mandatory provident fund - Principal

1 Exclusive DistributorPrincipal MPFproduct brochure mandatory provident fund1 IMPORTANT INFORMATION1. The Principal Guaranteed fund in Principal MPF Smart Plan (the Smart Plan ) invests solely in a single approved pooled investment fund in the form of an insurance policy issued by Principal Insurance Company (Hong Kong) Limited (the Sponsor ). The guarantee of the Principal Guaranteed fund Policy, in which the Principal Guaranteed fund of the Smart Plan invests, is given by the Sponsor. Your investments in this constituent fund , if any, are therefore subject to the credit risks of the Sponsor. The guarantee applies in specified circumstances only. Please refer to Section (6) of the relevant offering document for details of the credit risk, guarantee features and guarantee conditions.

2 Upon realisation of units in this constituent fund other than under the guarantee conditions, the proceeds of realisation are subject to a reduction by the Sponsor of a certain percentage of the member s account balance (or the relevant part of the account balance). The rate of reduction is determined by the Sponsor at its sole discretion and can be changed by the Sponsor at any time. The current maximum rate of reduction is 5%. Subject to the approval of the mandatory provident fund schemes Authority (Authority), the maximum rate may be The Principal MPF Conservative fund in Smart Plan and Principal MPF Simple Plan (the Simple Plan ) do not guarantee the repayment of Please be reminded that in the event that you do not make any investment choices or if you submit an investment mandate which is invalid in the circumstances set out in the relevant scheme enrolment form, your contributions made and/or benefits transferred into Principal MPF Smart Plan and Principal MPF Simple Plan will be invested into the Default Investment Strategy (DIS) as stated in section of the relevant offering document.

3 4. You should consider your own risk tolerance level and financial circumstances before investing in the DIS. You should note that the Principal Core Accumulation fund and the Principal Age 65 Plus fund may not be suitable for you, and there may be a risk mismatch between the Principal Core Accumulation fund and the Principal Age 65 Plus fund and your risk profile (the resulting portfolio risk may be greater than your risk preference). You should seek financial and/or professional advice if you are in doubt as to whether the DIS is suitable for you, and make the investment decision most suitable for you taking into account your You should note that the implementation of the DIS may have an impact on your MPF investments and benefits. You should consult with the Trustee if you have doubts on how you are being Fees and charges of a MPF conservative fund can be deducted from either: (i) the assets of the constituent fund ; or (ii) members account by way of unit deduction.

4 The Principal MPF Conservative fund uses method (i) and, therefore, unit prices/NAV/ fund performance quoted have incorporated the impact of fees and You should not invest based on this document alone and should read the relevant offering documents for further details including product features, fees and charges and risk factors. Investment involves risks. Past performance information presented is not indicative of future performance. For further details including product features, fees and charges and risk factors, please refer to the relevant offering the launch of the mandatory provident fund ( MPF ) Scheme in Year 2000, MPF has become an integral part of employees retirement protection. This is why it is important for you, whether as an employer or employee, to evaluate your choice of MPF service provider and MPF scheme regularly to ensure thatn retirement needs are well taken care of;n MPF accounts can easily be managed; andn an experienced and trustworthy MPF partner is standing by your side to help you explore the potential benefits from MPF is your trusted partner to support you along the Principal MPF is your choice of MPF provider?

5 Principal s financial strength and expertise in managing retirement scheme Principal is a provider of investment and retirement solutions in Hong Kong. We combine our capabilities in Global Investment Management, Retirement Leadership and Asset Allocation Expertise to provide retirement and asset management to businesses, individuals and institutional MPF schemes to meet different financial and retirement needsPrincipal MPF offers 2 MPF schemes , which are exclusively distributed by AXA, to provide a variety of fund options ranging from conservative to aggressive investments. You can develop your own investment portfolio based on your individual personal profile, including but not limited to age, financial status and risk tolerance fund managers who bring their investment expertise Principal MPF provides you easy access to the funds offered by top renowned managers.

