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Shanghai Commercial BankWealth Management

InvestmentOutlook Q4 2021

Global Market and Currency Outlook

Tapering on the horizonThe Fed is deliberately leading market discourse towards the inevitable announcement on tapering. With the newfound hawkish tilt, the greenback remains well sought-after. The introduction of standing repo facility and the resulting liquidity will cap the upside of dollar rally though.

Non-dollar bulls might have to reassess positions amid dollar strength. Paired with the blazing spread of delta variant, EUR and GBP are expected to test previous lows. Downside risks remain prevail for the yuan with yields ticking lower. The tone is similarly bearish for commodity bloc currencies. Anti-lockdown protests sweeping the Australia and the New Zealand added a touch to the sense of frustration. Still, as weak short positioning has been washed out, we expect the Aussie and Kiwi to grind lower. Source: Shanghai Commercial Bank Limited

Asset Managers’ Corner – FIL Investment Management (Hong Kong) Limited^

Asia eyes a tantrum-free taper this timeA faster-than-expected tapering by the Federal Reserve remains a risk at the margin for Asian bond markets, but investors have been reassured by the latest policy signals. Moreover, unlike the ‘taper tantrum’ of 2013, Asian economies today are much better positioned to weather most storms.

In his speech at the recent Jackson Hole Symposium, US Federal Reserve chair Jerome Powell deftly managed to telegraph winding down stimulatory bond purchases, while disconnecting this ‘taper timeline’ from any move to raise interest rates. US markets responded the same day by touching fresh all-time highs.

Despite the market’s apparent comfort around tapering, we think it’s a good time to consider risks for investors in Asia. The key question this year has been the prospect of the Fed tapping the brakes on its post-Covid stimulus. And investors in the region have reason to be on alert.

Taper tantrum 2?Back in 2013, a surprise reduction of quantitative easing in the US spooked markets and prompted a sell-off in Asian bonds along with other so-called risk assets. And recent signs of inflation, such as July’s 5.4 per cent growth in U.S. CPI, have spurred renewed talks of Fed tapering. The fear is that it may again trigger capital outflows, currency depreciations and forced policy tightening across Asia.

But we believe a taper tantrum is a more remote risk this time around. After learning a harsh lesson 8 years ago, and with the global recovery still on shaky ground, the Federal Reserve is clearly keen to tiptoe towards a less dovish stance. This was on display in recent months - after signs of surging inflation spooked investors, both the Fed and the European Central Bank were quick to respond with reassuring comments.

The Fed’s hawkish meeting in June rattled the market a bit, but treasury yields dropped as the economic backdrop weakened - even as inflation expectations held steady. Still, if the Fed should taper faster than expected, Asian bond investors are not likely to jump ship so quickly this time. For starters, economies around the region have seen dramatic growth in their balance of payments over the last 12 months. That’s been helped by surging exports and capital inflows, which have in turn fortified foreign currency reserves.

Asia Pacific Current Account Forecast

% o

f GD

P

Source: Bloomberg, various banks as of 1 Sept. 2021.

Exports boosting the regionChina’s economy was one of the first to rebound from the initial wave of Covid, but global cross-border travel remained at a standstill. As a result, the world’s biggest travel market turned inwards, with some spending diverted to onshore channels, while factories hummed as Western countries continued to buy China’s exports.

Despite recent headlines regarding more stringent regulatory action on education and internet companies, we think mainland China’s monetary policy is likely to remain accommodative. Targeted support to the real economy should help economic fundamentals. Valuations for onshore bonds have been mostly tight with rates rangebound. Across the Strait, Taiwan’s economy is more specialised along sectors, and as a large global supplier of semiconductors it has benefited from the recent global shortage, as did its currency.

Indonesia by contrast is more of a commodities exporter, especially for metals and palm oil where prices have surged. While Covid will continue to be a drag on the economy, higher commodity prices and exports from the global resumption of economic activity will help. Policymakers have enacted measures to attract foreign capital, such as the omnibus bill introduced in the third quarter of last year. Its implementation has been delayed by Covid outbreaks, but this bill should ease restrictions in several critical areas, making the economy more attractive to foreign investments and positioning Indonesia to become a critical part in the global supply chain. All this should be supportive for the rupiah and improve the outlook from rating agencies.

