Objective

The investment objective is to provide investment results that, before fees and expenses, closely correspond to the performance of the FTSE Custom Global AI Select Index (the “Index”).

Strategy

In seeking to achieve the Sub-Fund’s investment objective, the Manager will either use a full replication strategy or a representative sampling strategy as the Manager believes to be appropriate in order to achieve the investment objective of the Sub-Fund by tracking the Index as closely as possible to the benefit of the investors. The Sub-Fund may switch between the full replication strategy and the representative sampling strategy in its absolute discretion without prior notice to investors.
In pursuing the full replication strategy, the Manager will invest in substantially all securities constituting the Index (the “Index Securities”) in substantially the same weightings (i.e. proportions) as these Index Securities have in the Index.
In pursuing the representative sampling strategy, the Manager may:

1. invest in a representative sample whose performance is closely correlated with the Index, but whose constituents may or may not themselves be constituents of the Index;
   
2. invest less than 30% of the Sub-Fund’s NAV in collective investment schemes (“CIS”), each being either an exchange traded fund or an unlisted index tracking fund which tracks an index that has a high correlation with the Index. Such CIS may be authorised by the SFC, eligible schemes under Chapter 7.11A of the Code, or non-eligible schemes. For the avoidance of doubt, the Sub-Fund’s aggregate investment in non-eligible schemes and not authorised by the SFC may not exceed 10% of the NAV of the Sub-Fund; and/or
   
3. invest in financial derivative instruments including futures and swaps with less than 30% of the Sub-Fund’s NAV for investment and hedging purposes, where the Manager believes such investments will help the Sub-Fund achieve its investment objective and are beneficial to the Sub-Fund.

In pursuing a representative sampling strategy, the Manager may cause the Sub-Fund to deviate from the Index weighting on condition that the maximum deviation from the Index weighting of any constituent will not exceed 3% or such other percentage as determined by the Manager after consultation with the SFC.

Other investments

The Sub-Fund may invest in money market funds (subject to the investment restrictions as set out in Chapter 7 of the Code), and in cash deposits and cash equivalents for cash management purposes, up to 5% of its NAV.
The Manager may, on behalf of the Sub-Fund, enter into securities lending transactions, with the maximum level for up to 50% and expected level for approximately 20% of its NAV, and is able to recall the securities lent out at any time. As part of the securities lending transactions, the Sub-Fund must receive cash and/or non-cash collateral of at least 100% of the value of the securities lent (interests, dividends and other eventual rights included). The collateral will be marked-to-market on a daily basis and be safekept by the Custodian.
The Manager does not currently intend to enter into sale and repurchase transactions, reverse repurchase transactions and other similar over-the-counter transactions on behalf of the Sub-Fund. The Manager will seek prior approval of the SFC (to the extent required under applicable regulatory requirements) and provide at least one month’s prior notice to Unitholders before the Manager engages in any such transactions.
The investment strategy of the Sub-Fund is subject to the investment and borrowing restrictions set out in the Prospectus.

Index

The Index is designed to represent the performance of 50 companies focused on artificial intelligence computing power, large language model (LLM), and transformation and enhancement of existing software business through artificial intelligence technology.
The eligible securities of the FTSE Custom Global AI Select Index must be constituents of (i) the eligible Hong Kong listed stocks of FTSE Southbound Stock Connect All Cap Index; (ii) the eligible US listed stocks of FTSE Global All Cap plus US Executive Order Exclusions Index and (iii) the following single securities: Taiwan Semiconductor Manufacturing ADR, ASML Holding ADR, and Arm Holdings ADR (the “ADR Components”) (collectively, the “Index Universe”). The constituents will then be subject to the business activities screening set out in the index methodology of the Index as described in Appendix of the Sub-Fund to the Prospectus.
Following the business activities screening, the top 30 eligible securities fulfilled the selection criteria for the FTSE Southbound Stock Connect All Cap Index with the highest investable market cap are selected (the “Hong Kong Listed Stock Components”). The top 20 eligible securities which are the ADR components or securities fulfilled selection criteria for the FTSE Global All Cap Plus US Executive Order Exclusions Index with the highest investable market cap are selected (the “US Listed Stock Components”).
All constituents in the Index are subject to a 7% capping on a semi-annually basis (March and September). Additionally, the overall index weighting allocation of the Index will be split between (i) Hong Kong Listed Stock Components and (ii) US Listed Stock Components, at 65% and 35%, respectively.
The Index is a net total return index, which means that it reflects the reinvestment of dividends or distributions, after deduction of any withholding tax. The Index is free float adjusted market capitalisation weighted index, whereby the weights of Index constituents are based on their investable market capitalisations. The Index is denominated and quoted in HKD. The Index is reviewed semi-annually in March and September (each a “review month”).
The Index is compiled and published by FTSE International Limited (the “Index Provider”). The Manager (and each of its Connected Persons) are independent of the Index Provider.
The Index was launched in 27 September 2024 and had a base level of 1,000 on 19 September 2022. As of 24 March 2025, the Index had a total market capitalisation of approximately HKD 152.96 trillion and 50 constituents.
The constituents of the Index together with their respective weightings and additional information of the Index are published at the website of the Index Provider at https://www.lseg.com/en/ftse-russell/indices/custom-global-ai-select-index (this website has not been reviewed by the SFC).

Bloomberg Code: GPEFM002