PRODUCT KEY FACTS Eastspring Investments US Investment Grade Bond Fund

Transcription

1 PRODUCT KEY FACTS Eastspring Investments US Investment Grade Bond Fund Issuer: Eastspring Investments (Luxembourg) S.A. April 2017 This statement provides you with key information about Eastspring Investments US Investment Grade Bond Fund (the Sub-Fund ). This statement is a part of the Hong Kong Summary Prospectus. You should not invest in the Sub-Fund based on this statement alone. Quick facts Management Company: Investment Manager: Investment Sub-Manager: Depositary: Eastspring Investments (Luxembourg) S.A. Eastspring Investments (Singapore) Limited (internal delegation, in Singapore) PPM America, Inc. (internal delegation, in the United States of America) The Bank of New York Mellon SA/NV Luxembourg branch Ongoing Charges over a year # : Class A: 1.60% Class A DM : 1.60% Class A ADM (hedged): 1.59% Class A DQ : 1.60% # The ongoing charges figure is based on expenses for the year ended 31 December This figure may vary from year to year. Dealing Frequency: Base Currency: Daily (business day in Luxembourg and Hong Kong, and with respect to a specific sub-fund, in the country or countries where the assets of the sub-fund are primarily invested) USD Dividend Policy: Class A No dividends will be declared or paid Class A DM Class A ADM (hedged), Class A DQ Dividends may be declared on a monthly basis Dividends may be declared on a quarterly basis Dividends may be sourced from gross income, net realised capital gains and partially from capital from time to time. Any distributions involving payment of dividends out of capital may result in an immediate reduction of the net asset value. 107

2 Financial Year End of this Sub-Fund: 31 December Minimum Investment: Share Class Initial Subsequent What is this product? Class A, Class A DM, and USD500 USD50 Class A DQ Class A ADM (hedged) AUD1,000 AUD100 Eastspring Investments US Investment Grade Bond Fund is a sub-fund of Eastspring Investments which is an open-ended investment company registered in Luxembourg. Its home regulator is Commission de Surveillance du Secteur Financier ( CSSF ), Luxembourg. Objective and Investment Strategy Objective and Strategy The Sub-Fund invests in a diversified portfolio consisting primarily of quality bonds and other fixed income/debt securities denominated in US dollars, issued in the US market (including Yankee and Global bonds) rated BBB- (BBB Minus) and above. The Sub-Fund may continue to hold/ invest in securities that are downgraded below the minimum indicated rating after purchase but may not make additional purchases of such securities. Yankee bonds mean debt of foreign issuers issued in the US domestic market. Global bonds mean debt issued simultaneously in the eurobond and US domestic bond markets. The Sub-Fund may use financial derivative instruments extensively for hedging and efficient portfolio management purposes. However, financial derivative instruments will not be extensively used for investment purposes (i.e. entering into financial derivatives instruments to achieve the investment objectives). The Management Company will, for the time being, not enter into repurchase and reverse repurchase transactions nor engage in securities lending transactions. Should the Management Company decide to use such techniques and instruments in the future, this can be done so at the Management Company s discretion and the Summary Prospectus will be updated accordingly thereafter, subject to regulatory approval. At least one month s prior notice will also be given to Hong Kong investors accordingly. What are the key risks? Investment involves risks. Please refer to the Hong Kong Summary Prospectus for details including the risk factors. 1. General Investment Risk The Sub-Fund s investment portfolio may fall in value due to any of the key risk factors below and therefore your investment in the Sub-Fund may suffer losses. You may not get back your original investment. Past performance is not a guide to future performance. The level of investment return is not fixed and will vary. 108