Across the region, this favourable macroeconomic backdrop is one of a confluence of factors that has made it comparatively easier for local Asian companies to issue dollar-denominated bonds, bolstering regional credit markets. Asian banks’ balance sheets have been supported by rising exports and investment inflows. And regional central banks have been intervening to slow down their currencies from appreciating, which has often meant adding US dollars into their foreign exchange reserves. They then tend to invest their dollar reserves into two types of assets - US Treasuries and Asian investment grade bonds, the latter being mostly higher-quality issues within their own markets. Meanwhile, on the capital accounts side, easy monetary policy and low borrowing rates globally have brought investors into Asia’s higher yielding bond markets.

Local central banks should remain accommodativeLooking ahead, we think the overall balance of payments picture in Asia will continue to be supportive. US fiscal stimulus and lower savings rates in the West are fuelling spending on Asia-produced goods from mobile devices to automobiles. Global monetary policy is likely to continue driving investment demand as well. Low rates in Western countries mean investors will keep moving money abroad in the search for higher yields.

The main risk we’re watching is inflation. Across Asia, input prices had been rising faster than output prices, squeezing the profit margins of manufacturing firms. But some of the global supply chain disruptions that we have seen are beginning to resolve themselves, supporting our view that the inflation risk is transitory and fading.

Given the slow roll out of vaccines in Asia compared to the West, we expect most Asia ex-China central banks to remain accommodative. Most regional central banks are unlikely to be pressured into raising rates to defend their currencies against a strengthening dollar, as they have built up adequate FX reserves to intervene directly.

Against this backdrop, with the Fed signalling a gradual path toward tapering stimulus and, eventually, tightening rates - and with global investors continuing their search for yield - Asian bonds could have more wind in their sails.

^ FIL Limited and its subsidiaries are commonly referred to as Fidelity or Fidelity International. Fidelity, Fidelity International, the Fidelity International logo and F symbol are trademarks of FIL Limited. Any person considering an investment should seek independent advice.

Investment involves risks. This material contains general information only. It is not an invitation to subscribe for shares in a fund nor is it to be construed as an offer to buy or sell any financial instruments. The information contained in this material is only accurate on the date such information is published on this material. Opinions or forecasts contained herein are subject to change without prior notice. Reference to specific securities mentioned within this material (if any) is for illustrative purpose only and should not be construed as a recommendation to the investor to buy or sell the same.

The material is issued by FIL Investment Management (Hong Kong) Limited and it has not been reviewed by the Securities and Futures Commission (“SFC”).

Source: FIL Investment Management (Hong Kong) Limited

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Asia's IG spreads are more attractive than western developed markets'

Asia IG China IG US IG Euro IG

Source: Bloomberg, Fidelity International as of 1 Sept. 2021.

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Outlook of Hong Kong Equity Market in Q4

SCB 2021 Q3 Top 10 Best-Selling Funds*

Fund Risk Level is classified into 5 categories (1. Low / 2. Low to Medium / 3.Medium / 4. Medium to High / 5. High).1 Source: AllianceBernstein Hong Kong Limited, Allianz Global Investors Asia Pacific Ltd., Amundi Hong Kong Ltd, BlackRock Asset Management North Asia Ltd., Invesco Hong Kong Limited, J.P. Morgan Asset Management, Pictet Asset Management (HK) Ltd and UBS Asset Management (HK) Ltd, as of 31 Jul 2021.

2 Source: Bloomberg

Opportunities remain in times of volatility; accumulate amid appealing valuationsDuring the past quarter, the outbreak of COVID-19’s Delta variant had caused setbacks for the resumption of many Asian economies and delayed economic recovery. The Mainland China was not spared from the impact either, and economic growth had seen a slowdown. Fortunately, the Mainland China has implemented stricter epidemic prevention measures recently, infection rate is under control with the number of newly diagnosed patients declining. However, this had dealt a great shock on service industries including tourism, hotels and restaurants, inflicting downward pressure to the market. Adversely affected by internal and external shocks, the Hang Seng Index fell below the 28,000 points in the quarter to around 25,000 points, reaching a low. The sharp dip had remained until early September.

In the fourth quarter of this year, the global COVID-19 epidemic continue to pose a threat to economic recovery of various countries and the monetary policy of central banks. Although U.S. indices keep hitting record highs, worries have sparkled among some investors or are subject to fluctuation at high level at any time. On the other hand, the tense political and economic relationship between China and the United States will impact performance of Hong Kong stocks. From a valuation perspective, the overall valuation of the Hong Kong stock market has become quite attractive after a rather significant adjustment. As of 7th September, according to Bloomberg, the recent P/E (TTM) ratio of Hang Seng Index is only 10.9x, lower than its 5-year average 12.2x. With the expectation that the domestic economy and policies are gradually stabilizing, Hong Kong stocks are expected to stabilize at a low level this quarter, and even conditionally rise if the available funds are sufficient.

