September 5, 2003 Fidelity Retirement Services Investment Review.

September 5, 2003

Fidelity Retirement Services Investment Review

Hong Kong Baptist University 1998 Superannuation Fund

High Growth Profile1

Equities90%

Cash3%Bonds

7%

Growth Profile2

Bonds25%

Equities70%

Cash5%

Balanced Profile3

Cash5%

Bonds45%

Equities50%

1 High Growth Profile invests in Fidelity Advantage Portfolio Fund – Growth Fund Ordinary Class2 Growth Profile invests in Fidelity Advantage Portfolio Fund – Balanced Fund Ordinary Class

3 Balanced Profile invests in Fidelity Advantage Portfolio Fund – Stable Growth Fund Ordinary Class

Cumulative Performance

0%

3%

6%

9%

12%

15%

3-Month 13.3% 12.2%

Benchmark Fund

High Growth Profile

High Growth Profile Assets as at 31 July 2003 - HKD 8,977,816.22 High Growth Profile invests in Fidelity Advantage Portfolio Fund – Growth Fund Ordinary Class

Benchmark: A composite index consisting of 27% FTSE AW HK, 3% HSBC, 12% FTSE AW Japan, 12% FTSE AW Asia Pacific ex. Japan ex. HK, 18% FTSE AW North America, 18% FTSE AW Europe, 7% Salomon Smith Barney WGBI, and 3% 1-month HIBOR

Source: Fidelity Investments, Ordinary Class, NAV to NAV, and in USD, as of July 31, 2003.


0%

10%

20%

30%

40%

Since 1/1995 34.8% 38.4%

Benchmark Fund


0.0%

3.0%

6.0%

9.0%

12.0%

3-Month 10.2% 9.4%

Benchmark Fund

Growth Profile

Growth Profile Assets as at 31 July 2003 - HKD 4,324,671.62 Growth Profile invests in Fidelity Advantage Portfolio Fund – Balanced Fund Ordinary Class

Benchmark: A composite index consisting of 21.6% FTSE AW HK, 2.4% HSBC, 9% FTSE AW Japan, 9% FTSE AW Asia Pacific ex. Japan ex. HK, 14% FTSE AW North America, 14% FTSE AW Europe, 25% Salomon Smith Barney WGBI, and 5% 1-month HIBOR



0%

10%

20%

30%

40%

50%

Since 1/1995 45.5% 45.3%

Benchmark Fund


0.0%

2.0%

4.0%

6.0%

8.0%

3-Month 7.1% 6.6%

Benchmark Fund

Balanced Profile

Balanced Profile Assets as at 31 July 2003 - HKD 3,048,752.46 Balanced Profile invests in Fidelity Advantage Portfolio Fund – Stable Growth Fund Ordinary Class

Benchmark: A composite index consisting of 15.3% FTSE AW HK, 1.7% HSBC, 6.5% FTSE AW Japan, 6.5% FTSE AW Asia Pacific ex. Japan ex. HK, 10% FTSE AW North America, 10% FTSE AW Europe, 45% Salomon Smith Barney WGBI, and 5% 1-month HIBOR



0%

5%

10%

15%

Since 5/1997 11.2% 13.4%

Benchmark Fund

Balanced Profile

Source: Fidelity Investments, Ordinary Units, NAV to NAV, in USD, at as 31/07/2003Benchmark – Since 30/04/02

High Growth Profile invests in Fidelity Advantage Portfolio Fund – Growth Fund Ordinary ClassGrowth Profile invests in Fidelity Advantage Portfolio Fund – Balanced Fund Ordinary Class

Balanced Profile invests in Fidelity Advantage Portfolio Fund – Stable Growth Fund Ordinary Class


0%

1%

Since26/04/02

0.8% 0.1%

Benchmark Fund


0%

2%

4%

6%

Since26/04/02

5.6% 4.5%

Benchmark Fund

Growth ProfileHigh Growth ProfileCumulative Performance

-5%

-4%

-3%

-2%

-1%

0%

Since26/04/02

-3.7% -4.3%

Benchmark Fund

High Growth Profile


0%

3%

6%

9%

6-Month 8.5% 7.7%

Median Fund


0%

3%

6%

9%

12%

15%

3-Month 13.7% 13.5%

Median Fund

High Growth Profile invests in Fidelity Advantage Portfolio Fund – Growth Fund Ordinary ClassMedian: Survey median for the growth fund category is the median representative from the Mercer Hong Kong Investment Choice Universe

Source: Mercer Hong Kong Investment Choice Survey, Mercer Investment Consulting, NAV to NAV, and in HKD, as of June 30, 2003.

Growth Profile


0.0%

2.0%

4.0%

6.0%

8.0%

6-Month 7.7% 7.4%

Median Fund


0.0%

3.0%

6.0%

9.0%

12.0%

3-Month 11.6% 11.3%

Median Fund

Growth Profile invests in Fidelity Advantage Portfolio Fund – Balanced Fund Ordinary ClassMedian: Survey median for the balanced fund category is the median representative from the Mercer Hong Kong Investment Choice Universe


Balanced Profile


0.0%

2.0%

4.0%

6.0%

8.0%

6-Month 7.2% 7.1%

Median Fund


0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

3-Month 9.3% 9.1%

Median Fund

Balanced Profile invests in Fidelity Advantage Portfolio Fund – Stable Growth Fund Ordinary ClassMedian: Survey median for the stable growth fund category is the median representative from the Mercer Hong Kong Investment Choice Universe


Asset Class Investment View Main Reasons

Hong Kong Equity NeutralDeflation pressure and high unemployment rate but high dividend yield.

