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Zurich Insurance Malaysia

Investment-Linked Foreign Edge Funds


Zurich China Edge Fund
Zurich India Edge Fund
Zurich Global Edge Fund

11 April 2015
Investment-Linked Foreign Edge
Funds:
The world is your financial Edge
√ DIVERSIFY : Don’t put all your eggs in one basket. The
world is full of great investment opportunities to meet your
financial goals. Zurich now gives you more choices to tap into
these investment opportunities by adding to its stable of local
funds, three foreign Edge funds.

√ HIGHER GROWTH POTENTIAL : Invest in faster growing


markets, such as “Chindia” through the Zurich China Edge and
Zurich India Edge Funds. At the same time, Zurich Global
Edge Fund gives you access to the combined strength of top
economies around the globe. You can now switch between local
and foreign funds to maximize the investment potential.

√ GLOBAL EXPERTISE : We have multi-awarded international


fund manager, Schroders as our fund partner for the new foreign
Edge Funds.
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IT IS TIME TO INVEST
OFFSHORE !
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Why invest outside Malaysia?
Malaysia’s performance has not met expectations over the last 3
years

KLCI, China, India and Global stock indices – Performance last 10


years

India
China

M’sia
Global

Source: Bloomberg as at 31/1/2015. In US$ terms. Past performance is not indicative of future performance.
Investments in foreign equities are subject to high market risks, comprising equity and currency exchange rate risks. Please refer to fund factsheet and brochure
for more information. 4
It is time to invest offshore!
Plenty of investment opportunities outside of
Malaysia not to be missed
Malaysian companies do not have scale vs China, India and the
World Stock Market % of Global Market No. of Companies in
Region Cap* Capitalization Global Fortune 500^
(US$mil)

Global 34,331,485 - 500


China 880,636 2.5 100
India 357,897 1.0 8
Malaysia 138,088 0.4 1

*Source : MSCI as at 27 February 2015. All figures in USD. Global = MSCI World; China = MSCI China; India = MSCI India; Malaysia = MSCI Malaysia
^ Source: Fortune 500 as at July 2014

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Diversify: The way forward
In a world full of investment potential and uncertainties,
diversification is the way forward
EPF foreign
investments has gone
up from 10% in 2010
to 23% of assets as at
end-December 2014
(Source: EPF, The Star,
10/2/15 pdf attached)

Adobe Acrobat
Document

Growing number
of foreign
investment-
linked funds

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Invest in China, India and
Global Equities
- Plenty of attractive
opportunities

By:
Josephine Lip
Head of Intermediary Sales
Schroder Investment Management

11 April 2015
INTERNAL USE ONLY
Invest in China, India and Global
Equities
Contents
1. Why Invest in China and India?
2. Why Invest in Global Equities?
3. Who is Schroders?

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1. WHY INVEST IN CHINA &
INDIA?

9
Why Invest in China & India?
3 Key Benefits

1
Capture the strong and continuous growth
potential of the two fastest growing
economies of the world

2
Gain from the positive demographic
trends and rising incomes which
provide strong support for consumption
growth

3
Reap potentially attractive returns from
the Chinese and Indian stock markets that
are presenting attractive entry points

Source: Schroders, 28 February 2015

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1. Capture potential from the
world’s fastest growing
economies
China & India are able to grow faster, while fiscal positions continue to
improve
GDP Growth Forecasts – China and India vs US and the China & India’s stronger fiscal position2
World1 Fiscal balance (% of GDP, 2014 forecast)
4
9.0%
% yoy
8.0% 2

7.0%
0
6.0%
-2
5.0%

4.0% -4

3.0%
-6
2.0%

-8
1.0%

0.0% -10
China India US World 0 50 100 150 200 250
2013 2014 2015 (F) Gross government debt (% of GDP, 2014 forecast)

1.
Sources: International Monetary Fund as at July 2014, Datastream as at 31 December 2014.
2.
Sources: Bloomberg as at 8 September 2014. International Monetary Fund, World Economic Outlook Database, as at April 2014 (latest).

