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Switzerland Edition
March 2020
JSS Equity - All China
2
JSS Equity – All China
Source: ChinaAMC, World Bank 2019
China will become the largest economy in the world, contributing 27% of global
growth
Global investors are still underinvested and vast amounts of capital are expected
to flow into the Chinese equity market
The retail-dominated Chinese equity market is inefficient and a fertile ground for
alpha generation
Valuations are attractive compared to other developed and emerging markets
The first UCITS equity fund managed by a mainland Chinese firm
ChinaAMC, a leading and highly acclaimed firm, evidenced by numerous awards as
China’s premier asset manager
First class local network, access and due diligence capabilities. Over 120 equity
analysts conducting over 3’000 company meetings per year.
Capturing key Chinese thematic trends: Domestic consumption, increasing
industrial value-add, health care and tech innovation
Clear proof of alpha generation by PM Richard Pan
Why
China
Now?
Why
JSS Equity
All China?
3
Agenda
Why China Now?
Why ChinaAMC?
Investment Opportunities
Investment Philosophy
Investment Process
Strategy Characteristics
Fund Details
Opportunities and Risks
Appendix
4
Why China Now?
5
Technology Adoption
China’s mobile payment
market has 90 times the
size of the US market
(USD 15.5trn in 2017).
Growing Consumption
China will account for 46% of
global luxury market
by 2025.
Research & Development
Two thirds of global Artificial
Intelligence investments happen in
China. In 2018, 473 of 608 global AI
patents were filed by Chinese
companies.
Long-term Policies
One Belt, One Road Initiative
opening future markets with over
USD 900bn of investments.
Source: ChinaAMC, World Bank, Angus Maddison, World Economic Forum 2018. Past performance is no indication of current or future
performance. Information containing forecasts are intended for information purpose only and are neither projections nor guarantees for future
results and could differ significantly for various reasons from actual performance or developments.
Driving Forces of China’s Sustained Rise
Urbanization 2.0
Estimated 220m new city dwellers by 2030
driven by agricultural modernization, city clusters
and smart cities.
6
On Track to Become #1 Global Economy
Source: ChinaAMC, IMF, World Bank Global Economic Prospects 2019 Report, Wind, National Bureau of Statistics of China. GDP is substantially affected by world
and country-specific events and governmental responses to them. The actual GDP rate may be meaningfully higher or lower than estimates.
1. Bloomberg, Standard Chartered 2019. PPP= purchasing power parity. Past performance is no indication of current or future performance. Information containing
forecasts are intended for information purpose only and are neither projections nor guarantees for future results and could differ significantly for various reasons
from actual performance or developments.
6.0%
4.5%
2.8%
1.7%1.6%
ChinaEmergingmarkets
WorldU.S.Advancedeconomies
2020E
Economic Growth Projections Top 10 Economies in 2030by nominal GDP using PPP 1
0
10
20
30
40
50
60
70
7
Index Inclusion of A-Shares to Spur Inflows
Please see the glossary for definition of A-shares. Source: FactSet, MSCI, GS Global Investment Research, Bank J. Safra Sarasin Ltd 2019.
Past performance is no indication of current or future performance. Information containing forecasts are intended for information purpose only and
are neither projections nor guarantees for future results and could differ significantly for various reasons from actual performance or developments
It is expected that A-shares will see over USD 800bn to USD 1 trillion of foreign inflows due to
MSCI inclusion in the next 5-10 years.
Estimated MSCI Emerging Markets Index Inclusion Roadmap of China A-Shares
MSCI EM
Index
MSCI EM
Index
MSCI EM
IndexMSCI EM
Index
Jun 2019 Sep 2019 Nov 2019Full
inclusion
A-Shares 1.7% A-Shares 2.5% A-Shares 4.0% A-Shares 17.0%
China ex A-
Shrs 30%
Non-China
68.4%
Non-China
67.8%
Non-China
57.5%
China ex A-
Shrs 29.7%
China ex A-
Shrs 29.3%
China ex A-
Shrs 25.2%
Non-China
66.7%
8
Chinese Equity Valuations Are Attractive
Source: ChinaAMC, Bloomberg, as of 30.09.2019. Past valuations are no indication for current or future valuations.
25.2x
19.7x
17.4x
19.3x
16.2x
22.1x
14.4x
12.7x13.3x
0
10
20
30
India U.S. U.K. France Japan Germany MSCI ChinaA
MSCI China MSCI AllChina
Trailing Price to Earnings Ratios
9
Why ChinaAMC?
10
Source: ChinaAMC, including ChinaAMC(HK) and China Capital, data as of 31.12.2019.
A Leading Investment Manager in China
About the Company
Leading asset manager in China with
USD 166 billion in AuM
Headquartered in Beijing with presence throughout
China
250+ investment professionals cover 80% of
Chinese public companies
Team of 300+ in operations, risk and trading provide
solid asset management infrastructure
On-the ground manager and «plugged in» to
mainland China network
Richard Pan’s international team manages ca. USD
5bn in Chinese equities across funds and mandates
Firm Awards in 2019
(excerpt)
Global
International Business Best Asset Management Company China 2019
Global Finance The Stars Of China 2019-Best Asset Manager
Finance Derivative Best Asset Management Company China 2019
Asia
Asia Asset
ManagementBest Fund House - China
AsianInvestor Fund House of the Year - China
The Asset ESG Fund Manager of the Year - China
The AssetAsset Management Company of the Year - China
Onshore - Mutual Fund, Highly Commended
The AssetTop Investment House - China - Asset Manager -
Rank No. 1
Insurance Asia News Insurance Fund House of the Year - China
Insights & Mandate Best RMB Fund House
Insights & Mandate ESG Leader Award
Insights & Mandate Best Fund House - Mainland China
11
Source: ChinaAMC, Bank J. Safra Sarasin 2019. QDII= Qualified Domestic Institutional Investor. RQFII= Renminbi Qualified Foreign Institutional
Investor. UNPRI= United Nationas Principles for Responsible Investment. TCFD= Task Force on Climate-related Financial Disclosures.
