Fund Rationale: LionGlobal SGD Money Market Fund

LionGlobal SGD Money Market Fund
SGD Class I Accumulation (ISIN: SG9999002760)

Fund Manager Page

Introductory information
The LionGlobal SGD Money Market Fund (“the Fund”) aims to manage liquidity and risk while looking to provide a return which is comparable to that of SGD short-term deposits by investing in high quality short-term money market instruments and debt securities. Such investments may include government and corporate bonds, commercial bills and deposits with financial institutions. The Fund is a Sub-Fund of the LionGlobal Investment Funds, a Singapore-constituted umbrella unit trust, and is suitable for investors who are looking for liquidity, and are seeking for a return which is comparable to that of SGD short-term deposits.

The SGD Class I Accumulation Shares are the oldest share class of the Fund, which was incepted on 1 November 1999. As of July 2020, the Fund managed a total asset of SGD 200m.

Characteristics
The Fund will invest in high quality short-term money market instruments and debt securities, which may include government and corporate bonds, commercial bills and deposits with financial institutions. The Fund invests in non-Singapore issuers and also non-SGD instruments. It is the intention of the Managers for the Fund’s exposure to non-SGD instruments to be 100% hedged, although, there will be situations whereby the Managers will have to exercise their discretion as to whether the currency exposure of the Sub-Fund is to be fully or partially hedged.

As of July 2020, the Fund has a weighted credit rating of A, weighted duration of 0.31 years and weighted yield to maturity of 1.53%. It allocates 41.4% in Singapore, 9.7% in China, and others including Qatar, Hong Kong, UAE, Malaysia, and South Korea. Its top 3 sector exposure includes financial (35.3%), real estate(23.9%), industrial(8.6%).

 

Background information and cost
The Fund has an underlying fund management fee of 25bps per annum (0.25% p.a.) and total expense ratio (“TER”) of 35bps per annum (0.35% 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 12.5bps (0.125% p.a.) and net TER of 22.5bps (0.225% p.a.). Endowus do not charge a preliminary sales charge or any other  fees, other than the all-in advice fee. 

Lion Global Investors, a member of the Oversea-Chinese Banking Corporation Limited (OCBC) Group, are one of the largest asset management companies in Southeast Asia, with group assets under management of SGD 61bn as of June 2020. 

 

Selection criteria for Endowus
Endowus have selected the LionGlobal SGD Money Market Fund for its diverse exposure to short term money market instruments and debt securities. It is the best-in-class money market product in Singapore, and provides a higher yield compared to the fixed deposit rate offered by banks, while maintaining high liquidity and low risk. As of August 2020, its largest drawdown was in July 2011, during which the Fund fell 13bps (0.13%), however, the Fund recovered its losses in 5 days. Otherwise, the Fund has had drawdowns from 1bps to 6bps with the recovery period ranging from as short as 2 days and as long as 19 days.

Updated by Endowus: 26 Oct 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.