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Semi-annual Fund Reportfor the half year as of 30 June 2012

CIO’s Message 2

Summary of Fund Performance as of 30 June 2012 3

Core Funds

Global Bond Fund 4

Global Equity Fund 8

Singapore Bond Fund 13

Singapore Equity Fund 17

Mixed Assets and Global Managed Funds

Aim Now 20

Aim 2015 24

Aim 2025 28

Aim 2035 32

Aim 2045 36

Asia Managed Fund 40

Global Managed Fund (Balanced) 44

Global Managed Fund (Conservative) 50

Global Managed Fund (Growth) 56

Prime Fund 62

Singapore Managed Fund 66

Takaful Fund 70

Specialised Funds

Global Technology Fund 74

Money Market Fund 78

Annex

Guide To Your Investment-Linked Plan Policy Statement 82

Contents

Semi-annual Fund Report for the half year as of 30 June 2012

2 I NTUC INCOME

MESSAGE

Peter HengSVP & Chief Investment Officer

1 September 2012

Dear Policyholder

We are pleased to bring you our Semi-annual Fund Report.

The first half of 2012 continues to be a challenging period for global economies and financial markets, although prospects are gradually improving. The MSCI World index, which provides a broad measure of equity market performance throughout the developed world, returned 1.91% during the first six months of 2012 in Singapore dollar terms. Closer to home, the MSCI Asia ex-Japan index returned 2.17% in Singapore dollar terms, a testament to Asia’s resiliency to global market turmoil.

Progress towards a resolution of the debt crisis in the Eurozone continues to drag and is fraught with uncertainty as a result of politicking. However, at every hurdle in the process to resolve the debt issue, Eurozone officials ultimately reconfirm their commitment to the monetary union. The recent French and Greek elections resulted in changes in political leadership, but no change in commitment to the Euro.

While macroeconomic concerns continue to dominate headlines, company fundamentals remain positive. Globally, corporations are very healthy. Excluding financials, S&P 500 companies have US$1.2 trillion in excess of cash on their balance sheets – fuel for strong future growth.

At NTUC Income, we aim to meet investors' needs. Our wide ranging Investment-Linked Plans (ILPs) provide opportunities to invest in various market conditions; the diversification provided by our Global Equity Fund, the Asian growth story evident in our Asia Managed Fund and the customised asset allocation strategies available from our AIM Funds are just some examples.

In addition, I am glad to report that our funds continue to perform well. Our ILPs were represented among the Lipper Leader categories, with the Global Bond Fund and Takaful Fund obtaining “Lipper Leader” status in the respective, “Consistent Return”, “Total Return” and “Preservation” metrics for the first quarter of 2012. Our Prime Fund, Asia Managed Fund, Global Technology Fund and Singapore Managed Fund were “Lipper Leader” in two categories, “Consistent Return” and “Total Return” in the same review.

The latest Semi-annual Fund Report for the financial period ended June 2012 can be downloaded at www.income.com.sg/fund/coopprices.asp. You may also access your Investment-Linked Plans statement from me@income, our online customer portal at www.income.com.sg.

To request for a copy of the Fund Report, please call our Customer Service Hotline at 63INCOME (6346 2663) or email us at [email protected]

NTUC INCOME I 3


Fund Launch Date

Fund Size (S$ million)

Performance (1 year)

Performance (2 years - Cumulative)

Core Funds

Global Bond Fund Jan-03 126 8.56% 11.98%

Global Equity Fund Apr-98 229 -3.67% 8.19%

Singapore Bond Fund Mar-00 236 5.36% 9.27%

Singapore Equity Fund Jan-03 196 -6.92% 2.71%

Mixed Assets and Global Managed Funds

Aim Now Sep-09 49 3.24% 5.73%

Aim 2015 Sep-09 2 2.31% 7.48%

Aim 2025 Sep-09 6 0.38% 7.98%

Aim 2035 Sep-09 9 -1.12% 8.08%

Aim 2045 Sep-09 8 -2.06% 8.39%

Asia Managed Fund Sep-95 92 0.00% 11.25%

Global Managed Fund (Balanced) Jan-03 182 1.11% 8.89%

Global Managed Fund (Conservative) Jan-03 13 4.01% 9.86%

Global Managed Fund (Growth) Jan-03 242 -1.39% 7.88%

Prime Fund Aug-73 203 -4.18% 2.09%

Singapore Managed Fund May-94 90 -4.50% 2.19%

Takaful Fund Sep-95 21 -4.13% 13.87%

Specialised Funds

Global Technology Fund Aug-00 64 -4.84% 22.77%

Money Market Fund May-06 33 0.27% 0.72%

Average Return -0.42% 8.30%

Notes:

1. The Global Managed Funds are invested in our Core Funds in the following ratios: Balanced : Singapore Equity (10%), Global Equity (40%), Singapore Bond (15%) and Global Bond (35%). Conservative : Singapore Equity (5%), Global Equity (25%), Singapore Bond (20%) and Global Bond (50%). Growth : Singapore Equity (15%), Global Equity (55%), Singapore Bond (10%) and Global Bond (20%).

2. The returns are calculated on a bid-to-bid basis, in Singapore dollars term. All dividends are re-invested. Fees and charges payable through premium deduction or units cancellation are excluded from the calculation.

3. Past performance of the funds is not indicative of future performance. Actual returns are also not guaranteed. The bid prices

and returns can fluctuate, just like the overall fluctuations of stock and bond markets. Our funds are subjected to market risks, which we have diversified across many quality investments.

SUMMARY OF FUND PERFORMANCE AS OF 30 JUNE 2012


4 I NTUC INCOME

GLOBAL BOND FUND

Investment Objective To provide a medium- to long-term rate of return by investing mainly in global bonds.

Investment ScopeThe fund will invest mainly in global government and corporate bonds, mortgage backed securities and asset backed securities. The portfolio will have an average “A” rating by Standard and Poor’s. The fund is denominated in Singapore Dollars.

Fund Details as of 30 June 2012Launch Date 2 January 2003Fund Size S$126.26 millionInitial Sales Charge 3.5% (an extra 0.5% bonus unit will be given for all single premium and top-ups)Annual Management Charge 0.85% p.a.Inclusion in CPFIS Yes (CPF OA and CPF SA)CPFIS Risk Classification Low to Medium Risk, Broadly DiversifiedBenchmark Barclays Global Aggregate hedged to Singapore Dollars

The Annual Management Charge is not guaranteed and may be reviewed from time-to-time. However, it shall not exceed 2.0% of the fund balance at any point of time.

Top 10 HoldingsJune 2012 S$

(mil)% of Net

Asset ValueJune 2011 S$

(mil)% of Net

Asset Value

US Treasury Bill 300513 15.6 12.3 Bundesobligation 2% 260216 9.0 7.1

Netherlands Govt 0.75% 150415 11.9 9.4 US Treasury Bill 080911 6.2 4.9

US Treasury Bill 200912 5.4 4.3 Japan Treasury Bill 120911 5.8 4.6

US Treasury Infl. Index Bond 0.125% 150122 5.3 4.2 SAMI 2005-AR5 A2 FLR 190735 3.4 2.7

Treasury UKT 3.75% 070921 4.3 3.4 CMLTI 2005-6 A2 FRN 250835 2.7 2.1

Treasury UKT 3.75% 070920 4.2 3.4 Kommunalbanken AS 2.6 2.0

SAMI 2005-AR5 A2 FLR 190735 3.4 2.7 Australian Govt 5.75% 150521 2.5 1.9

US Treasury Note/Bond 2% 150222 2.9 2.3 TMST 2006- A1 FLR 251046 2.4 1.9

Netherlands Govt 4% 150718 2.9 2.3 Lloyds TSB Bank 4% 290920 2.2 1.7

Kommunalbanken AS 2.7 2.1 RVMLT 2007-2A A1 FRN 250747 1.9 1.5

Important: Any differences in the total and percentage of the Net Asset figures are the result of rounding off.

Fund ManagerNTUC Income Insurance Co-operative Limited is the Investment Manager of the fund. Pacific Investment Management Company LLC is the Sub-Investment Manager of the fund.

NTUC Income Insurance Co-operative LimitedEstablished in 1970 to provide affordable insurance to workers in Singapore, NTUC Income is today a market leader in life, health, annuity and motor insurance. It has about 1200 financial advisers and over 1500 employees and is committed to serving the needs of over two million customers. NTUC Income has over S$28.5 billion of assets under management (as of 30 June 2012).

Its highly qualified team manages its funds with a long-term value approach. With a strong commitment to its social purpose, NTUC Income seeks to maximise value for its customers. Since 1973, it has managed Singapore’s longest-running investment-linked fund, the Prime Fund.

Pacific Investment Management Company LLC (PIMCO LLC) Pacific Investment Management Company LLC ("PIMCO") was founded in Newport Beach, California in 1971. PIMCO is a global investment solutions provider with more than 2,000 dedicated professionals in 11 countries focused on a single mission: to manage risks and deliver returns for our clients. Today, PIMCO has offices in Newport Beach, New York, Amsterdam, Singapore, Tokyo, London, Sydney, Munich, Zurich, Toronto, Hong Kong and Milan. PIMCO's global investment process includes both top-down and bottom-up decision-making, holding a long-term view to guard against periodic bouts of euphoria and depression that often characterise financial markets. As of 30 June 2012, PIMCO manages US$1,468.32 billion globally.

Fund Performance vs Benchmark1-month 3-month 6-month 1-year 3-year

(annualised)5-year

(annualised)10-year

(annualised)Since inception

(annualised)

Global Bond Fund 0.1% 2.8% 4.7% 8.6% 7.6% 5.7% N.A. 3.8%

Benchmark -0.2% 1.5% 2.7% 6.7% 5.5% 5.1% N.A. 3.9%

NTUC INCOME I 5


GLOBAL BOND FUND

The returns are calculated using bid-to-bid prices, in Singapore dollars term, with dividends and distributions reinvested. Past performance is not necessarily indicative of future performance. Fees & charges payable through deduction of premium or cancellation of units are excluded from this calculation.

Market Review

Market OverviewDuring the first quarter, concerns about a disorderly Eurozone outcome subsiding and optimism on the US economic outlook on the rise, combined with the Greek debt deal and a second dose of 3-year LTRO (Long-Term Refinancing Operations) liquidity seemed to have averted for the time being another crisis moment for the Eurozone. However, economic data in the second quarter suggested sharply slowing growth across both developed and emerging countries, as recession gripped Europe, US growth weakened and emerging markets (EM) engines cooled.

USUS economic data fell well short of expectations with pronounced weakness in the labour market (the worst quarter for job growth since 2010) feeding through to declines in consumer sentiment and retail sales. Housing related activity was the sole bright spot as it continued its gradual recovery, albeit from depressed levels.