Track Record of Market Leadership
Consistent market leadership through pioneering products and strategic initiatives
1998One of the first managers of closed-
ended funds in China
2001One of the first managers of open-
ended funds in China
2002One of the first managers for National
Social Security Fund (NSSF)
2004 The first ETF manager in China
2005Sole manager for ABF China Bond
fund for EMEAP
2005One of the first managers for
corporate pensions in China
2013Investment manager for a foreign sovereign wealth fund
and the China Insurance Security Fund
2014 Investment manager for a foreign asset owner
2016 First managers of the Provincial Social Security Fund
2016Strategic partnership with Russell Investments and
launched China’s first Fund of Funds
2016Strategic partnership with PanAgora on Risk Parity
strategies
2017 Strategic partnership with Microsoft on AI investments
2007 One of the first managers for QDII funds
2008 Established its subsidiary in Hong Kong
2010 Investment manager for CIC
2011 One of the first managers of RQFII funds
2012Discretionary manager for three foreign
asset owners and CSIPF
2012One of the first managers for cross-border
ETFs: Hang Seng ETF and CSI 300 ETF
2017The first full-service asset manager
to sign the UN PRI in China
2018Strategic partnership with NNIP in
ESG Research and Investments
2018Strategic partnership with Fidelity
in retirement products
2018First Chinese asset manager to
support CA100+ and TCFD
2019
One of the first managers to issue
Japan-China cross-border ETF,
partnered with Nomura AM
12
ChinaAMC – Commitment to Sustainability
Source: ChinaAMC
ChinaAMC is a pioneer in sustainability in China and the first Chinese asset
manager to embed ESG functions directly into the investment team.
Signed on to the UN PRI in March 2017, becoming the first full-service
Chinese asset manager to join the organization.
Supporter of Task Force on Climate-related Financial Disclosures (TCFD),
dedicated to promoting climate-related disclosures in China.
ChinaAMC first supporter of Climate Action 100+ in mainland China and is
leading one of the engagement groups of international investors. They are
also a member of the Asia Advisory Group of the initiative.
In 2017, ChinaAMC joined the China Green Finance Committee. In 2018 the
firm became one of the only two Chinese managers in a new private group of
UK and Chinese financial institutions to pilot TCFD reporting, which was
established by The City of London Green Finance Initiative, China Green
Finance Committee, and the PRI.
In April 2019, the group participated in drafting the Guidelines for Financial
Institution Environmental Information Disclosure for A-share listed
companies. In this way, they are assisting in directing and regulating ESG
information disclosure in China.
ChinaAMC is ranked #1 of all Chinese managers in the category
«Responsible Investor» by SharedAction.
13
Source: ChinaAMC, Bank J. Safra Sarasin 2019
First Class Research Capabilities
In-depth coverage of 80% of public
companies in China
3,000+ on-site visits per year
Investment analysts have both financial
as well as industry backgrounds
Powerful matrix research framework
pursues forward-looking fundamental
analysis
Leveraging sector expertise and
relationships around each company (e.g.
regulators, suppliers, competitors,
customers)
Teams share centralized trading,
operations, and risk management
functions.
Investment
Professionals:
120+
Equity
60+
Fixed Income Quantitative
20+
Sectors:
Financials, Real Estate
Materials, Energy,
Consumers, TMT,
Healthcare, Industrials,
Utilities …
Strategy
Asset Allocation
Internal Rating
Team
Rates,
Credit
…
AI Investments,
Smart Beta,
Multi-assets,
Risk Parity,
…
Trading | Operations | Risk Management: 300+
14
Source: ChinaAMC, Bank J. Safra Sarasin 2019. QFII= Qualified Foreign Institutional Investor.
Strong Team with Local Expertise
Richard Pan
Portfolio Manager of the JSS Equity All China Fund
Managing Director, Head of QFII Investment, Head of International Business
Mr. Pan has 21 years of investment experience. Before joining ChinaAMC in 2013,
Mr. Pan served as CIO and Deputy CEO of Vstone Capital, overseeing its A-share
investments. He worked as a Director/Portfolio Manager at Manulife Asset
Management from 2007 to 2011, managing its Greater China funds and QFII A-share
fund. He also worked as a Portfolio Manager at United Securities from 2001 to 2004,
and worked as a VP at Guotai Junan Securities since 1998. Mr. Pan holds BS in
Engineering and MA in Economics from Wuhan University and an MBA from
Georgetown University in the US.
Please see further team information in the appendix.