For the technical trend, the Hang Seng Index had fallen below the reference support level of about 27,000 points in the fourth quarter of last year, but rebounded significantly after hitting recent lows of 24,748 and 24,581 points in July and August respectively. This reflects that a certain support level should be around 24,000 to 25,000 points. In addition, according to the trends in 2018 and 2019, the low level points of Hang Seng Index in those two years were 24,540 and 24,896 points respectively. Despite the low-level 21,139 points caused by the outbreak of the epidemic in 2020, the supporting level at near 25,000 points is rather solid, so it is expected to see some capital enter the market and start accumulating at a low level for a medium and long-term strategy.

For individual sectors, investors may consider to focus on industries benefiting from national policies, including new energy, automobiles, sporting goods and semiconductor industries. Nevertheless, after the significant adjustment of the technology stock sector, valuations of some leading stocks in the new economy industry have become quite attractive, and some institutional investors have increased holdings in them, so investors may pay attention to them.Source: Shanghai Commercial Bank Limited

Product Risk

Rating

Fund Inception

Date1

Fund AUM1 ($m)

YTD Cumulative Returns2 (%)

2020 Calendar

Year Returns2

(%)

2019 Calendar

Year Returns2

(%)

2018 Calendar

Year Returns2

(%)

2017 Calendar

Year Returns2

(%)

2016 Calendar

Year Returns2

(%)

3-Year Annualised Volatility2

(%)

3-Year Sharpe Ratio2

4

4

4

3

5

5

3

3

4

3

22/09/1997

02/01/2003

15/10/2012

30/06/2011

01/12/2017

03/10/1994

09/09/2011

30/09/2016

08/06/2015

31/03/2014

USD 20,742

EUR 1,590

USD 36,975

USD 1,233

USD 1,132

USD 6,650

USD 5,522

HKD 2,256

USD 3,152

EUR 597

5.22

22.80

9.79

4.40

-0.44

2.50

8.22

9.46

-11.23

8.55

2.93

N/A

21.37

14.34

12.29

60.85

4.73

17.01

15.43

3.24

13.40

N/A

18.91

17.28

13.27

25.51

14.81

10.92

26.38

13.81

-4.36

N/A

-4.69

-11.22

N/A

-11.12

-5.03

-5.11

-10.55

-6.05

10.51

N/A

13.29

21.56

N/A

34.28

10.60

13.84

26.86

6.33

16.55

N/A

8.97

1.83

N/A

9.09

7.41

N/A

2.11

0.63

12.67

N/A

14.01

12.33

N/A

27.08

10.22

9.37

12.76

10.88

0.32

N/A

0.86

0.64

N/A

0.76

0.70

0.94

0.51

0.64

AB FCP I - Global HighYield Portfolio

- AA/RMB Hedged

BlackRock Asian HighYield Bond Fund- A8 Distributing

Monthly - RMB Hedged

Invesco Global ConsumerTrends Fund - A

JPMorgan Multi Income- A/mth/USD

Pictet HK - Pictet StrategicIncome - P/HKD/dm

UBS (Lux) Key SelectionSICAV - China Allocation

Opportunity- P/6Pct/Mdist/HKD

UBS (Lux) Key SelectionSICAV - European Growthand Income - P/Acc/EUR

Allianz Incomeand Growth Fund

- AM/dis/HKD

Amundi HK–Balanced Fund

- Classic/dis/HKD

Allianz GlobalSustainability Fund

- AT/Acc/HKD

Smart Tips / PromotionFrom now until 31 December 2021, New SMART Banking Customers can enjoy exclusive rewards of up to HK$10,688! Offers are subject to

applicable Terms and Conditions. For details, please contact our staff or call SMART Banking Customer Service Hotline (852) 2855 8818.