Euroland & UKEuropean data continued to disappoint with nearly all indicators confirming the region’s ‘double-dip’. Even German data showed signs of weakness as manufacturing orders declined in lockstep with exports to the Eurozone. In addition, Cyprus and Spain joined the growing list of countries that have requested bailouts and headlines quickly shifted to Spain’s deepening banking crisis, which led to another cut to Spain’s credit rating.

The UK saw a second successive quarterly contraction in GDP, signalling the first double dip recession in Britain since the 1970s. The British economy continues to struggle in the face of deep fiscal cuts and the contraction in the Eurozone, its key export market.

EMEM economies continued to show signs of weakness as global demand slowed and domestic demand appeared insufficient to pick up the slack. Though their economic fundamentals remain healthier and their growth rates faster than those of their developed counterparts, emerging economies are showing increasing vulnerability to a global slowdown.

Market Outlook

Global Markets Remain Captive to Policy Decisions

Our manager expects the global economy to grow at a real rate of 1.0 to 2.0% over the year ahead. The negative effects of austerity measures implemented throughout the Eurozone and the UK are reflected in the weak growth numbers within the region and strongly point to recessions already underway. Worsening data out of the US and other developed and emerging economies have reinforced investor apprehension and led to a resurgence in market volatility which had decreased during the first quarter. Ongoing efforts by policymakers to offer short-term solutions are becoming increasingly ineffective. Financial markets’ heightened sensitivity to policy-related news reflects acknowledgement of the difficulties that lie ahead in resolving significant structural problems in many economies.

•Elections ShakeUp Eurozone Landscape – France’s new Socialist government will likely continue to pursue its May election mandate by challenging the austerity-focused approach promoted by Germany. France’s preference for more growth-oriented measures and less austerity will align it more closely with the European periphery. Observers await demonstrations of how Spain and Greece will utilise the recently extended loans to alleviate their current crises, however, these funds will not be sufficient to resolve the fundamental challenges faced by their economies.

•USEconomicDataSlip – Our manager forecasts US growth between 1.0 and 2.0% as rising unemployment and softening manufacturing and consumption data increasingly offset the positive momentum generated by the upbeat data released during the first quarter. Brighter news out of the housing and construction sectors stands out as a notable positive as many other major indicators follow a downward trajectory. As Presidential campaigns intensify ahead of November’s election, few expect any important issues to be resolved before the current Presidential term expires. No further clarity has surfaced on how either party intends to tackle the ‘fiscal cliff’ that the US will reach in January 2013 as tax stimuli and government spending worth approximately 3.9% of GDP approach expiration.

•SlowdownAcceleratesinEmergingMarkets – The economic slowdown experienced by many EM over the past year has accelerated. Our manager anticipates EM growth to continue to outpace that of developed markets over the cyclical horizon, however, at a significantly lower level than seen in recent years. EM economies continue to suffer from the knock-on effects of recession and slowdown in much of the developed world.

•Near-TermInflationConcernsAbate – Our manager anticipates global inflation of between 2.0 and 2.5% over the cyclical horizon. However, deflationary pressures driven by falling oil prices are mounting, and raise the possibility of inflation dropping below 1% by early 2013. Our manager is also attuned to upside risks to its inflation forecasts, largely due to the unstable geopolitical situation surrounding the Middle East. On a secular basis, our manager expects the current wave of ultra-dovish monetary policy to drive longer-term inflation notably higher.

RisksAs the fund has investments concentrating in fixed income securities, it is subjected to debt risk which includes interest rate sensitivity, credit risk, changes in debt rating and credit

IndexedPerformance

Cumulative Performance Since Inception

Benchmark Fund

Jan-03 Sep-04 May-06 Jan-08 Sep-09 May-11 Jun-12100

105

110

115

120

125

130

135

140

145

150


6 I NTUC INCOME

GLOBAL BOND FUND

Asset and Country Allocation as of 30 June 2012

S$ (mil)Corporate Bonds 54.5Government Bonds 74.2Statutory Board Bonds 4.4Cash/Others -6.9Total 126.3

Sector Allocation as of 30 June 2012

S$ (mil)Asset Backed Securities 3.8Communications 1.0Consumer, Cyclical 0.8Consumer, Non-cyclical 0.5Diversified 0.1Energy 0.3Financial 26.4Government 77.7Industrial 0.1Mortgage Securities 21.1Utilities 1.2Total 133.1

Credit Rating of Debt Securities

S&P’s rating or its equivalent S$ (mil) % of NAVAAA 38.3 30.3AA+ 4.6 3.6AA 4.1 3.3AA- 7.1 5.6A+ 4.2 3.4A 6.5 5.1A- 7.6 6.0BBB+ 2.4 1.9BBB 7.0 5.5BBB- 2.9 2.3BB+ 1.7 1.3BB 1.8 1.4BB- 0.1 0.1B+ 0.0 0.0B- 1.4 1.1CCC+ 0.4 0.3CCC 1.7 1.4CCC- 0.3 0.2CC 1.6 1.3D 0.1 0.1Unrated 39.4 31.2Total 133.1 105.5

‘Unrated’ refers to debt securities which are not rated by S&P or other equivalent rating agencies, including but not limited to treasury bills, bonds issued by government, government agency, statutory board or corporate.


rating, currency risk and sovereign risk. This is not an exhaustive list of risks.

The managers intend to hedge its foreign currency exposure. Financial derivatives in the ILP fund are used for hedging and efficient portfolio management purposes. The global exposure of the ILP fund to financial derivatives or embedded financial derivatives is calculated using the commitment approach described in and in accordance with the provisions of the Code on Collective Investment Schemes.

You should be aware that past performance is not indicative of future performance. The value of the units may rise or fall as the performance of the fund changes.

NTUC Income’s ILP funds are intended for long-term investment. It is not suited for any short-term speculation. You should not

North America 61.8%

Europe 33.1%Asia 1.8%Others 3.2%

Cash/Others -5.5%

Corporate Bonds 43.2%

Government Bonds 58.8%

Statutory Board Bonds 3.5%

Consumer, Non-cyclical 0.4%Diversified 0.1%

Financial 19.8%Mortgage Securities 15.8%

Utilities 0.9%Asset Backed Securities 2.9%

Communications 0.8%

Energy 0.3%

Government 58.3%

Consumer, Cyclical 0.6%

Industrial 0.1%

expect to obtain any short-term gains from investing in NTUC Income’s ILP funds. It is important that your investment suits your risk appetite. You may wish to consult your financial adviser before investing in any ILP fund.

Expense and Turnover RatioExpense Ratio Turnover Ratio

As of 30 June 2012 0.93% 197.78%

As of 30 June 2011 0.94% 212.42%

Expense ratio does not include (where applicable) charges for insurance coverage, brokerage and other transaction costs, performance fee, foreign exchange gains or losses, front or back end loads arising from the purchase or sale of collective investment schemes and tax deducted at source or arising out of income received.

S$ (mil)Asia 2.4Europe 44.1North America 82.3Cash/Others 4.3Total 133.1

NTUC INCOME I 7


GLOBAL BOND FUND

Summarised Financial Statement as of 30 June 2012S$

Net assets as of 1 January 2012 126,690,232

Purchase of new units 1,152,441

Redemption of units (7,416,053)

Gain/(loss) on investments and other income 6,353,339

Management fee and other charges (520,808)

Net assets as of 30 June 2012 126,259,151

Units in issue 88,826,237Net asset value per unit- at the beginning of the year 1.357- as of 30 June 2012 1.421

Exposure to DerivativesMarket Value

S$% of Net

Asset ValueRealised Gains/

(Losses) S$Unrealised Gains/

(Losses) S$

Forwards (2,485,177) 1.97 6,087,614 (2,751,424)

Swaps 1,195,651 0.95 – 504,055

Options 2,556 – 32,760 35,837

Investment in Collective Investment SchemesNil.

BorrowingsNil.

Related Party DisclosuresNTUC Income is the Investment Manager of the fund. During the financial period ended 30 June 2012, management fee paid or payable by the fund to the Investment Manager was S$520,808.

Soft Dollar Commission or ArrangementThe managers did not retain, for its own account, cash or commission rebates arising out of transactions executed in or outside Singapore. The managers also did not receive soft dollars for the fund.

ConflictofInterestsThe managers did not encounter any conflict of interests in the management of the fund.

Other PartiesThe auditor of this fund is PricewaterhouseCoopers LLP (PwC). Please note that financial results ending 31 December of each year will be audited.

Material InformationThere are no material information that will adversely impact the valuation of the fund.

ReportsThe financial year end of the fund is 31 December of each year.

As part of the continuous efforts to update you on the performance of the funds you have invested in, we produce a Fund Report (with summarised financial statements) twice a year.


8 I NTUC INCOME

GLOBAL EQUITY FUND

Investment Objective To achieve long-term capital appreciation and diversification by investing in stocks traded on the global equity markets.

Investment ScopeThe fund is fully invested in global equities. The fund is denominated in Singapore Dollars.

Fund Details as of 30 June 2012Launch Date 1 April 1998Fund Size S$228.89 millionInitial Sales Charge 3.5% (an extra 0.5% bonus unit will be given for all single premium and top-ups)Annual Management Charge 1.25% p.a.Inclusion in CPFIS Yes (CPF OA) CPFIS Risk Classification Higher Risk, Broadly DiversifiedBenchmark MSCI World Index in Singapore Dollars



(mil)% of Net


(mil)% of Net

Asset Value

Schroder ISF - Global Equity Alpha 65.6 28.7 Schroder ISF - Global Equity Alpha 77.0 30.2

Nestle SA 4.3 1.9 Linde AG 4.2 1.7

Linde AG 3.6 1.6 Nestle SA 4.2 1.7

The Walt Disney Co 3.3 1.5 Heineken 3.4 1.3

Oracle Corp 3.0 1.3 Reckitt Benckiser Group 2.9 1.1

Diageo Plc 2.9 1.3 Bayer AG 2.7 1.1

Heineken 2.9 1.3 The Walt Disney Co 2.6 1.0

Reckitt Benckiser Group 2.8 1.2 Schneider Electric 2.6 1.0

United Technologies Corp 2.7 1.2 Oracle Corp 2.6 1.0

Visa Inc 2.6 1.1 Danone 2.5 1.0


Fund ManagerNTUC Income Insurance Co-operative Limited is the Investment Manager of the fund. Capital International, Inc., and MFS International Ltd are the Sub-Investment Managers of the fund.



Capital International, Inc. (CII)The Capital Group Companies was founded in 1931. It has 11 offices across the globe and a total of approximately US$1,110.20 billion assets under management today (as of 30 June 2012). CII seeks long-term value by devoting significant resources to internally generated, fundamental credit research and use a fundamental approach based on thorough, detailed research, organised on an industry, macroeconomic, country and currency basis.

