MAX MULTI-ASSET ADVANTAGE FUND (FUND SUMMARY) Schroder Investment Management (Singapore) Ltd

Transcription

1 Fund Summary With effect from July 2017 MAX MULTI-ASSET ADVANTAGE FUND (FUND SUMMARY) 1. Fund Facts (as at 30 April 2017) Launch Date: 15 March 2004 Minimum Floor (per unit): S$ # Fund Size: S$ million Fund Manager: Schroder Investment Management (Singapore) Ltd Fund Management Charge: 1% p.a. (1.75% p.a. max) Trustee & Custody Fee (Charged at Underlying Fund level): Up to 0.05% p.a. (0.25% p.a. max) (currently not subject to a min. amount) Custodian: Not applicable Capital Guaranteed: No Name of Guarantor: Not applicable Valuation Frequency Weekly Currency of Fund Singapore Dollar Fund Structure: Feeder Fund Country of Domicile: Singapore Risk Category: Low to Medium # With effect from 24 November 2009, the Minimum Floor is 85% of the highest NAV per unit reached on any prior Dealing Day on and after 24 November The minimum floor is a target only and is not guaranteed. 2. Information on the Manager At Schroders, asset management is their business and their goals are completely aligned with those of their clients - the creation of long-term value. Schroders manages billion, as at 31 December 2016, on behalf of institutional and retail investors, financial institutions and high net worth clients from around the world, invested in a broad range of asset classes across equities, fixed income, multi-asset and alternatives. They employ over 4100 talented people worldwide operating from 41 offices in 27 different countries across Europe, the Americas, Asia and the Middle East, close to the markets in which they invest and close to their clients. Schroders has developed under stable ownership for over 200 years and long-term thinking governs their approach to investing, building client relationships and growing their business. Schroder Investment Management (Singapore) Ltd has been managing collective investment schemes and discretionary funds in Singapore since Source: Schroder Investment Management (Singapore) Ltd 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 The Max Multi-Asset Advantage Fund ( ILP Sub-Fund ) invests all or substantially into Schroder Multi- Asset Advantage ( Underlying Fund ) managed by Schroder Investment Management (Singapore) Ltd. Schroder Multi-Asset Advantage is an open-ended non-specialized unit trust established under the umbrella fund structure known as the Schroder Advantage Series. The country of domicile of the Underlying Fund is Singapore. A proportion of the assets of Schroder Multi-Asset Advantage which is allocated to the Growth Asset comprises of various sub-funds of Schroder International Selection Fund and other collective investment 1 Pickering Street #01-01 Great Eastern Centre Singapore Page 1 of 7

2 schemes and exchange traded funds. The allocation to Growth Asset may be between 0% and 100%, depending on market conditions. 4. Investment Objective, Focus and Approach Schroder Multi-Asset Advantage is an open-ended non-specialised fund established under the umbrella fund structure known as the Schroder Advantage Series. The investment objective of Schroder Multi-Asset Advantage is to provide growth through exposure to a portfolio of investment funds and indices comprises various asset classes; and a continuous minimum floor on each dealing day equal to 85% of the highest Net Asset Value per Unit reached on any prior dealing day starting from 24 November The minimum floor is a target only and is not guaranteed. Schroder Multi-Asset Advantage invests in two assets: a Growth Asset and a Safe Asset. The Growth Asset comprises various sub-funds of Schroder International Selection Fund and other collective investment schemes and exchange traded funds. The allocation to the Growth Asset may be 0% to 100%, depending on market conditions. The Safe Asset comprises mainly SGD denominated money market instruments e.g. deposits of short duration, and/or funds (including funds managed by Schroders). The Safe Asset may also comprise money market instruments or funds that are denominated in foreign currencies and hedged back to SGD. To achieve the investment objective, the fund manager employs active strategic asset allocation between the Growth Asset and Safe Asset. As part of the asset allocation strategy of the fund manager, Schroder Multi-Asset Advantage s exposure to the Growth Asset will tend to increase when the performance of the Growth Asset is positive and vice versa. Consequently, (a) in the event of a sustained decline in the value of the Growth Asset, the exposure to the Growth Asset may be substantially reduced such that Schroder Multi-Asset Advantage is comprised almost entirely of the Safe Asset. In such circumstances, the fund manager may in the interest of the investors elect to terminate Schroder Multi-Asset Advantage. Upon such termination, the amount policyholders will receive will be based on the Net Asset Value per Unit of Schroder Multi-Asset Advantage, which may or may not be above the Minimum Floor; and (b) in the event of a period of elevated volatility, such asset allocation strategy may result in an accumulation of small losses, resulting in the gradual erosion of the Net Asset Value of Schroder Multi-Asset Advantage. The fund manager may employ tactical asset allocation within the Growth Asset, with the objective of improving portfolio performance. The fund manager may also, from time to time and depending on prevailing market conditions, alter the composition of the investments comprised within the Growth Asset and/or the proportion of assets of the Underlying Fund to be invested in each investment provided that any investment in a fund authorised or registered in a foreign jurisdiction of more than 10% of the assets of Schroder Multi-Asset Advantage shall be subject to the approval of the Authority. The purpose of the active strategic asset allocation is to maximise exposure to the Growth Asset whilst still aiming to maintain a continuous floor on each dealing day equal to 85% of the highest Net Asset Value per Unit reached on any prior Dealing Day on and after 24 November 2009 (the Minimum Floor ). That is, the aim of the active strategic asset allocation is to provide policyholder with at least the Minimum Floor at the time of redemption of his units. Investors should, nonetheless, note that the aim is not guaranteed and the fund manager will attempt to achieve the aim on a best efforts basis only. Investors should note that the investment objective of providing the Minimum Floor cannot be guaranteed and is subject to risks as set out in the paragraphs below. As such, investors may not receive the Minimum Floor. The Manager will aim to meet the investment objective of the Underlying Fund on a best efforts basis only. The fund manager will base the asset allocation strategy approximately on a dynamic model, where the allocation of the assets of Schroder Multi-Asset Advantage to the Growth Asset at any time is determined such that if the Growth Asset were to fall by a specified percentage (referred to as the Gap Factor ) immediately following such determination, the Net Asset Value per Unit of the Underlying Fund would be at the prevailing Minimum Floor on the next Dealing Day. The Gap Factor is expected to be within the range of 20% to 33%. 1 Pickering Street #01-01 Great Eastern Centre Singapore Page 2 of 7