・ Exchange and RENMINBI Currency Risk: Foreign currency investments are subject to exchange rate fluctuations which may result in losses. If the investment is denominated in a foreign currency or invest in assets denominated in a currency other than the base currency, you may face an exchange rate risk or exchange controls or any other restrictions which the return or amount you receive after redemption may be reduced. The fluctuation in the exchange rate of foreign currency may result in losses in the event that customer converts the foreign currency into Hong Kong dollars or other foreign currencies. If RENMINBI is involved in the investment product(s), offshore RENMINBI exchange rate will be quoted. The offshore RENMINBI exchange rate may be at a premium or discount to the exchange rate for onshore RENMINBI and there may be significant bid and offer spreads. RENMINBI is subject to exchange rate risk, RENMINBI is currently not freely convertible. Customers should be aware that they can conduct conversion of RENMINBI through bank accounts, for which it is subject to the requirements specified by the Relevant Authorities from time to time (the requirements may amend from time to time without any prior notice) the requirements specified by the Bank and/or the RMB position and commercial decisions of the Bank at that moment.

・ The information of this document has not been reviewed by the Securities and Futures Commission of Hong Kong or any regulatory authorities in Hong Kong.

Important Notice / Disclaimer・ This document is issued and solely owned by the Bank. This document is for general information and reference only and does not constitute any offer, solicitation,

invitation, advice or recommendation to subscribe, trade, redeem or sell for any deposits or investments. No representation, guarantee or other assurance as to the outcome of any investment has been made or will be given to you by or on behalf of the Bank.

・ This document contains information from third party, which may be incomplete or simplified. Although the information herein contained is obtained or compiled from sources the Bank believes to be reliable, it has not been independently verified. The Bank cannot and does not represent or warrant the accuracy, validity, reliability, timeliness or completeness of any such information (whether in whole or in part), and accepts no liability for any loss or damage howsoever arising from or in reliance upon the whole or any part of such information or opinions (unless due to the negligence or wilful default of the Bank, the Bank’s authorised officers, employees or agents). The Bank reserves the right to amend all or any part in this document, which all views, forecasts and estimates constitute judgments made before the publication date, and are subject to change without further notice. This document contains certain statements that may be deemed as forward-looking statements involving risks and uncertainties. Customers should be aware that actual results may differ materially from those projected, estimated, assumed or anticipated in any such forward-looking statements due to different factors, risks and economic situation. The opinions expressed are those of the featured speakers/analysts, which is for reference only and do not represent the Bank's view.

・ The information herein contained may not be reproduced, quoted, distributed, disclosed or published (whether in whole or in part) in any media for any purpose without prior express written consent from the Bank. The Bank accepts no liability for any loss arising from or in reliance upon such information or contents. This document is not intended for distribution to, or use by, any person or entity in any jurisdiction or country where such distribution would be contrary to the laws or regulations.

・ The above offers are not applicable to the staff of the Bank. The above offers cannot be used in conjunction with other promotion offers that are not listed in this promotional material. The above offers are subjected to prevailing regulatory requirements and restrictions and relevant terms and conditions of the Bank. Please refer to relevant materials or consult our staff. The Bank reserves the right to amend these terms and conditions or/and to amend, suspend and/or terminate all or any part of the offers from time to time. The Bank is entitled at its absolute discretion for the above rights without prior notice to customers. If any matters or disputes arise at any time in relation to the promotional offers, the Bank's relevant records / decisions / explanations shall be conclusive evidence of the offers. The decision of the Bank on all matters relating to this promotion and the relevant offers shall be final and binding on all parties concerned.

・ The Bank and its affiliates or subsidiaries, and/or their officers, directors, agents and employees may have positions in and may trade for their own account in all or any of the foreign currencies, securities or investments mentioned in this document. Companies within the Bank may have provided investment services or underwritten in relation to these securities. Commission or other fees may be earned by the Bank respect of the services provided by them relating to these securities or investments.

・ In case of any inconsistency between the Chinese and English versions of this promotional material, the English version shall prevail.

Remarks・ *“SCB 2021 Q3 Top 10 Best-Selling Funds” lists the top 10 best-selling funds among all funds distributed by Shanghai Commercial Bank Limited (the “Bank”) during

1 Jul 2021 to 15 Sep 2021, based on the total subscription and switching amount (in HKD or equivalent) for each fund. The funds shown in the table under “SCB 2021 Q3 Top 10 Best-Selling Funds” are sorted by ascending alphabetical order, without reference to the total subscription amount involved for each fund. Result of the Top 10 Best-Selling Funds is provided for information and reference only and is not intended to constitute any investment advice or opinion. The funds referred to in this document constitute only a portion of the funds that are available for distribution from the Bank and references to such funds in this document do not constitute recommendations over any other fund available from the Bank.

