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4 New Funds On Board (Jul/Aug): EM, US Bond And Chinese Fund With Quarterly Distributions! October 10, 2013
In the first two months of 2H2013, we have brought four new funds on our platform.
Author : Fundsupermart.com


Untitled Document

In the first two months of 2H2013, we have brought four new funds on our platform:

First State Global Emerging Markets Select Fund (USD) I
Manulife Global Fund - U.S. Bond Fund (USD) AA
BOCIP China Value Fund (HKD)
JPM Emerging Markets Opportunities A (Acc) – USD

We have already introduced to you JPM Emerging Markets Opportunities A (Acc) – USD in early August (see Idea Of The Week: New Emerging Markets Equity Fund On FSM!). Therefore, in this article, we focus on the other three funds that show uniqueness in their respective fields.

FIRST STATE GLOBAL EMERGING MARKETS SELECT FUND (USD) I

View factsheet

Launched in October 2012, this fund "invests primarily in a diversified portfolio of securities of larger capitalisation companies established or having significant operations in emerging economies and are listed, traded or dealt in on Regulated Markets worldwide".

Management Team With Track Record – This fund was set up on our platform to replace our previous Fund Pick, First State Global Emerging Markets Leaders Fund (USD) I, which soft closed on 7 September 2013. The fund is managed by the same team as that of the aforementioned Fund Pick, which our research team has confidence in its ability to deliver similarly impressive performance in this fund.

Outperforming Benchmark – As of 31 August 2013, the fund has outperformed its benchmark, MSCI Emerging Markets Index, in terms of 3-month performance, year-to-date performance and cumulative performance since its inception in October 2012 (see Table 1). Although the emerging markets generally posted a negative return during the period, these results indicate a potential for the fund to have better resilience. The fund recorded a 5.42% positive return since launch as of 7 October 2013.

Table 1:
Cumulative performance in USD (%)
 
3 mths
YTD
Since Inception
-4.4
-5.2
-1.8
MSCI Emerging Markets Index
-6.9
-9.9
-4.5
Source: First State Investments (HK) Ltd
* The performance quoted are based on USD total return (non-dividend distributing) of the fund as of end-August 2013.

MANULIFE GLOBAL FUND - U.S. BOND FUND (USD) AA

View factsheet

This fund aims to maximise its total returns "from a combination of current income and capital appreciation". To achieve this objective, "the fund will normally invest its assets in USD denominated fixed-income securities with an intended average credit rating of A and above".

Strong Performance And Resilience – Launched in January 2007, this fund has a solid track record for us to study its performance. Compared to its USD fixed income fund peers of risk rating 1 on our platform, it ranks first in terms of one-, three- and five-year cumulative returns (in HKD terms, as of 4 October 2013). It also recorded fewer losses than its peers when USD bond funds encountered market corrections (see Table 2). In calendar years 2008, 2009, 2010 and 2012, the fund has been the second best among its peers (see Table 3).

Table 2:
Cumulative Performance of Funds(%)
 
YTD
6 mths
1 yr
3 yrs
5 yrs
Since Launch
Launch Date
-1.15
-2.46
-0.21
12.45
43.50
49.20
29/01/2007
-3.72
-3.37
-3.76
4.98
39.23
28.74
16/12/2004
-1.90
-2.59
-1.41
7.51
39.14
79.53
17/04/2002
-2.26
-3.33
-1.88
9.67
38.45
29.62
20/04/2007
-3.14
-3.48
-2.56
10.00
37.51
36.98
25/09/2006
Average Return of USD Fixed Income Funds of Risk Rating 1 on FSM
-2.30
-2.59
-2.20
6.50
27.54
41.41
 
Source: iFAST compilations, as at 4 October 2013, performance in the tables are in HKD terms, calculated on NAV-to-NAV basis, with any income or dividend reinvested. For updated performance numbers, please refer to our website.

Table 3:
Calendar Year Performance (%)
 
2012
2011
2010
2009
2008
8.70
5.23
9.43
17.85
-2.88
5.86
5.12
7.00
14.52
-9.37
9.20
2.04
8.51
15.40
0.18
6.62
6.05
9.79
19.38
-13.45
6.26
9.28
8.56
11.22
-4.10
Average Return of USD Fixed Income Funds of Risk Rating 1 on FSM
4.78
5.27
6.72
10.48
-2.76
Source: iFAST compilations, as at 4 October 2013, performance in the tables are in HKD terms, calculated on NAV-to-NAV basis, with any income or dividend reinvested. For updated performance numbers, please refer to our website.

