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SRP Lifestyle Portfolio Investment-Linked Policy Sub-Funds Report and Financial Statements 1 January 2016 to 30 June 2016
MCI (P) 106/03/2016 Inside this booklet, you will find the Semi-Annual Report for our Investment-Linked Policy Sub-Funds, which includes an overview of each fund's investment objectives and performance. To ensure that you are best positioned to meet your financial goals, we encourage you to review your investments regularly and maintain a well-diversified portfolio. We will continue to be vigilant in our choice of investments and look out for the best opportunities available to help you grow your wealth in the long term. If you have any questions about your policy or investments, please speak to your Manulife Representative or contact our Client Services Executives at 6833-8188.
Thank you for trusting Manulife with your investment needs. We look forward to continue supporting you in the years ahead – so whatever life sends your way, you'll be ready.
Naveed IrshadPresident & Chief Executive OfficerManulife Singapore Semi-Annual Report and Financial Statements for the period 1 January 2016 to 30 June 2016 Register of Representatives - You may logon to the Monetary Authority of Singapore (MAS) website (www.mas.gov.sg) to conduct a background check of your representative.
The information relating to the Investment-Linked Policy ("ILP") sub-funds is compiled by Manulife (Singapore) Pte. Ltd., solely for general information purposes. It does not constitute an offer, invitation, solicitation or recommendation by or on behalf of Manulife (Singapore) Pte. Ltd. to any person to buy or sell any ILP sub-fund.
All overviews and commentaries, if provided, are intended to be general in nature and for current interest. While helpful, these overviews and commentaries are no substitute for professional tax, investment or legal advice. Investors are advised to seek professional advice for their particular situation. The information provided herein does not take into account the suitability, investment objectives, financial situation or particular needs of any specific person. Investors should consider the suitability of any ILP sub-fund based on his or her investment objectives, financial situation and particular needs before making a commitment to subscribe for units, shares or any other interests in any ILP sub-funds.
Investments in ILP sub-funds are not deposits in, guaranteed or insured by Manulife (Singapore) Pte. Ltd., its partners or distributors. The value of units in any ILP sub-fund and any income accruing to it may rise as well as fall, which may result in the possible loss of principal amount invested. Past performance of any ILP sub-funds or fund managers and any prediction, projection or forecast on the economy or markets are not necessarily indicative of the future or likely performance of the ILP sub-funds or the fund managers. Semi-Annual Report and Financial Statements for the period 1 January 2016 to 30 June 2016 SRP Aggressive Portfolio Fund (US$) .4 SRP Balanced Portfolio Fund (US$) .6 SRP Growth Portfolio Fund (US$) .8 SRP Balanced Portfolio Fund (S$) .10 SRP Growth Portfolio Fund (S$) .12 • Manulife Global Fund – U.S. Bond Fund .16 • Manulife Global Fund – U.S. Special Opportunities Fund .19 • Manulife Global Fund – American Growth Fund .21 • Manulife Global Fund – Asian Equity Fund .24 • Manulife Global Fund – European Growth Fund .28 • Manulife Global Fund – Global Property Fund .31 • Manulife Global Fund – Japanese Growth Fund .34 Financial Statements .38 Semi-Annual Report and Financial Statements for the period 1 January 2016 to 30 June 2016 SRP Aggressive Portfolio Fund (US$) Launch Date / Price : May 2007 / US$1.00 (Offer) : US$1.0913 (Bid) / US$1.0913 (Offer) Net Asset Value (NAV) : US$44,451,597.85 Fund Manager : Manulife (Singapore) Pte. Ltd.
: Bank draft in USD / Cheque in *Based on NAV as at 30 June 2016 Fund ObjectiveAggressive Portfolio is a unitized fund, which is designed to provide long-term capital growth. It is designed for Fund Performance/ those who hold a long-term investment view and who are Benchmark returns prepared to accept significant fluctuations in the value of their investments in order to achieve long-term returns.
It is intended that the investments will be made on a diversified basis. Around 80 percent of its underlying investment portfolio will consist of equities and equity- related investments, with the remainder of the assets being directly or indirectly invested in bonds, deposits and other investments. The intended target asset allocation as aforesaid is for reference only and may be changed as and when the Fund Manager deems appropriate.
The ILP sub-fund may invest in the following allocation: Source: Manulife (Singapore) Pte. Ltd., total return, USD, bid-to-bid end 30 June 2016.
*20% Barclays Capital U.S. Aggregate Bond Index + 80% S&P 500 IndexAverage Annual Compounded Return for period above 1 year, bid-to- Manulife Global Fund bid with income reinvested.
- U.S. Bond Fund Manulife Global Fund - U.S. Special Opportunities Fund Investment and Market Review Please refer to respective Underlying Funds (see appendix).
Manulife Global Fund - American Growth Fund Manulife Global Fund Market Outlook and Investment Strategy - Global Property Fund Please refer to respective Underlying Funds (see appendix).
Manulife Global Fund - European Growth Fund Schedule of Investments Manulife Global Fund - Japanese Growth Fund A) Distribution of Investments as at 30 June 2016 Manulife Global Fund Please refer to respective Underlying Funds (see - Asian Equity Fund Semi-Annual Report and Financial Statements for the period 1 January 2016 to 30 June 2016 B) Top 10 Holdings as at 30 June 2016 & 30 June 2015 I) Turnover Ratio Please refer to respective Underlying Funds (see Please refer to respective Underlying Funds (see C) Exposure to Derivatives J) Any material information that shall adversely Please refer to respective Underlying Funds (see impact the valuation of the ILP sub-fund D) Amount and percentage of Total Investment K) Soft dollar commissions/ arrangements Please refer to respective Underlying Funds (see MGF U.S. Special US$25,893,548.97 58.25% MGF Global Property US$6,004,768.57 13.51% E) Amount and percentage of debt to NAV Please refer to respective Underlying Funds (see F) Total amount of Subscriptions and Redemptions Total Subscriptions Total Redemptions G) Amount of related-party transactions Please refer to respective Underlying Funds (see 30 June 2016 : 3.74% 30 June 2015 : 3.74% Note: The expense ratio is calculated in accordance with the Investment Management Association of Singapore's guidelines on the disclosure of expense ratios. The expense ratio does not include (where applicable) charges for insurance coverage, brokerage and other transaction costs, performance fee, foreign exchange gains/losses, front or back end loads arising from the purchase or sale of collective investment schemes and tax deducted at source or arising out of income received.
Semi-Annual Report and Financial Statements for the period 1 January 2016 to 30 June 2016 SRP Balanced Portfolio Fund (US$) Launch Date / Price : May 2007 / US$1.00 (Offer) : US$1.2489 (Bid) / US$1.2489 (Offer) Net Asset Value (NAV) : US$7,025,300.71 Fund Manager : Manulife (Singapore) Pte. Ltd.
: Bank draft in USD / Cheque in *Based on NAV as at 30 June 2016 Fund ObjectiveBalanced Portfolio is a unitized fund, which is designed to provide medium to long term capital growth for those who Fund Performance/ hold a long term investment view and who are prepared Benchmark returns to accept fluctuations in the value of their investments in order to achieve long term returns.
It is intended that the investments will be made on a diversified basis. Around 40 per cent of its underlying investment portfolio will consist of equities and equity- related investments, with the remainder of the assets being directly or indirectly invested in bonds, deposits and other investments. The intended target asset allocation as aforesaid is for reference only and may be changed as and Not Applicable Not Applicable when the Fund Manager deems appropriate.
The ILP sub-fund may invest in the following allocation: Source: Manulife (Singapore) Pte. Ltd., total return, USD, bid-to-bid end 30 June 2016.
*60% Barclays Capital U.S. Aggregate Bond Index + 40% S&P 500 IndexAverage Annual Compounded Return for period above 1 year, bid-to- Manulife Global Fund bid with income reinvested.
Manulife Global Fund - U.S. Special Opportunities Fund Investment and Market Review Please refer to respective Underlying Funds (see appendix).
Manulife Global Fund - American Growth Fund Manulife Global Fund Market Outlook and Investment Strategy - Global Property Fund Please refer to respective Underlying Funds (see appendix).
Manulife Global Fund - European Growth Fund Schedule of Investments Manulife Global Fund - Japanese Growth Fund A) Distribution of Investments as at 30 June 2016 Manulife Global Fund Please refer to respective Underlying Funds (see - Asian Equity Fund The Portfolio Fund will allocate 2% of Portfolio holdings into cash.
Semi-Annual Report and Financial Statements for the period 1 January 2016 to 30 June 2016 B) Top 10 Holdings as at 30 June 2016 & 30 June 2015 I) Turnover Ratio Please refer to respective Underlying Funds (see Please refer to respective Underlying Funds (see C) Exposure to Derivatives J) Any material information that shall adversely Please refer to respective Underlying Funds (see impact the valuation of the ILP sub-fund D) Amount and percentage of Total Investment K) Soft dollar commissions/ arrangements Please refer to respective Underlying Funds (see MGF U.S. Special US$904,344.79 12.87% MGF American Growth US$1,716,130.77 24.43% MGF Global Property US$3,004,044.04 42.76% MGF European Growth MGF Japanese Growth E) Amount and percentage of debt to NAV Please refer to respective Underlying Funds (see F) Total amount of Subscriptions and Redemptions Total Subscriptions Total Redemptions G) Amount of related-party transactions Please refer to respective Underlying Funds (see 30 June 2016 : 3.37% 30 June 2015 : 3.37% Note: The expense ratio is calculated in accordance with the Investment Management Association of Singapore's guidelines on the disclosure of expense ratios. The expense ratio does not include (where applicable) charges for insurance coverage, brokerage and other transaction costs, performance fee, foreign exchange gains/losses, front or back end loads arising from the purchase or sale of collective investment schemes and tax deducted at source or arising out of income received.