・ The data used to calculate the year to date cumulative returns are as of 31 Aug 2021.・ Fund inception date refers to the fund’s first share class inception date.・ Shanghai Commercial Bank Limited Product Risk Rating ("Product Risk Rating") is assigned by the Bank to each distributing investment fund in a scale of 1 to 5, with

1 indicating the lowest risk category and 5 being the highest. Product Risk Rating of each investment fund is assigned by the Bank according to its product features and corresponding risk factors. The categorization results may be different from those provided by the respective fund houses. The Bank may revise the Product Risk Rating assigned to an investment fund from time to time without prior notice. For more information on the Product Risk Rating and the respective investment preference, please visit your nearest Shanghai Commercial Bank Limited branch.

・ Volatility is a statistical measure of risk. The above 3-year volatility has been annualised for comparison and is calculated by using the annualised standard deviation of the monthly returns during 1 Sep 2018 to 31 Aug 2021.

・ Risk relative to return of fund can be measured by 3-year Sharpe Ratio. Sharpe Ratio at the table above is a measure of the fund’s performance against the 3-month US Treasury bill rate (risk free investment return), adjusted for risk. A relatively high positive ratio indicates that the fund has a relatively high risk-adjusted return historically. Data is calculated by using the monthly investment returns from 1 Sep 2018 to 31 Aug 2021.

・ In respect of each relevant fund, the returns were calculated based on the principle of NAV-to-NAV of the relevant fund, with reinvestment of all dividends (if any). Only the funds that have an investment track record of at least 6 months as of the information captured date will have their percentage returns displayed.

・ Certain funds may have significant exposure in financial derivatives instruments. Risks associated with these instruments include among other risks, counterparty risk, credit risk and liquidity risk. Such exposure may lead to a higher risk of loss of all or part of the invested capital.

・ The returns are denominated in relevant fund currency (which may be foreign currency). Investors may be exposed to exchange rate fluctuations which may cause the value of investments to go up or down. The value and income of your investment can fall as well as rise and you may suffer a loss.

・ The fund(s) mentioned above has been authorized by the Securities and Futures Commission in Hong Kong (the "SFC"). SFC’s authorization is not a recommendation or endorsement of a fund nor does it guarantee the commercial merits of a fund or its performance. It does not mean the fund is suitable for all investors nor is it an endorsement of its suitability for any particular investor or class of investors. The information herein contained has not been reviewed by the SFC.

Investment Risk Disclosure・ The following risk disclosure statement cannot disclose all the risks involved and does not take into account any circumstances that are unknown to the Bank.

Investment involves risks. Securities, Investment fund and Bonds are investment products. The price of investment products may go up or down, and may become valueless. It is as likely that losses will be incurred rather than profit made as a result of buying or selling investment products. Any past performance figures shown are not indicative of futures performance. Part of the investment may not be able to liquidate immediately under certain market situation. Customers should refer to relevant offering documents for detailed information, including but not limited to Risk Disclosures, prior to any investment subscription. The products described herein may not be suitable for all people. The decisions to invest are made by customers and customers should not invest in investment products unless the intermediary selling them has explained to them that the product is suitable for them having regard to customers’ financial situation, investment experience and investment objectives. Customers should not make any investment decisions based on this document alone. Customers must make their own assessment of the information provided in this document. Customers should carefully consider whether any investment products or services mentioned herein are appropriate for them in view of their financial situations, investment experiences and investment objectives. If customers have any doubt about this material or any relevant offering document, they should consult their own independent advisers on the legal, regulatory, tax, investment and financial implications of the investments (including but not limited to estate duty and withholding tax and other tax obligations which may arise from local or foreign investment) as they deem appropriate to ensure that they understand the nature of the investments in order to consider whether the investments are suitable investments for them.

・ Investment Risk in Securities: The prices of securities fluctuate, sometimes dramatically. The price of a security may move up or down, and may become valueless. It is as likely that losses will be incurred rather than profit made as a result of buying and selling securities. Investment involves risks. Any past performance figures shown are not indicative of futures performance. Part of the investment may not be able to liquidate immediately under certain market situation. Customers must ensure to read and understand the information of Shanghai and Shenzhen Connect A-shares trading of the Bank including relevant details, trading rules, risk, fees, restriction and notices before investing in Shanghai and Shenzhen Connect A-shares trading.

