UBS Asset Management

Hong Kong edition | End July 2023

Grow with
future leaders
in China
yuan jian | foresight, vision

UBS (Lux) Equity Fund –

China Opportunity (USD)

Morningstar Rating™
As of 31 July 2023

Awards

Fund Selector Asia House Benchmark Fund of the Year Awards 2020
Awards Singapore 2021 Best-in-Class of China Equity category
Best Equity House
Refinitiv Lipper Fund Award 2020
Best Fund over 3 years, Equity China
Best Fund over 5 years, Equity China
Morningstar Awards 2020
Best Greater China Equity Fund Fund Selector Asia Fund Awards
Hong Kong 2021
Gold Award - Greater China/China Equity
For more information about the awards mentioned, please visit the award page of our website.
category

Important informatio
1. The Fund, UBS (Lux) Equity Fund – China Opportunity (USD) (“ UBS China Opportunity Equity Fund”)
primarily invests in shares of companies that are either domiciled in or with their main business in China. The
aggregate exposure (whether direct or indirect) to China A-Share and China B-Share markets for the Sub-Fund will be
maintained at 20% or below of its total net asset value.
2. The Fund’s investments in emerging markets, e.g. PRC, may involve a greater risk than developed markets including
sharp price movements, liquidity risk and currency risk. The Fund’s investment in a single country may be subject to
a higher level of risks comparing to a fund investing in a more diversified portfolio/strategy. Under extreme market
circumstances, the Fund may suffer substantial loss.
3. The Fund may use financial derivative instruments (“FDI”) for investment management and hedging purposes.
Although financial derivative instruments will not be used extensively for investment purposes, the use of derivatives
may involve additional risks, e.g. leverage, liquidity, counterparty risks.
4. Specifically for the P-mdist share class, the Fund may at the discretion of the Management Company make
distributions out of capital or out of gross income while charging/paying all or part of the Fund’s fees and expenses
to/out of capital of the Fund, resulting in an increase in the payment of dividends by the Fund. Payment of dividends
out of capital or on a gross-of-fee basis may result in an immediate reduction of the net asset value per share.
5. Any distributions from the income and/or involving the Capital result in an immediate reduction of the net asset
value per unit of the Sub-Fund. Payment of dividends out of Capital amounts to a return or withdrawal of part of an
investor’s original investment or from any capital gains attributable to that original investment.
6. Investors should not invest in the Fund solely based on this document and should read the relevant offering
document.
Why now is the best time to invest in China equity market?
China's economic transformation brings up new investment opportunities
China’s economic transformation will consolidate China's international position. Besides, China's economic growth,
which is underpinned by various favorable factors, has created a lot of opportunities for the investors
Rebalancing towards a more service… …more consumption driven economy
% of GDP % of GDP
Tertiary
60 Industry
65

50 60
55 Total
40 Secondary Consumption
Industry 50
30
45
Total
20 40 Investment
Primary (GCF)
10 Industry 35
0 30
90 93 96 99 02 05 08 11 14 17 20 Year 96 00 04 08 12 16 20 Year

Source: Morgan Stanley Research, data as of Q4 2021 Source: Morgan Stanley Research, data as of December 2020
Note: Primary industry involves the extraction and collection of natural resources. Secondary industry refers to Industry and Construction.Tertiary
industry refers to Transport, Storage and Post; Wholesale and Retail Trade; Hotels & Catering Services; Financial Intermediation; Real Estate and Others
GCF: gross capital formation.
This information should not be considered as a recommendation to purchase or sell any security

Primary Secondary Tertiary Total Consumption Total Investment (GCF)

Industry Industry Industry
Service and consumption are the main drivers for China's economic development, and they boost economic growth.

