MAX SINGAPORE TRUST FUND (FUND SUMMARY)

Transcription

1 Fund Summary With effect from July Fund Facts (as at 30 April 2017) MAX SINGAPORE TRUST FUND (FUND SUMMARY) Launch Date: 10 December 2009 Fund Size: S$0.506 million Fund Manager: Lion Global Investors Limited Fund Management Charge: 1.15% p.a. (1.25% p.a. max) Trustee Fee (Charged at Underlying Fund level): Not more than 0.05% p.a. (Subject to a minimum of S$10,000 p.a.) (0.10% p.a. max) Custodian: Not applicable Capital Guaranteed: No Name of Guarantor: Not applicable Valuation Frequency Daily Currency of Fund Singapore Dollar Fund Structure: Feeder Fund Country of Domicile: Singapore Risk Category: Higher 2. Information on the Manager One of the largest asset managers in Southeast Asia, Lion Global Investors' (LGI) core competency is in managing Asian equities and fixed income on behalf of institutional and retail investors worldwide. At end of 31 December 2016, LGI managed S$42.5 billion (US$29.4 billion) on behalf of their clients. LGI s investment capabilities, strong parentage and in-depth knowledge of Asian markets have contributed to their significant presence in Asia for 31 years. This and being headquartered in Singapore widely recognised as Asia s leading financial hub make LGI the preferred investment partner in Asia for international investors. LGI has been managing discretionary funds in Singapore since 1986 and collective investment schemes in Singapore since Source: Lion Global Investors Limited Investors should note that the past performance of the Manager is not necessarily indicative of the future performance of the Manager. 3. Structure of ILP Sub-Fund Max Singapore Trust Fund ( ILP Sub-Fund ) invests all or substantially into the SGD share class of LionGlobal Singapore Trust Fund ( Underlying Fund ) managed by Lion Global Investors Limited. The country of domicile of the Underlying Fund is Singapore. The units in the ILP Sub-Fund are Excluded Investment Products 1, and that the Fund is subjected to the investment restrictions prescribed under the Notice on the Sale of Investment Products issued by the Monetary Authority of Singapore ( MAS ). 1 Excluded Investment Product is as defined in the Notice on the Sale of Investment Products. Notice on the Sale of Investment Products means the Notice on the Sale of Investment Products issued by the MAS, as the same may be modified, amended or revised from time to time. 4. Investment Objective, Focus and Approach The investment objective of the Underlying Fund is to achieve long-term capital appreciation by investing in securities listed on the Main Board of The Singapore Exchange Securities Trading Limited ( SGX-ST ) and on 1 Pickering Street #01-01 Great Eastern Centre Singapore Page 1 of 5

2 Catalist. The investments of the Underlying Fund shall be diversified into the various sectors of the Singapore equities markets. The Manager believes that equity markets are structurally inefficient and that this inefficiency provides the opportunity for investors, such as the Manager, to add value for clients through the application of a disciplined investment process. The Manager s investment process is underwritten by thorough stock analysis, disciplined stock selection and the construction of portfolios which reflect prevailing and anticipated macro/thematic trends. The Manager also believes that portfolio construction disciplines play an essential role in the investment process as they ensure adherence to the clients investment objectives. The Manager adopts a neutral approach with respect to style, and therefore any style bias, is a by-product of stock selection approach and macro view at that point in time in the investment cycle. Please note that the units of the Underlying Fund are Excluded Investment Products. The Underlying Fund will not invest in any product or engage in any transaction which may cause the units of the Underlying Fund not to be regarded as Excluded Investment Products. The investment process is essentially split between research and portfolio. Research is a critical component to the Manager s investment approach. It focuses on identifying companies that meet most of or all of the following criteria: Sustainable competitive advantage Balance Sheet strength High calibre management Strong culture of corporate governance Evidence of share price mispricing Identifiable critical factors and associated catalysts that will move the share price. The Manager constructs the portfolio in a manner consistent with the objective of the Underlying Fund as well as taking account the prevailing macro directions and sector/thematic considerations, while adhering to portfolio construction disciplines of the Underlying Fund. 5. General Risks Investors should consider and satisfy themselves as to the risks of investing in the Underlying Fund. Generally, some of the risk factors that should be considered by the investors of the Underlying Fund are market, credit, derivatives, interest rate, liquidity and regulatory risks. An investment in the Underlying Fund is meant to produce returns over the long-term. Investors should not expect to obtain short-term gains from such an investment. 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. 6. Specific Risks (a) Market Risks The risks of investing and participating in listed and unlisted securities apply. Prices of securities may go up or down in response to changes in economic conditions, interest rates, and the market's perception of securities. These may cause the price of units to go up or down as the price of units is based on the current market value of the investments of the Underlying Fund. There are also the risks of investing in bonds and other fixed income securities. Bond prices may go up or down in response to interest rates with increases in interest rate leading to falling bond prices. The market prices of bonds and other fixed income securities are also affected by credit risks, such as risk of default by issuers and liquidity risk. 1 Pickering Street #01-01 Great Eastern Centre Singapore Page 2 of 5

