Fund Rationale: Fullerton SGD Cash Fund

Fullerton SGD Cash Fund
SGD Class A Shares (ISIN: SG9999005961)

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Introductory information
The Fullerton SGD Cash Fund (“the Fund”) aims to provide investors with liquidity and a return that is comparable to that of the Singapore Dollar Banks Saving Deposits rate. The Fund is benchmarked against the Singapore Dollar Savings Deposits Rate. The Fund is suitable for investors who are looking for a cash fund and conservative returns. It only invests in institutional bank deposits at the highest prevailing interest rates.

The SGD Class A Accumulation Shares are the oldest share class of the Fund, which was incepted on 2 March 2009. As of July 2020, the Fund managed a total asset of SGD 985.8m.

The Managers intend to hold its assets primarily in Singapore Dollar deposits with eligible financial institutions with varying terms of maturity of not more than 366 calendar days. The Managers may also place deposits of varying maturity tenures exceeding 366 calendar days but not more than 732 calendar days, subject to a maximum of 10% of the Fund’s Net Asset Value.

As of July 2020, the Fund holds 44.6% in deposits with a maturity equal to or less than 4 weeks, 30.9% in maturities greater than 12 weeks, and 15.2% and 12.5% respectively for maturities between 4 to 8 weeks and 8 to 12 weeks. Its top counterparties are Bank of Tokyo-Mitsubishi, Sumitomo Mitsui Banking Corp, Maybank Singapore, Sumitomo Mitsui Trust Bank, and Qatar National Bank Singapore.

Background information and cost
The Fund has an underlying fund management fee of 10bps per annum (0.10% p.a.) and a total expense ratio (“TER”) of 15bps per annum (0.15% p.a.). Endowus have arranged for Fullerton to rebate the trailer fees which Endowus will refund 100% back to the client to achieve a lower net management fee of 5bps (0.05% p.a.) and net TER of 10bps (0.10% p.a.). Endowus do not charge a preliminary sales charge or any other  fees, other than the all-in advice fee.

Fullerton Fund Management Company are Asia-based investment specialists, with capabilities that span equities, fixed income, multi-asset, treasury management, and alternatives, including private equity.  Prior to their establishment, Fullerton’s investment team operated as the internal fund management division within Temasek Holdings (“Temasek”), a global investment company headquartered in Singapore. Fullerton Fund Management were incorporated in Singapore in 2003 and are currently a subsidiary of Temasek. NTUC Income, a leading Singapore insurer, became their minority shareholder in 2018.

Selection criteria for Endowus
Endowus have selected the Fullerton SGD Cash Fund for its stable and safe characteristics as the largest domestic Cash Fund in Singapore. Its investment in institutional fixed deposits with the highest yield attainable makes it the best in class and best performing cash fund. Due to this fact, the fund does not have any daily drawdowns and has a steady accumulating NAV structure. The Fund is the largest Cash Fund in Singapore and is used by large financial institutions including sovereign wealth funds to manage their cash liquidity. The Fund has a Singapore Dollar (SGD) and a US Dollar (USD) version of the fund, both of which Endowus have access to for their clients.

Updated by Endowus: 25 Sept 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.