Factsheet Singapore September 2018 All data as at 31 August 2018 unless otherwise stated Eastspring Investments Asian Local Bond Fund RATINGS Class A Morningstar Overall Rating QQQ FUND DETAILS Fund size (mil) 3,411.3 Fund base currency Fund dealing frequency USD Daily Net asset value (Class A) USD 13.136 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 (USD unhedged) FUND MEASURES Number of Securities 383 3 year tracking error(%) (Class A) 0.7 3 year sharpe ratio (Class A) 0.3 3 year volatility(%) (Class A) 6.8 Source: Morningstar SECTOR WEIGHTS (%) Treasury 72.0 Foreign agencies 5.0 Other financial institutions 4.8 Other REIT 3.2 Banking 2.2 Home construction 2.2 Other industry 1.4 Metal and mining 1.2 Other sectors 5.3 COUNTRY WEIGHTS (%) Korea 17.0 Indonesia 15.3 Singapore 14.3 India 11.2 Malaysia 9.9 China 8.2 Philippines 8.1 Thailand 7.7 Other countries 5.6 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 maximise 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 inception Offer-bid -3.3-5.7-8.4-6.4 1.7 0.9 2.6 2.2 Bid-bid -0.3-2.8-5.5-3.5 2.7 1.5 2.9 2.5 Benchmark 0.0-2.0-4.0-1.4 3.5 2.1 3.5 3.4 : per annum. Source: Eastspring Investments (Singapore) Limited. 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. For full details, please refer to the performance disclosure. TOP 10 HOLDINGS (%) 1. KOREA (REPUBLIC OF) 2.125% 06/10/2027 1.6 2. THAILAND (KINGDOM OF) 4% 06/17/2066 1.1 3. KOREA (REPUBLIC OF) 2% 09/10/2022 1.1 4. INDONESIA (REPUBLIC OF) 8.375% 03/15/2024 1.1 5. KOREA (REPUBLIC OF) 1.875% 03/10/2022 1.0 6. SINGAPORE (REPUBLIC OF) 3.5% 03/01/2027 1.0 7. INDONESIA (REPUBLIC OF) 7% 05/15/2022 1.0 8. PHILIPPINES (REPUBLIC OF) 8% 07/19/2031 1.0 9. CHINA PEOPLES REPUBLIC OF (GOVERNMENT) 3.17% 04/19/2023 0.9 10. INDONESIA (REPUBLIC OF) 5.625% 05/15/2023 0.9 Page 1 / 5
RATINGS (%) AAA 6.0 AA 19.9 A 19.1 BBB 32.6 BB 2.4 B 2.3 CCC 0.1 Non-Rated 14.9 Credit ratings by S&P/Moody's/Fitch. MATURITY (%) 0-1 year 1.4 1-3 years 13.4 3-5 years 25.8 5-10 years 30.1 10+ years 26.7 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 13.136 IOFALBU LX LU0315179829 05-Sep-07 Cash 3.000 1.250 A ADM (hedged) AUD 8.061 ESALADM LX LU0795475739 18-Jun-12 Cash 3.000 1.250 A DM USD 9.318 IOFASLB LX LU0428352859 02-Jun-09 Cash 3.000 1.250 A S SGD 11.736 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 03-Sep-18 0.0274420 3.75 A DM USD 0.250 USD1,000 USD100 Monthly 03-Sep-18 0.0317071 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 (%) 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 -3.3-5.7-8.4-6.4 1.7 0.9 2.6 2.2 6.4-0.5-8.1 1.2-11.3 Bid-bid USD -0.3-2.8-5.5-3.5 2.7 1.5 2.9 2.5 9.7 2.6-5.2 4.3-8.6 Benchmark USD 0.0-2.0-4.0-1.4 3.5 2.1 3.5 3.4 11.3 2.2-4.4 4.1-7.3 A ADM (hedged) Offer-bid AUD -3.4-5.8-8.6-6.7 2.1 2.0 1.3 6.6 0.2-6.2 3.3-9.4 Bid-bid AUD -0.4-2.9-5.8-3.8 3.1 2.7 1.8 9.9 3.3-3.3 6.5-6.6 Benchmark AUD 0.0-2.1-4.1-1.4 4.0 3.3 2.6 11.7 2.7-3.1 6.8-5.3 A DM Offer-bid USD -3.3-5.7-8.4-6.4 1.7 0.9 2.7 6.4-0.5-8.0 1.2-11.3 Bid-bid USD -0.3-2.8-5.5-3.5 2.7 1.5 3.1 9.7 2.6-5.2 4.3-8.6 Benchmark USD 0.0-2.0-4.0-1.4 3.5 2.1 3.5 11.3 2.2-4.4 4.1-7.3 A S Factsheet Singapore September 2018 All data as at 31 August 2018 unless otherwise stated Page 2 / 5
Returns (%) Calendar year returns (%) 3 y 5 y 10 y Share class 1 m 3 m YTD 1 y inception 2017 2016 2015 2014 2013 Offer-bid SGD -2.7-3.4-6.0-5.6 0.7 2.3 1.7-1.6 1.5-1.6 6.0-8.3 Bid-bid SGD 0.4-0.4-3.1-2.7 1.7 3.0 2.1 1.5 4.6 1.4 9.3-5.5 Benchmark SGD 0.7 0.4-1.6-0.5 2.5 3.6 2.9 3.0 4.1 2.4 9.3-4.2 Performance Disclosure: : 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. 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. Wef July 2018, the monthly fund and benchmark returns calculated are aligned to the last NAV date of the fund for the month. Factsheet Singapore September 2018 All data as at 31 August 2018 unless otherwise stated Page 3 / 5
