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Fund Rationale: United SGD Plus Fund

United SGD Plus Fund
SGD Retail Class A Accumulation Shares (ISIN: SG9999017156)
Fund Manager Page

Introductory information
The United SGD Plus Fund (the “Fund”) aims to maximise long-term return through capital appreciation and/or income for investors by investing primarily in fixed income or debt securities. The Fund is designed with a low volatility target to cater to local investors’ more conservative style. Its usual asset allocation consists of 70-80% in investment grade bonds, which acts as an anchor for stability, and the remaining in High Yield bonds. The portfolio is tilted towards Asia, which offers a more attractive risk reward profile. The Fund is benchmarked against an absolute return of 3% per annum, and is suitable for investors who are comfortable with the volatility and risks of a fixed income fund.

The SGD Class A Accumulation Shares are the oldest share class of the Fund, which was incepted on 5 October 2017. As of August 2020, the Fund managed a total asset of SGD 30.7m.

 

Characteristics
The Fund aims to achieve its objective by investing primarily in a diversified portfolio of fixed income or debt securities issued by any entity (including corporates, trusts, governments, government agencies and supra-nationals) worldwide. The Fund may invest in a broad range of fixed income or debt securities, which may or may not be listed and which may be denominated in any currency. Investments may be rated or unrated, and if rated, may be investment grade or high yield/non-investment grade. Such investments may be made either directly or through other collective investment schemes, or both.

A substantial portion of the assets of the Fund may from time to time be invested into the following Singapore-authorised open-ended collective investment schemes constituted and domiciled in Singapore which are also managed by UOBAM, namely: United SGD Fund, and United Asian High Yield Bond Fund.

As of August 2020, the Fund’s average duration stood at 2.66 years with a weighted average yield to maturity of 4.26%. The Fund allocated 45.5% in Singapore, 33.9% in China, and others including Australia, India, Indonesia, South Korea, and Thailand. The Fund also holds 38.0% of its total NAV in units trusts and funds, with an exposure of 31.9% in the United SGD Fund, “Class A” Accumulation.

 

Background information and cost
The Fund has an underlying fund management fee of 90bps per annum (0.90% p.a.) and total expense ratio (“TER”) of 160bps per annum (1.60% p.a.). 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 45bps (0.45% p.a.) and net TER of 115bps (1.15% p.a.). Endowus do not charge a preliminary sales charge or any other  fees, other than the all-in advice fee.

 

Selection criteria for Endowus
Endowus have selected the United SGD Plus Fund for its diversified exposure to mostly Asia investment grade and high yield securities, and for its stable and flexible characteristics. The Fund is designed to fulfil investor’s priority for income stability regardless of market climate; hence for its distribution share class, the Fund intends to make regular monthly distributions of up to 4% per annum. The Fund has no benchmark constraint, which provides flexibility on credit selection, and focuses on achieving returns from the best risk versus reward perspective. UOB Asset Management’s fixed income team form investment convictions well before the market event happens, so that they can quickly work on them when the opportunities arise. Despite a short track record, since inception the Fund has delivered an annualised return of 3.35% with relatively low volatility of 4.6%.

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.