Fund Rationale: United Global Quality Growth Fund

United Global Quality Growth Fund
SGD Class B Accumulation Shares (ISIN: SG9999017495) 
SGD Class C Accumulation Shares (ISIN: SGXZ31699556)
Fund Manager Page

Introductory information
The United Global Quality Growth Fund (the “Fund”) aims to provide long-term total return by investing in equity and equity-related securities of companies listed and traded on stock exchanges globally. The Fund is benchmarked against the MSCI AC World Index, and is suitable for investors who seek total return over the long-term, and are comfortable with the risks of a global equity fund.

The inception date of the oldest share class of the Fund is 21 October 2016. The SGD Class B Accumulation shares (Cash/SRS investments) were incepted in January 2018, and the SGD Class C Accumulation shares were incepted in November 2018. As of August 2020, the Fund managed a total asset of SGD 624.4m.

 

Characteristics
The Fund focuses on identifying market-leading companies with growing industry market share, quality balance sheets and strong management teams. These companies often have a history of successful new products, innovative ways of doing business, or having opportunities to expand globally. The Fund also seeks to invest in companies with positive long-term revisions, operating efficiency, and the ability to generate increasing return on capital. The Fund invests primarily in equity securities. Subject to the foregoing, the Fund may invest in other securities including, without limitation, exchange traded funds and equity-related securities such as depositary receipts. While the Fund is not constrained by market capitalisation, country, sector or industry, the companies it seeks to invest in typically have market capitalisation exceeding US$3 billion with sufficient trading volume.

The Fund’s investment process first begins with screening the broad universe of securities included in global equity indices. From there, the investable universe is reduced to approximately 750 companies. The Fund then employs a bottom-up investment approach to identify companies based on a balance of metrics such as quality, growth, valuation and capital returns.

As of August 2020, the Fund allocated 62.5% in the USA, 8.1% in China, and others including Switzerland, Japan, Taiwan, France, and the UK. Its top 5 sector exposure includes IT, healthcare, consumer discretionary, communication services, and industrials, each ranging from an allocation of 10.5% to 34.6%.

 

Background information and cost
The Fund has an underlying fund management fee of 100bps per annum (1.00% p.a.) and total expense ratio (“TER”) of 126 bps per annum (1.26% p.a.) for Class B and 123bps per annum (1.23% p.a.) for Class C. Endowus have arranged for the Fund Management Company to rebate the trailer fees which Endowus will refund 100% back to the client to achieve a lower net management fee of 90bps and net TER of 116bps (1.16% p.a.) for Class B share class, and 82.5bps (0.825% p.a.) and net TER of 105.5bps (1.055% p.a.) for Class C share class. 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 class of “High Risk – Broadly Diversified.”

 

Selection criteria for Endowus
Endowus have selected the United Global Quality Growth Fund for its exposure to  a diversified basket of mostly large cap growth equities that’s carefully selected by the Fund’s management team. In addition, the Class C share class of the Fund is one of the approved funds on the CPFIS list, offering efficient access to Singaporean investors utilising CPFIS to invest. While we think that the track record is too short to be highly informative of the management’s capability, just as a reference, since the inception of its oldest share class up to Aug 2020, the Fund has delivered consistent outperformance to the benchmark, and since inception it returned an annualised return of 16.94% compared to 11.86% from the benchmark, while keeping the risk level in line with the benchmark.

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.