BOCIP CHINA VALUE FUND (HKD)

View factsheet

As this fund has only been launched in January 2011, we think that its track record is insufficient for us to further analyse its performance. Looking at its investment objective, this fund seeks to "achieve long term capital growth by investing primarily in securities issued by or linked to companies which activities and business are closely related to the economy of the People's Republic of China ("PRC")". Specifically, it mainly invests in H shares, shares of red-chip companies and shares of other Hong Kong-listed companies listed on the Stock Exchange of Hong Kong Limited and may invest up to 10% of its Net Asset Value in B shares listed on the stock exchanges in the PRC.

Quarterly Distribution And High Dividend Yield* – This fund is the only fund to declare quarterly distributions on our platform. While such distribution policy is rare among Chinese equity funds, its annualised dividend yield of 5.6% makes it even rarer. However, investors should note that "in the event that the net income is insufficient to pay the distributions that it declares", the fund "may effectively pay distributions out of capital". This may reduce the capital that the fund has available for investment in future and may constrain capital growth.

* The amount of distributions (if any) is not guaranteed and subject to Fund Manager's discretion. Positive distribution rate does not mean that one can receive positive return.

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First State Global Emerging Markets Select Fund (USD) I
Risk Disclosure Statements

• Please refer to the Fund's offering document for the details of its "Risk factors", particularly the Emerging Markets Risks. Emerging Market Risk – Investing in securities in emerging markets (countries considered to have social or business activity in the process of rapid growth and development) may involve a greater risk than investing in securities in developed markets. These risks may include sharp price movements, liquidity and volatility risk, currency risk, changes in social, political or economic policies, uncertainties with respect to taxation policies, and risks associated with the use of access products.
The accounting, auditing and financial reporting standards of emerging markets may differ from those of developed markets which may result in a lower level of assurance and transparency of information. The custody risks and costs of holding securities are generally higher in emerging markets. Less information is available to investors in respect of securities of companies in the emerging markets as compared to securities of companies in developed markets.
• The value of the Fund can be extremely volatile according to the change of market situation and could go down within a short period of time. It is possible that the entire value of your investment could be lost.
• The regulatory requirements of SFC state that investors should not invest in the product unless the intermediary who sells it to you has advised you that the product is suitable for you and explained how it is consistent with your investment objectives. Note: Fundsupermart.com is a self-directed online distributor and we only provide limited personal financial advisory services upon a particular request from client.

Manulife Global Fund - U.S. Bond Fund (USD) AA
Risk Disclosure Statements

• Manulife Global Fund (the "Fund") is an umbrella fund comprising a number of sub-funds investing primarily in equity and bond securities, each of which has a different investment objective and risk profile.
• Certain sub-funds with significant exposure to non-investment grade bonds, structured products, a single emerging market, a single sector / geographic region, or smaller companies may involve credit / counterparty, concentration, currency, liquidity, volatility, down-grading, regulatory and political risks.
• Certain sub-funds trading in futures, forwards, options, swaps and other financial derivative instruments ("FDI") may involve credit / counterparty, correlation, liquidity and settlement risks.
• Certain sub-funds may be subject to a performance fee that may be paid on unrealized gains which may subsequently never be realized; Investors may still incur such a fee despite investment capital loss.
• Investors may suffer substantial loss of their investments in certain sub-funds that are subject to higher risks, extreme volatility, less liquid market conditions, or default by counterparty.
• Investment involves risks. Investors should not invest in the Fund solely based on this material and should read the offering document(s) of the Fund for details, including the risk factors, charges and features of the Fund.
• The regulatory requirements of SFC state that investors should not invest in the product unless the intermediary who sells it to you has advised you that the product is suitable for you and explained how it is consistent with your investment objectives. Note: Fundsupermart.com is a self-directed online distributor and we only provide limited personal financial advisory services upon a particular request from client.