Semi-Annual Report and Financial Statements for the period 1 January 2016 to 30 June 2016 SRP Growth Portfolio Fund (US$) Launch Date / Price : May 2007 / US$1.00 (Offer) : US$1.2052 (Bid) / US$1.2052 (Offer) Net Asset Value (NAV) : US$23,585,587.17 Fund Manager : Manulife (Singapore) Pte. Ltd.
: Bank draft in USD / Cheque in *Based on NAV as at 30 June 2016 Fund ObjectiveGrowth Portfolio is a unitized fund, which is designed to provide medium to long term capital growth for those who Fund Performance/ hold a long term investment view and who are prepared Benchmark returns to accept considerable fluctuations in the value of their investments in order to achieve long term returns.
It is intended that the investments will be made on a diversified basis. Around 60 per cent of its underlying investment portfolio will consist of equities and equity- related investments, with the remainder of the assets being directly or indirectly invested in bonds, deposits and other investments. The intended target asset allocation as aforesaid is for reference only and may be changed as and Not Applicable Not Applicable when the Company deems appropriate.
The ILP sub-fund may invest in the following allocation: Source: Manulife (Singapore) Pte. Ltd., total return, USD, bid-to-bid end 30 June 2016.
*40% Barclays Capital U.S. Aggregate Bond Index + 60% S&P 500 IndexAverage Annual Compounded Return for period above 1 year, bid-to- Manulife Global Fund bid with income reinvested.
Manulife Global Fund - U.S. Special Opportunities Fund Investment and Market Review Manulife Global Fund Please refer to respective Underlying Funds (see appendix).
- American Growth Fund Manulife Global Fund Market Outlook and Investment Strategy - Global Property Fund Please refer to respective Underlying Funds (see appendix).
Manulife Global Fund - European Growth Fund Schedule of Investments Manulife Global Fund - Japanese Growth Fund A) Distribution of Investments as at 30 June 2016 Manulife Global Fund Please refer to respective Underlying Funds (see - Asian Equity Fund The Portfolio Fund will allocate 1% of Portfolio holdings into cash.
Semi-Annual Report and Financial Statements for the period 1 January 2016 to 30 June 2016 B) Top 10 Holdings as at 30 June 2016 & 30 June 2015 I) Turnover Ratio Please refer to respective Underlying Funds (see Please refer to respective Underlying Funds (see C) Exposure to Derivatives J) Any material information that shall adversely Please refer to respective Underlying Funds (see impact the valuation of the ILP sub-fund D) Amount and percentage of Total Investment K) Soft dollar commissions/ arrangements Please refer to respective Underlying Funds (see US$230,238.72 0.98% US$229,912.28 0.97% MGF U.S. Special US$3,707,845.41 15.72% MGF American Growth US$9,781,636.55 41.47% MGF Global Property US$1,668,799.15 7.08% US$5,309,467.73 22.51% MGF European Growth US$1,962,468.14 8.32% MGF Japanese Growth US$695,219.19 2.95% E) Amount and percentage of debt to NAV Please refer to respective Underlying Funds (see F) Total amount of Subscriptions and Redemptions Total Subscriptions Total Redemptions G) Amount of related-party transactions Please refer to respective Underlying Funds (see 30 June 2016 : 3.46% 30 June 2015 : 3.45% Note: The expense ratio is calculated in accordance with the Investment Management Association of Singapore's guidelines on the disclosure of expense ratios. The expense ratio does not include (where applicable) charges for insurance coverage, brokerage and other transaction costs, performance fee, foreign exchange gains/losses, front or back end loads arising from the purchase or sale of collective investment schemes and tax deducted at source or arising out of income received.
Semi-Annual Report and Financial Statements for the period 1 January 2016 to 30 June 2016 SRP Balanced Portfolio Fund (S$) The Portfolio Fund will allocate 2% of Portfolio holdings Launch Date / Price : April 2008 / S$1.00 (Offer) : S$1.2647 (Bid) / Net Asset Value (NAV) : S$26,334,408.51 : Manulife (Singapore) Pte. Ltd.
: Bank draft in SGD / Cheque in *Based on NAV as at 30 June 2016 Fund ObjectiveBalanced Portfolio is a unitized fund, which is designed to provide medium to long term capital growth for those who hold a long term investment view and who are prepared to accept fluctuations in the value of their investments in order to achieve long term returns.
Fund Performance/ It is intended that the investments will be made on a Benchmark returns diversified basis. Around 40 per cent of its underlying investment portfolio will consist of equities and equity-related investments, with the remainder of the assets being directly or indirectly invested in bonds, deposits and other investments. The intended target asset allocation as aforesaid is for reference only and may be changed as and when the Fund Manager deems appropriate.
Over the long term, the Fund targets to hedge 75% of the Net Asset Value to S$ to reduce currency exchange risk. This activity is material to the fund return and volatility.
The ILP sub-fund may invest in the following allocation: Source: Manulife (Singapore) Pte. Ltd., total return, bid-to-bid end 30 June 2016.
*60% Barclays Capital U.S. Aggregate Bond Index + 40% S&P 500 Manulife Global Fund Average Annual Compounded Return for period above 1 year, bid-to- bid with income reinvested.
Manulife Global Fund - U.S. Special Opportunities Fund Investment and Market Review Manulife Global Fund Please refer to respective Underlying Funds (see appendix).
- American Growth Fund Manulife Global Fund Market Outlook and Investment Strategy - Global Property Fund Please refer to respective Underlying Funds (see appendix).
Manulife Global Fund - European Growth Fund Schedule of Investments Manulife Global Fund - Japanese Growth Fund A) Distribution of Investments as at 30 June 2016 Manulife Global Fund Please refer to respective Underlying Funds (see - Asian Equity Fund Semi-Annual Report and Financial Statements for the period 1 January 2016 to 30 June 2016 B) Top 10 Holdings as at 30 June 2016 & 30 June 2015 I) Turnover Ratio Please refer to respective Underlying Funds (see Please refer to respective Underlying Funds (see C) Exposure to Derivatives J) Any material information that shall adversely Please refer to respective Underlying Funds (see impact the valuation of the ILP sub-fund D) Amount and percentage of Total Investment K) Soft dollar commissions/ arrangements Please refer to respective Underlying Funds (see MGF U.S. Special S$3,387,317.89 12.86% MGF American Growth S$6,435,487.97 24.44% MGF Global Property S$11,652,445.57 44.25% MGF European Growth MGF Japanese Growth E) Amount and percentage of debt to NAV Please refer to respective Underlying Funds (see F) Total amount of Subscriptions and Redemptions Total Subscriptions Total Redemptions G) Amount of related-party transactions Please refer to respective Underlying Funds (see 30 June 2016 : 3.45% 30 June 2015 : 3.44% Note: The expense ratio is calculated in accordance with the Investment Management Association of Singapore's guidelines on the disclosure of expense ratios. The expense ratio does not include (where applicable) charges for insurance coverage, brokerage and other transaction costs, performance fee, foreign exchange gains/losses, front or back end loads arising from the purchase or sale of collective investment schemes and tax deducted at source or arising out of income received.
Semi-Annual Report and Financial Statements for the period 1 January 2016 to 30 June 2016 SRP Growth Portfolio Fund (S$) The Portfolio Fund will allocate 1% of Portfolio holdings Launch Date / Price : April 2008 / S$1.00 (Offer) : S$1.2566 (Bid) / Net Asset Value (NAV) : S$109,159,262.08 : Manulife (Singapore) Pte. Ltd.
: Bank draft in SGD / Cheque in *Based on NAV as at 30 June 2016 Fund ObjectiveGrowth Portfolio is a unitized fund, which is designed to provide medium to long term capital growth for those who hold a long term investment view and who are prepared to accept considerable fluctuations in the value of their investments in order to achieve long term returns.
Fund Performance/ It is intended that the investments will be made on a Benchmark returns diversified basis. Around 60 per cent of its underlying investment portfolio will consist of equities and equity-related investments, with the remainder of the assets being directly or indirectly invested in bonds, deposits and other investments. The intended target asset allocation as aforesaid is for reference only and may be changed as and when the Fund Manager deems appropriate.
Over the long term, the Fund targets to hedge 75% of the Net Asset Value to S$ to reduce currency exchange risk. This activity is material to the fund return and volatility.
The ILP sub-fund may invest in the following allocation: Source: Manulife (Singapore) Pte. Ltd., total return, bid-to-bid end 30 June 2016.
*40% Barclays Capital U.S. Aggregate Bond Index + 60% S&P 500 Manulife Global Fund Average Annual Compounded Return for period above 1 year, bid-to-bid with income reinvested.