・ Investment Risk in investment funds: The prices of investment funds fluctuate, sometimes dramatically. The price of an investment fund may go up or down and may become valueless. It is as likely that losses will be incurred rather than profit made as a result of buying and selling investment funds. Investment involves risks. Any past performance figures shown are not indicative of futures performance. Part of the investment may not be able to liquidate immediately under certain market situation. Customers should refer to relevant investment fund offering documents for detailed information, including but not limited to Risk Disclosures, prior to any investment fund subscription. Customers should carefully consider whether any investment products or services mentioned herein are appropriate for them in view of their financial situations, investment experiences and investment objectives. Please refer to explanatory memorandum or relevant materials of the fund for further information. The subscription of investment fund is subjected to prevailing regulatory requirements and restrictions and relevant terms and conditions of the Bank. The Bank acts as a distributor of the funds managed by fund housed and the funds are the product of the third party fund houses. For distribution of funds – in respect of an eligible dispute (as defined in the Terms of Reference for the Financial Dispute Resolution Centre in relation to the Financial Dispute Resolution Scheme) arising between the Bank and the customers out of the selling process or processing of the related transaction, the Bank is required to enter into a Financial Dispute Resolution Scheme process with the customers; however any dispute over the contractual terms of the product should be resolved directly between the third party fund house and the customers.

・ Investment Risk in Bonds: Bond investments are not bank deposits and involve risks, including the possible loss of the principal amount invested. Customers should be aware of the risk of exchange rate fluctuations for bonds denominated in non-local currency, which may cause a loss of principal. Unless specified, these investments are not guaranteed by the Bank. The prices of bonds fluctuate, sometimes dramatically. The price of a bond may go up or down and may become valueless. It is as likely that losses will be incurred rather than profit made as a result of subscribing and redeeming bonds. Investment involves risks. Any past performance figures shown are not indicative of future performance, which the Bank does not guarantee the existence of a secondary market for bonds. Part of the investment may not be able to liquidate immediately under certain market situation. Customers should refer to relevant bonds offering documents for detailed information, including but not limited to Risk Disclosures, prior to any bonds subscription.

Issued by Shanghai Commercial Bank Limited

2021

10 P

W

・ Exchange and RENMINBI Currency Risk: Foreign currency investments are subject to exchange rate fluctuations which may result in losses. If the investment is denominated in a foreign currency or invest in assets denominated in a currency other than the base currency, you may face an exchange rate risk or exchange controls or any other restrictions which the return or amount you receive after redemption may be reduced. The fluctuation in the exchange rate of foreign currency may result in losses in the event that customer converts the foreign currency into Hong Kong dollars or other foreign currencies. If RENMINBI is involved in the investment product(s), offshore RENMINBI exchange rate will be quoted. The offshore RENMINBI exchange rate may be at a premium or discount to the exchange rate for onshore RENMINBI and there may be significant bid and offer spreads. RENMINBI is subject to exchange rate risk, RENMINBI is currently not freely convertible. Customers should be aware that they can conduct conversion of RENMINBI through bank accounts, for which it is subject to the requirements specified by the Relevant Authorities from time to time (the requirements may amend from time to time without any prior notice) the requirements specified by the Bank and/or the RMB position and commercial decisions of the Bank at that moment.

・ The information of this document has not been reviewed by the Securities and Futures Commission of Hong Kong or any regulatory authorities in Hong Kong.

Important Notice / Disclaimer・ This document is issued and solely owned by the Bank. This document is for general information and reference only and does not constitute any offer, solicitation,

invitation, advice or recommendation to subscribe, trade, redeem or sell for any deposits or investments. No representation, guarantee or other assurance as to the outcome of any investment has been made or will be given to you by or on behalf of the Bank.

・ This document contains information from third party, which may be incomplete or simplified. Although the information herein contained is obtained or compiled from sources the Bank believes to be reliable, it has not been independently verified. The Bank cannot and does not represent or warrant the accuracy, validity, reliability, timeliness or completeness of any such information (whether in whole or in part), and accepts no liability for any loss or damage howsoever arising from or in reliance upon the whole or any part of such information or opinions (unless due to the negligence or wilful default of the Bank, the Bank’s authorised officers, employees or agents). The Bank reserves the right to amend all or any part in this document, which all views, forecasts and estimates constitute judgments made before the publication date, and are subject to change without further notice. This document contains certain statements that may be deemed as forward-looking statements involving risks and uncertainties. Customers should be aware that actual results may differ materially from those projected, estimated, assumed or anticipated in any such forward-looking statements due to different factors, risks and economic situation. The opinions expressed are those of the featured speakers/analysts, which is for reference only and do not represent the Bank's view.

