Schroder Asian Asset Income Fund - .Schroder Asian Asset Income Fund Seize Asia’s growth potential,

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  • Schroder AsianAsset Income Fund Seize Asias growth potential,grasp income opportunities

    31 May, 2018

    Important Information:1. The fund invests primarily in Asian equities and fixed income securities which offer attractive yields and sustainable dividend payments. The fund

    will have limited Renminbi (RMB) denominated underlying investments.2. In respect of the distribution units, the manager will declare and pay monthly distributions. However, the distribution rate is not guaranteed.

    Distribution yield is not indicative of the return of the fund. Distribution may be paid from capital of the fund. Investors should note that where the payment of distributions are paid out of capital, this represents and amounts to a return or withdrawal of part of the amount you originally invested or capital gains attributable to that and may result in an immediate decrease in the value of units.

    3. Changes in market interest rates will affect the value of debt securities held by the fund. The fund invests in below investment grade and/or unrated debt securities may be subject to higher counterparty, credit and liquidity risk than higher rated securities.

    4. The fund's investment in emerging and less developed markets may be subject to significant risks such as political and economic risks, legal and regulatory risks, market and settlement risks, execution and counterparty risk, and currency risk.

    5. The fund may invest into investments denominated in currencies other than the fund's base currency and subject to currency and exchange risk. If the investor's based currency is a different currency than the share class's currency being invested in, the investor needs to carry out conversion and would involve conversion costs. RMB is currently not freely convertible. There is no assurance that RMB will not be subject to devaluation.

    6. The effects of hedging will be reflected in the net asset values of the respective hedged classes. Expenses arising from hedging transactions will be borne by the relevant hedged classes. Hedged share class hedges the fund's base currency back to its currency of denomination on a best efforts basis. The volatility of the hedged classes measured in the fund's base currency may be higher than that of the equivalent class denominated in the fund's base currency.

    7. The fund may invest in financial derivative instruments (FDI) for hedging purposes. In adverse situations, the fund's use of FDI may become ineffective in hedging and the fund may suffer significant losses. Risks associated with FDI include counterparty risk, credit risk and liquidity risk. Such exposure may lead to a high risk of capital loss.

    You should not make any investment decision solely based on this document. Please read the relevant offering document carefully for further fund details including risk factors.

  • Capture investment opportunities in Asia by investing in high yielding Asian equities and bonds! The fund adopts an active investment strategy and a multi-asset approach to help investors seize the enormous opportunities in Asia's fast-growing economies.

    Why invest in the Schroder Asian Asset Income Fund?

    Yields on Asian assets remain attractive With persistently low interest rates across the globe, the Asian market provides plenty of investment opportunities which investors may enjoy attractive income streams. The region has also become an important market for many investors.The funds payouts mainly come from high income-generating Asian equities and Asian fixed income. The relevant asset class indices possess an average historical yield of 5.3% and 3.1% (in US dollar terms), respectively. The fund is a respectable investment choice for investors seeking out sustained income.

    Great growth potential in Asias capital market The Asia Pacific region is host to a wide range of economies that enjoy more rapid growth compared to developed markets. In terms of valuations, Asian equities with high dividend yields remain attractive. In addition, yields of Asian bonds are higher than their counterparts in Europe and the US, bringing more attractive potential income to investors. Given continuous favourable factors, the growth potential of high dividend yield equities and bonds in Asia is worth investors attention.

    Active asset allocation improves potential returns and manages risksThe funds active asset allocation strategy between Asian equities, Asian bonds, other asset classes and cash aims to capture investment opportunities in Asia in all market conditions. We look to increase exposure to equities and bonds to enhance potential returns as opportunities arise and hold cash to mitigate risks should markets reverse. The fund invests in a wide range of assets to earn returns for investors via active asset allocation in different economic cycles.

    Historical yields of Asian bonds and equities(in US dollar terms)

    Asia ex Japans economic growth is expected to remain strong

    Year JPM Asia bond yield (%)

    2008200920102011201220132014201520162017Average

    9.05.65.05.34.05.34.75.04.74.65.3

    5.12.52.63.53.02.93.13.32.92.53.1

    MSCI Asia (exc. Japan) stock dividend yield (%)

    Source: Schroders, Bloomberg, as of 29/12/2017.

    Source: Bloomberg, as of 29/03/2018.*Projected Data

    Real

    GD

    P (Y

    oY%

    )Al

    loca

    tion

    %8070605040302010

    0Equities

    US Europe Asia ex JP EMEA LatinAmerica

    Bonds Other AssetClasses

    Cash

    Asian Equities30~70%

    Asian Bonds30~70%

    0~30%0~20%

    2015 2016 2017 2018*

    A wide range of asset classesprovide flexibility in asset allocation

    The exact asset allocation may deviate from the range mentioned above without prior notice to investors. Please refer to the relevant offering documents for details.