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1. Capture potential from the world’s fastest
growing economies
Pro-reform governments are favourable for the economic outlook in both China &
India
China’s Reform Roadmap
Despite lowering the GDP growth target, the Chinese government is
committed to stabilising growth and supporting employment
One-child
One-child Policy
Policy Reform
Reform

Hukou
Hukou Reform
Reform

Interest Service
Service Sector
Sector
Interest Rate
Rate Demand
Liberalization Demand Boost
Boost Deregulation
Deregulation
Liberalization
Slower
Slower Land
Land Monetization
Monetization

Local
Local Govt
Govt
Growth
Growth Consumer
Consumer Credit
Credit
Debt
Debt Control
Control
Deleveraging
Deleveraging
Price
Price Reform
Reform
Government
SOE
SOE Reform
Reform
Better
Better Government
Deregulation
Deregulation
Structure
Structure Increase SOE
SOE Reform
Reform
Increase
Productivity
Productivity Hukou
Hukou Reform
Reform

Anti-Corruption
Anti-Corruption

Source: Citi Research, July 2014. Photo of Premier Xi JinPing from Getty Images
Environment
Environment Protection
Protection

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1. Capture potential from the world’s fastest
growing economies
Pro-reform governments are favourable for the economic outlook in both China &
India
India’s new government has boosted investor’s confidence with steps taken
to improve ease of doing business

New project investments also improving


800 Project investments rebound strongly 9,000
718
8,000 Rs bn
700 INR bn
7,000
600
6,000
500
437 5,000
408
400 347
314 4,000
300
234 235 3,000
216
200 151 162 2,000
96
100 64 73 70 91 84 86
1,000
28 41 24 40 41
0 0
9 0 1 2 3 4 5 6 7 8 9 0 1 2 3 4
n-9 n-0 n-0 n-0 n-0 n-0 n-0 n-0 n-0 n-0 n-0 n-1 n-1 n-1 n-1 n-1
Ju Ju Ju Ju Ju Ju Ju Ju Ju Ju Ju Ju Ju Ju Ju Ju

Total Government Private Sector


Source: Capitaline, CIME, Morgan Stanley India Capital Goods Team, Morgan Stanley, December 2014
Source: Capitaline, CIME, Morgan Stanley India Capital Goods Team, Morgan Stanley, December 2014

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2. Gain from positive demographics + rising
household income
Dramatic trends in spending power from a growing middle class
• In China, the number of households earning over US$35,000 in real terms will triple to almost 80 million
by 2022. China will have more households with this earning power in 2022 than Japan.
• India is forecasted to grow 2.5 times in this category bringing the number of households to more than 10
million from the current 4 million.
World’s share of disposable household income – Households with an income greater than US$35,000
China’s share increasing

Source: Oxford Economics, Haver Analytics, February 2014

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2. Gain from positive demographics + rising
household income
Strong support for consumption growth – the numbers are BIG!
India’s trends in consumption is rising China India
strongly supported by a young & working Population1 1,393,783,840 1,267,401,850
age population with rising income per World Rank 1 2
capita
India’s Consumption Growth (% y-y)
10.0 Youth Population2 356,000,000 269,000,000
9.0 World Rank 2 1
8.0
7.0
6.0 Internet Users3 641,601,070 243,198,922
5.0 World Rank 1 3
4.0
3.0
Mobile Phone Users4 1,276,660,000 970,955,980
2.0
World Rank 1 2
1.0
0.0
FY93
FY94
FY95
FY97
FY99
FY00
FY02
FY03

FY06
FY07
FY08
FY09
FY11
FY12
FY14
FY96
FY98

FY01

FY04
FY05

FY10

FY13
FY15E
FY16E

Smartphone Users5 519,700,000 123,300,000


World Rank 1 3
1
Source – Internet Live Stats, July 2014
2
Source – The Economic Times, 18 November 2014
3
Source – Internet Live Stats, July 2014
4
Source – Statista October 2014, The Hindu February 2015
5
Source – eMarketer December 2014

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2. WHY INVEST IN GLOBAL
EQUITIES?
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Why Invest in Global Equities?
3 Key Benefits