3 (b) Derivatives Risks The Underlying Fund may, subject to applicable investment guidelines in the MAS Code of Collective Investment Scheme ( Code ) and the Deed of the Underlying Fund, from time to time invest in derivatives such as futures, options, warrants, forwards and swaps, which are financial contracts whose value depends on, or is derived from, the value of an underlying asset, reference rate or index for hedging purposes or for the purpose of efficient portfolio management. Such assets, rates and indices may include bonds, shares, interest rates, currency exchange rates, bond indices and stock indices. While the judicious use of derivatives by professional investment managers can be beneficial, derivatives involve risks different from, and, in some cases, greater than, the risks presented by more traditional securities investments. Some of the risks associated with derivatives are market risk, management risk, credit risk, liquidity risk and leverage risk. As the viability of exercising derivative instruments depends on the market price of the investments to which they relate, it may be the case that the Manager may from time to time consider it not viable to exercise certain derivatives held by the Underlying Fund within the prescribed period, in which case any costs incurred in obtaining the derivatives will not be recoverable. There is also the risk that the market price of the relevant investment will not exceed the exercise price attached to the derivative instrument at any time during the exercise period or at the time at which the warrants or options are exercised and this may result in an immediate loss to the Underlying Fund. Derivative instruments are highly volatile instruments and their market values may be subject to wide fluctuations and may subject the Underlying Fund to potential gains and losses. Where such instruments are used, the Manager will ensure that the risk management and compliance procedures and controls adopted are adequate and that the Manager has the necessary experience to manage the risks relating to the use of these financial derivative instruments. The Manager will attempt to minimise the risks through careful selection of reputable counterparties and constant monitoring of the Underlying Fund s derivatives positions. Depending on the severity, non-compliance or deviation from established controls or limits will be escalated to senior management and monitored for rectification. The Manager may modify the risk management and compliance procedures from time to time, where appropriate and in the interest of the Underlying Fund. The Manager has a dedicated team which oversees portfolio risk management. (c) Currency Risk As the investments of the Underlying Fund may be denominated in foreign currencies, fluctuations of the exchange rates of foreign currencies against the base currency of the Underlying Fund (i.e. the Singapore Dollar) may affect the value of Units. The Manager may from time to time employ currency hedging techniques to manage the impact of the exchange rate fluctuations on the Underlying Fund and/or for the purpose of efficient portfolio management. The managers do not currently hedge the currency exposure of the Underlying Fund but in the event they do, they intend to use an active approach in respect of such currency hedging. Investor should hence note that as the Underlying Fund is not currently fully hedged, the Underlying Fund will be subject to currency risk. (d) Concentration Risks The Underlying Fund may be subject to concentration risks as it invests mainly in securities listed on SGX-ST and on Catalist. This could result in a higher risk to the investments of the Underlying Fund due to lack of diversification. (e)other Risks The Underlying Fund's investments are also subject to liquidity and regulatory risks. The ILP Sub-Fund is not listed and you can redeem only on Dealing Days. There is no secondary market for the ILP Sub-Fund. All redemption requests should be made to The Great Eastern Life Assurance Company Limited. The risk of investing in companies in the emerging markets will be higher than that encountered when investing in companies in developed markets. The Underlying Fund s investments in emerging economies are subject to regulatory risks, for example, the introduction of new laws, the imposition of exchange controls, the adoption of restrictive provisions by individual companies or where a limit on the holding of the Underlying Fund in a particular company, sector or country by non-residents (individually or collectively) has been reached. Also, some markets may be less liquid and the limited liquidity of these markets may therefore affect the Underlying Fund s ability to acquire or dispose of securities at the time and price it desires. 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 1 Pickering Street #01-01 Great Eastern Centre Singapore Page 3 of 5

