SIP Aggressive Portfolio

Transcription

1 SIP LIFESTYLE PORTFOLIOS FACT SHEET (JUL 2017) SIP Aggressive Portfolio SIP Aggressive Portfolio is a unitized fund, which is designed to provide long term capital growth. It is designed for those who hold a long term investment view and who are prepared to accept significant fluctuations in the value of their investment in order to achieve long term returns. MGF - American Growth Fund (A Share) 39.7% MGF - US Small Cap Equity Fund (AA Share) 15.5% MGF-Global Property Fund (AA Share) 2.1% MGF-European Growth Fund (A Share) 13.9% MGF-Japanese Growth Fund (A Share) 5.2% MGF-Asian Equity Fund (A Share) 1.5% MGF-Global Resources Fund (AA Share) 5.3% MGF-US Bond Fund (AA Share) 7.3% MGF-US Special Opportunities Fund (AA Share) 10.3% MGF-US Treasury Inflation-Protect Fund (AA Share) 3.1% Information Liquidity and others -4.0% Investment Management Fee : 1.40% per annum NAV per Unit million : 4.18 million SIP Growth Portfolio SIP Growth Portfolio is a unitized fund, which is designed to provide medium to long term capital growth for those who hold a long term investment view and who are prepared to accept considerable fluctuations in the value of their investments in order to achieve long term returns. 1 Month 3 Months 6 Months YTD 1 Year 3 Years 7.99% 5 Years 35.71% Since Inception 33.35% Aggressive Portfolio 1.86% 3.18% 7.67% 8.75% 11.73% MGF - American Growth Fund (A Share) 33.5% MGF - US Small Cap Equity Fund (AA Share) 4.1% MGF-Global Property Fund (AA Share) 7.0% MGF-European Growth Fund (A Share) 8.5% MGF-Japanese Growth Fund (A Share) 3.0% MGF-Asian Equity Fund (A Share) 1.2% MGF-Global Resources Fund (AA Share) 5.4% MGF-US Bond Fund (AA Share) 18.2% MGF-US Special Opportunities Fund (AA Share) 16.4% MGF-US Treasury Inflation-Protect Fund (AA Share) 5.1% Information Liquidity and others -2.4% Growth Portfolio 1 Month 1.52% 3 Months 2.52% Investment Management Fee : 1.30% per annum 6 Months 5.82% NAV per Unit YTD 6.73% 5.38 million 1 Year 7.45% : 4.00 million 3 Years 3.72% 5 Years 24.96% Since Inception 34.56%

2 SIP Balanced Portfolio SIP Balanced Portfolio is a unitized fund, which is designed to provide medium to long term capital growth for those who hold a long term investment view and who are prepared to accept fluctuations in the value of their investments in order to achieve long term returns. MGF - American Growth Fund (A Share) 21.1% MGF - US Small Cap Equity Fund (AA Share) 4.3% MGF-Global Property Fund (AA Share) 5.1% MGF-European Growth Fund (A Share) 8.0% MGF-Japanese Growth Fund (A Share) 2.7% MGF-Asian Equity Fund (A Share) 1.0% MGF-Global Resources Fund (AA Share) - MGF-US Bond Fund (AA Share) 41.9% MGF-US Special Opportunities Fund (AA Share) 13.3% MGF-US Treasury Inflation-Protect Fund (AA Share) 3.9% Information Liquidity and others -1.2% Balanced Portfolio 1 Month 0.97% 3 Months 1.97% Investment Management Fee : 1.20% per annum 6 Months 4.95% NAV per Unit YTD 5.63% 4.77 million 1 Year 5.28% : 3.50 million 3 Years 3.27% 5 Years 18.59% Since Inception 36.09% The SIP Lifestyle Portfolios are managed by Manulife Asset Management Services Berhad and are fund of funds structures. They invest all or substantially all of their assets into the Underlying Funds under the Manulife Global Fund platform. Please refer to the for the list of the Underlying Funds and the allocation for the respective portfolios. Past performance is not an indication for future results. This report is prepared for information purposes only. Important Notes: The fund performances are strictly the performance of the investment-linked (IL) fund and not to be treated as the gross premium/contribution of the IL insurance product. In the event of exceptional circumstances, such as high volume of sale investment within a short period of time, Manulife Insurance Berhad ("the Company") reserves the right to defer or suspend issuance or redemption of units. Page 2 of 5

3 and Outlook (Jul 2017) Asia Pacific ex Japan The Asia Pacific ex Japan equity markets recorded gains in July despite initial geopolitical concerns and some profit taking towards the end of the month. China was the best performing benchmark constituent on the back of solid economic data. Second quarter GDP grew by 6.9% year-on-year, above consensus forecast, amid deleveraging measures due to healthy global trade and resilient domestic demand. In June, producer price index (PPI) remains in positive territory, and industrial production and exports continue to expand. Manufacturing Purchasing Managers Index (PMI) in July was slightly less expansive due to adverse weather conditions and flooding. Investors also became optimistic on the People s Bank of China s (PBoC) liquidity injection, and ahead of China s National Financial Work Conference, which aims to promote more coordination and transparency among the different financial regulators. The second quarter of 2017 s reporting season kicked off in several markets during the month. Technology hardware companies in Hong Kong and Taiwan generally reported softer-than-expected quarterly earnings, dragged by inventory adjustment in the smartphone supply chain in China. However, internet and e-commerce related companies reported stronger-than-expected earnings. Earnings outlook guidance also beat expectations. In India, consensus 2017/18 fiscal year