Manulife Global Fund - U.S. Special Opportunities Fund Investment and Market Review Manulife Global Fund Please refer to respective Underlying Funds (see appendix).
- American Growth Fund Manulife Global Fund Market Outlook and Investment Strategy - Global Property Fund Please refer to respective Underlying Funds (see appendix).
Manulife Global Fund - European Growth Fund Manulife Global Fund Schedule of Investments - Japanese Growth Fund A) Distribution of Investments as at 30 June 2016 Manulife Global Fund Please refer to respective Underlying Funds (see - Asian Equity Fund Semi-Annual Report and Financial Statements for the period 1 January 2016 to 30 June 2016 B) Top 10 Holdings as at 30 June 2016 & 30 June 2015 I) Turnover Ratio Please refer to respective Underlying Funds (see Please refer to respective Underlying Funds (see C) Exposure to Derivatives J) Any material information that shall adversely Please refer to respective Underlying Funds (see impact the valuation of the ILP sub-fund D) Amount and percentage of Total Investment K) Soft dollar commissions/ arrangements Please refer to respective Underlying Funds (see MGF U.S. Special S$17,156,644.81 15.72% MGF American Growth S$45,257,433.42 41.46% MGF Global Property S$24,517,873.57 22.46% MGF European Growth MGF Japanese Growth E) Amount and percentage of debt to NAV Please refer to respective Underlying Funds (see F) Total amount of Subscriptions and Redemptions Total Subscriptions Total Redemptions G) Amount of related-party transactions Please refer to respective Underlying Funds (see 30 June 2016 : 3.54% 30 June 2015 : 3.54% Note: The expense ratio is calculated in accordance with the Investment Management Association of Singapore's guidelines on the disclosure of expense ratios. The expense ratio does not include (where applicable) charges for insurance coverage, brokerage and other transaction costs, performance fee, foreign exchange gains/losses, front or back end loads arising from the purchase or sale of collective investment schemes and tax deducted at source or arising out of income received.
Semi-Annual Report and Financial Statements for the period 1 January 2016 to 30 June 2016 Semi-Annual Report and Financial Statements for the period 1 January 2016 to 30 June 2016 • Manulife Global Fund – U.S. Bond Fund • Manulife Global Fund – U.S. Special Opportunities Fund • Manulife Global Fund – American Growth Fund • Manulife Global Fund – Asian Equity Fund • Manulife Global Fund – European Growth Fund • Manulife Global Fund – Global Property Fund • Manulife Global Fund – Japanese Growth Fund Semi-Annual Report and Financial Statements for the period 1 January 2016 to 30 June 2016 Manulife Global Fund – U.S. Bond Fund Portfolio Review*** The primary objective of this Fund is to maximise total The sub-fund's duration positioning detracted from relative return from a combination of current income and capital performance for the 12-month period. Throughout most appreciation. To pursue this objective, the fund normally of the period, the sub-fund's duration (a measure of invests its assets in U.S. dollar denominated fixed-income interest rate sensitivity) was slightly shorter than that of securities with an intended average credit rating of A and the benchmark, which meant that the sub-fund had less sensitivity to yield fluctuations than the benchmark did. As a result, when bond yields declined broadly during the reporting period, the sub-fund did not benefit as much as Investment and Market Review*** the benchmark.
The US bond market posted a solid gain for the 12 months ended 30 June 2016, as slowing economic growth led to Sector allocation aided performance compared with declining bond yields. After growing at a robust 4% annual the benchmark. In particular, overweight positions in growth rate in the second quarter of 2015, the US economy investment-grade corporate bonds and asset-backed decelerated over the ensuing quarters, slowing to a 2% securities (mainly backed by auto loans and credit card annual growth rate in the third quarter and a 1.5% annual debt) added value, as did an underweight position in growth rate in the fourth quarter. Despite the slowdown, residential mortgage-backed securities. On the downside, continued strength in employment growth led the Fed to the sub-fund's position in high-yield corporate bonds raise its short-term interest rate target in late 2015. The weighed on relative results as this segment of the bond December rate hike, which was the Fed's first interest rate market underperformed during the reporting period.
increase since 2006, lifted the federal funds rate from a range of 0%–0.25% to a range of 0.25%–0.50%.
Individual security selection detracted overall from performance versus the benchmark. Notable detractors Economic activity continued to moderate in the first half included grocery retailer Tops Markets and energy of 2016 as weak global growth and a stronger US dollar producers Continental Resources and Plains Exploration weighed on US exports. Even employment growth, which & Production. Leading performance contributors included had been one of the stronger segments of the economy, Mexican auto parts manufacturer Tenedora Nemak, began to slow toward the end of the 12-month period. healthcare provider Molina Healthcare, and movie theatre Nonetheless, the unemployment rate finished the period at chain AMC Entertainment.
its lowest level since November 2007.
Other factors buffeting the fixed-income markets during Market Outlook And Investment Strategy*** the 12-month period included a slowdown in global Moderating US economic growth is likely to keep the Fed economic growth, particularly in China and other emerging on hold through the end of 2016. Despite the muted markets; continued weakness in energy and commodity economic backdrop, the sub-fund's portfolio manager (PM) prices, primarily during the first half of the reporting continues to see value in the credit-related sectors of the period; continued geopolitical conflict in the Middle East bond market. As US Treasury yields approach historically and terrorist attacks around the globe; and the "Brexit" low levels, increased investor demand for higher yields referendum – the UK's vote in June 2016 to leave the EU.
should provide support for corporate bonds and other higher-yielding segments of the bond market.
The combination of decelerating economic growth, low inflation, and a flight to quality resulting from broader Although the Fed has held short-term interest rates steady financial market volatility pushed US bond yields lower and so far in 2016, the PM expects interest rates to trend higher bond prices higher for the 12-month period. Higher-quality over time, and so the PM is maintaining slightly shorter sub- bonds rallied the most, led by investment-grade corporate fund duration compared with the benchmark.
bonds, which also benefited from strong investor demand for yield. US Treasury bonds and commercial mortgage- The uncertainty surrounding the gradual process of Brexit backed securities also fared well during the period. could remain a source of volatility in the fixed-income Laggards included high-yield corporate bonds, which markets going forward.
were left behind by the flight to quality, and residential mortgage-backed securities, which faced fears of increased refinancing activity as yields declined.
Semi-Annual Report and Financial Statements for the period 1 January 2016 to 30 June 2016 Schedule of Investments Federal National Mortgage A) Distribution of Investments as at 30 June 2016*** AssnFederal National Mortgage Market Value % of Top 10 Holdings as at 30 June 2015*** Market Value % of United States Treasury United States Treasury Federal National Mortgage United States Treasury Note/BoFederal National Mortgage Federal National Mortgage United States Treasury Note/BoFederal National Mortgage Federal National Mortgage AssnFederal Home Loan Mtg B) Top 10 Holdings as at 30 June 2016*** Market Value % of Note: Any differences in the percentage of the Net Asset figures are the result of rounding.
United States Treasury C) Exposure to Derivatives United States Treasury i) Market value of derivative contracts United States Treasury ii) Net gains/losses on derivative contracts United States Treasury iii) Net gains/losses on outstanding derivative contracts United States Treasury Note/BoUnited States Treasury D) Amount and percentage of NAV invested in collective investment schemes Federal National Mortgage AssnUnited States Treasury E) Amount and percentage of debt to NAV Semi-Annual Report and Financial Statements for the period 1 January 2016 to 30 June 2016 Manulife Global Fund – U.S. Bond Fund F) Total amount of Subscriptions and Redemptions G) Amount of related-party transactions H) Expense Ratio*** 30 June 2016 : 1.47% 30 June 2015 : 1.50% I) Turnover Ratio*** 30 June 2016 : 48.69% 30 June 2015 : 42.04% J) Any material information that shall adversely impact the valuation of the Fund K) Soft dollar commissions/ arrangements Note: ***Information given is provided by the Fund Manager, Manulife Asset Management (U.S.) Limited.
Semi-Annual Report and Financial Statements for the period 1 January 2016 to 30 June 2016 Manulife Global Fund – U.S. Special Opportunities Fund selection in the communications sub-sector detracted The primary objective of this Fund is to maximise total from performance. Individual detractors included media return from a combination of current income and capital entertainment company iHeart Media, which struggled with appreciation. To pursue this objective, the Fund primarily a weak business outlook. In the energy sector, independent invests in U.S. and non-U.S. fixed-income securities rated energy company Approach Resources detracted from BB/Ba or lower and their unrated equivalents.
performance as a result of volatility in the oil market. In the communications sub-sector, satellite operator Intelsat detracted from performance as a result of pricing concerns.
