SCHRODER MULTI-ASSET REVOLUTION 70 Semi-Annual Report & Financial Statements June 2018

Transcription

1 Semi-Annual Report & Financial Stements June 2018

2 Manager Schroder Investment Management (Singapore) Ltd 138 Market Street #23-01 CapitaGreen Singapore Company Registrion No H Trustee HSBC Institutional Trust Services (Singapore) Limited 21 Collyer Quay #13-02 HSBC Building Singapore Company Registrion No R Audir PricewerhouseCoopers LLP 7 Straits View Marina One East Tower, Level 12 Singapore Solicir the Manager Allen & Gledhill LLP One Marina Boulevard #28-00 Singapore Solicir the Trustee Shook Lin & Bok LLP 1 Robinson Road #18-00 AIA Tower Singapore Further Informion Schroders is a Foreign Account Tax Compliance Act ( FATCA ) compliant organision. Please find the FATCA classificion of this Fund and its Global Intermediary Identificion Number ( GIIN ) below. FATCA entity classificion: GIIN: Nonreporting IGA FFI / Sponsored Investment Entity WM9S4Z SF.702 1

3 COMMENTARY Global equity markets declined in Q1, despite getting off a strong start the beginning of US-China trade tensions domined markets, while higher-than-expected inflion da in the US in February also prompted concerns th the US Federal Reserve could raise interest res a quicker pace than expected. Global bond markets reflected the news, as most major government bond yields rose while credit spreads widened in the risk-off environment. In the volile second quarter, global equities regained their footing by posting modest positive returns, as resilient economic and earnings da competed with geopolitical uncertainty establish the market s direction. Conversely, Asian and emerging market (EM) underperformed sharply on the back of ongoing trade war rheric. In currencies, the US Dollar rebounded against the Singapore Dollar, although the lter held up better than the majority of Asian and emerging market currencies which came under renewed selling pressure in the second quarter. The Fund delivered positive returns over the first half of Fixed income contributed negively absolute performance on the back of higher bond yields and wider credit spreads. The losses were more than offset by positive return contribution from equities, led by the US, where economic da and earnings momentum remain the most buoyant. The Fund underperformed the reference benchmark, mainly due negive asset allocion. A tactical overweight in credit and a preference for Singapore bonds detracted, as did an overweight in EM and Asian equities, which sold off in the second quarter on the back of global trade concerns. However, losses were partially offset by positive selection in underlying Asia and US equity stregies, which outperformed strongly over the period. Looking ahead, valuions have improved for the first time since While there is cause feel more constructive on risk, we continue position cautiously as the cyclical environment has deteriored. US-China trade tensions, resurgence of political risk in Europe, and tighter global liquidity remain on the horizon. Th said, economic growth continues remain robust. While some lead indicars have started roll-over, they are doing so from significant highs and are still, in aggrege, pointing an expansion rher than a contraction. Lest da suggests th this was just a slow pch as manufacturing performance, for example, has begun re-accelere. The current overriding issue for markets is how global trade will play out. Our base case scenario is th the ugh US rheric on trade tariffs is a negotiing tactic ahead of the midterm elections ler this year, which means equities especially for EM stand a chance performing well wards the fourth quarter. However, it is also clear th if trade tensions were escale further, this would have a detrimental effect on markets. We will thus protect the Fund through put options and / or safe haven currencies until there is more clarity on the trade front. For now, we are piently waiting for better opportunities and are focused on maintaining a diversified stance. We continue retain a preference for short-durion fixed income and inflion-linked bonds which we expect will outperform as inflion moves higher. In equities, we hold a preference for higher quality US equities as well as the tractively valued Asian and emerging markets. June

4 STATEMENT OF TOTAL RETURN For the financial period ended 30 June 2018 (Unaudited) 30 Jun Jun 2017 $ $ Income Foreign dividends 63,890 - Interest on deposits with banks , Less : Expenses Management fees 986, ,425 Less : Management fee rebes (30,575) (32,300) Trustee fees 31,117 30,224 Valuion fees 19,460 18,988 Cusdian fees Registrion fees 60,205 57,880 Audit fees 9,937 10,117 Transaction costs 5,585 9,050 Others 21,017 82,711 1,103,618 1,126,251 Net expense (1,039,665) (1,126,238) Net gains or losses on value of investments and financial derivives Net gains on investments 1,355,938 6,851,078 Net losses on spot foreign exchange contracts (63,676) (50,208) Net (losses)/gains on forward foreign exchange contracts (202,942) 335,860 Net gains on futures contracts - 13,195 Net gains/(losses) on options contracts 34,368 (334,364) Net foreign exchange gains 50,263 19,261 1,173,951 6,834,822 Total return for the period before income tax 134,286 5,708,584 Add : Income tax credit 25,176 - Total return for the period 159,462 5,708,584 3