China’s online retail market Urbanization continuously Significant growth in Aging population boosts
has room to grow increases the demand for spending on innovation the healthcare sector
services R&D and international filing market's growth

Meanwhile, the China market has risks but many opportunities, and it is still attractive:

． The second largest stock ． Considerable structural ． US-China friction may continue
market in the world growth areas
． Tightening regulatory environment
． Many opportunities conducive ． Growing discretionary and
to active management premium consumption ． Some hot sectors are overvalued

． Technology and R&D to rival ． Clean energy and ． Covid is still impeding economic
the U.S. environmental priority growth

． 5-Year-Plan to achieve ． Potential contagion risk from real

long-term planning estate sectority

Attractive valuation
Chance to earn abnormal profits through long-term holding
12M forward price-to-earnings ratio (P/E)

10 years history
28 High / low + / - 1 S.D. Current
24
21.4
20
17.7 17.0
16 15.6 15.6 14.6 13.9
12 13.1 12.5
11.2 11.9
10.6
8 8.6
4
India

Singapore

Philippines

Indonesia

Malaysia

Hong Kong

Taiwan

Korea

Asia ex-Japan

China

China A

US
Thailand

Source: FactSet, MSCI, UBS Asset Management. As of end August 2022. Past performance is not indicative of future results.
Note: For reference only. This information should not be considered as a recommendation to purchase or sell any security
S.D. : Standard deviation
Why invest in UBS China Opportunity Equity Fund?
Fund performance
5 years performance (Repositioning date performance rebased to 100)
Performance Fund Reference Peer Average:
450 (in USD, %) cumulative Index: MSCI China Equity
(net of fees) returns China 10/40
400
YTD1 0.42 4.71 -1.47

350
1 Year -2.89 1.14 -6.55

300
3 Years -35.71 -22.37 -25.11

250
5 Years -8.46 -10.74 -7.18

200 Source: UBS Asset Management, Morningstar, Bloomberg, data as of

31 July 2023, unless otherwise stated. UBS (Lux) Equity Fund – China
Opportunity (USD) fund inception: 15 November 1996. Repositioned
150 to current strategy on 19 July 2010. Performance is calculated on
NAV to NAV basis, with dividend reinvested, based on P-acc (USD).
Performance shown is net of fees. Annual performance of UBS (Lux)
100 Equity Fund – China Opportunity (USD) P-acc in the last five years:
2017 (59.69%), 2018 (-14.83%), 2019 (41.56%), 2020 (28.28%), 2021
(-25.90%),2022 (-20.70%). Past performance is not indicative of
50
future results. Reference index changed from MSCI China to MSCI
July/18 July/19 July/20 July/21 July/22 July/23 China 10/40 with effect from 1 January 2018. Peer Group average is
the average fund performance of Morningstar China Equity universe
UBS China Opportunity Equity fund Reference Index Peer Average (in terms of USD).
1 YTD: Year-to-date (since beginning of the year)

New economy sectors at the heart of the fund portfolio

Sector allocation Top 10 holdings Fund (%) Index (%)
35.0% Kweichow Moutai 9.83 0.98
30.0%
Tencent Holdings Ltd 9.79 8.45
25.0%
20.0% NetEase Inc 9.68 2.11
15.0% Alibaba Group Holding Ltd 7.18 8.86
10.0% Ping An Bank Co Ltd 4.93 2.49
5.0%
China Merchants Bank 4.53 1.25
0.0%
AIA Group Ltd 3.97 -
Financials

Communication
Services
Consumer
Staples
Consumer
Discretionary

Real Estate

Health Care

Industrial

Information
Technology

Materials

Energy

Utilities
Cash

Ping An Bank Co Ltd 3.83 0.10

CSPC Pharmaceutical Group 3.82 0.37

UBS China Opportunity Equity Fund MSCI China 10/40 Index

Meituan 3.78 4.68

Source: UBS Asset Management. MSCI, Corporate information. Data as of 31 July 2023.
This information should not be considered as recommendation to buy or sell any security. The portfolio is actively managed,
thus the allocations and positionings can be changed any time at UBS's / the portfolio manager's sole discretion.

Invest in attractive sectors and leading companies

Our fund’s analysts conduct in-depth industry and company research and identify leading companies in China that would
outperform industry earnings growth and have attractive valuations.