3 2. Risks of Investing in Bonds Interest rate risk: Bonds are subject to interest rate fluctuations. In general, the prices of debt securities rise when interest rates fall, whilst their prices fall when interest rates rise. Credit risk: Investments in bonds are subject to credit default risk of the issuers of the bonds. Adverse economic conditions, unanticipated rise in interest rate, unavailability of additional funding, may impair the issuer s ability to meet its debt obligations, which may lead to potential default by the issuer. Counterparty risk: The Sub-Fund will be exposed to the credit risk on counterparties with which it trades and any default by such a counterparty (for example, due to insolvency) could result in substantial losses to the Sub-Fund. Risk of credit rating downgrades: The credit rating of a debt instrument or its issuer may subsequently be downgraded. In the event of such downgrading, the value of the Sub-Fund may be adversely affected. The investment manager may or may not be able to dispose of the debt instruments that are being downgraded. Valuation risk: Valuation of the Sub-Fund s investments may involve uncertainties and judgmental determinations. If such valuation turns out to be incorrect, this may affect the net asset value calculation of the Sub-Fund. Credit rating risk: Credit ratings assigned by rating agencies are subject to limitations and do not guarantee the creditworthiness of the security and/or issuer at all times. 3. Country Specific Risk As the Sub-Fund invests in a single country, the value of the Sub-Fund may be more susceptible to the market, currency, economic, political, policy, liquidity, tax, legal or regulatory event affecting the economy of that country. The concentration of the Sub-Fund s investments in a single country may result in greater volatility than portfolios which comprise broad-based global investments. 4. Liquidity Risk The Sub-Fund may have investments which have high liquidity risks (for example, low trading volumes), and may incur substantial losses if it is unable to sell these investments at opportune times or prices. 109

4 5. Asset Backed Securities ( ABS ) and Mortgage Backed Securities ( MBS ) Risk ABS, including MBS, are generally limited recourse obligations of the issuers, and holders of ABS (including the Sub-Fund) must rely solely on the cash flows generated from the underlying assets of the issuer and proceeds thereof ( ABS Assets ). In addition, interest payments on ABS (other than the most senior tranche(s) of an issue) are generally subject to deferral. ABS Assets may be highly illiquid and prone to substantial price volatility, and are subject to greater liquidity, market value, credit interest rate, reinvestment and certain other risks compared to other debt securities. The aggregate return on the ABS Assets will depend in part upon the ability of the relevant investment manager to actively manage the related portfolio of the ABS Assets. They are often exposed to extension and prepayment risks and risks that the payment obligations relating to the underlying assets are not met, which may adversely impact the returns of the securities. 6. Hedged Share Class Risk If the Shares of a Share Class can be subscribed and redeemed in a currency other than the base currency of the Sub-Fund, a fluctuation in exchange rates could affect the value of an investment performance and therefore substantially impact the performance of such Share Class. The hedging strategy is to reduce but not eliminate currency risk. If these hedging transactions are imperfect or are only placed over a portion of the foreign exchange exposure, such Share Class will bear the resulting benefit or loss. It is important to note there could be multiple different currency Share Classes within the Sub-Fund. Thus currency hedging transactions for one Share Class may in extreme cases adversely affect the net asset value of the other Share Classes within the Sub-Fund. 7. Derivatives Risk 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, operational risk, leverage risk, valuation risk and OTC transaction risk. Although the Sub-Fund uses derivatives only for the purposes of efficient portfolio management and/or hedging, in adverse market situations, the Sub-Fund s use of derivatives may become ineffective in such endeavours and the Sub-Fund may suffer significant losses. 8. Risks associated with Payment of Dividends out of/effectively out of Capital Investors should note that where distributions are declared and paid out of the Sub-Fund, the board of directors of Eastspring Investments may at its discretion pay dividends out of the capital of the Sub-Fund or pay dividends out of gross income while charging/paying all or part of the Sub-Fund s fees and expenses to/out of the capital of the Sub-Fund, resulting in an increase in distributable income for the payment of dividends by the Sub-Fund and therefore, the Sub-Fund may effectively pay dividends out of capital. Payment of dividends out of capital amounts to a return or withdrawal of part of an investor s original investment or from any capital gains attributable to that original investment. Any distributions involving payment of dividends out of the Sub-Fund s capital or payment of dividends effectively out of the Sub-Fund s capital (as the case may be) may result in an immediate reduction of the net asset value per share. 110

