Download LionGlobal Asia Bond Fund

MAY 2017
LionGlobal Asia Bond Fund
The investment objective of the Fund is to provide total return of capital growth and income over the medium to long-term, through
an actively managed portfolio of bonds, high quality interest rate securities, convertible bonds, real estate investment trusts
(“REITs”), business trusts and other related securities issued by issuers predominantly in the Asian region. There is no target
industry or sector.
Fund Manager’s Commentar y
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Fund Facts
Despite Moody’s China sovereign rating downgrade and market sentiment impacted
by a number of company specific credit news within the high-yield (HY) credit space,
Asian credit market continued its positive momentum in May 2017. JACI Composite
gained +0.49% as bull flattening of the U.S. Treasury (UST) yield curve offset modest
credit spread widening caused by weak HY segment performance on company
specific news. In terms of split, investment grade (IG) outperformed HY, returning
+0.76% while HY returned -0.50% in May 17, dragged down by the selloff in Noble
Group and Reliance Communication curve during the month. Credit spreads traded
wider (Composite: +4basis points (bps)) with HY spreads widening by +23bps while IG
spreads were flat.
The primary market remained active in May 2017:
• Issuers tapped the primary market for US$19.3 billion in the month of May, more than
May 2016’s print of US$18.1 billion.
• Issuance was skewed towards IG issuers with IG to HY split ratio of 66% to 34%.
• Chinese issuers continued to lead the issuance pipeline, accounting for about 46% of
the total while Hong Kong, Indonesia and Sri Lanka ranked behind accounting for
21%, 12% and 8% of issuance respectively.
• Notable issuances during the month of May include PT Perusahaan Listrik Negara’s
US$2 billion dual tranche print, Sri Lanka sovereign’s US$1.5 billion 10Y print, Cheung
Kong Property’s US$1.5 billion fixed-for-life perpetual securities print and Nanyang
Commercial Bank’s US$1.2 billion Basel 3 AT1 bank capital note print.
For the month of May, emerging market (EM) hard currency bond funds saw fund
inflows of about US$4 billion on still supportive risk appetite. Year to date (YTD)
cumulative fund inflows into EM hard currency bond funds remained positive +$18.3bn
as at end-May 17. (end-April 17: +US$14.3bn)
The outperformance in May was mainly on the back of selection, with a slight drag
from marginal underweight in duration amidst US Treasury rally.
Looking ahead for 2017, we believe credit spreads will range trade but further
tightening seems limited in view of current tight valuations. IG bonds performance will
be mainly driven by movements in UST yields.
Fund Inception Date:
SGD Class: 1 Dec 2009
USD Class: 1 Dec 2009
SGD-Hedged: 19 Jul 2016
Subscription Mode:
Cash, SRS2
Minimum Investment:
S$ / US$ 1,000
Initial Charge:
Currently 3%
Maximum 5%
Management Fee:
Currently 1.0% p.a.
Maximum 2.0% p.a.
Valuation Dealing:
Every dealing day
NAV Price:
S$1.380/US$0.997
NAV Price (Hedged Class):
Fund Size:
S$0.984
S$48.8 million
Weighted Yield to
Maturity3:
4.26%
Weighted Duration4:
Weighted Credit
4.91 years
Rating5:
BB+
Currenc y Exposure of Bonds
(% of N AV )
USD
99.4
CNY
0.6
100.0
1
Performance ( %)
Codes
Year-toDate
1-year
3-years
p.a.
5-years
p.a.
NAV
-0.4
5.8
8.1
7.2
NAV^
-5.4
0.5
6.3
6.1
Benchmark#
-0.8
5.2
8.5
7.2
NAV
4.0
5.3
4.8
6.0
USD
NAV^
0.0
-1.2
3.0
4.9
Class
Benchmark#
3.6
4.7
5.0
5.7
NAV
2.8
SGDNAV^
-2.3
Hedged
Benchmark#
Class6
3.5
Past performance is not necessarily indicative of future performance
Source: Lion Global Investors Ltd / Morningstar
SGD
Class
© Lion Global Investors Limited. Company Registration Number 198601745D.
A member of the OCBC Group. All rights reserved.
Since
Inception
p.a.