U.S. Equity PositiveReasonable valuation. Strong buying momentum, better market breath and slowing improving economy

Japanese Equity NeutralThe current recovery is peaking. Skeptical on Japan economic recovery in spite of its cheap valuation.

European Equity NegativeEconomic activity is flattening. Strengthened Euro is a de facto tightening of monetary conditions. Consumption shows further signs of weakness

Other Asian EquityModerately

Positive

With SARS is over, the macro environment has stablised. Strong liquidity in the region. Valuations are trading at a discount to other markets.

Global BondsSlightly

Negative

Less attractive compared to equities and corporate bonds offering better value than government debt.

Source: Fidelity Investments, July 2003

Investment Strategy Summary

Contact Fidelity Investments

2629-2666

www.fidelity.com.hk

Hotline

Website

Discount on sales charge for

personal investment savings outside

the Superannuation Fund

Including both lump sum and

monthly savings

Free rollover arrangement when

leaving the University

Keep investing in the same profile

under Saving Class

Ask for a “Fidelity Rollover Pack -

ORSO”

Call Fidelity at 2629-2666

Privileges for Hong Kong Baptist University Members

Investment involves risks. Past performance is no guarantee of future returns. Please refer to the Explanatory Memorandum of Fidelity Advantage Portfolio Fund for further details.

Investment in the Fidelity Advantage Portfolio Fund is not available to the general investing public. Investment in the Fidelity Advantage Portfolio Fund is available only to ORSO and MPF retirement benefit schemes, their related Approved Pool Investment Funds, institutions, high net worth individuals, or those individuals who have recently been or still are members of an ORSO or MPF retirement benefit scheme.

If you are an individual retail investor who is not a current member of an ORSO or MPF retirement benefit scheme but wish to invest your accrued benefits in Fidelity managed funds, please contact Fidelity for further details about our range of investment funds, which are available to the general public.

Fidelity Advantage Portfolio Fund (FAP) – Investment Objectives

Appendix

Growth Fund Mainly invested in equity funds

Geographical bias towards Hong Kong

To maximise long term returns

Balanced Fund

Normally maintain a balanced, global portfolio of bond funds and equity funds

To achieve a consistent overall return than Hong Kong inflation

With lower risk and volatility of returns in the short term

Stable Growth Fund

To invest in a global portfolio of bond funds, cash funds and equity funds

With a lower weighting in equities than the Balanced Fund

To achieve a consistent overall return higher than Hong Kong inflation

Geographic Allocation

Asset Class Target Current

Hong Kong Equities 30% 30.20%

Japan Equities 12% 12.40%

Other Asia Pacific Equities 12% 12.63%

US Equities 18% 17.93%

European Equities 18% 17.71%

Global Bonds 7% 7.08%

Cash & Others 3% 2.06%

High Growth Profile

High Growth Profile invests in Fidelity Advantage Portfolio Fund – Growth Fund Ordinary ClassSource: Fidelity Investments as of June 30, 2003.










Growth Profile

Growth Profile invests in Fidelity Advantage Portfolio Fund – Balanced Fund Ordinary ClassSource: Fidelity Investments as of June 30, 2003.










Balanced Profile

Balanced Profile invests in Fidelity Advantage Portfolio Fund – Stable Growth Fund Ordinary ClassSource: Fidelity Investments as of June 30, 2003.

Major Holdings

HSBC Holdings PLC (HK) Hong Kong 2.98%

Hutchison Whampoa Ltd. Hong Kong 2.91%

Cheung Kong Holdings Ltd. Hong Kong 2.50%

Hang Seng Bank Ltd. Hong Kong 2.17%

China Mobile (HK) Ltd. Hong Kong 2.12%

Sun Hung Kai Properties Ltd. Hong Kong 1.72%

Hong Kong & China Gas Company Ltd.

Hong Kong 1.67%

CLP Holdings Ltd. Hong Kong 1.52%

Hong Kong Electric Holdings Ordinary Hong Kong 1.20%

Samsung Electronics Co Ltd Hong Kong 0.84%

Total 19.63%

High Growth Profile*

* High Growth Profile invests in Fidelity Advantage Portfolio Fund – Growth Fund Ordinary ClassSource: Fidelity Investments as of June 30, 2003.

Major Holdings




Hang Seng Bank Ltd. Hong Kong 1.73%


Sun Hung Kai Properties Ltd. Hong Kong 1.38%

Hong Kong & China Gas Company Ltd. Hong Kong 1.34%

CLP Holdings Ltd Hong Kong 1.22%

France OAT 5.75% 10/25/32 France 1.01%

Hong Kong Electric Holdings Ordinary Hong Kong 0.96%

Total 16.06%

Growth Profile*

* Growth Profile invests in Fidelity Advantage Portfolio Fund – Balanced Fund Ordinary ClassSource: Fidelity Investments as of June 30, 2003.

Major Holdings

France OAT 5.75% 10/25/32 France 1.86%




Japan Government SER 4 1.1% 6/20/05 Japan 1.39%

Instituto De Credit FRN 2/1/05 France 1.36%

USTB 6.25% 5/15/30 US 1.29%

Belgium Government 7.75% 10/15/04 20 Belgium 1.28%

Hang Seng Bank Ltd Hong Kong 1.23%


Total 14.37%

Balanced Profile*

* Balanced Profile invests in Fidelity Advantage Portfolio Fund – Stable Growth Fund Ordinary ClassSource: Fidelity Investments as of June 30, 2003.

September 5, 2003 Fidelity Retirement Services Investment Review.

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