Andy Song
Assistant Portfolio Manager, FII Equity Investment
Mr. Song has over 4 years' investment research experience with ChinaAMC. He served
as financial and quantitative equity analyst and he developed the quantitative stock
screening model for the investment process. Prior to joining the team, he worked in
Quantitative Investment Department, covering quantitative multi-factor investment
strategies. Mr. Song holds B.S. in Economics from Wuhan University and Master degree
of Financial Mathematics and Master of Public Policy Analysis from University of Chicago
in the US.
15
Investing with a Local Edge
ChinaAMC provides solutions to investment challenges particular to China.
Issue Challenge for global investors ChinaAMC Solution
Language
barrier
A-share companies only required to file in Chinese
On-site due diligence and primary research require communication with Chinese speakers.
Industry experience and in-depth understanding of the Chinese market;
Many PMs and analysts educated in the West with extensive local training.
Accounting
transparency
Accounting statements may be inaccurate Dedicated personnel to conduct on-site due diligence, primary research, and fact checks.
Cultural
understanding
The Chinese culture is different from that of the West. The same message can be interpreted differently.
200-people investment team has in-depth understanding of both Chinese and Western cultures.
Idea
sourcing
Foreign investors are not themselves users of the products and services in China, which makes idea generation difficult.
PMs and analysts live and are users of products and services available in China;
PMs and analysts spend ~50% of time on the road conducting due diligence.
Active
engagement
Significant presence, cultural understanding and resources required to engage Chinese companies effectively.
ChinaAMC is a leading asset manager in China with significant investments.
Corporate access is much better than global peers.
关系
Source: ChinaAMC.
16
Investment Opportunities
17
Capturing Key Chinese Thematic Trends
Source: ChinaAMC, World Economic Forum (2016), Chinese National Bureau of Statistics, Bank J. Safra Sarasin Ltd. Data as of December 2018.
STEM stands for Science, Technology, Engineering and Mathematics.
90+
80-8970-79
60-69
50-59
40-49
30-3920-2910-19
0-9
Chinese Demographics
Male Female
110,000
$0
$2’000
$4’000
$6’000
$8’000
$10’000Chinese GDP per Capita
11%23%
52%36%
46%
39%
0%
20%
40%
60%
80%
100%
1980 1990 2015
Manu. Exports by Value Add
High Medium Low (non-resource) Low (resource)
Wealth Effect
Ageing Population
Industrial Value-Add
Higher Education
From manufacturing center to technology- and consumption-driven economy
0.20
0.56
0.57
2.60
4.70
Japan
Russia
US
India
China
No. of STEM graduates in 2016 by country (in millions)50,000 50,000 110,000
In ‘000
18
A Taste for Premium Products: Baijiu
Source: ChinaAMC, Bank J. Safra Sarasin 2019; Past performance is no indication for current or future performance. Information containing forecasts are intended
for information purpose only and are neither projections nor guarantees for future results and could differ significantly for various reasons from actual performance
or developments. Information on companies is shown for illustrative purposes only and does not constitute an offer, solicitation or recommendation to buy, hold or
sell investments and does not consider the circumstances of any individual investor. The information shown may change without notice.
High-end Chinese grain liquor (Baijiu): Soaring sales reflect the consumption upgrade in China.
We prefer Moutai, a producer of Baijiu, due to its unchallenged position as well as its pricing
power.
200
400
600
800
1000
4’000
6’000
8’000
10’000
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
20
11
20
12
20
13
20
14
20
15
20
16
20
17
20
18
Prices of Moutai and Hermès Kelly Bag
Hermes - Kelly（$） Moutai（￥）(Right axis）
0
30’000
60’000
90’000
Revenue of High-end Baijiu(Mln RMB)
Moutai Wuliangye
19
Source: ChinaAMC, Bank J. Safra Sarasin as of 28.02.2019; Past performance is no indication for current or future performance. Information containing forecasts
are intended for information purpose only and are neither projections nor guarantees for future results and could differ significantly for various reasons from actual
performance or developments. Information on companies is shown for illustrative purposes only and does not constitute an offer, solicitation or recommendation to
buy, hold or sell investments and does not consider the circumstances of any individual investor. The information shown may change without notice.
Industrial Value-Add: Home Appliance Companies
Domestic
brands
Overseas
brands
Data source: Wind, ChinaAMC, as of 27.11.2019
Many Global Leaders are Chinese
CompanyMkt Cap
(USDb)
PE
(TTM)
NI
CAGR
(3yrs)
ROE
(2018)
Midea Group 54.4 15.4x 18% 26%
Gree 48.96 12.7x 25% 33%
Haier 15.29 19.3x 26% 20%
Whirlpool 9.33 8.6x 6% -6%
A.O.Smith 7.94 20.2x 8% 26%
IROBOT 1.29 15.7x 24% 16%
Electrolux 7.83 19.8x 8% 18%
Increasing Market share of domestic brands
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
AC - oversea AC - domestic
Refrigerator - oversea Refrigerator - domestic
Washing machine - oversea Washing machine - domestic
TV - oversea TV - domestic
20
Source: ChinaAMC, Wind, Bank J. Safra Sarasin 04.03.2019 *Startup companies with valuations of over USD 1 billion are referred to as “unicorns”.
Historic data and developments are no indication of current or future development. Information on companies is shown for illustrative purposes only
and does not constitute an offer, solicitation or recommendation to buy, hold or sell investments and does not consider the circumstances of any
individual investor. The information shown may change without notice.