COMMENTARY Commentary sources 1.Eastspring Investments (Singapore) Limited Market Review Following a respite in July, risk sentiment again took a dive in August. The risk-averse backdrop contributed to broad weakness in Asian currencies, while performance of Asian domestic bond markets was mixed. Over the month, the custom Markit iboxx Asian Local Bond Index was largely unchanged in USD terms. During the month, trade tariffs and rising contagion fears in the Emerging Market (EM) region hogged the headlines, triggering a broad sell-off in the EM and Asia s risk assets; The risk-averse backdrop drove flight to quality flows, with the 10-year US Treasury (UST) yield falling by 10 bps to close the month at 2.86%. This was despite a modest rebound in UST yields towards month-end on the back of news that a trade deal was reached between the US and Mexico. The declines in UST yields and soft risk sentiment influenced domestic interest rates lower in selected Asian markets. This included Korea, Singapore and Malaysia bond markets, which delivered positive local currency returns over the month. The Korean bond market was a key outperformer as softer employment outlook lowered expectation on rate hikes. Stronger Korean won against the US dollar also boosted total return in USD terms, making the market a top performer during the month. Another currency outperformer was the Thai baht which rose 1.3% against the US dollar and contributed to the market s outperformance in USD terms despite moderately higher government bond yields there. However, Asian currency weakness elsewhere, including the Singapore dollar (-0.8%) and Malaysia ringgit (-1.0%) against the US dollar (USD) negated gains in the local currency bond markets. Nevertheless, it was the currencies of twin-deficit countries that were the hardest hit during this latest bout of risk aversion, with the Indian rupee and Indonesian rupiah falling by 3.5% and 2.0% respectively. The weak investor sentiment also spilled over to their bond markets, which saw the 10-year government bond yields rising by 18 bps and 44 bps respectively in India and Indonesia. The spike in IDR volatility prompted Bank Indonesia to raise policy rate by 25 bps to 5.50% - its fourth hike since May to stem the slide in currency. India and the Philippines also raised rates to the tune of 25bp and 50bp respectively, although the rate hikes were aimed more at addressing the inflationary pressures in their countries; In India, the central bank statement emphasized potential upside risks to inflation due to the proposed hike in minimum support price (MSP) of summer crops, while in the Philippines, the hike came on the back of elevated CPI prints, with the July inflation coming in at 5.7%, which was materially above the central bank s target band of 2-4%. In other notable policy developments, the People s Bank of China announced that it will impose a reserve requirement of 20% on banks that buy USD forward on behalf of clients and adopt other countercyclical measures to manage the renminbi weakness. Later in the month, the central bank also reintroduced a counter-cyclical factor to the USD-CNY fixing, which provided another boost to the RMB and helped provide some relief to the broad Asian currency complex. Fund Review The Fund s overweight in Indonesian and Indian bonds was negative for performance, as currencies weakened and bond yields rose in both countries. The underweight in Thai Baht and Korean Won was also negative for performance as both currencies strengthened in anticipation of policy tightening by the respective central banks. This was partially offset by the underweight in Malaysian Ringgit, and the overweight duration in Singapore and corporate bonds. Year-to-date, the Fund s duration underweight via selective markets such as Hong Kong, as well as its short US Treasury position, added value. In addition, the Fund s duration overweight in India, as well as the underweight in the Korean won were also key positive contributors. However, overall currency positioning was negative, dragged down by the overweights in INR, IDR and the RMB. The overweight in corporate bonds was also negative for relative performance as spreads widened. Outlook During the month, we went further underweight Korean Won and Thai Baht as both currencies appreciated against the rest of Asia, as we expect the monetary policy support to be limited, and both currencies are exposed to global trade slowdown. We also increased duration exposure in Hong Kong and Singapore. We remain positive on Asian domestic bond markets as sufficient policy tightening has been priced in, valuation is attractive, and expect these markets to perform once the trade tension ease and Asian currencies find stability. Factsheet Singapore September 2018 All data as at 31 August 2018 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. 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. Past performance is no guarantee of future results. 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 September 2018 All data as at 31 August 2018 unless otherwise stated Page 5 / 5