Factsheet Singapore January 2018 All data as at 31 December 2017 unless otherwise stated Eastspring Investments Asian Local Bond Fund RATINGS Class A Morningstar Overall Rating QQQ FUND DETAILS Fund size (mil) 2,738.9 Fund base currency Fund dealing frequency USD Daily Net asset value (Class A) USD 13.904 ISIN (Class A) Inception date (Class A) LU0315179829 05-Sep-07 Benchmark (BM) Markit iboxx ALBI ex-china Onshore ex- China Offshore ex-taiwan Net of Tax Custom Index FUND MEASURES Number of Securities 346 3 year tracking error (Class A) 0.9 3 year sharpe ratio (Class A) 0.3 3 year volatility (Class A) 7.1 Source: Morningstar SECTOR WEIGHTS (%) Government 70.2 Real estate management & development 5.9 Diversified finance 5.2 Banks 4.4 Real Estate Investment Trusts (REITS) 1.6 Diversified telecom 1.5 Government agency 1.5 Hotels & restaurants 0.7 Diversified industries 0.6 Cash and others 8.4 COUNTRY WEIGHTS (%) South Korea 19.9 Indonesia 15.0 Malaysia 12.8 Singapore 12.6 India 11.8 Philippines 7.9 Thailand 7.7 China 4.5 Hong Kong 3.4 Cash and others 4.4 INVESTMENT OBJECTIVE This Sub-Fund invests in a diversified portfolio consisting primarily of fixed income / debt securities issued by Asian entities or their subsidiaries. This Sub-Fund s portfolio primarily consists of securities denominated in the various Asian currencies and aims to maximize total returns through investing in fixed income / debt securities that are rated as well as unrated. This Sub-Fund may invest up to 20% of its net assets in ABS, MBS, Contingent Convertible Bonds ( CoCos ), Distressed Securities and Defaulted Securities, with a limit of 10% for Distressed Securities and Defaulted Securities combined. In addition, this Sub-Fund may invest up to 10% of its net assets in synthetic fixed income instruments (including credit-linked notes). It may also hold up to 10% of its net assets in equity securities to the extent that such securities result from the conversion or exchange of a preferred stock or debt obligation. This Sub-Fund may make investments up to 10% of its net assets in Chinese onshore debt securities through the China interbank bond market direct access program (the CIBM Direct Access Program ) and/or China Hong Kong Bond Connect ( Bond Connect ). PERFORMANCE Calendar year returns (%) (Class A) 15 10 5 0-5 -10-15 2013 2014 2015 2016 2017 Offer-bid Bid-bid Benchmark Returns (%) Class A 1 m 3 m YTD 1 y 3 y 5 y 10 y Since inception Offer-bid -2.2-0.9 6.4 6.4 1.1-0.3 2.6 2.9 Bid-bid 0.8 2.1 9.7 9.7 2.2 0.3 2.9 3.2 Benchmark 1.1 3.0 11.3 11.3 2.9 1.0 3.8 4.1 : per annum. Source: Eastspring Investments (Singapore) Limited. Returns are based in USD and computed on bid-bid basis with net income reinvested, if any. Offer-bid is inclusive of sales charge which is subject to changes. Since inception returns for periods less than a year are not annualised. From inception to 29-Apr-16, the benchmark was the HSBC Asian Local Bond with Government and Corporate Bonds Custom Index. 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. TOP 10 HOLDINGS (%) 1. KOREA TREASURY BOND 2.125000% 06/10/2027 2.1 2. THAILAND GOVT 04.000% 06/17/2066 1.7 3. KOREA TREASURY BOND 2.000000% 09/10/2022 1.4 4. THAILAND GOVT 01.875% 06/17/2022 1.3 5. KOREA TREASURY BOND 1.875000% 03/10/2022 1.3 6. INDONESIA GOV'T 07.000% 05/15/2022 1.2 7. PHILIPPINE GOV'T 04.000% 01/26/2022 1.1 8. KOREA TREASURY BOND 1.375000% 09/10/2021 1.1 9. INDIA GOVT BOND 07.160% 05/20/2023 1.0 10. INDONESIA GOV'T 07.000% 05/15/2027 0.9 Page 1 / 5
RATINGS (%) AAA 5.6 AA 11.9 A 10.6 BBB 26.5 BB 2.8 B 1.9 Cash and others 40.7 Credit ratings by S&P/Moody's/Fitch. MATURITY (%) 0-1 year 2.8 1-3 years 10.3 3-5 years 20.3 5-10 years 30.3 10+ years 32.8 Cash and others 3.5 SHARE CLASS DETAILS Share class Net asset value Bloomberg ticker ISIN Inception date Subscription method Initial sales charges% (max) Annual management fee % (Current) A USD 13.904 IOFALBU LX LU0315179829 05-Sep-07 Cash 3.000 1.250 A ADM (hedged) AUD 8.773 ESALADM LX LU0795475739 18-Jun-12 Cash 3.000 1.250 A DM USD 10.113 IOFASLB LX LU0428352859 02-Jun-09 Cash 3.000 1.250 A S SGD 12.106 IOALASS LX LU0588547272 07-Feb-11 Cash 3.000 1.250 Share class Annual admin fee% (max) Minimum initial investment Minimum subsequent investment Distribution frequency Ex-date Dividend per share Annual dividend yield % A USD 0.250 USD1,000 USD100 N.A. N.A. N.A. N.A. A ADM (hedged) AUD 0.250 AUD2,000 AUD200 Monthly 02-Jan-18 0.0305201 4.00 A DM USD 0.250 USD1,000 USD100 Monthly 02-Jan-18 0.0329688 3.75 A S SGD 0.250 SGD1,000 SGD100 N.A. N.A. N.A. N.A. Distributions are not guaranteed. Distributions may be paid out of distributable income, capital or both. Important Notes: (i) Payment of distributions 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; and (ii) Any distributions involving payment out of the Fund s capital may result in an immediate reduction of 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." means