China – New Home of the Unicorns
920
862
556
484
403
129
77
72
49
41
Alphabet
Amazon
Alibaba
Tencent
Netflix
Booking
Meituan
JD
BaiduAs of 27.11.2019
Five of Top 10 Internet Companies are Chinese
75%
62%
49%43% 41%
12%28%
29% 36%
25% 26% 23% 28% 23%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2013 2014 2015 2016 2017
36% of New Unicorns Are Chinese*
OthersChinaUS
in USD bn
21
Source: ChinaAMC, Bank J. Safra Sarasin 2019 *CAGR stands for compounded annual growth rate. Past performance is no indication of current or future
performance. Information on companies is shown for illustrative purposes only and does not constitute an offer, solicitation or recommendation to buy, hold or sell
investments and does not consider the circumstances of any individual investor. The information shown may change without notice. **2018: Total global market size
USD 138bn.
Tencent – A Rising Global Tech Giant
Strategic
Investment
E-Commerce/
Payment
Content/IPs
Entertainment
Social Media
Complete ecosystem built around a social media platform
1 billion active users spending 2-3 hours on WeChat every day
Largest global gaming company with 12% market share **
802.6
1082.5
0
200
400
600
800
1000
1200
4Q
200
3
4Q
200
4
4Q
200
5
4Q
200
6
4Q
200
7
4Q
200
8
4Q
200
9
4Q
201
0
4Q
201
1
4Q
201
2
4Q
201
3
4Q
201
4
4Q
201
5
4Q
201
6
4Q
201
7
4Q
201
8
QQ WeChat
CAGR*=62%
(2012-2018Q3)CAGR*=16%
(2003-2018Q3)
QQ and WeChat monthly active users
(million)
22
Investment Philosophy
23
Investment Philosophy
Source: ChinaAMC, Bank J. Safra Sarasin 2019. The investment philosophy refers to the JSS Equity All China fund managed by ChinaAMC.
ChinaAMC is deeply rooted in fundamental research.
Active management with a reliable and disciplined investment
process enables consistent excess return generation in the
long run.
High quality Chinese companies are expected to consistently
prevail over the long term. We invest in high quality
companies that are considered undervalued, with competitive
advantages in operational efficiency, technological
advancement, and brand equity.
ChinaAMC actively engages with invested companies to
discuss and identify strategies that can improve their value
propositions.
24
Source: ChinaAMC, World Bank Global Economic Prospects 2019 Report, Wind, National Bureau of Statistics of China. Information on companies
is shown for illustrative purposes only and does not constitute an offer, solicitation or recommendation to buy, hold or sell investments and does not
consider the circumstances of any individual investor. The information shown may change without notice.
Capturing the All China Opportunities
Broad
Consumers
Advanced
ManufacturingHealthcare
Information
Technology
Opportunities
in the A
Share
Universe
Opportunities
in the H/ADR
Universe
JSS Equity –
All China Fund
25
All China Fund Strategy Characteristics
Source: ChinaAMC, Bank J. Safra Sarasin 2019. Shown for illustrative purposes only and information may change without notice.
Target portfolio characteristics
Reference Index MSCI China All Shares (USD) Net Total Return Index
Investment Universe Constituents of the MSCI China All Shares Investable Universe (A/H/ADRs)
Investment Style Long only
Mid- to Large-cap companies
Emphasis on value with sustainable growth
Number of Stocks Ca. 40 to 60
Single Position Weight ≤10% of Portfolio (UCITS)
Equity Position ≥80% of Portfolio
Target Information Ratio 0.5 – 1.0
Strategy Capacity USD14 bn USD
26
Investment Process
27
What We Look For in Companies
Source: ChinaAMC, Bank J. Safra Sarasin 2019. Simplified illustration for information purpose only. *ESG = Environment, Social, Governance
Competitive Advantage
Product cycle
Competitors
Value proposition
Pricing power
Financial sustainability
Cash Generation
Operating cash flow
Return on Equity, ROIC and
earnings growth
Dividend yield
Capital Structure/Net gearing
Access to funding
Valuation
Intrinsic value
Relative value
Mispricing
Governance
Vision and integrity
Execution capability
Transparency
Shareholder value creation
ESG*
28
Bottom-up Selection with Macro/Sector Overlay
Source: ChinaAMC, Bank J. Safra Sarasin 2019. Simplified illustration for information purpose only.
Quant Screening
Portfolio Construction
Mid-Large Cap
Stock Pool
800
High Potential
Stock Pool
300
Portfolio
40-60
Macro factors
Business
cycle
Long-term
valuationFinal Stock
Pool
100Fundamental & ESG
Sector
AllocationAll China Universe
29
Strategy Characteristics
30
ChinaAMC A-Shares Strategy Track Record
Historical Performance
Source: ChinaAMC, Bank J. Safra Sarasin. Due to the lack of JSS Equity All China Strategy’s own track record, the longer track record of Richard Pan in managing
Chinese equities is shown. Track record is shown from November 2012, when Richard Pan started managing this strategy. The strategy shown above invests in A-
shares only and therefore differs from the proposed All China Strategy. It is not simulated past performance for the JSS Equity – All China. The track record is
shown as it is the closest available track record indicative of the portfolio manager’s long-term performance even though it differs from the All China Strategy.
Strategy annual returns in CNY are GIPS-audited, interim figures are referenced using similar methodology but is not audited.