MFS International LtdMFS International Ltd was founded in 1924. Funds under management totaled US$277 billion (as of 30 June 2012). MFS believes in active bottom-up research aimed at consistently identifying high-quality investments by focusing on companies that have potential to generate above-average and sustainable earnings. MFS has a global network of research analysts and portfolio managers based in Boston, Toronto, Mexico City, London, Tokyo, Hong Kong, Singapore and Sydney.

Schroder Investment Management LimitedSchroder Investment Management Limited is the Investment Manager of the Schroder ISF- Global Equity Alpha.

Schroder Investment Management Limited is domiciled in the United Kingdom and has been managing collective investment schemes and discretionary funds since 1985.

NTUC INCOME I 9


GLOBAL EQUITY FUND

Schroder is a leading global asset management company, whose history dates back over 200 years. The group's holding company, Schroders Plc is and has been listed on the London Stock Exchange since 1959. Assets under management totaled US$305.1 billion (as of 30 June 2012).

Schroders' aim is to apply their specialist asset management skills in serving the needs of their clients worldwide. With one of the largest networks of offices of any dedicated asset management company, and over 350 portfolio managers and analysts covering the world's investment markets, they offer their clients a comprehensive range of products and services.


(annualised)5-year

(annualised)10-year


(annualised)

Global Equity Fund 2.0% -5.3% 3.8% -3.7% 4.7% -8.7% 1.0% 2.0%

Benchmark 3.3% -4.4% 3.5% -1.9% 6.2% -6.5% 1.7% 0.9%


Market Review

Market OverviewGlobal equities, as measured by the MSCI World Index, rose 1.91% in Singapore dollar terms over the 1st half of 2012. Most major indices, for both developed markets and for emerging markets, made respectable single-digit gains in the 1st quarter, before losing much of the ground that they had made (if not more) in the 2nd quarter.

During the 2nd quarter of 2012, investor sentiment was clouded by two major issues. The 1st issue was the continuing financial crisis in the euro area. From early in the year, concerns mounted in relation to the ability and willingness of the government of Greece to abide by the strict budgetary conditions that had been imposed on it by the ‘Troika’ of the European Union (EU), European Central Bank (ECB) and International Monetary Fund (IMF) as a condition for financial assistance. In the 2nd quarter, investors were increasingly worried about the implications of the massive bad debts of banks in Spain. The 2nd issue was the clear signs of deceleration in the global economy. It was apparent that much of Europe was in recession, and signs of a slowing in the US as well as in each of the four largest emerging markets economies (China, India, Brazil and Russia). In many emerging markets, purchasing managers indices (PMIs) and other indicators pointed to softening in demand.

During the period, the US Federal Reserve (Fed), the ECB, the Bank of England, the People’s Bank of China and many other central banks cut official interest rates and/or undertook unorthodox measures to boost demand at a time that, in most countries, inflationary pressures were clearly falling. A highlight, at the very end of June, was the Euro Summit in Brussels, where four decisions were made. The decisions were: a €120bn fiscal stimulus; the establishment of a pan-European bank regulator, which would operate under the ECB; ‘flexible and efficient’ use of money from the European Stability Mechanism (ESM) to stabilise financial markets; and, the potential for money from the ESM to be advanced directly to banks (as opposed to national governments). The last decision, if implemented, it should break the nexus between the problems of banks (in Spain, especially) and the financial positions of national governments.

The US S&P 500 composite gained 5.92% in the 1st half of 2012 in Singapore dollar terms. Corporate earnings have generally been at least as strong as expected, and at a time that most corporate balance sheets have been robust. Monetary policy has emphasised growth. For much of the period, economic data has pointed to resilient demand in many sectors and geographic areas. However, the Institute for Supply Management (ISM)’s PMI for the US manufacturing sector pointed to a modest contraction in activity in June. In addition, the University of Michigan’s consumer confidence index slipped to the lowest level since the beginning of 2012 and other indicators were weaker than had been anticipated. First-quarter GDP growth was revised down to 1.9% from the advance estimate of 2.2%. The Fed lowered its growth forecasts for 2013 and 2014 and predicted unemployment would remain “stubbornly

IndexedPerformance


Benchmark Fund

Apr-9850

100

150

200

250


10 I NTUC INCOME

GLOBAL EQUITY FUND

high” through next year. Private sector job gains fell short of economists’ forecasts in April and May, and the jobless rate edged up to 8.2%.

European stocks as measured by Dow Jones STOXX 50 Index in Singapore dollar terms slid 4.08% in the 1st half of 2012. Investor sentiment was clouded by the problems of the major banks in the euro area and by clear signs that economic weakness was spreading from ‘peripheral’ countries (such as Italy, Spain and Greece) to ‘core’ countries (including Germany). In addition, the European manufacturing sector PMI in June indicated that activity had been contracting for 11 straight months.

In Japan, the Nikkei Composite Index gained just 0.50% in Singapore dollar terms in the 1st half of 2012. Most indicators suggested that overall activity in the Japanese economy is flat. Many exporters have also had to contend with the general strength of the yen. 1st quarter GDP rose by an annualized 5%, while capital expenditures climbed 3%.

Similarly, the MSCI Emerging Markets Investable Index rose just 0.03% in Singapore dollar terms in the 1st half of 2012. As usual, there was a quite wide divergence in the performances of the underlying markets. Because of the softness of the real and the clear weakening in economic activity, Brazil’s market was a conspicuous laggard. By contrast, India’s was an outperformer: this was in spite of the slowing of the economy and the persistent inflationary pressures that have constrained the Reserve Bank of India from aggressively easing monetary policy.

Market OutlookThe decisions made during the Euro Summit, only treat the symptoms rather than the underlying structural cause, namely the lack of competiveness brought about principally by labour market rigidity and a lack of growth. The only solution to these problems is a significant boost in productivity and/or a decline in real wages through structural reform.

In addition, fiscal deficits across most of the periphery also remain unsustainable, and the tax, borrow and spend policies have reached their limit, testing the tolerance of sovereign bond investors, but at the same time the fiscal austerity is worsening the fiscal situation creating a vicious cycle.

In conclusion, developments in the Eurozone, particularly concerning Greece and Spain, will continue to affect investor sentiment. Although policymakers are slowly moving toward the goal of making the Eurozone a viable economic entity over the long term, but the process will likely be stressful and characterised by ongoing market volatility.

RisksAs the fund has investments concentrating in equities, it is subject to equity risk which includes market risk, company risk, selection risk, currency risk and counter party risk. This is not an exhaustive list of risks.



NTUC Income’s ILP funds are intended for long term investment. It is not suited for any short term speculation. You should not expect to obtain any short term gains from investing in NTUC Income’s ILP funds. It is important that your investment suit your risk appetite. You may wish to consult your financial adviser before investing in any ILP fund.


As of 30 June 2012 1.53% 14.03%

As of 30 June 2011 1.47% 50.68%


NTUC INCOME I 11



S$ (mil)Equities 226.7Cash/Others 2.2

Total 228.9

S$ (mil)Asia 12.2Europe 132.8North America 80.0Others 1.7

Total 226.7Sector Allocation as of 30 June 2012

S$ (mil)Basic Materials 17.1Communications 14.5Consumer, Cyclical 13.3Consumer, Non-cyclical 40.7Diversified 2.3Energy 8.7Financial 25.1Funds 65.6Industrial 25.3Technology 13.6Utilities 0.6

Total 226.7

Equities 99.0%

Cash/Others 1.0% North America 35.3%

Europe 58.6%

Others 0.8%Asia 5.4%

Basic Materials 7.5%Energy 3.9%

Financial 11.1%

Diversified 1.0%

Utilities 0.3%Technology 6.0%

Industrial 11.2% Funds 28.9%

Communications 6.4%

Consumer, Cyclical 5.9% Consumer, Non-cyclical 17.9%


GLOBAL EQUITY FUND

Credit Rating of Debt SecuritiesThere are no debt securities under Global Equity Fund.


12 I NTUC INCOME

GLOBAL EQUITY FUND






Management fee and other charges (1,272,638)




S$% of Net



(Losses) S$

Forwards 439 0.0002 1,342 439

Investment in Collective Investment SchemesJune 2012 S$ (mil) % of Net Asset Value

Schroder ISF - Global Equity Alpha 65.6 28.7

BorrowingsNil.

Related Party DisclosureNTUC Income is the Investment Manager of the fund. During the financial period ended 30 June 2012, management fee paid or payable by the fund to the Investment Manager was S$1,272,638.

Soft Dollar Commission or ArrangementThe Managers did not retain for its own account cash or commission rebates arising out of transactions executed in or outside Singapore. Soft dollar commission/arrangement had been received/entered into by the Sub-Investment Managers in respect of the ILP. The soft dollar commission/arrangement relates essentially to research services, economic and political analyses, portfolio analyses, market analyses, data and quotation services, computer hardware and software used for and in support of the investment process. The Sub-Investment Managers did not accept or enter into soft dollar commission/arrangement unless such commission/arrangement would, in the opinion of the Sub-Investment Managers, assist the Sub-Investment Managers in the management of the ILP. The Sub-Investment Managers confirmed that trades were made on best execution basis and there was no churning of trades.

ConflictofInterestsMFS has in place policies and procedures to monitor conflict of interests which may arise in the management of clients’ accounts. MFS believed that these policies and procedures are reasonably designed to ensure that portfolio management decisions are made in the best interests of clients, regardless of the existence of any conflict.

Capital International has in place policies and procedures to monitor conflict of interests which may arise in the management of the fund. To the extent that any material conflicts may arise, these would be addressed and/or mitigated in accordance with Capital International's policies and procedures to ensure that they would not affect the interest of policyholders. No such conflict has been detected in the reporting period.





NTUC INCOME I 13


SINGAPORE BOND FUND

Investment Objective The objective of this fund is to provide a medium- to long-term rate of fixed return through investing mainly in bank deposits, corporate bonds rated at least “A” by Standard and Poor’s or secured on collaterals such as properties and receivables. The expected average duration for the fund is at least 4 years.

Investment ScopeThis fund invests mainly in bank deposits, corporate bonds rated at least “A” by Standard and Poor’s or secured collaterals such as properties and receivables. This fund may invest up to 30% high quality unsecured or unrated bonds. The fund is denominated in Singapore Dollars.

