue

price

per s

hare

10.00

0010

.6574

10.00

0010

.3100

10.35

70 –

– –

– –

– –

– –

– –

–

Lowe

st red

empti

on pr

ice pe

r sh

are8.9

047

10.06

40n/a

(1)10

.0483

10.19

23 –

– –

– –

– –

– –

– –

–

(1)

No

trans

actio

n du

ring

the

year

/per

iod

I



Annual Report Audited Financial Statementsfor the year ended 30 June 2019

I

B a c kC o v e r

P re v i e w

D o n ' t o u t p u t

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