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Fund Rationale: Fullerton Asian Short Duration Bonds Fund

Fullerton Asian Short Duration Bonds Fund
SGD Hedged Retail Class A Accumulation Shares (ISIN: LU1015492678)

Fund Manager Page

Introductory information
The Fullerton Asian Short Duration Bonds Fund (the “Fund”) aims to deliver long term capital appreciation and/or income returns for investors by investing primarily in US-denominated short duration fixed income or debt securities issued by companies, governments, quasi-governments, government agencies or supra-nationals in the Asian region. It limits its duration exposure to up to 3 years and also has the flexibility to invest up to 30% of the portfolio in non-investment grade bonds to further enhance the fund’s yield. The Fund is suitable for investors who have a long term investment horizon, and are looking for exposure to the Asia credit market and/or are looking for enhanced yield without too much credit and duration risk.

The inception date of the oldest share class of the Fund is 18 October 2013, while the SGD Class A Accumulation shares were incepted on 10 June 2014. As of July 2020, the Fund managed a total asset of SGD 158.2m.

 

Characteristics
The Asian countries may include but are not limited to China (including Hong Kong SAR and Taiwan), South Korea, India, Thailand, Malaysia, Singapore, Indonesia, the Philippines, Pakistan and Vietnam.

As of July 2020, the Fund holds 44.7% in China, 9.4% in Hong Kong, and others including India, Indonesia, Korea, Malaysia, and Qatar,  with a majority (52.2%) of its fixed income assets holding BBB-rated securities, followed by 24.6% in A-rated. The average duration of the Fund is 2.6 years, with yield to worst being 3.6%.

 

Background information and cost
The Fund has an underlying fund management fee of 74bps per annum (0.74% p.a.) and total expense ratio (“TER”) of 87bps per annum (0.87% 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 37bps (0.37% p.a.) and net TER of 50bps (0.50% 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 Asian Short Duration Fund for its ability to deliver relatively stable and enhanced return on a long term basis. Since its inception in 2013 and as of Aug 2020, the Fund realised about 3% annualised return with a volatility around 3%. Fullerton, with their local expertise, are one of the earliest to provide a short duration Asian investment grade solution. The Fund has a proven track record to offer good exposure to the Asian credit market without exposing investors to too much duration and credit risk. It is an Luxembourg domiciled UCITS fund which is more tax efficient and it is denominated in Singapore dollars to make it an FX efficient portfolio for Singapore based investors matching your assets with your future liabilities and thereby removing unnecessary FX risk and cost.

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.