GREATLINK INCOME FOCUS FUND^ (FUND DETAILS)

Transcription

1 Fund Details version 27 (Errors & Omissions excepted) With effect from 1 November 2014 GREATLINK INCOME FOCUS FUND^ (FUND DETAILS) The ILP Sub-Fund aims to provide regular income and long term capital growth by investing primarily in a portfolio of income generating securities globally. This ILP Sub-Fund invests all or substantially into JPMorgan Investment Funds - Global Income Fund (SGD-Hedged) and JPMorgan Funds Asia Pacific Income Fund (SGD-Hedged) ( Underlying Funds ), both managed by JPMorgan Asset Management (Europe) S.à r.l. Underlying Funds Underlying Fund Manager Country of domicile JPMorgan Investment Funds - Global Income Fund (SGD-Hedged) JPMorgan Funds Asia Pacific JPMorgan Asset Management (Europe) S.à r.l. Luxembourg Income Fund (SGD-Hedged) FUND FACTS Currency Singapore Dollar Valuation Frequency Daily Underlying Fund Manager JPMorgan Asset Management (Europe) S.à r.l. Investment Manager JPMorgan Asset Management (UK) Limited and J.P. Morgan Investment Management Inc. are the investment managers for JPMorgan Investment Funds - Global Income Fund (SGD-Hedged); JF Asset Management Limited is the investment manager for JPMorgan Funds Asia Pacific Income Fund (SGD- Hedged). Country of Domicile Singapore Inception Date 24 July 2007 Fund Management Fee (p.a.) 1.35% (2.00% max) Custodian Fee (p.a.) 0.022% Trustee Fee (p.a.) N.A. Operating and Administrative Expenses (p.a.) 0.40% (charged at Underlying Funds level) Fund Structure Feeder Fund Fund Size (as at 31 August2014) $6.365 million CPFIS Included N.A. Risk Category Higher Risk - Broadly Diversified* *Prior to 16 October 2014, the risk category of GreatLink Lion Global Flexi Fund was Medium to High Risk Broadly Diversified. PAST PERFORMANCE (as at 31 August2014) Annualized Returns 1 year 3 years 5 years 10 years Since Inception GreatLink Income Focus Fund^ N.A Benchmark^ N.A ^ Previously known as GreatLink Lion Global Flexi Fund. The past performance shown above is based on the past performance of the old underlying fund (LionGlobal Flexi Fund) managed by Lion Global Investors Limited. Effective 16 October 2014: - fund objective is changed from to achieve absolute returns over the medium to long term whereby the Manager will invest in a diversified portfolio of equities, money market securities, asset-backed securities, equity-related securities (including, but not limited to, preference shares, real estate investment trusts, deposited receipts), fixed income instruments, other debt-related instruments such as collaterlised debt obligations to its new fund objective. The Great Eastern Life Assurance Company Limited (Reg. No G) 1/6