Cumulative Net Performance & Statistics
(in USD, Portfolio Manager: Richard Pan) ChinaAMC A-
Share
Strategy
MSCI China
A
Annualised
Return14.91% 7.46%
2013 11.81% 0.75%
2014 37.08% 46.51%
2015 14.79% 7.08%
2016 -17.05% -19.11%
2017 51.07% 20.29%
2018 -24.53% -33.00%
2019 46.24% 37.46%
2020 YTD -3.82% -1.63%
Volatility 24.73% 25.38%
Data as of 29.02.2020
-
50
100
150
200
250
300
350
ChinaAMC A-Share Strategy MSCI China A
31
ChinaAMC All China Strategy Track Record
Historical Performance
Source: ChinaAMC, FactSet, Bank J. Safra Sarasin. Past performance is no indication for current or future performance. Due to the lack of JSS
Equity All China Strategy’s own track record, the track record above is shown for illustrative purposes only and represents a strategy (e.g. tracking
error target, benchmark) similar to the proposed All China strategy as it invests predominantly in A-shares but also includes other Chinese share
types. It is not simulated past performance for the JSS Equity – All China.
Cumulative Net Performance & Statistics
(since inception in USD, Portfolio Manager: Richard Pan)
Data as of 29.02.2020
ChinaAMC
All China
Strategy
MSCI China
All Shares
Excess
Return
Annualised
Return6.88% -1.61% 8.49%
2017 8.49% 1.50% 7.00%
2018 -25.18% -23.27% -1.91%
2019 48.45% 27.64% 20.81%
2020 YTD -2.54% -3.26% 0.72%
Volatility 20.31% 19.54%
70
80
90
100
110
120
130
ChinaAMC All China Strategy MSCI China All Shares - NR
32
Source: ChinaAMC, FactSet, Bank J. Safra Sarasin Ltd. Past performance is not reflective of current or future returns. The information shown may change without
notice.
JSS Equity – All China
Portfolio Snapshot
Exposure by Sector in %Valuation Metrics & Fund Statistics
Exposure by Market Capitalization (bn USD) in %
Data as of 29.02.2020
29.8
6
51.8
1
17.3
8
0.9
5
37.7
5
37.0
8
24.3
2
0.8
5
>100 10-100 2-10 <2
JSS Equity All China MSCI China All Shares
9.31
22.55
10.54
0.56
9.80
8.99
6.87
20.19
4.31
4.07
0.00
15.75
20.37
6.85
2.85
20.91
5.89
7.96
7.85
4.12
4.93
2.51
Communication Services
Consumer Discretionary
Consumer Staples
Energy
Financials
Health Care
Industrials
Information Technology
Materials
Real Estate
Utilities
JSS Equity All China MSCI China All SharesJSS Equity All China MSCI China All Shares
Price/Earnings (LTM) 30.97 23.17
Price/Earnings (NTM) 27.95 20.82
Price/Book Value 6.67 5.18
ROE (%) 20.07 16.97
# of Securities 47 738
Active Share (%) 77.37
Fund AuM USD 108.9m
33
Source: ChinaAMC. Past performance is not reflective of current or future returns. The information shown may change without notice.
JSS Equity – All China
Holdings
Top 10 Holdings Listing Allocation
Data as of 29.02.2020
Name Sector in %
Tencent Holdings Ltd.Communicatio
n Services9.31
Alibaba Group Holding Ltd.Consumer
Discretionary7.65
Luxshare Precision Industry Co. Ltd. Class AInformation
Technology6.94
Tianjin Zhonghuan Semiconductor Co., Ltd.
Class A
Information
Technology5.39
Kweichow Moutai Co., Ltd. Class AConsumer
Staples5.01
Gree Electric Appliances, Inc. of Zhuhai Class
A
Consumer
Discretionary4.81
Wuliangye Yibin Co., Ltd. Class AConsumer
Staples4.08
Meituan Dianping Class BConsumer
Discretionary3.72
Ping An Insurance (Group) Company of China,
Ltd. Class AFinancials 3.41
Poly Developments & Holdings Group Co.,
Ltd. Class AReal Estate 2.68
A-Share (China Mainland)
61.4%
H-Share (Hong Kong)32.8%
ADR (US)3.0%
Cash2.8%
34
Fund Details
35
JSS Equity – All China
Fund Details
As of September 2019.
For further details refer to the corresponding prospectus.
Name of fund JSS Equity – All China
Fund domicile Luxembourg
Legal structure SICAV according to Luxembourg law / UCITS
Fund management company J. Safra Sarasin Fund Management (Luxembourg) S.A., Luxembourg
Portfolio management China Asset Management Co. Ltd Beijing
Custodian bank RBC Investor Services Bank S.A., Luxembourg
Share Class P
Accounting currency USD
Currency share classes USD, EUR and CHF
Client segment Private Clients
Management fee p.a. 1.70%
Minimum subscription P (none)
Liquidity
Daily subscription and redemption of fund shares. Subscription and Redemption orders must be received by
the transfer agent one bank business day before the valuation day, no later than 12:00 (noon) Luxembourg
(cut-off time)
Authorisation for saleSwitzerland, Luxembourg, Germany, Austria, Great Britain, Gibraltar, Netherlands, Singapore (qualified
investors)
Share classes /
ISIN /
Securities-No.