・ The information herein contained may not be reproduced, quoted, distributed, disclosed or published (whether in whole or in part) in any media for any purpose without prior express written consent from the Bank. The Bank accepts no liability for any loss arising from or in reliance upon such information or contents. This document is not intended for distribution to, or use by, any person or entity in any jurisdiction or country where such distribution would be contrary to the laws or regulations.

・ The above offers are not applicable to the staff of the Bank. The above offers cannot be used in conjunction with other promotion offers that are not listed in this promotional material. The above offers are subjected to prevailing regulatory requirements and restrictions and relevant terms and conditions of the Bank. Please refer to relevant materials or consult our staff. The Bank reserves the right to amend these terms and conditions or/and to amend, suspend and/or terminate all or any part of the offers from time to time. The Bank is entitled at its absolute discretion for the above rights without prior notice to customers. If any matters or disputes arise at any time in relation to the promotional offers, the Bank's relevant records / decisions / explanations shall be conclusive evidence of the offers. The decision of the Bank on all matters relating to this promotion and the relevant offers shall be final and binding on all parties concerned.

・ The Bank and its affiliates or subsidiaries, and/or their officers, directors, agents and employees may have positions in and may trade for their own account in all or any of the foreign currencies, securities or investments mentioned in this document. Companies within the Bank may have provided investment services or underwritten in relation to these securities. Commission or other fees may be earned by the Bank respect of the services provided by them relating to these securities or investments.

・ In case of any inconsistency between the Chinese and English versions of this promotional material, the English version shall prevail.

Remarks・ *“SCB 2021 Q3 Top 10 Best-Selling Funds” lists the top 10 best-selling funds among all funds distributed by Shanghai Commercial Bank Limited (the “Bank”) during

1 Jul 2021 to 15 Sep 2021, based on the total subscription and switching amount (in HKD or equivalent) for each fund. The funds shown in the table under “SCB 2021 Q3 Top 10 Best-Selling Funds” are sorted by ascending alphabetical order, without reference to the total subscription amount involved for each fund. Result of the Top 10 Best-Selling Funds is provided for information and reference only and is not intended to constitute any investment advice or opinion. The funds referred to in this document constitute only a portion of the funds that are available for distribution from the Bank and references to such funds in this document do not constitute recommendations over any other fund available from the Bank.

・ The data used to calculate the year to date cumulative returns are as of 31 Aug 2021.・ Fund inception date refers to the fund’s first share class inception date.・ Shanghai Commercial Bank Limited Product Risk Rating ("Product Risk Rating") is assigned by the Bank to each distributing investment fund in a scale of 1 to 5, with

1 indicating the lowest risk category and 5 being the highest. Product Risk Rating of each investment fund is assigned by the Bank according to its product features and corresponding risk factors. The categorization results may be different from those provided by the respective fund houses. The Bank may revise the Product Risk Rating assigned to an investment fund from time to time without prior notice. For more information on the Product Risk Rating and the respective investment preference, please visit your nearest Shanghai Commercial Bank Limited branch.

・ Volatility is a statistical measure of risk. The above 3-year volatility has been annualised for comparison and is calculated by using the annualised standard deviation of the monthly returns during 1 Sep 2018 to 31 Aug 2021.

・ Risk relative to return of fund can be measured by 3-year Sharpe Ratio. Sharpe Ratio at the table above is a measure of the fund’s performance against the 3-month US Treasury bill rate (risk free investment return), adjusted for risk. A relatively high positive ratio indicates that the fund has a relatively high risk-adjusted return historically. Data is calculated by using the monthly investment returns from 1 Sep 2018 to 31 Aug 2021.

・ In respect of each relevant fund, the returns were calculated based on the principle of NAV-to-NAV of the relevant fund, with reinvestment of all dividends (if any). Only the funds that have an investment track record of at least 6 months as of the information captured date will have their percentage returns displayed.

・ Certain funds may have significant exposure in financial derivatives instruments. Risks associated with these instruments include among other risks, counterparty risk, credit risk and liquidity risk. Such exposure may lead to a higher risk of loss of all or part of the invested capital.

・ The returns are denominated in relevant fund currency (which may be foreign currency). Investors may be exposed to exchange rate fluctuations which may cause the value of investments to go up or down. The value and income of your investment can fall as well as rise and you may suffer a loss.