Fund Details as of 30 June 2012Launch Date 1 March 2000Fund Size S$236.48 millionInitial Sales Charge 3.5% (an extra 0.5% bonus unit will be given for all single premium and top-ups)Annual Management Charge 0.5% p.a.Inclusion in CPFIS Yes (CPF OA and CPF SA)CPFIS Risk Classification Low to Medium Risk, Narrowly Focused – Country – SingaporeBenchmark UOB Long Bond Index



(mil)% of Net


(mil)% of Net

Asset Value

Singapore Government Bonds 3.25% 010920 20.3 8.6 Singapore Government Bonds 3% 010924 20.6 8.7

Singapore Government Bonds 3% 010924 19.1 8.1 Singapore Government Bonds 3.25% 010920 19.0 8.0

Singapore Government Bonds 2.75% 010442 14.9 6.3 Singapore Government Bonds 3.125% 010922 13.7 5.8



Temasek FINL I 4% 071229 5.4 2.3 Temasek FINL I 4% 071229 5.2 2.2

Land Transport Authority 3.275% 291025 5.4 2.3 SP Powerassets 4.19% 180815 5.2 2.2

SP Powerassets 4.19% 180815 5.2 2.2 DBS Cap Funding 5.75% 290549 5.2 2.2

DBS Cap Funding 5.75% 290549 5.1 2.2 Singapore Airlines Ltd 4.15% 191211 5.1 2.2

Bank of East Asia Ltd 4.25% 130922 4.6 1.9 United Overseas Bank 4.95% 300916 5.0 2.1


Fund ManagerNTUC Income Insurance Co-operative LimitedEstablished in 1970 to provide affordable insurance to workers in Singapore, NTUC Income is today a market leader in life, health, annuity and motor insurance. It has about 1200 financial advisers and over 1500 employees and is committed to serving the needs of over two million customers. NTUC Income has over S$28.5 billion of assets under management (as of 30 June 2012).


Fund Performance vs Benchmark 1-month 3-month 6-month 1-year 3-year

(annualised)5-year

(annualised)10-year


(annualised)

Singapore Bond Fund 0.3% 1.7% 2.4% 5.4% 5.2% 4.6% 4.1% 3.8%

Benchmark 0.5% 1.9% 2.6% 7.8% 5.5% 5.4% 4.8% 5.0%


14 I NTUC INCOME

SINGAPORE BOND FUND


Market ReviewSingapore government bond market ended the first six months of 2012 firmer amid concerns over global growth prospects and euro zone debt situation. The inaugural S$2.1 billion 30-year Singapore government bond was auctioned in March and saw good demand from investors with auction yield cut-off at 2.84%. With inflation turning out more persistent than expected, the monetary authority announced a tightening of its policy stance in its April meeting. The slope of the Singapore dollar nominal effective exchange rate (NEER) was increased slightly and the policy band narrowed. The centre of the band was left unchanged. Overall, the UOB government long bond index gained 2.6% over the review period as the whole yield curve moved lower.

Singapore’s gross domestic product (GDP) grew 1.9% year-on-year in the second quarter of 2012, compared to 1.4% expansion in the preceding quarter, according to the advance estimates. The expansion was weaker than expected due to weakness in biomedical manufacturing cluster as well as financial services and wholesale & retail trade sectors. Sluggish US recovery, deteriorating European economic conditions and slowdown in China will continue to weigh on the outlook for exports and manufacturing in the coming months.

Meanwhile, consumer price inflation (CPI) rose 5.3% in June from a year ago, up from 5.0% the previous month. The higher headline number was led by increases in the costs of

transport and accommodation. Core inflation measure, which excludes accommodation and private road transport costs, was unchanged at 2.7% year-on-year in June. While inflation is likely to moderate gradually in the second half of the year, the 2012 inflation is now expected to come in at the upper half of 3.5-4.5% forecast range. The CPI forecast was 2.5-3.5% at the start of the year. Lower oil and some commodity prices should help to ease inflationary pressure even as car prices are likely to remain elevated.

Singapore is expected to continue benefiting from foreign fund inflows thereby keeping the domestic system flushed with liquidity and short term interest rates low. The Federal Reserve is also determined to keep the front end of US interest rate anchored at current low levels for a prolonged period to stimulate the economy. The environment for credits is constructive in view of the steady credit fundamentals and strong technical backdrop. We continue to favour corporate bonds for yield pick-up.

RisksAs the fund has investments concentrating in Singapore fixed income securities, it is subject to debt risk which includes interest rate sensitivity, credit risk, changes in debt rating and credit rating, currency risk and sovereign risk. This is not an exhaustive list of risks.




As of 30 June 2012 0.58% 16.29%

As of 30 June 2011 0.58% 27.40%


IndexedPerformance


Benchmark Fund

Mar-00 Apr-02 May-04 Jun-06 Jul-08 Aug-10 Jun-1280

100

120

140

160

180

200

NTUC INCOME I 15


SINGAPORE BOND FUND


S$ (mil)Corporate Bonds 89.5Government Bonds 88.8Statutory Board Bonds 40.2Cash/Others 17.9

Total 236.5

S$ (mil)Singapore 168.1Europe 7.4North America 19.4Others 23.6

Total 218.5


S$ (mil)Communications 4.5Consumer, Cyclical 6.4Consumer, Non-cyclical 5.1Diversified 4.0Energy 3.1Financial 72.0Government 111.9Industrial 2.1Utilities 9.4

Total 218.5


S&P’s rating or its equivalent S$ (mil) % of NAVAAA 97.8 41.3AA- 7.8 3.3A+ 19.5 8.2A 8.8 3.7A- 9.1 3.9BBB+ 8.8 3.7BBB 10.8 4.6BB+ 3.0 1.3Unrated 52.9 22.4

Total 218.5 92.4



Corporate Bonds 37.8%Cash/Others 7.6%


Statutory Board Bonds 17.0%North America 8.9%

Europe 3.4%

Singapore 76.9%

Others 10.8%

Consumer, Non-cyclical 2.3%Diversified 1.8%

Energy 1.4% Financial 32.9%

Government 51.2%Industrial 1.0%

Consumer, Cyclical 2.9%Communications 2.1%

Utilities 4.3%


16 I NTUC INCOME

SINGAPORE BOND FUND









Exposure to DerivativesThere are no exposure to derivatives.


BorrowingsNil.

Related Party DisclosureNTUC Income is the Investment Manager of the fund. During the financial period ended 30 June 2012, management fee paid or payable by the fund to the Investment Manager was S$581,718.

Soft Dollar Commission or ArrangementThe Manager did not retain for its own account cash or commission rebates arising out of transactions executed in or outside Singapore. The Manager also did not receive soft dollars for the fund.

ConflictofInterestsNTUC Income has advised that certain inherent conflict of interests may arise from time to time. However, actions are taken to resolve such conflict of interests.





NTUC INCOME I 17


SINGAPORE EQUITY FUND

Investment ObjectiveThe objective of this fund is to achieve long-term capital appreciation by investing in stocks traded on the Singapore Exchange.

Investment ScopeThis fund is fully invested in Singapore Equities. The fund is denominated in Singapore Dollars.

Fund Details as of 30 June 2012Launch Date 2 January 2003Fund Size S$196.21 millionInitial Sales Charge 3.5% (an extra 0.5% bonus unit will be given for all single premium and top-ups)Annual Management Charge 0.65% p.a.Inclusion in CPFIS Yes (CPF OA) CPFIS Risk Classification Higher Risk, Narrowly Focused – Country – SingaporeBenchmark FTSE Straits Times Index (FTSE STI)



(mil)% of Net


(mil)% of Net

Asset Value

DBS Group Holdings Ltd 18.5 9.4 DBS Group Holdings Ltd 22.7 10.4

Singapore Telecommunications Ltd 18.0 9.2 United Overseas Bank Ltd 19.4 8.9

United Overseas Bank Ltd 17.7 9.0 Oversea-Chinese Banking Corp 17.3 7.9

Oversea-Chinese Banking Corp 15.0 7.7 Singapore Telecommunications Ltd 15.4 7.0

Jardine Matheson Holdings 11.7 6.0 Jardine Matheson Holdings 13.7 6.3

Keppel Corp Ltd 11.5 5.9 Keppel Corp Ltd 11.7 5.3

Hongkong Land Holdings Ltd 7.6 3.9 Wilmar International Ltd 9.3 4.3

Wilmar International Ltd 7.4 3.8 Hongkong Land Holdings Ltd 9.3 4.3

Jardine Strategic Holdings Ltd 7.0 3.6 Genting Singapore 8.9 4.1

Genting Singapore 6.6 3.4 Singapore Exchange Ltd 7.7 3.5


Fund ManagerNTUC Income Insurance Co-operative Limited is the Investment Manager of the fund. State Street Global Advisors Singapore Limited is the Sub-Investment Manager of the fund.



State Street Global Advisors Singapore Limited (SSGA Singapore)SSGA was founded in 1978 and assets under management totaled US$1.9 trillion (as of 30 June 2012). SSGA is one of the largest global institutional managers and has an impressive investment record for both passive & active management and a solid reputation in meeting the needs of institutional and individual investors. It has a network of over 29 global locations such as Boston, London, Montreal, Munich, Paris, Hong Kong, Sydney, Singapore and Tokyo.


(annualised)5-year

(annualised)10-year


(annualised)

Singapore Equity Fund 3.6% -3.7% 9.7% -6.9% 8.3% -2.3% N.A. 10.1%

Benchmark 3.8% -3.2% 10.5% -4.8% 10.5% -0.6% N.A. 12.6%


18 I NTUC INCOME



Market ReviewThe Straits Times Index rose 8.8% in 1H, driven by positive U.S. economic data and improved liquidity in Europe. Financials was the best performing sector, +17.8%. Consumer staples was the worst performing sector, -19.5%. Non-oil domestic exports expanded 6.8% in June from a year ago, improving slightly from the +3.2% in May. Growth was led by pharmaceuticals which surged 24% year-on-year. Inflation rebounded to 5.3% year-on-year in June, while core inflation stayed at 2.7%. Industrial production rose 7.6% year-on-year in June, led by biomedical output. With 2Q manufacturing growth of 4.5%, 2Q GDP growth would have expanded a sluggish +2.3% year-on-year. With the balance of risks shifted to growth from inflation, the Monetary Authority of Singapore may ease back to a “modest and gradual” slope. Singapore loans growth moderated to 20.9% year-on-year in June. Corporate loans continued to slow while trade finance picked up the slack. General commerce loans, rose by 34% year-on-year and +2% sequentially. Loan growth momentum will continue to moderate in 3Q12, given high prior-year base.

In the property sector, property prices are starting to move up again. 2Q12 private residential price index was up 0.4% sequentially, led by the prime segment. The pace of foreign buying

accelerated in April – May. With residential prices continuing to rise, the risk of further property measures has increased.

