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contents

10 Collyer Quay #26-01, Ocean Financial Centre, Singapore 049315www.FSMOne.com

+65 6557 2853clienthelp@fundsupermart.com

Disclaimer: this brochure is not to be construeD as an offer or solicitation for the subscription, purchase or sale of any funD. an investment in the funD(s) is subject to investment risks, incluDing the possible loss of the principal amount in-vesteD. no investment Decision shoulD be taken without first viewing a funD’s prospectus, which is available from the funD manager or www.funDsupermart.com. any aDvice herein is maDe on a general basis anD Does not take into account the specific investment objectives of the specific person or group of persons. the value of units anD the income from them may fall as well as rise. past performance anD any forecast is not necessarily inDicative of the future or likely performance of the funD. investors may wish to seek aDvice from a financial aDviser before making a commitment to invest in units of a funD. in the event an investor chooses not to seek aDvice from a financial aDviser, he/she shoulD consiDer whether the funD is suitable for him/her.

foreworD

risk rating methoDology

funD selection methoDology

recommenDeD funDs list

core portfolio

supplementary portfolio

bonD portfolio

cpfis-sa approveD

new to investing? get starteD now

about usFSMOne.com is the online B2C division of iFAST Financial Pte Ltd. iFAST Financial Pte Ltd carries the Capital Markets Services (CMS) licence and Financial Adviser (FA) licence issued by the Monetary Authority of Singapore (MAS).

iFAST Financial Pte Ltd is also a member of SGX-ST Securities Trading and CDP Securities Clearing, and a registered CDP Depository Agent.

iFAST Financial Pte Ltd is an entity licensed by MAS to conduct the following regulated activities: Dealing in securities Marketing of collective investment schemes Providing discretionary portfolio management service Providing custodial services for securities Providing services as an exempt insurance broker Arranging of any contract of insurance in respect of life policies Advising others

FSMOne.com’s regional research team specialises in the research of investment products such as unit trusts and bonds, and provides research support and market updates to retail investors in Singapore, Hong Kong, Malaysia and China. (Singapore Company Registration No. 200000231R)

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fundsupermart | 3

FOREWORDThe middle part of each year is a good time for tennis fans like me. Two out of four Grand Slams are held around

May to July – Roland Garros in Paris and Wimbledon in London. Two players have made their mark in these

tournaments for more than a decade: Rafael Nadal at Roland Garros and Roger Federer at Wimbledon.

At Roland Garros, Nadal achieved the remarkable feat of winning his 11th trophy this year – an achievement that cements

his place in the record books. What stood out behind his triumph was his never-say-die attitude and cool level-headedness. His

mental strength – to make the right decisions during a match as well as to recuperate from bouts of serious injuries attributed to

his intense playing style – continues to impress.

What has all this have to do with our Recommended Funds Report, you may wonder?

Two attributes from Nadal and Federer stand out. In many ways, the award-winning funds featured in our Recommended Funds Report share

them too.

THE FIRST ONE IS cONSISTENcy. The Recommended Funds Report 2018 is into its 18th edition. 18 is also the number of years FSMOne.com has been serving investors in Singapore. Since our company started business in the year 2000 to serve the investor community, our mission has been to help investors make better investment decisions. The Recommended Funds Report is one of the resources our teams provide to help investors in their quest to build a more profitable portfolio.

Today, those objectives remain unchanged. Our research team continues to sieve out the consistent outperformers, as opposed to one-hit wonders. The team of fund managers and analysts behind each award-winning fund have shown a solid track record over a period of three years or more.

THE SEcOND ATTRIbuTE IS TO STAy cOOL.While I am clearly no clairvoyant, it is fair to say that the markets will always have their fair share of ups and downs. It is precisely during times of turbulence that a calm approach can do wonders for our investments. Fund managers who can stay committed to their core investment values and mandates, irrespective of whether markets are in euphoria or in despair, will continuously find opportunities to add value to investors. In the Recommended Funds Report, our research team looks for funds that outperform not just during the good bullish market times, but have also demonstrated resilience during times when markets go down.

We believe that 2018 has so far shown why it pays to have an active management approach. Markets will always face turbulence (be it from geopolitical tensions, tit-for-tat trade retaliatory moves, or closer to home, from property cooling measures), and it pays to look for funds that have a portfolio management team that can make calm decisions during all types of market conditions.

It is no mean feat to outperform consistently over time, but that is precisely what the award-winning funds have achieved. We would like to congratulate the fund houses and the fund managers who are represented in this year’s Recommended Funds Report.

On behalf of the FSMOne.com Team, we want to take this opportunity to thank you, our investors, for steadfastly turning to our research, including our Recommended Funds Report, as a guidepost in your journey to making more profitable investments.

Jean Paul WongGeneral Manager, FSMOne.com

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RISK RATING METHODOLOGY

At Fundsupermart, we rate the riskiness of funds on a scale of 0 to 10. Factors that we consider include: the types of securities a fund invests in, the geo-graphical and sector diversification of the fund and how derivatives are being used. It represents our view on the riski-ness of each fund relative to each other. A fund with a risk rating of 4 is more risky than a fund with a risk rating of 2 but it is not twice as risky.

Lowest to Lower risk (risk rating: 0 - 1) Money market funds invest in SGD bank deposits and/or short-term money mar-ket instruments. This makes them the safest product on a fund distribution platform. We have assigned a rating of ‘0’ to money market funds.

Short-duration funds and other funds that invest mainly in Singapore bonds with limited foreign currency ex-posure are exposed to interest rate risk. As such, we assign such funds a risk rat-ing of ‘1’.

Low risk to Moderate risk (risk rating: 2 - 5)Non-Singapore bonds take on foreign currency risk. As such, non-Singapore focused bond funds have a risk rating

starting from 2. Depending on the cat-egories of bond classes that the bond funds invest into, the risk rating would range from 2 to 5. On the lower risk scale, we have bond funds invested into government bonds from a diversified number of developed nations where credit risk is low. For bond funds focus-ing on Asian regions or other emerging markets, the fund would be exposed to higher credit risk and political risk as emerging markets are more likely than developed nations to default on their bonds. For bonds focusing on sub-investment grade corporate bonds, we believe that the risk of default is even higher and these funds warrant a risk rating of 5.

ModerateLy Low risk to ModerateLy HigH risk (risk rating: 4 - 6)Balanced funds invest in a mixture of eq-uity and fixed income instruments. Thus, they are assigned a risk rating which falls between that of bond funds and equity funds. This ranges from 4 to 6, depend-ing on the regions in which they invest as well as their asset allocation between equities and bonds (as inferred from their benchmark). A larger percentage of bond holdings would suggest lower risk.

Disclaimer: The above risk raTing meThoDology is baseD on our research, anD may Differ from oTher raTing meThoDolo-gies. as This only serves as a guiDeline, iT is up To The invesTor To DeciDe on iTs suiTabiliTy. also, as The risk caTegories are broaD caTegories, There may be Differences in risk from one funD To anoTher even if They have The same risk raTing. if in DoubT, please seek professional aDvice.

EquITY FuNDS

BALANcED FuNDS,RISKIER FIxED INcOME FuNDS

SAFER FIxED INcOME FuNDS

ASIA BOND FuNDSEMERGING MARKET BOND FuNDSHIGH YIELD BOND FuNDS

SEcTOR EquITY FuNDS

cOuNTRY EquITY FuNDS

REGIONAL EquITY FuNDS

GLOBAL EquITY FuNDS

SGD MONEY MARKET FuNDS

GLOBAL BOND FuNDS

SGD BOND FuNDS

HIGH RISK

LOW RISK

ModerateLy HigHer risk to HigH risk (risk rating: 7 - 10)Typically, equity funds tend to generate higher returns compared to bond funds. This usually comes with higher risk. The risk ratings for equity funds usually be-gin from 7 for globally-diversified eq-uity funds. Funds which are invested in a major region would be assigned a risk rating of ‘8’. As an exception, Singapore equity funds are also rated 8, though they are also considered single-country funds; this is because local investors do not face exchange-rate risk when they invest in these funds.

Funds that invest in the riskier emerging markets, such as the Asian and Latin-American region, are rated ‘9’ and above. In addition, funds which invest in specialised industries or sectors (e.g. technology funds) are usually rated ‘10’ due to concentration risk. Funds which invest in single emerging economies will face greater political risk as well as for-eign exchange risk, while sector-specific funds face greater industry-specific risks. Therefore, they are assigned a risk rat-ing higher than that of regional or global equity funds.

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FUND SELECTION METHODOLOGY

PERFORMANCEThe most objective way to determine the quality of the fund manager is to assess the fund’s historical perfor-mance, a factor we weight heavily in our fund selection exercise. For this, we consider both the magnitude of performance as well as the consist-ency of returns.

In the case of new funds which feed into their overseas target funds with a longer track record, we may as-sess the target fund’s performance. We recommend funds which have at least a 3-year track record.

ExPENsE RAtiOThe expense ratio is what investors pay for the management of their fund on an annual basis. This charge is de-ducted from the value of the unit trust, and it takes into account all the op-erating expenses that a fund incurs, including its annual management fee, administration costs as well as trustee and custodian fees.

Generally speaking, the lower the expense ratio, the better it is for you, because you are incurring less costs.

RiskInstead of purely using standard devia-tion as the measure of risk, we believe that it is more appropriate to focus on how well a fund holds up during periods when the relevant markets saw substan-tial decline. As such, in our assessment of risk, we focus on the maximum decline of a fund over a given period, and also incorporate a measure of downside vola-tility, which tells us how volatile a fund is over periods when it is losing value.

BONd FuNdsEquity funds usually track well-known stock market benchmarks, making it easier to compare funds invested in a similar region or country. Bond funds are less comparable, given their differenti-ated focus on credit, country selection, currency and duration. To reflect the em-phasis on stability in fixed income invest-ments, we assign different weightings to the three quantitative parameters as shown above.

OthER QuAlitAtivE CRitERiAIn addition to looking at the above-men-tioned qualitative parameters, we also

WEightAgE OF QuANtitAtivE PARAMEtERs

FUND NAME EqUITy FUND BAlANcED FUND BoND FUND

Performance 60% 60% 40%

Expense Ratio 20% 20% 30%

Risk 20% 20% 30%

Source:FundSupermart compilationS.

consider other qualitative factors in our analysis, including the fund manager’s consistency in their investment approach, the departure of key personnel as well as the stability of the management team. We also incorporate our outlook on the fixed income market to assess the merits and disadvantages of a bond fund.

As most of the funds which invest in other regions buy companies that pre-dominantly have their assets and earn-ing streams denominated in foreign cur-rencies, there is currency exchange risk involved. A gain in the SGD against an-other currency may reduce the returns of the funds exposed to other currencies, while a drop in the SGD against other currencies would increase the returns. Thus, qualitative analysis is a necessary step to distinguish funds with superior management ability from those which were beneficiaries of strong market or currency movements.

As we take into account the qualitative factors, the highest-scoring fund based on quantitative assessment in a particular cat-egory may not necessarily be the fund we recommend, although fund performance remains a significant factor.

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CATEGORY RECOMMENDED uNiT TRusTs

Core Equity - Asia Ex-Japan 12 BlackRock Global Funds – Asian Growth Leaders Fund

12 schroder Asian Growth Fund

Core Equity - Asia Ex-Japan (smaller companies) 13 PineBridge Asia Ex Japan small Cap Equity Fund

Core Equity - Asia Pacific Ex-Japan 13 First state Dividend Advantage

14 Threadneedle (Lux) Asia Contrarian

Core Equity - Europe 14 BlackRock Global Funds – European special situations Fund

Core Equity - Europe (smaller companies) 15 Threadneedle (Lux) Pan European small Cap Opportunities

Core Equity - Japan 15 JPMorgan Funds – Japan Equity Fund

Core Equity - Japan (smaller companies) 16 united Japan small and Mid Cap Fund

Core Equity - Global Emerging Markets 16 schroders Global Emerging Market Opportunities Fund

Core Equity - Global 17 Nikko AM shenton Global Opportunities Fund

Core Equity - us 17 Legg Mason ClearBridge us Large Cap Growth Fund

Core Equity - us (smaller companies) 18 BlackRock Global Funds – us small & MidCap Opportunities Fund

CORE PORTFOLIO

Recommended Funds List

EQUITY

sUPPLEmEnTaRY PORTFOLIOREgIOnaL

CATEGORY RECOMMENDED uNiT TRusTs

sub Regional Equity - BRiC 19 schroder BRiC Fund

sub Regional Equity - Emerging Europe 19 schroder isF – Emerging Europe

sub Regional Equity - Greater China 20 First state Regional China Fund

sub Regional Equity - Latin America 20 PineBridge Latin America Equity Fund

sub Regional Equity - EEMEA 21 Fidelity Funds – Emerging Europe, Middle East and Africa Fund

sIngLE COUnTRY

CATEGORY RECOMMENDED uNiT TRusTs

Country Equity - China 22 Fidelity Funds – China Focus Equity Fund

Country Equity - india 22 First state Global Growth Funds – Regional india

Country Equity - indonesia 23 JPMorgan Funds – indonesia Equity Fund

Country Equity - Malaysia 23 CiMB-Principal Malaysia Equity Fund

Country Equity - Russia 24 Parvest Equity Russia

Country Equity - singapore 24 Nikko AM shenton Thrift Fund

Country Equity - south Korea 25 LionGlobal Korea Fund

Country Equity - Thailand 25 Aberdeen Thailand Equity Fund

fundsupermart | 9

CATEGORY RECOMMENDED uNiT TRusTs

Bonds - Asia 28 Allianz Flexi Asia Bond Fund (sGD-Hedged)

Bonds - Asia (Local Currency) 28 Nikko AM shenton Asia Bond Fund

Bonds - Global Emerging Markets 29 Neuberger Berman – Emerging Market Debt Hard Currency Fund (sGD-Hedged)

Bonds - Global 29 HsBC Global investment Funds – Global High income Bond (sGD-Hedged)

30 BlackRock Global Funds – Fixed income Global Opportunities Fund (sGD-Hedged)

Bonds - High Yield (Asia) 30 Fidelity Funds – Asian High Yield Bond Fund (sGD-Hedged)

Bonds - High Yield (Global) 31 schroder isF Global High Yield (sGD-Hedged)

Bonds - High Yield (us) 31 Threadneedle (Lux) us High Yield Bond (sGD-Hedged)

Bonds - singapore-Centric 32 LionGlobal short Duration Bond Fund

32 united sGD Fund

Designated Parking Facility 33 NikkoAM shenton short Term Bond Fund s$

CORE PORTFOLIOBOnd

CATEGORY RECOMMENDED uNiT TRusTs

CPFis-sA Approved - Asia Balanced 34 First state Bridge

CPFis-sA Approved - Global Balanced 34 schroder Multi-Asset Revolution

CPFIs-sa aPPROVEd

Disclaimer: no investment Decision shoulD be taken without first viewing a funD’s prospectus. any aDvice herein is maDe on a gen-eral basis anD Does not take into account the specific investment objectives of the specific person or group of persons. past per-formance anD any forecast is not necessarily inDicative of the future or likely performance of the funD. there are necessary limita-tions whenever performance is stateD or comparison is maDe to another unit trust, benchmark, or inDex for a perioD of less than 3 years.

sUPPLEmEnTaRY PORTFOLIOsECTOR

CATEGORY RECOMMENDED uNiT TRusTs

sector Equity - Global Financials 26 Fidelity Funds – Global Financial services Fund

sector Equity - Global Property 26 Janus Henderson Global Property Equity Fund

sector Equity - Global Resources 27 JPMorgan Funds – Global Natural Resources Fund

sector Equity - Global Technology 27 Fidelity Funds – Global Technology Fund

Recommended Funds List

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BlackRock Global Funds – Asian Growth Leaders Fund2018

Among the flurry of changes we have for our Recom-mended Funds List for 2018 is our newest addition for the Asia ex Japan Equity category. The BlackRock Asian Growth Leaders Fund, who is replacing the First State Asian Growth Fund, was selected for its consistent perfor-mance over its peers. Posting a five-year annualised gain of 13.9%, the fund returned investors 650 basis points per annum more than the peer average. Additionally, the fund managed to lock in the first spot for two years (out of five) in terms of calendar year periods, a notable achieve-ment given the highly competitive nature of the product category.