5 How has the fund performed? 40% 30% 29.1% 20% 10% 3.2% 9.0% 7.6% 11.1% 6.5% 5.9% 0% -10% -20% % -3.0% -13.6% Note: Past performance information is not indicative of future performance. Investors may not get back the full amount invested. The computation basis of the performance is based on the calendar year end, NAV-to-NAV, with dividend reinvested. These figures show by how much Class A increased or decreased in value during the calendar year being shown. Performance data has been calculated in USD, including ongoing charges and excluding subscription fee and redemption fee you might have to pay. Fund launch date: 2004 Class A launch date: 2005 The Management Company views Class A, being the retail share class offered and available for sale in Hong Kong, as the most appropriate representative share class. Is there any guarantee? This Sub-Fund does not have any guarantees. You may not get back the full amount of money you invest. What are the fees and charges? Charges which may be payable by you You may have to pay the following fees when dealing in the shares of the Sub-Fund. Fee Subscription fee Switching fee Redemption fee What you pay Maximum 3% of the amount you buy Nil (You should note that an individual distributor may charge a switching fee, which is subject to such distributor s discretion.) Nil 111

6 Ongoing fees payable by the Sub-Fund The following expenses will be paid out of the Sub-Fund. They affect you because they reduce the return you get on your investments. Annual rate (as a % of the Sub-Fund s value) Management fee Maximum 1.25% Depositary fee Maximum 0.12% (related to safekeeping of assets) Performance fee N/A Administration fee Maximum 0.25% (payable to the Management Company) Other fees You may have to pay other fees when dealing in the shares of the Sub-Fund. Additional Information You generally buy and redeem shares at the Sub-Fund s next-determined net asset value (NAV) after an authorised distributor receives your request in good order prior to 3:00pm (Hong Kong time) being the dealing cut-off time on each valuation day. However, before placing your subscription or redemption orders, please check with your distributor for the distributor s internal dealing cut-off time (which may be earlier than the Sub-Fund s dealing cut-off time). The net asset value of this Sub-Fund is calculated and the price of shares published each business day on The Dividend Composition Information i.e. the relative amounts paid out of (i) net distributable income and (ii) capital, is available from the Hong Kong Representative upon request, and will be published on Please note that the Dividend Composition Information will only show information on a rolling 12-month period. Investors may obtain the past performance information of other share classes offered to Hong Kong investors from The aforementioned website has not been reviewed by the SFC. Important If you are in doubt, you should seek professional advice. The SFC takes no responsibility for the contents of this statement and makes no representation as to its accuracy or completeness. 112