・ The fund(s) mentioned above has been authorized by the Securities and Futures Commission in Hong Kong (the "SFC"). SFC’s authorization is not a recommendation or endorsement of a fund nor does it guarantee the commercial merits of a fund or its performance. It does not mean the fund is suitable for all investors nor is it an endorsement of its suitability for any particular investor or class of investors. The information herein contained has not been reviewed by the SFC.

Investment Risk Disclosure・ The following risk disclosure statement cannot disclose all the risks involved and does not take into account any circumstances that are unknown to the Bank.

Investment involves risks. Securities, Investment fund and Bonds are investment products. The price of investment products may go up or down, and may become valueless. It is as likely that losses will be incurred rather than profit made as a result of buying or selling investment products. Any past performance figures shown are not indicative of futures performance. Part of the investment may not be able to liquidate immediately under certain market situation. Customers should refer to relevant offering documents for detailed information, including but not limited to Risk Disclosures, prior to any investment subscription. The products described herein may not be suitable for all people. The decisions to invest are made by customers and customers should not invest in investment products unless the intermediary selling them has explained to them that the product is suitable for them having regard to customers’ financial situation, investment experience and investment objectives. Customers should not make any investment decisions based on this document alone. Customers must make their own assessment of the information provided in this document. Customers should carefully consider whether any investment products or services mentioned herein are appropriate for them in view of their financial situations, investment experiences and investment objectives. If customers have any doubt about this material or any relevant offering document, they should consult their own independent advisers on the legal, regulatory, tax, investment and financial implications of the investments (including but not limited to estate duty and withholding tax and other tax obligations which may arise from local or foreign investment) as they deem appropriate to ensure that they understand the nature of the investments in order to consider whether the investments are suitable investments for them.

・ Investment Risk in Securities: The prices of securities fluctuate, sometimes dramatically. The price of a security may move up or down, and may become valueless. It is as likely that losses will be incurred rather than profit made as a result of buying and selling securities. Investment involves risks. Any past performance figures shown are not indicative of futures performance. Part of the investment may not be able to liquidate immediately under certain market situation. Customers must ensure to read and understand the information of Shanghai and Shenzhen Connect A-shares trading of the Bank including relevant details, trading rules, risk, fees, restriction and notices before investing in Shanghai and Shenzhen Connect A-shares trading.

・ Investment Risk in investment funds: The prices of investment funds fluctuate, sometimes dramatically. The price of an investment fund may go up or down and may become valueless. It is as likely that losses will be incurred rather than profit made as a result of buying and selling investment funds. Investment involves risks. Any past performance figures shown are not indicative of futures performance. Part of the investment may not be able to liquidate immediately under certain market situation. Customers should refer to relevant investment fund offering documents for detailed information, including but not limited to Risk Disclosures, prior to any investment fund subscription. Customers should carefully consider whether any investment products or services mentioned herein are appropriate for them in view of their financial situations, investment experiences and investment objectives. Please refer to explanatory memorandum or relevant materials of the fund for further information. The subscription of investment fund is subjected to prevailing regulatory requirements and restrictions and relevant terms and conditions of the Bank. The Bank acts as a distributor of the funds managed by fund housed and the funds are the product of the third party fund houses. For distribution of funds – in respect of an eligible dispute (as defined in the Terms of Reference for the Financial Dispute Resolution Centre in relation to the Financial Dispute Resolution Scheme) arising between the Bank and the customers out of the selling process or processing of the related transaction, the Bank is required to enter into a Financial Dispute Resolution Scheme process with the customers; however any dispute over the contractual terms of the product should be resolved directly between the third party fund house and the customers.

・ Investment Risk in Bonds: Bond investments are not bank deposits and involve risks, including the possible loss of the principal amount invested. Customers should be aware of the risk of exchange rate fluctuations for bonds denominated in non-local currency, which may cause a loss of principal. Unless specified, these investments are not guaranteed by the Bank. The prices of bonds fluctuate, sometimes dramatically. The price of a bond may go up or down and may become valueless. It is as likely that losses will be incurred rather than profit made as a result of subscribing and redeeming bonds. Investment involves risks. Any past performance figures shown are not indicative of future performance, which the Bank does not guarantee the existence of a secondary market for bonds. Part of the investment may not be able to liquidate immediately under certain market situation. Customers should refer to relevant bonds offering documents for detailed information, including but not limited to Risk Disclosures, prior to any bonds subscription.