5 STATEMENT OF FINANCIAL POSITION As 30 June 2018 (Unaudited) ASSETS 30 Jun Dec 2017 $ $ Portfolio of investments 151,299, ,751,880 Bank balances 6,776,141 2,686,742 Sales awaiting settlement 1,262,316 1,752,888 Receivables 294, ,084 Financial derivives 129, ,678 Margin account 1 21,831 Total 159,760, ,046,103 LIABILITIES Purchases awaiting settlement 1,262,316 2,548,209 Payables 450, ,556 Financial derivives 509,001 79,058 Total liabilities 2,221,411 2,938,823 EQUITY Net unitholders 157,539, ,107,280 4

6 STATEMENT OF MOVEMENTS OF UNITHOLDERS FUNDS For the financial period ended 30 June 2018 (Unaudited) 30 Jun Dec 2017 $ $ Net unitholders the beginning of the financial period/year 160,107, ,933,930 Operions Change in net unitholders resulting from operions 159,462 14,226,092 Unitholders contributions/(withdrawals) Creion of units 3,898,029 7,228,017 Cancellion of units (6,625,197) (12,280,759) Change in net unitholders resulting from net creion and cancellion of units (2,727,168) (5,052,742) Total (decrease)/increase in net unitholders (2,567,706) 9,173,350 Net unitholders the end of the financial period/year 157,539, ,107,280 5

7 STATEMENT OF PORTFOLIO As 30 June 2018 (Unaudited) Primary Percentage of tal net unitholders Holdings Fair value 30 Jun Jun Jun 2018 By geography $ % Quoted Collective investment schemes LUXEMBOURG (country of domicile) Schroder Internional Selection Fund - Asian Opportunities I Accumulion Share Class 239,102 9,306, Schroder Internional Selection Fund - Emerging Markets I Accumulion Share Class 68,892 2,034, Schroder Internional Selection Fund - Emerging Markets Debt Absolute Return I Accumulion Share Class 34,267 1,767, Schroder Internional Selection Fund - EURO Equity I Accumulion Share Class 164,564 13,747, Schroder Internional Selection Fund - Global Corpore Bond I Accumulion Share Class 169,497 3,090, Schroder Internional Selection Fund - Global Equity Alpha I Accumulion Share Class 27,118 9,410, Schroder Internional Selection Fund - Global Inflion Linked Bond I Accumulion Share Class 87,089 4,995,

8 STATEMENT OF PORTFOLIO As 30 June 2018 (Unaudited) Primary (continued) Percentage of tal net unitholders Holdings Fair value 30 Jun Jun Jun 2018 By geography $ % Quoted Collective investment schemes LUXEMBOURG (continued) (country of domicile) Schroder Internional Selection Fund - Japanese Equity I Accumulion Share Class 244,137 5,070, Schroder Internional Selection Fund - QEP Global Active Value I Accumulion Share Class 22,423 7,953, Schroder Internional Selection Fund - QEP Global Core I Accumulion Share Class 503,846 23,826, Schroder Internional Selection Fund - QEP Global Quality I Accumulion Share Class 6,203 1,583, Schroder Internional Selection Fund - US Large Cap I Accumulion Share Class 123,871 35,502, ,289,

9 STATEMENT OF PORTFOLIO As 30 June 2018 (Unaudited) Primary (continued) Percentage of tal net unitholders Holdings Fair value 30 Jun Jun Jun 2018 By geography $ % Quoted Collective investment schemes SINGAPORE (country of domicile) Schroder Asian Investment Grade Credit Class I 3,000,191 2,985, Schroder Global Quality Bond Class I USD Accumulion 6,190,846 8,238, Schroder Singapore Fixed Income Fund Class I 10,562,055 15,452, Schroder Singapore Trust Class SGD I Accumulion 557,334 1,604, ,280, UNITED STATES OF AMERICA (country of domicile) Vanguard Energy ETF 33,006 4,728, Portfolio of investments 151,299, Other net 6,240, Net unitholders 157,539,

