Manulife Singapore Bond Fund

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Manulife Singapore Bond Fund
30 JUNE 2017
Manulife Singapore Bond Fund
Investment Objective
Fund Performance (Class A)
125
Fund Information (Class A)
ISIN CodeSG9999006258
120
Total Return (NAV to NAV)
Indexed to 100
The Fund seeks to provide stable medium to long
term return with capital preservation, through
investing in primarily investment-grade SGD
denominated fixed income and money markets
instruments issued by Singapore and nonSingapore entities.
115
110
105
100
Bloomberg Ticker
Inception Date
MNSGBON SP
95
Sep-09
14 Sep 2009
Dec-10
Base CurrencySGD
Fund Size
NAV Per Unit SGD 1.240
6.79 years
Fund (NAV to NAV)
Fund (Offer to bid)*
Benchmark
1 Month 3 Months
0.08%
0.98%
-4.92% -4.07%
0.10%
1.31%
Average Credit Quality:A1/A2
Fund Characteristics
Subscription Mode:
Cash, SRS
Currency Allocation
Subscription Fee:
Up to 5%
Management Fee:
Jun-13
Class A SGD 18.47 mn
Yield to Maturity2.92%
Duration:
Mar-12
0.75% p.a.
Minimum Initial Subscription:SGD1,000
Minimum Subsequent Subscription:SGD100
Year-toDate
3.42%
-1.75%
3.62%
Oct-14
Feb-16
Jun-17
Benchmark
Since
1 Year‡ 3 Years‡ 5 Years‡ Inception‡
2.39% 4.04% 2.97% 2.80%
-2.73% 2.28% 1.92% 2.12%
1.36% 2.99% 1.87% 2.62%
%
Singapore Dollar
72.67
United States Dollar
24.58
Indonesia Rupiah
1.43
Cash & Others
1.32
Total
100.00
Dealing FrequencyDaily
Benchmark#
Markit iBoxx ALBI Singapore Government
Top 10 holdings
%
Singapore Government 3.375% 9/1/2033
8.76
Singapore Government 2.75% 4/1/2042
8.73
Singapore Government 2.875% 09/01/2030
3.86
Singapore Government 2.75% 03/01/2046
3.67
Wharf Finance No 1 Limited 4.5% 7/20/2021
2.98
Singapore Post Limited 4.25% 9/29/2049
2.89
Oversea-Chinese Banking 4% 12/29/2049
2.75
IOI Investment Berhad 4.375% 6/27/2022
2.33
CNOOC Finance 2012 Limited 3.875% 5/2/2022
1.56
China Overseas Finance V 4.25% 5/8/2019
1.55
Managed By
Manulife Asset Management (Singapore) Pte.Ltd.
Company Registration No. 200709952G
http://www.ManulifeAM.com
Annualised for periods over one year with net income & dividends reinvested
The Offer to Bid performance includes the effect of an assumed maximum front end load,
which the investor might or might not pay. NAV to NAV figures reflect the Fund’s investment
performance.
Figures may not sum to 100 due to rounding
Source: Manulife Asset Management (Singapore) Pte.Ltd., Bloomberg and Morningstar
1
‡
# On 1 May 2017, the benchmark was changed from Singapore
Government Bond Index All UOB to Markit iBoxx ALBI Singapore
Government as the Singapore Government Bond Index All UOB
was discontinued on 1 June 2017.
*
M anulif e S in g apor e B ond F und 3 0 J U N E 2017
Commentary
Market and Fund Review
US treasury and Singapore government bond yields ended the month broadly higher across the curve as the US Federal Reserve (Fed)
raised interest rates. Credit wise, Singapore dollar and Asian US dollar investment grade corporates spreads ended the month tighter.
The Fed lifted the range of its benchmark interest rates by 25 basis points as expected to 1.0% to 1.25%. This was the third rate hike in
a space of seven months. The Fed also announced details of its plan to trim its balance sheet after buying USD3.5trn bonds and other
assets as part of its quantitative-easing programme. Across the Atlantic, newly elected French president Emmanuel Macron won a large
majority in the French parliament, sweeping aside traditional parties and securing a powerful mandate for pro-business reforms. Closer to
home, the integration of China into the world’s financial markets took a step closer as MSCI, an index provider decided to include China
mainland stocks in its indices beginning next year.