    76543210

    -1-2

    1

  • Schroder Asian Asset Income Fund

    Fund Features A Distribution unit class offers a monthly payout (Distribution

    rate is not guaranteed, and payment of distributions could be paid out from capital)~

    Capture Asia's strong growth potential through investment in Asian high dividend yielding equities and high yield bonds

    Enjoy the capital growth potential of other assets Active asset allocation to manage risk

    Top HoldingsEquityHK Electric Investments & HK ELyxor China Enterprise HSCEI UMapletree Greater China Commercial TrustThe Link REITAscendas Real Estate Investment

    Holdings (%)2.01.91.91.91.9

    Fixed IncomeCNOOC Finance 2015 USA LLC 3.5% 05/05/2025Industrial And Commercial Bank Of China LimitedSingapore FRN 16/04/2021Tsinghua Unic Ltd 4.75% 31/01/2021CDB Leasing Company Limited 4.25% 02/12/2024Indian Oil Corporation Limited 5.75% 01/08/2023

    Holdings (%)0.4

    0.4

    0.40.30.3

    Dividend Distribution Record~

    Unit Classes

    A Dis - HKDA Dis - USDA Dis - AUD HedgedA Dis - RMB HedgedA Dis - GBP Hedged

    DistributionPer Unit0.4148470.0411670.0363710.5148590.024983

    104.812310.4010

    9.699098.8592

    9.9931

    Price on Record Date(30/05/2018)

    Upcoming Distribution Record Date

    Note: The distribution record date may subject to change.

    Key Information

    Fund Objective To provide income and capital growth over the medium to longer term by investing primarily in Asian equities and Asian fixed income securities.

    Unit NAV (Class A Acc) HKD 149.6155

    Hi/Lo (past 12 mths, Class A Acc) HKD 156.0361/144.3954

    Base Currency HKD

    Fund Manager Multi-Asset Team

    Launch Date 27/06/2011

    Fund Size (Million) HKD 41,257.33

    Initial Charge up to (Class A) 5%

    Management Fee (Class A) 1.25% p.a.

    Dealing Frequency Daily

    Reference Benchmark 50% MSCI AC Asia Pacific ex Japan Index and 50% JP Morgan Asia Credit Index

    Financial Year End 30/6

    ~ In respect of the distribution units, the manager will declare and pay monthly distributions. However, the distribution rate is not guaranteed. Distribution yield is not indicative of the return of the fund. Distributions may be paid from capital of the fund. Investors should note that where the payment of distributions are paid out of capital, this represents and amounts to a return or withdrawal of part of the amount you originally invested or capital gains attributable to that and may result in an immediate decrease in the value of units.

    All fund information as at 31/05/2018. Source: Schroders. Fund performance based on Class A Accumulation; NAV-NAV in HKD with net income re-invested. The fund size quoted includes all classes of the fund.Investment involves risks. Past performance is not indicative of future performance. Please refer to the relevant offering documents for fund details including risk factors. This material, including the website, is issued by Schroder Investment Management (Hong Kong) Limited and has not been reviewed by the SFC.Management Company: Schroder Investment Management (Hong Kong) Limited, Level 33, Two Pacific Place, 88 Queensway, Hong KongSupervisory Authority: Securities and Futures Commission, 35/F, Cheung Kong Center, 2 Queen's Road Central, Hong Kong

    Distribution Policy and Frequency

    A Dis- HKDA Dis- USDA Dis- AUD HedgedA Dis- RMB HedgedA Dis- GBP HedgedA Acc- HKDA Acc- USDA Acc- GBP Hedged

    Unit Classes

    HK0000081908HK0000081932HK0000126141HK0000169232HK0000311743HK0000081841HK0000081874HK0000311750

    ISIN Code

    SCAAHAD HKSCAAUAD HKSCAAIAA HKSCAAAHR HKSCAADHG HKSCAAHAA HKSCAAUAA HKSCAAAHG HK

    BloombergTicker

    VariableVariableVariableVariableVariableN/AN/AN/A

    DistributionPolicy

    MonthlyMonthlyMonthlyMonthlyMonthlyN/AN/AN/A

    DistributionFrequency

    Fund PerformanceCumulativePerformance (%)Fund

    Sincelaunch49.6

    YTD

    -2.0

    3-mth

    -