Going forward, we remain positive. Post the 1Q earnings release, the earnings momentum continued to improve. We prefer quality stocks to ride the recovery, with preference for Offshore & Marine and stocks which provide sustainable yield. We remain focused on quality blue chips and sustainable yields. Our focus is on finding companies with strong earnings growth, solid balance sheet and quality management. We will continually re-assess the companies’ fundamental in the coming months.

RisksAs the fund has investments concentrating in the Singapore Equity sector, it is subject to equity risk which includes market risk, company risk, selection risk, currency risk and counter party risk. This is not an exhaustive list of risks.

Financial derivatives in the ILP fund are used for hedging and efficient portfolio management purposes. The global exposure of the ILP fund to financial derivatives or embedded financial derivatives is calculated using the commitment approach described in and in accordance with the provisions of the Code on Collective Investment Schemes.




As of 30 June 2012 0.73% 16.41%

As of 30 June 2011 0.73% 29.12%


IndexedPerformance


Benchmark Fund


100

125

150

175

200

225

250

275

300

325

350

375

Asset Allocation as of 30 June 2012

S$ (mil)Equities 193.3Cash/Others 3.0Total 196.2



S$ (mil)Communications 22.2Consumer, Cyclical 23.6Consumer, Non-cyclical 16.0Diversified 32.8Financial 86.6Industrial 11.9Total 193.3

Financial 44.8%

Consumer, Non-cyclical 8.3%

Communications 11.5%

Industrial 6.2%


Diversified 17.0%

Cash/Others 1.5%

Equities 98.5%

NTUC INCOME I 19



Credit Rating of Debt SecuritiesThere are no debt securities under Singapore Equity Fund.

Summarised Financial Statement as of 30 June 2012 S$









S$% of Net



(Losses) S$

Futures 32,640 0.02 12,000 39,920


BorrowingsNil.


Soft Dollar Commission or ArrangementThe Managers did not retain for its own account cash or commission rebates arising out of transactions executed in or outside Singapore. Soft dollar commission/arrangement had been received/entered into by the Manager and Sub-Investment Manager in respect of the ILP. The soft dollar commission/arrangement relates essentially to research services, economic and political analyses, portfolio analyses, market analyses, data and quotation services, computer hardware and software used for and in support of the investment process. The Manager and Sub-Investment Manager did not accept or enter into soft dollar commission/arrangement unless such commission/arrangement would, in the opinion of Manager and Sub-Investment Manager, assist the Manager and Sub-Investment Manager in the management of the ILP. The Manager and Sub-Investment Manager confirmed that trades were made on best execution basis and there was no churning of trades. The said brokers had also executed trades for other ILPs managed by the Manager.

ConflictofInterestsNTUC Income has advised that certain inherent conflict of interests may arise from time to time. However, actions are taken to resolve such conflict of interests. SSGA did not encounter any conflict of interests in the management of the fund.






20 I NTUC INCOME

AIM NOW

Investment ObjectiveTo provide investors with a regular and steady income whilst maintaining a stable capital value.

Investment ScopeThe sub-fund intends to achieve this objective by investing in a diversified portfolio of asset classes including fixed income, equities and alternatives. As the portfolio is designed for investors who require a supplemental source of income, it will have a low risk profile and volatility target and as such, will allocate more to defensive assets such as fixed income.

Fund Details as of 30 June 2012Launch Date 25 September 2009Fund Size S$48.53 millionInitial Sales Charge 3.5% (an extra 0.5% bonus unit will be given for all single premium and top-ups)Annual Management Charge 0.85% p.a.Inclusion in CPFIS Yes (CPF OA and CPF SA)CPFIS Risk Classification Low to Medium Risk, Broadly DiversifiedBenchmark Barclays Global Aggregate hedged to Singapore Dollars UOB Singapore Government Bond Index (All) MSCI AC Asia ex-Japan Index in Singapore Dollars MSCI AC World Index in Singapore Dollars FTSE Straits Times Index (FTSE STI) Gold Spot hedged to Singapore Dollars

The sub-fund offers a semi-annual payout feature, with a distribution of up to 2% of the net asset value on 31 May and 30 November every year, or a total potential distribution of 4% per annum.



(mil)% of Net


(mil)% of Net

Asset Value

Singapore Bond Fund 12.01 24.7 Singapore Bond Fund 6.02 32.1

Schroder ISF - Global Corporate Bond 6.86 14.1 Schroder ISF Asian Bond Absolute Return 2.64 14.1

Schroder Asian Premium Bond 4.88 10.1 Schroder ISF Global Bond 2.13 11.4

Schroder ISF Asian Bond Absolute Return 4.69 9.7 Schroder ISF Global Inflation Linked Bond 1.47 7.9

Schroder ISF Global Bond 4.66 9.6 Schroder ISF Global Equity 0.70 3.7

Schroder ISF Pacific Equity 1.96 4.0 Schroder ISF Pacific Equity 0.58 3.1

Schroder ISF Global Inflation Linked Bond 1.87 3.8 Singapore Equity Fund 0.58 3.1

Singapore Equity Fund 1.50 3.1 N.A. N.A. N.A.

Schroder ISF Global Equity 1.36 2.8 N.A. N.A. N.A.

SPDR Gold Trust 0.97 2.0 N.A. N.A. N.A.


Fund ManagerNTUC Income Insurance Co-operative Limited is the Investment Manager of the fund. Schroder Investment Management (Singapore) Limited is the Sub-Investment Manager of the fund.



NTUC INCOME I 21


AIM NOW

Schroder Investment Management (Singapore) LimitedSchroder Investment Management (Singapore) Ltd was incorporated in Singapore and has been managing collective investment schemes and discretionary funds since 1992.

Schroder is a leading global asset management company, whose history dates back over 200 years. The group’s holding company, Schroders Plc is and has been listed on the London Stock Exchange since 1959. Assets under management totaled US$305.1 billion (as of 30 June 2012).

Schroders’ aim is to apply their specialist asset management skills in serving the needs of their clients worldwide. With one of the largest networks of offices of any dedicated asset management company, and over 350 portfolio managers and analysts covering the world’s investment markets, they offer their clients a comprehensive range of products and services.


(annualised)5-year

(annualised)10-year


(annualised)

AIM Now 0.5% 0.3% 2.1% 3.2% N.A. N.A. N.A. 3.2%

Benchmark 0.3% 0.7% 2.5% 4.9% N.A. N.A. N.A. 4.7%

Changes to benchmarks during the life of the fund: Since 1 Mar 2010 to 31 May 2011 - MSCI AC World, MSCI AC Asia ex-Japan, FTSE STI, Barclays Global Agg (SGD Hedged), UOB All Bond Index, DJ UBS Commodity Index; Since inception to Feb 2010 - MSCI AC World, MSCI AC Asia ex-Japan, FTSE STI, Barclays Global Agg (SGD Hedged), UOB All Bond Index


IndexedPerformance


Benchmark Fund

95

100

105

110

115

Oct-09 May-10 Dec-10 Jul-11 Feb-12 Jun-12

Market ReviewGlobal equity markets began the year with a strong rally as investors were encouraged by the agreement of the EU and Greece over terms for the second €130 billion bailout package as well as expectations of further monetary easing in China. However, the appetite for risk assets faded in the second quarter as chaos in Greece and financial system instability in Spain exacerbated concerns about the European debt crisis. Slowing growth in US employment data also weighed on investor sentiment while Chinese economic data was weak across the board, further stoking concerns that the economy may be heading for a hard landing. Against this backdrop, equity markets were sold off sharply over the months of April and May and erased most of the gains that were earned during the first quarter. It was in the month of June that global markets began to see improvement when an agreement was reached to allow the European Stability Mechanism (ESM) to inject capital directly into banks. This prompted a rally in equity markets and helped secure positive returns over 1H12. During this period, the MSCI Asia ex-Japan gained 2.17%, while the MSCI World rose 1.91%. Meanwhile, Gold rose to a high in February before consolidating over the remaining months to produce a net gain of 2.2%.

On the fixed income side, performance of government bonds was lacklustre in the beginning of the year but managed to catch up over Q2 with 10-year yields in the core sovereign bond markets of the US, Germany and UK falling on flight to quality. In Singapore, bond yields of 10-year Singapore Government Securities was relatively flat (10Y: -2bps) over the 6-month period while yields at the shorter-end declined (2Y: -18bps), resulting in a steepening of yield curve. Corporate bonds particularly high yield led in the fixed income sector over 1H12, with the Barclays Capital Global High Yield returning 7.8% in USD terms while the Citigroup WGBI delivering 2% in local currency terms.


22 I NTUC INCOME

AIM NOW

Market OutlookOur outlook going in to the 2nd half of 2012 is very similar to our approach entering 2012 – the forces of private sector deleveraging and public sector reflation remain in opposition, generating volatile price action within essentially range bound markets. With the crisis in Europe no closer to resolution and the potential knock-on effects to global growth high, we remain cautious and selective in our investment allocations.

However, the cyclical risks in Asia have lessened with easing inflation providing policy makers with room to loosen monetary and fiscal conditions. Having underperformed through 2011, these stimulatory policies should see Asian assets outperform their Western counterparts, particularly in equities.

RisksThe risk in the fund is diversified by investing directly (or indirectly through other collective investment schemes) in a mixture of local and global bonds and equities as well as alternatives. As the fund has direct/indirect investments in equities and bonds, it is subject to (1) equity risk which includes market risk, company risk, selection risk, currency risk and counterparty risk; and (2) debt risk which includes interest rate sensitivity, credit risk, changes in debt rating and credit rating, currency risk and sovereign risk. The fund is also subject to financial and/or commodity derivatives risk including but not limited to commodity, agricultural commodity or gold and metal related futures and options contracts and other commodity-related derivative instruments such as commodity-linked swaps. This is not an exhaustive list of risks.

The managers intend to hedge its foreign currency exposure. Financial derivatives in the ILP fund are used for hedging and efficient portfolio management purpose. The global exposure of the ILP fund to financial derivatives or embedded financial derivatives is calculated using the commitment approach described in and in accordance with the provisions of the Code on Collective Investment Schemes.


S$ (mil)Bonds 35.0Equities 4.8Alternatives 1.0Cash/Others 7.8

Total 48.5


NTUC Income’s Investment-Linked Plan (ILP) funds are intended for long-term investment. It is not suited for any short-term speculation. You should not expect to obtain any short-term gains from investing in NTUC Income’s ILP funds. It is important that your investment suits your risk appetite. You may wish to consult your financial adviser before investing in any ILP fund.