6.7
6.0
6.4
6.9
6.2
6.4
0.4
-4.6
1.7
SGD Class:
SG9999006548
LGLASBS
USD Class:
SG9999006555
LGLASBU
SGD Hedged Class:
SG9999015515
LGLABSH SP
Credits Rating 5 (% of N AV)
Investment Grade
64.0
High Yield
36.0
100.0
LionGlobal Asia Bond Fund
Countr y Allocation (% of N AV )
China
Hongkong
Indonesia
Japan
Malaysia
Korea, South
Thailand
Australia
Philippines
India
United Kingdom
Singapore
Sri Lanka
Ireland
Switzerland
Cash Equivalent
Top 10 Holdings (% of NAV )
47.9%
19.9%
6.9%
4.1%
4.0%
3.6%
3.1%
2.3%
1.5%
1.3%
0.7%
0.7%
0.6%
0.6%
0.6%
2.5%
Sector Allocation (% of NAV )
Real Estate
Financial
Industrial
Utilities
Consumer, Cyclical
Energy
Communications
Sovereign
Basic Materials
Funds
Cash Equivalent
32.8%
28.1%
14.5%
7.6%
5.2%
3.8%
2.5%
1.3%
1.3%
0.6%
2.5%
WANDA PROPERTIES OVERSEA
2.2
4.875% 21/11/2018
CHINA LIFE INSURANCE VAR
2.1
03/07/2075
POWERLONG REAL ESTATE
1.8
HOLDINGS LTD 4.875% 15/09/2021
HUARONG FINANCE II SER EMTN VAR
1.6
PERP
WANDA PROPERTIES INTL CO 7.25%
1.6
29/01/2024
BLUESTAR FIN HOLDINGS 3.5%
1.6
11/06/2018
WING LUNG BANK LTD EMTN 3.5%
1.6
07/11/2022
SINO OCEAN LND TRS FIN I (REG)
1.5
5.95% 04/02/2027
FUKOKU MUTUAL LIFE INSURANCE CO 1.5
VAR PERP
NWD MTN LTD SER EMTN 4.375%
1.5
30/11/2022
# Benchmark: JP Morgan Asia Credit Index.
^ NAV: Figures include Initial Charge.(in respective
fund’s currency)
1 Returns based on single pricing. Dividends are
reinvested net of all charges payable upon
reinvestment and in respective share class currency
terms.
2 Supplementary Retirement Scheme ("SRS") monies
may be used to purchase SGD Class Units only.
3 In local currency yield terms and on unhedged FX
basis. Inclusive of cash & equivalents at a yield of
0.10%.
4 Inclusive of cash & equivalents which are assumed to
be zero duration.
5 Includes cash & equivalents @ AA, takes the worst of
S&P, Moody’s or Internal ratings and based on a
straight-line model.
6 Returns are based on a single pricing basis. Return
periods longer than 1 year are annualised. Returns
less than 1 year are cumulative. Dividends are
reinvested net of all charges payable upon
reinvestment and in respective share class currency
terms.
The above is based on information available as of 31
May 2017, unless otherwise stated. Bonds referenced
are not intended as recommendations to buy or sell.
Opinions and estimates constitute our judgment and
along with other portfolio data, are subject to change
without notice.
© Lion Global Investors Limited. Company Registration Number 198601745D.
A member of the OCBC Group. All rights reserved.
LionGlobal Asia Bond Fund
For further information or to
obtain a copy of the prospectus:
Funds Hotline | +65 6417 6900
Facsimile | +65 6417 6806
www.lionglobalinvestors.com
Lion Global Investors Limited
65 Chulia Street #18-01
OCBC Centre
Singapore 049513
This publication is for information only. It is not an offer or solicitation for the purchase or sale of any securities/investments and does not have regard to your
specific investment objectives, financial situation or particular needs. All applications for units in our funds must be made on application forms accompanying the
prospectus. You should read the prospectus and Product Highlights Sheet, available from Lion Global Investors Limited (“LGI”) or any of its approved
distributors, before deciding whether to subscribe for or purchase units of the Fund. Investments in the Fund are not obligations of, deposits in, guaranteed or
insured by LGI or any of its affiliates and are subject to investment risks including the possible loss of the principal amount invested. The performance of the
Fund is not guaranteed and the value of units in the Fund and the income accruing to the units, if any, may rise or fall. Past performance, as well as any
prediction, projection, or forecast on the economy, securities market, or the economic trends of the markets are not necessarily indicative of the future or likely
performance of the funds. Distribution of income and capital will be at the Managers' sole discretion. Any distributions made out of capital will reduce the net
asset value of the Fund. Any opinion or view presented is subject to change without notice. Accordingly, no warranty is given and no liability is accepted for any
loss arising directly or indirectly as a result of you acting on any information, opinion, forecast, or estimate contained herein. You may wish to seek advice from a
financial adviser before making a commitment to purchase the Fund. In the event that you choose not to seek advice from a financial adviser, you should
consider carefully whether the Fund is suitable for you. The Fund may invest in financial derivative instruments such as futures, options, warrants, forwards and
swaps for hedging purposes or for the purpose of efficient portfolio management. The Manager reserves the right to make any amendments to the information
at any time, without notice.
© Lion Global Investors Limited. All rights reserved. LGI is a Singapore incorporated company, and is not related to any corporation or trading entity that is
domiciled in Europe or the United States (other than entities owned by its holdings companies).
© Lion Global Investors Limited. Company Registration Number 198601745D.
A member of the OCBC Group. All rights reserved.