2 - benchmark is 12-month Singapore Interbank Bid Rate (SIBID) +2.5%, since inception to 30 April Effective 1 May 2014, benchmark is changed to 12-month Singapore Inter-Bank Offer Rate (SIBOR) %. Reason for the change of benchmark from SIBID to SIBOR is the cessation of the availability of SIBID rates to the public. Effective 16 October2014, the benchmark is a composite benchmark comprising Barclays US High Yield 2% Issuer Cap Index (Total Return Gross) hedged to SGD, MSCI World Index (Total Return Net) hedged to SGD, Barclays Global Credit Index (Total Return Gross) hedged to SGD, MSCI All Country Asia Pacific ex Japan Index (Total Return Net), J.P.Morgan Asia Credit Index (Total Return Gross) The composite benchmark is a reference benchmark. Reason for the change is to align the benchmark with that of the new underlying funds. Source: Morningstar Performance (%) indicated above is on Nav-Nav basis, assuming dividends and distributions are reinvested, in SGD terms. The performance of the ILP Sub-Fund is not guaranteed and the value of investments and income from them may fall as well as rise. Past performance is not necessarily indicative of future performance. Fees and charges payable through deduction of premiums or cancellation of units are excluded from performance calculation. INVESTMENT APPROACH JPM Global Income Fund (SGD-Hedged) The Underlying Fund will primarily invest in debt securities, equity securities and REITs. Issuers of these securities may be located in any country, including emerging markets. The Underlying Fund may also invest in other assets including, but not limited to, convertible securities and forward currency exchange contracts. The Underlying Fund may invest in below investment grade and unrated debt securities. The Underlying Fund may invest in financial derivative instruments to achieve its investment objective. Such instruments may also be used for the purposes of hedging. These instruments may include, but are not limited to, futures, options, contracts for difference, forward contracts on financial instruments and options on such contracts, credit linked instruments, mortgage TBAs (To-Be-Announced) 1, and swap contracts by private agreement and other fixed income, currency and credit derivatives. Periodic dividends, to be made available at the sole discretion of the Fund Manager. 1 TBAs (To-Be-Announced) means a forward contract on a generic pool of mortgages. The mortgage pools are announced and allocated prior to delivery date. JPM Asia Pacific Income Fund (SGD-Hedged) At least 67% of the Underlying Fund s assets (excluding cash and cash equivalents) will be invested in equity securities, debt securities, convertible securities and REITS. Issuers of these securities will be companies that are domiciled in, or carrying out the main part of their economic activity in, the Asia Pacific region (excluding Japan) or governments or their agencies of countries in the Asia Pacific region (excluding Japan). The Underlying Fund will hold between 25% and 75% of its assets in equity securities and between 25% and 75% of its assets in debt securities. The Underlying Fund adopts an investment process based on the fundamental analysis of individual securities and their income potential. The Investment Manager will vary asset and country allocations over time to reflect market conditions and opportunities. DIVIDEND POLICY The Fund Manager ( Manager ) may make semi-annual distributions to investors provided that there is distributable income and/or capital gains for that period. Investors should note that the semi-annual distributions (if any), whether out of capital or otherwise, may have the effect of lowering the net asset value of the ILP Sub-Fund. There is no guarantee, assurance and/or certainty that the semi-annual distribution will be achieved. The right to vary the frequency and/or amount of the semi-annual distributions, if any, will be at the Manager s absolute discretion. Dividends, if declared, will be paid out semi-annually for GreatLink Income Focus Fund. INFORMATION ON THE MANAGER J.P. Morgan Asset Management is the asset management division of JPMorgan Chase & Co. and is one of the world's largest asset managers. With a heritage of more than two centuries, a broad range of core and alternative strategies, and investment professionals operating in every major world market, they offer investment experience and insight that few other firms can match. J.P. Morgan Asset Management has a global network of 808 investment professionals located in various locations worldwide and assets under management of almost US$1.71 trillion (as at 30 June 2014). This enormous global investment capability is based on a strong local market presence across three regions Asia Pacific, Europe and the US The Great Eastern Life Assurance Company Limited (Reg. No G) 2/6

3 - and brings together an incredible pool of specialist investment knowledge and expertise which further enhances their capabilities to provide their clients with the very best products. With the reputation for innovation and market leadership, J.P. Morgan Asset Management is committed to helping investors reach their financial goals by providing them with a broad range of professionally managed funds, excellence in investment performance, and the highest quality of client service. Their commitment and disciplined investment approach is recognised by investors worldwide. J.P. Morgan Asset Management believes that assets are best managed by specialists located in the markets and regions in which they invest. Having investment professionals globally provides fund managers with direct access to local market knowledge. Moreover, through original research and company visits, they are able to identify those companies with superior longterm potential, and those that can react quickly to market changes. This philosophy has proven extremely successful over the years, resulting in numerous performance awards and high ratings from independent agencies. Source: J.P. Morgan Asset Management Investors should note that the past performance of the Manager is not necessarily indicative of the future performance of the Manager. SOFT DOLLAR COMMISSIONS OR ARRANGEMENTS The Investment Managers may enter into Commission Sharing Arrangements only where there is a direct and identifiable benefit to the clients of the Investment Managers, including JPMorgan Funds and JPMorgan Investment Funds, and where the Investment Managers are satisfied that the transactions generating the shared commissions are made in good faith, in strict compliance with applicable regulatory requirements and in the best interests of JPMorgan Funds and JPMorgan Investment Funds and the investors. Any such arrangements must be made by the Investment Manager on terms commensurate with best market practice. Due to their local regulatory rights, certain Investment Managers may make use of soft commission to pay for research or execution services. Other jurisdictions may have other arrangements in place to pay for such services in accordance with local regulatory obligations. CONFLICTS OF INTEREST The Manager and JPMorgan Chase & Co. may effect transactions in which the Manager or JPMorgan Chase & Co. has, directly or indirectly, an interest which may involve a potential conflict with the Manager s duty to JPMorgan Funds and JPMorgan Investment Funds. Neither the Manager nor JPMorgan Chase & Co. shall be liable to account to JPMorgan Funds and JPMorgan Investment Funds for any profit, commission or remuneration made or received from or by reason of such transactions or any connected transactions nor will the Manager s fees, unless otherwise provided, be abated. The Manager will ensure that such transactions are effected on terms which are not less favourable to JPMorgan Funds and JPMorgan Investment Funds than if the potential conflict had not existed. Such potential conflicting interests or duties may arise because the Manager or JPMorgan Chase & Co. may have invested directly or indirectly in JPMorgan Funds and JPMorgan Investment Funds. More specifically, the Manager, under the rules of conduct applicable to it, must try to avoid conflicts of interests and, when they cannot be avoided, ensure that its clients (including JPMorgan Funds and JPMorgan Investment Funds) are fairly treated. The Management Company, the Investment Managers, Corporate and Administrative Agent, the Custodian and the Sales Agents are not an independent third party. The Group is a multi-service banking group, providing its clients all forms of banking and investment services. As a result, there may be conflicts of interest between the various activities of these companies and their duties and obligations to the Underlying Funds. The Management Company has in place conflicts of interest policies and procedures (which, amongst others, take into account the relations with other members of the group) for the mitigation of any resulting conflicts of interest. The Management Company, under the rules of conduct applicable to it, must try to avoid conflicts of interest and, when they cannot be avoided, ensure that its clients (including the Fund) are fairly treated. The Management Company, the Investment Managers, Corporate and Administrative Agent, the Custodian, and the Sales Agents, may from time to time act as management company, investment manager or adviser, sales agent, administrator, registrar, custodian or trustee in relation to, or be otherwise involved with, other funds or UCITS, other UCIs or other clients. It is therefore possible that any of them may, in the due course of their business, have potential The Great Eastern Life Assurance Company Limited (Reg. No G) 3/6