As a result of the fund’s tilt towards mid-cap growth style firms, which can be fairly volatile at times, its risk management metrics are on the higher side compared to its peers. While the fund posted a relatively favourable three-year drawdown of -23.9% compared to the peer av-erage of -25.6%, its five-year drawdowns came in much higher at -39.5%, versus -28.3% average recorded by the fund’s peers. Downside volatility vis-à-vis its peers over a three year period also came in slightly higher (8.0% versus peer average of 7.6%).

The fund’s portfolio alpha is expected be driven by bottom-up stock selection (>50%), with sector views, country allocation and style factors contributing to a smaller share (<30%) of the fund’s outperformance, Also, the fund is benchmark agnostic when it comes to stock selection, however, the fund manager guides that sectoral and country allocations do not typically deviate beyond +/-10% from the benchmark. The fund’s tendency to hold a concentrated portfolio also underscores the manager’s high conviction approach when investing in Asia, which has allowed investors to enjoy significant benchmark and outperformance over the last five years. This fund will be highly suitable for investors seeking a growth oriented Asia ex Japan equity fund with a long-term track record.

• OneofthemostconsistentperformingAsianexJapan equity funds that focuses on investing in reasonably priced growth oriented companies

• Mid-capbiasedportfolioandstrategywillbefocusedon mid to long term structural trends reshaping Asia

• Suitableforinvestorsseekingamoreaggressiveapproach when investing in the Asia ex Japan market

Key FeAtuRes

OuR COMMeNts

AsiA ex-JApAn equitycore portfolio – equity

schroder Asian Growth Fund

2018 | 2017 | 2016 | 2015 | 2014 | 2013 | 2012 | 2011 | 2010 | 2004 | 2002 | 2001

• Astrongoutperformer,emphasisingactivemanagement and bottom-up stock picking

• Fairlylowexpenseratioduetomodestannualmanagement fees

• Fundmayappealtocost-consciousinvestorswhoarealso looking for a good long-term track record

Key FeAtuRes

AsiA ex-JApAn equitycore portfolio – equity

A returning household name for the category of Asia ex-Japan equity is the Schroder Asian Growth Fund, mak-ing 2018 the ninth consecutive year the fund has been onourRecommendedList.Overthepastfiveyears,thefund posted a five-year annualised return of 12.2%, com-fortably above its peer average of 6.9%, allowing it to rank highly across various, and multiple, cumulative per-formance periods. In managing this relatively strong per-formance against its peers over the years, the investment managers have not let down on overall risk management. Over the past three years, the fundposted amaximumdrawdown (of -21.4%) considerably lower than its peer av-erage of -25.7%. As for downside risk, the fund has been fairly resilient thus far, exhibiting a downside deviation of 7.1%,versus7.6%registeredbyitspeers.Managedinanunconstrainedfashion,theMSCIACAsiaexJapan(NDR)Index is used as a reference benchmark, broadly indicat-ing the fund’s investment universe.

As a bottom-up stock picker, the fund manager’s sec-tor or country positioning is primarily the result of fun-damental stock selection decisions, avoiding top-down, technical analysis or market timing investment decisions in the process. With a longer-term investment horizon in mind, the investment team prefers to focus on growth companies underpinned by secular trends and long-term fundamentals. Therefore, alpha is expected to be driven by stock selection. The fund’s strong outperformance over the long-term as well as over shorter periods is a credit to the manager’s stock picking ability, while the fund’s low expense ratio (a function of the modest annual management fee of 1.125%) is also a positive.Offeringinvestors an option for gaining exposure to this fast grow-ing region, the fund would appeal to cost-conscious in-vestors seeking an Asia ex-Japan equity fund which sports a strong long-term track record.

OuR COMMeNts

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PineBridge Asia ex Japan small Cap equity Fund 2018 | 2017

The PineBridge Asia ex-Japan Small Cap Equity Fundmakes an appearance on our List of Recommended Funds for the second year in a row, with its strong track record exemplified in its five-year annualised return of 12.5%, significantly than its peer average (of 5.1%). Its perfor-mance over the past five years (as of end-March 2018)has also been consistent, ranking strongly across multi-ple calendar year periods. Aside from returns, the invest-ment managers have also not compromised on its overall risk management, registering a downside deviation lower than its peer average over the past three years (6.5% against average of 8.0%). Similarly, the fund’s three-year maximum drawdown is also one of the lowest, ranking second amongst the category’s seven contenders.

The investment team employs a rigorous, fundamental bottom-up research process in its stock-picking, focusing on business-specific factors such as competitive sustain-able advantage, returns on invested capital, quality of management as well as valuation considerations during theresearchprocess.Noparticularstylebiasisadoptedby the investment team. Suitable candidates are catego-rised into various stock types before inclusion into the portfolio. The strategy is benchmark agnostic when it comes to stock selection. However, for risk management purposes, the strategy’s performance is benchmarked to theMSCIACAsia Pacific ex-Japan Small CapUSDNetIndex.

A relatively high conviction approach is employed by the investment manager, with the team expecting to hold anywherebetween40to70stocks.Asofend-March2018,the fund has a total of 68 holdings in its portfolio, staying true to its conviction based investing style for the Asia ex-Japan small cap equity universe. The fund is suitable for investors who desire an actively-managed bottom-up Asia ex-Japan small-cap fund for the supplementary portion of their portfolios, as a complement to existing large-cap equity exposure. The SGD share class of the fund is also available.

•Asiaex-Japansmall-capequitystrategy;possiblecomplement to large-cap exposure

• Investmentmanagersemployarigorous,fundamentalbottom-up research process without a particular style bias

• Suitableforinvestorswhodesireanactive,fairlyconcentrated Asia ex-Japan small-cap equity fund

Key FeAtuRes

OuR COMMeNts

AsiA ex-JApAn equitycore portfolio – equity

First state Dividend Advantage2018 | 2017 | 2016 | 2015 | 2014 | 2013 | 2012 | 2011

• Focusesonhigher-qualitycompanies,primarilythosewithhigherdividendyields;oftenviewedasamoreresilient segment of the equity market

• Consistenttopperformerwithgoodriskmanagement• Stronglong-termtrackrecord,suitableforinvestors

seeking a more defensive Asia Pacific ex-Japan equity fund

Key FeAtuRes

AsiA pAcific ex-JApAn equitycore portfolio – equity

As a fund with an exemplary and consistent long term track record, the First State Dividend Advantage contin-ues to be our recommended Asia Pacific ex-Japan fund for 2018. The fund ranked first in two out of five cumula-tiveperformanceperiods fromend-March 2013 to end-March2018,deliveringannualisedreturnsof10.4%overfive years, outpacing the overall peer average of 5.7% by a comfortable distance. During this observed period, the fund also ranked decently for its performance on various calendar years. In achieving the fund’s superior track re-cord, the investment team had not compromised on risk, trouncing its peers by consistently mitigating downside risk, and hence scoring highly on risk metrics among its peer group. Three-year downside deviation and maxi-mum drawdowns are 5.9% and 19.8%, compared to its peer average of 7.2% and 24.6% respectively.

The fund’s reputation as one of the more resilient of-ferings on our platform within the Asia pacific ex-Japan space is a function of the manager’s adherence to an ac-tive bottom-up approach, which sees the team focus on sensibly priced, high quality companies that can deliver sustainable long-term earnings, and growth. A unique dif-ference that sets this fund apart is the fund’s remuneration scheme, which ensures that the analysts, and portfolio managers, are invested into the same funds as investors, wholly aligning both stakeholders’ interests.

Portfolio allocations are “conviction-based” with the team’s level of conviction in each investment contributing alargepartindeterminingtheactualportfolioallocation;this can result in the fund’s portfolio differing significantly from the benchmark. Investors seeking a more defensive strategy encompassing the First State Dividend Advan-tage may consider the First State Bridge, which offers exposure to the same underlying equity strategy (both the First State Dividend Advantage and First State Bridge feed into the First State Asian Equity Plus Fund), with the inclusion of investment grade Asian fixed income hold-ings to create a Balanced fund.

OuR COMMeNts

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threadneedle (Lux) Asia Contrarian

2018

The debutant in the Asia Pacific ex-Japan category is the Threadneedle(Lux)AsianContrarianfund,makingitsfirstforayintoourRecommendedFundsListin2018.Oneofthe fund’s highlights is its ability to outperform its peers – ranking first, second, and third across three cumula-tive performance periods (three years was used since the fund does not have a five-year track record). Its consist-ent stellar performance, however, comes at the expense of slightly higher risk, registering a three-year maximum drawdown of -26.3%, slightly above the -25.3% peer aver-age. Three-year downside deviation was also marginally higher than its peer average.

The investment team seeks out high quality and sus-tainable businesses priced at attractive valuations due to market inefficiencies, or long-term mispricing. Their investment style consists of taking on views contrarian to the markets, believing that any volatility derived from market pessimism can be an advantageous point to either initiate a new position or build upon an existing position, so long as the fundamentals of their investments remain robust. Therefore the fund’s slightly elevated risk profile is a function of its investment process of taking advantage of short-term market volatility for extra returns.

Asabenchmarkagnosticfund(benchmarkisMSCIACAsia Pacific Ex Japan Index), the fund seeks to hold 40-60 stocks at any one time, with tracking error typically within therangeof3%to8%(exante).Asofend-March2018,the fund has 51 securities, highlighting its high conviction and concentrated investment style. Investors looking for an aggressive Asia Pacific ex-Japan equity strategy that can exploit short-term opportunities should consider this fund, given its focus on long-term investment horizon and strong outperformance relative to its peers.

• Contrarianviewshaveservedtheinvestmentteamwell,given that it was the strongest overall performer in both cumulative and calendar year periods across five years

• Growthorientedandfocusedoncompanieswithpotential for long-term sustainable growth and returns

• Suitableforinvestorswhowouldlikeanactively-managed fund manager that seeks to exploit market inefficiencies with a focus on investments for the long-term

Key FeAtuRes

OuR COMMeNts

AsiA pAcific ex-JApAn equitycore portfolio – equity

BlackRock Global Funds – european special situations Fund2018

• Bestperformingfundwithoutcompromisingonriskmanagement

• Benchmark-aware,fairlyhigh-convictionapproachwith a focus on undervalued and growth companies that the market has failed to appreciate

• Consistencyandstrengthofreturnswouldappealtoinvestors

Key FeAtuRes

europecore portfolio – equity

Joining the list of other BlackRock funds on our Rec-ommended Funds List in 2018 is the BlackRock Global Funds – European Special Situations Fund, a fund that we like for its strong long term returns and decent risk managementcapabilities.Over thepast fiveyears sinceend-March2013, the fundhas returned investorsanan-nualised 9.7% per year, representing a 2.8% upside over the peer average. Its calendar year performance was also noteworthy, clinching the top spot in performance rank-ings in 2014-15 and 2016-17. In terms of risk, while the fund slightly underperformed its peers when it came to its three-year downside deviation of 8.4% (against 8.1%), the fund was more resilient when considering its three-year maximum drawdown, which was 200 basis points lower than its peers (-19.2% versus -21.0%).

Generally the fund is benchmark aware but the man-ager guides that he is happy to build off benchmark po-sitions and make meaningful deviations from the bench-mark should there be high conviction opportunities out thereinthemarkets.Unlikeitscompetitors,onestandoutfeature is the fund’s ability to invest across the full mar-ket capitalization spectrum, with the fund currently over-weight on the small and mid-cap segments of the market.

Besides, a good part of the fund’s strong active re-turns thus far can be explained by its fairly high-convic-tionportfolioof65holdingsasatend-March2018.Thefund’s investment philosophy emphasises on investing in companies under “special situations” that exhibit improv-ing returns on capital and above-average growth rates in earnings or sales, among other financial metrics under consideration.

The strong and long-term track record of the fund will appeal to investors who wish to seek exposure to the European equity space, particularly those who would be happy to align their investment horizon with the long-term approach undertaken by the fund manager.

OuR COMMeNts

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threadneedle (Lux) Pan european small Cap Opportunities2018 | 2017 | 2015 | 2014 | 2013

The recommended fund for the niche category of Europe small-cap equity for this year once again goes to Thread-needle(Lux)PanEuropeanSmallCapOpportunities!Thefund invests in the equities of smaller-capitalised com-panies in theregionofEurope includingtheUK,prefer-ring companies that are quality and growth oriented. The strategy ranked top in both performance and risk metrics, generatinganannualisedreturnof14.2%fromend-March2013toend-March2018,higherthanthepeeraverage’s9.9%, and ranking first over the last three years. It also ranked highly across various calendar year periods, illus-trating its consistency. It is worthy to mention that the fund managed to achieve the lowest three-year maximum drawdown and downside deviation among its peers whilst maintaining its outperformance.

The strategy is managed by adopting a fundamental stock-picking approach which drives the fund’s overall al-location and geographic weightings. During the analytical process, the team’s selection criteria focuses on premium business models and companies’ pricing power, utilising Porter’s Five Forces framework. Valuations factors, along-side current thematic and economic views are also consid-ered when picking suitable candidates. For performance comparisons, fund performance is benchmarked against the Euromoney Smaller Pan European Index, but it is un-constrained and may take off-benchmark positions. The portfolio is expected to have between 80 to 100 holdings atanyonepointoftime.AsoftheendofMarch2018,thefund has 84 holdings in its portfolio.

The fund would be suitable for investors who are fans of bottom-up stock picking, and would like to comple-ment their existing larger-cap European equity fund holdings with exposure to smaller companies. Investors should note that the SGD-hedged class of the strategy is also available on the platform, providing investors with a meansofexpressinganegativeviewontheEURvis-à-visthe SGD.