As of 30 June 2012 0.97% 24.60%

As of 30 June 2011 0.99% 0.00%



Bonds 72.1%

Equities 9.9%Alternatives 2.0%

Cash/Others 16.0%

NTUC INCOME I 23


AIM NOW




Redemption of units (877,416)

Dividend distribution (957,549)

Gain/(loss) on investments and other income 881,517





S$% of Net

Asset ValueRealisedGains/


(Losses) S$

Forwards (184,543) 0.38 216,006 (164,119)


Singapore Bond Fund 12.01 24.7

Schroder ISF - Global Corporate Bond 6.86 14.1

Schroder Asian Premium Bond 4.88 10.1

Schroder ISF Asian Bond Absolute Return 4.69 9.7

Schroder ISF Global Bond 4.66 9.6

Schroder ISF Pacific Equity 1.96 4.0

Schroder ISF Global Inflation Linked Bond 1.87 3.8

Singapore Equity Fund 1.50 3.1

Schroder ISF Global Equity 1.36 2.8

SPDR Gold Trust 0.97 2.0

BorrowingsNil.


Soft Dollar Commission or ArrangementThe managers did not retain, for their own account, cash or commission rebates arising out of transactions executed in or outside Singapore. The managers also did not receive soft dollars for the fund.

ConflictofInterestsSchroders has in place policies and procedures to mitigate conflicts of interests which may arise in the management of clients’ accounts. Schroders believed that these policies and procedures are reasonably designed to ensure that clients are treated fairly and material conflicts of interest are either avoided or are managed to avoid damage to a client’s interests.






24 I NTUC INCOME

AIM 2015

Investment Objective To generate capital growth at a sensible risk level for investors who intend to accumulate assets for retirement or other purposes until the year 2015.

Investment ScopeThe sub-fund intends to achieve this objective by investing in a diversified portfolio of asset classes including fixed income, equities and alternatives. The allocation between the asset classes will become more conservative as the portfolio nears its maturity date, reflecting the need for reduced investment risks as retirement approaches and the need for a lower volatility portfolio. It is intended for the assets to be switched into the Aim Now portfolio once the portfolio reaches its maturity date for investors to enjoy a steady income and stable capital value post retirement.

Fund Details as of 30 June 2012Launch Date 25 September 2009Fund Size S$2.25 millionInitial Sales Charge 3.5% (an extra 0.5% bonus unit will be given for all single premium and top-ups )Annual Management Charge 0.90% p.a.Inclusion in CPFIS Yes (CPF OA and CPF SA)CPFIS Risk Classification Medium to High Risk, Broadly DiversifiedBenchmark Barclays Global Aggregate hedged to Singapore Dollars UOB Singapore Government Bond Index (All) MSCI AC Asia ex-Japan Index in Singapore Dollars MSCI AC World Index in Singapore Dollars FTSE Straits Times Index (FTSE STI) FTSE EPRA/NAREIT Developed Real Estate Index in Singapore Dollars DJ UBS Commodity hedged to Singapore Dollars Gold Spot hedged to Singapore Dollars



(mil)% of Net


(mil)% of Net

Asset Value


Schroder ISF Global Bond 0.40 18.0 Schroder ISF Global Bond 0.33 17.9

Schroder ISF Asian Bond Absolute Return 0.33 14.7 Schroder ISF Asian Bond Absolute Return 0.28 15.1

Schroder ISF Pacific Equity 0.14 6.2 Schroder ISF Global Equity 0.09 5.2

Singapore Equity Fund 0.12 5.3 Schroder ISF Global Inflation Linked Bond 0.09 5.1

Schroder ISF Global Inflation Linked Bond 0.11 5.0 Schroder ISF Pacific Equity 0.09 5.0

Schroder ISF Global Equity 0.09 4.2 Singapore Equity Fund 0.08 4.4

Schroder ISF Asia Pacific Property Securities 0.09 3.9 Schroder ISF Asia Pacific Property Securities 0.07 3.9

Schroder ISF Emerging Markets 0.06 2.8 Schroder ISF Emerging Markets 0.06 3.2

SPDR Gold Trust 0.04 2.0 Schroder ISF Global Smaller Companies 0.03 1.9





NTUC INCOME I 25


AIM 2015





(annualised)5-year

(annualised)10-year


(annualised)

AIM 2015 0.8% -0.4% 3.2% 2.3% N.A. N.A. N.A. 3.7%

Benchmark 0.9% 0.0% 3.1% 3.3% N.A. N.A. N.A. 4.7%

Changes to benchmarks during the life of the fund: Since inception to 31 May 2011 - MSCI AC World, MSCI AC Asia ex-Japan, FTSE STI, Barclays Global Agg (SGD Hedged), UOB All Bond Index, FTSE EPRA/NAREIT Developed Real Estate, DJ UBS Commodity


IndexedPerformance


Benchmark Fund

95

100

105

110

115

Oct-09 May-10 Dec-10 Jun-11 Feb-12 Jun-12




26 I NTUC INCOME

AIM 2015







Total 2.2




As of 30 June 2012 1.08% 13.78%

As of 30 June 2011 1.05% 10.74%



Bonds 61.4%

Cash/Others 11.8%

Alternatives 6.8%

Equities 20.0%

NTUC INCOME I 27


AIM 2015



Purchase of new units 373,142







S$% of Net



(Losses) S$

Forwards (7,955) 0.35 11,042 200









Schroder ISF Asia Pacific Property Securities 0.09 3.9

Schroder ISF Emerging Markets 0.06 2.8


Schroder ISF Global Smaller Companies 0.03 1.4

Schroder Alt Solutions Commodity 0.02 0.9

BorrowingsNil.









28 I NTUC INCOME

AIM 2025



Fund Details as of 30 June 2012Launch Date 25 September 2009Fund Size S$6.14 millionInitial Sales Charge 3.5% (an extra 0.5% bonus unit will be given for all single premium and top-ups )Annual Management Charge 1.00% p.a.Inclusion in CPFIS Yes (CPF OA and CPF SA)CPFIS Risk Classification Medium to High Risk, Broadly DiversifiedBenchmark Barclays Global Aggregate hedged to Singapore Dollars UOB Singapore Government Bond Index (All) MSCI AC Asia ex-Japan Index in Singapore Dollars MSCI AC World Index in Singapore Dollars FTSE Straits Times Index (FTSE STI) FTSE EPRA/NAREIT Developed Real Estate Index in Singapore Dollars DJ UBS Commodity hedged to Singapore Dollars Gold Spot hedged to Singapore Dollars



(mil)% of Net


(mil)% of Net

Asset Value

Schroder ISF Pacific Equity 0.84 13.8 Schroder ISF Global Bond 0.77 17.7

Schroder ISF - Global Corporate Bond 0.66 10.8 Schroder ISF Asian Bond Absolute Return 0.57 13.0

Schroder ISF Global Equity 0.66 10.8 Schroder ISF Pacific Equity 0.54 12.3

Singapore Bond Fund 0.61 10.0 Schroder ISF Global Equity 0.48 11.0

Schroder ISF Global Bond 0.59 9.6 Singapore Bond Fund 0.43 9.8

Schroder Asian Premium Bond 0.47 7.7 Singapore Equity Fund 0.32 7.3

Schroder ISF Asia Pacific Property Securities 0.43 7.0 Schroder ISF Asia Pacific Property Securities 0.27 6.2

Singapore Equity Fund 0.43 6.9 Schroder ISF Emerging Markets 0.25 5.7

Schroder ISF Emerging Markets 0.38 6.1 Schroder ISF Global Inflation Linked Bond 0.21 4.9

Schroder ISF Asian Bond Absolute Return 0.30 4.9 Schroder ISF Global Smaller Companies 0.17 3.9





NTUC INCOME I 29


AIM 2025





(annualised)5-year

(annualised)10-year


(annualised)

AIM 2025 1.2% -1.6% 4.5% 0.4% N.A. N.A. N.A. 3.4%

Benchmark 1.4% -1.5% 4.0% 0.4% N.A. N.A. N.A. 4.3%

Changes to benchmarks during the life of the fund: Since inception to 31 May 2011 - MSCI AC World, MSCI AC Asia ex-Japan, FTSE STI, Barclays Global Agg (SGD Hedged), UOB All Bond Index, FTSE EPRA/NAREIT Developed Real Estate, DJ UBS Commodity


IndexedPerformance


Benchmark Fund

Oct-09 May-10 Dec-10 July-11 Feb-12 Jun-1295

100

105

110

115




30 I NTUC INCOME

AIM 2025







Total 6.1




As of 30 June 2012 1.19% 25.53%

As of 30 June 2011 1.17% 6.21%



Bonds 45.8%

Alternatives 10.0%Cash/Others 2.7%

Equities 41.5%

NTUC INCOME I 31


AIM 2025










S$% of Net



(Losses) S$

Forwards (21,460) 0.35 27,417 (1,009)
















BorrowingsNil.









32 I NTUC INCOME

AIM 2035



Fund Details as of 30 June 2012Launch Date 25 September 2009Fund Size S$8.56 millionInitial Sales Charge 3.5% (an extra 0.5% bonus unit will be given for all single premium and top-ups)Annual Management Charge 1.00% p.a.Inclusion in CPFIS Yes (CPF OA)CPFIS Risk Classification Higher Risk, Broadly DiversifiedInvestment Manager NTUC IncomeSub Investment Manager Schroder Investment Management (Singapore) LtdBenchmark Barclays Global Aggregate hedged to Singapore Dollars MSCI AC Asia ex-Japan Index in Singapore Dollars MSCI AC World Index in Singapore Dollars FTSE Straits Times Index (FTSE STI) FTSE EPRA/NAREIT Developed Real Estate Index in Singapore Dollars DJ UBS Commodity hedged to Singapore Dollars Gold Spot hedged to Singapore Dollars


Top 10 HoldingsJune 2012 S$ (mil) % of Net

Asset ValueJune 2011 S$ (mil) % of Net

Asset Value


Schroder ISF Global Equity 1.37 16.0 Schroder ISF Global Bond 1.11 15.0

Singapore Equity Fund 0.88 10.3 Schroder ISF Global Equity 0.97 13.1

Schroder ISF Global Bond 0.86 10.0 Schroder ISF Asian Bond Absolute Return 0.75 10.2

Schroder ISF Asia Pacific Property Securities 0.72 8.4 Singapore Equity Fund 0.69 9.3

Schroder ISF - Global Corporate Bond 0.68 8.0 Schroder ISF Emerging Markets 0.58 7.9

Schroder ISF Emerging Markets 0.64 7.5 Schroder ISF Asia Pacific Property Securities 0.49 6.6

Schroder ISF Asian Bond Absolute Return 0.45 5.3 Schroder ISF Global Smaller Companies 0.44 5.9

Schroder ISF Global Smaller Companies 0.42 4.9 Schroder ISF Global Inflation Linked Bond 0.20 2.7

Schroder Asian Premium Bond 0.41 4.7 SPDR Gold Trust 0.14 1.9





NTUC INCOME I 33


AIM 2035





(annualised)5-year

(annualised)10-year


(annualised)

AIM 2035 1.4% -2.6% 5.3% -1.1% N.A. N.A. N.A. 3.4%

Benchmark 1.8% -2.4% 4.5% -1.9% N.A. N.A. N.A. 3.9%

Changes to benchmarks during the life of the fund: Since inception to 31 May 2011 - MSCI AC World, MSCI AC Asia ex-Japan, FTSE STI, Barclays Global Agg (SGD Hedged), FTSE EPRA/NAREIT Developed Real Estate, DJ UBS Commodity


IndexedPerformance


Benchmark Fund

95

100

105

110

115

120





34 I NTUC INCOME

AIM 2035







Total 8.6




As of 30 June 2012 1.19% 24.25%

As of 30 June 2011 1.17% 10.10%



Bonds 30.8%

Cash/Others 1.2%

Alternatives 11.4%

Equities 56.6%

NTUC INCOME I 35


AIM 2035










S$% of Net



(Losses) S$

Forwards (29,789) 0.35 32,532 352















BorrowingsNil.









