Suitable for: Balanced / Growth / Aggressive
Markets are heading further into uncharted territory and investors are faced with conditions such as the start of a global tightening of monetary policy after years of easing, a shift in power from old school political incumbents, the renewed threat of a rogue state wielding nuclear power and increasing debt levels in the world’s second largest economy. The intersection of such events provides investors with both profitable and risky opportunities alike. An intelligent investor would navigate such choppy waters through a diversified portfolio spread across multiple asset classes and various regional allocations. Active management strategies which minimise risk in any asset class should help the portfolio benefit from potential upside, while buffer it during a downturn.
With political and policy uncertainty likely to inject more turbulence into markets, the fund’s focus on managing volatility whilst adopting a flexible and unconstrained approach to delivering consistent income may be particularly useful for investors. The fund provides investors access to a large variety of asset classes including non-traditional assets such as preferred stocks, listed master limited partnerships and real estate vehicles, aside from conventional stocks and bonds. Investors are thus able to invest in a portfolio that is highly diversified across both asset classes and regional exposure. The fund offers an average pay-out of 5 to 6 per cent per annum, which is not guaranteed and may rise or fall.
Source: NAV chart based on Bloomberg data as at 23 October 2017; fund information extracted from the fund’s factsheet provided by BlackRock Investment Management was as at 30 September 2017.
Note: Performance as at 30 September 2017, for the SGD Hedged Share Class, calculated on an offer-to-bid basis with all dividends and distributions reinvested, net of all charges payable upon reinvestment, if any. Performance figures exceeding 1 year, if any, were stated on an average annual compounded basis.
Suitable for: Balanced / Growth / Aggressive
Asian markets remained on a steady growth trajectory in Q3 2017, buoyed by positive economic momentum in China. The 19th Party Congress concluded recently, with no major shift in policy direction for the next five years being mentioned for China. This adds to the region’s stability. However, the undercurrent of growing regional debt stemming largely from China and the timing of S&P’s downgrade of the nation’s sovereign debt is becoming increasingly worrisome and will be a point of urgency for China's post-election leadership committee to address. As other developed markets embark on gradual monetary tightening, some emerging markets may experience lesser capital inflows and financial support. For investors looking to gain exposure in a region rife with potential near term risks, we advocate an active management strategy that provides flexibility between asset class holdings.
The fund invests in Asia through a flexible multi-asset approach, reducing overall portfolio volatility. Following a Tactical Asset Allocation framework devised by the Bank of Singapore - OCBC’s private banking arm - the fund is able to adjust the size of its market participation by actively tweaking the composition of its holdings to either defend itself against downside risks or ride on favourable market conditions to generate returns. Investors may benefit from a potentially stable and regular income stream, derived from traditional stocks and bonds as well as option fee premiums. The latter arises from the ability of the fund to write covered call options or take active bets against overvalued stocks, giving the fund an edge over its competitors in terms of delivering income.
Source: NAV chart based on Bloomberg data as at 23 October 2017; fund information extracted from the fund’s factsheet provided by Lion Global Investors Limited was as at 30 September 2017.
Note: Performance as at 30 September 2017 (for the SGD-Hedged Class A Acc share class only), calculated on an offer-to-bid basis with all dividends and distributions reinvested, net of all charges payable upon reinvestment, if any. Performance figures exceeding 1 year, if any, were stated on an average annual compounded basis.
Suitable for: Balanced / Growth / Aggressive
Although markets move and opinions change, one adage holds constant. A robust and diversified portfolio geared for the long term goes a long way. When focusing on the longer term, immediate market concerns - while notable – should not serve to distract from the initial investment goals. A strong portfolio diversified across various asset classes, as well as spread across an array of subclasses and industry sectors, may prove more able of weathering the test of time.
The use of Exchange Traded Funds or ETFs in a portfolio can be an added boost, as ETFs enable access to a huge range of investment options across asset classes, sectors and geographies. ETFs also add extra liquidity into a portfolio at a lower cost compared to traditional investment methods. Investors with a longer term investment horizon but who do not wish to miss out on current market opportunities may choose to invest partially in a core portfolio, and rotate selectively among other market driven strategies.
The Lion-OCBC Global Core fund is a low cost, Exchange Traded Funds-based (ETFs)-based investment solution that is diversified globally and across multiple asset classes. The portfolio is rebalanced regularly, typically on a quarterly basis to stay relevant and adjust to changing market conditions. The portfolio seeks to provide a sustainable level of income and medium- to long-term capital growth while targeting an above-average level of portfolio risk. This concept of a fund of ETFs and relatively less active management allows the fund manager to charge investors a lower fee. Low cost diversification via such an investment proposition thus provides a solid foundation upon which investors could build their investment portfolio on.
Source: NAV chart based on Bloomberg data as at 23 October 2017; fund information extracted from the fund’s factsheet provided by Lion Global Investors Limited was as at 30 September 2017.