• Providesfairly-diversifiedsmall-capEuropeanequityexposure

• Fundamentalbottom-upstock-pickingapproach,which has seen the fund deliver strong outperformance over its benchmark

• Suitableasacomplementtoexistinglarge-capEuropean equity exposure within the portfolio, which can provide an additional driver of overall returns

Key FeAtuRes

OuR COMMeNts

europecore portfolio – equity

JPMorgan Funds – Japan equity Fund

2018

• TopperformingJapanesefundacrossafive-yearcumu-lative period with strong risk management capabilities

• Primarilybottom-upstockpickers,withapreferencefor companies that exhibit sustainable earnings and long-term growth potential

• Highlyactivemanagerandisbenchmarkunconstrained;bestsuitedforindividualswhoarehappy to align their investment horizon with the long-term approach of the manager

Key FeAtuRes

JApAncore portfolio – equity

MakingitswaytothelistoftheRecommendedFundsListundertheJapanesecore-equitycategoryistheJPMorganJapan Equity fund. We selected the fund for its strong performance alongside its exceptional risk metrics relative to its peers. The fund was consistent and ranked highly across a five-year cumulative period, returning investors an annualised 14.7% versus the peer average of 9.6%. It is also a top performer when considering calendar year per-formances, with numerous appearances within the cate-gory’s top 3 performers. Additionally, we also the balance the fund has found between superior performance and strong risk metrics. While its downside deviation came in slightly below its peers, the fund’s three-year maximum drawdown came in at -17.5%, significantly better than the peer average by a significant margin (of -22.1%).

The investment approach of the fund rests on the be-lief that a company’s valuation is driven by the sustain-ability of its earnings, and its ability to grow them in the future. Therefore, the team relies on bottom-up research to identify companies with undervalued earnings growth potential. With good companies at attractive valuations hard to come by, the fund holds a fairly concentrated portfolio of 64 securities as of end-April 2018. While the fund isbenchmarked to theTOPIX Index (USDhedged)for identifying the investment universe and performance comparisons, it is largely benchmark agnostic when it comes to portfolio construction. This product is highly suited for investors who want to invest in Japan for the long-term, via a fund manager that has proven to outper-form without taking on excessive risks.

OuR COMMeNts

16 | fundsupermart

united Japan small and Mid Cap Fund

2018

For Japan’s small andmid-capequity space, theUnitedJapanSmallandMidCapEquityFundmakesitsRecom-mended Funds List debut in 2018. As its name suggests, the fund invests in small and medium capitalised cor-porations listed in the Japaneseequitymarkets.Over athree-year cumulative performance period, the fund out-stripped its peers, returning investors a stunning annual-ised20.3%,versusthepeeraverageof14.2%.Unsurpris-ingly, the strategy’s strong showing was also reflected in its calendar year performance.

The fund manager relies purely on bottom-up research in selecting their stocks, and holds the stocks for an aver-age of five years, underscoring the team’s long-term invest-ment horizon and focus on companies with strong earnings growth potential, regardless of economic, currency and geopolitical conditions surrounding Japanese companies.

Besides outperforming its peers, the fund has also donesoagainstitsbenchmark,theMSCIJapanSMIDCapIndex. As a highly diversified strategy, the fund consists of 81 securities in the portfolio as of end-March 2018.Top 10 holdings currently constitute a mere 16.7% of total funds, with no single security investment exceeding 2.0%. The utilisation of a highly diversified strategy should help the fund in mitigating volatility that is commonplace in the targeted market capitalisation space it seeks to invest in. Ranking first and second for the lowest downside de-viation and three year maximum drawdown respectively, the fund has shown more resilience than most of its peers.

The fund’s three portfolio managers have worked together for more than 15 years, and have developed strong synergy with one another in navigating this seg-ment of the Japanese equity market. The fund would thus be suitable for investors seeking an actively-managed Japanese equity fund with a tilt towards the small- and mid-cap space; the fundwouldalsobeagoodcomple-ment for existing large-cap Japanese equity exposure. Investors should note that the SGD-hedged class of the strategy is also available on the platform, providing inves-tors with a means of expressing a negative view on the JPY vis-à-vis the SGD.

OuR COMMeNts

JApAncore portfolio – equity

schroders Global emerging Market Opportunities Fund

2018 | 2011 | 2010

GlobAl emerGinG mArketscore portfolio – equity

After a seven-year hiatus, the Schroders Global Emerging MarketOpportunitiesFundmakesitswaybacktoourListofRecommendedFundsfortheGlobalEmergingMarketsequity category. With consistency and strong risk-adjust-ed returns; across various cumulative periods, the fundnever ranked below third place, and returned investors a five-year annualised return of 7.9% against the peer aver-age of 5.2%. Besides outperforming most peers on the upside, it also does so when considering downside risk. Five-year maximum drawdown and downside deviation showed positives, registering a better risk performance by -1.4% and 0.5% respectively.

The investment team employ a combination of bot-tom-up and fundamental analysis alongside top-down macroeconomic country allocation views, as selecting the right countries in which to invest within the emerging markets universe is key to driving returns, given that many countries across the emerging markets are at different stages of development. For this reason, the fund does not apply any form of systematic bias (growth, quality, value etc) with a broad stroke across the entire portfolio. From a bottom-up perspective, the manager generally focus on higher quality companies; thosewith robust balancesheets, high return-on-equity, and strong free cash flow, avoiding expensive stocks in the process.

Although benchmarked to theMSCI EmergingMar-kets Net Total Return Index, the fund is unconstrained,and does not take guidance from the index when con-structing its portfolio. The fund currently holds 62 posi-tions in its portfolio, highlighting its conviction based and concentratedapproachwheninvestinginGEM.Thisfundwould be suitable for investors seeking an unconstrained activelymanagerintheGEMspacewithalongtermtrackrecord.

OuR COMMeNts

• Managedwithaheavybiastowardssmallandmid-caps

• Growthorientedandhighlydiversified• Suitableforinvestorsseekingtoexploitinefficiencies

in the Japanese equity market via an actively-managedstrategy;cancomplementexistinglarge-cap Japanese equity exposure

Key FeAtuRes • Rankedhighlyinperformanceandoverallrisk

management• Managersadoptacombinationoftop-downand

bottom-up research process with no particular systematic style bias

• Suitableforinvestorsseekinganactivelymanagerin this highly challenging space with a proven track record

Key FeAtuRes

fundsupermart | 17

Nikko AM shenton Global Opportunities Fund

2018

Nikko AM Shenton Global Opportunities makes its de-but in the Recommended Funds List, taking the coveted Global Equity spot for 2018, a highly competitive space due to the breadth of offerings available on the platform. Over the last five years (end-March 2013 to end-March2018), the fund managed a staggering annualised return of 11.7%, bettering the peer average of 8.1% during the same period. Likewise for calendar year returns, the fund was also a strong and consistent outperformer against most peers. Risk management is one aspect the fund has performed admirably, with three-year downside deviation lower than peer average, and maximum drawdown num-bers in line with others.

A major part of the manager’s investment philoso-phy is centred on the search for companies with growth and quality characteristics, that is, those with potentially strong growth in future cash flows and long-term sustain-ability, that have yet to be reflected in their current share prices. As firm believers of bottom-up stock picking, the fund believes that high conviction investment ideas are best reflected in a concentrated portfolio. Thus, the fund aims to hold anywhere from 40-50 securities in their portfolio with a high active share ratio. The investment managerisbenchmarkagnostic,indicatingthattheMSCIWorldFree Index (NetTotalReturn) isusedonly forriskmanagement and performance appraisal purposes.

As of 31March 2018, the fund held 40 stocks in itsportfolio, underscoring the highly concentrated style adopted by the investment managers in driving returns from their high conviction stock ideas. This fund is highly suitable for those looking for an actively managed bot-tom-up global equity fund that has a track record in trans-lating high conviction stock ideas into strong portfolio performance.

OuR COMMeNts

GlobAlcore portfolio – equity

Legg Mason ClearBridgeus Large Cap Growth Fund

2018

• Rankedhighlyinperformancewithdecentriskmetrics• Growthandqualityoriented;managersarehigh

conviction bottom-up stock pickers focused on companies that can deliver growth in future cash flows and long-term sustainability

• Suitableforinvestorsseekingadynamicandaggressive fund that has a long-term track record of outperforming its benchmark

Key FeAtuRes • Consistentlong-termperformanceandgoodrisk

management shaped by a long-term investing horizon• Growthorientedandbottom-upstockpickers;portfolio

is constructed with companies across a spectrum of growth rates and valuations

• FundwillappealtoinvestorswhowantabalancedapproachininvestingintoUSequitymarkets

Key FeAtuRes

uscore portfolio – equity

Forthefirsttime,theLeggMasonClearBridgeUSLargeCapGrowth (managed byClearBridge Investments)willbe included in our Recommended Funds List under the US equitymarket category for its stellar long-termout-performance and risk profile. Besides ranking highly on multi-year calendar performances, the fund’s cumulative performance has also managed an annualised return of 15.9% versus the peer average of 11.1% for investors (fromend-March2013toend-March2018).Itsgoodper-formancedoesnotcomeattheexpenseofhigherrisk;inrelative terms, the fund’s three-year maximum drawdown and downside deviation were one-fifth and one-quarter respectively lower than the peer average.

A major part of the fund manager’s investment philos-ophy is to “behave like an ‘owner’ of a company instead of a ‘renter’”, preferring to invest in innovative compa-nies with strong competitive advantages and growth po-tential with the long term in mind. Thus far, such beliefs have translated into a high-conviction portfolio with a low turnover ratio, underscoring the fund’s commitment to long-term and sustainable bottom-up investing. The port-folio is categorised into stable, cyclical and select stocks, which have differing valuations and growth characteris-tics, allowing the fund to diversify and capture a spectrum of growth opportunities across the large cap space.

As an actively managed fund, the overall portfolio ex-hibits little overlap in terms of holdings with its bench-mark, the Russell 1000 Growth Index. Therefore the benchmark’s and portfolio’s performances are likely to differ.AsofMarch312018,thefundheld48securitiesinits portfolio, with top 10 holdings forming 34.4% of its en-tireportfolio.ForexposuretotheUSequitymarkets,in-vestors seeking a high conviction bottom-up stock picker with a demonstrated history of outperforming its peers in both risk and performance should definitely consider this fund for inclusion into their portfolios.

OuR COMMeNts

18 | fundsupermart

BlackRock Global Funds – us small & Mid Cap Opportunities Fund2018 | 2017 | 2016

The BGF US Small & Midcap Opportunities Fund fromBlackRock is once again on our list for the rather niche category of US small-cap equity. Its performance hasbeen strong over the past five years from end-March2013 (as of end-March 2018), posting a five-year annu-alised gain of 12.8% as compared to the peer average of 11.9%. While managing this track record, the fund has also ranked highly on overall risk management given its focus on the volatile small and mid-cap segments in the US equity market. Its three year downside deviation at8.0% as compared to the peer average of 10.2%, while its three year maximum drawdown came in at -23.0%, lower than its peer average of -27.7%.

Considering the manager’s style agnostic approach,the fund has the potential to deliver returns that devi-ate significantly from its benchmark, which is expected to lead to superior risk-adjusted returns. Adopting a diversi-fied portfolio approach, the fund typically holds between 75-120 stocks in its portfolio, with each position typically ranging from 0.35% to 2.5% of its assets. We like that the fund manager has historically displayed dynamism in portfolio management, by tweaking its cyclicality expo-sure and the average market capitalisation of its hold-ings, depending on market conditions and its in-house research views.

The fund is fairly diversified, with its ten largest hold-ings constituting about 20.17% of the overall portfolio. With a mix of both mid-cap and small-cap equity expo-sure, the fund serves as a good complement to an inves-tor’sexistingUSlarge-capexposureinhisportfolio.Whilethe strategy is available in itsUSD share class, theEURclassandtheAUD-hedgedclassarealsoavailableontheplatform for investors.

• Investsincompaniesacrossthecapitalisationcurveofsmall and mid-sized companies

• Styleagnostic,diversifiedportfolioapproach• Strongtrackrecord;suitableasacomplementto

existinglarge-capUSequityexposure

Key FeAtuRes

OuR COMMeNts

us core portfolio – equity

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fundsupermart | 19

Schroder BRIC Fund

2018 | 2017 | 2016 | 2015 | 2014 | 2013 | 2012

For the regional equity category of Brazil, Russia, India and China (BRIC) in our Recommended List, the place once again goes to the Schroder BRIC Fund. While the fund’s ranking fluctuates between first and second place in its peer group during the five-year cumulative performance periods, the fund’s consistency is illustrated by ranking first on various calendar year periods from end of March 2013 to end-March 2018. The fund also stood out with its better overall risk management, posting a 8.9% downside deviation over the past three years as compared to its peer’s 10.9%. Its three year maximum drawdown is also lower (-34.3% versus -37.2%), highlighting its resiliency in this somewhat tough market segment.

The fund’s strong and consistent risk management capabilities stem from its investment approach. The in-vestment manager does not adopt a systematic style bias towards investing in emerging markets as the vari-ous countries may differ in their stage of development or economic cycle. Rather, the fund manager uses a mix of primarily fundamental bottom-up stock selection to drive alpha generation, with top-down views on country allo-cation expected to provide added value. The fund has no style or market capitalisation bias towards its portfolio construction, although it tends to focus mainly on larger capitalised companies for its high concentrated portfolio approach. While able to underweight or overweight indi-vidual sectors relative to its benchmark, we note that the fund seeks to be diversified across all countries, granting exposure to each BRIC country at all times. The fund’s good risk management stems from its decision to focus on investing in large-cap stocks to aid liquidity, as well as its strict stop-loss policy amongst several other prudent risk management measures.

With BRIC remaining the cornerstone of Global Emerging Markets, investors seeking targeted exposure to the big four might find this fund appealing given its consistent and strong longer term track record. Investors should note that while the fund is denominated in SGD, currency exposure will be to the various BRIC currencies.

• Strongtrackrecordwithcategoryleadingriskmanagement

• Concentratedportfolioapproachforhighconvictionideas

• SuitableforinvestorsseekingaBRIC-focusedemerging market equity fund which has delivered consistent returns with good risk management during weak market environments

Key FeatuReS

OuR COMMeNtS

BRIC EquItYSupplEmEntaRY poRtfolIo – REgIonal EquItY

Schroder ISF - emerging europe

2018 | 2017 | 2016 | 2015 | 2014 | 2013 | 2012 | 2011 | 2010 | 2009

The Schroder ISF Emerging Europe is our choice for the re-gional equity category of Emerging Europe for our Recom-mended List. Its performance over the past five years (end-March 2013 to end-March 2018) led it to rank first across all cumulative performance periods relative to its peers. Its consistency is also reflected in its high rankings across mul-tiple calendar year periods. While managing to outperform its peers, the fund has not sacrificed on its overall risk man-agement, coming in first in its downside deviation over the past three years (7.2%), beating its peer average of 8.2%. The fund’s three-year maximum drawdown of -27.6% also compares favourably with the peer average of -32.2%.

The fund’s strong risk management capabilities stem from its approach to investing. The fund manager does not adopt a systematic style bias towards investing in emerging markets as the various countries may differ in their stage of develop-ment or economic cycle, similar to the Schroder BRIC Fund. Primarily, it uses a mix of primarily fundamental bottom-up stock selection to drive alpha generation, with top-down views on country allocation expected to provide added value. The fund has no style or market capitalisation bias towards its portfolio construction, although it tends to focus mainly on larger cap companies for its concentrated portfolio ap-proach, which helps to reduce volatility. With the ability to go underweight or overweight individual sectors relative to its benchmark, the fund seeks to be diversified across a range of countries in the region.