BOCIP China Value Fund (HKD)
Risk Disclosure Statements

• BOCIP China Value Fund (the "Sub-Fund") will mainly invest in H shares, shares of red-chip companies and shares of other Hong Kong-listed companies listed on the Stock Exchange of Hong Kong Limited and may invest up to 10% of the Sub-Fund's Net Asset Value in B shares listed on the stock exchanges in the People's Republic of China ("PRC"). The Sub-Fund currently does not intend to invest in or have any exposure to A shares.
• The key risks to which the Sub-Fund is subject to include: economic, political and social risks, risk relating to the PRC legal system and regulatory framework, exchange rate risk, risk relating to choice of investments and market volatility, single country risk, taxation risk, value stock risk and risk relating to distribution.
• Investment in emerging markets involves special risks and considerations, such as, potential price and market volatility and illiquidity. These factors may have an adverse impact on the performance of the Sub-Fund.
• The indicative per annum distribution is not guaranteed and may not be paid. The amount of distributions (if any) of the Sub-Fund is not guaranteed and may go up and down. The Manager retains the absolute discretion to determine or vary the frequency and dates for distribution. The Manager intends to declare an indicative per annum distribution rate at the beginning of each calendar year.
• The Manager will normally make distributions out of net income received or receivable by the Sub-Fund. However, in the event that the net income is insufficient to pay the distributions that it declares, the Manager may also, in its absolute discretion, determine that such distributions be paid out of the capital of the Sub-Fund, or the Manager may, in its discretion, pay distributions out of gross income while charging/paying all or part of the Sub-Fund's fees and expenses to/out of the capital of the Sub-Fund, resulting in an increase in distributable income for the payment of distributions by the Sub-Fund and therefore, the Sub-Fund may effectively pay distributions out of capital. This may reduce the capital that the Sub-Fund has available for investment in future and may constrain capital growth.
• Investors should be aware that in circumstances where distributions are paid out of capital of the Sub-Fund, this amounts to a return or withdrawal of part of the amount investors originally invested or from any capital gains attributable to that original investment. Any distributions involving payment of distributions out of the Sub-Fund's capital or payment of distributions effectively out of the Sub-Fund's capital (as the case may be) may result in an immediate decrease in the Net Asset Value per Unit.
• Investment involves risks and the Sub-Fund may not be suitable for everyone. The Sub-Fund is subject to market and exchange rate fluctuations and to the risks inherent in all investments. Investor could face no returns and/or suffer significant loss related to the investments.
• Please refer to the offering document of the Sub-Fund for further details including investment policy and risk factors, before making any investment decision.
• The regulatory requirements of SFC state that investors should not invest in the product unless the intermediary who sells it to you has advised you that the product is suitable for you and explained how it is consistent with your investment objectives. Note: Fundsupermart.com is a self-directed online distributor and we only provide limited personal financial advisory services upon a particular request from client.

JPM Emerging Markets Opportunities A (Acc) - USD
Risk Disclosure Statements

• The Fund invests primarily in emerging markets companies.
• The Fund is therefore exposed to emerging markets, currency, liquidity and equity risks.
• Investors may be subject to substantial losses.
• The regulatory requirements of SFC state that investors should not invest in the product unless the intermediary who sells it to you has advised you that the product is suitable for you and explained how it is consistent with your investment objectives. Note: Fundsupermart.com is a self-directed online distributor and we only provide limited personal financial advisory services upon a particular request from client.

Eastspring Investments - US High Investment Grade Bond (USD) A
Risk Disclosure Statements