Note: Performance as at 30 September 2017, for the SGD Hedged O Distributed Share Class, calculated on an offer-to-bid basis with all dividends and distributions reinvested, net of all charges payable upon reinvestment, if any. Performance figures exceeding 1 year, if any, were stated on an average annual compounded basis.
Suitable for: Balanced / Growth / Aggressive
Monetary policy tightening, in the form of interest rate hikes and cuts to central banks’ balance sheets will spread from North America to a range of other developed economies in the coming year. In the U.S., the mystery of low inflation may temporarily slow down the pace of interest rate hikes, but it is unlikely to shift the Fed from its course of raising rates and shrinking the balance sheet. Expectations for the European Central Bank to cut its quantitative easing programme point towards 1H2018 and will remain as such if the European economy stays on its road to recovery. Investors looking to hold fixed income in their portfolios should aim for shorter duration assets which are less impacted by rising interest rates.
The fund’s focus on short duration bonds means investors are less exposed to a rising interest rate environment risk. It also addresses investors’ conservative low-return dilemma by aiming to deliver non-guaranteed quarterly payouts of around 2.5 per cent per annum as a form of regular income. To guard against credit risk, investors are exposed to a diversified portfolio of investment grade corporate bonds, issued mainly by Asian corporates. The fund is included in the Central Provident Fund Investment Scheme.
Source: NAV chart based on Bloomberg data as at 23 October 2017; fund information extracted from the fund’s factsheet provided by Lion Global Investors Limited was as at 30 September 2017.
Note: Performance as at 30 September 2017, for the SGD A Distribution Share Class, calculated on an offer-to-bid basis with all dividends and distributions reinvested, net of all charges payable upon reinvestment, if any. Performance figures exceeding 1 year, if any, were stated on an average annual compounded basis.
Suitable for: Growth / Aggressive
Although markets move and opinions change, one adage holds constant. A robust and diversified portfolio geared for the long term goes a long way. When focusing on the far sight, immediate market concerns while notable are far less impactful. Instead, a strong foundation built with the aim of reducing cost compounding at the expense of more nuanced investment strategies may prove to be more capable of weathering the test of time. Such cost efficiency can manifest in a portfolio through the use of ETFs which provide for a broader form of stock-picking while allowing the investor to focus on the macro economy. Those seeking a balance between the longer term and the immediate may choose to partially invest in a core portfolio while rotating amongst other more market driven strategies.
The Lion-OCBC Global Core fund is a low cost, Exchange Traded Funds-based (ETF-based) investment solution that is diversified globally and across multiple asset classes. The portfolio is rebalanced regularly, typically on a quarterly basis to stay relevant and adjust to changing market conditions. The portfolio seeks to provide a sustainable level of income and moderate medium- to long-term capital growth while keeping within a target level of volatility. This concept of a fund of ETFs and relatively less active management allows the fund manager to charge investors a lower fee. Low cost diversification via such an investment proposition thus provides a solid foundation upon which investors could build on.
Source: NAV chart based on Bloomberg data as at 23 October 2017; fund information extracted from the fund’s factsheet provided by Lion Global Investors Limited was as at 30 September 2017.
Note: Performance as at 30 September 2017, for the SGD Hedged O Distributed Share Class, calculated on an offer-to-bid basis with all dividends and distributions reinvested, net of all charges payable upon reinvestment, if any. Performance figures exceeding 1 year, if any, were stated on an average annual compounded basis.
Suitable for: Growth / Aggressive
President Donald Trump’s proposed tax reform plans gave equity markets a second wind, pushing already steeply valued U.S. stocks even higher. Yet, despite U.S. indices having clocked consecutive highs, the possibility of an extended stock market rally remains intact. Economic fundamentals remain firm, placing markets in a position to react even more favourably if Trump’s corporate and repatriation tax plans take off. With earnings season for Q3 2017 meeting expectations on the whole, the Federal Reserve is expected to hike interest rates in 2018, in addition to the one in December 2017. A more selective approach towards stock-picking would be appropriate for investors who wish to reap the immediate benefits of potential policy change while exercising caution towards rising valuations.
The fund has delivered strong performance since its inception by investing in U.S. with a bias towards large cap holdings. The fund maintains a concentrated portfolio of about 30 to 40 stocks, constructed on a bottom-up basis. It relies on an opportunistic approach to investing and stock-picking is based on in-depth cash flow and capital structure analysis. The fund has a cyclical tilt, with 64 per cent of the portfolio allocated to cyclical sectors such as financials, industrials, consumer discretionary, materials and IT. The fund is managed by an experienced and dedicated investment team based in New York.
Source: NAV chart based on Bloomberg data as at 23 October 2017; fund information extracted from the fund’s factsheet provided by Neuberger Berman Investment Funds was as at 30 September 2017.
Note: Performance as at 30 September 2017, for the USD A Accumulating Share Class, calculated on an offer-to-bid basis with all dividends and distributions reinvested, net of all charges payable upon reinvestment, if any. Performance figures exceeding 1 year, if any, were stated on an average annual compounded basis.
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