4 conflicts of interest with the Underlying Funds. In such event, each will at all times have regard to its obligations under any agreements to which it is party or by which it is bound in relation to the Underlying Funds. In particular, when undertaking any dealings or investments where conflicts of interest may arise, each will respectively endeavor to ensure that such conflicts are resolved fairly. The Management Company and the Group may effect transactions in which they have, directly or indirectly, an interest which may involve a potential conflict with the Management Company s duty to the Fund. Neither the Management Company nor the Group shall be liable to account to the Fund for any profit, commission or remuneration made or received from or by reason of such transactions or any connected transactions nor will the Management Company s fees, unless otherwise provided, be abated. The Management Company will ensure that such transactions are effected on terms that are at least as favorable to the Underlying Funds than if the potential conflict had not existed. There is no prohibition on the Underlying Funds entering into any transactions with the Management Company, or any Investment Manager, the Sales Agents, or the Custodian or with any of their affiliates, provided that such transactions are carried out as if effected on normal commercial terms negotiated at arm s length. In such case, in addition to the management fees the Management Company or the Investment Managers earn for managing the Underlying Funds, they may also have an arrangement with the issuer, dealer and/or distributor of any products entitling them to a share in the revenue from such products that they purchase on behalf of the Underlying Funds. In addition, there is no prohibition on the Management Company or the Investment Managers to purchase any products on behalf of the Fund where the issuer, dealer and/or distributor of such products are their affiliates provided that such transactions are carried out as if effected on normal commercial terms negotiated at arm s length, in the best interest of the Underlying Funds. The Group acts as counterparty for financial derivative contracts entered into by the Underlying Funds. Potential conflicting interests or duties may arise because the Management Company or The Group may have invested directly or indirectly in the Underlying Funds. The Group could hold a relatively large proportion of unitsand voting rights in any Underlying Funds. The Group may make substantial investments in the Underlying Funds for various purposes including, but not limited to, facilitating the growth of theunderlying Funds, for facilitating the portfolio management or tax reporting of the Underlying Funds, or for meeting future remuneration payment obligations to certain employees. The Group is under no obligation to make or maintain its investments and may reduce or dispose of any of these in the Underlying Funds Class at any time. As part of its financial planning, The Group may also hedge the risk of its investments in the Underlying Funds with the intention of reducing all or part of its exposure to such investments. The Group acting in a fiduciary capacity with respect to client accounts may recommend to or direct clients to buy and sell units of the Underlying Funds. If a client defaults on its obligation to repay indebtedness to the Group that is secured by units in the Underlying Funds, and the Group forecloses on such interest, the Group would become a unitholder of the Underlying Funds. Employees (including but not limited to portfolio managers) and Directors of the Group and Directors of the Underlying Funds may hold units in the Underlying Funds. Employees of the Group are bound by the terms of the Group policy on personal account dealings and managing conflicts of interest. RISKS General Risks Investors should consider and satisfy themselves as to the risks of investing in the Underlying Funds. Generally, some of the risk factors that should be considered by the investors are market, derivatives, liquidity, political, repatriation, regulatory, counterparty, currency and market risks, and risks associated with investments in debt securities which are default and interest rate risks. An investment in the Underlying Funds is meant to generate returns over the medium to long-term. Investors should not expect to obtain short-term gains from such investment. Past performance is not a guide to future performance. Investors should note that the value of units, and the income accruing to the units, may fall or rise and that investors may not get back their original investment. Specific Risks Market Risks Returns to investors will vary from year to year, depending on dividend income and capital returns generated by the underlying financial assets. Capital returns may be negative in some years and dividends are not guaranteed. The value of equity securities may go down as well as up in response to the performance of individual companies and general market conditions. The Great Eastern Life Assurance Company Limited (Reg. No G) 4/6

