Important Notes:

1. Principal MPF Scheme Series 800 ("Scheme") is an MPF Scheme.
2. All constituent funds (except for Principal Hong Kong Equity Fund and Principal China Equity Fund) under this Scheme invest solely in insurance policies issued by Principal Insurance Company (Hong Kong) Limited ("Principal"). Your investment in these funds is therefore subject to the credit risk of Principal.
3. Principal, the Guarantor of the Principal Long Term Guaranteed Fund under this Scheme, will only provide a guarantee of capital and a prescribed guarantee rate of return in certain specified circumstances. Please refer to page 9 of this Principal Brochure under the section "Provision of Guarantee" for details of the guarantee conditions.
4. Principal, the Guarantor of the Principal Capital Guaranteed Fund under this Scheme, will provide a guarantee to ensure the unit value of the fund will never decrease. Under the Indirect Charge Option, part of the management fee is asset-based which is deducted from the net asset value of the fund, while the remaining part is payable by deducting units from member's account. As such, capital may not be guaranteed in absolute term for scheme members under the Indirect Charge Option. For details, please refer to pages 7 and 21 of this Principal Brochure under the section "How the guarantee works" and "Fees and Charges" respectively.
5. Investment in Principal HK Dollar Savings Fund or Principal US Dollar Savings Fund is different from placing deposits with a bank or deposit-taking company and is not protected by the Deposit Protection Scheme. Investment in these funds will be subject to investment risks.
6. You should consider your own risk tolerance level and financial circumstances before making any investment choices. When, in your selection of funds, you are in doubt as to whether a certain fund is suitable for you (including whether it is consistent with your investment objectives), you should seek financial and/or professional advice and choose the fund(s) most suitable for you, taking into account your own circumstances.
7. In the event that you do not make any investment choices, please be reminded that any contributions made and/or benefits transferred into this Scheme will be invested into Principal HK Dollar Savings Fund, and such fund may not necessarily be a suitable investment for you.
8. You should not invest in reliance on this marketing material alone. You should read the Principal Brochure of the Scheme for further details (including investment policy, risk factors, fee and charges and constituent funds information).

Series 800 consists of 14 constituent funds with different risk/return profiles. It gives your employees more fund choices than other Principal MPF Schemes. This is particularly suitable for large companies as it provides a wide variety of investment choices for each employee.

Members could design your own investment portfolio to better meet your retirement needs. Series 800 is suitable for members with a greater investment knowledge and experience.

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Principal Capital Guaranteed Fund* (Capital may not be guaranteed in absolute term for scheme members under the Indirect Charge Option.)
Objective	The objective of this fund is to guarantee the capital value of the contributions, and to earn a competitive short-term rate of return.
Investment Portfolio	Invest in an insurance policy Approved Pooled Investment Fund ("Policy APIF") which will in turn invests in mainly a portfolio of short duration securities.   (Investments in the Policy APIF are subject to the credit risk of Principal)
Asset Allocation	Debt Securities 0 - 100% Cash & Short-term Investments(e.g.bills and deposits) 0 - 100%
Geographic Allocation	Hong Kong 60 - 100% United States 0 - 40% Europe 0 - 40% Other 0 - 20%
Risk / Return Profile#	(Guaranteed Fund)

* Principal Capital Guaranteed Fund

Principal, the Guarantor of the Principal Capital Guaranteed Fund under this Scheme, will provide a guarantee to ensure the unit value of the fund will never decrease. Your investments are subject to the credit risk of Principal.  

There are two charge options available in this Scheme, namely the Direct Charge Option and Indirect Charge Option. Under the Indirect Charge Option, part of the management fee is asset-based which is deducted from the net asset value of the fund, while the remaining part is payable by deducting units from member's account.   As such, capital may not be guaranteed in absolute term for scheme members under the Indirect Charge Option.  For details, please refer to pages 7 and 21 of the Principal Brochure of the Scheme under the section "How the guarantee works" and "Fees and Charges" respectively. 

Subject to the sole discretion of the Trustee, (i) the Direct Charge Option will not be available to employers, employees and self-employed persons who join the Scheme on or after 1 October 2004; and (ii) preserved members and SVC members will be subject to the Indirect Charge Option only.

Objective	The objective of the fund is to provide a competitive long-term total rate of return, while also providing a minimum guaranteed average annual return over the career of the members.
Investment Portfolio	Invest in a Policy APIF which will in turn invest in two or more Approved Pooled Investment Funds ("APIFs") and/or Approved Index-Tracking Collective Investment Schemes ("ITCIS"). The underlying investments will consist of debt and equity securities which may be denominated in HK dollars, US dollars or other currencies.   (Investments in the Policy APIF are subject to the credit risk of Principal)
Asset Allocation	Equity Securities 10 - 55% Debt Securities 25 - 90% Cash & Short-term Investments (e.g.bills and deposits) 0 - 20%
Geographic Allocation	United States and Greater China 40 - 100% Other Asia 0 - 50% Europe 0 - 50% Other Countries 0 - 50%
Risk / Return Profile#	(Guaranteed Fund)

** Principal Long Term Guaranteed Fund

Principal, the Guarantor of the Principal Long Term Guaranteed Fund under this Scheme, will only provide a guarantee of capital and a prescribed guarantee rate of return in certain specified circumstances.  Your investments are subject to the credit risk of Principal. 

