Fund Rationale: Eastspring Singapore Select Bond Fund

Eastspring Singapore Select Bond Fund
SGD Hedged Retail Accumulation Shares (ISIN: SG9999007454)

Fund Manager Page

Introductory information
The Eastspring Singapore Select Bond Fund (the “Fund”)  aims to maximise total returns over time by investing primarily in Singapore-dollar denominated debt securities and foreign currency debt securities which will be hedged back into Singapore Dollars. The Fund takes a “top-down” investment management approach through economic and market analysis to establish duration, yield curve and credit strategies. This approach is complemented with a “bottom-up” credit selection process, which involves the research and analysis of bond issuers, to identify value opportunities and manage credit risks. The Fund is benchmarked against the Markit iBoxx ALBI Singapore Index, and is suitable for investors who seek long-term total return, are comfortable with the risk of a fund investing in bonds which are primarily denominated in Singapore Dollars, and appreciate that their capital will be at risk and that the value of their investment and any derived income may fall as well as rise.

The Fund is a sub-fund of a Singapore-constituted umbrella unit trust, and inception of the Fund was on 8 April 2011. As of August 2019, the Fund managed assets of SGD 1.41bn. 

 

Characteristics
The Singapore Select Bond Fund will invest primarily in Singapore-dollar denominated debt securities, including the Singapore government securities, investment grade and/or unrated debt securities issued by Singapore statutory boards and Singapore-incorporated entities as well as investment-grade debt securities issued by entities outside Singapore. The Singapore Select Bond Fund may also invest up to 30% of its assets in foreign currency-denominated debt securities issued by the above entities. Any such foreign currency-denominated debt securities will be hedged back into Singapore Dollars. As of August 2019, the Fund had a 64.4% allocation to Singapore, followed by 8.8% allocation to China and 5.7% allocation to Australia. The average credit rating of the portfolio is A+ and a has a 3-year standard deviation of 2.62% annualised. The yield to maturity is 2.9%, with an average duration of 7.5 years.

 

Background information and cost
The Fund has an underlying fund management fee of 50bps per annum (0.50% p.a.) and total expense ratio ("TER") of 62bps per annum (0.62% p.a.). Endowus have 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 33.5bps and a net TER of 45.5bps. Endowus do not charge a preliminary sales charge or any other fees, other than the all-in Access 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 classification of “Low to Medium Risk Low to Medium Risk – Narrowly Focused – Country – Singapore.” 

 

Selection criteria for Endowus
Endowus have selected the Eastspring Singapore Select Bond Fund for its diversified portfolio of primarily Singapore government, Quasi-government and regional Asian credit exposure. It is able to achieve stable returns through different economic and interest rate cycles. The diversification into corporate bonds and foreign currency bonds provides the potential for yield pick-up. The fund has positive 3-year rolling returns since inception and has consistently outperformed the benchmark. The fund has returned 3.8% annualised since inception and 4.1% annualised in the past 5 years. It has outperformed the benchmark 5 of the past 8 years. 

Updated by Endowus: 22 Oct 2019

** 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.