Despite the fund’s relatively diversified mandate, the Emerging Europe sub-regional market is expected to be more volatile than global or more-developed regional equity markets due to heightened geopolitical and inflationary risks. As of end-March 2018, 53.6% of the fund was invested in Rus-sian equities, 14.6% in Polish equities and 10.5% in Turkish equities, representing significant concentration risks to these three countries in the portfolio. The fund is currently under-weight the energy sector relative to its benchmark, and its largest sector exposure is to the financials, comprising 38.1% of the entire portfolio (overweight). The fund will appeal to investors who want more targeted exposure to the Emerg-ing Europe sub-region within their overall emerging market exposure, or want a more diversified approach to investing in Russian equities.

• Rankedfirstforbothriskmanagementandperformance, consistent track record

• Displayedstrongriskmanagementcapabilitiesduringdifficult market environments

• Suitableforinvestorsseekingmoretargetedexposure to the Emerging Europe sub-region, or prefer a more diversified approach to investing in Russian equities

Key FeatuReS

OuR COMMeNtS

EmERgIng EuRopE EquItYSupplEmEntaRY poRtfolIo – REgIonal EquItY

20 | fundsupermart

First State Regional China Fund

2018 | 2017 | 2016 | 2015 | 2014 | 2013 | 2012 | 2011 | 2010 | 2009 | 2008 | 2007 | 2006 | 2005 | 2003 | 2002 | 2001

Yet again, First State Regional China Fund takes the top spot under our coverage of the Greater China equity space for the Recommended List of Funds for 2018. The fund’s status as the most awarded equity fund on our list is a testament to its long term track record of outperform-ing its peers over multiple cumulative performance peri-ods. Over the last five years, it posted an annualised re-turn of 12.7%, commanding a 10 basis points lead over its peers (of 12.6%). The fund truly shines when we consider its ability to mitigate risk and capital loss. Ranking first on overall risk metrics, its three-year maximum drawdown (-27.3%) and downside deviation (-9.0%) are comfortably ahead its peer average of -31.0% and -10.2% respectively.

The team believe that Asian equity markets are among the most inefficient in the world, resulting in the consist-ent mispricing of Asian companies relative to those in more mature markets. Thus, the managers thus seek to exploit these inefficiencies by utilising the investment team’s proprietary bottom-up research process which has served investors well, as evidenced by the strong long-term track record of the fund. Furthermore, the fund has historically registered low turnover ratios, underscoring the long-term approach of the fund’s high conviction, buy and hold mind-set.

Consisting of China, Hong Kong and Taiwan, the fund’s focus on the Greater China region offers a more di-versified investment scope compared to a single-country China equity fund. The fund’s strong longer-term track record should appeal to investors looking for exposure to the Greater China region, while the fund’s consistent returns, low turnover and defensive qualities may find fa-vour with investors seeking a more stable management approach with a focus on longer-term returns.

• Rankedfirstinriskmanagement;defensivenaturehasaided returns

• Proprietarybottom-upapproachtoexploitmarketinefficiencies has reaped rewards

• Fundwillappealtoinvestorsseekingstrong,consistent long-term performance when investing in the Greater China region

Key FeatuReS

OuR COMMeNtS

gREatER ChIna EquItYSupplEmEntaRY poRtfolIo – REgIonal EquItY

PineBridge Latin america equity Fund

2018

Among the sea of changes we have for our Recommend-ed Funds List for 2018, the Latin America equity category is one of them. Representing the category this year is the PineBridge Latin America Equity Fund, which has per-formed admirably against its peers, and has been consist-ent across various calendar periods. The fund has been able to manage an annualised return of -0.9% over the last five years, versus the peer average of -2.6%, enabling investors to reduce their risk when investing in this sub-category of the emerging markets, which can prove to be highly volatile. A big part of the fund’s strong show-ing can be attributed to its risk management capabilities. Relative its peers, the fund posted a three-year downside deviation of 10.9%, considerably lower than the average of 12.0%.

While benchmark aware for risk purposes in avoiding unintended style exposures, the fund is benchmark-ag-nostic when it comes to stock selection, as the managers believe alpha opportunities tend to be limited when the investment universe is restricted to the MSCI EM Latin America DTR Net Index. With 54 stocks in the portfolio as of 31 March 2018, the fund exhibits a high conviction approach to investing, with top 10 holdings constituting 49.5% of the fund’s portfolio.

Latin America is a major sub-regional market within theglobalemergingmarketsspace;withBrazilmakingupthe largest component (the Brazilian equity market com-prises the largest component of the MSCI EM Latin Amer-ica index). The fund held 66.1% and 20.3% of its assets in Brazilian and Mexican equities respectively (as of end-March 2018), representing significant country concentra-tion within the portfolio. The fund would be suitable for investors who seek a more targeted investment to supple-ment their global emerging market equity allocation, and while the fund is denominated in USD, currency exposure will be to the various Latin American currencies and pri-marily, the Brazilian Real and the Mexican Peso.

• Rankedhighlyforstrongperformanceandriskmetrics• Suitableforthosewhoseekstrongactivereturns

without adding unnecessary risk when investing in Latin America

• Maybeusedinconjunctionwithotherregional/sub-regional equity funds for more diversified exposure to global emerging market equities

Key FeatuReS

OuR COMMeNtS

latIn amERICa EquItYSupplEmEntaRY poRtfolIo – REgIonal EquItY

fundsupermart | 21

Fidelity Funds – emerging europe, Middle east and africa Fund2018 | 2017 | 2016 | 2013 | 2012

Once again for the third year running, we are recom-mending the Fidelity Funds – Emerging Europe, Middle East and Africa Fund (EEMEA) as the EEMEA equity fund to invest for 2018’s List of Recommended Funds. As of end-March 2018, the fund has posted an annualised five-year return of 5.2%, returning investors 370 basis points higher than its peer. The fund’s brilliant track record is aided by its strong risk management capabilities, having posted lower downside deviations and maximum draw-downs than its peer over the past three years.

With the emphasis of owning high quality companies capable of delivering consistent returns, at a reasonable price, the investment manager believes that such a strat-egy will be key in delivering consistent outperformance against its peers over time. While it is benchmarked against the MSCI Emerging EMEA Index Capped 5% for performance comparison purposes, the manager’s invest-ment decision is not constrained by the benchmark uni-verse. Rather, its portfolio allocation is determined largely by its bottom-up stock picking process, evidenced from the fund’s off-benchmark positioning in Nigeria (4.1%), Israel (2.2%) and Romania (2.8%) as of end-March 2018 – countries that are not represented in the index.

As a sub-regional market comprised of countries like South Africa and Russia, EEMEA is part of the larger Glob-al Emerging Markets, which is generally more volatile than global or developed regional equity markets. De-spite the fund’s relatively diversified mandate, investors should be aware of heightened political and inflationary risk often associated with such markets. Within a diversi-fied global equity portfolio, investors may consider break-ing down their exposures into the Asia ex Japan region, LatinAmericaandtheEEMEAviatherespectiveregional/sub regional equity funds for better control over how each region is weighted in one’s portfolio. Nonetheless, investing in an EEMEA fund would provide exposure to some of the smaller markets which may not be adequately represented within most of the global emerging market equity funds.

• Consistentperformerovermultiplecumulativeperiods

• Managerhasdemonstratedwillingnesstotakeoffbenchmark positions

• Maybeusedinconjunctionwithotherregional/subregional equity funds for more diversified exposure to global emerging market equities

Key FeatuReS

OuR COMMeNtS

EEmEa EquItYSupplEmEntaRY poRtfolIo – REgIonal EquItY

Disclaimer: This advertisement is not to be construed as an offer or solicitation for the subscription, purchase or sale of any fund. an investment in the fund(s) is subject to investment risks, including the possible loss of the principal amount invested. You may wish to seek advice from a financial adviser before making a commitment to purchase any fund. in the event that you choose not to seek advice from a financial adviser, you should consider whether the fund is suitable for you. No investment decision should be taken without first viewing a fund’s prospectus, which is available from the fund manager or www.FsmOne.com.

FsmOne.com is the online distribution arm of iFasT Financial Pte ltd, a subsidiary of iFasT corporation ltd. iFasT Financial Pte ltd is a licensed Dealer, custodian, Financial adviser, cPFis-registered investment administrator, and provides Portfolio management services in singapore. iFasT Financial Pte ltd is also a member of sGX-sT securities Trading and cDP securities clearing, and a registered cDP Depository agent. singapore company registration No. 200000231r.

For more information, visit FSMOne.com

22 | fundsupermart

Fidelity Funds – China Focus Equity Fund2018 | 2012 | 2009

Fidelity Funds – China Focus Equity Fund is ready to take upon the mantle as our recommended Chinese equity fund for 2018, following the soft closure of Neuberger Berman China Equity, our previous recommended fund for this space. As our top choice, Fidelity has the strong-est five-year cumulative performance out of all its peers , and was resilient during periods of market turmoil (e.g. 2014 to 2015), returning investors 6.0% during that pe-riod when the peer average was a mere 1.6%. The level of risk taken by the fund was also not excessive; the fund’s three-year maximum drawdown (of 36.6%) and down-side deviation (of 11.1%) all came in lower than its peers, compared to the peer average of 37.2% and 11.6% re-spectively, underscoring the fund’s strong risk-adjusted returns.

Fundamentally a bottom-up stock picker, the manager aims to exploit long-term mis-priced opportunities and avoid growth traps within the Chinese market in generat-ing long-term value. Primarily a contrarian manager, the fund’s style can be characterised as deep value and qual-ity. Generally avoiding growth traps (e.g. overweighting growth firms), the manager prefers out-of-favour busi-nesses that can generate durable earnings, or businesses that have long-term positive secular trends ignored by market participants. Aside from quantitative screens, cor-porate governance is one key qualitative areas the invest-ment team looks at when deciding on conviction for their stock picks.

While benchmark aware, the fund is not beholden to buy lists or market index holdings. As of end-March 2018, the fund’s top 10 holdings constitute 48% of total funds, underscoring the manager’s high-conviction approach, whilst still maintaining some form of diversification (cur-rently holding 73 securities as of end-March 2018). As a fund that takes into account the impact of policy changes in the medium-to-longer term, such as China’s gradual liberalisation of its capital markets, this strategy may add value to investors who desire an actively-managed strategy for capturing opportunities in the Chinese equity markets.

• Bestperformingfund,consistentrisk-adjustedperformance and fairly resilient during market volatility

• Deepvalueinvestorwholikestoseekoutqualitystocks trading at attractive valuations that are out-of-favour due to short-term macroeconomic or company-specific reasons

• Providesexposuretobothonandoff-shoreChinaequities

KEy FEaturEs

Our COMMENts

China EquitySupplEmEntary portfolio – SinglE Country Equity

First state Global Growth Funds – regional India 2018 | 2017 | 2016 | 2011

Yet again, the renowned First State Regional India fund returns to our Recommended Funds List in 2018, retain-ing its top spot for the third year running. Across all pe-riods since 2013, the fund ranked first in its cumulative performance, outperforming its peers with a five-year annualised returns of 18.7% (versus the peer average of 11.7%). The fund’s performance has also been relatively consistent, ranking highly on various calendar year pe-riods. While managing this superior track record, the fund also ranked first in its peer category for overall risk metrics, recording a three year maximum drawdown of -19.0%, decently lower than the peer average of -23.4%. Amongst its peers, the fund’s three-year downside devia-tion was one of the lowest at 9.3%, comparing favourably with the peer average of 11.0%!

In its portfolio construction, the fund adopts a “bot-tom-up” approach that begins with a thorough analysis of individual companies, identifying quality companies exhibiting good growth potential, and are undervalued when relatively measured against a range of valuation metrics. The investment team pays close attention to the quality of management and balance sheet strength when assessing individual companies. As conviction-based stock pickers, the team does not attempt to make a top-down view, instead focus on investing in quality compa-nies that can deliver sustainable returns, regardless how the broader economy is faring. While the fund’s perfor-mance is benchmarked to the MSCI India Index, the man-agers have communicated that the portfolio construction process is benchmark-agnostic, without any tracking error targeted.

With its resilience and strong active management capabilities as well as its relatively concentrated invest-ment focus, the fund is suitable for investors looking for dedicated exposure to the Indian equity market. While the fund is denominated in SGD, investors should notethat currency exposure will be largely to the Indian Rupee (INR) when investing in the fund.

• Topperformingfundovercumulativefive-yearandfour-year periods, consistent performer

• Impressiveriskmetrics,rankedfirstinoverallriskmanagement

• Suitableforthosewhoseekstrongactivereturnswhen investing in the Indian equity market

KEy FEaturEs

Our COMMENts

india EquitySupplEmEntary portfolio – SinglE Country Equity

fundsupermart | 23

JPMorgan Funds – Indonesia Equity Fund2018 | 2017

For the second year in a row, taking the place of Indone-sia Equity on our Recommended Funds List is JPMorgan Asset Management’s JPMorgan Funds – Indonesia Equity Fund! From the end of March 2013 to end-March 2018, the fund has posted a -3.0% annualised return (versus peer average of -3.3%), ranking second for its five-year and three-year cumulative performance periods and first in its four-year cumulative performance periods! In terms of its calendar year performance, the fund has managed to be consistent as well, ranking highly in various periods relative to its peers in the category. In terms of overall risk management, the fund’s good performance metrics meant that a higher level of risk was taken to achieve stronger returns. Both five-year maximum drawdowns and downside deviation all came in slightly higher than the peer average (-33.2% and 13.2% versus peer average of -32.8% and 12.8% respectively).

The investment managers adopt a bottom-up ap-proach in finding suitable candidates for the portfolio. Business dynamics and qualitative factors are considered, with the analysis process supplemented by taking into ac-count the macro environment, political dynamics as well as industry trends to assess the nature of opportunity. The fund will also invest across the entire spectrum of market capitalisation, allowing investors to capture various sorts of opportunities. The team is expected to hold between 20 and 50 stocks at any one point of time in the portfo-lio. Benchmarked to the MSCI Indonesia Index (Total Net Return), the investment manager is benchmark aware, but not constrained by it during portfolio construction.

The fund is suitable for investors who desire a multi-cap, bottom-up stock picking style of investing when it comes to investing in the Indonesian equity market. Given its narrow investment focus, the fund should be part of an investor’s supplementary portfolio; more conservative investors may wish to seek more diversified exposure via a South East Asian focused equity fund or through an Asia ex-Japan equity fund. While the fund is denominated in SGD,investorsshouldnotethatcurrencyexposurewillbelargely tothe IndonesianRupiah (IDR)when investing inthe fund.

• Rankedhighlyovercumulativeperformanceperiods• Bottom-upapproachinseekingoutopportunitiesin

Indonesia• Suitableforthosewhoseekarelativelyconcentrated

approach when investing in the Indonesian equity market

KEy FEaturEs

Our COMMENts

indonESia EquitySupplEmEntary portfolio – SinglE Country Equity

CIMB-Principal Malaysia Equity Fund2018

Disrupting Aberdeen’s long reign on the single countryequity category of Malaysia is CIMB-Principal Malaysia Equity Fund – a new face on our Recommended Funds List. The fund ranked first in terms of cumulative perfor-mance across all periods up to five years except in 2017. Dating from2013, the fund returned investors an annu-alised gain of 3.2% (as of end-March 2018), well above the peer average of 0.2%. On a calendar year basis, the fund is also ranked highly consistently to its peers in the Malaysian equity space.