P USD acc / LU1900873529
P USD dist / LU1900873792
P CHF acc / LU1965940353
P CHF dist / LU1965940437
P EUR acc / LU1965940197
P EUR dist / LU1965940270
36
Opportunities and Risks
37
JSS Equity – All China
Opportunities
Provides diversified exposure to a comprehensive
universe of Chinese Equities of H-Shares, ADRs and
the increasingly globally integrated A-Shares market.
Benefitting from strong research basis of ChinaAMC,
the portfolio manager of the fund, covering 80% of
public companies in China.
This is a long-only strategy with an emphasis on value
with sustainable growth.
Combining a quantitatively assisted selection process
and proprietary bottom-up research to identify the best
investment targets.
Process is robust, transparent and repeatable.
Risks
Investments can fluctuate in value, and there is no
guarantee that the amount invested can be redeemed.
If the investor’s reference currency differs from the
fund’s investment currency, a currency risk exists.
As the fund invests in equities, performance is
influenced by company-specifics and changes in
economic environment. Investments in emerging
markets carry higher price risk
The fund invests in emerging markets, which are at an
early stage of development and are faced with
increased risk of expropriations, nationalisations as
well as political and economic uncertainty
The fund may invest in derivatives where the
underlying instruments are emerging market equities.
These investments may fluctuate significantly.
Increasing international trade frictions can negatively
affect invested companies
Source: ChinaAMC, Bank J. Safra Sarasin 2019. * As of 30.04.2019. The risk and reward profile shown is based on the share class P USD
acc. Risk and reward profiles of other share classes are included in the KIID of the specific share class. Risk and reward profiles are based
historical data and can not be used as a reliable indicator of the future risk profile of a share class. The risk classification of the share class may
change over time and is not a guarantee.
38
Source: ChinaAMC, Bank J. Safra Sarasin 2019
Glossary
A-Shares: China domestic shares that are denominated in Renminbi andtraded in the Shanghai and Shenzhen stock exchanges (including theChiNext and National Equities Exchange and Quotations). This is contrast toB-shares that are denominated in foreign currency and traded in Shanghaiand Shenzhen.
B-Shares: B-shares are equities by companies based in that are listed inforeign currency on the Shanghai Exchange (in U.S. dollars) or on theShenzhen Exchange (in Hong Kong dollars).
H-Shares: Shares of Chinese mainland companies that are registered inmainland China but listed on the Hong Kong Stock Exchange. Although H-shares are regulated by Chinese law, they are denominated in Hong Kongdollars and are traded in the same way as other equities on the Hong Kongexchange.
China ADR: An American depositary receipt (ADR) is a negotiablecertificate issued by a U.S. bank representing a specified number of shares(or one share) in a foreign stock traded on a U.S. exchange. China ADRsare denominated in U.S. dollars, with the underlying security of China-basedcompany held by a U.S. financial institution overseas. ADRs are listed oneither the NYSE, AMEX or Nasdaq but they are also sold OTC.
CDR: Chinese regulators have modeled CDRs after U.S.-listed Americandepositary receipts so that overseas stocks could be traded on China’smainland market. The goal of issuing CDRs is to lure capital back to theChinese market in order to drive the economy, as China’s tech giants havetraditionally opted to list outside of their home market. The issuance ofCDRs allows both Chinese institutional and private investors to own stock inforeign companies.
Attribution analysis: A quantitative method for evaluating the returns andrisks in a portfolio according to different factors such as industry orcompany-specific risks.
Bottom-up research: Focuses on fundamental analysis of individual stocksand de-emphasizes the significance of macroeconomic and market cycles.
Dividend yield: Ratio of a company's annual dividend compared to itsshare price.
EPS: Earnings per share is a company's profit divided by the outstandingshares of its common stock
Information Ratio: A measurement of portfolio returns beyond the returnsof a benchmark, compared to the volatility of those returns.
Investment style: The method and philosophy followed to manage a fundor separate account. The investment style of a fund helps set expectationsfor risk and performance potential.
Price / Book: Used to compare a company’s market to book value bydividing price per share by book value per share.
PE (Price / Earnings): Reflects the ratio of a company’s stock price to thecompany’s earnings per share.
QFII: Qualifed Foreign Institutional Investors is a programme that allowsspecified licensed international investors to participate in mainland China’sstock exchanges.
Quantitative strategies: Investment strategies that are typically rule-basedfinancial models
RFQII: Renminbi Qualified Foreign Institutional Investor is a policy thatallows foreign investors who hold the RQFII quota to invest directly inmainland China’s bond and equity markets.
Smart beta: Combines passive and active investing strategies. The goal isto obtain alpha, lower risk or increased diversification at lower cost thantraditional active management and marginally higher than pure indexinvesting.
ROE: Return on Equity, is a measure of financial performance calculated bydividing net income by shareholders’ equity.
Risk parity: A portfolio allocation strategy using risk to determineallocations across various components of an investment portfolio.
Sustainable growth: Long-term viable growth
Unicorn: Startup companies with valuations of over USD 1 billion arereferred to as «unicorns».
Value-added: Refers to products whose values have been increased byspecial manufacturing, marketing or processing.
Value: Stocks that trade below the intrinsic value of the company.
39
Important Legal Information
Switzerland
SICAV I
This document constitutes marketing material. If it refers to a financial instrument for which a prospectus and/or a key investor/information document
exists, these are available free of charge from Bank J. Safra Sarasin Ltd, Elisabethenstrasse 62, P.O. Box, CH-4002 Basel, Switzerland.