that this share class does not distribute dividends. Returns (%) Calendar year returns (%) Since 3 y 5 y 10 y Share class 1 m 3 m YTD 1 y inception 2017 2016 2015 2014 2013 A Offer-bid USD -2.2-0.9 6.4 6.4 1.1-0.3 2.6 2.9 6.4-0.5-8.1 1.2-11.3 Bid-bid USD 0.8 2.1 9.7 9.7 2.2 0.3 2.9 3.2 9.7 2.6-5.2 4.3-8.6 Benchmark USD 1.1 3.0 11.3 11.3 2.9 1.0 3.8 4.1 11.3 2.2-4.4 4.1-7.3 A ADM (hedged) Offer-bid AUD -2.2-0.9 6.6 6.6 2.1 1.2 2.6 6.6 0.2-6.2 3.3-9.4 Bid-bid AUD 0.8 2.2 9.9 9.9 3.2 1.8 3.2 9.9 3.3-3.3 6.5-6.6 Benchmark AUD 1.1 3.1 11.7 11.7 3.6 2.4 3.7 11.7 2.7-3.1 6.8-5.3 A DM Offer-bid USD -2.2-0.9 6.4 6.4 1.1-0.3 3.6 6.4-0.5-8.0 1.2-11.3 Bid-bid USD 0.8 2.1 9.7 9.7 2.2 0.3 4.0 9.7 2.6-5.2 4.3-8.6 Benchmark USD 1.1 3.0 11.3 11.3 2.9 1.0 4.3 11.3 2.2-4.4 4.1-7.3 A S Offer-bid SGD -3.0-2.5-1.6-1.6 1.5 1.5 2.3-1.6 1.5-1.6 6.0-8.3 Bid-bid SGD 0.0 0.5 1.5 1.5 2.5 2.2 2.8 1.5 4.6 1.4 9.3-5.5 Benchmark SGD 0.3 1.4 3.0 3.0 3.1 2.8 3.4 3.0 4.1 2.4 9.3-4.2 Factsheet Singapore January 2018 All data as at 31 December 2017 unless otherwise stated Page 2 / 5
: per annum. Source: Eastspring Investments (Singapore) Limited. Returns are based in share class currency and computed on bid-bid basis with net income reinvested, if any. Offer-bid is inclusive of sales charge which is subject to changes. Since inception returns for periods less than a year are not annualised. The benchmark for the hedged share classes, if any, is also calculated on a hedged basis. From inception to 29-Apr-16, the benchmark was the HSBC Asian Local Bond with Government and Corporate Bonds Custom Index. 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. Factsheet Singapore January 2018 All data as at 31 December 2017 unless otherwise stated Page 3 / 5
COMMENTARY Commentary sources 1.Eastspring Investments (Singapore) Limited Market Review Asian local currency bond markets posted another month of positive gains in USD terms, with the representative customised Markit iboxx Asian Local Bond Index gaining 1.1%. The positive performance of the market was primarily driven by broad-based positive returns from Asian currencies. At the global macro level, the US Federal Reserve ( Fed ) proceeded on 13 December to raise the federal funds target range by 25 basis points to 1.25%-1.50%. The yield on the 10-year remained virtually unchanged at 2.41%, bringing the full-year flattening of the 2-10 UST spread just decimals shy of 2017 s record 52bps on December 15. Over the month, performance across Asian domestic government bond markets was largely positive. Whilst upward pressure on the front-end of local government curves from the Fed s widely-anticipated rate hike was evident, idiosyncratic domestic factors, appreciating local currencies and a flatter yield curve were the more dominant drivers. Short-dated yields in Singapore, South Korea, and Hong Kong, as well as yields in all tenors of the Indian local sovereign market, were up month on month. On a total return basis, however, only India and the Philippines ended the month in the red. In India, the MPC statement struck a vigilant tone around inflation and revised Consumer Price Index (CPI) forecasts marginally higher. Further, the announcement of an additional government borrowing, rising oil prices and a closely-contested state election win for the ruling party all served to keep sentiment around Indian bonds on the back foot. In the Philippines, although tax reform and lower inflation were positives, its durationheavy sovereign bond tilt suffered from yield increases of 15-30bps at the longer end. In contrast, in a crowded field of positive performers, Indonesia was a standout with a return of 1.65% (as represented by Markit iboxx ALBI Indonesia Bond index, in local currency). In addition to Bank Indonesia remaining on hold, an upgrade of the country s sovereign long-term foreign currency credit rating to BBB by Fitch supported the rally of the sovereign bonds across the curve. In the currency space, Asian currencies strengthened amid broad US dollar weakness, while continued inflows into emerging markets were also supportive. The rally in Asian currencies was led by the Korean won, Chinese yuan and Malaysian ringgit. Over the month, the currencies appreciated by 1.63%, 1.49% and 1.1% respectively on the back of improving fundamentals. South Korea, in particular, reaped the full benefit of a sustained resurgence in demand for high-end electronics with export growth clocking 9.6% yoy in November. On the other hand, the Indonesian rupiah once again lagged the regional markets, posting a negative return of 31bps against the US dollar as central bank reserve accumulation continued. Fund Review The Fund s underweight in the Korean Won and overweight in Indonesian rupiah were key performance detractors in December. This was partially offset by positive contribution from the duration overweight in Indonesia and underweight in the Thai