10 STATEMENT OF PORTFOLIO As 30 June 2018 (Unaudited) Primary (continued) Percentage Percentage of tal net of tal net unitholders unitholders 30 Jun Dec 2017 By geography (summary) % % Quoted Luxembourg Singapore United Stes of America Portfolio of investments Other net Net unitholders Secondary Percentage Percentage of tal net of tal net Fair value unitholders unitholders 30 Jun Jun Dec 2017 By asset class $ % % Collective investment schemes - Alternive investments Equities 114,768, Fixed income 36,530, Portfolio of investments 151,299, Other net 6,240, Net unitholders 157,539,

11 UNITS IN ISSUE For the financial period ended 30 June 2018 (Unaudited) 30 Jun Dec 2017 Units Units At the beginning of the financial period/year 107,991, ,597,926 Creed 2,617,493 5,092,386 Cancelled (4,477,726) (8,699,283) At the end of the financial period/year 106,130, ,991,029 $ $ Net unitholders 157,539, ,107,280 Net unitholders per unit

12 FINANCIAL RATIOS For the financial period ended 30 June 2018 (Unaudited) 30 Jun Jun 2017 Expense rio 1 (excluding underlying funds unaudited expense rio) 1.39% 1.39% Expense rio 2 (including underlying funds unaudited expense rio) 1.50% 1.50% Turnover rio % 32.89% 1 The expense rio has been computed based on the guidelines laid down by the Investment Management Associion of Singapore ( IMAS ). The calculion of the expense rio was based on tal opering expenses divided by the average net asset value for the year. The tal opering expenses do not include brokerage and other transaction costs, performance fee, interest expense, distribution paid out unitholders, foreign exchange gains/losses, front or back end loads arising from the purchase or sale of other funds and tax deducted source or arising out of income received. The Fund does not pay any performance fee. The respective values used in the calculion of the expense rio are disclosed below. The average net asset value is based on the daily balances. Expense rio calculions 30 Jun Jun 2017 $ $ Total opering expenses 2,189,801 2,086,504 Average net asset value 157,514, ,259, The expense rio is the sum of the Fund s expense rio and the weighted average of the underlying funds unaudited expense rios. The unaudited expense rios of the underlying funds are obtained from the respective managers or independent sources. There is no requirement for the expense rios of those underlying funds be published or audited. The portfolio turnover rio is calculed in accordance with the formula sted in the Code on Collective Investment Schemes. The calculion of the portfolio turnover rio was based on the lower value of purchases or sales of the underlying investments divided by the average daily net asset value. Turnover rio calculions 30 Jun Jun 2017 $ $ Lower of purchases or sales 35,620,364 (purchases) 50,380,327 (purchases) Average net asset value 159,225, ,171,742 11

13 REPORT TO UNITHOLDERS 30 June 2018 The following is a report on the (the Fund ): 1. Top 10 holdings of the Fund as 30 June 2018: Percentage of tal net Fair value unitholders $ % SISF - US Large Cap I Acc 35,502, SISF - QEP Global Core I Acc 23,826, Schroder Singapore Fixed Income Fund Class I 15,452, SISF - EURO Equity I Acc 13,747, SISF - Global Equity Alpha I Acc 9,410, SISF - Asian Opportunities I Acc 9,306, Schroder Global Quality Bond Class I USD Acc 8,238, SISF - QEP Global Active Value I Acc 7,953, SISF - Japanese Equity I Acc 5,070, SISF - Global Inflion Linked Bond I Acc 4,995, Top 10 holdings of the Fund as 30 June 2017: Percentage of tal net Fair value unitholders $ % SISF - QEP Global Core I Acc 27,973, SISF - US Large Cap I Acc 26,248, Schroder Singapore Fixed Income Fund Class I 18,646, SISF - QEP Global Active Value I Acc 16,941, SISF - EURO Equity I Acc 11,793, SISF - Asian Opportunities I Acc 11,187, SISF - QEP Global Quality I Acc 11,004, Schroder Global Quality Bond Class I USD Acc 5,630, SISF - Japanese Equity I Acc 4,988, SISF - Global Inflion Linked Bond I Acc 3,343, Legend: SISF : Schroder Internional Selection Fund The Fund was not invested in other unit trusts, mutual funds or collective investment schemes as 30 June 2018 other than as sted in the Stement of Portfolio. For the full composition of investments of the Fund as 30 June 2018, refer the Stement of Portfolio on pages

