Factsheet Singapore October 2017 All data as at 30 September 2017 unless otherwise stated Eastspring Investments Asian Equity Fund FUND DETAILS Fund size (mil) 409.7 Fund base currency Fund dealing frequency USD Daily Net asset value (Class A) USD 18.533 ISIN (Class A) Inception date (Class A) Benchmark (BM) MSCI AC Asia ex Japan Index FUND MEASURES LU0163747925 26-Aug-05 Number of Securities 69 3 year tracking error (Class A) 3.1 3 year sharpe ratio (Class A) 0.2 3 year volatility (Class A) 16.1 Source: Morningstar SECTOR WEIGHTS (%) Information technology 31.6 Financials 29.3 Industrials 8.0 Real estate 7.3 Consumer discretionary 6.3 Materials 4.9 Utilities 3.5 Energy 3.3 Telecommunication services 2.5 Cash and others 3.3 COUNTRY WEIGHTS (%) China 34.4 Korea 17.4 Hong Kong 14.4 Taiwan 11.9 India 7.2 Singapore 5.7 Thailand 2.7 Indonesia 2.1 Malaysia 1.9 Cash and others 2.3 INVESTMENT OBJECTIVE This Sub-Fund aims to maximise long-term total return by investing primarily in equity and equity-related securities of companies, which are incorporated, or have their area of primary activity in the Asia Pacific ex-japan Region. The Sub-Fund may also invest in depository receipts including ADRs and GDRs, debt securities convertible into common shares, preference shares and warrants. PERFORMANCE Calendar year returns (%) (Class A) 25 20 15 10 5 0-5 -10-15 -20-25 2012 2013 2014 2015 2016 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 -6.2 0.2 20.9 13.6 1.3 1.6-0.7 4.7 Bid-bid -1.3 5.5 27.3 19.6 3.0 2.6-0.1 5.2 Benchmark -0.1 6.6 30.9 22.7 7.9 7.4 3.2 8.8 : 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 30-Sep-08, the benchmark was the MSCI AC Far East ex Japan 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. TAIWAN SEMICONDUCTOR MANUFACTURING 6.2 2. SAMSUNG ELECTRONICS 6.0 3. TENCENT HOLDINGS 5.1 4. CHINA CONSTRUCTION BANK-H 3.8 5. ALIBABA GROUP HOLDING-SP ADR 3.4 6. BAIDU INC - SPON ADR 3.0 7. HYUNDAI MOTOR 2.9 8. BANK OF CHINA LTD-H 2.7 9. CK HUTCHISON HOLDINGS 2.6 10. CHINA MERCHANTS BANK-H 2.1 Page 1 / 5
SHARE CLASS DETAILS Share class Currency Net asset value Bloomberg ticker ISIN Inception date Subscription method Initial sales charges% (max) Annual management fee % (Current) A USD 18.533 PRUASIE LX LU0163747925 26-Aug-05 Cash 5.000 1.500 A S SGD 15.054 IOFAEFF LX LU0228367735 26-Aug-05 Cash 5.000 1.500 Share class Currency Annual admin fee% (max) Minimum initial investment Minimum subsequent investment Distribution frequency Ex-date Dividend per share Annual dividend yield % A USD 0.500 USD1,000 USD100 N.A. N.A. N.A. N.A. A S SGD 0.500 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 Currency 1 m 3 m YTD 1 y inception 2016 2015 2014 2013 2012 A Offer-bid USD -6.2 0.2 20.9 13.6 1.3 1.6-0.7 4.7-1.3-21.4 0.3-10.6 13.0 Bid-bid USD -1.3 5.5 27.3 19.6 3.0 2.6-0.1 5.2 3.9-17.3 5.6-5.8 19.9 Benchmark USD -0.1 6.6 30.9 22.7 7.9 7.4 3.2 8.8 5.4-9.2 4.8 3.1 22.4 A S Offer-bid SGD -6.3-1.1 13.7 13.2 3.4 3.7-1.6 2.9 0.6-15.9 5.2-7.5 6.5 Bid-bid SGD -1.4 4.1 19.7 19.2 5.2 4.7-1.0 3.4 5.9-11.5 10.7-2.6 13.0 Benchmark SGD -0.1 5.2 23.1 22.2 10.2 9.6 2.3 7.0 7.4-2.8 10.0 6.5 15.3 : 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 30-Sep-08, the benchmark was the MSCI AC Far East ex Japan 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 October 2017 All data as at 30 September 2017 unless otherwise stated Page 2 / 5
COMMENTARY Commentary sources 1.Eastspring Investments (Singapore) Limited Performance Review Global stockmarkets were mixed in September with Developed Markets (+2.1%) outperforming Emerging Markets (-0.5%) for the first time in 2017. A slightly stronger US dollar was behind the switch as prospects of tax reform progressed in the US and Federal Reserve policymakers hinted at further rate rises. Confirmation that the Federal Reserve was beginning to reduce its balance sheet also supported the dollar while on the whole, global markets shrugged off geo-political concerns in Korea. In Asia, the MSCI Asia ex Japan index was down 0.3% in September to record its first monthly loss for the year however the performance of individual markets was mixed with China, Korea and Thailand indices all adding to gains made this year but Taiwan, Hong Kong and Singapore among those losing ground. MSCI China added 1.0% over the month however selling pressure in the final week took the shine off an otherwise solid month. The correction was caused largely by a ratings downgrade by S&P the first since 1999 that said it was worried about surging debt, and falling property stocks caused by eight provincial cities imposing a variety of cooling measures on their housing sectors. Korea was the strongest country in the region with the