China Merchants Bank Kweichow Moutai

• One of the leading retail and consumer banking franchise • Market leading in the Baiju (white liquor) market in China
in China • The company is well positioned to benefit from the
• Well-positioned to benefit from China’s growing wealth consumer premiumization trend in China, given its strong
• A majority of profits comes from its resilient retail business presence in the ultra-premium Baiju segment
• High share of low-cost demand deposits to total deposits • Consumption upgrades, stronger brand image and
(highest in its sector2), leading to high growth potential healthier competition landscape will be key drivers for the
long term growth
This information should not be considered as a recommendation to purchase or sell any security.
2 JP Morgan, as of end December 2020.
 Fund information
Fund name UBS (Lux) Equity Fund – China Opportunity (USD)3
Fund inception date 15 November 1996
(Repositioned to current strategy on 19 July 2010. Old sub-fund name
was UBS (Lux) Equity Fund – Hong Kong)
Base currency USD

Reference index MSCI China 10/40

Total fund assets USD 4.853 billion (as of 31 July 2023)

Management fee 1.87% p.a. ; hedged share class: 1.91% p.a.

Dealing Daily

Available share classes ISIN Subscription Fee

(USD) P-acc LU0067412154

(HKD) P-acc LU1008478684 Up to 5%

(AUD hedged) P-acc LU1227825731

(USD) P-mdist 5,6

LU1152091168

(HKD) P-mdist5,6 LU1152091754 Up to 5%4

(AUD hedged) P-mdist5,6 LU1230129766

3 Following the realignment of the UBS investment fund range, asset allocation for this fund was adjusted with effect from 19 July 2010. All
performance details thus refer to the date of the repositioning.
4 Hong Kong distributors will currently only charge up to 5% of the subscription amount. However, investors should note that a maximum of
up to 6% of the subscription amount may be charged upon giving 1 month’s prior notice to affected investors.
5 The share classes with “-mdist” aim to pay dividends on a monthly basis. Dividend is not guaranteed. Dividend may be paid out of
capital. Share classes with “-mdist” in their name may also make distributions out of capital and realized capital gains, at the discretion of
the Management Company, or pay distributions out of gross income while charging/paying all or part of the fund’s fees and expenses to/out
of the capital of the relevant fund, resulting in an increase in distributable income for the payment of distributions by the fund and therefore,
the fund may effectively pay distributions out of capital. Any distributions involving payment of dividends out of the fund’s capital or payment of
dividends effectively out of the fund’s capital (as the case may be) may result in an immediate reduction of the next asset value per share/unit.
6 A positive distribution yield does not imply a positive return. Distribution yield = (Dividend per unit on last record date x 12 /Previous month-end
NAV) x 100. The distribution yields shown here are for reference only. These share classes continue to distribute in periods that the Fund has
negative return/is making losses which further reduces the NAV of the Fund. In extreme circumstances, investors may not be able to get back
the original investment amount. Constant distributing share classes must not be seen as alternative to savings account or fixed-interest paying
investment.

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Investment involves risks, and past performance figures shown are not indicative of future performance. The value of the funds and
income from them can go up as well as down and consequently you may not get back the amount originally invested. Investors please
refer to the offering document for further details including the risk factors.
The investment returns of some of our range of funds are denominated in currency other than USD/HKD. US/HK Dollar-based investors
are therefore exposed to fluctuations in the US/HK dollar/ foreign currency exchange rate.
Units of UBS funds mentioned in this publication may not be offered, sold or delivered in the USA.
The document has not been reviewed by the Securities and Futures Commission in Hong Kong. The document is issued by UBS Asset
Management (Hong Kong) Limited.
A number of comments in this document are based on current expectations and are considered “forward-looking statements”. Actual
future results may prove to be different from expectations and any unforeseen risk or event may arise in the future. The opinions
expressed are a reflection of UBS Asset Management’s judgment at the time this document is compiled and any obligation to update or
alter forward-looking statements as a result of new information, future events, or otherwise is disclaimed.
You are advised to exercise caution in relation to this document. The information in this document does not constitute advice and
does not take into consideration your investment objectives, legal, financial or tax situation or particular needs in any other respect.
Investors should be aware that past performance of investment is not necessarily indicative of future performance. Potential for profit is
accompanied by possibility of loss. If you are in any doubt about any of the contents of this document, you should obtain independent
professional advice.
Source for all data and charts (if not indicated otherwise): UBS Asset Management.
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