4 the case may be). In the event of insolvency of the Manager, the investments are held by the Trustee (where applicable) on behalf of investors and are not affected by the Manager s insolvency. The above should not be considered to be an exhaustive list of the risk which investors should consider before investing in the ILP Sub-Fund. Investors should be aware that an investment in the ILP Sub-Fund may be exposed to other risks of an exceptional nature from time to time. 7. Past Performance (as at 30 April 2017) Annualized Returns 1 year 3 years 5 years Since Inception^ Max Singapore Trust Fund Benchmark Index* ^ Inception Date at 10 December 2009 * MSCI Singapore Source: Morningstar Performance figures are calculated on a bid-bid basis, with all dividends and distributions reinvested, taking into account all charges which would have been payable upon such reinvestment. Past performance is not necessarily indicative of future performance. Fees and charges payable through deduction of premiums or cancellation of units are excluded. 8. 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 of 1 January 2016 to 31 December 2016 is 1.47%*. 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. * Ratio is derived from the Underlying Fund. 9. Turnover Ratio Turnover ratio is calculated based on the lesser of purchases or sales expressed as a percentage 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. Fund Turnover Ratio 31 December 2016 Max Singapore Trust Fund* 75.00% Underlying Fund 75.00% * Ratio is derived from the Underlying Fund. 10. Soft Dollar Commissions or Arrangement The Manager shall be entitled to and currently do receive or enter into soft-dollar commissions/arrangements in respect of the Underlying Fund. The Manager will comply with applicable regulatory and industry standards on softdollars. The soft-dollar commissions/arrangements which the Manager may receive or enter into include specific 1 Pickering Street #01-01 Great Eastern Centre Singapore Page 4 of 5

5 advice as to the advisability of dealing in or as to the value of any investments, research and advisory services, economic and political analyses, portfolio analyses including valuation and performance measurements, market analyses, data and quotation services, computer hardware and software or any other information facilities to the extent that they are used to support the investment decision making process, the giving of advice, or the conduct of research or analysis, and custodial service in relation to the investments managed for our clients. Soft-dollar commissions received shall not include travel, accommodation, entertainment, general administrative goods and services, general office equipment or premises, membership fees, employees salaries or direct money payment. The Manager will not accept or enter into soft-dollar commissions/arrangements unless such soft-dollar commissions/arrangements would reasonably assist the Manager in their management of the Underlying Fund, provided that the Manager shall ensure at all times that best execution is carried out for the transactions and that no unnecessary trades are entered into in order to qualify for such soft-dollar commissions/arrangements. 11. Conflicts of Interest The Manager and the Trustee of the Underlying Fund are not in any positions of conflict in relation to the Underlying Fund. The Manager and the Trustee of the Underlying Fund shall conduct all transactions with or for the Underlying Fund at arm s length. The Manager is of the view that they are not in a position of conflict in managing their other funds and the Underlying Fund as each of the funds and the Underlying Fund has its own investment universe, investment objectives and investment restrictions, separate and distinct from each of the other funds. The Manager is obligated by the provisions of each respective trust deed to observe strictly such separate and distinct investment mandate for each of the funds. If the various funds place orders for the same securities as the Underlying Fund, the Manager shall try as far as possible to allocate such securities among the funds in a fair manner based on a proportionate basis. The Manager s affiliates and the affiliates of the Trustee of the Underlying Fund are or may be involved in other financial, investment and professional activities which may sometimes give rise to possible conflict of interest with the management of the Underlying Fund. The Manager and the Trustee of the Underlying Fund will each ensure that the performance of our respective duties will not be impaired by any such involvement. If a conflict of interest does arise, The Manager and/or the Trustee of the Underlying Fund will try to ensure that it is resolved fairly and in the interest of the investors. Associates of the Trustee of the Underlying Fund may be engaged to provide financial, banking or brokerage services to the Underlying Fund or buy, hold and deal in any investments, enter into contracts or other arrangements with the Trustee of the Underlying Fund and make profits from these activities. Associates of the Manager may also be engaged to provide financial, banking or brokerage services to the Underlying Fund and make profits from these activities. Such services, where provided, and such activities, where entered into, by associates of the Manager or the associates of the Trustee of the Underlying Fund, will be on an arm s length basis. 1 Pickering Street #01-01 Great Eastern Centre Singapore Page 5 of 5