Given the fund’s overall bias towards companies with growth and dividend characteristics, the fund offers higher returns at the expense of higher risk, with a risk management rating slightly higher than most of its peers. While the fund’s three-year downside deviation is 10 basis points higher (compared to peer average), its three maxi-mum drawdown came in at 24.2%, a tad lower than the peer aggregate of -25.1%.

Although a benchmark aware fund, with approximate-ly 80-85% of holdings consisting of benchmark stocks, the fund adopts a concentrated high conviction approach, contributing to its long term track record of beating the benchmark. At any one time, the fund generally holds a portfolio of 40-55 securities, focusing on liquid large caps without any sector bias. With a high conviction investment philosophy, the fund has no qualms about overweighting or underweighting a sector, should the manager perceive compelling investment ideas, or the lack thereof.

This fund is best suited for investors seeking a high conviction approach in investing in the Malaysian equity markets, having repeatedly shown its ability to outperform both the benchmark and its peers without compromising on risk management. While the fund is denominated in SGD, investors should note that currency exposure willbe largely to the Malaysian Ringgit (MYR) when investing in the fund.

• Topperformingfundovercumulativefive-yearperiod,consistent long-term performance

• Activelymanagedportfoliothattakesintoaccountbottom-up securities selection and top-down asset allocation

• Highconvictionandgrowthorientedportfoliosuitable for those seeking strong active returns

KEy FEaturEs

Our COMMENts

malaySia EquitySupplEmEntary portfolio – SinglE Country Equity

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Parvest Equity russia

2018 | 2017 | 2016 | 2015 | 2014 | 2013 | 2012 | 2011

For the eighth consecutive year, the Parvest Russia eq-uity funds from BNP Paribas Asset Management retains its spot on our Recommended Funds List for the single country equity category of Russia. Ranking first over its three-year, four-year and five-year cumulative perfor-mance periods, the fund has posted a 4.8% five-year an-nualised return (as of end-March 2018), beating its peer average of -1.8%. Also, the fund managed to outperform its peers with its consistent performance without sacrific-ing on overall risk management. The fund posted the low-est downside deviation at 8.3% (against peer average of 9.5%) over the past three years, with three year maximum drawdown below that of its peers (30% against the peer average of 31.8%).

The Russian equity market offers appealing opportu-nities to investors, but it can be highly volatile and risky, which makes it imperative for the fund to be actively man-aged.During a normalmarket environment, the fund isfocused on investing in growth biased companies, while preferring stronger “value” propositions during periods of risk aversion, having consistently shown a willingness to shift towards a defensive stance during periods of vola-tility. For example, the fund underweighted financials and growth companies during a tumultuous period for Russian equities back in 2014.

The fund’s portfolio is relatively concentrated, with an initial guidance of 45-55 stocks, consisting primarily of benchmark stocks of typically larger capitalisation to provide liquidity and stability, alongside an allocation to off-benchmark stocks (dependent on liquidity and float) to generate additional alpha. As of end-March 2018, the fund had 37 holdings in its portfolio.

Given its narrow investment focus, the fund should be part of an investor’s supplementary portfolio; less aggres-sive investors may wish to seek exposure via a more diver-sified Emerging Europe equity fund. Investors should also note that while the fund is denominated in EUR, currency exposure will be to the Russian Rouble (RUB) when invest-ing in the fund.

• Topperformingfundovermultiplecumulativeperformance periods

• Activemanagementthattakesoverallmarketenvironment into consideration

• Russianequitieshavetendedtobefairlyvolatile;less aggressive investors could look towards a more diversified Emerging Europe equity fund

KEy FEaturEs

Our COMMENts

ruSSia EquitySupplEmEntary portfolio – SinglE Country Equity

Nikko aM shenton thrift Fund

2018

The Nikko AM Shenton Thrift Fund takes the pole po-sition within the Singapore equity category for the first time in 2018, with the combination of strong equity re-turns, consistency in performance and good risk manage-ment, leading to our recommendation. Ranked first for overall performance, the fund came is ranked second for its five-year cumulative performance, registering an an-nualised return of 5.1%, compared to the peer average of 4.0%. Similarly, its calendar year performance was also strong, being one of the few funds able to rank consist-ently high across the various periods.

In terms of overall risk metrics, investors will be thrilled to know that the fund ranks first among its peers, post-ing the lowest three year maximum drawdown of 23.0% (versus peer average of -24.5%), and one of the lowest three-year downside deviation in its category!

The investment team holds the belief that markets are inherently inefficient as individual stocks are prone to periodic mis-pricings, which they may exploit to deliver strong returns over the long term. Besides sourcing for ideas from bottom-up fundamental research, the fund also takes into account the top-down macro environment into portfolio allocation, recognising that such factors can be important drivers of returns at times. For example, a rising rate environment reduces the attractiveness of SRE-ITs, of which the fund has pared down its exposure ac-cordingly.

As of end-March 2018, the fund’s current holdings of 31 stocks in the portfolio underscores its high conviction approach in investing within the Singapore equity mar-kets. Investors may consider this fund if they are looking for high conviction managers focused on exploiting mar-ket inefficiencies and delivering strong market returns. While currency risk is less of an issue given that underly-ing currency exposure is primarily to the Singapore dol-lar (SGD), investors shouldbewary of thepossibility ofoverconcentration risks when allocating exposure owing to any concurrent participation in the local stock market.

• Consistentoutperformanceagainstpeers,strongriskmanagement metrics

• Benchmarkandstyleagnostic,preferringtocombineboth top-down macroeconomic views with bottom-up fundamental research into its portfolio allocation

• SuitableforinvestorsseekingahighconvictionSingapore equity fund

KEy FEaturEs

Our COMMENts

SingaporE EquitySupplEmEntary portfolio – SinglE Country Equity

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LionGlobal Korea Fund

2018 | 2017 | 2016 | 2009

LionGlobal’s South Korean equity strategy, the LionGlobal Korea Fund, grabs the place for Korea Equity on our Rec-ommended Funds List once again, retaining its spot for the third consecutive year. LionGlobal’s fund ranked first against its other peer for performance once again, post-ing a 9.7% annualised return over the past five years (as of end-March 2018). It ranked first multiple times across various cumulative and calendar year periods, highlight-ing its consistency. In managing this outperformance, the investment managers certainly have not compromised on overall risk management. While the fund demonstrated similar downside deviation as its peer, it posted a three year maximum drawdown of -17.9%, decently lower the -22.3% attained by its peer. Thus, the investment team’s ability to reduce the risk of capital loss over the years for investors has helped it rank favourably.

Bottom-up stock analysis and early identification of emerging trends drive the selection and construction of the fund. The investment manager favours companies with niche business models and companies that have a competitive edge. The performance of the fund is bench-marked against the MSCI Korea (NR) Index, and the fund is managed on a benchmark-aware basis.

The South Korean equity market tends to be domi-nated by cyclical industries like information technology, industrials as well as financials, and many Korean com-panies compete with their Japanese and Chinese neigh-bours for market shares in their respective segments. An active strategy that includes identification of industry or sectoral trends will thus complement a bottom-up fun-damental strategy. While the fund’s currency exposure is expected to be largely to the South Korean Won (KRW), the managers may actively manage currency exposure to maximisereturnsforinvestorsinUSDterms.

• Consistentperformer,rankedfirstinperformanceandrisk management

• Bottomupanalysisiscomplementedwithsectoralorthematic views

• ForinvestorswhodesirededicatedexposuretoSouthKorean equities

KEy FEaturEs

Our COMMENts

South KorEa EquitySupplEmEntary portfolio – SinglE Country Equity

aberdeen thailand Equity Fund

2018 | 2017 | 2016 | 2015 | 2014 | 2010 | 2009 | 2007 | 2006

Aberdeen Thailand Equity Fund is once again on our Rec-ommended List for the single country category of Thailand equity, helped by its outstanding long term track record of outperforming its peers. Although the fund’s perfor-mance had suffered over the last two years, contribut-ing to its less-than-stellar cumulative five-year annualised performance of 2.4% (against peer average of 4.1%), the fund’s calendar year performance was much better, com-ing in higher than most other peers. Also, Aberdeen’s fund remains as the top performing Thai equity fund over a period covering two market cycles (since 2003).

The fund’s strong track record is also a function of its ability to manage risk, as seen from its three-year down-side deviation of 6.5%, comparing favourably to its peer average of 6.9%. Its maximum drawdowns have been lower as well, with a three-year maximum drawdown of -24.0% as compared to the peer average of -27.4%. Its risks metrics are impressive given that the underlying market is known for periodic bouts of high volatility due to geopolitical instability.

Similar to other Aberdeen single country equity funds, the fund is aware of its benchmark although it is not benchmark driven. Rather, the fund prefers to adopt a concentrated high conviction approach that might see the returns of the fund diverge from its benchmark re-turns. Usually constructing a portfolio of between 30-40 stocks, Aberdeen Thailand Equity is known to significantly overweight sectors should the manager perceive there to be compelling investment ideas or underweight a sector should there be a lack of opportunities, with the manager preferring a good mix of domestic producers and export-ers with multinational parentage.

The fund is suitable for investors seeking a high-con-viction approach to the Thai equity market. Given its nar-row investment focus, the fund should be part of an inves-tor’s supplementary portfolio; less aggressive investors may wish to seek exposure via a more diversified South East Asia focused equity fund.

• Strongactivepositioningevidenceofbenchmarkagnostic approach

• Suitableforthosewhoseekstrongactivereturnswhen investing in the Thai equity market

• SuitableformoretargetedexposuretoThailandequities, as opposed to a more diversified Asia ex-Japan or South East Asian equity fund

KEy FEaturEs

Our COMMENts

thailand EquitySupplEmEntary portfolio – SinglE Country Equity

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Fidelity Funds – Global Financial Services Fund

Global Financials EquitysupplEmEntary portFolio – sEctors

2018 | 2017 | 2016 | 2011 | 2010

For the third year running, the Fidelity Global Financial Services Fund takes the top spot as our recommended Global Financials equity for 2018, given its proven record of outperformance over multiple cumulative performance periods against its peers. The fund posted a 5-year an-nualised gain of 10.6% (end-March 2013 to end-March 2018), beating the peer average of 9.8%.

Furthermore, the fund’s consistency in performance have also seen it rank highly across various calendar year periods. Another noteworthy aspect of the fund is its re-silience and ability to manage risk, given its lower three-year downside deviation of 8.4% (versus the peer average of 10.6%), and three-year maximum drawdowns (-22.6% against peer average of -26.9%).

The investment managers utilise a bottom-up research and analytical approach to find quality companies exhibit-ing strong potential, focusing on the fundamentals of the business (balance sheet assets, strength of franchise and management). The macro back-drop would also be as-sessed to establish the future operational and regulatory context for the various companies under consideration. Benchmarked to the MSCI AC World Financials Index, the fund is expected to be fairly diversified across geogra-phies.

Since the Great Financial Crisis back in 2008-2009, fi-nancial institutions have witnessed various legal and regu-latory changes, restructurings as well as adaptations to business models due to changing technological trends. Whilst banks and financial institutions are expected to benefit from a rising interest rate environment, interested investors are encouraged to limit this fund to the sup-plementary portion of their portfolios, due to the fund’s concentrated mandate and exposure.

• Consistentperformer,rankingfirstovermultiplecumulative performance periods

• Notalow-riskfundgiventheconcentratedinvestment mandate and heavily regulated sector

• Providesexposuretosomeofthelargestglobalfinancial companies; limit exposure to supplementary portion of the portfolio

Key FeatureS

Our COMMeNtS

Janus Henderson Global Property equity Fund

Global propErty EquitysupplEmEntary portFolio – sEctors

2018

JanusHendersonGlobalPropertyEquityFundisourrec-ommended global equity fund for 2018, displacing our previous recommended fund given its stronger overall performance and risk management across various cu-mulative and calendar year periods. The strategy netted investors 4.8% over a five-year cumulative period, repre-senting a 30 basis points upside compared to the peer average. It also ranks amongst the top three funds across all calendar year periods. While three-year downside de-viation is in line with peers, the fund outshines its peers when it comes to managing risks, as it posted the lowest three-year drawdown of -11.3%, versus the peer average of -14.5%.

The main objective of the fund is to seek long-term capital appreciation, by investing in listed equity securi-tiesofcompaniesorRealEstateInvestmentTrusts(REITs)aroundtheworld,andisbenchmarkedagainsttheFTSEEPRA/NAREIT Developed Index. While a rising interestrate environment generally reduces the attractiveness of property yields, the fund manager on the contrary, be-lieves that it would in fact be a positive for property and REITs, given the strong global economic growth back-drop, which would spur a pickup in property demand, and rental and occupancy rates. With the business cycle ma-turing, the fund is selective and actively manages where it invests in, seeing value in longer-term structural growth trends, such as data centres and global logistics, when positioning for the future.

As of end-March 2018, the fund has 60 holdings in its portfolio, and is largely exposed to real estate in devel-oped markets like the US, Japan, and United Kingdom (together about 68.4% of overall portfolio). Due to thefund’s mandate and exposure, interested investors are encouraged to limit this fund to the supplementary por-tion of their portfolios. Investors will have to take note that although the fund isdenominated inSGD, the cur-rency exposure will be to the various currencies of the different markets of the fund’s underlying assets.

• Primarilyinvestsinpropertyequitiesglobally• Strongcumulativeandcalendaryearperformance

across various periods• Largelyexposedtorealestatecompaniesof

developed markets

Key FeatureS

Our COMMeNtS

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JPMorgan Funds – Global Natural resources Fund

Global rEsourcEs EquitysupplEmEntary portFolio – sEctors

2018

• Strongandconsistentlong-termperformance• Highervolatilityexpectedduetomorefocused

investment mandate; allows one to gain exposure to the global resources value chain

• Performancemayhaveastrongpositivecorrelationwith commodity prices

Key FeatureS

Fidelity Funds – Global technology Fund

Global tEchnoloGy EquitysupplEmEntary portFolio – sEctors

2018 | 2017 | 2016 | 2007 | 2006 | 2005

• Consistentperformer,rankingfirstandsecondoverthree cumulative performance periods

• Unconstrainedbottom-upinvestmentstyleseekingtocapitalise on mispriced opportunities with a long term horizon

• Suitableforinvestorsseekinganactively-managedstrategy in the technology equity space

Key FeatureS

For the global resource equity category on our Recom-mendedList, the JPMorganFunds –GlobalNaturalRe-sources Fund takes centre stage as our preferred choice, for investors interested in this niche market segment. As a fund with a more aggressive approach, the fund was selected for its superior performance numbers over it its peers. For instance, the fund topped its peers based on five-year cumulative performance metrics, and ranks first on four out of five calendar year periods. While the fund’s three-year downside deviation registered lower than the peer average (14.5% versus 16.2%), the fund three-year drawdown was slightly higher at -47.0% (versus peer aver-age of -43.8%).

The fund manager’s investment philosophy stems from the premise that commodity demand will continue to be driven by the ongoing transformational urbanisa-tion process in emerging markets, which provides struc-tural tailwinds for commodity prices. Given the favourable long-term backdrop, the fund manager seeks out compa-nies that can grow production, and successfully replace depleting reserves, especially in tight commodities mar-kets, as they are likely to enjoy strong profitability.