earnings per share forecasts were revised lower over the past three months. All sectors except financials, energy, and materials had negative revisions. Despite this, companies in India continue to deliver healthy earnings growth on a year-on-year basis. South Korea saw positive earnings per share revisions in the past three months. The technology sector was the key contributor to earnings growth due to memory/component price strength. Major banks also reported earnings that beat consensus estimates, led by the improvement in net interest margins and loan growth, as well as declining credit costs. Consumer related names had negative earnings revisions as companies continue to feel the impact from the geopolitical tensions with China. In South East Asia, banks in Indonesia and Singapore have reported decent earnings for the first half of the year. Property companies profitability in Singapore also improved as they sold more properties during the period. However, performance of consumer companies remained soft in most ASEAN markets, partly due to seasonal effect as well as generally weaker consumer spending in the first half of the year. Looking ahead, we believe performance of markets in the region should be well supported by earnings growth, and valuations remain undemanding relative to the US equity market. Hong Kong and China equity markets have performed well amid strong positive earnings momentum. That said, we are mindful of paying a reasonable price for growth when selecting stocks. The portfolio is positioned for exposure to: 1) new product cycle driven growth in the consumer sector; 2) government led infrastructure spending; 3) growth in real estate markets in tier-2 and tier-3 cities in China; and 4) strong growth in e-commerce consumption. In Taiwan, a new product cycle in the smartphone and electric vehicle segments should put companies in the corresponding supply chains under the spotlight in the latter half of the year. In South Korea, favourable supply-demand dynamics in memory chips continue to support the earnings of bellwethers in the semiconductor sector. The increase in minimum wage should also stimulate domestic consumption in the near term. We continue to like stocks in India s financial sector especially mid-sized banks, wealth managers, a micro finance company, and life insurers. We believe the consumer companies in the organised sector will continue to outperform as they gain market share from the unorganised sector following the reform and formalisation of the Indian economy. In South East Asia, value is emerging in Indonesia especially when the fundamentals of the economy continue to improve, albeit at a gradual pace. We turned more cautious on the outlook of Malaysia following the resurfacing of the 1Malaysia Development Berhad (1MDB) debt repayment issue. Furthermore, domestic consumption remains weak and corporate earnings growth has been weaker than expected. The outlook for Singapore is more positive as earnings of banks and property companies recover from last year s low. In Thailand, we expect export-oriented companies to perform better than domestic-based businesses. The Philippines remains a stock picking market and our preference lies with businesses benefiting from strong tourist flows. North America The US stock market rose in July, helped by improved economic and employment data, and rising consumer and corporate spending. Interest rates and market volatility remained low, while corporate earnings were strong for the second consecutive quarter. These positive factors more than offset disappointment around the Trump administration s inability to agree on healthcare reform, turmoil within the White House, and concern around North Korea s missile launches. The telecommunication services and information technology sectors were top-performing sectors in the S&P 500 Index, while the industrials and healthcare sectors were laggards. Although the economy and stock market are in the ninth year of recovery, we believe stocks can continue to climb given stronger consumer balance sheets, improving economic growth, and potential legislative changes. We also think large-cap valuations remain attractive. The Fund ended the period with sizable overweights in the financials and consumer discretionary sectors and a slightly higher stake in the healthcare sector, which is in line with that of the benchmark for the first time in years. Europe The European market rose 3% over the month, driven predominantly by currency gains. The euro appreciated versus the US dollar due to another setback for the new US administration s attempt to implement healthcare reform, which undermined the credibility of its other legislative actions designed to stimulate the economy, such as tax cuts and infrastructure spending. Also supporting the euro were comments by the European Central Bank (ECB) president suggesting that the European economy was strong enough to start the tapering of quantitative easing, as well as asset flows into European equities. Domestic-facing sectors like financials and telecommunication services outperformed sectors reliant on US-dollar earnings, like healthcare. The materials sector also performed well, as capacity constraints combined with buoyant demand from emerging markets to push up metal prices. The consumer staples sector was weighed down by tobacco stocks after an announcement by the US Food and Drug Administration that the agency was considering reducing the nicotine content in cigarettes below addictive levels. Page 3 of 5