• The Fund invests in bonds, which are subject to interest rate fluctuations, liquidity, and credit risks, such as downgrade risk and the risk of issuer default.
• The Fund invests in a single country, and is subject to greater volatility risks compared to a broad based investment.
• The Fund may offer currency hedged share classes which involve currency hedging transactions that may, in extreme cases, adversely affect the Fund's net asset value.
• The Fund invests in Asset Backed Securities and Mortgage Backed Securities, both of which have limited recourse to the issuers. These instruments are also generally illiquid and subject to market, credit and interest rate risks.
• The Fund will also be exposed to credit risk of the counterparties with which it trades.
• The Fund may, at its discretion, pay dividends out of capital or gross income while charging all or part of its fees and expenses to its capital, resulting in higher distributable income. Thus, the Fund may effectively pay dividends out of capital. Payment of dividends out of capital (effective or not) amounts to a return or withdrawal of part of an investor's original investment or from any capital gains attributable to that original investment, which may result in an immediate reduction of the net asset value per share/unit.
• The Fund may, for efficient portfolio management and/or hedging purposes, have significant exposure to financial derivatives instruments, which involve risks may be different and greater than, the risks presented by traditional investments. These risks include market, management, credit, liquidity, operational and leverage risks. The Fund will also be exposed to credit risk of the counterparties with which it trades. The use of such instruments may be ineffective in adverse market situations and may incur losses.
• Under extreme market conditions and circumstances, investors may lose the entire principal amount originally invested. Investors should not make any investment decision solely based on this document and should read the Funds' offering document for details.
• The regulatory requirements of SFC state that investors should not invest in the product unless the intermediary who sells it to you has advised you that the product is suitable for you and explained how it is consistent with your investment objectives. Note: Fundsupermart.com is a self-directed online distributor and we only provide limited personal financial advisory services upon a particular request from client.

Old Mutual Total Return USD Bond Fund (USD) A
Risk Disclosure Statements

• Investment involves risk and may not be suitable for all investors.
• It cannot be guaranteed that the performance of the Fund will generate a return and there may be circumstances where no return is generated or the amount invested is lost.
• Past performance is not indicative of future performance.
• The regulatory requirements of SFC state that investors should not invest in the product unless the intermediary who sells it to you has advised you that the product is suitable for you and explained how it is consistent with your investment objectives. Note: Fundsupermart.com is a self-directed online distributor and we only provide limited personal financial advisory services upon a particular request from client.

Legg Mason Western Asset U.S. Core Plus Bond Fund (USD) A Acc
Risk Disclosure Statements

• INVESTMENT INVOLVES RISKS. Past performance is not indicative of future results.
• The Fund may invest up to 100% of its NAV in mortgage related securities, including mortgage-backed securities (MBS), stripped securities and asset-backed securities (ABS), which can involve material additional risks, e.g. counterparty default risk, and may expose the Fund to significant losses.
• The Fund may invest in a single country which may give rise to increased risk over more diversified funds.
• Investors should read and understand the Fund's most current offering document, including details of risk factors relevant to the Fund and, in particular, the risk of investments in the securities of emerging markets issuers, MBS, stripped securities, ABS and derivatives, before making an investment in the Fund.
• The regulatory requirements of SFC state that investors should not invest in the product unless the intermediary who sells it to you has advised you that the product is suitable for you and explained how it is consistent with your investment objectives. Note: Fundsupermart.com is a self-directed online distributor and we only provide limited personal financial advisory services upon a particular request from client.

Fidelity Funds - US Dollar Bond Fund A-Acc-USD
Risk Disclosure Statements

• The Fidelity Funds is an umbrella fund with sub-funds investing in equities, debt, money market securities and/or other instruments, including derivatives.
• These funds may be subject to the risks of investing in emerging markets which may be more volatile, and to concentration risks of investing in a single or in a limited number of market(s) or sector(s).
• These funds may invest in non-investment grade bonds which may be more volatile and subject to greater credit and liquidity risks.
• These funds may invest in derivative instruments and / or structured products which may involve additional risks. (For example, leverage may cause greater volatility.)
• Investors may suffer substantial loss of their investments in the funds.
• The regulatory requirements of SFC state that investors should not invest in the product unless the intermediary who sells it to you has advised you that the product is suitable for you and explained how it is consistent with your investment objectives. Note: Fundsupermart.com is a self-directed online distributor and we only provide limited personal financial advisory services upon a particular request from client.


This article is not to be construed as an offer or solicitation for the subscription, purchase or sale of any fund. No investment decision should be taken without first viewing a fund's prospectus. 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. Past performance and any forecast is not necessarily indicative of the future or likely performance of the fund. The value of units and the income from them may fall as well as rise. Opinions expressed herein are subject to change without notice. Please read our disclaimer in the website.

Fundsupermart.com is a non-advisory online investment platform and we do not provide any online investment advice to clients on a personal basis. If you have any doubt, please contact our Client Investment Specialist at (+852) 3766 4300.

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