Fund Rationale: UBS Full Cycle Asian Bond Fund

UBS Full Cycle Asian Bond Fund (the “Fund”)
SGD Hedged Class P Accumulation Shares (ISIN: LU0464247518)
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Endowus has selected the Fund as it offers:

  • Strong bench of portfolio managers and analysts that have delivered favourable risk-adjusted return across their flagship strategies;
  • Unique full cycle approach that actively manages credit, duration and currency profile of the fund in different market conditions to generate alpha and manage downside risk; and
  • Retail share class with 100% trailer fee rebated back to Endowus investors to achieve lower cost of access.

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Key Information

Fund Objective: The Fund invests primarily in securities denominated in USD and local currencies issued by Asian economies/borrowers (ex Japan), and aims for relatively high returns when markets are rising, whereas proactively reduces and hedges high-risk assets to protect against price losses in anticipation of a downswing.

Suitability: Investors who wish to achieve a competitive total yield, invest in a diversified portfolio of bonds issued primarily by Asia ex Japan that is adapted to economic and financial market cycles in terms of interest-rate risk and credit risk by means of derivatives, have a medium level of risk tolerance, and are comfortable with the volatility and risks of a bond fund. 

Cost:

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  1. Total Fund-level Fees include fund management fee of 1.08%.
  2. This is a retail share class with 100% trailer fee rebated back to Endowus investors to lower the cost of access.
  3. Endowus do not charge a preliminary sales charge or any other additional fees, other than the all-in Endowus Access Fee.

Fund Characteristics

Fund Inception: 28 January 2010
Share Class Inception: 14 May 2010
Benchmark: JP Morgan Asia Credit Index

Fund AUM: SGD 969m
Source: MorningStar as of  24 June 2021. Please refer to the FMC page for the most updated AUM.

Regional Allocation:

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Sector Allocation:

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Source: MorningStar as of 30 April 2021. Allocation data indicate actual exposure as a percentage of the Fund's total Net Asset Value. Please refer to the Fund Manager Page for the most updated information on Fund Holdings and Breakdown. 

Selection Criteria

Endowus has selected the UBS Full Cycle Asian Bond Fund because it benefits from a strong bench of portfolio managers and credit research analysts, and a robust investment process that utilises credit, duration and currency levers under different market environments.

The Fund is managed by Hayden Briscoe, Ross Dilkes and Smit Rastogi. Hayden has more than 30 years of investment experience while Ross has been in the industry for more than 15 years. The team is supported by a sizeable credit research team of more than 10 people organised by country and industry coverage. Apart from this Fund, the same team also manages an Asian Investment Grade fund and an Asian High Yield fund. Across all three funds, the team has delivered favourable risk-adjusted return compared to peers and benchmark. 

The Fund has a unique full cycle approach: the team actively manages credit, duration and currency risks of the Fund depending on its top down views on the market. Macro views are set at the quarterly Fixed Income Investment Forum while sub-committees meet bi-weekly to discuss sector specific opportunities. From the bottom up, credit analysts marry issuer fundamentals, relative value analysis, and ESG risk assessments to arrive at credit recommendations. The portfolio management team combines top down and bottom up views in combination with qualitative and portfolio management considerations (issuer diversification, liquidity etc.) to construct the final portfolio. With this approach, it aims to deliver higher returns when the market is going up, and to reduce or hedge downside risks when the market goes down. Historically, each return lever was able to contribute to outperformance at different points in time. The Fund has also been more defensive than its peers on the downside. 

The Fund has an average credit rating of BBB. Historically its maximum allocation to high yield was about 30%. The duration constraints  would be ±2 years relative to the benchmark. While the Fund's Mandate allows for local currency exposure up to 50%, historically local currency exposure has been limited to an overweight or underweight of 15% versus the US Dollar. 

Investors should take note that solely investing in this Fund involves taking on specific risks in Asian markets, and should consider diversifying their portfolio across other geographies.

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Updated by Endowus: June 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.