7 Factsheet Hong Kong June 2017 All data as at 31 May 2017 unless otherwise stated Eastspring Investments US Investment Grade Bond Fund (the "Fund") The Fund invests in bonds and is subject to interest rate fluctuation and exposed to credit default, valuation and credit rating risks as well as credit risk of the counterparties with which it trades. Investment grade bonds are subject to the risks of credit rating downgrades. The Fund invests in a single country, and may be subject to greater volatility compared to more diversified funds. The Fund may incur substantial losses if it is unable to sell those investments with high liquidity risks at opportune times or prices. The Fund may invest in mortgage backed and asset backed securities, both of which have limited recourse to the issuers. These securities are also generally illiquid and subject to market, credit and interest rate risks. The Fund may offer currency hedged share classes which involve currency hedging transactions that may, in extreme cases, adversely affect the Fund's net asset value. The Fund may use financial derivatives instruments only for efficient portfolio management and/or hedging purposes, which may expose the Fund to market risk, management risk, credit risk, liquidity risk, operational risk, leverage risk, valuation risk and OTC transaction risk. In adverse markt situations, the use of such instruments may be ineffective and the Fund may incur significant losses. The Fund's Board of Directors may, at its discretion, pay dividends out of capital or gross income while charging all or part of the fees and expenses to the Fund s capital, resulting in higher distributable income. Thus, the Fund may effectively pay dividends out of capital. Payment of dividends out of capital (effectively or not) amounts to a return or withdrawal of part of an investor s original investment or from any capital gains attributable to that original investment, which may result in an immediate reduction of the net asset value per share. Investment involves risk. Investors should not rely solely on this document in making investment decision. Past performance information presented is not indicative of future performance. RATINGS Class A Morningstar Overall Rating QQQ FUND DETAILS Fund size (mil) Fund base currency Fund dealing frequency USD Daily Net asset value (Class A) USD ISIN (Class A) Inception date (Class A) LU Mar-05 Benchmark (BM) The BofA Merrill Lynch U.S. Corporates, BBB3-A3 Rated Index FUND MEASURES 3 year tracking error (Class A) year sharpe ratio (Class A) year volatility (Class A) 4.1 Source: Morningstar SECTOR WEIGHTS (%) Industrials 48.4 Financials 33.3 Utilities 7.0 Asset backed 5.0 Government 3.0 Quasi & foreign government 0.2 Cash and others 3.1 INVESTMENT OBJECTIVE The Fund invests in a diversified portfolio consisting primarily of quality bonds and other fixed income/ debt securities denominated in US dollars, issued in the US market (including Yankee and Global bonds) rated BBB- (BBB Minus) and above. The Fund may continue to hold/invest in securities that are downgraded below the minimum indicated rating after purchase but may not make additional purchases of such securities. Yankee bonds mean debt of foreign issuers issued in the US domestic market. Global bonds mean debt issued simultaneously in the eurobond and US domestic bond markets. PERFORMANCE Cumulative returns (price indexed) Fund (Class A) Cumulative returns (%) Benchmark Class A 1 m 3 m YTD 1 y 3 y 5 y 10 y Since inception Fund Benchmark Calendar year returns (%) Year Class A Fund Benchmark Source: Eastspring Investments (Singapore) Limited. Returns are based in USD and computed on NAV-NAV basis with net income reinvested, if any. Calendar year returns are based on the share class performance for the year, and if the share class was incepted during a particular year, the returns shown relate to the performance of the share class since its inception to the end of that calendar year. Past performance information presented is not indicative of future performance. TOP 10 HOLDINGS (%) 1. BNYMELLON LIQUIDITY B FUND US TREASURY N/B 2.25% 31/07/ JPMORGAN CHASE & CO 3.22% 01/03/ GOLDMAN SACHS GROUP INC 5.75% 24/01/ GOLDMAN SACHS GROUP INC 3% 26/04/ MORGAN STANLEY 3.625% 20/01/ CITIGROUP INC 4.125% 25/07/ WELLS FARGO & COMPANY 2.112% 11/02/ COMMONWEALTH BANK AUST 2% 06/09/ ANHEUSER-BUSCH INBEV FIN 4.9% 01/02/ Page 1 / 3

8 RATINGS (%) AAA 4.4 AA 8.2 A 29.7 BBB 54.3 BB 0.4 Cash and others 3.0 MATURITY (%) 0-1 year years years years years 35.2 Cash and others 3.1 Credit ratings by S&P/Moody's/Fitch. SHARE CLASS DETAILS Share class Currency Bloomberg ticker ISIN Inception date Initial sales charges % (max) Annual management fee% (max) Annual admin fee% (max) Minimum initial investment Minimum subsequent investment Distribution frequency Ex-date Dividend per share Annual dividend yield % A USD PRUUIGA LX LU Mar USD500 USD50 N.A. N.A. N.A. N.A. AADM (hedged) AUD ESUIADM LX LU Jun AUD1,000 AUD100 Monthly 01-Jun ADM USD IUSIGBA LX LU Jun USD500 USD50 Monthly 01-Jun ADQ USD IOUIGAD LX LU Feb USD500 USD50 Quarterly 03-Apr Distributions are not guaranteed and may fluctuate. Past distributions are not necessarily indicative of future trends, which may be lower. Distribution payouts and its frequency are determined by the Board of Directors, and can be made out of (a) income; or (b) net capital gains; or (c) capital of the Fund or a combination of any of (a) and/or (b) and/or (c). The payment of distributions should not be confused with the Fund s performance, rate of return or yield. Any payment of distributions by the Fund may result in an immediate decrease in the net asset value per share. Funds with Monthly and Quarterly Distribution Frequency: Annual Dividend Yield = (Dividend amount / Reference NAV) x (No. of calendar days in a year / No. of calendar days in distribution period) x 100%. Funds with Yearly Distribution Frequency: Annual Dividend Yield = (Dividend amount / Total Net Assets) x (No. of calendar days in a year / No. of calendar days in distribution period) x 100%. "N.A.": This share class does not distribute dividends. For details of other fees and charges, please refer to the offering document. Cumulative returns (%) Calendar year returns (%) Share class Currency 1 m 3 m YTD 1 y 3 y 5 y 10 y A Since inception Fund USD Benchmark USD AADM (hedged) Fund AUD Benchmark AUD ADM Fund USD Benchmark USD ADQ Fund USD Benchmark USD Source: Eastspring Investments (Singapore) Limited. Returns are based in share class currency and computed on NAV-NAV basis with net income reinvested, if any. The benchmark for the hedged share classes, if any, is also calculated on a hedged basis. Calendar year returns are based on the share class performance for the year, and if the share class was incepted during a particular year, the returns shown relate to the performance of the share class since its inception to the end of that calendar year. Past performance information presented is not indicative of future performance. Factsheet Hong Kong June 2017 All data as at 31 May 2017 unless otherwise stated Page 2 / 3

