Fund Rationale: Legg Mason Western Asset Global Bond Trust

Legg Mason Western Asset Global Bond Trust
SGD Class A Accumulation Shares (ISIN: SG9999005193)

Fund Manager Page

Introductory information
The Legg Mason Western Asset Global Bond Trust (the "Trust”) aims to maximise total returns in Singapore Dollar terms over the longer term by investing in a portfolio of high-quality debt securities of Singapore and major global bond markets such as the G10 countries and Australia and New Zealand. The Trust takes an active but prudent approach to investing, employing fundamental economic and market analysis to take advantage of investment opportunities in interest rate and currency trends of the global bond markets. With effect from 1 April 2011, the Trust is benchmarked against FTSE World Government Bond Index ex-Japan (hedged to S$). The Trust is suitable for investors who want globally diversified exposure and more stable returns.

The SGD Class A Accumulation Shares are the oldest share class of the Trust, which was incepted on 2 November 1998. As of July 2020, the Trust managed a total asset of S$358m.

 

Characteristics
The Trust offers high-grade sovereign exposure in a diversified portfolio of global bonds, and will invest primarily in debt securities issued by governments, government linked companies and corporations (a) in Singapore; (b) in countries as defined by the FTSE World Government Bond Index ex Japan; or (c) in countries with a minimum investment grade credit rating of Aa2 by Moody's, AA by S&P, AA by Fitch Inc. or its equivalent.

The Trust takes an active but prudent approach to investing, employing fundamental economic and market analysis to take advantage of investment opportunities in interest rate and currency trends of the global bond markets. As of July 2020, the Trust holds 44.5% in the US, 30.2% in the Eurozone, and others including the UK.

 

Background information and cost
The Trust has an underlying fund management fee of 75bps per annum (0.75% p.a.) and total expense ratio (“TER”) of 87bps per annum (0.87% p.a.). Endowus have arranged for the FMC to rebate the trailer fees which Endowus will refund 100% back to the client to achieve this lower net management fee of 45bps (0.45% p.a.) and a net TER of 57bps (0.57% p.a.). Endowus do not charge a preliminary sales charge or any other  fees, other than the all-in advice fee. The Trust is on the CPF Investment Scheme - List A Fund, and is included under the CPF Investment Scheme for Ordinary and Special Account. It has been classified by the CPF Board under the risk classification of “Low to Medium Risk / Broadly Diversified.”

Founded in 1971, Western Asset are one of the world’s leading global fixed income managers, known for superior team management and proprietary research supported by robust risk management and a long-term fundamental value approach.

 

Selection criteria for Endowus
Endowus have selected the Legg Mason Western Asset Global Bond Fund for its diversified portfolio of high credit quality government debt, and its ability to generate enhanced yet stable and low risk returns. The Trust has one of the longest track records among the global bond funds included in CPFIS. There are significant benefits as a truly globally diversified portfolio with exposure to major markets in North America, Europe and Emerging Markets. The Trust allows for more stable returns in safer government bonds. As of July 2020, the Trust has averaged returns of 2.41% since inception and 3.31% in the past 5 years.

Updated by Endowus: 26 Oct 2020

** Disclaimer
Past performance should not be taken as an indication or guarantee of future performance and no representation or warranty, express or implied, is made regarding future performance. Any opinions expressed reflect a judgment at the original date of publication by us and are subject to change without notice.

The prospectus, profile statement, product highlight sheet, fund factsheet or other offer or product documents may contain references about the expected risk tolerance of their target investors. These are in no way indicative of how we at Endowus have assessed your risk tolerance based on your stated objectives and financial situation. Endowus accepts no responsibility for investment decisions made in response to the expected risk tolerance levels mentioned in the product or offer documents.