The guarantee of capital and return will only be offered if the contributions in the fund are withdrawn upon the occurrence of a "qualifying event", which is the receipt by the Trustee of a valid claim of all the accrued benefits of the member upon satisfying any of the following conditions:

(a) Attainment of the normal retirement age or retirement at or after the early retirement age but before the normal retirement age

(b) Total incapacity

(c) Death

(d) Permanent departure from Hong Kong

(e) Claim of small balance

The above conditions (a) to (e) apply to employee members, self-employed persons and preserved account holders.

(f) Termination of the member's employment (regardless of the reason of termination) and the continuous period for which the member has been investing in the fund up to and including the last date of his employment ("qualifying period") is at least 36 complete months.  The qualifying period in respect of a member will also be re-set to zero if the member (or his personal representative) effects a redemption, switching out or withdrawal of the units of the fund other than upon the occurrence of a qualifying event.  For the avoidance of doubt, condition (f) does not apply to self-employed persons or preserved account holders.

If a redemption, switching out or withdrawal of units of the fund is effected by a member other than upon the occurrence of a qualifying event as stated above, the guarantee will be affected and the member's investments in this fund will be subject to market fluctuation and investment risks.  Please refer to page 9 of the Principal Brochure of the Scheme under the section "Provision of Guarantee for details of the guarantee conditions.

Principal MPF Conservative Fund***
Objective	The objective of this fund is to at least earn a net return equal to the prescribed savings rate (which is broadly the average rate of interest on a Hong Kong dollar savings account) determined by the MPFA.
Investment Portfolio	Invest in a Policy APIF which will consist of a portfolio of bank deposits, short duration securities and high quality money market instruments denominated in Hong Kong dollars.   (Investments in the Policy APIF are subject to the credit risk of Principal)
Asset Allocation	Certificates of Deposit 0 - 95% Debt Securities 0 - 95% Cash & Short-term Investments(e.g.bills and deposits) 0 - 100%
Geographic Allocation	Hong Kong 100%
Risk / Return Profile#

*** Principal MPF Conservative Fund

Principal MPF Conservative Fund under this Scheme is not a guaranteed fund and does not guarantee the repayment of capital. Fees and charges of MPF conservative fund can be deducted from either (i) the assets of the fund or (ii) members' account by way of unit deduction.  This fund uses method (i) and, therefore, unit prices/net asset value/fund performance quoted have incorporated the impact of fees and charges.                

Note: Investment in Principal HK Dollar Savings Fund is different from placing deposits with a bank or deposit-taking company and is not protected by the Deposit Protection Scheme.  Investments in this fund will be subject to investment risks.

Note: Investment in Principal US Dollar Savings Fund is different from placing deposits with a bank or deposit-taking company and is not protected by the Deposit Protection Scheme.  Investments in this fund will be subject to investment risks.

Principal Long Term Accumulation Fund
Objective	The objective of this fund is to earn a competitive long-term total rate of return through investing in a balanced portfolio.
Investment Portfolio	Invest in a Policy APIF which will in turn invest in two or more APIFs and/or ITCIS.   (Investments in the Policy APIF are subject to the credit risk of Principal)
Asset Allocation	Equity Securities 20 - 80% Debt Securities 15 - 75% Cash & Short-term Investments (e.g.bills and deposits) 0 - 20%
Geographic Allocation	United States 15 - 100% Asia 0 - 85% Europe 0 - 30% Others 0 - 20%
Risk / Return Profile#

Principal China Equity Fund
Objective	The objective of the fund is to achieve capital growth over the long term by investing mainly in China-related equities.
Investment Portfolio	Invest in an APIF which will invest primarily in equities issued by companies with exposure in different sectors of economies in Peoples Republic of China (Mainland China). A majority of the equities will be listed on the Hong Kong Stock Exchange and may include exposure to stocks listed on other exchanges within the applicable regulatory limits.
Asset Allocation	Equity Securities 70 - 100% Cash & Short-term Investments(e.g.bills and deposits) 0 - 30%
Geographic Allocation	People's Republic of China (Mainland China) 70 - 100% Other countries 0 - 30%
Risk / Return Profile #

Principal Hong Kong Equity Fund
Objective	The objective of this fund is to achieve capital growth over the long-term by investing mainly in Hong Kong equity markets.
Investment Portfolio	Invest in an APIF which will invest primarily in listed equities issued by companies established in Hong Kong or by companies whose shares are listed in Hong Kong.  The APIF may also invest in listed equities issued by companies which have business in Hong Kong. The fund may hold cash and short-term investments.
Asset Allocation	Equity Securities 70 - 100% Cash & Short-term Investments(e.g.bills and deposits) 0 - 30%
Geographic Allocation	Hong Kong 30 - 100% China 0 - 50% Others 0 - 30%
Risk / Return Profile#

#Risk/Return Profile

Low

Moderate

Moderate to High

High

The classifications of Risk/Return Profile are based on past volatility (i.e. annualized standard deviation of returns), worst and best two months returns, and the relative risk levels among the funds in the Scheme.  Besides, reference is also made to the investment objectives of the respective funds.

NOTE:

Investors should note that (i) the above ranges of asset and geographic allocations are for indication only and long term allocations may vary with changing market conditions; and (ii) the geographic allocation for equity investments is classified by the place of principal business of the issuers and the geographic allocation for debt investments is classified by their currency denomination.

Investment involves risks. The value of the funds may go up or down.  Please refer to the Principal Brochure of the Scheme for more details, including fees, charges and the risk factors of the constituent funds and the Scheme.