local MSCI index up 2.1% largely driven by a very strong tech sector that was up 8.3% to reverse some of August s subdued returns while Healthcare was also strong. Ongoing political tensions with the North have not sustained any negative effects on domestic equity markets. Among the declining markets for the month, MSCI Taiwan was down 3.4% as its iphone supply chain stocks bore the brunt of delays to the iphone X and lukewarm demand for the iphone 8. Indonesia lost 0.8% despite a second interest rate cut in two months while Hong Kong and Singapore lost 0.7% and 1.4% respectively. India equities fell 3.7% as stocks were weighed down by a falling rupee caused in turn by slowing GDP figures and a worsening current account deficit. Key Contributors Tingyi, China s largest noodle manufacturer, contributed to performance although there was no fresh newsflow in September. The company announced strong first half results which supported investor sentiment. We believe ongoing cost reductions and improvements to their strategy can continue to feed through into the bottom-line over time and support further upside from here. China Resources Cement, one of the biggest cement and concrete producers in southern China, rose to fresh two-year highs after saying nine-month profits would significantly increase because of higher cement prices. We think the stock is attractively valued with further upside potential. The company has high quality assets and is well positioned to benefit from the improving structure of the cement market in China. Its returns are improving along with the pick-up in the cement demand cycle and the market is beginning to reflect this potential. Philippine power generation group First Gen contributed to performance as the stock bounced back after a year-long decline. The company is very attractively valued given its potential for capacity increases over the next few years, however the market has been more short term focused. The company announced management changes on top of news from August that a consortium had launched a bid for a minority stake their geothermal power unit Energy Development Corp (EDC). The cash raised from the sale would likely strengthen First Gen s financial position, while a possible delisting of EDC could further boost First Gen s valuations. Key Detractors Catcher, the Taiwan-based casing manufacturer that supplies to Apple for its iphones detracted from performance during the month. Although there was no stock-specific newflow during the period, reports of sluggish demand for the iphone 8 added to headwinds for the stock. We remain positive on the outlook for the company and believe there is further upside to the stock. Indonesia s PGAS (Perusahaan Gas Nagara) detracted from the Fund after the stock dropped sharply in September as more uncertainty emerged over the regulatory framework for the company, and electricity demand weakened over the month. The stock also suffered from a credit downgrade. The Fund trimmed its holding in the stock during September. Korean electricity producer Kepco (Korea Electric Power Corporation) fell again in September to reach three-year lows as sentiment continued to deteriorate for the stock given potential government policy headwinds. We remain overweight in the stock as we believe it offers value at these levels given the negative outlook being priced in by the market despite many uncertainties. Fund Activity During September, the Fund added to positions in FIH Mobile and Kunlun Energy, while trimming holdings in Tingyi, PGAS and China Resources Cement. Outlook Factsheet Singapore October 2017 All data as at 30 September 2017 unless otherwise stated Page 3 / 5
COMMENTARY Asian equities remain cheap relative to their long term averages and very relative to developed markets of the West. Investing at these valuations has historically been a very attractive entry point. We are now seeing improving economic growth supported by a pickup in earnings delivery across Asia which has been driving improving sentiment for the region s shares. Investors have ignored the price they are paying for certainty and quality for the last few years creating a huge valuation anomaly within Asian equity markets between value and quality. We have positioned the Fund to exploit this anomaly and have seen more attractively valued cyclical companies outperform over the last year. Factsheet Singapore October 2017 All data as at 30 September 2017 unless otherwise stated Page 4 / 5
IMPORTANT INFORMATION Investment manager - Eastspring Investments (Singapore) Limited 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 October 2017 All data as at 30 September 2017 unless otherwise stated Page 5 / 5