14 REPORT TO UNITHOLDERS 30 June The Fund has the following exposure financial derivives as 30 June 2018: Percentage of tal net Fair value unitholders $ % Contracts: Forward foreign exchange (379,835) (0.24) The net gain on financial derivives realised during the period 1 January June 2018 amounted S$147,585. The net loss on outstanding financial derivives marked market as 30 June 2018 amounted S$379, The Fund did not have any borrowings as 30 June The amount of subscriptions and redemptions during the period 1 January June 2018 were as follows: Subscriptions 3,898,029 Redemptions 6,625, Expense Rio (including underlying funds) 1 July June % 1 July June % 6. Turnover of Portfolio 1 January June % 1 January June % $ 13

15 REPORT TO UNITHOLDERS 30 June Soft dollar commissions/arrangements: In the management of the Fund, the Manager may accept soft dollar commissions from, or enter in soft dollar arrangements with, sckbrokers who execute trades on behalf of the Fund and the soft dollars received are restricted the following kinds of services: (i) (ii) (iii) (iv) research, analysis or price informion; performance measurement; portfolio valuions; and administrion services. The Manager may not receive or enter in soft dollar commissions or arrangements unless (a) such soft dollar commissions or arrangements shall reasonably assist the Manager in their management of the Fund, (b) best execution is carried out for the transactions, and (c) th no unnecessary trades are entered in in order qualify for such soft dollar commissions or arrangements. The Manager shall not receive goods and services such as travel, accommodion and entertainment. The description of soft dollars and the conditions set out above also apply the investment managers of the underlying Schroders funds. 8. Reled Party Transactions The Manager of the Fund is Schroder Investment Management (Singapore) Ltd. The Registrar for the Fund is Schroder Investment Management (Europe) SA (formerly known as Schroder Investment Management (Luxembourg) SA), a reled party of the Manager. The Trustee is HSBC Institutional Trust Services (Singapore) Limited, a subsidiary of the HSBC Group. The management fees, net of any management fee rebes, paid the Manager and registrion fees paid the Registrar; trustee fees, valuion fees and cusdian fees charged by, and interest earned on deposits with, the HSBC Group are shown in the Stement of Total Return. As reporting de, the Fund maintained with the HSBC Group, the following bank balances: 30 Jun 2018 $ 31 Dec 2017 $ Current accounts 6,776,141 2,686,742 In addition the above, the respective management fees are chargeable by: i) Schroder Investment Management (Singapore) Ltd as Investment Manager of the following underlying funds: Underlying fund Per annum of NAV Schroder Asian Investment Grade Credit Class I - Schroder Global Quality Bond Class I USD Acc 0.500% Schroder Singapore Fixed Income Fund Class I 0.200% Schroder Singapore Trust Class SGD I Acc - 14

16 REPORT TO UNITHOLDERS 30 June 2018 ii) Schroder Investment Management (Europe) SA (formerly known as Schroder Investment Management (Luxembourg) SA) as Management Company of the following underlying funds: Underlying fund Per annum of NAV SISF Asian Opportunities I Acc - SISF Emerging Markets I Acc - SISF Emerging Markets Debt Absolute Return I Acc - SISF EURO Equity I Acc - SISF Global Corpore Bond I Acc - SISF Global Equity Alpha I Acc - SISF Global Inflion Linked Bond I Acc - SISF Japanese Equity I Acc - SISF QEP Global Active Value I Acc - SISF QEP Global Core I Acc - SISF QEP Global Quality I Acc - SISF US Large Cap I Acc - Legend: SISF : Schroder Internional Selection Fund 9. Performance of Fund for periods ended 30 June mths 6 mths 1 yr 3 yrs* 5 yrs* Since Launch* # Fund 3.1% 0.1% 5.8% 5.1% 6.7% 5.8% Benchmark** 4.0% 1.9% 7.4% 7.2% 9.2% 8.5% * Returns of more than 1 year are annualised # Since launch figures from 15 June 2011 ** Benchmark: 70% MSCI World Index + 30% Citi World Government Bond Index (SGD Hedged) Source: Schroders, S$, bid bid, net income reinvested. 15

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