1
Global growth environment in 2015 will remain supportive of
global equities

2
Divergence in global growth creates attractive pockets
of opportunities

3
Valuation of global equities remain
attractive with further potential for upside

Source: Schroders as at 28 February 2015

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1. Global growth in 2015 supportive of global
equities
Led by a buoyant consumer in the United States
Falling unemployment, improving Higher wages signals a buoyant US
current account and improving trade consumer
balance

Source: Thomson Datastream, Consensus Economics, Schroders, 28 February 2015

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2. Divergence in growth => attractive
opportunities
Positives for Europe: Lower oil prices, monetary stimulus by European Central
Bank, and boost to exports from weaker Euro
Brent Oil Spot Prices Euro/USD movement (good for Europe)
€ /US$
1.40

1.36

1.32

1.28

1.24

1.20

1.16

1.12

Source: Thomson Datastream as at 28 February 2015

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3. WHO IS SCHRODERS?

SCHRODER’S INVESTMENT CAPABILITIES


IN ASIAN AND GLOBAL EQUITIES

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Schroder’s Capabilities in Asian Equities
Strong in regional presence and resources

1. Close to 40 Asia Pacific ex-Japan Schroders offices


fund managers and analysts based Tokyo
Opened 1974
in seven countries Seoul
Opened 1987
Beijing

2. Conduct more than 5,300 company Opened 1996


Mumbai^
visits per year* across the Asia Opened 2012
Taipei
Pacific region Opened 1989
Shanghai
Opened 1994
3. Total Asia Pacific ex Japan Equity Hong Kong
Assets under Management of about Opened 1971
Singapore
US$32bn as at 31 December 2014# Opened 1977
Jakarta
Opened 1991

Sydney
Opened 1963
Melbourne
Opened 2007

Investment office
Source: Schroders as at 31 March 2015 Representative office
*For the year 2014
^A joint venture fund management company with Axis Asset Management Company
# including China A-shares managed by Schroders only
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Schroder’s Capabilities in Asian Equities
Asian funds and ratings

Fund Fund Size (US$) Rating Inception Date


Schroder ISF Asian Total Return 2,470m 1/11/2007
Schroder Asian Growth 380m 22/3/2004
Schroder Asian Asset Income 4,878m 1/6/2011
Schroder Asian Income 956m 1/9/2011
Schroder ISF Asian Equity Yield 2,521m 11/6/2004
Schroder ISF Asian Opportunities 3,394m 29/10/1993
Schroder ISF Emerging Asia 1,152m 9/1/2004
Schroder ISF Asian Smaller Co 345m 16/9/2005
Schroder ISF Indian Equity 275m 10/11/2006
Schroder ISF China Opportunities 1,273m 17/2/2006
Schroder ISF Hong Kong Equity 3,293m 9/8/2002
Schroder ISF Taiwanese Equity 281m 18/1/2008

Source: Schroders as at 28 February 2015. Rating refers to Morningstar rating as at 28 February 2015

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Schroder’s Capabilities in Asian Equities
Award-winning funds with proven track record
The Edge-Lipper Fund Awards 2014
Schroder Asian Growth Fund
Best Fund Over 3 Years – Equity Asia Pacific Ex Japan
Schroder Asian Growth Fund
Best Fund Over 5 Years – Equity Asia Pacific Ex Japan
Schroder ISF Korean Equity
Best Fund Over 3 Years – Equity Korea

2014 Morningstar Awards


Best Fund House: Equity
Schroder Asian Growth Fund
Best Asia ex-Japan Equity Fund
Schroder ISF Hong Kong Equity
Best Greater China Equity Fund
Schroder Singapore Trust
Best Singapore Equity Fund

Asia Asset Management


Best of the Best Awards 2013
Best Retail House Singapore

Source: Schroders as at 28 February 2015


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Schroder’s Capabilities in Global Equities
A well-resourced global investment team managing >US$44bn

Justin Abercrombie
Head of QEP Global Investment Team
Set up team in 1996; Lead Portfolio Manager
22 years of experience

David Philpotts Stuart Adrian Stephen Langford Tim Matthews


Head of Research Senior Analyst Senior Analyst Client Portfolio Manager
and PM Sydney and PM and PM
24 years of experience 18 years of experience 16 years of experience 23 years of experience