In Singapore, May’s non-oil domestic exports contracted 1.2% year-on-year. The decline in external demand was largely attributed to a
fall in pharmaceutical goods. On the inflation front, May’s headline inflation jumped to 1.4% year-on-year from 0.4% in the preceding
month. The increase in inflation prints was mainly due to base effects associated with housing maintenance and repairs.
The Fund underperformed slightly (NAV to NAV basis) relative to the benchmark in June. The main detractor from performance was the
Fund’s foreign exchange position in US dollar versus Singapore dollar. However, that was mostly offset by the yield curve positioning and
the overweight in Singapore dollar corporate bonds.
Outlook
Global growth has been humming along smoothly on the back of steady expansions in the US and China as well as improving traction
in the Eurozone and Japan. However, we remain cognizant of policy uncertainty in the US, geopolitical risk in the Korean peninsula
and Middle East and the pace of tightening in China. Against this backdrop, some of the major central banks have appeared to turn
more hawkish in their rhetoric despite recent soft inflation prints. We expect the US rate normalization cycle to continue at a measured
pace, but that said, any potential hike by the Fed should not see a sharp sell-off in global bonds given that financial conditions remain
supportive. As such, we forecast US treasury yields to range trade in the short to medium-term. On valuations, Asian dollar credit spreads
are trading on the tight side and we see limited room for spreads to compress significantly from here. However, all in, yields still look
fair compared to historical ranges and we continue to believe that Asia remains fundamentally an attractive investment destination. The
portfolio manager looks to be selective and invest in credits opportunistically. Singapore continues to benefit from the improvement in
global trade, but the domestic economy is still soft, in particular the weak labour market. That said, liquidity in the Singapore banking
system remains robust and should support Singapore interest rates. We expect Singapore’s GDP to grow in the lower range of 1% to 3%,
while headline inflation to print between 0.5% to 1.5% for 2017.
Manulife Asset Management (Singapore) Pte.Ltd. is part of Manulife Asset Management - the asset management arm of Manulife Financial. Manulife Asset
Management is a leading global institutional asset manager, with expertise across a full range of asset classes - equity, fixed income and alternatives such
as real estate, timberland and agriculture. Manulife Asset Management has investment offices in 17 countries around the world, including 10 countries in
Asia; China, Japan, Hong Kong, Singapore, Taiwan, Indonesia, Thailand, Vietnam, Malaysia and the Philippines. Our clients benefit from the in-depth local
market expertise of empowered, inter-connected investment professionals across Asia, North America and Europe, underpinned by world-class investment
and risk management processes and the backing of a global leader in financial services, Manulife Financial Corporation.
Important Information
The information provided herein does not constitute financial advice, an offer or recommendation with respect to the Fund. The information
and views expressed herein are those of Manulife Asset Management (Singapore) Pte. Ltd. (Company Registration No. 200709952G) and
its affiliates (“Manulife”) as of date of this document and are subject to change based on market and other conditions. Manulife expressly
disclaims any responsibility for the accuracy and completeness of, and the requirement to update, such information.
Investments in the Fund are not deposits in, guaranteed or insured by Manulife and involve risks. The value of units in the Fund and any
income accruing to it may fall or rise. Past performance of the Fund is not necessarily indicative of future performance. Opinions, forecasts
and estimates on the economy, financial markets or economic trends of the markets mentioned herein are not necessarily indicative of the
future or likely performance of the Fund. The Fund may use or invest in financial derivative instruments. Investors should read the prospectus
and the product highlights sheet and seek financial advice before deciding whether to purchase units in the Fund. A copy of the prospectus
and the product highlights sheet can be obtained from Manulife or its distributors. In the event an investor chooses not to seek advice from
a financial adviser, he should consider whether the Fund is suitable for him.
Manulife Asset Management (Singapore) Pte.Ltd.
51 Bras Basah Road #11-02, Manulife Centre, Singapore 189554
Unit Trust Hotline: (65) 6501 5438 | Fax: (65) 6235 1138
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