Asian Investment Grade Credit Class A

Transcription

1 Schroder Asian Investment Grade Credit Class A Capture yields from Asia s premium bonds *Distributions at a variable percentage per annum of the net asset value per unit of the Schroder Asian Investment Grade Credit (the Fund ) will be declared quarterly. The distributions are not guaranteed and might be changed at the Manager s discretion in accordance with the Trust Deed. Ordinarily, they will be reviewed annually. In the event of the Fund s income and realised gains being less than the intended distribution, distributions will be made from capital, subject to trustee approval. Investors should be aware that the distributions may exceed the income and realised gains of the Fund at times and lead to a reduction of the amount originally invested, depending on the date of initial investment.

2 Asia is one of the world s fastest growing regions, a trend that looks set to continue. The Schroder Asian Investment Grade Credit (the Fund ) now gives you the opportunity to access a premium selection of investment grade bonds in Asia. Besides potential payouts of 3%-3.5% per annum every quarter*, you can also enjoy the relative stability and security of Asian fixed income through one of the largest and most experienced Asian fixed income teams globally. *Distributions at a variable percentage per annum of the net asset value per unit of the Fund will be declared quarterly. The distributions are not guaranteed and might be changed at the Manager s discretion in accordance with the Trust Deed. Ordinarily, they will be reviewed annually. In the event of the Fund s income and realised gains being less than the intended distribution, distributions will be made from capital, subject to trustee approval. Investors should be aware that the distributions may exceed the income and realised gains of the Fund at times and lead to a reduction of the amount originally invested, depending on the date of initial investment.

3 Why Asian investment grade bonds now? Solid fundamentals Asia should continue to experience sustainable growth backed by strong demographics, high productivity, sound government finances, robust banking systems and functioning macro-economic policy tools. Asian corporate bonds remain attractively supported by a strong economic environment and low default rates. Relatively more attractive yields Asian bonds should be supported by global demand for safer bonds and diversification from Europe/US bonds. In fact, Asian investment grade bonds currently offer better value compared to its counterparts in the US. Strong demand for Asian bonds With Asia s stronger fundamentals and relatively more attractive yields, there is a strong case to allocate more to Asian bonds and a mutual fund vehicle enables investors to access the broad range of Asian bond markets. IG Corporate spread differential: Asia vs US Sep-5 Mar-6 Sep-6 Mar-7 Sep-7 Mar-8 Sep-8 Mar-9 Sep-9 Mar-1 Sep-1 Mar-11 Sep-11 Mar-12 Sep-12 Mar-13 Sep-13 Mar-14 Sep-14 Mar-15 Difference (RHS) US IG Corporate (LHS) Asia IG Corporate (LHS) IG Corporate spread differential: Asia vs Europe Sep-5 Mar-6 Sep-6 Mar-7 Sep-7 Mar-8 Sep-8 Mar-9 Sep-9 Mar-1 Sep-1 Mar-11 Sep-11 Mar-12 Sep-12 Mar-13 Sep-13 Mar-14 Sep-14 Mar-15 Difference (RHS) Euro Corp (LHS) Asia IG Corporate (LHS) Source: Bloomberg, as at 24 Apr 215. Asian High Grade Corporate based on the JPMorgan Asia Credit Index High Grade Corporate Sub-Index, US High Grade Corporate based on the Credit Suisse Liquid US Corporate Index (LUCI) High Grade sub-index. The information contained herein: (1) is proprietary to Bloomberg and/or its content providers; (2) may not be copied or distributed; (3) may not be accurate, complete or timely; and (4) has not been checked or verified by Schroders in any way. None of Bloomberg, its content providers or Schroders shall be responsible for any damages or losses arising from any use of the information in any way.

4 Why Schroder Asian Investment Grade Credit? 1. Attractive potential payouts* The Fund intends to make potential payouts of 3%-3.5% per annum, paid out every quarter*. This translates to attractive regular income for investors, year after year. Intended distribution calendar for 215 Month Record Date March 31 Mar 215 June 3 Jun 215 September 3 Sep 215 December 31 Dec Access Asia s potential through premium bonds The Fund invests in a basket of investment grade bonds, with an average credit rating of A and average yield-to-maturity of 2.9%. Portfolio characteristics Average YTM 2.9% Average Coupon 3.1% Average Credit Rating Average Duration (incl. Futures, if any) A 2.5 years Source: Schroders, FIA, as at 31 Mar 215. Based on Schroder Asian Investment Grade Credit. The information is for illustrative purposes only and should not be viewed as a recommendation to buy/sell. 3. Low volatility portfolio The Fund takes a medium-term approach to investments, and invests only in investment grade bonds. Non-SGD exposures are predominantly hedged back to the Singapore dollar, limiting volatility as a result of currency fluctuations. The Fund also uses interest rate hedges to mitigate interest rate volatility. *Distributions at a variable percentage per annum of the net asset value per unit of the Fund will be declared quarterly. The distributions are not guaranteed and might be changed at the Manager s discretion in accordance with the Trust Deed. Ordinarily, they will be reviewed annually. In the event of the Fund s income and realised gains being less than the intended distribution, distributions will be made from capital, subject to trustee approval. Investors should be aware that the distributions may exceed the income and realised gains of the Fund at times and lead to a reduction of the amount originally invested, depending on the date of initial investment.