This document has been prepared by Bank J. Safra Sarasin Ltd (“Bank”) for the sole use of the recipient only. The information and descriptions of
the investment product contained in this document are intended purely for information purposes and do not constitute financial, legal or tax advice
and/or any other recommendation, offer or solicitation to acquire or sell investment products, to engage in a transaction, or to conclude any type of
business, nor are they any substitute for, in each individual case, obtaining the necessary advice and information on risk from your professional
advisor to an extent which you consider appropriate and reasonable, in order to ensure that the transaction is appropriate and suitable to your
financial goals and circumstances.
This document is based on publicly available information and data (“the Information”) believed to be correct, accurate and complete. The Bank has
not verified and is unable to guarantee the accuracy and completeness of the Information contained herein. Possible errors or incompleteness of the
Information do not constitute legal grounds (contractual or tacit) for liability, either with regard to direct, indirect or consequential damages. There is
no obligation on the part of Bank or any other person to update the content of this document. The views and opinions contained in this document,
along with the quoted figures, data and forecasts, may be subject to change without notice.
The collective investment fund described in this document is a subs-fund of JSS Investmentfonds. JSS Investmentfonds is a UCITS organized as an
open-ended investment company (société d’investissement à capital variable – “SICAV”) regulated by the Commission de Surveillance du Secteur
Financier (“CSSF”). It has been authorized for marketing in Switzerland by the Swiss Financial Market Supervisory Authority FINMA.
The price and value as well as any income that might accrue of any financial instrument mentioned in this document may move upwards or
downwards.
Past performance is no indication of current or future performance. The performance shown does not take account of any commissions and costs
incurred on the issue and redemption of units. Such costs and commissions have a negative impact on the performance of the fund. Information
containing forecasts are intended for information purpose only and are neither projections nor guarantees for future results and could differ
significantly for various reasons from actual performance. Investments in foreign currencies are subject to exchange rate fluctuations. Exchange rate
risk will apply if the investor’s reference currency is not the same as the investment currency.
40
Important Legal Information
Switzerland
SICAV I
Investing in this fund entails risks which are outlined in the prospectus. The latest available prospectus as well as the Key Investor Information
Document “KIID” should be carefully read and an independent consultant should be consulted before considering any investment. The above
mentioned documents, the articles of incorporation as well as the annual and semi-annual reports are available free of charge from the paying agent
(Bank J. Safra Sarasin Ltd, Elisabethenstrasse 62, P.O. Box, CH-4002 Basel, Switzerland) or the Swiss representative (J. Safra Sarasin
Investmentfonds Ltd, Wallstrasse 9, CH-4002 Basel, Switzerland).
The Bank and/or an affiliate of the J. Safra Sarasin Group, its clients and/or officers may hold a position or engage in transactions in any of the
financial instruments mentioned.
The Bank does not accept any liability whatsoever for losses arising from the use of the Information (or parts thereof) contained in this document. In
particular, neither the Bank nor its shareholders and employees shall be liable for the views contained in this document.
This publication is intended only for investors in Switzerland. It may only be distributed in countries where its distribution is legally permitted. This
information is not directed to any person in any jurisdiction where (by reason of that person’s nationality, residence or otherwise) such offering is
prohibited. Shares/Units of this fund may not be offered, sold or delivered to persons domiciled in the USA, US nationals or US person as defined by
FATCA-rules. Consequently, services and/or products mentioned in this document may not be available in all countries. Interested parties should
contact the local J. Safra Sarasin Group-representative to be informed about the services and products available in their country of residence.
© Copyright Bank J. Safra Sarasin Ltd. All rights reserved.
Bank J. Safra Sarasin Ltd
Elisabethenstrasse 62
P.O. Box
CH-4002 Basel
T: +41 (0) 58 317 44 44
F: +41 (0) 58 317 44 00
www.jsafrasarasin.com
41
Appendix
42
Strong Team with Local Expertise
Source: ChinaAMC, Bank J. Safra Sarasin 2019
Mr. Richard Pan, Managing Director, Portfolio Manager of the JSS Equity All China Fund, Head of FII Equity Investment , Head of International Business
Mr. Pan has 21 years of investment experience. Before joining ChinaAMC in 2013, Mr. Pan served as CIO and Deputy CEO of Vstone Capital, overseeing its
A-share investments. He worked as a Director/Portfolio Manager at Manulife Asset Management from 2007 to 2011, managing its Greater China funds and
QFII A-share fund. He also worked as a Portfolio Manager at United Securities from 2001 to 2004, and worked as a VP at Guotai Junan Securities since
1998. Mr. Pan holds an MBA from Georgetown University in the U.S., MA in Economics and BS in Engineering from Wuhan University.
Mr. Ruizhi Wang (Patrick), Portfolio Manager, FII Equity Investment
Mr. Wang has 10 years of research and investment experience at ChinaAMC. He worked as an analyst covering financial sector during 2010-2013, and as a
strategist during 2013-2015. He also co-managed ChinaAMC Industry Select Fund from 2013 to 2015. Mr. Wang holds an MA in Finance from China Center
for Economic Research, Peking University, BS in Economics, and BS in Statistics from Peking University.