5 The value of debt securities may change significantly depending on economic and interest rate conditions as well as the credit worthiness of the issuer. The Underlying Funds may have a higher volatility to its net asset value due to its investment policy when compared to other ILP sub-funds investing in global markets, with broader investment policies and/or are a less volatile asset class. In addition, emerging markets may be subject to increased political, regulatory and economic instability, less developed custody and settlement practices, poor transparency and greater financial risks. Emerging market currencies may be subject to volatile price movements. Emerging market and below investment grade debt securities may also be subject to higher volatility and lower liquidity than non emerging market and investment grade debt securities respectively. Investments in REITs may be subject to increased liquidity risk and price volatility due to changes in economic conditions and interest rates. Bond Default and Interest Rate Risks Issuers of debt securities may fail to meet payment obligations or the credit rating of debt securities may be downgraded. These risks are typically increased for emerging market and below investment grade debt securities. Convertible bonds are subject to the credit, interest rate and market risks stated above associated with both debt and equity securities, and to risks specific to convertible securities. Convertible bonds may also be subject to lower liquidity than the underlying equity securities. The credit worthiness of unrated debt securities is not measured by reference to an independent credit rating agency. The securities in which the Underlying Funds invest may carry a risk of default or downgrade. The Underlying Funds may subject investors to potential bond default risks and interest rate risks. Currency Risks Movements in currency exchange rates can adversely affect the return of the investment. The currency hedging that may be used to minimise the effect of currency fluctuations may not always be successful. Where a purchase involves a foreign exchange transaction, it may be subject to the fluctuations of currency values. Foreign currency exchange rate movements are likely to influence the returns, and investors may be exposed to exchange rate risks. Derivative Risks The Underlying Funds may, within its prescribed limits, invest in financial derivative instruments (FDIs) for hedging purposes and to achieve its investment objective. The value of FDIs can be volatile. This is because a small movement in the value of the underlying asset can cause a large movement in the value of the FDIs and therefore, investment in such instruments may result in losses in excess of the amount invested by the Underlying Funds. In an extreme scenario, investments made through derivative transactions may cause the investor to lose his entire principal amount invested. Participation in certain FDIs involves risks of a type, level or nature to which the Underlying Funds would not ordinarily be subject to, including risks relating to exchange traded and OTC (over-the-counter) derivative transactions such as suspension of trading, absence of regulation, counterparty default and liquidity risks. The ILP Sub-Fund is also subject to the usual counterparty risks, such that the ability of the ILP Sub-Fund to make payments may depend upon the due performance by the other parties, namely the Manager and/or the Custodian (as the case may be). In the event of insolvency of the Manager, the investments are held by the Trustee on behalf of investors and are not affected by the Manager s insolvency. In the event of insolvency of the Custodian, as the ILP Sub-Fund s non-cash investments are maintained and held separately from those of the Custodian s assets, non-cash investments should normally not be affected by the Custodian s insolvency. In relation to cash investments, there could be a risk that the ILP Sub-Fund s investments (insofar as it is in the form of cash) may be affected in the event of the Custodian s insolvency. The Great Eastern Life Assurance Company Limited (Reg. No G) 5/6

6 EXPENSE RATIO Expense ratio is calculated in accordance with the Investment Management Association (IMAS) of Singapore s guidelines on the disclosure of expense ratios. The expense ratio for the period 1 January 2013 to 31 December 2013 is 2.38%, during which the underlying fund was LionGlobal Flexi Fund. The prospective expense ratio will reflect the experience of the new Underlying Funds. The following expenses (where applicable) as set out in the IMAS Guidelines (as may be updated from time to time) are excluded from the calculation of the expense ratio: (a) brokerage and other transaction costs associated with the purchase and sales of investments (such as registrar charges and remittance fees); (b) interest expenses; (c) performance fee; (d) foreign exchange gains and losses of the ILP Sub-Fund, whether realised or unrealised; (e) front-end loads, back-end loads and other costs arising on the purchase or sale of a foreign exchange unit trust or mutual fund; (f) tax deducted at source or arising from income received, including withholding tax; and (g) dividends and other distributions paid to investors. TURNOVER RATIO Turnover ratio means a ratio calculated based on the lesser of purchases or sales expressed as a percentage of over 'average net asset value'. Where 'average net asset value' means the net asset value for each day averaged over, as far as possible, the same period used for calculating the expense ratio. The turnover ratio for the period 1 January 2013 to 31 December 2013 is %, during which the underlying fund was LionGlobal Flexi Fund. The prospective turnover ratio will reflect the experience of the new Underlying Funds. The Great Eastern Life Assurance Company Limited (Reg. No G) 6/6