Investment and Market Review*** For the one-year period ending in June, high-yield markets exhibited two distinct phases of performance – the first Market Outlook And Investment Strategy*** decidedly negative and the second resulting in robust The sub-fund's portfolio manager (PM) believes that positive returns. The main themes behind both phases corporate fundamentals remain sound in a variety of were the same – expectations for Fed policy, the price of sectors, but that earnings growth has slowed materially. oil and the outlook for global growth. In the first part of With a more benign US interest rate outlook, or at least the period, low commodity prices put a significant strain a more measured course of action expected from the Fed on the energy sector and the metals and mining sub-sector, and accommodative conditions elsewhere, the low global causing default expectations to rise and risk assets to fall interest rate environment provides some support to sectors out of favour. In addition, questions about stabilisation in desired by yield-seeking investors. However, the PM believes China, global growth conditions and the likelihood that the this same central bank message supporting low inflation Fed would establish a rate hike schedule left many investors and limited growth is cause for concern; particularly about on the side-lines. After oil prices reached a low in mid- the economic trajectory and business conditions affecting February, recovery in the commodities sectors remained a many bond issuers. With the possibility for elevated default key theme for high-yield markets during the second half of activity, particularly from commodity-related industries, the period. This was led by the performance of the energy the PM believes security selection and fundamental credit sector, and the metals and mining sub-sector. After the analysis will be critical elements of success in the leveraged February low, high-yield bonds provided solid gains, which credit markets. Broader market volatility causing wide price were interrupted by increased volatility at the end of the movements with limited volume – as recently experienced period resulting from the surprise decision by UK voters after Brexit – may also provide more reason to remain to leave the EU. Expectations for accommodative central cautious for the coming period.
bank policies in response to global growth concerns and for deferred action from the Fed had a positive impact on demand for fixed-income assets offering additional yield in Schedule of Investments such a low interest rate environment.
A) Distribution of Investments as at 30 June 2016*** Portfolio Review*** Security selection contributed to the sub-fund's performance, particularly across the consumer staples and consumer discretionary sectors and the electricity sub-sector. The sub-fund's overweight position in the banking sub-sector, which outperformed, also contributed. Significant individual contributors to performance included Mohegan Tribal Gaming, transportation services company Teekay Offshore Partners and utilities services company Exelon Corporation. Mohegan Tribal Gaming and Teekay Offshore Partners benefited from favourable outlooks. The sub-fund's underweight position in the technology sector, select holdings in the energy sector and security Semi-Annual Report and Financial Statements for the period 1 January 2016 to 30 June 2016 Manulife Global Fund – U.S. Special Opportunities Fund B) Top 10 Holdings as at 30 June 2016*** C) Exposure to Derivativesi) Market value of derivative contracts Cooper Tire & Rubber Co ii) Net gains/losses on derivative contracts iii) Net gains/losses on outstanding derivative contracts Select Medical Corp Aercap Ireland Cap Ltd/A Cablevision Systems Corp D) Amount and percentage of NAV invested in collective investment schemes JPMorgan Chase & Co CCO Holdings LLC / CCO E) Amount and percentage of debt to NAV F) Total amount of Subscriptions and Redemptions JPMorgan Chase & Co Top 10 Holdings as at 30 June 2015*** G) Amount of related-party transactions H) Expense Ratio*** Lmi Aerospace Inc 30 June 2016 : 1.51% Iron Mountain Inc/Old 30 June 2015 : 1.52% Tenet Healthcare Corp I) Turnover Ratio*** 30 June 2016 : 25.28% 30 June 2015 : 39.32% Cooper Tire & Rubber Co Wells Fargo Total Return J) Any material information that shall adversely impact the valuation of the Fund Cincinnati Bell Inc EP Energy LLC / Everest K) Soft dollar commissions/ arrangements JPMorgan Chase & Co Southern States Coop Inc Note: ***Information given is provided by the Fund Manager, Note: Any differences in the percentage of the Net Asset figures Manulife Asset Management (U.S.) Limited.
are the result of rounding.
Semi-Annual Report and Financial Statements for the period 1 January 2016 to 30 June 2016 Manulife Global Fund – American Growth Fund buy back shares and increase dividends. The stocks rallied The Fund aims to achieve capital growth from a portfolio after the tests results were announced, but still ended the of North American equities, with the main emphasis on year with losses.
the United States of America. While the portfolio consists predominantly of securities of a carefully selected list Elsewhere, the sub-fund's lack of exposure to the top- of larger companies, smaller and medium-sized quoted performing utilities sector hampered relative performance. companies are also included.
Utilities stocks did not seem to be attractively valued, nor did the stocks seem to meet criteria for substantial and sustainable cash flow. Similarly, the sub-fund lost ground Investment And Market Review*** from having a sizable underweight in the consumer staples sector, as many of the more favourable-looking, higher- Market conditions were volatile during the period, largely quality stocks had already been bid up. due to shifting outlooks for US economic growth and interest rates. Plunging energy prices and disappointing Other individual detractors this period included fashion economic growth overseas further pressured returns, apparel and home furnishings company Ralph Lauren. Its resulting in a sharp market decline late last summer. Stocks stock slid as the company's turnaround dragged on for rebounded, however, in the last quarter of 2015. Many longer than investors expected. In addition, the company of these concerns eased and the Fed raised its short-term was hurt by currency challenges and by declining sales at interest rate target for the first time in nearly a decade. department stores as more consumers shopped online. Equities sank again early in the new year when oil prices Also, in the consumer discretionary sector, an investment fell even further and US recession fears resurfaced. A in used-car retailer CarMax proved disappointing, as a subsequent rally in oil prices, encouraging US economic slowdown in used-vehicle purchases led to weaker-than- data, a weaker US dollar and indications from the Fed that expected revenue numbers. The company also did not have its next interest rate hike might come as soon as this summer an adequate inventory of sport utility vehicles (SUV) and helped spur a rebound beginning in mid-February. Stocks trucks when low gas prices began boosting their popularity. were buffeted again in June by volatility leading up to the An out-of-index position in premium mattress company UK's surprise vote to leave the EU (known as "Brexit"), a Tempur Sealy International further hindered performance. decision that pushed out prospects for a near-term US rate A slowdown in big-ticket purchases resulted in softer-than- hike. Within the S&P 500 Index, the more defensive utilities, expected revenues, which hurt the stock. Lastly, shares of telecommunication services and consumer sectors posted natural gas-focused exploration and production company double-digit gains for the period, while the financials and Southwestern posted a steep loss, as gas prices collapsed energy sectors were notable laggards.
and investors worried about the company's high level of debt. Southwestern was eliminated from the sub-fund in late 2015. Portfolio Review***Security selection in the financial sector, a sizable Despite some near-term individual disappointments, overall overweighting, accounted for much of the sub-fund's security selection in the consumer discretionary sector, a underperformance relative to the S&P 500 Index. Individual sizable overweight, was strong and gave a sizable boost detractors included diversified financials Citigroup, Bank to relative performance. Much of the gain came from of America, and Morgan Stanley; each of which posted a e-commerce giant Amazon.com, the sub-fund's top holding significant double-digit decline for the period as continued and nearly 7% of assets at period end. The stock soared low interest rates kept a lid on net interest margins – the this past year, as increased financial disclosure revealed difference between what the banks earn on loans and pay strong profits in the company's cloud-computing business out on deposits. Concerns about the banks' energy loan and its continued dominance in online retail. Other strong exposure also hurt as oil prices remained well below the performers in the consumer discretionary sector included levels seen a year earlier. In addition, investors worried US-based homebuilder NVR and Germany-based athletic about the impact of slowing global growth and the UK's apparel company adidas, both of which were not in the Brexit vote. Shares of investment bank Goldman Sachs S&P 500 Index. NVR benefited from continued strong also fell sharply, as sluggish global economic growth, execution as the US housing market recovered. Adidas's weak commodities markets, interest-rate uncertainty, shares climbed as its turnaround efforts gained traction. equity market volatility and regulatory changes pressured In addition, news that the company had hired a new CEO its trading, investment banking and money management pushed the stock higher. The sub-fund's portfolio manager businesses. All four banks, however, passed regulatory (PM) locked in profits and sold the sub-fund's stake before stress tests late in the period, giving them a green light to period end. In the information technology sector, a sizable Semi-Annual Report and Financial Statements for the period 1 January 2016 to 30 June 2016 Manulife Global Fund – American Growth Fund overweight in Facebook helped performance, as the social networking company's growing mobile advertising revenues fuelled strong earnings gains that drove the stock Consumer Discretionary Information Technology Market Outlook And Investment Strategy***Looking ahead, the PM remains optimistic. The PM expects economic growth to improve, particularly because wage growth has been rising. This bolsters consumer spending, which drives roughly 70% of the economy. The PM also anticipates continued recovery in the US housing market. At some point, it's possible a stronger US economy will lead to higher interest rates, although the exact timing of the Fed's next move is unclear. In the meantime, the big US banks passed their fourth year of regulatory stress tests in late June, proving they are well capitalised and giving them the ability to increase share buybacks and dividends. The B) Top 10 Holdings as at 30 June 2016*** PM also believes Brexit will turn out to be more of a political issue rather than a liquidity concern. The PM plans to maintain the sub-fund's focus on large- Amazon.com, Inc.
capitalisation companies with strong and sustainable cash flow and reasonable or discounted stock prices. At period end, valuations on large-capitalisation stocks seemed Facebook, Inc.
attractive relative to smaller capitalisation stocks. Many stocks that meet the PM's criteria have been identified in Citigroup Inc.
the consumer discretionary and financials sectors, both of which represented sizable overweights and together over 40% of the sub-fund's assets at period end. The PM expects both sectors to benefit as US economic growth improves Alphabet, Inc.
and interest rates move higher. JPMorgan Chase & Co.