9 IMPORTANT INFORMATION Investment manager - Eastspring Investments (Singapore) Limited Investment sub-manager - PPM America, Inc. Rating should not be taken as a recommendation Morningstar. All rights reserved. Morningstar Category: USD Corporate Bond DISCLAIMER All data are from Eastspring Investments (Singapore) Limited. The Fund is a sub-fund of the Eastspring Investments (the SICAV ), an open-ended investment company with variable capital (société d'investissement à capital variable) registered in the Grand Duchy of Luxembourg on the official list of collective investment undertakings pursuant to part I of the Luxembourg law of 17 December 2010 relating to undertakings for collective investment (the 2010 Law ) and the Directive 2009/65/ EC of the European Parliament and of the Council of 13 July 2009 (the UCITS Directive ). The SICAV has appointed Eastspring Investments (Hong Kong) Limited ( Eastspring Investments Hong Kong ) as its Hong Kong Representative. This information is not an offer or solicitation of an offer for the purchase of investment units in the Fund. An offering document in relation to the Fund is available and may be obtained through Eastspring Investments Hong Kong or any of its appointed distributors. All applications for units in the Fund must be made on the application forms accompanying the offering document. Potential investors should read the offering document (including the risk factors stated therein in details and the risk factors in particular those associated with investments in emerging markets, if applicable) before deciding whether to subscribe for or purchase units in the Fund. An investment in units of the Fund is subject to investment risks, including the possible loss of the principal amount invested. Past performance is not necessarily a guide to the future or likely performance of the Fund. The value of the units in the Fund and any income accruing to the units, if any, may fall or rise. US/HK dollar-based investors are exposed to currency fluctuations where the Fund is denominated in currencies other than US/HK dollar. The information contained herein does not have any regard to the specific investment objective(s), financial situation or the particular needs of any person. Potential investors may wish to seek advice from a financial adviser before purchasing units in the Fund. In the event that potential investors choose not to seek advice from a financial adviser, they should consider whether the Fund is a suitable investment for them. Eastspring Investments Hong Kong is an ultimately wholly owned subsidiary of Prudential plc of the United Kingdom. Eastspring Investments Hong Kong and Prudential plc are not affiliated in any manner with Prudential Financial, Inc., a company whose principal place of business is in the United States of America. This factsheet and information on our website (eastspring.com.hk) have not been reviewed by the SFC. Issued by Eastspring Investments (Hong Kong) Limited. For more information, please contact: Eastspring Investments (Hong Kong) Limited 13/F, One International Finance Centre, 1 Harbour View Street, Central, Hong Kong T: (852) F: (852) eastspring.com.hk Factsheet Hong Kong June 2017 All data as at 31 May 2017 unless otherwise stated Page 3 / 3