3 When the Net Asset Value per Unit of Schroder Multi-Asset Advantage achieves a new high point on any Dealing Day, the dynamic asset allocation strategy will determine that assets are allocated to the Safe Asset so that the Underlying Fund should continue to maintain a Minimum Floor that is at least 85% of the higher Net Asset Value per Unit just reached. The fund manager may at its discretion modify or change the above dynamic asset allocation strategy, including the Gap Factor, if it believes at any time that to do so would be in the best economic interest of the policyholders. 5. General Risks 5.1 Investments in the Underlying Fund are subject to different degrees of economic, political, foreign exchange, interest rate, liquidity, default, regulatory, industry and possible repatriation risks depending on the countries that the Underlying Fund invests into. 5.2 Investments in the Underlying Fund are designed to produce returns over the medium term and are not suitable for short-term speculation. Investors should not expect to obtain short-term gains from such investment. 5.3 Investors should be aware that the price of units in the Underlying Fund, and the income from them, may fall or rise and that past performance is not necessarily a guide to future performance. Investors may not get back their original investment. 6. Specific Risks 6.1 Market Risk The value of investments by the Underlying Fund may go up and down due to changing economic, political or market conditions, or due to an issuer s individual situation. 6.2 Derivatives Risk The Underlying Fund s use of futures, options, warrants, forwards, swaps or swap options involves increased risk. The Underlying Fund s ability to use such instruments successfully depends on the Manager s ability to accurately predict movements in stock prices, interest rates, currency exchange rates or other economic factors and the availability of liquid markets. If the Manager s predictions are wrong, or if the derivatives do not work as anticipated, the Underlying Fund could suffer greater losses than if the Underlying Fund had not used the derivatives. If the Underlying Fund invests in over-the-counter derivatives, there is increased risk that a counterparty may fail to honour its contract. In some instances, the use of the above-mentioned instruments may have the effect of leveraging the Underlying Fund. Leveraging adds increased risks because losses may be out of proportion to the amount invested on the instrument. Financial derivatives will only be used for hedging and efficient portfolio management purposes and will not be used to gear the overall portfolio in which the Underlying Fund invests. These instruments are highly volatile instruments and their market values may be subject to wide fluctuations. The exposure of the Underlying Fund to financial derivatives will not exceed 100% of the Deposited Property of the Underlying Fund at any time. Such exposure shall be calculated by converting the derivative positions into equivalent positions in the underlying assets embedded in those financial derivatives. The responsibility for risk management and compliance procedures and controls for the Underlying Fund is assumed by Schroders Structured Investments team. Risks are assessed prior to investment to ensure that the Manager has the appropriate processes and controls in place to mitigate operational, investment and credit risks. Risk and compliance monitoring of investment restrictions is performed on a regular basis. The fund managers have primary responsibility for ensuring that derivative transactions are consistent with the investment objective of a Underlying Fund. Derivative positions are monitored to ensure that derivative usage is consistent with the Underlying Fund s investment objectives and communications to Schroders investors. The fund managers liaise with the risk or compliance team where appropriate to agree how the derivative investments should be monitored and clarify any uncertainty in relation to 1 Pickering Street #01-01 Great Eastern Centre Singapore Page 3 of 7