Mr. Qingze Lin (David), Portfolio Manager, FII Equity Investment
Mr. Lin joined ChinaAMC in 2013 as an analyst for global consumer and internet sectors, including Hong Kong-listed stocks and ADRs. He later shifted his
focus to domestic consumer, agriculture and e-commerce before taking on the PM role. Before joining ChinaAMC, he worked in sales at P&G China, and as
a financial analyst in the retail division of Apple Inc. in U.S. Mr. Lin received an MBA from Fuqua Business School, Duke University, and a B.A in
International Business and English from Nanjing University.
Mr. Bolong Song (Andy), Assistant Portfolio Manager, FII Equity Investment
Mr. Song has over4 years' investment research experience with ChinaAMC Prior to joining the team, he worked in Quantitative Investment
Department, covering quantitative multi-factor investment strategies. Mr. Song holds Master of Financial Mathematics and Master of Public Policy from
University of Chicago and B.S. in Economics from Wuhan University.
Mr. Hao Luo (Stanley), Equity Analyst, FII Equity Investment
Mr. Luo Hao currently covers multiple sectors including media, catering and tourism, social service, game, TV & films, and internet. Mr. Luo holds an M.S in
Statistics and Operations from the University of North Carolina, and a B.S degree from School of Statistics and Management, Shanghai University of Finance
and Economics.
Ms. Mengran Zhao (Miranda), ESG Analyst, FII Equity Investment
Ms. Zhao currently serves as ESG specialist in QFII Equity team, covering responsible investment issues. Ms. Zhao holds an MPA in Economics and
Financial Policy from Cornell University, a B.B.A degree in Accounting and a dual LL.B degree in Law from Tsinghua University.
Ms. Xinran Xu (Shirley), ESG Analyst, FII Equity Investment
Ms. Xu newly joined and currently serves as ESG specialist in QFII Equity team, covering responsible investment issues. Ms. Xu holds an MS in Applied
Economics and Management from Cornell University and a Bachelor of Economics from Renmin University of China.
Dr. Cong Wang, Equity Analyst, FII Equity Investment
Dr. Wang covers energy and industrial sectors in QFII Investment team. He received his M.S. and Ph.D. in Chemical and Biomolecular Engineering from the
University of Pennsylvania. Prior to this experience, he received his B.S. in Chemical Engineering from Tsinghua University and a dual B.S. in Economics
from Peking University in China. His primary research interests are in sustainable energy, with professional experience at PetroChina International (America)
Inc. and Deutsche Bank, etc.
43
Source: Bank J. Safra Sarasin 2019. Image from Wikimedia Commons Shadowxfox [CC BY-SA 3.0 (https://creativecommons.org/licenses/by-
sa/3.0)] * Qualified Institutional Investor and Renminbi Qualified Foreign Institutional Investor ** American Depository Receipt
How to Invest in Chinese Companies?
Chinese companies can be listed on various exchanges and in various currencies.
China A-shares can be accessed through QFII/RQFII or Stock Connect. Bank J. Safra Sarasin
has just been granted a China inbound RQFII* quota of RMB 2.6 bn.
A-Shares
Mainland Chinese companies listed in Shanghai and Shenzhen exchanges
Denominated in Renminbi (CNY)
Accessible to foreign institutions through QFII/RQFII* scheme, stock
connect program, mutual recognition etc.
Starting to be included in global stock indices
H-Shares
Mainland Chinese companies listed in Hong Kong
Denominated in Hong Kong Dollars (HKD)
Already included in global stock indices
Overseas Shares (ADR**)
Mainland Chinese companies listed mainly in New York
Denominated in USD
Already included in global stock indices
Shanghai
Shenzhen
Hong Kong
44
Source: ChinaAMC, Bank J. Safra Sarasin 2019. Simplified illustration for information purpose only.
Risk Management Overview
Investment Compliance Control
Risk controls based on
legislation, regulations and
contracts
System authorization
Stress Testing & Scenario Analysis
Monthly and ad-hoc stress testing
based on historical scenarios
Forward-looking testing to evaluate
potential impact of certain events,
such as testing ahead of Brexit
Sensitivity analysis, e.g. FX rates
Risk Monitoring
Daily monitoring of risk
indicators
Risk alerts to PMs
Periodic risk reports
Attribution Analysis
Examine different elements
and factors that contribute
to the return and risk of a
portfolio
45
Source: ChinaAMC, Bank J. Safra Sarasin 2019. Simplified illustration for information purpose only.
Risk Management Process
The seamless risk management
process is to achieve the following
goals
Ensure investment activities are
conducted in accordance with
regulatory authorities’ and clients’
requirements, and in accordance
with the decisions and policies
instituted by the company’s
Investment Committee;
Timely discovery of potential risks
and making improvements to the
investment process;
Various information and analysis
from risk management should be
delivered to the portfolio managers,
investment decision committee and
the senior management team
Period and ad-hoc risk management reports
Breach alert report Risk analysis report Attribution analysis report
Pre-trade Review Trade Monitoring Post-trade Review
Securities checking;
Investment quantity
calculation;
Available cash
calculation;
Liquidity testing &
calculation
Trade behavior
monitoring: counter-
party & fair trading
Important investment
reminders: selling
within certain period &
exercising rights
Compliance Review
Portfolio Risk Analysis
Attribution Analysis
46
Bank J. Safra Sarasin Ltd
Elisabethenstrasse 62
P.O. Box
CH-4002 Basel
Switzerland
T: +41 (0)58 317 44 44
F: +41 (0)58 317 44 00
www.jsafrasarasin.ch
For further information please contact us
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