5 Where the Fund is Invested Top 5 Holdings Portfolio Weight % Yield to Maturity % Rating CNPC General Capital Ltd 2.75% 14 May A+ Housing and Development Board 2.365% 19 Sep AAA Axis Bank/Dubai 5.125% 5 Sep BBB- Oversea-Chinese Banking 4% 15 OCT BBB+ Housing and Development Board 1.875% 13 Nov AAA Geographical Allocation Credit Exposure Singapore BBB Hong Kong 21.% 2.6% 25.3% 19.2% Korea 16.4% AA China 27.1% India 5.6% A 5.2% Not Rated 5.9% Taiwan 2.7% Malaysia 2.2% Cash 2.2% Thailand 1.1% USA.6% Source: Schroders, as at 31 Mar 215. This is not a recommendation to buy or sell the above securities. Fund Performance Cumulative performance of Schroder Asian Investment Grade Credit Class A 9 Feb 7-31 Mar 215 6% Return in % 4% 2% 1.5% 1.7% 4.5% 3.5% 3.5% 3.5% 3.5% 3.5% 3.1% 3.1% 3.3% 2.3% % 6 mths 1 year 3 years (p.a.) Since update of investment policy^ (p.a.) Fund Return (Net) BM Return (CPF OA rate + 1% p.a.) 5 years (p.a.) Since inception (p.a.) Source: Schroders, Morningstar, bid to bid, dividends reinvested in SGD, as at 31 Mar 215. The Fund s date of inception is 9 Feb 7. Past performance is not indicative of future returns. ^From 1 Jul 9, the Fund s investment policy was revised to a lower-volatility strategy focused on investing in good quality investment grade bonds, with the majority of positions having an underlying maturity of less than 7 years. Morningstar 215. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information.

6 Fund Details Fund Objective Inception Date 9 Feb 7 Fund Currency Launch Price Minimum Subscription Amount Mode of Subscription To provide a return of capital growth and income primarily through investment in a portfolio of investment grade (i.e. at or greater than BBB-) debt securities denominated in local and foreign currencies, issued by governments, government agencies, supra-national and corporate borrowers across Asia (ex Japan) debt markets. The Fund is also permitted to make tactical investments (up to 3% maximum including cash) in G7 Government bonds for diversification and capital preservation purposes. SGD S$1. S$1, Sales Charge Up to 5% Management Fee ISIN Code Bloomberg Ticker Benchmark Fund Size as at 31 Mar 215 Cash/CPFIS-OA/CPFIS-SA/SRS.8% p.a. SG SCHASPB:SP CPFIS-OA Interest rate + bps p.a. S$264.4 million Dealing Frequency Daily Important Notes This document is prepared by Schroders for information and general circulation only and the opinions expressed are subject to change without notice. It does not constitute an offer or solicitation to deal in units of the Fund and does not have any regard to specific investment objectives, financial situation or particular needs of any specific person who may receive it. Investors may wish to seek advice from a financial adviser before purchasing units of the Fund. In the event that the investor chooses not to seek advice from a financial adviser, he should consider carefully whether the Fund in question is suitable for him. Past performance of the Fund or the manager, and any economic and market trends or forecast, are not necessarily indicative of the future or likely performance of the Fund or the manager. The value of units in the Fund, and the income accruing to the units, if any, may fall as well as rise. Investment in units of the Fund involves risks, including the possible loss of the principal amount invested. Investors should read the prospectus, available from Schroders or its distributors, before deciding to subscribe for or purchase units in the Fund. The Fund may use or invest in derivatives. The CPF interest rate for the CPF-OA is based on the 12-month fixed deposit and month-end savings rates of the major local banks. Under the CPF Act, the CPF Board pays a minimum interest rate of 2.5% per annum when this interest formula yields a lower rate. The interest rate for the Special and Medisave Accounts ( SMA ) is pegged to the 12-month average yield of 1-year Singapore Government Securities (1YSGS) plus 1%, or 4% whichever is the higher, adjusted quarterly. The interest rate to be credited to the Retirement Account ( RA ) is the weighted average interest rate of the entire portfolio of Special Singapore Government Securities (SSGS) the RA savings are invested in which earn a fixed coupon equal to the 12-month average yield of the 1YSGS plus 1% at the point of issuance, or 4% whichever is the higher, adjusted yearly. As announced in September 214, the Singapore government will maintain the 4% p.a. minimum rate for interest earned on all SMA and RA monies until 31 December 215. Thereafter, interest rates on all CPF account monies will be subject to a minimum rate of 2.5% p.a.. In addition, the CPF Board will pay an extra interest rate of 1% per annum on the first S$6,. of a CPF member s combined balances, including up to S$2,. in the CPF-OA. The first S$2, in the CPF-OA and the first S$4, in the CPF-SA are not allowed to be invested under the CPFIS. Investors should note that the applicable interest rates for each of the CPF accounts may be varied by the CPF Board from time to time. Published: April 215 Schroders Reg. No H