4 interpretation of rules or monitoring requirements prior to investing or as soon as the uncertainty arises. The Manager ensures that the fund managers are made aware of changes to regulations, including those in relation to derivatives usage and the Manager ensures that processes are put in place to monitor investment restrictions. The Manager will ensure that the risk management and compliance procedures and controls adopted are adequate and that it has the requisite expertise and experience to manage and contain such investment risks. Investments in derivatives are monitored and controlled by the Manager with regular mark to market valuations, careful research prior to investment and compliance monitoring to ensure careful compliance with the investment restrictions set out in the trust deed (as amended or supplemented) relating to the Underlying Fund with regard to derivatives. 6.3 Interest Rate Risk Deposits in financial institutions and investments in bonds, debentures, loan stocks, convertibles and other debt securities may decline in value if interest rates change. In general, the prices of debt securities rise when interest rates fall, and fall when interest rates rise. 6.4 Credit Risk The Underlying Fund is subject to the risk that some issuers of debt securities and other investments made by the Underlying Fund may not make payments on such obligations. Or, an issuer may suffer adverse changes in its financial condition that could lower the credit quality of a security, leading to greater volatility in the price of the security and in the value of the Underlying Fund. A change in the quality rating of a security can also affect the security s liquidity and make it more difficult to sell. In particular, investors in the Underlying Fund should note that the Minimum Floor depends inter alia on the non-default of the issuers of the bonds within the funds which the Underlying Fund invests in and/or the financial institutions in which deposits are placed in, for the Safe Asset. 6.5 Foreign Securities The Underlying Fund may invest in securities throughout the world and subject to numerous risks resulting from market and currency fluctuations, future adverse political and economic developments, the possible imposition of restrictions on the repatriation of currency or other governmental laws or restrictions, reduced availability of public information concerning issuers and the lack of uniform accounting, auditing and financial reporting standards or of other regulatory practices and requirements comparable to those applicable to companies in the investor s domicile. In addition, securities of companies or governments of some countries may be illiquid and their prices volatile and, with respect to certain countries, the possibility exists of expropriation, nationalisation, exchange control restrictions, confiscatory taxation and limitations on the use or removal of funds or other assets, including withholding of dividends. Some of the securities held by the Underlying Fund may be subject to government taxes that could reduce the yield on such securities, and fluctuation in foreign currency exchange rates may affect the value of securities and the appreciation or depreciation of investments. Certain types of investments may result in currency conversion expenses and higher custodial expenses. 6.6 Currency Risk The base currency of Schroder Multi-Asset Advantage is Singapore dollars. The assets and liabilities of the Underlying Fund may be denominated in currencies different to the base currency and the Underlying Fund may be affected favourably or unfavourably by exchange control regulations or changes in the exchange rates between such base currency and other currencies. If the currency in which a security is denominated appreciates against the base currency, the value of the security would increase. Conversely, a decline in the exchange rate of the currency would adversely affect the value of the security. The Manager may manage the currency risk of the Underlying Fund by hedging through forward currency contracts, currency futures, currency swap agreements or currency options. 1 Pickering Street #01-01 Great Eastern Centre Singapore Page 4 of 7