Its concentrated investment mandate may likely lead to higher levels of volatility as compared to a more diver-sified equity fund, and investors should be aware that the fund’s performance is likely to have a positive correlation with the prices of commodities. Additionally, the fund does not have meaningful exposure to the agriculture sector, mainly due to its benchmark which sees the fund focusing on energy, gold and precious metals, metals companiesandcoal-relatedcompanies.Duetothefund’smandate and exposure, interested investors are encour-aged to limit this fund to the supplementary portion of their portfolios.

Our COMMeNtS

The Fidelity Global Technology Fund retains its place on ourRecommendedListfortheequitycategoryofglobaltechnology once again! As of end-March 2018, the fund’s stellar performance has seen it rank first and second plac-es among its peers across most cumulative and calendar year periods over the last three years. Having posted a three-year annualised return of 17.8%, the strategy com-fortably surpassed its peer average of 10.8%. While gen-erating this outperformance, the fund has not sacrificed on its overall risk management. Risk metrics like its three year maximum drawdown and its downside deviation over the past three years remain within range of its peer aver-ages.

The investment manager believes that understanding trends in technology, innovations, and technological de-velopments is key to identifying long-term industry lead-ers of the future. The manager seeks to capitalise on mis-pricings that occur via complex sub-cycles in the industry, adopting an unconstrained, bottom-up style of investing, and focusing on companies that have, or are developing, products, processes, or services, that will benefit from technological advances and improvements. The perfor-mance of the fund is benchmarked against the MSCI AC World Information Technology Index.

At this juncture, valuation multiples of the global technology sector on aggregate are looking relatively stretched, fuelled by expectations of growth in earnings. Following various data privacy scandals and debates on how far technology companies can go in using personal data for generating revenues, the technology sector is becoming increasingly trickier to navigate. Therefore, we think an actively-managed strategy is crucial when invest-ing in the market segment, and the Fidelity Global Tech-nology Fund has shown its capability in doing so. Dueto the fund’s mandate and focused exposure, interested investors are encouraged to limit this fund to the supple-mentary portion of their portfolios.

While the fund is denominated in EUR, investorsshould note that their currency exposure will be to the various currencies of the underlying markets (predomi-nantly the US) that the fund is invested in.

Our COMMeNtS

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Allianz Flexi Asia Bond Fund (SGD-Hedged)

AsiA Bondscore portfolio - Bond

2018

The Allianz Flexi Asia Bond Fund is debuting for the first time on our Recommended List for the Asian Bond cat-egory. Managed by Allianz’s in-house Asia Pacific Fixed Income Team, the fund was launched back in July 2012, and has registered a cumulative total return of 9.1% over the past five years. It also scored above average in terms of risk management metrics (recording a lower three-year downside deviation than the category average).

To fulfil its investment objective of long term capital growth and income, the fund invests in both sovereign and corporate bond issues in the Asian debt space. Its un-constrained mandate allows it to invest across the credit spectrum, having some exposure to high yield issues but typically targeting an overall average investment grade rating for the portfolio. The fund also has no geographic or country as well as sector constraints, allowing the man-agers to seek out opportunities wherever appropriate. Its unconstrained style in investing in Asian credits has seen the investment managers consequently not adopting a benchmark for the fund. Other than hard-currency issues, the fund may also invest in local currency bonds at the discretion of the investment team. In terms of its duration profile, it is expected to be between zero and ten years.

Qualitative and quantitative analysis will be employed during the research process for selecting appropriate credits and constructing the portfolio, with the invest-ment managers incorporating top-down macro research with bottom-up credit analysis. With regards to other sources of returns, currency is expected to be a driver of returns, as exposure is actively managed relative to the base currency, which is the USD.

As of end-March 2018, the fund’s portfolio sports an effective duration of 3.0 years, and a yield-to-maturity of 5.8%. The portfolio’s average credit quality is BBB-, and has 171 individual holdings. With various Asian markets at different stages of the credit cycle at this juncture, it’s imperative that investors opt for actively-managed strate-gies that are unconstrained in order to navigate this seg-ment going forward.

• InvestsinbothAsiansovereignandcorporatedebt,with the flexibility to invest in local currency issues

• Unconstrainedmandateallowsthefundtoinvestacross the credit spectrum; including the non-investment grade credit space

• Currencyexposureisactivelymanagedandexpectedto be a driver of returns

Key FeAtureS

Our COMMeNtS

Nikko AM Shenton Asia Bond Fund

AsiA Bondscore portfolio - Bond

2018 | 2017 | 2016 | 2015 | 2014

Apart from the usual Asian bond product recommenda-tion which is typically a fund concentrating on hard-cur-rency denominated bonds, we also recommend a prod-uct that is dedicated to the local currency-denominated Asian credit market. For the fifth time in a row, the Nikko AM Shenton Asia Bond Fund takes the place on our Rec-ommended List. The fund’s mandate is reflected with its adoptionof theHSBCAsian Local Bond Index as itsbenchmark, as it focuses on the Asian local currency de-nominated debt market, which tends to be dominated by sovereign bonds. Nevertheless, the investment managers have the ability to allocate up to 30% of the portfolio’s assets in issues denominated in non-Asian currencies, or in regions beyond Asia Pacific ex Japan.

Due to the nature of the Asian local currency bond market, country selection, currency views, as well as du-ration management by the manager becomes crucial in order to generate returns. A combined top-down and bottom-up research process is employed by the manag-er. The fund’s performance is benchmarked against the Markit iBoxx Asian Local Bond Index (ALBI). As of end of March 2018, the fund’s largest country allocations are to China,SouthKorea,MalaysiaandThailand,holdingmorethan half of its assets in sovereign bond issues. Relative to its benchmark, the fund’s largest duration positioning is neutral to overweight in Indonesia and India, against underweight duration positioning in the Philippines and HongKong.Asofend-March2018,thefund’sportfolioisdiversified across 43 holdings, sporting a yield of 4.00% and a duration profile of 5.87 years.

Currency is also expected to be a key return driver,with the fund overweighting the currencies of countries with strong current account balances (such as the MYR, THB and RMB) and underweighting currencies of coun-tries with weaker current accounts such as the Philippines, Indonesia and India at this current juncture. Additionally, derivatives may be employed by the fund manager to achieve the intended currency exposure. Investors should note that the fund’s underlying strategy is managed from a SGD-perspective, entailing a larger allocation to Asian currencies which the manager expects will appreciate vis-à-vis the SGD.

• OffersexposuretolocalcurrencyAsianbonds• Mostlyinvestedingovernmentbonds;bondsinthe

portfolio tend to be mostly investment-grade• StrategyismanagedfromaSGD-perspective• Recommendedforinvestorswhowantexposureto

Asian local currency bonds, and want to benefit from the potential appreciation of Asian currencies vis-à-vis the SGD

Key FeAtureS

Our COMMeNtS

fundsupermart | 29

Neuberger Berman – emerging Market Debt Hard Currency Fund (SGD-Hedged)

emerging mArket Bondscore portfolio - Bond

2018

For the category of ‘Bonds – Global Emerging Markets’, the Neuberger Berman Emerging Market Debt Hard Currency Fund is our choice for this year’s List of Rec-ommended Funds. The fund was launched back in May 2013 and has registered a 4-year annualised gain of 4.6%, comparing favourably to its peer average of 2.9%. On a calendar year basis, the fund has consistently ranked above the category’s average, highlighting its consistency in performance.

The fund will invest across the emerging market debt universe, primarily focusing on hard currency issues. While the fund may invest in both sovereign and corpo-rate bonds, sovereign and quasi-sovereign bonds will be the focus, with the portfolio typically having a minor ex-posure to corporate issues. The fund has no credit rating constraints. To fulfil the objective of seeking an attractive level of risk adjusted total return, the investment team employ a combination of top-down and bottom-up ana-lytical research processes in order to find suitable issues and to construct the portfolio. The performance of the fund is benchmarked to the JPMorgan EMBI Global Di-versified Index (USD). In terms of duration, the portfolio is expected to have duration exposure within a +/- 1 year range vis-à-vis the benchmark index.

As of end-March 2018, the fund has 269 different indi-vidual holdings, making it widely-diversified. The invest-ment managers are overweight Argentina as they view the spread on its hard-currency debt attractive, and they arealsooverweightCroatiagivenpositive fundamentalsthat support’s the country’s convergence towards better qualitynamesinCentralandEasternEurope,focusingonits EUR-denominated sovereign bonds. Given that emerg-ing markets worldwide are at various stages of the credit cycle coupled with varying macroeconomic backdrops, an actively-managed approach will be vital for navigating the space successfully for future investment performance. Managed by Neuberger Berman’s in-house emerging markets debt ream, the fund is appropriate for investors desiring a well-diversified and actively-managed strategy for the global emerging market debt universe.

• Investingacrosstheemergingmarketdebtuniverse;primarily focused on hard currency issues

• Focusedonsovereignandquasi-sovereigndebt,withminor exposure to corporate issues

• Productissuitableforinvestorsdesiringawell-diversified and actively-managed strategy

Key FeAtureS

Our COMMeNtS

HSBC Global Investment Funds – Global High Income Bond Fund (SGD-Hedged)

gloBAl Bondscore portfolio - Bond

2018 | 2017 | 2016 | 2015

TheHGIFGlobalHighIncomeBondfundfromHSBCGlobalAs-set Management once again takes the place for the global bond category on our Recommended List. An investor of the fund would be granted one-stop access to various segments of the global fixed income markets, with the managers being able to seek out returns from across the entire fixed income spectrum.

The fund’s performance is benchmarked against a cus-tomised benchmark: 35% Barclays Emerging Markets USD Aggregate Index, 20% Barclays Baa Corporate Index,15% Barclays US High Yield Ba Index, 15% Barclays Euro-Aggregate Baa Index USD hedged and 15% Barclays Euro High Yield BB Index USD Hedged. 35% of the composite benchmark would thus be constituted of US investment and non-investment grade bonds, while another 35% would be constituted of USD-denominated emerging market bonds. The remaining 30% of the benchmark comprises of European investment and non-investment grade bonds. With the fund manager managing the fund against this composite bench-mark within an internal tracking error budget, the fund would thus be exposed to somewhat equal weights to the debt markets of the US, Europe and Emerging Markets, as well as broad-based exposures to both the BBB and BB segments of the fixed income credit spectrum. The fund may also invest up to a maximum of 20% of its assets to mortgage-backed and asset-backed securities.

Similar to its customised benchmark, the fund is widely di-versified as well, holding 831 securities in the portfolio (as of end-March 2018), which should help in lowering the overall vola-tility of the fund. The fund has an off-benchmark exposure to asset-backed securities on the basis of attractive relative valua-tion, which has helped to improve the overall yield profile of the fund. Additionally, approximately 80% of the ABS exposure is floating rate, which should help in lowering sensitivity to move-ments in risk-free rates and US government yields.

Investors would have to take note that although the fund will typically maintain an average credit rating that is investment grade, the managers may allocate the portfolio’s assets to non-investment grade securities. With its broadly-diversified approach and almost equal allocations to the vari-ous bond market segments worldwide, the fund is recom-mended for investors who desire a generic fixed income fund which offers various bond classes within a single fund. The USD share class of the original strategy is also available in HGIF Glb High Income Bond AM USD.

• Actively-managedbondallocationacrossaspectrumof investment and non-investment grade bonds

• Allowsalmostequalexposurestovariousbondmarket segments that include emerging markets, European and US debt

• Recommendedforinvestorswhodesireagenericglobal bond fund which offers exposure to various bond classes within a single fund

Key FeAtureS

Our COMMeNtS

30 | fundsupermart

Blackrock Global Funds – Fixed Income Global Opportunities Fund (SGD-Hedged)

gloBAl Bondscore portfolio - Bond

2018 | 2017 | 2016 | 2015

For the other product recommendation for the global bond category (apart from the HGIF Global High Income Bond Fund), the BGF Fixed Income Global Opportunities Fund from renowned asset manager BlackRock is once again our pick for the fourth consecutive year running.

Adopting an absolute return approach, the fund is an unconstrained strategic bond fund that could invest across the entire spectrum of fixed income assets in order to fulfil its investment objective. The fund managers have elected not to utilise a benchmark index as a result, which provides the flexibility to allocate and rotate across any segment or sector across the bond universe. A diversified approach will be adopted, with the managers aiming to ensure that no sin-gle trade or position dominates the risk-return profile of the fund. Additionally, the BGF Fixed Income Global Opportuni-ties Fund has the ability to venture into negative duration as a result of the investment managers being able to sell short bond futures contracts. This ability essentially allows the managers to shield the overall portfolio against the risk of interest rates rising faster-than-expected. Investors should note that currency is also expected to be a driver of perfor-mance returns.

At this current juncture, the investment team have short durationpositionsintheUK,Japan,aswellasvariousEuro-zone sovereign bonds. Regarding the US bond market, the managers find value in the front-end of the Treasury yield curve, wherewith they are of the opinion that multiple Fed rate hikes have already been priced in and where higher level of yields makes the segment one of their favoured duration expressions among the developed economies. Regarding investment-grade and high yield credit, securitised assets and emerging market bonds, the managers have maintained diversified, albeit lower exposure to them as compared to the previous level in 2017. The team has also opined that beta exposure and spreads do not hold as much upside as before in the current market environment. The absolute re-turn nature of the fund’s strategy means the SGD-hedged share class of the fund will be more appropriate for investors based in Singapore and investing with a SGD perspective. The USD share class of the original strategy is also available with: BlackRock Fixed Inc Global Opps A6 USD.

• Unconstrained,strategicmandatethatallowsthemanager the flexibility to seek out opportunities across the entire spectrum of bond markets

• Fundhasabilitytoventureintonegativedurationtocushion against rising interest rates

• SGD-hedgedshareclassavailable;recommendedfor investors seeking a diversified and flexible global bond fund

Key FeAtureS

Our COMMeNtS

Fidelity Funds – Asian High yield Bond Fund (SGD-Hedged)

HigH Yield Bondscore portfolio - Bond

2018 | 2017 | 2016 | 2015 | 2014 | 2013 | 2012 | 2011

The Fidelity Asian High Yield Bond Fund retains its place on our Recommended List once again for the eighth consecutive time. Offering investors exposure to the Asian high yield debt market, the fund is expected to be primarily invested in lower-quality but higher-yielding Asian corporate bonds rather than sovereign debt, which tends to be of investment-grade rat-ings. Reflecting the fund’s focus on higher-yielding securities, the fund’s running yield was 7.9%, significantly higher than the investment grade focused Fidelity Funds – Asian Bond Fund’s yield of 4.6% (as of end-March 2018).

The manager aims to generate attractive risk-adjusted re-turns by investing in multiple, diversified positions of sub-in-vestment grade fixed income securities which have their prin-cipalbusinessactivitiesintheAsianregion.Creditselectionisobviously a key driver of returns, and the manager leverages on a team-based approach which combines four core areas of expertise – legal research, credit research, quantitative re-search and specialised trading to formulate the fund’s portfo-lio. Duration management and currency factors are less signifi-cant contributors, especially given that the fund’s underlying holdings tend to be largely denominated in USD, although the manager guides that the fund may keep a small position (which tends to be less than 10%) in Asian local currencies. In terms of interest rate risk, the manager tends to keep portfolio duration within +/- 1 year of the benchmark. With a core focus on both income and liquidity, a less liquid environment should not prove too challenging to the fund’s holdings should the fund manager need to lighten his portfolio.

