Fund Rationale: FSSA Dividend Advantage Fund

FSSA Dividend Advantage Fund
SGD Retail Distribution Shares (ISIN: SG9999002083)
Fund Manager Page

Introductory information
The FSSA Dividend Advantage Fund (the “Fund”) aims to provide investors with regular distributions and long term growth, and invests all or substantially all of its assets in FSSA Asian Equity Plus Fund (the “Underlying Sub-Fund”), under the Dublin registered First Sentier Global Umbrella Fund plc. The Underlying Sub-Fund invests primarily (at least 70% of its net asset value) in equity securities or equity-related securities of companies that are listed, or have their registered offices in, or conduct a majority of their economic activity in the Asia Pacific region (excluding Japan). Such companies will be selected on the basis of their potential dividend growth and long term capital appreciation. The Fund focuses on quality, earnings visibility and valuation support, long-term growth potential, and risk control through diversification and maximum weights, compliance and liquidity.

The Fund is a Singapore-constituted open-ended unit trust, and its inception date was 20 December 2004. As of September 2020, the Fund managed a total asset of SGD 3.2bn. 

 

Characteristics
The Fund seeks to achieve long term capital growth and invests primarily in companies in Asia ex-Japan. The benchmark is the MSCI AC Asia Pacific ex-Japan Index. The investment team has an absolute return mindset, focusing on long-term investing in quality companies with sensible valuations and invests in a benchmark agnostic way. As of August 2020, the Fund holds 24.1% in equities from China, 18.0% from India, and others including Taiwan, Hong Kong, South Korea, and Japan. Its top 5 sector exposure includes financials, IT, consumer staples, consumer discretionary and health care, each ranging from an allocation of 9.8% to 21.2%. The Fund underweights mega-caps while overweights mid- and small-caps.

 

Background information and cost
The fund has an underlying fund management fee of 150bps per annum (1.50% p.a.) and total expense ratio (“TER”) of 171bps per annum (1.71% 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 100bps (1.00% p.a.) and net TER of 121bps (1.21% p.a.). Endowus do 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 Account. It has been classified by the CPF Board under the risk classification of “Higher Risk / Narrowly Focused (Regional, Asia).”

The Fund is managed by FSSA Investment Managers which is an autonomous investment management team that manages USD 26.4bn in a range of Asia Pacific and Global Emerging Market equity strategies. It sits within First Sentier, a global asset management company with USD 148bn of AUM as of 30 June 2020.

 

Selection criteria for Endowus
Endowus have selected the FSSA Dividend Advantage Fund as it has delivered consistently outstanding risk-adjusted returns in this asset class over the long-term. It is led by Martin Lau and a strong investment team with a wealth of experience in investing across Asia and Emerging Markets. The Fund is the best performing Asian equity fund with additional exposure to the pacific region in Japan & Australia. As of November 2020, the Fund has managed annualised returns of 9.3% (ex-charges) vs its benchmark returns of 6.6% in the past 10 years, and has outperformed its benchmark consistently over the 3 years, 5 years, 10 years, and since inception periods, with strong downside protection and upside capture.

Updated by Endowus: 18 January 2021

** 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.