4 and Outlook (Jul 2017) (continued) We believe the subdued growth outlook, low free cash flow (FCF) yields, and negative exposure to tightening monetary policy pose significant risks to the continued outperformance of large-capitalisation quality defensive stocks. We believe that oil majors, miners, and stocks in the financials sector offer more attractive returns given their positive correlation to a reflationary environment and high-single-digit FCF yields. We are also doing work on the tobacco subsector following a recent sell-off, as we believe the regulatory concerns could be overdone. Furthermore, we believe the potential for technological disruption has created interesting valuation opportunities in the automotive, auto parts, and traditional advertising industries although we are cautious on the longterm earnings power of these businesses. Overall, European equities remain supported by liquidity, relatively attractive valuations, and earnings growth. While the global economy remains healthy and interest rates stay low, we believe this position can endure. Japan The market rose for the fourth month in a row, despite the yen appreciating against the dollar over the month. There were signs of strength in both the export and domestic markets. Japan machine tool orders grew over 30% in June and have seen double digit growth for the last four months. Japanese domestic consumption recovered back to levels last seen prior to the 2014 consumption tax hike. The best performing sectors were steel and metals reflecting improvements in prices. The worst performing sector was banks, which were unable to sustain strong performance in the previous month as inflation remained stubbornly low at 0.4%. The best performing stock in the Topix 500 Index was Yaskawa Electric, which has seen strong demand in its robots, especially as it expands its presence in China. The worst performing stock was Idemitsu Kosan, an oil refiner, which announced a significant share offering to finance the purchase of Showa Shell shares from Royal Dutch Shell. Until recently, Japan had been the lone outsider of political certainty in a world of political uncertainty and chaotic election and referendum outcomes. Now, things aren t looking so rosy for Mr Abe in Japan either after the fallout from various scandals related to Mr Abe and his family. The election outcome of the Tokyo Metropolitan Government elections was a landslide for Ms Koike s new Tomin First Party and a disappointment for the Liberal Democratic Party (LDP). It should be noted that this is only local and not national elections. Outside of Brexit, unexpected political outcomes have had a limited impact on equity markets. With all the earnings announcements for the March fiscal year end now complete, earnings growth clearly stagnated in 2016 as the yen strengthened and companies struggled to grow sales both at home and overseas. Despite this, earnings growth remained positive with various strong performers, including construction and machinery companies. Japanese companies are also expecting earnings growth in However, most companies are showing restraint in their optimism, using currency forecasts of 100 or 105 yen/us dollar. This implies that upward earnings revisions should be possible over the course of the year which would be supportive for a further rise in the equity market. There were notable strong earnings growth forecasts for next year from Sony, Tokyo Electron, and Fujitsu among others. Japan remains the cheapest developed market on both price to earnings and price to book. Japan s return on equity (ROE) has also been steadily improving and currently stands at 8%. We believe this could reach 10% by Although this is still below the US (13%), it is on a faster growth path. One of the drivers for higher ROE is the record level of share buybacks. Most Japanese corporates have a net cash position giving them ample opportunity to make further buybacks in Global Global equity markets advanced over the month. A recovery in corporate earnings, as well as continued accommodative monetary policy from most central banks, supported share prices. The Fed left interest rates unchanged and indicated that the process for reducing the size of its bond portfolio would begin relatively soon if the current rate of moderate economic growth continued. The materials sector rallied in response to the rise in commodity prices. Investors continued to rotate out of defensive sectors, as healthcare and consumer staples were the worst-performing sectors. We believe global markets should continue to fare well in Key indices continued to rise in July, with international markets outperforming the US (in US dollar terms). The US has struggled on a relative basis as the market questions the US administration s ability to implement its economic agenda. In Europe, investor sentiment remains reasonably positive, and markets welcomed the outcome of France s presidential elections. However, most price-earnings ratios for global equities remain higher than historical averages, and comparable price-earnings ratios have not been seen since the early 2000s. Furthermore, debt levels have risen, even as profit