36 I NTUC INCOME

AIM 2045



Fund Details as of 30 June 2012Launch Date 25 September 2009Fund Size S$7.54 millionInitial Sales Charge 3.5% (an extra 0.5% bonus unit will be given for all single premium and top-ups )Annual Management Charge 1.00% p.a.Inclusion in CPFIS Yes (CPF OA)CPFIS Risk Classification Higher Risk, Broadly DiversifiedBenchmark Barclays Global Aggregate hedged to Singapore Dollars MSCI AC Asia ex-Japan Index in Singapore Dollars MSCI AC World Index in Singapore Dollars FTSE Straits Times Index (FTSE STI) FTSE EPRA/NAREIT Developed Real Estate Index in Singapore Dollars DJ UBS Commodity hedged to Singapore Dollars Gold Spot hedged to Singapore Dollars


Top 10 HoldingsJune 2012 S$ (mil) % of Net


Asset Value


Schroder ISF Global Equity 1.28 17.0 Schroder ISF Global Equity 0.89 12.9

Singapore Equity Fund 0.75 10.0 Schroder ISF Global Bond 0.69 9.9

Schroder ISF Asia Pacific Property Securities 0.74 9.8 Schroder ISF Asian Bond Absolute Return 0.68 9.8

Schroder ISF Emerging Markets 0.72 9.6 Schroder ISF Emerging Markets 0.67 9.8

Schroder ISF Global Smaller Companies 0.52 7.0 Singapore Equity Fund 0.62 9.1

Schroder ISF - Global Corporate Bond 0.50 6.6 Schroder ISF Global Smaller Companies 0.56 8.1

Schroder ISF Global Bond 0.45 6.0 Schroder ISF Asia Pacific Property Securities 0.47 6.8

Schroder ISF Asian Bond Absolute Return 0.37 4.9 Schroder Alt Solutions Commodity 0.17 2.4

Schroder Asian Premium Bond 0.37 4.9 SPDR Gold Trust 0.16 2.4





NTUC INCOME I 37


AIM 2045





(annualised)5-year

(annualised)10-year


(annualised)

AIM 2045 1.7% -3.1% 5.3% -2.1% N.A. N.A. N.A. 3.1%

Benchmark 2.0% -2.9% 4.6% -2.9% N.A. N.A. N.A. 3.7%

Changes to benchmarks during the life of the fund: Since inception to 31 May 2011 - MSCI AC World, MSCI AC Asia ex-Japan, FTSE STI, Barclays Global Agg (SGD Hedged), FTSE EPRA/NAREIT Developed Real Estate, DJ UBS Commodity


IndexedPerformance


Benchmark Fund

95

100

105

110

115

120





38 I NTUC INCOME

AIM 2045







Total 7.5




As of 30 June 2012 1.20% 28.00%

As of 30 June 2011 1.17% 25.24%



Bonds 22.5%

Cash/Others 1.3%

Alternatives 13.0%

Equities 63.2%

NTUC INCOME I 39


AIM 2045










S$% of Net



(Losses) S$

Forwards (22,357) 0.30 10,256 9,289














BorrowingsNil.







As part of the continuous efforts to update you on the performance of the ILP funds you have invested in, we produce a Fund Report (with summarised financial statements) twice a year.


40 I NTUC INCOME

ASIA MANAGED FUND

Investment Objective To achieve long-term capital appreciation by investing in stocks and fixed income securities in the region, including North Asian and South-East Asian countries. The strategy is to be value oriented.

Investment ScopeThe Fund will invest all or substantially all of its assets in the Singapore-domiciled Schroder Asian Growth Fund (managed by Schroder Investment Management) in relation to the equity portion (70%) and Singapore bonds (managed by NTUC Income) in relation to the fixed income portion (30%). (Prior to 22 October 2010, the investment scope was Singapore (39%), Hong Kong (18%) and Thailand (13%) stocks and Singapore Bonds (30%)). The fund is denominated in Singapore dollars.

Fund Details as of 30 June 2012Launch Date 1 September 1995Fund Size S$92.35 millionInitial Sales Charge 3.5% (an extra 0.5% bonus unit will be given for all single premium and top-ups)Annual Management Charge 1.0% p.a.Inclusion in CPFIS Yes (CPF OA and CPF SA)CPFIS Risk Classification Medium to High Risk, Narrowly Focused – Regional – AsiaBenchmark 70% MSCI AC Asia ex-Japan Index in Singapore Dollars 30% UOB Long Bond Index


Top 10 Holdings

Asia Managed Fund

June 2012 S$(mil)

% of Net Asset Value

June 2011 S$(mil)


Schroder Asian Growth Fund 62.7 67.9 Schroder Asian Growth Fund 68.1 68.3


Schroder ISF -Indian Equity 3.4 3.7 Schroder ISF -Indian Equity 4.6 4.6

Oversea Chinese 4.2% 140149 0.1 0.1 Oversea Chinese 4.2% 140149 0.1 0.1

Schroder Asian Growth Fund

June 2012 S$(mil)


June 2011 S$(mil)


Samsung Electronics Co Ltd 17.2 7.1 Jardine Strategic Holding Ltd 16.4 6.1

Jardine Strategic Hldg Ltd 13.4 5.5 Samsung Electronics Co Ltd 12.3 4.6

Hyundai Motor Co 9.5 3.9 Taiwan Semiconductor Manufacturing Co Ltd 8.0 3.0

Taiwan Semiconductor Manufacturing Co Ltd 8.9 3.6 Hyundai Motor Co 7.3 2.7

Hon Hai Precision Ind Co Ltd 6.5 2.7 China Taiping Insurance Holding Co Ltd 6.6 2.5

United Overseas Bank Ltd 6.2 2.5 Hon Hai Precision Industry Co Ltd 6.6 2.4

China Taiping Insurance Hldg Co Ltd 5.8 2.4 Industrial & Commercial Bank of China Ltd 6.5 2.4

Hana Financial Group Inc 5.2 2.2 United Overseas Bank Ltd 6.3 2.3

Television Broadcasts Ltd 5.2 2.1 Swire Pacific Ltd 6.1 2.3

Bangkok Bank PCL NVDR 4.9 2.0 China Construction Bank Corp 5.9 2.2


Fund Manager



NTUC INCOME I 41


ASIA MANAGED FUND

Schroder Investment Management (Singapore) LimitedSchroder Investment Management (Singapore) Ltd is the Investment Manager of Schroder Asian Growth Fund. Schroder Investment Management (Singapore) Ltd was incorporated in Singapore and has been managing collective investment schemes and discretionary funds since 1992.




(annualised)5-year

(annualised)10-year


(annualised)

Asia Managed Fund 0.2% -2.6% 6.3% 0.0% 9.3% 2.7% 9.4% 5.0%

Benchmark 1.0% -3.7% 3.4% -5.0% 7.5% 2.0% 8.6% 5.1%

Changes to benchmarks during the life of the fund: Since 1 Apr 2000 to 21 Oct 2010 - 39% FTSE STI, 18% HSI, 13% SET, 30% UOB Long Bond Index; Since Apr 99 to Mar 2000 - 45% FTSE STI, 20% HSI, 15% SET, 20% UOB Long Bond Index; Since Mar 97 to Mar 99 - 25% DBS 50, 25% KLCI, 10% SET, 40% Singapore 3-Month Deposit rate; Since inception to Feb 97 - 33.33% DBS 50, 33.33% KLCI, 33.33% Singapore 3-Month Deposit rate


Market Review

Market Overview2012 started off on a positive note, with Asian equity markets rallying on stronger US macroeconomic data, some relief from the European debt crisis following massive injections of liquidity by the ECB, and expectations of China easing policy given its slower growth and fading inflation risks. However, the rally paused for breath in March as a slew of weaker data and renewed fears over Chinese growth emerged. Caution surrounding global growth continued in the second quarter of 2012, with a deceleration in manufacturing activity in Europe and Asia, while in the US, consumer spending slowed and the labour market softened. Market sentiment was also weighed down by the renewed problems of Greece and potential contagion risks to other parts of the Euro area, as well as liquidity concerns surrounding Spanish banks. Economic data continued to surprise on the downside and cyclical commodity prices (energy and metals) remained weak, although markets made up for some of that lost ground in an event-filled month of June from the reduction of Chinese interest rates and the extension of “Operation Twist” in the US, to EU leaders surprising markets towards the end of the month with a far reaching deal to let the Eurozone’s rescue funds directly recapitalise banks.

Market Outlook The outlook for Asian, and global, equities in the near term is dominated by the weaker economic data that is apparent in both the US and China and the continuing ‘tail risk’ from any disorderly break-up of the Eurozone or its banking system. These negative influences have dampened sentiment towards risk assets and seen a significant reduction in market liquidity as investors just sit on the sidelines waiting for more clarity to emerge on the Eurozone’s crisis resolution and the shape and extent of the downturn now apparent in the rest of the world.

None of this is a great surprise as the structural problems in Europe are deep seated and ‘political’ in nature, requiring a dramatic rethink of the Continent’s institutional and governing frameworks, and hence are unlikely to be resolved near term by the endless round of emergency summits. The weaker US data continues the pattern over the last few years of a sub-par recovery in an economy still burdened by deleveraging. Political uncertainty in the run-up to the Presidential elections is also not helping confidence. The

IndexedPerformance


Benchmark Fund

50

100

150

200

250

300

Sep-95 Aug-98 Jul-01 Jun-04 May-07 Apr-10 Jun-12


42 I NTUC INCOME

ASIA MANAGED FUND


S$ (mil)Corporate Bonds 9.8Government Bonds 9.8Statutory Board Bonds 4.4Equities 66.2Cash/Others 2.2

Total 92.4


S$ (mil)Communications 0.5Consumer, Cyclical 0.7Consumer, Non-cyclical 0.6Diversified 0.4Energy 0.3Financial 8.0Funds 66.1Government 12.3Industrial 0.2Utilities 1.0

Total 90.2



Total 24.0 26.0



expect to obtain any short term gains from investing in NTUC Income’s ILP funds. It is important that your investment suit your risk appetite. You may wish to consult your financial adviser before investing in any ILP fund.