Investors should note that the Asian high yield bond seg-ment tends to be fairly concentrated, with a large proportion of issuers coming from the real estate and the financial sec-tors. Nevertheless, the manager guides that the fund aims to be as diversified as possible, while we note that the fund also has the flexibility to hold up to 30% of its portfolio in non-Asian high yield bonds.

Owing to the higher-risk, higher-yield nature of the Asian high yield credit market, the fund is thus recommended for in-vestors seeking some of the strongest returns within the fixed income market whilst willing to undertake the higher risk as-sociated with investing in the segment. Although managed from a USD-perspective, the SGD-hedge minimises the risk of a decline in the USD against the SGD.

• ProvidesexposuretoAsianhighyieldbonds;largelyinvested in non-investment grade (lower quality) corporate bonds which entail higher risk

• ManagedfromaUSD-perspective,butSGD-hedgedclass reduces risk of fluctuations in the USD against the SGD

• Recommendedforinvestorslookingforexposuretoahigh-risk high-return segment of the fixed income market

Key FeAtureS

Our COMMeNtS

fundsupermart | 31

Schroder ISF Global High yield (SGD-Hedged)

HigH Yield Bondscore portfolio - Bond

2018 | 2017 | 2016 | 2012

For the category of global high yield bonds, the Schroder ISF Global High Yield fund continues to be our recommend-ed product on our Recommended List of Funds for 2018. Although a global high yield bond fund, the fund is tilted towards the western developed credit markets, and is ex-pected to have a sizable allocation to the US high yield debt market (which is the largest and deepest high yield market globally). The fund also holds a substantial amount of Euro-pean non-investment grade credit, offering investors some exposure to the European credit markets.

While the performance of the fund is benchmarked againsttheBloombergBarclaysGlobalHighYieldexCMBSex EMG2% IssuerCappedBond IndexUSD-hedged, theinvestment manager invests on a discretionary basis and is not limited to investing in accordance with the composition of the benchmark index. The investment manager is focused more on credit quality as opposed to yield solely, and the fund generally does not invest in the lower tiers of the credit spectrum such as distressed debt despite having no specific ratings restrictions, implying a more conservative approach. The duration of the fund will typically be within +/- 1 year of the benchmark, and all non-USD issues are hedged back to the USD.

As of end-March 2018, the fund had 532 holdings, and is underweight both BB and B-rated issues (comprising a total 71.1% of the overall portfolio) relative to its benchmark in-dex, and has off-benchmark exposure to AAA, AA and BBB-rated issues. The portfolio sports an effective duration of 3.91 years, with an effective yield of 6.07%.

The high yield bond segment provides some of the strongest returns within the global fixed income universe, but comes with commensurately higher risk. They tend to be more correlated to economic momentum rather than the overall direction of interest rates. While yields in devel-oped markets are generally higher than levels seen for most of 2017, credit spreads remain tight as risk-free rates have risen. Additionally, various parts of the world are at different stages of the credit cycle at this current juncture. Thus, in such a market environment, we believe that investors should opt for actively-managed strategies moving forward.

• Investedinglobalhighyieldbonds;primarilyinUSand European high yield bonds

• ManagedfromaUSD-perspective,althoughSGD-hedged class reduces fluctuations between the USD and SGD

• Recommendedforexposuretotheglobalhighyieldspace which tends to offer higher yields relative to safer segments, albeit with higher credit risk

Key FeAtureS

Our COMMeNtS

threadneedle (Lux) uS High yield Bond (SGD-Hedged)

HigH Yield Bondscore portfolio - Bond

2018 | 2017 | 2016 | 2013 | 2012

OurpickforthecategoryofUShighyieldbondsisColumbiaThreadneedle’s (Lux) US High Yield Bond fund, making 2018 the third consecutive year that the product has been on our Recommended List of Funds. The investment manager histori-cally tended to focus more on the higher rungs of the “junk bond”market,withsecuritiesratedCCCandbelow(deemedto be “extremely speculative” by credit rating agency S&P) usually forming a minor portion of the overall portfolio (6.4% of the portfolio, as of end-March 2018).

The manager employs a dynamic approach to investing, combining bottom-up and top-down analysis to uncover relative value opportunities in the broad high yield market. A proprietary risk and relative value rating system based on rigorous, in-house credit research helps position the portfo-lio based on the trade-off between risk and expected return. Bottom-up fundamental research typically contributes at least two-thirds of the alpha generated, and is crucial given that returns in the US high yield space are driven primarily by credit selection. The performance of the fund is benchmarked againsttheBofAMerrillLynchUSHighYieldCashPayCon-strained Index.

Yields have fallen from levels seen in 2016, and credit spreads have remained tight in the US non-investment grade marketin2017.ThefundisunderweightCCCandBB-ratedissues and overweight B-rated issues. On an industry basis, the fund is underweight retailers and automakers and is over-weight the cable and gaming industries. Despite the rise in yields since the start of 2018, credit spreads are still tight as risk-free rates have risen as well. With valuations not particu-larly attractive coupled with the fact that the US is in the later stages of the credit cycle, an actively-managed strategy is thus crucial for navigating the current environment going forward.

Investors should note that while the fund is managed from a USD-perspective (the majority of the fund’s holdings are mostly denominated in USD), the SGD-hedge provides an avenue for a minimisation of the fluctuations in the USD vis-à-vis the SGD. The fund is recommended for investors seek-ing dedicated exposure to the US high yield market; investors who want exposure to the USD may wish to consider the un-hedged class of the strategy instead.

• PrimarilyinvestedinUShighyieldcorporatebonds;diversified across a fairly large number of issuers

• Focusesoncreditselection,managerprefersindependent ratings on securities

• StrategymanagedfromaUSD-perspective,butSGD-hedged to minimise fluctuations of the USD against the SGD

• Recommendedforinvestorsseekingdedicatedexposure to the US high yield bond market

Key FeAtureS

Our COMMeNtS

32 | fundsupermart

LionGlobal Short Duration Bond Fund

singApore-centric Bondscore portfolio - Bond

2018 | 2017 | 2016 | 2015 | 2014 | 2013 | 2012 | 2008 | 2007 | 2006 | 2005 | 2004 | 2003 | 2002

The LionGlobal Short Duration Bond Fund is once again our pick for the SGD-centric bond space on our Recommended List of Funds for 2018. The fund’s continued focus on short duration exposure is pertinent in the current fixed income market environment, and its typical allocation range of 33% and 60% to Singapore bonds makes it fairly Singapore-cen-tric. As of end-March 2018, 48.7% of the fund’s geographic exposure is in Singapore.

The fund has been known to focus on corporate bond issues instead of sovereign debt issues and the investment manager has guided that credit exposure will predominantly be in investment-grade credits; with the fund’s end-March 2018 average credit rating of BBB a reflection of the man-ager’s intention and mandate. Given the expectation that interest rates in the US will continue to normalise higher go-ing forward, duration management continues to be vital. The fund has maintained a defensive stance, with its portfolio’s weighted duration at 2.19 years, positioning itself towards the shorter end of the yield curve.

Investors should note that currency positioning is unlike-ly to be a key driver of returns for the fund, given that the fund’s portfolio currency exposure is primarily to the SGD. The investment manager is cognisant of currency risks when investing in non-SGD denominated bonds, and will seek to hedge currency exposure where appropriate. While man-aged against the 12-Month S$ Interbank Bid Rate, the fund actually adopts an “absolute return” approach which sees it target positive returns regardless of market conditions.

The fund’s prudent duration management and focus on higher-quality bonds has aided its stability and resilience, earning it a continued recommendation for investors seeking a lower-risk Singapore-centric bond fund with the flexibility to invest globally. The fund also presents a diversified ap-proach to investing directly in selected local company bonds; investors are likely to recognise many of the names within the fund’s 10 largest holdings.

• Previouslyknownasthe“LionGlobalBondFund”,the change in name and mandate reflects a conscious shift towards a more defensive (lower duration) positioning

• Focusesonhigher-qualityglobalbondswithatilttowards the domestic market, although not as highly-diversified as most global bond funds

• ManagedfromaSGD-perspective;themajorityofsecurities held by the fund are SGD-denominated

• Recommendedforinvestorsseekingalower-riskSingapore-centric bond fund with the flexibility to invest globally

Key FeAtureS

Our COMMeNtS

united SGD Fund

singApore-centric Bondscore portfolio - Bond

2018 | 2017 | 2016 | 2015 | 2014 | 2013 | 2012 | 2011

UOB Asset Management’s United SGD Fund continues to be ourpickfortheSingapore-Centricfixedincomecategoryonthe Recommended List. The fund’s focus on short duration exposure makes it a pertinent choice among the SGD-cen-tric bond products available. Managed against the 6-month SIBID rate, the fund is invested primarily in short duration credit with overall duration kept fairly low although inves-tors should be aware that the fund manager has allocations to perpetual bonds that are either expected to be called or which offer non-call step ups that are sufficiently attractive.

As of end-March 2018, the fund had a weighted average yield-to-maturity of 3.6% with an effective duration of just 1.8 years, representing a fairly low level of interest rate risk.

Our communication with the investment manager re-vealed that the fund tends to be focused on credits, with credit selection expected to be the main driver of the fund’s returns, making selection of issues critical. The investment manager employs both bottom-up and top-down research analysesintheircreditselection.Currencyisnotexpectedtoplay a major role in deriving returns, as all non-SGD exposure in the portfolio is expected to be hedged back to the SGD.

In 2017, the fund’s positioning was relatively consistent, withmainallocationsinChinaandSingapore.Themanagerhas trimmed some of its real estate exposures last year as well. The fund has also initially raised its cash holdings to-wards the end of 2017, and have actively deployed its cash towards pricing mismatches in secondary market issues when risk-free rates in the US rose. As of end-March 2018, there are 58 holdings in the portfolio. The fund continues to maintain its “ladder” strategy, where maturities are spread across a one-year, two-year and three-year time frame. Bond issues that mature in the current year will be reinvested by the manager at the prevailing interest rates, enabling the portfolio to ride on an increasing interest rate environment.

At this current juncture, adopting a defensive stance as risk-free rates rise is crucial not just for returns but for capital preservation. Investors who desire slightly higher yields from exposure to corporate credit but with lower duration risk can consider the United SGD Fund for the fixed income portion of their portfolios.

• SeekstobeatSGDdepositrates;provideshigheryields compared to most money market funds

• Thefundcanholdlonger-maturitysecuritieswhichthe manager expects to be called within 3 years

• ManagedfromaSGD-perspective;managertendsto adopt a passive currency hedge for non-SGD denominated securities

• Recommendedforinvestorswhoareseekingareasonable level of yield but want to avoid taking on excessive interest rate risk

Key FeAtureS

Our COMMeNtS

fundsupermart | 33

For the Designated Parking Facility, the NikkoAM Shen-ton Short Term Bond is our recommended product on our list of Recommended Funds, whereby the fund invests in high quality short duration bond issues and money mar-ket instruments, allowing investors to obtain a reasonable level of yield without taking on excessive interest rate risk. The investment managers focus on high quality issues and seek to maintain the average credit rating of bonds at BBB+ and above, avoiding issues which are rated lower than BBB-. As of end-March 2018, the average portfolio credit rating of the fund’s holdings was A-. In managing the portfolio, the managers also do not buy into perpetual or undated bonds.

The investment managers adopt a prudent approach to duration management, with the fund’s duration typically kept below 2 years (the fund’s portfolio duration was 1.42 years as of end-March 2018). Our communication with the investment managers indicated that they do not utilise a barbell duration strategy, but employ a laddered ap-proach in terms of bond maturities – which the managers believe will lead to smaller immediate marked-to-market losses when interest rates eventually increase. In addition, currency is not expected to be one of the main drivers of fund returns, with the managers typically hedging all non-SGD positions back to the SGD. As of end-March 2018, the fund is broadly diversified (128 holdings) with larger weights allocated to China, Singapore and Hong Kong.On a sector basis, banks are the largest allocation on ac-count of high credit quality and attractive valuation.

Our COMMeNtS

There is no lag time involved in the utilisation of the NikkoAM Shenton Short Term Bond Fund to finance an investment in another fund, so investors will be able to transact at that day’s price. In addition, investors can spec-ify the dollar investment amount when making buy orders funded with the NikkoAM Shenton Short Term Bond Fund, instead of having to determine the number of units to switch, making it similar to a cash transaction and provid-ing convenience to investors.

Given its transactional and investment features, the fund is recommended for investors who want to park funds for future investment, but want to earn a respect-able amount of interest at the same time. The short dura-tion nature of the fund also makes it suitable for investors who are looking for a fund which can offer a decent level of yield, but does not come with high interest rate risk.

[Investors who are looking for an alternate currency parking facility with similar transactional features may be interested in the AUD-hedged class of the Nikko AM Shenton Short Term Bond Fund, which utilises currency forwards to swap SGD exposure of the Nikko AM Shenton Short Term Bond Fund (S$) for AUD exposure, allowing for an additional component of returns due to interest rate carry (as yields on AUD deposits are currently higher than those on SGD deposits). Investors should note that in the Nikko AM Shenton Short Term Bond Fund (A$), the higher yield comes with AUD currency risk (the risk of the AUD depreciating against the SGD).]

NikkoAM Shenton Short term Bond Fund S$

designAted pArking fAcilitYcore portfolio - Bond

2018 | 2017 | 2016 | 2015 | 2014 | 2013 | 2012 | 2011

• Investsinshortdurationinstrumentslikeshort-termbondsandmoneymarketinstruments• Fairlydiversifiedacrossissuersandcountries(Asia),whilebeingmanagedfromaSGD-perspective• “Sameday”transactionalfeaturemakesthefundausefulparkingtool• Recommendedforinvestorsseekingareasonablelevelofyieldbutwanttoavoidtakingonexcessiveinterestraterisk

Key FeAtureS

34 | fundsupermart

First State Bridge

AsiA BAlAncedcPFis-sA PortFolio

2018 | 2017 | 2016 | 2015 | 2014 | 2013 | 2012 | 2011 | 2010 | 2009 | 2008 | 2007 | 2006

Being on our Recommended List for more than a decade, the venerable First State Bridge deserves its place once again, ranking first on its overall ranking. Over the past five years, the fund has generated an annualised return of 6.5% as of the end of March 2018. On a calendar year basis, the fund has also ranked first multiple times, and has not let investors down on its overall risk management throughout its consistent performance over the years. It has registered a lower three-year maximum drawdown and downside deviation than its peer.

Based on the fund’s benchmark, the equity – fixed in-come allocation is expected to be 50:50 (the fund had 49.0% of its assets in equities and the remaining in fixed income and liquidity as of end-March 2017). Asian equi-ty exposure is obtained via the First State Asian Equity Plus fund while the First State Asian Quality Bond Fund provides investment grade Asian fixed income exposure which lends the fund stability. Investors looking for the same Asian equity strategy without the fixed income component may wish to consider the First State Dividend Advantage, which feeds into the same underlying equity strategy and is also featured in our Recommended Funds list for 2018.

