United SGD Fund
SGD Retail Accumulation Shares (ISIN: SG9999001382)
The United SGD Fund (“Fund”) aims to achieve a yield enhancement over Singapore dollar deposits with a long-term view to preserve capital by investing substantially all of its assets in money market and short term interest bearing debt instruments and bank deposits. The Funds is benchmarked against the 6-Month Singapore Interbank Bid Rate (SIBID), and is suitable for investors who seek to achieve a yield enhancement over Singapore dollar deposits, and are comfortable with the volatility and risks of a bond fund which invests in money market and short term interest bearing debt instruments and bank deposits.
The SGD Class A Accumulation Shares are the oldest share class of the Fund, which was incepted on 19 June 1998. As of August 2020, the Fund managed a total asset of S$1.5bn.
The Fund offers a short duration exposure to Singapore and global credits, with an objective of yield enhancement over Singapore dollar deposits, invested into a range of sectors, geographies, issuers and bonds which are denominated in different currencies for greater diversification. All non-SGD exposures are hedged back to the Singapore dollar to minimise foreign exchange risk.
The Fund takes a fundamental and valuation driven, and bottom-up approach to investing, and has a team of credit analysts for both Singapore fixed income issuers and high grade corporate issuers in the developed markets.
As of August 2020, the Fund’s average duration stood at 1.71 years with a weighted average yield to maturity of 2.55%. The Fund allocated 37.9% in Singapore, 26.5% in China, and others including Hong Kong, Indonesia, UAE, Thailand, and Malaysia. Its top 5 sector exposure includes real estate, financials, industrials, basic materials, and government, each ranging from an allocation of 10.6% to 29.3%.
Background information and cost
The Fund has an underlying fund management fee of 63bps per annum (0.63% p.a.) and total expense ratio (“TER”) of 67bps per annum (0.67% p.a.). Endowus has arranged for the FMC to rebate the trailer fees which Endowus will refund 100% back to the client to achieve a lower net management fee of 30bps (0.30% p.a.) and net TER of 34bps (0.34% p.a.). Endowus does not charge a preliminary sales charge or any other fees, other than the all-in advice fee.
The Fund 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 class of “Low to Medium Risk – Broadly Diversified.”
Selection criteria for Endowus
Endowus has selected the United SGD Fund for its diversified portfolio of money market and short term interest bearing debt instruments and bank deposits, and its ability to constantly generate enhanced yet stable and lower risk returns over the long term. It acts as a buffer against market stability with lower drawdown compared to peer asset classes during market instability. United SGD Fund has one of the longest track records among short duration fixed income funds in Singapore. Including being in the CPFIS included fund list, with a track record that spans 22 years since its launch in June 1998. The fund has averaged over 3.5% return over the past 10 years. The fund has outperformed its benchmark in 6 out of 9 years and has shown tremendously low volatility.
Updated by Endowus: 25 Sept 2020
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.