Lennar Corporation Schedule of Investments American International A) Distribution of Investments as at 30 June 2016*** Top 10 Holdings as at 30 June 2015*** Bank Of America Corp Semi-Annual Report and Financial Statements for the period 1 January 2016 to 30 June 2016 JPMorgan Chase & Co K) Soft dollar commissions/ arrangements Note: ***Information given is provided by the Fund Manager, Manulife Asset Management (U.S.) Limited.
American International GroupGoldman Sachs Group Inc Ralph Lauren Corp Note: Any differences in the percentage of the Net Asset figures are the result of rounding.
C) Exposure to Derivativesi) Market value of derivative contracts ii) Net gains/losses on derivative contracts iii) Net gains/losses on outstanding derivative contracts D) Amount and percentage of NAV invested in collective investment schemes E) Amount and percentage of debt to NAV F) Total amount of Subscriptions and Redemptions G) Amount of related-party transactions H) Expense Ratio*** 30 June 2016 : 1.70% 30 June 2015 : 1.71% I) Turnover Ratio*** 30 June 2016 : 12.59% 30 June 2015 : 18.33% J) Any material information that shall adversely impact the valuation of the Fund Semi-Annual Report and Financial Statements for the period 1 January 2016 to 30 June 2016 Manulife Global Fund – Asian Equity Fund sluggish. The National Financial Stabilization Fund and The Fund aims to achieve capital growth by investing in four other government funds had bought more than NT$4 a diversified portfolio of securities of companies listed on billion worth of stocks to help support the equity market stock markets throughout Asia including those in Australia, in February but announced plans to pull out as market Hong Kong, Indonesia, Malaysia, New Zealand, the People's sentiment had stabilised. Republic of China, the Philippines, Singapore, South Korea, Taiwan, and Thailand, but not any of the stock exchanges In South Korea, equity markets fell to start the period as in Japan. A proportion of the Fund may be invested in an outbreak of Middle East Respiratory Syndrome (MERS) warrants and convertible bonds issued by, or in respect of, forced the central bank to cut its policy rate by 25 basis such companies.
points (bps) to a record-low 1.50%. As a result, the economy grew at the fastest pace in more than five years in the third quarter, driven by a strong rebound in consumer spending. Investment And Market Review*** However, Bank of Korea trimmed its 2016 growth forecasts as sluggish exports continued to weigh on the economy. Asian equities were higher in the past year despite the The Ministry of Finance announced an additional US$17 volatile start to 2016 as central banks in Asia cut interest billion stimulus package and S&P upgraded the country's rates and maintained accommodative monetary and sovereign country rating to AA-. guidance to support growth. During the reporting period, there were concerns regarding an economic slowdown, India released its budget plans with the focus on developing fears of Greek and British exit from the EU and interest rural infrastructures, recapitalising state banks, and rate hikes in the US. The Fed raised interest rates for the maintaining spending on rails and roads. The central bank first time in close to 10 years in December 2015. The initial cut rates three times during the period and Reserve Bank negative market shock from Britain's exit from the EU of India Chief Raghuram Rajan unexpectedly announced (known as "Brexit") in Asia was short lived as most Asian he would be stepping down after his term ends in early markets rose in the month of June. In China, the People's Bank of China (PBoC) devalued the In Southeast Asia, most central banks cut interest rates to yuan in August in order to better reflect market forces, support growth. In Indonesia, parliament approved the which led to further falls in Chinese equity markets. As a long awaited Tax Amnesty Bill that the government feels result, the PBoC announced a reduction in the required will finance a widening budget given plans for increased reserve ratio, and expectations grew that Beijing would infrastructure spending to spur economic growth. The reveal more stimulus programmes to spur growth. During central bank continued to cut interest rates, showing the the National People's Congress Annual Work Report in government's willingness to favour economic growth over March, the government released growth targets for 2016 stability as inflation dropped to its lowest level in more highlighting China's pro-growth stance. China A-shares than six years in May. Optimism also grew in Thailand due were not included in the benchmark MSCI benchmark to expectations of strong growth in its tourism industry indices, citing concerns around China A-share market after recovering from a bombing in Bangkok in August. accessibility, Qualified Foreign Institutional Investors (QFII) Additionally, Indonesia and Thailand continued to make quota allocation effectiveness, capital mobility policy progress on the roll out of its infrastructure spending. In changes and the effectiveness of new trading suspension the Philippines, the country saw the largest foreign inflow policies. The Hong Kong Monetary Authority raised its in over a year as investors were encouraged by the new base rate for the first time in nine years following the hike president's policy continuity. First quarter 2016 year-on- in US interest rates. Retail sales in Hong Kong remained year GDP growth was 6.9%; the highest in almost three weak during the period and the Hong Kong Tourism Board expects mainland Chinese visitor arrivals to drop by 3.2% with spending down 4.0% in 2016. In Australia, the Reserve Bank of Australia cut the cash rate for the first time in a year to a record low 1.75% due to In Taiwan, the central bank lowered the benchmark slower inflation, moderation in unemployment data and interest rate four times over the past year to spur economic slowing wage growth.
growth and boost real demand as export growth remained Semi-Annual Report and Financial Statements for the period 1 January 2016 to 30 June 2016 Portfolio Review*** Market Outlook And Investment Strategy*** The performance stemmed from stock selection sector The Brexit shock has changed global growth/interest rate level and asset allocation decisions at the country. Positive dynamics. The sub-fund's portfolio manager (PM) expects contribution came from allocation decisions at the sector central banks to maintain a longer period of accommodative level and stock selection at the country level. Stock monetary policies on the back of lower economic growth selection in Taiwan and Thailand were the primary positive in developed markets. The deterioration of the post-Brexit macro environment Throughout 2016, the sub-fund has considerably increased points to a preference for markets with higher domestic its exposure to Southeast Asia and reduced its overall exposure and higher dividend support. In this case, the weighting in North Asia, particularly in Hong Kong and Asia ex-Japan region ranks favourably. Within the region, China. This decision was driven by Southeast Asia's South Asia is expected to fare better than North Asia. India accommodative fiscal and monetary policies, improved and the ASEAN markets are more leveraged to domestic growth outlook given government measures, progress with growth, while Australia and the North Asian markets are infrastructure rollouts and the growth in consumption. more exposed to the precarious external environment.
A Hong Kong-listed Chinese online gaming company Among the ASEAN markets, the PM prefers Indonesia. detracted from performance as a subsidiary provided The government made a big leap by passing the Tax sales guidance that was lower than expected. Although Amnesty Bill into law. If executed well, the repatriation of the parent company reported first quarter 2016 sales and offshore funds is expected to help support the country's earnings that were higher than expected, the slowdown fiscal spending on infrastructure as well as ease pressure at the subsidiary is expected to delay the profit recovery on the country's balance of payment. It is also expected to plan for the overall group. Furthermore, a Hong Kong- contribute to growth in domestic consumption and private listed Chinese property and casualty insurance company investments. Furthermore, the impact of government traded lower after announcing the acquisition of the parent spending since the earlier part of the year is gradually being company's health insurance business. Investors were wary felt. The PM expects to see improving asset turns and cash of the reason for the acquisition, the high valuation that flow for most Indonesian corporates in due course. This was paid for a loss making business and the uncertainty should help alleviate the risk of non-performing loans in from an operational front.
the banking system.
Positive contributors included a company that operates Investor sentiment towards China eased during the past department stores in Thailand which traded higher as quarter and the government remains in control of its capital domestic consumption is picking up on the back of account. However, growth momentum is expected to additional public holidays and government stimulus taper off in the second half of the year as the government measures to support domestic travel. Another was a Hong reins in credit growth after a very strong first quarter. Kong-listed Chinese automotive parts manufacturer that The government's focus has shifted to supply side reform contributed to performance. Its growth prospects remain in the coal and steel sectors. While still in its early stage, strong due to an improvement in sales and margins due to the expectation of tighter supply has helped raise prices of a shift in product mix.
these materials and thus helped improve the profitability of companies in these sectors. The sustainability of supply From a sector perspective, stock selection in financials, discipline, in the PM's view, is crucial to support the materials, information technology and utilities expectations that have already been well reflected in the detracted from performance. Offsetting some of the valuations of stocks in the material sector.
underperformance was the underweight in financials and stock selection in telecommunications. Additionally, In Taiwan, the new Democratic Progressive Party (DPP) consumer discretionary continues to perform well as stock government is more focused on domestic issues. It has selection and the overweight in the consumer discretionary launched a new economic plan targeting five sectors: sector contributed to performance. The sub-fund's largest a Taiwan "Silicon Valley" focused on IT/e-commerce, underweight remains financials.
renewable "green" energy, precision machinery, biotechnology and defence. The PM will seek investment opportunities related to the new economic plan going forward as growth in the iPhone and related smartphone supply chain peaks. Taiwan equities also have strong dividend support, which is desirable in the current low growth, low rate environment.