Investors should note that while the fund is denomi-nated in SGD, only the fixed income portion of the fund will be hedged back to the SGD, which means that inves-tors in the fund will still be exposed to the various Asian currencies in the equity portion of the portfolio. However, given its diversified nature, currency risk is expected to be mitigated. The fund is suitable for investors seeking a product with exposure to both Asian equity markets as well as investment grade credit.

• Aconsistentperformerwithastrongtrackrecord,aided by the fund’s defensive nature

• Resilientin“down”markets,aidedbyallocationtofixed income

• SuitableforinvestorsseekingexposuretobothAsianequities and investment grade bonds

Key FeatureS

Our COMMeNtS

Schroder Multi-assetrevolution

GloBAl BAlAncedcPFis-sA PortFolio

2018 | 2016 | 2015 | 2014 | 2013 | 2012

Returning to our List of Recommended Funds is the Schroder Multi-Asset Revolution fund for the category of CPFIS-SA Approved Global Balanced! The fund regis-tered a five-year 5.0% annualised return (as of end-March 2018), and its performance has been relatively consistent; it managed to rank first in multiple calendar year periods over the past five years. In terms of its overall risk scoring, it has also consistently ranked first, clocking a three-year downside deviation of 3.8% and a three-year maximum drawdown of -10.0% as compared to its category average of -14.1%.

The Schroder Multi-Asset Revolution fund is a unique, globally diversified fund-of-funds that provides exposure to bonds, stocks and real estate – the fund was restruc-tured in 2006 to adopt a multi-asset approach, which has seen it outperform its customised benchmark. The fund adopts a flexible and active asset allocation strategy that is left to the discretion of the investment managers with the intention of optimising returns and lowering risks ac-cording to changing market conditions.

The fund obtains asset class and market exposure via investing in various underlying funds that include the Schroder ISF US Large Cap fund, Schroder ISF QEP Glob-al Core, Schroder Singapore Fixed Income fund, Schroder Global Quality Bond and the Schroder Asian Investment Grade Credit fund. Investors should take note that given the global nature of the portfolio, currency risks are miti-gated due to the fund’s wide geographic diversification and the employment of active currency hedging (to the SGD) by the managers on the fund’s fixed income assets.

• Strongtrackrecordonarisk-adjustedbasis;alsoconsistently outperformed benchmark since fund restructured in 2006

• Multi-Assetapproachtofulfilobjectiveoflong-termcapital appreciation

• Mayappealtoinvestorsseekingahighly-diversifiedfund, with exposure to various asset classes

Key FeatureS

Our COMMeNtS

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DISclAIMER: All materials and contents found in this advertisement are strictly for general circulation and informational purposes only and should not be considered as an offer, or solicitation, to deal in any of the funds or products found/identified in this advertisement. While iFAST Financial Pte ltd (“IFPl”) has tried to provide accurate and timely information, there may be inadvertent delays, omissions, technical or factual inaccuracies and typographical errors. Any opinion or estimate contained in this report is made on a general basis and neither IFPl nor any of its servants or agents have given any consideration to nor have they or any of them made any investigation of the investment objective, financial situation or particular need of any user or reader, any specific person or group of persons. You should consider carefully if the products you are going to purchase are suitable for your investment objective, investment experience, risk tolerance and other personal circumstances. If you are uncertain about the suitability of the investment product, please seek advice from a financial adviser, before making a decision to purchase the investment product. Past performance is not indicative of future performance. The value of the investment products and the income from them may fall as well as rise. Opinions expressed herein are subject to change without notice. Please note that only certain security(ies) herein are available to all investors, while the rest are only available for certain persons to invest in, such as Accredited Investors (as defined in the Securities and Futures Act) or one who invests at least S$200,000 (or its equivalent currency) per transaction. To qualify as an Accredited Investor, one needs to submit a declaration form and certain relevant supporting documents, according to iFAST’s prevailing policies and procedures. Please read our full disclaimers on the website at www.FSMOne.com

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DIScLAIMeR: All materials and contents found in this advertisement are strictly for general circulation and informational purposes only and should not be considered as an offer, or solicitation, to deal in any of the funds or products found/identified in this advertisement. While iFAST Financial Pte Ltd (“IFPL”) has tried to provide accurate and timely information, there may be inadvertent delays, omissions, technical or factual inaccuracies and typographical errors. Any opinion or estimate contained in this report is made on a general basis and neither IFPL nor any of its servants or agents have given any consideration to nor have they or any of them made any investigation of the investment objective, financial situation or particular need of any user or reader, any specific person or group of persons. You should consider carefully if the products you are going to purchase are suitable for your investment objective, investment experience, risk tolerance and other personal circumstances. If you are uncertain about the suitability of the investment product, please seek advice from a financial adviser, before making a decision to purchase the investment product. Past performance is not indicative of future performance. The value of the investment products and the income from them may fall as well as rise. Opinions expressed herein are subject to change without notice. Please note that only certain security(ies) herein are available to all investors, while the rest are only available for certain persons to invest in, such as Accredited Investors (as defined in the Securities and Futures Act) or one who invests at least S$200,000 (or its equivalent currency) per transaction. To qualify as an Accredited Investor, one needs to submit a declaration form and certain relevant supporting documents, according to iFAST’s prevailing policies and procedures. Please read our full disclaimers on the website at www.FSMOne.com

FSMOne.com is the online distribution arm of iFAST Financial Pte Ltd, a subsidiary of iFAST corporation Ltd. iFAST Financial Pte Ltd is a Licensed Dealer, custodian, Financial Adviser, cPFIS-Registered Investment Administrator, and provides Portfolio Management Services in Singapore. iFAST Financial Pte Ltd is also a member of SGX-ST Securities Trading and cDP Securities clearing, and a registered cDP Depository Agent. Singapore company Registration No. 200000231R.

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DISCLAIMER: All materials and contents found in this advertisement are strictly for general circulation and informational purposes only and should not be considered as an offer, or solicitation, to deal in any of the funds or products found/identified in this advertisement. While iFAST Financial Pte Ltd (“IFPL”) has tried to provide accurate and timely information, there may be inadvertent delays, omissions, technical or factual inaccuracies and typographical errors. Any opinion or estimate contained in this report is made on a general basis and neither IFPL nor any of its servants or agents have given any consideration to nor have they or any of them made any investigation of the investment objective, financial situation or particular need of any user or reader, any specific person or group of persons. You should consider carefully if the products you are going to purchase are suitable for your investment objective, investment experience, risk tolerance and other personal circumstances. If you are uncertain about the suitability of the investment product, please seek advice from a financial adviser, before making a decision to purchase the investment product. Past performance is not indicative of future performance. The value of the investment products and the income from them may fall as well as rise. Opinions expressed herein are subject to change without notice. Please note that only certain security(ies) herein are available to all investors, while the rest are only available for certain persons to invest in, such as Accredited Investors (as defined in the Securities and Futures Act) or one who invests at least S$200,000 (or its equivalent currency) per transaction. To qualify as an Accredited Investor, one needs to submit a declaration form and certain relevant supporting documents, according to iFAST’s prevailing policies and procedures. Please read our full disclaimers on the website at www.FSMOne.com

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Step 1: Figure Out YOur inveStOr prOFile!The old adage that there is no free lunch in markets is probably true. In order to produce investment returns, one essentially needs to take some form of risk. However, before we start investing and taking risks with our capital, we would need to know our own risk tolerance.

Examining your own behaviour and risk appetite is thus the first step required before pulling the trigger. In-vestors just starting out should there-fore ask themselves how much they are willing to risk and what kind of volatil-ity they are willing to accept in order to stay vested. For instance, people with relatively high risk tolerance would probably accept volatility levels that are characteristic of those seen in eq-uities. However, if high volatility levels make you uncomfortable to stay vest-ed, perhaps you are more inclined to be risk averse, and gunning for lower risk assets like high quality fixed income would be more appropriate.

Some factors to consider would be your liquidity needs: how much cash do you need in the future and when do you need the cash by? Most of us have bills and student or mortgage loans to service, and figuring out all your re-quirements is a crucial step; it allows you to thus plan for what you need and how much you can set aside to invest. It also enables you to decide on an appropriate investment plan that can meet those needs or goals of yours. If on the other hand, you do not have any short term commitments or finan-cial obligations but have the desire to build some capital and are willing to take some risks with the expectation of higher potential returns, then you could plan out your capital that you are willing to commit and invest. If, however, you are a retiree, and require

a regular stream of income to support your retirement days, then perhaps a lower risk investment plan would be more suitable as you may not be able to afford the risks of capital loss.

Step 2: DeciDe On the ApprOpriAte ASSet AllOcAtiOnOnce you know your risk appetite and investment goals, choosing your instru-ments and your asset allocation is the next step. At Fundsupermart, we have 2 main asset classes (bonds and equities) for investors to choose from and to con-struct their portfolios.

Given the fact that equities are riskier than bonds, investors with a higher risk tolerance and the ability to take more risks would favour a more aggressive portfolio consisting of more equity funds, while investors who are more risk averse may prefer to invest in a more conservative portfolio with more bond funds. For investors who perhaps possess a medium risk tolerance profile, having an equal exposure to both bonds and equities is a viable course of action. They could also opt for balanced funds, which offer a proportionate amount of equities and bonds, helping to strike a better balance between the 2 main asset classes. They may also be good simple one stop solutions for inexperienced or investors just starting out who are unfamiliar with asset allocation strategies, delegating the task to the investment managers and professionals!

Step 3: DeciDe On the exAct FunD(S) tO inveSt in AnD Keep upDAteD - tOOlS AnD SuppOrt AvAilAble!After choosing your desired asset alloca-tion, you would next need to choose the funds needed to fulfil those allocations.

With regards to the various kinds of funds available on Fundsupermart, fund information such as prospectuses and

factsheets are available for investors to download and carry out the necessary ‘homework’ before investing. Addition-ally, investors may also like to consider funds in the Recommended Funds List which have been spotted to have strong-er performances and better consistency in their investment strategy compared to peer funds. The list also serves as a starting point for investors to choose an appropriate fund for their portfolio, given that investors just starting out may not know where to begin given the en-tire plethora of funds we offer.

Additionally, our in-house Research team monitors and constantly provides timely updates on the various markets under our coverage. Star ratings provide our take on the relative attractiveness of those markets, helping investors to see which markets sport the most attrac-tive potential upside. Investors can also review articles listed in the Fund house depository section which provides in-sights as to what investment profession-als are thinking about the investment landscape or their thoughts regarding the various market segments or market-related events.

For comparison of similar funds, the funds selector acts as a screener for funds by asset management groups, risk ratings, asset class categories, special-ist sectors, and other useful filters. For better comparison, the chart centre pro-vides a graphical comparison of the per-formances of FSM indices and funds on our platform.

Should you be unsure of the risks and commitments involved in any investment product, contact us at advisory@fundsupermart.com or speak to your friendly and informative Invest-ment Advisers at our office (Ocean Financial Centre – 10 Collyer Quay, #26-01, Singapore 049351).

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advisory@fundsupermart.com Contact us at: 6557 2853, 8.30am to 5.30pm, Monday to Friday (excluding Public Holidays)

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DISClAIMeR: All materials and contents found in this advertisement are strictly for general circulation and informational purposes only and should not be considered as an offer, or solicitation, to deal in any of the funds or products found/identified in this advertisement. While iFAST Financial Pte ltd (“IFPl”) has tried to provide accurate and timely information, there may be inadvertent delays, omissions, technical or factual inaccuracies and typographical errors. Any opinion or estimate contained in this report is made on a general basis and neither IFPl nor any of its servants or agents have given any consideration to nor have they or any of them made any investigation of the investment objective, financial situation or particular need of any user or reader, any specific person or group of persons. You should consider carefully if the products you are going to purchase are suitable for your investment objective, investment experience, risk tolerance and other personal circumstances. If you are uncertain about the suitability of the investment product, please seek advice from a financial adviser, before making a decision to purchase the investment product. Past performance is not indicative of future performance. The value of the investment products and the income from them may fall as well as rise. Opinions expressed herein are subject to change without notice. Please note that only certain security(ies) herein are available to all investors, while the rest are only available for certain persons to invest in, such as Accredited Investors (as defined in the Securities and Futures Act) or one who invests at least S$200,000 (or its equivalent currency) per transaction. To qualify as an Accredited Investor, one needs to submit a declaration form and certain relevant supporting documents, according to iFAST’s prevailing policies and procedures. Please read our full disclaimers on the website at www.FSMOne.com

FSMOne.com is the online distribution arm of iFAST Financial Pte ltd, a subsidiary of iFAST Corporation ltd. iFAST Financial Pte ltd is a licensed Dealer, Custodian, Financial Adviser, CPFIS-Registered Investment Administrator, and provides Portfolio Management Services in Singapore. iFAST Financial Pte ltd is also a member of SGX-ST Securities Trading and CDP Securities Clearing, and a registered CDP Depository Agent. Singapore Company Registration No. 200000231R.

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Get priority invites to exclusive closed-door events, redeem exclusive rewards items, enjoy preferential rates on subscription services such as live streaming of Stock market prices and additional Rewards Points when you invest with any of our products and services. In addition, as an Accredited Investor, you can subscribe to selected SGX IPO private placement issues and HKEX IPOs as well as invest in Restricted Funds normally only available to private banking clients.

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DISclAIMER: All materials and contents found in this advertisement are strictly for general circulation and informational purposes only and should not be considered as an offer, or solicitation, to deal in any of the funds or products found/identified in this advertisement. While iFAST Financial Pte ltd (“IFPl”) has tried to provide accurate and timely information, there may be inadvertent delays, omissions, technical or factual inaccuracies and typographical errors. Any opinion or estimate contained in this report is made on a general basis and neither IFPl nor any of its servants or agents have given any consideration to nor have they or any of them made any investigation of the investment objective, financial situation or particular need of any user or reader, any specific person or group of persons. You should consider carefully if the products you are going to purchase are suitable for your investment objective, investment experience, risk tolerance and other personal circumstances. If you are uncertain about the suitability of the investment product, please seek advice from a financial adviser, before making a decision to purchase the investment product. Past performance is not indicative of future performance. The value of the investment products and the income from them may fall as well as rise. Opinions expressed herein are subject to change without notice. Please note that only certain security(ies) herein are available to all investors, while the rest are only available for certain persons to invest in, such as Accredited Investors (as defined in the Securities and Futures Act) or one who invests at least S$200,000 (or its equivalent currency) per transaction. To qualify as an Accredited Investor, one needs to submit a declaration form and certain relevant supporting documents, according to iFAST’s prevailing policies and procedures. Please read our full disclaimers on the website at www.FSMOne.com

FSMOne.com is the online distribution arm of iFAST Financial Pte ltd, a subsidiary of iFAST corporation ltd. iFAST Financial Pte ltd is a licensed Dealer, custodian, Financial Adviser, cPFIS-Registered Investment Administrator, and provides Portfolio Management Services in Singapore. iFAST Financial Pte ltd is also a member of SGX-ST Securities Trading and cDP Securities clearing, and a registered cDP Depository Agent. Singapore company Registration No. 200000231R.