5 6.7 Industry Risk The value of the units in the Underlying Fund will be susceptible to factors affecting the respective industries that it covers and may be subject to greater risks and market volatility than an investment in a broader range of securities covering various economic sectors. 6.8 Liquidity Risk Schroder Multi-Asset Advantage is designed to offer frequent dealing and liquidity. In certain circumstances, it might not be possible for the Manager to liquidate the Underlying Fund s assets in an orderly fashion and as such, the Manager might determine to suspend the realization of units until such time as the Manager determines that circumstances that lead to the suspension ceased to exist. 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. 6.9 Other Risk The exposure of the Underlying Fund to the Growth Asset is expected to change in accordance with the performance of the Underlying Fund and the asset allocation strategy of the Manager. To the extent that the Manager is able to follow the asset allocation strategy, the Net Asset Value per Unit of the Underlying Fund is not expected to fall below the Minimum Floor provided that the equity markets or the value of the Growth Asset do not suffer a sudden, extreme downward move greater than the Gap Factor, for example. If a fall of this magnitude were to occur however, the Net Asset Value per Unit would be expected to fall below the Minimum Floor and the investment objective of providing the Minimum Floor would not be met. Further, if the Manager is not able to follow the asset allocation strategy in an accurate and timely fashion, the investment objective of providing the Minimum Floor may not be met. In other words, the Minimum Floor is not guaranteed. The Manager will aim to meet the Underlying Fund s investment objective on a best efforts basis only. As part of the asset allocation strategy of the Manager, the Underlying Fund s exposure to the Growth Asset will tend to increase when the value of the Growth Asset rises and vice versa. Consequently, (a) in the event of a sustained decline of the value of the Growth Asset, the exposure to the Growth Asset may be substantially reduced such that the Underlying Fund is comprised almost entirely of the Safe Asset. In such circumstances, the Manager may in the interest of the investors elect to terminate the Underlying Fund. Upon such termination, the amount policyholders will receive will be based on the Net Asset Value per Unit of the Underlying Fund, which may or may not be above the Minimum Floor; and (b) in the event where the performance of the Growth Asset exhibits a volatile and rangebound trading pattern, such asset allocation strategy may result in an accumulation of small losses, resulting in the gradual erosion of the Net Asset Value of the Underlying Fund. The Manager shall implement strategies to reduce, as far as is practicable, this risk of monetisation (where allocation to the Growth Asset falls to close to 0%). 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 (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 risks 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. 1 Pickering Street #01-01 Great Eastern Centre Singapore Page 5 of 7

6 7. Past Performance (as at 30 April 2017) Annualized Returns 1 year 3 years 5 years 10 years Since Inception^ Max Multi-Asset Advantage Fund* 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. There is no benchmark against which the performance of the Underlying Fund would be measured. This is because conventional benchmarks are unconstrained, whereas the Underlying Fund is constrained by the Minimum Floor. Hence no conventional benchmark would be appropriate to measure the performance of the Underlying Fund. ^ Inception Date at 15 March 2004 * The underlying fund of Max Multi-Asset Advantage Fund was formerly known as The Accumulator. Its assets were fully allocated to Safe Asset between 10 Oct 2008 and 23 Nov 2009 due to significant decline in equity markets With effect from 24 November 2009, its name was changed to The Accumulator II following amendments made to its investment objective, focus and approach to that as described above. It is known as Schroder Multi-Asset Advantage effective from 2 February 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 1.48%*. 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 Multi-Asset Advantage Fund* % Underlying Fund % * Ratio is derived from the Underlying Fund. 1 Pickering Street #01-01 Great Eastern Centre Singapore Page 6 of 7

7 10. Soft Dollar Commissions or Arrangement In the management of the Underlying Fund, the Manager may accept soft dollar commissions from, or enter into soft dollar arrangements with stockbrokers who execute trades on behalf of the Underlying Fund and the soft dollars received are restricted to the following kinds of services: i) research and price information; ii) performance measurement; iii) portfolio valuations; and iv) analysis administration services. The Manager may not receive or enter into soft dollar commissions or arrangements unless (a) such soft dollar commissions or arrangements shall reasonably assist the Manager in their management of the Underlying Fund, (b) the Manager shall ensure at all times that the transactions are executed at the best available terms taking into account the relevant market at the time for transaction of this kind and size concerned, and (c) that no unnecessary trades are entered into in order to qualify for such soft dollar commissions or arrangements. The Manager shall not receive goods and services such as travel, accommodation and entertainment. 11. Conflicts of Interest The Manager may from time to time have to deal with competing or conflicting interests of the Underlying Fund with other funds managed by the Manager. For example, the Manager may make a purchase or sale decision on behalf of some or all of the other funds managed by it without making the same decision on behalf of the Underlying Fund, as a decision whether or not to make the same investment or sale for the Underlying Fund depends on factors such as the case availability and portfolio balance of the Underlying Fund. However, the Manager will use reasonable endeavours at all times to act fairly and in the interests of the Underlying Fund. In particular, after taking into account the availability of cash and relevant investment guidelines of the other funds managed by the Manager and the Underlying Fund, the Manager will endeavour to ensure that securities bought and sold will be allocated proportionately as far as possible among the Underlying Fund and the other funds managed by the Manager. The factors which the Manager will take into account when determining if there are any conflicts of interest as described in the paragraph above include the assets of the Underlying Fund. To the extent that another fund managed by the Manager intends to purchase substantially similar assets, the Manager will ensure that the assets are allocated fairly and proportionately and that the interests of all investors are treated equally between the Underlying Fund and the other funds. 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. Such services to the Underlying Fund, where provided, and such activities with the Trustee, where entered into, will be on an arm s length basis. 1 Pickering Street #01-01 Great Eastern Centre Singapore Page 7 of 7