Semi-Annual Report and Financial Statements for the period 1 January 2016 to 30 June 2016 Manulife Global Fund – Asian Equity Fund In India, the PM continues to like the domestic consumption Advantech Co., Ltd.
theme. The PM expects private consumption growth to rise driven by above normal monsoons and the implementation Beijing Capital International of the pay commission recommendations. Private Airport Co., Ltd. Class H consumption is expected to be the key driver of India's Picc Property & Casualty Co. economic growth while corporate investment and exports are likely to remain lacklustre in the near term.
Top 10 Holdings as at 30 June 2015*** Schedule of Investments A) Distribution of Investments as at 30 June 2016*** Samsung Electronics Co., Ltd.
Tencent Holdings Ltd.
AIA Group Limited Consumer Discretionary Bank Of China Limited China Construction Bank Corporation Class H Picc Property & Casualty Co. Ltd. Class HChina Life Insurance Co. Ltd. Information Technology Bgf Retail Co., Ltd.
Samsung C & T Corporation Flexium Interconnect, Inc.
Note: Any differences in the percentage of the Net Asset figures are the result of rounding.
B) Top 10 Holdings as at 30 June 2016*** C) Exposure to Derivatives i) Market value of derivative contracts Samsung Electronics Co., Ltd.
ii) Net gains/losses on derivative contracts Tencent Holdings Ltd.
AIA Group Limited iii) Net gains/losses on outstanding derivative contracts Taiwan Semiconductor Manufacturing Co., Ltd.
China Mobile Limited D) Amount and percentage of NAV invested in collective investment schemes Amorepacific Corp.
Aerospace Industrial Development Corp.
E) Amount and percentage of debt to NAV Semi-Annual Report and Financial Statements for the period 1 January 2016 to 30 June 2016 F) Total amount of Subscriptions and Redemptions G) Amount of related-party transactions H) Expense Ratio*** 30 June 2016 : 1.88% 30 June 2015 : 1.89% I) Turnover Ratio*** 30 June 2016 : 205.85% 30 June 2015 : 132.81% J) Any material information that shall adversely impact the valuation of the Fund K) Soft dollar commissions/ arrangements Note: ***Information given is provided by the Fund Manager, Manulife Asset Management (Hong Kong) Limited.
Semi-Annual Report and Financial Statements for the period 1 January 2016 to 30 June 2016 Manulife Global Fund – European Growth Fund suppliers and chemical companies were correlated with The Fund aims to achieve capital growth from a diversified the price of oil to varying degrees. Similarly, a low oil price portfolio of equities in mainly larger companies quoted on negatively affected the large oil producing nations such as stock markets in Europe (including in the United Kingdom).
the Middle Eastern states, Russia, Brazil and the US. The main emphasis of the investment strategy of the Fund The consumer discretionary sector was surprisingly weak. is on the assessment and selection of individual stocks The crackdown on corruption in China hurt the luxury within the European markets.
end of the market and stuttering economic growth in emerging markets weighed on auto sales. Some traditional retail formats also struggled to deal with the transition to Investment And Market Review*** ecommerce and online disruptors like Amazon. The UK referendum also sparked concerns that the economy was Over European equity investors experienced their second headed into recession, which negatively affected UK retail consecutive year of negative returns in US dollars. Corporate profits stalled in the face of falling commodity prices, a sharp slowdown in emerging markets and more stringent Concerns that the UK would leave the EU, which had banking regulation. The UK's surprising decision (known weighed on UK equities throughout the year, took a step as "Brexit") to exit the European Union (EU) following its closer to becoming reality following the June referendum referendum also resulted in investors pulling money out of when 52% of voters opted to leave. The British pound fell European equities.
sharply on the news, hitting a 31-year low against the US dollar. The worst affected sectors in the subsequent sell-off Escalating costs of regulation and balance sheet concerns were UK house-builders and retailers, and UK and European led to another year of poor performance for the European banks. Paradoxically, the FTSE 100 Index (which is made financial sector. The uncertainty over asset quality was up of UK companies) outperformed European equities in most acute in Italy, which was among the weakest June because the majority of UK-listed large-capitalisation performing countries over the year. In addition, the move revenues are generated in US dollars and were relatively by the European Central Bank to negative interest rates insulated from currency weakness and domestic economic has flattened the yield curve, further placing pressure on uncertainty. European companies, by contrast, are more their margins and earnings outlook. Banks have also had exposed to the economies of continental Europe, which to provision more for loans to companies operating in may suffer from the UK referendum more than globally- emerging markets and the energy sector. focused UK companies.
The materials sector was affected by a combination of falling demand from China and a surplus of low-cost new supply from Australia and Brazil. Since the start of 2016, Portfolio Review*** iron ore prices have rebounded sharply from their lows as Significant individual contributors to the Fund's performance China resorted to fiscal stimulus to counteract its economic included SCA Group, Admiral Group and Rheinmetall. Rheinmetall benefited from Germany's commitment to spend 2% of its GDP on defence. Bathroom tissue maker Oil rebounded in February 2016 after falling over 60%, SCA Group performed well after its valuation rose to trade largely as a result of additional supply from US shale basins more in line with consumer staples, which its business coming on stream at a time of subdued global demand. model more closely resembles than the materials sector When oil is below US$40–50 per barrel, however, the in which it is technically classified. Admiral Group, the UK majority of shale prospects are below cash breakeven. car insurer, continued to deliver strong dividend growth Furthermore, as shale wells have short reserve lives, an underpinned by industry leading profitability, market share extended period of oil at US$30 per barrel would have gains and pricing power.
resulted in a supply deficit by 2018. The most significant detractor from the Fund's performance In theory, the low oil price should have boosted consumer was Intesa Sanpaolo, which suffered from rising political spending. But from an equity market perspective it seemed risk as Italy holds its own referendum in October on to mainly have a negative impact. Profits for various sectors whether to implement Prime Minister Renzi's structural ranging from energy producers and oil services to industrial reforms. A rejection of the proposals could play into the hand of populist parties that seek to take Italy out of the eurozone. Individual detractors from performance also Semi-Annual Report and Financial Statements for the period 1 January 2016 to 30 June 2016 included aerospace and defence company Cobham, which announced a significant equity issuance to strengthen its balance sheet. Standard Chartered (Hong Kong) and HSBC also detracted, as both holdings struggled with slowing economic growth in Asia and regulatory uncertainty.
During the year, the portfolio manager (PM) added Publicis Groupe, Liberty Global, Halfords Group and Groupe Eurotunnel to the Fund as some of these stocks were trading at their most attractive levels since 2012. PM increased the Fund's position in Hugo Boss after the company's stock price fell following an earnings downgrade. PM decreased the Fund's position in Berendsen because it was nearing fair value.
Market Outlook And Investment Strategy***The UK's decision to leave the EU may be a game-changer for the European economy, and it may affect the global economy as well. In the short term, expectations of economic momentum across Europe will likely decline, and Consumer Discretionary businesses and consumers will react cautiously. PM believes a recession in Europe is now a distinct possibility, and PM will revisit the expectations of growth in the cash flow models and assess the impact on valuations.
Information Technology It is important, however, to note that not all UK firms will be adversely affected. For example, companies that Telecommunication earn foreign revenues with almost no exposure to the domestic UK economy, and are most exposed to the wider global economy, may be sheltered. PM believes they will outperform in a scenario where investors question the B) Top 10 Holdings as at 30 June 2016*** sustainability of the EU. Secondly, PM has been nervous for some time about the UK domestic economy, with or without a Brexit scenario, and has been relatively cautious towards UK financials and consumer stocks. It is also worth mentioning that such volatile periods will offer GlaxoSmithKline plc good opportunities for active long-term investors. PM is finding these opportunities in favoured names that are Koninklijke Ahold N.V.
exhibiting strong free cash flow yields with reinvestment opportunities, and are trading at a significant discount to Royal Dutch Shell Plc their long term value.
Zurich Insurance Group AG Henkel AG & Co. KGaA Schedule of Investments HSBC Holdings plc A) Distribution of Investments as at 30 June 2016*** Semi-Annual Report and Financial Statements for the period 1 January 2016 to 30 June 2016 Manulife Global Fund – European Growth Fund Top 10 Holdings as at 30 June 2015*** G) Amount of related-party transactions Glaxosmithkline PLC H) Expense Ratio*** 30 June 2016 : 1.80% Koninklijke KPN NV 30 June 2015 : 1.77% HSBC Holdings PLC I) Turnover Ratio*** 30 June 2016 : 48.94% 30 June 2015 : 22.50% J) Any material information that shall adversely Roche Holding AG- impact the valuation of the Fund Admiral Group PLC Telecom Italia SPA K) Soft dollar commissions/ arrangements RSA Insurance Group PLC Note: Any differences in the percentage of the Net Asset figures Note: ***Information given is provided by the Fund Manager, MFC are the result of rounding.
Global Investment Management (Europe) Limited.