Research Product Management


Portfolio Implementation
10 based in London, 5 based in London,
3 based in London
Sydney and New York Sydney and New York

Product Executives

7 based in London, Sydney and New York

Source: Schroders. Assets as at 30 September 2014. Team as at 31 January 2015

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INTRODUCING ZURICH CHINA EDGE
FUND
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Zurich China Edge Fund
Fund Structure

IL Fund
Schroder ISF
IL Policy Zurich China China
Holders Edge Fund Opportunities

Target Fund
IL Fund Manager Target Fund’s
Investment Manager

Zurich Insurance Malaysia Bhd Schroder Investment


Management Ltd
(Schroders)
IL – Investment-Linked. Schroder ISF – Schroder International Selection Fund.

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Zurich China Edge Fund
Objective, style and universe

Objective
To provide capital growth primarily through
investment in equity and equity related securities of
companies with substantial business exposure to the
People's Republic of China.

Investment Style* Investment Universe*


The Fund focuses on:- The investment universe for Chinese equities
- High quality companies that grow shareholder includes H-shares, Red Chips, B-shares, A-
value; and shares, P-shares and B-shares.
- Companies that will outperform their peers over
the medium to long term.

Risk Profile
- High, comprising of China equity risk and foreign
currency (US$, Renminbi) risk
* Investment style and universe of the target Schroder ISF China Opportunities Fund

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Target Schroder Fund Performance
A 4-star rated fund with consistently top quartile ranking
Schroder China Fund Performance as at 28 February 2015
Since
3 mths 6 mths YTD 1 year 3 years 5 years inceptio
n
% % % % % % %
Schroder ISF China
Opportunities 4.9 4.1 3.7 12.9 23.4 29.0 179.1

China Benchmark 6.8 5.9 5.6 19.0 22.8 32.6 160.4


Fund Quartile Ranking* 2 2 2 2 2 2 1
Fund size (US$): 1,272.8million

*Offshore and International Funds – Greater China Equity Universe (The quartile is based on Schroder ISF China Opps Class A (Acc))
Benchmark: Morgan Stanley Capital International (MSCI) China Net Total Return Index
Source: Schroders and Morningstar as at 28 February 2015. Returns quoted are based on NAV to NAV prices of the Fund, in USD, net of fees, with net income re-invested. Inception
date: 17 February 2006. Past performance is not indicative of future returns.

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INTRODUCING ZURICH INDIA EDGE
FUND
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Zurich India Edge Fund
Fund Structure

IL Fund

IL Policy Zurich India Schroder ISF


Holders Edge Fund Indian Equity

Target Fund
IL Fund Manager Target Fund’s
Investment Manager

Zurich Insurance Malaysia Bhd Schroder Investment


Management Ltd
(Schroders)
IL – Investment-Linked. Schroder ISF – Schroder International Selection Fund.

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Zurich India Edge Fund
Objective, style and universe

Objective
To provide capital growth primarily through
investment in equity and equity related
securities of Indian companies.

Investment Style* Investment Universe*


The Fund focuses on:- Equity and equity-related securities of
- High quality companies that grow Indian companies listed in India.
shareholder value; and
- Companies that will outperform their peers
over the medium to long term.

Risk Profile
- High, comprising of India equity risk and foreign
currency (US$, Rupee) risk

* Investment style and universe of the target Schroder ISF Indian Equity Fund

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Target Schroder Fund Performance
Delivered strong absolute returns over 1, 3 and 5 years and since
inception
Schroder India Fund Performance as at 28 February 2015
Since
3 mths 6 mths YTD 1 year 3 years 5 years inception
In USD, net of fees % % % % % % %
Schroder ISF Indian
Equity Fund 6.3 14.1 8.4 39.4 48.3 51.5 74.6

India Benchmark 3.4 7.7 9.9 36.9 30.1 30.6 64.0


Excess Returns
+2.9 +6.4 -1.5 +2.5 +18.2 +21.4 +10.6
above benchmark

Fund size (US$): 275million

Source: Schroders. Returns quoted are based on A Accumulated Share Class, in USD, dividend re-invested, net of fees. Inception date: 10 November 2006.
Benchmark: Morgan Stanley Capital International (MSCI) India Net Total Return Index
Source of fund ratings: Citywire, Trustnet and Morningstar, as at 28 February 2015. Fund ranking information refers to A Acc share class and is based on Morningstar’s universe –
Offshore and International Funds: India Equity. Past performance is not indicative of future returns.

