Fund Rationale: United SGD Money Market Fund

United SGD Money Market Fund
SGD Retail Class B Accumulation Shares (ISIN: SG9999017297)
Fund Manager Page

Introductory information
The United SGD Money Market Fund (the “Fund”) aims to provide a return which is comparable to that of Singapore dollar short-term deposits, by investing primarily in SGD denominated and non-SGD denominated high quality debt securities and money market instruments, and deposits worldwide. The Fund is benchmarked against the 3-Month Bank Deposit Rate, and is suitable for investors who seek a return comparable to that of Singapore dollar short-term deposits, and are comfortable with the risks of investing in a money market fund. The Fund is a Sub-Fund of United Liquidity Solutions Portfolios.

The inception date of the oldest share class of the Fund is 7 June 2018, while the SGD Class B Accumulation shares were incepted on 20 September 2018. As of August 2020, the Fund managed a total asset of SGD 381.7m.

 

Characteristics
The Fund will invest primarily in SGD denominated and non-SGD denominated high quality debt securities and money market instruments, and deposits worldwide. These include government bonds, corporate bonds, deposits with financial institutions, bank certificates of deposit, commercial papers and Treasury bills. The Managers intend to fully hedge non-SGD denominated investments back to SGD. The Fund will not invest in investments from the following sectors as classified by the Global Industry Classification Standards (GICS): alcohol manufacturing and retailing, gambling, military-related, pork-related, and tobacco.

The Managers conduct independent fundamental bottom-up research which includes analyses on relative valuation, credit quality and security structure. This is complemented by a disciplined top-down strategy which covers macro-economic and market analyses that include duration management, currency overlay and country/sector allocation.

As of August 2020, the Fund’s average duration stood at 0.21 years with a weighted average yield to maturity of 1.20%. The Fund allocates 69.9% in Singapore, 17.4% in China, and others including Hong Kong, Japan, France, the UAE, and supra-nationals. Its top 5 sector exposure includes government, financials, real estates, industrials, and materials, each ranging from an allocation of 2.7% to 69.3%.

 

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 50bps per annum (0.50% 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 13bps (0.13% p.a.) and net TER of 38bps (0.38% 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 Money Market Fund for its diversified exposure to high quality debt and money market instruments, which generates a slightly higher yield than the deposit rate while keeping a very safe portfolio profile and daily liquidity. Most of the Fund’s allocation is to Singapore government bills, and during the market volatility of February - March 2020, the Fund experienced its largest drawdown since inception, which is -0.11% and recovered in 50 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.