C) Exposure to Derivativesi) Market value of derivative contracts ii) Net gains/losses on derivative contracts iii) Net gains/losses on outstanding derivative contracts D) Amount and percentage of NAV invested in collective investment schemes E) Amount and percentage of debt to NAV F) Total amount of Subscriptions and Redemptions Semi-Annual Report and Financial Statements for the period 1 January 2016 to 30 June 2016 Manulife Global Fund – Global Property Fund Later in the period, the UK referendum on leaving the The Fund is a unitized equity fund which is primarily EU (known as "Brexit") increased volatility leading up designed to provide medium to long-term capital growth to the vote. Markets declined in light of the uncertainty with the secondary goal of generating income. The Fund about what a post-Brexit Europe would look like. Interest is suitable for those who hold a long-term investment view rates also declined, which helped support the real estate and who are prepared to accept significant fluctuations in sector as investors became more risk averse. Energy prices the value of their investments in order to achieve long-term stabilised earlier in the quarter, which helped steady equity markets. Economic growth in the US remained tepid, which resulted in expectations that interest rate increases would It is intended that the investments will be made on a diversified basis. The underlying investment portfolio will mainly consist of real estate securities primarily real estate investment trusts (REITs) of U.S. and non-U.S. companies. Portfolio Review*** The Fund may invest in companies which derive a significant Stock selection in Australia and Germany contributed to portion of earnings from the development or management the sub-fund's performance over the period. The sub-fund's of real estate situated in the U.S. and other non-U.S. underweight position in Singapore and overweight position countries. The investment instruments of the portfolio in the US also contributed. An overweight position in include, but are not limited to, North American REITs (the technology-related real estate investment trusts (REITs) that U.S. and Canada), non-U.S. REITs, real estate company own, manage, develop or operate data centres contributed equities, bonds (as low as BB), short-term securities, to performance. US data centre REITs such as CyrusOne, equity securities of non-real estate securities and deposits. CoreSite Realty and Digital Realty posted strong financial The underlying REITs may not necessarily be authorised results throughout the year, and overall technology trends by the Securities and Futures Commission in Hong Kong continued to drive demand for data centre space. Daito and the dividend policy/payout policy of the Fund is not Trust Construction showed stronger financial results as representative of the dividend policy/payout policy of the construction orders for new apartments continued to underlying REITs.
improve. With German residential properties heavily sought after as the industry looks to consolidate, financial results The Fund may also invest in bonds of any maturity rated at during the past year for Deutsche Wohnen were strong and BB grades and unrated bond equivalents. If the Investment above expectations. Manager so determines, it may also temporarily invest in investment grade short-term securities and/or cash, and Stock selection in the US, Hong Kong and Japan detracted non-U.S. securities including sponsored and unsponsored from the sub-fund's performance. The sub-fund's American Depository Receipts. overweight position in the lodging sector and underweight position in storage REITs in the US also detracted from performance, as did its overweight exposure to Hong Kong Investment and Market Review*** and its underweight position in Japanese REITs. Individual detractors from performance included UK property Concerns over growth in emerging markets, China's companies such as British Land and Land Securities Group, devaluation of its currency and uncertainty surrounding which declined due to Brexit. Lodging companies La future moves by the Fed put pressure on global equity Quinta, FelCor Lodging Trust and Diamondrock Hospitality markets early in the period. The real estate sector also declined. La Quinta was weaker given its exposure to outperformed during this volatile start to the period, as energy markets, especially in Texas. Hang Lung Properties market participants sought the shelter of more defensive was weaker during the period as retail sales in Hong Kong and China declined.
The Fed raised its benchmark interest rate as economic Over the period, the sub-fund's portfolio manager (PM) data remained steady. Despite the Fed's actions, interest increased exposure to Japanese REITs such as Japan Real rates remained at historically low levels, which continued Estate Investment Trust and Japan Retail Fund Investment. to support the real estate sector. The European Central The PM decreased positions that had posted strong Bank indicated that it was open to further quantitative performance, for example in data centre REITs Digital easing (increasing the money supply), as it tries to stimulate Realty, CoreSite and CyrusOne. The PM also trimmed select economic growth.
US positions including Rexford Industrial Realty and Simon Property Group.
Semi-Annual Report and Financial Statements for the period 1 January 2016 to 30 June 2016 Manulife Global Fund – Global Property Fund The PM continues to retain underweight positions in Europe and Japan and an overweight position in the US. The underweight position in European property companies is the result of an overall weaker economic growth outlook and unattractive valuations relative to other regions. The PM favours the Nordic, Irish and German real estate markets within Europe but retains an underweight exposure overall. The overweight position in the US is the result of stronger property fundamentals and a positive outlook on relative economic growth.
14,894,736.50 93.87 Market Outlook And Investment Strategy*** The PM believes that the outlook for the real estate sector remains positive. Given uncertainty in Europe and recent Consumer Discretionary economic data in the US, it is expected that major central banks are likely to continue to ease interest rates in order to stimulate economic growth. With interest rates still at B) Top 10 Holdings as at 30 June 2016*** historically low levels, the sector represents an attractive opportunity for income-oriented investors as well as those who are risk averse in the current environment. Simon Property Group, Inc.
Expectations for improving economic conditions should continue to support the real estate sector given the relatively Digital Realty Trust, Inc.
low supply, which should lead to higher occupancy and Prologis, Inc.
rents. The sector continues to offer an attractive dividend yield versus other yield securities. Within the market, the Mitsubishi Estate Company, PM continues to find attractive opportunities that trade at significant discounts to their net asset values. The PM General Growth Properties, believes the current share prices and yields they offer are still at attractive levels.
Mitsui Fudosan Co., Ltd.
Essex Property Trust, Inc.
Schedule of Investments Boston Properties, Inc.
A) Distribution of Investments as at 30 June 2016*** Daito Trust Construction Vornado Realty Trust 8,827,713.46 55.63 Top 10 Holdings as at 30 June 2015*** 1,730,819.29 10.91 Simon Property Group Inc Mitsubishi Estate Co Ltd Digital Realty Trust Inc Mitsui Fudosan Co Ltd Sun Hung Kai Properties Paramount Group Inc Semi-Annual Report and Financial Statements for the period 1 January 2016 to 30 June 2016 Sumitomo Realty & K) Soft dollar commissions/ arrangements Cheung Kong Property Note: ***Information given is provided by the Fund Manager, British Land Co Plc Manulife Asset Management (Hong Kong) Limited.
Essex Property Trust Inc Note: Any differences in the percentage of the Net Asset figures are the result of rounding.
C) Exposure to Derivativesi) Market value of derivative contracts ii) Net gains/losses on derivative contracts iii) Net gains/losses on outstanding derivative contracts D) Amount and percentage of NAV invested in collective investment schemes E) Amount and percentage of debt to NAV F) Total amount of Subscriptions and Redemptions G) Amount of related-party transactions H) Expense Ratio*** 30 June 2016 : 2.27% 30 June 2015 : 2.19% I) Turnover Ratio*** 30 June 2016 : 3.98% 30 June 2015 : 3.22% J) Any material information that shall adversely impact the valuation of the Fund Semi-Annual Report and Financial Statements for the period 1 January 2016 to 30 June 2016 Manulife Global Fund – Japanese Growth Fund survey announced at the beginning of April. For corporates, The Fund aims to achieve growth principally from a currency concerns and the spectre of a further 2% portfolio of Japanese stocks with the emphasis on larger consumption tax hike in April 2017 are weighing on their companies. Scope exists for a proportion of the Fund to be outlook for coming years. However, there could be signs invested in warrants. It should be noted that the value of for a stronger domestic economy in 2016. These include assets invested in warrants is subject to greater fluctuations, the approval of a record budget in March, and hints of a warrants being more volatile than ordinary shares.
recovery in private capital spending with new housing starts rising in February.
Investment And Market Review*** The market was driven by yen strength over the second quarter, which has been a feature since the Bank of Japan The TOPIX Total Return Index (TOPIX) fell by 21.97% in yen first announced a policy of negative interest rates at the terms over the past 12 months. The equity market finally end of January. The yen's strengthening was hastened by trended downwards due to a stronger yen, which was the delay in any further Fed rate rise, due to a slowdown supported by risk-off money flow.
in the US followed by Brexit at the end of last month. The yen rose from 113 to 103 over the period. Although the In the third quarter of 2015, the Japanese market succumbed market declined 8% in yen terms, it actually rose slightly in to a sell-off, falling 12.9% in yen terms. Although global US dollar terms. The Brexit referendum and the Leave result markets were also in decline, the reaction of the Japanese have caused a major upset in global markets. Although it market was more extreme. Possible reasons for this were should not have a major impact on global growth, it has that Japan is considered a liquid proxy for emerging clearly raised concerns about a rise in protectionism and a markets and is generally considered a trading rather than pandering to populism that could have further geopolitical an investment market by some foreign investors. There was also some disappointment with the slowing momentum of Abenomics reforms, which caused the S&P ratings agency to downgrade Japanese government debt by one notch to A+.