margins appear to be near peak levels. This is cause for concern, because current valuations have priced-in strong earnings growth a perspective that we believe might be somewhat optimistic. Valuation concerns aside, we believe there are additional macroeconomic issues that should be in focus for investors. Deflation continues to be a risk, as does continued political uncertainty in the US, as well as in relation to the upcoming German and Italian elections, and to Brexit (the UK vote to exit the EU) negotiations. That said, we believe political risks in the eurozone have subsided, leading to a lower probability that the euro will fall sharply from concerns over cohesion of euro-area states. Meanwhile, a sense of unease remains over North Korea s nuclear situation. We believe markets are currently in a valuation-rich environment. Against this backdrop, we will focus on companies that have enduring businesses and strong management teams, with solid track records of effective capital allocation, strong balance sheets, and sustainable free cash flow. We continue to view the US financials sector positively, although we remain cautious of European firms within the sector. We also continue to favour sustainable, quality franchises within the consumer staples sector. In our view, the biggest potential market risks stem from high global valuations and high debt levels. Despite significant efforts by central banks to kickstart economies with an injection of liquidity, inflation remains subdued. Some measures of inflation expectations have even declined to levels below those experienced during previous periods of quantitative easing. We believe deflation risks remain and are not being priced-in by the market, a factor contributing to our concern about higher debt levels. We maintain a negative view of the utilities sector because of high valuations, which come from low interest rates, although the sector is relatively no more expensive than the broader market. Page 4 of 5

5 SIP Lifestyle Portfolio (Jul 2017) (continued) Investment in the fund is subject to certain risks, including but not limited to: Risk Type Description Risk Management (Bond funds) Risk Management (Equity funds) Fund Management Risk The selection of securities which make up the investments of the fund is subjective and securities selected may perform better or worse than overall market. To mitigate this risk, the investment Manager has in place a disciplined investment process and practices prudent risk management. Manager has in place a disciplined investment process and practices prudent risk management. In addition, risk is also monitored through risk models. Liquidity Risk Market or Price Risk Timing Risk Company / Stock Specific Risk Interest Rate Risk The risk of the funds being unable to meet their obligations at the reasonable cost or at any time. Market risk arises when the value of the securities fluctuate in response to the general market and economic conditions. The risk is subject to the volatility of the market/interest rate. The risk of loss due to the fall of stocks/shares prices given the deteriorating business condition. Manager will review and monitor the Fund continuously, and actively manage asset allocations of the Fund. In addition, the investment Manager will practice prudent liquidity management to enable the Fund to meet short term obligations. The Investment Manager will attempt to diversify the portfolio, and monitor the investment climate and market conditions to take measures, where necessary and appropriate, to mitigate this risk. The Investment Manager will manage it based on its professional knowledge and experienced investment skill. The interest rate is a general economic This risk will be mitigated via the N/A indicator that will have an impact on the management of the duration of the management of the Fund. This risk refers fixed income securities. to the effect of interest rate changes on the market value of fixed income securities. In the event of rising interest rates, prices of fixed income securities will decrease and vice versa. Meanwhile, fixed income securities with longer maturities and lower coupon/profit rates are more sensitive to interest rate changes. N/A Manager will review and monitor the Fund continuously, and actively manage asset allocations of the Fund. In addition, the Investment Manager will practice prudent liquidity management. This risk is managed through sector/stock diversification and asset allocation. Timing risk will be managed via technical tools (i.e. from Bloomberg) as well as based on the Investment Manager's professional knowledge and experience investment skill. Manager will be performing continuous research and analysis on the balance sheet strength, earnings generation capability and strength of management team of the company. Inflation Risk Credit Risk This is the risk that investors' investment The risk may be mitigated by investing N/A in the Fund may not grow or generate in fixed income securities that can income at a rate that keeps pace with provide positive real rate of return. inflation. The risk of loss due to the counter party's Credit risk may be managed by N/A inability to make payment of coupon/profit performing continuous fundamental and/or principal. credit research and analysis to ascertain the creditworthiness of its issuer. Page 5 of 5