baht. Year-to-date, the Fund s duration overweight in Indonesia was a key positive contributor given the market s strong outperformance. Additionally, the Fund s overweight in the Indian rupee and positive security selection in markets such as Hong Kong and Singapore, were also key positive contributors. However, the Fund s relative returns were partly negated by the Fund s underweight in the Korean won and overweight in the Indonesian rupiah. Outlook During the month, we reduced duration exposure, moving to neutral in Thailand and underweight in Singapore and Korea. We expect bond yields to rise moderately as the global expansion continues, but do not expect any disruptive sell-off given inflation remains subdued. We will maintain overall duration underweight, selectively overweight Indonesian and Indian bonds where value is attractive. Factsheet Singapore January 2018 All data as at 31 December 2017 unless otherwise stated Page 4 / 5
IMPORTANT INFORMATION Investment manager - Eastspring Investments (Singapore) Limited Rating should not be taken as a recommendation. 2018 Morningstar. All rights reserved. Morningstar Category: Asia Bond - Local Disclaimer This document is issued by Eastspring Investments (Singapore) Limited (UEN: 199407631H). Eastspring Investments (Singapore) Limited is the appointed Singapore Representative and agent for service of process in Singapore. This document has not been reviewed by the Monetary Authority of Singapore. The Fund is a sub-fund of Eastspring Investments, an open-ended investment company with variable capital (Société d Investissement à Capital Variable or SICAV) registered in the Grand Duchy of Luxembourg, which qualifies as an Undertaking for Collective in Transferable Securities ( UCITS ) under relevant EU legislation. The Management Company of the SICAV is Eastspring Investments (Luxembourg) S.A., Grand-Duchy of Luxembourg. All transactions into the Fund should be based on the Singapore Prospectus and Product Highlights Sheet ( PHS ). Such documents, together with the articles of incorporation of the SICAV and the most recent financial reports, may be obtained free of charge from Eastspring Investments (Luxembourg) S.A., or at relevant Eastspring Investments business units/website and their distribution partners. This document is solely for information and does not have any regard to the specific investment objectives, financial or tax situation and the particular needs of any specific person who may receive this document. This document is not intended as an offer, a solicitation of offer or a recommendation, to deal in shares of securities or any financial instruments. Please refer to the offering documents for details on fees and charges, dealing and redemption, product features, risk factors and seek professional advice before making any investment decision. An investment in the Fund is subject to investment risks, including the possible loss of the principal amount invested. The value of shares in the Fund and the income accruing to the shares, if any, may fall or rise. Where an investment is denominated in a currency other than the base currency of the Fund, exchange rates may have an adverse effect on the value price or income of that investment. Investors should not make any investment decision solely based on this document. Investors may wish to seek advice from a financial adviser before purchasing shares of the Fund. In the event that an investor may choose not to seek advice from a financial adviser, the latter should consider carefully whether the Fund in question is suitable for him. Past performance and the predictions, projections, or forecasts on the economy, securities markets or the economic trends of the markets are not necessarily indicative of the future or likely performance of Eastspring Investments or any of the funds managed by Eastspring Investments. There are limitations to the use of indices as proxies for the past performance in the respective asset classes/sector. The Fund may use derivative instruments for efficient portfolio management and hedging purposes. 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. The preceding paragraph is only applicable if the Fund intends to pay dividends / distributions. Eastspring Investments companies (excluding JV companies) are ultimately whollyowned / indirect subsidiaries / associate of Prudential plc of the United Kingdom. Eastspring Investments companies (including JV's) 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. In case of discrepancy between the English and Chinese versions, the English version shall prevail. For more information, please contact: Eastspring Investments (Singapore) Limited UEN: 199407631H 10 Marina Boulevard #32-01 Marina Bay Financial Centre Tower 2 Singapore 018983 T: (65) 6349 9711 F: (65) 6509 5382 eastspring.com.sg Factsheet Singapore January 2018 All data as at 31 December 2017 unless otherwise stated Page 5 / 5