Portfolio Review*** Over the past 12 months, sector allocation effect and stock After a sharp sell-off in the third quarter, the Japanese selection effect contributed negatively while interaction market saw a strong recovery in the fourth quarter. The effect became positive. Financial sectors such as securities Japanese market rose almost 10%, outperforming all other & commodity futures, banks, and insurances negatively global markets. Despite some concerns about the technical affected the fund. On the other hand, domestic sectors recession in Japan in the second and third quarters, the such as information & communication, as well as fishery, market focused more on expected improvements in the agriculture & forestry contributed positively.
fourth quarter. This is because the recession had been driven by a drawdown of inventories rather than a decline The best contributor was Nippon Suisan Kaisha, a seafood in demand. Economic data showed a continued squeeze in producer. The company enjoyed brisk sales of food the employment market with the jobs-to-applicants ratio of products even after price hikes. On the negative side, 1.25, now at its highest level since 1991. Core consumer financial services provider Nomura Holdings fell as the price index (CPI) edged back towards 1%, which may equity market lost momentum.
have persuaded the Bank of Japan to make only a limited extension of its quantitative easing (QE) policy on 18 December by announcing a slight increase in the duration Market Outlook And Investment Strategy*** of Japanese Government Bonds it intends to buy. Since the beginning of the year, MSCI Japan has underperformed MSCI World by 5.1% in US dollar terms. The market had a weak start to 2016, declining 12% in This recent relative underperformance has brought back yen terms. This was weaker than most developed markets. the question of whether Japanese equities are a trade The two concerns driving the Japanese market's decline (short-term beta play on the global economy) or an were the slowdown in the Chinese economy and the investment (long-term holding strategy on improving and impact of currency appreciation. Japan's unemployment sustainable Japanese returns on equity). Yen strength in the rate continued to decline towards 3% and core inflation first half of the year, and weak company forecasts in April/ remained close to 1%. These statistics show a positive May, have led many investors to feel that Japan's earnings outlook to the Japanese economy, despite negative GDP improvement in the Abe era is ephemeral. figures for last year's fourth quarter and a weak Tankan Semi-Annual Report and Financial Statements for the period 1 January 2016 to 30 June 2016 We believe that today's Japan is less vulnerable to Tokio Marine Holdings, Inc.
currency movements, as a large part of its production base has moved overseas. We also believe that the West Japan Railway focus on improving returns and better use of corporate cash positions is starting to have a positive effect. The NH Foods Ltd.
government is lowering corporate tax rates and is looking at incentivising corporates to spend their cash piles rather than just have them sitting on their balance sheets. This could drive a further leg to Japan's economic recovery.
Top 10 Holdings as at 30 June 2015*** Schedule of Investments Sumitomo Mitsui Financial A) Distribution of Investments as at 30 June 2016*** Group, Inc.
Mizuho Financial Group, Nippon Telegraph and Telephone Corporation Consumer Discretionary Tokio Marine Holdings, Inc.
Hitachi Ltd.
NTT DoCoMo, Inc.
Nomura Holdings, Inc.
Toyota Motor Corp.
Information Technology Sony Financial Holdings Note: Any differences in the percentage of the Net Asset figures Telecommunication are the result of rounding.
C) Exposure to Derivatives i) Market value of derivative contracts B) Top 10 Holdings as at 30 June 2016*** ii) Net gains/losses on derivative contracts iii) Net gains/losses on outstanding derivative contracts Nippon Telegraph and Telephone CorporationSoftBank Group Corp.
D) Amount and percentage of NAV invested in East Japan Railway collective investment schemes Mitsubishi UFJ Financial E) Amount and percentage of debt to NAV Yamada Denki Co., Ltd.
Astellas Pharma Inc.
F) Total amount of Subscriptions and Redemptions Maruha Nichiro Corp.
Semi-Annual Report and Financial Statements for the period 1 January 2016 to 30 June 2016 Manulife Global Fund – Japanese Growth Fund G) Amount of related-party transactions H) Expense Ratio*** 30 June 2016 : 1.90% 30 June 2015 : 2.01% I) Turnover Ratio*** 30 June 2016 : 109.27% 30 June 2015 : 143.19% J) Any material information that shall adversely impact the valuation of the Fund K) Soft dollar commissions/ arrangements Note: ***Information given is provided by the Fund Manager, Manulife Asset Management (Hong Kong) Limited.
Semi-Annual Report and Financial Statements for the period 1 January 2016 to 30 June 2016 Financial Statementsfor the Period 1 January 2016 to 30 June 2016 • Statement of Assets and Liabilities • Capital Account • Notes to the Accounts Semi-Annual Report and Financial Statements for the period 1 January 2016 to 30 June 2016 Statement Of Assets And Liabilities As At 30 June 2016 Cash and Cash Equivalents Value of Investment in Unit Trusts Value of Investments
44,943,927
6,730,603
23,621,330
Due from Brokers for investment sales Total Assets
44,943,927
7,035,319
23,621,330
Due to Brokers for investment purchases Other liabilities Value of Fund as at 30 June 2016
44,451,598
7,025,301
23,585,587
Semi-Annual Report and Financial Statements for the period 1 January 2016 to 30 June 2016 Capital Account For The Period 1 January 2016 To 30 June 2016 Value of Fund as at 1 January 2016
48,153,889
6,616,545
24,345,775
Amount paid (by)/to the fund for (liquidation)/ creation of units Investment income Net realised gain/(loss) on sale of investments Unrealised appreciation/(loss) in value of investment during the period Exchange gain/(loss) Fund income/(expenses) Value of Fund as at 30 June 2016
44,451,598
7,025,301
23,585,587
Semi-Annual Report and Financial Statements for the period 1 January 2016 to 30 June 2016 Notes To The Accounts 1. Significant Accounting Policies (a) Basis of Accounting The accounts of the SRP Lifestyle Portfolio Funds (US$),are prepared under the historical cost convention except for the investments which are stated at market value. As the SRP Lifestyle Portfolio Funds are denominated in the United States dollars, the annual report is expressed in United States dollars.
(b) Cash and Cash equivalents Cash and cash equivalents comprise cash deposited with financial institutions that are subject to an insignificant risk of changes in value.
Unit trusts are valued at the market prices on 30 June 2016.
(d) Investment Income Dividend income is taken up in the financial statements when it is declared payable. Interest income is recognised using the effective interest method.
(e) Foreign Currencies Transactions arising in foreign currencies during the period are converted at rates closely approximating those ruling on the transaction dates. Foreign currencies denominated monetary assets and liabilities are translated into local currency at exchange rates ruling on the financial statement date. All exchange differences arising from conversion are included in the capital account. (f) Realised Gain/(Loss) on Sale of Investments Gain/(loss) on sale of investments is determined at average cost and includes realised foreign exchange gains and losses.
The number of units issued as of valuation date 30 June 2016: SRP Aggressive (US$) 40,734,151.00966 SRP Balanced (US$) 5,625,397.04721 19,569,919.53285 Semi-Annual Report and Financial Statements for the period 1 January 2016 to 30 June 2016 Statement Of Assets And Liabilities As At 30 June 2016 Cash and Cash Equivalents Value of Investment in Unit Trusts Value of Investments
26,375,972
109,346,549
Due from Brokers for investment sales Total Assets
26,375,972
109,346,549
Due to Brokers for investment purchases Other liabilities Value of Fund as at 30 June 2016
26,334,409
109,159,262
Semi-Annual Report and Financial Statements for the period 1 January 2016 to 30 June 2016 Capital Account For The Period 1 January 2016 To 30 June 2016 Value of Fund as at 1 January 2016
27,043,767
113,630,194
Amount paid (by)/to the fund for (liquidation)/ creation of units Investment income Net realised gain/(loss) on sale of investments Unrealised appreciation/(loss) in value of investment during the period Exchange gain/(loss) Fund (expenses)/income Value of Fund as at 30 June 2016
26,334,409
109,159,262
Semi-Annual Report and Financial Statements for the period 1 January 2016 to 30 June 2016 Notes To The Accounts 1. Significant Accounting Policies (a) Basis of Accounting The accounts of the SRP Lifestyle Portfolio Funds (S$), expressed in Singapore dollars, are prepared under the historical cost convention except for the investments and derivatives which are stated at market value. (b) Cash and Cash equivalents Cash and cash equivalents comprise cash deposited with financial institutions that are subject to an insignificant risk of changes in value.
(c) Investments and derivatives Unit trusts and derivatives are valued at the market prices on 30 June 2016.
(d) Investment Income Dividend income is taken up in the financial statements when it is declared payable. Interest income is recognised using the effective interest method.
(e) Foreign Currencies Transactions arising in foreign currencies during the period are converted at rates closely approximating those ruling on the transaction dates. Foreign currencies denominated monetary assets and liabilities are translated into local currency at exchange rates ruling on the financial statement date. All exchange differences arising from conversion are included in the capital account. (f) Realised Gain/(Loss) on Sale of Investments Gain/(loss) on sale of investments is determined at average cost and includes realised foreign exchange gains and losses.
The number of units issued as of valuation date 30 June 2016: S$ SRP Balanced (S$) 20,822,907.10037 S$ SRP Growth (S$) 86,869,807.83138 Semi-Annual Report and Financial Statements for the period 1 January 2016 to 30 June 2016 This page has been intentionally left blank.
Semi-Annual Report and Financial Statements for the period 1 January 2016 to 30 June 2016 SRP Lifestyle Portfolio Investment-Linked Policy Sub-Funds Report and Financial Statements 1 January 2016 to 30 June 2016
MCI (P) 106/03/2016

Source: https://www.manulife.com.sg/pdfs/FP_ILP_Annual_SRP_Report_2016.pdf