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INTRODUCING ZURICH GLOBAL
EDGE FUND
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Zurich Global Edge Fund
Fund Structure

IL Fund
Schroder ISF
IL Policy Zurich Global QEP Global
Holders Edge Fund Quality

Target Fund

IL Fund Manager Target Fund’s


Investment Manager

Zurich Insurance Malaysia Bhd Schroder Investment


Management Ltd
(Schroders)
IL – Investment-Linked. Schroder ISF – Schroder International Selection Fund. QEP – Quantitative Equity Premium.

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Zurich Global Edge Fund
Objective, style and universe

Objective
To provide capital growth primarily through
investment in equity and equity related
securities of companies worldwide whose
financial characteristics show high quality
attributes.

Investment Style* Investment Universe*


The Fund focuses on:- Global universe of 5,000 companies to
- Companies with high quality characteristics maximise the investment opportunity. The
(profitability, stability and financial strength) Fund then selects a portfolio of over 400
that will deliver higher and more stable stocks around the world.
returns over the medium to long-term.

Risk Profile
- High, comprising of global equity risk and foreign
currency risk
* Investment style and universe of the target Schroder ISF Indian Equity Fund

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Target Schroder Fund Performance
A 4-star rated fund

Schroder Global Quality Fund Performance as at 28 February 2015


Since
3 mths 6 mths YTD 1 year 3 years 5 years inceptio
n
% % % % % % %
Schroder ISF QEP Global Quality
Fund 2.1 1.3 3.1 7.4 36.9 70.4 34.7

World Benchmark 2.3 2.1 3.9 7.9 45.3 73.8 25.5


Fund size (US$): 1,670.5million

Benchmark: Morgan Stanley Capital International (MSCI) World Index


Source: Schroders and Morningstar as at 28 February 2015. Returns quoted are based on NAV to NAV prices of the Fund, in USD, net of fees, with net income re-invested. Inception
date: 17 October 2007. Past performance is not indicative of future returns.

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Zurich Edge Investment-Linked
Funds:
The world is your financial Edge
Zurich Edge
Malaysian Funds Foreign Funds*
Zurich Vulture Fund Zurich China Edge Fund Diversify and
Zurich Growth Fund Zurich India Edge Fund harness the full
potential of
Zurich Dana Mas Maju Zurich Global Edge Fund your
Zurich Billion Cap Fund investments –
right now !
Zurich Balanced Fund
Zurich Dana Mas Yakin
Zurich Income Fund
Zurich Dana Seri Mulia

* Foreign Funds are available for new and existing


policies of :
√ Zurich FlexiLife Plus √ Zurich EduStart
√ MASTER Investment Plan √ MASTER Savings Plan
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Zurich FlexiLife Plus policy:
Protection that grows with you
Get your
Zurich
FlexiLife
Plus
policy
now!

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ZURICH FOREIGN
EDGE FUNDS

Happy Selling & Investing,


Thank You!
This report shall not be distributed or reproduced whether in whole or in part without prior written consent of Zurich Insurance Malaysia Berhad. All
information contained herein has not been verified by us and we do not make any representation or warranty to the accuracy and completeness of such
information. Zurich, its related companies, their directors, employees and representatives shall not hold any liability to any person (whether by reason of
negligence, negligent misstatement or otherwise) arising from any statement, opinion or information, expressed or implied, arising out of, contained in or
derived from or omission from the reports or matter, or your decision or commitment to invest derived or concluded upon sole reliance to the information
revealed hereto. This report is strictly for general information purposes only and is not intended as an offer or solicitation with respect to the purchase or sale
of any products. It does not have regard to any other investment objectives or financial needs of any specific person who may receive it. Investors should also
consider the investment risks and the fees and charges carefully. Past performance is not necessarily indicative of future performance. Price of units and
distributions, if any, may go down as well as up.

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