6 Their expertise will ensure your MPF contributions are invested effectively with diversification across different markets and asset fees and chargesPrincipal MPF members can enjoy competitive management fees, ranging from to per annum of net asset value of the relevant constituent funds. For Principal Guaranteed fund in the Smart Plan, there is an additional guarantee fee of 1% of net asset value of the underlying Insurance Policy Approved Pooled Investment fund . Please refer to Section 10 of the relevant offering document for details of other fees, charges and administration, flexible account management and a bundle of value-added servicesOur comprehensive MPF schemes are accompanied by easy administration and up-to-date information for both employers and employees.

7 You will enjoy the benefits of flexible account management and a bundle of value-added services to help you invest for your future efficiently. Principal MPF3 What does Principal MPF offer? Principal MPF Smart PlanPrincipal MPF Simple PlanFeaturesProviding a more comprehensive range of funds, covering the entire risk and return spectrum, particularly with guarantee fund . Offering a diversified range of funds from conservative to aggressive of constituent funds15 funds10 fundsChoice of constituent fundsEquity FundPrincipal JPMorgan Greater China Equity FundPrincipal Dynamic Hong Kong Equity FundPrincipal Dynamic Hong Kong Equity FundPrincipal Fidelity Asia Pacific Equity FundPrincipal Fidelity Asia Pacific Equity fund Principal Fidelity Global Equity FundPrincipal Fidelity Global Equity fund Principal Hang Seng Index Tracking fund Mixed Assets FundPrincipal Age 65 Plus FundPrincipal Age 65 Plus FundPrincipal Core Accumulation FundPrincipal Core Accumulation FundPrincipal Growth FundPrincipal Growth FundPrincipal Balanced FundPrincipal Balanced FundPrincipal Stable FundPrincipal Stable FundBond FundPrincipal

8 JPMorgan Asian Bond FundPrincipal Templeton Global Bond FundPrincipal Templeton Global Bond fund Money Market FundPrincipal MPF Conservative fund ^ Principal MPF Conservative fund ^ Principal Cash fund Guaranteed FundPrincipal Guaranteed fund * Fees and charges of a MPF conservative fund can be deducted from either: (i) the assets of the constituent fund ; or (ii) members account by way of unit deduction. The Principal MPF Conservative fund uses method (i) and, therefore, unit prices/NAV/ fund performance quoted have incorporated the impact of fees and charges.* The Principal Guaranteed fund in Smart Plan invests solely in Principal Guaranteed fund Policy, an approved pooled investment fund in the form of an insurance policy ( Insurance Policy APIF ), which in turn invests in an approved pooled investment fund in the form of a unit trust ( Unit Trust APIF ), namely the Principal MPF fund Principal MPF Capital Stable fund .

9 The Unit Trust APIF will invest through other Unit Trust APIFs to gain exposure to a diversified portfolio of bonds, equities and deposits, with heavier weighting in bonds. The Insurance Policy APIF in which the constituent fund invests offers a guarantee, which is guaranteed by Principal Insurance Company (Hong Kong) Limited (the Sponsor ). Your investments in this constituent fund , if any, are therefore subject to the credit risks of the Sponsor. The guarantee applies in specified circumstances only. Please refer to Section (6) of the Offering Document of Smart Plan for details of the credit risk, guarantee features and guarantee conditions. Upon realisation of units in this constituent fund other than under the guarantee conditions, the proceeds of realisation are subject to a reduction by the Sponsor of a certain percentage of the member s account balance (or the relevant part of the account balance).

10 The rate of reduction is determined by the Sponsor at its sole discretion and can be changed by the Sponsor at any time without prior notice. The current maximum rate of reduction is 5%. Subject to the approval of the mandatory provident fund schemes Authority (Authority), the maximum rate may be increased. Please call Customer Service Hotline at 2802 2812 for the latest rate of reduction and the declared crediting MPF schemes provide flexibility in the choice of investment options that members can select different combinations of constituent funds to create personal investment strategy. Following are the fund details of each of the constituent Global Investors Asia Pacific LimitedAllianz Global Investors Asia Pacific Limited is a global asset management firm providing active investment strategies.