Launch of LionGlobal Emerging Markets Bond Fund

Singapore, 11 October 2010 – Lion Global Investors today launched the LionGlobal Emerging Markets Bond Fund (‘the Fund’). Together with Bank of Singapore as sub-advisor, the Fund aims to provide both capital growth and income over the medium to long term by primarily investing in global Emerging Markets debt securities. (‘Emerging Markets’ include but are not limited to, developing countries in Asia, Latin America, Europe, Africa and Middle East.)

Real GDP growth in the emerging markets has, over the last decade, consistently outperformed that of advanced economies (source: IMF). To participate in these rapidly expanding economies, the Fund looks to invest in attractive bonds of issuers in developing countries such as China, Brazil and Russia. While the focus of the Fund is mainly on corporate bond issues, it can also invest in sovereign bonds as and when risk-reward conditions are favourable.

The Global Financial Crisis profoundly impacted the economies of the world's developed nations, many of which now carry heavy debt burdens as a result of the various bail-outs devised by  Governments in order to mitigate the worst of the crisis. However, the emerging markets have escaped the worst of the crisis given their generally lower levels of debt which has enabled them to emerge faster and better positioned to take advantage of the opportunities created by the volatility. Adding to the appeal of emerging market bonds are the improvements seen in the legal and regulatory environment, all of which have brought a measure of stability to this asset class.

"Recent returns from this asset class have exceeded those of global bonds and equities. While the volatility of emerging market bonds is higher than that of global bonds, it is still lower than equities’ risk,” commented Mrs Toh Lock Lan, Head of Business Development – Retail of Lion Global Investors.

"The resilience offered by bond investments and the positive progress of this asset class have steadily gained recognition. Corporate bonds in emerging markets can still be considered under owned, with further room for growth as more investors become aware of their inherent attraction. We expect corporates in the emerging markets to increase their issuance of bonds to fund their expansion as the economies in which they operate continue to grow. This will in turn create additional liquidity. According to JP Morgan, emerging markets corporate bonds issues are expected to double in four years from the current size of US$625 billion," explained Mr Marc Van de Walle, Managing Director of Bank of Singapore.

The process of investing in individual debt securities can be expensive, time-consuming and complex, especially for emerging markets where detailed research is required and yet not easily available. With the combined strength of the dedicated credit research teams of both Lion Global Investors and Bank of Singapore, investors can be assured that their investments are in very experienced hands.

Commenting on Lion Global's investment methodology for fixed income portfolios, Mr Kon Chee Keat, Head of Fixed Income of Lion Global Investors said, "We aim to add value in five principal areas, namely - country, duration, yield curve, currency and credit. We believe in diversifying our risk "bets" across the above-mentioned five areas to achieve our performance objective. We do not make concentrated investments for outsized gains. Risk management, with an emphasis on portfolio diversification, forms an integral part of our investment process which incorporates both the 'top down' and 'bottom-up' approaches."

Lion Global’s top-down approach employs three forms of analysis - fundamental, technical and valuation. This is complemented by bottom-up techniques aimed to enhance the portfolio’s return via active credit selection to identify under-valued and over-valued securities for timely investment decisions.

Key Risks

Credit & Default Risk - Adverse changes in the company or government that the Fund invests in may cause the Fund to suffer a loss of interest or principal.

Emerging Market Risk - Investments in these countries may experience a greater degree of volatility due to inherent characteristics such as unstable political situations, speculation, lack of liquidity and corporate governance.

Market Risk - Prices of underlying investments may go up or down in response to fluctuations in interest rates, foreign exchange, sovereign debt or economic conditions. These may cause the price of units in the Fund to go up or down as determined by the current market value of the investments of the Fund.

Please refer to prospectus for full risk disclosure.

 

Asset Class

Bonds

Geography / Sectors

Global Emerging Markets / No target industry or sector

Tenor

Open-ended

Benchmark

JP Morgan Corporate Emerging Market Bond Index Broad

(CEMBI Broad)

Fund currency

USD & SGD (hedged)

Minimum initial investment

$5,000

Subsequent investment

$200

Mode of subscription

Cash & Supplementary Retirement Scheme

Preliminary charge

Currently 3%

Annual management fee

Currently 1.5%

Dealing frequency

Daily subscription and redemption

Pricing

Single NAV on forward pricing basis

Dividend Payout

The Fund intends to pay out USD0.02 per unit for the USD

class and SGD0.02 for the SGD hedged class at the end

of its first year. This annual payout is not guaranteed and

will be at the Fund Manager’s sole discretion.

 

The LionGlobal Emerging Markets Bond Fund is available for subscription at the following distributors:

-       BOS : 6559 8000

-       Finatiq : 6438 3883

-       First Principal Financial : 6220 5333

-       Fundsupermart : 6557 2853

-       iFAST Financial : 6557 2000

-       MAA Financial Planners : 6336 2001

-       OCBC Premier Banking : 1800 773 6437

-       Distributors on iFAST platform

  • Financial Alliance : 6222 1889
  • Finexis : 6341 5300

 

Fund Manager – Mr Chu Toh Chieh

Chu Toh Chieh is a Senior Portfolio Manager with the Fixed Income team. His 14 years of experience in the fund management industry includes managing fixed income portfolios in Asia and the Emerging Markets. Currently, he heads the Emerging Markets and Alternative Products team at Lion Global Investors. Prior to joining Lion Global Investors in September 2005, Toh Chieh was a fund manager at UOB Asset Management and State Street Global Advisors.

Toh Chieh has a Bachelor of Business Administration (Honours) from the National University of

Singapore. He also holds the Chartered Financial Analyst® designation.