Expense and Turnover Ratio

Asia Managed Fund

Expense Ratio Turnover Ratio

As of 30 June 2012 1.41% 0.00%

As of 30 June 2011 1.26% 92.47%

Schroder Asian Growth Fund

Expense Ratio Turnover Ratio

As of 30 June 2012 1.35% 38.80%

As of 30 June 2011 1.25% 25.10%


extent of the slowdown in China this year has been greater than most commentators expected, with forecasts for a pick-up in activity pushed out from Q2 towards year end. The recent policy response has, correspondingly, come through a bit faster and this should help stabilise growth in the second half – although our manager continue to think China should grow more slowly in the next few years as the overhang from the massive credit bubble of 2009/10 is slowly digested. Weaker growth in China, and more generally in the key export markets of the West, is likely to put pressure on earnings for Asian corporates through 2012.

RisksThe risk in the Asia Managed Fund is diversified by investing in a mixture of Asian equities & bonds. As the Fund has investments in equities and bonds, it is subject to (1) equity risk which includes market risk, company risk, selection risk, currency risk and counter party risk; and (2) debt risk which includes interest rate sensitivity, credit risk, changes in debt rating and credit rating, currency risk and sovereign risk. This is not an exhaustive list of risks.

You should be aware that past performance is not indicative of future performance. The value of the units may rise or fall as the performance of the Fund changes.

NTUC Income’s ILP funds are intended for long term investment. It is not suited for any short term speculation. You should not


Cash/Others 2.3%

Equities 71.7%



Funds 73.3%

Government 13.6%Industrial 0.3%

Financial 8.8%

Utilities 1.2%Communications 0.6%

Energy 0.4%Diversified 0.5%Consumer, Non-cyclical 0.6%


NTUC INCOME I 43


ASIA MANAGED FUND











Schroder Asian Growth Fund 62.7 67.9


Schroder ISF -Indian Equity 3.4 3.7

BorrowingsNil.



ConflictofInterestsNTUC Income has advised that certain conflict of interests may arise from time to time. However, actions are taken to resolve such conflict of interests.






44 I NTUC INCOME

GLOBAL MANAGED FUND (BALANCED)

Investment Objective The objective of this fund is to provide medium- to long-term capital appreciation by investing in the core funds, Global Equity, Global Bond, Singapore Equity and Singapore Bond.

Investment ScopeThe Balanced Fund is invested in NTUC Income’s core funds in the following proportions: Singapore Equity (10%), Global Equity (40%), Singapore Bond (15%), and Global Bond (35%). The fund is denominated in Singapore Dollars.

Fund Details as of 30 June 2012Launch Date 2 January 2003Fund Size S$181.78 millionInitial Sales Charge 3.5% (an extra 0.5% bonus unit will be given for all single premium and top-ups)Annual Management Charge Charges at core fund levels as follow: Singapore Equity: 0.65% p.a. Singapore Bond: 0.5% p.a. Global Equity: 1.25% p.a. Global Bond: 0.85% p.a. Based on the above management fees charged to the respective Core Funds, the computed effective management fee applicable is 0.9375% p.a.Inclusion in CPFIS Yes (CPF OA and CPF SA)CPFIS Risk Classification Medium to High Risk, Broadly DiversifiedBenchmark 10% FTSE Straits Times Index (FTSE STI) 40% MSCI World Index in Singapore Dollars 15% UOB Long Bond Index 35% Barclays Global Aggregate in Singapore Dollars



(mil)% of Net


(mil)% of Net

Asset Value

Global Equity Fund 70.6 38.8* Global Equity Fund 80.3 40.9*

Global Bond Fund 65.1 35.8* Global Bond Fund 65.6 33.4*

Singapore Bond Fund 23.2 12.7 Singapore Equity Fund 26.6 13.5

Singapore Equity Fund 23.1 12.7 Singapore Bond Fund 24.4 12.4

*Please refer to the respective Fund Reports for the top 10 holdings. Important: Any differences in the total and percentage of the Net Asset figures are the result of rounding off.

Fund ManagerNTUC Income Insurance Co-operative Limited is the Investment Manager of the fund.

More information can be found in the respective Fund Reports of Singapore Equity Fund, Singapore Bond Fund, Global Equity Fund and Global Bond Fund.


(annualised)5-year

(annualised)10-year


(annualised)

Global Managed Fund (Balanced) 1.3% -1.5% 4.7% 1.1% 6.1% -0.6% N.A. 4.7%

Benchmark 1.7% -1.2% 3.9% 2.5% 6.6% 0.3% N.A. 5.0%

NTUC INCOME I 45




Market Review

Global Bond





EMEM economies continued to show signs of weakness as global demand slowed and domestic demand appeared insufficient to pick up the slack. Though their economic fundamentals remain healthier and their growth rates faster than those of

their developed counterparts, emerging economies are showing increasing vulnerability to a global slowdown.

Market Outlook







IndexedPerformance


Benchmark Fund

90

100

110

120

130

140

150

160

170



46 I NTUC INCOME


Singapore BondSingapore government bond market ended the first six months of 2012 firmer amid concerns over global growth prospects and Eurozone debt situation. The inaugural S$2.1 billion 30-year Singapore government bond was auctioned in March and saw good demand from investors with auction yield cut-off at 2.84%. With inflation turning out more persistent than expected, the monetary authority announced a tightening of its policy stance in its April meeting. The slope of the Singapore dollar nominal effective exchange rate (NEER) was increased slightly and the policy band narrowed. The centre of the band was left unchanged. Overall, the UOB government long bond index gained 2.6% over the review period as the whole yield curve moved lower.


Meanwhile, consumer price inflation (CPI) rose 5.3% in June from a year ago, up from 5.0% the previous month. The higher headline number was led by increases in the costs of transport and accommodation. Core inflation measure, which excludes accommodation and private road transport costs, was unchanged at 2.7% year-on-year in June. While inflation is likely to moderate gradually in the second half of the year, the 2012 inflation is now expected to come in at the upper half of 3.5-4.5% forecast range. The CPI forecast was 2.5-3.5% at the start of the year. Lower oil and some commodity prices should help to ease inflationary pressure even as car prices are likely to remain elevated.


Global Equity


During the 2nd quarter of 2012, investor sentiment was clouded by two major issues. The 1st issue was the continuing financial

crisis in the euro area. From early in the year, concerns mounted in relation to the ability and willingness of the government of Greece to abide by the strict budgetary conditions that had been imposed on it by the ‘Troika’ of the European Union (EU), European Central Bank (ECB) and International Monetary Fund (IMF) as a condition for financial assistance. In the 2nd quarter, investors were increasingly worried about the implications of the massive bad debts of banks in Spain. The 2nd issue was the clear signs of deceleration in the global economy. It was apparent that much of Europe was in recession, and signs of a slowing in the US as well as in each of the four largest emerging markets economies (China, India, Brazil and Russia). In many emerging markets, purchasing managers indices (PMIs) and other indicators pointed to softening in demand.


The US S&P 500 composite gained 5.92% in the 1st half of 2012 in Singapore dollar terms. Corporate earnings have generally been at least as strong as expected, and at a time that most corporate balance sheets have been robust. Monetary policy has emphasised growth. For much of the period, economic data has pointed to resilient demand in many sectors and geographic areas. However, the Institute for Supply Management (ISM)’s PMI for the US manufacturing sector pointed to a modest contraction in activity in June. In addition, the University of Michigan’s consumer confidence index slipped to the lowest level since the beginning of 2012 and other indicators were weaker than had been anticipated. First-quarter GDP growth was revised down to 1.9% from the advance estimate of 2.2%. The Fed lowered its growth forecasts for 2013 and 2014 and predicted unemployment would remain “stubbornly high” through next year. Private sector job gains fell short of economists’ forecasts in April and May, and the jobless rate edged up to 8.2%.


NTUC INCOME I 47



In Japan, the Nikkei Composite Index gained just 0.50% in Singapore dollar terms in the 1st half of 2012. Most indicators suggested that overall activity in the Japanese economy is flat. Many exporters have also had to contend with the general strength of the yen. 1st quarter GDP rose by an annualised 5%, while capital expenditures climbed 3%.





Singapore EquityThe Straits Times Index rose 8.8% in 1H, driven by positive U.S. economic data and improved liquidity in Europe. Financials was the best performing sector, +17.8%. Consumer staples was the worst performing sector, -19.5%. Non-oil domestic exports expanded 6.8% in June from a year ago, improving slightly from the +3.2% in May. Growth was led by pharmaceuticals which surged 24% year-on-year. Inflation rebounded to 5.3% year-on-year in June, while core inflation stayed at 2.7%. Industrial production rose 7.6% year-on-year in June, led by biomedical output. With 2Q manufacturing growth of 4.5%, 2Q GDP growth would have expanded a sluggish +2.3% year-on-year. With the balance of risks shifted to growth from inflation, the Monetary Authority of Singapore may ease back to a “modest and gradual” slope. Singapore loans growth moderated to 20.9% year-on-year in June. Corporate loans continued to slow while trade finance picked up

the slack. General commerce loans, rose by 34% year-on-year and +2% sequentially. Loan growth momentum will continue to moderate in 3Q12, given high prior-year base.

In the property sector, property prices are starting to move up again. 2Q12 private residential price index was up 0.4% sequentially, led by the prime segment. The pace of foreign buying accelerated in April – May. With residential prices continuing to rise, the risk of further property measures has increased.


RisksThe risk in the Balanced Fund is diversified by investing in a mixture of local and global bonds and equities. As the fund has investments in equities and bonds, it is subject to (1) equity risk which includes market risk, company risk, selection risk, currency risk and counter party risk; and (2) debt risk which includes interest rate sensitivity, credit risk, changes in debt rating and credit rating, currency risk and sovereign risk. This is not an exhaustive list of risks.


NTUC Income’s ILP funds are intended for long term investment. It is not suited for any short term speculation. You should not expect to obtain any short term gains from investing in NTUC Income’s ILP funds. It is important that your investment suits your risk appetite. You may wish to consult your financial adviser before investing in any ILP fund.


As of 30 June 2012 1.16% 0.00%

As of 30 June 2011 1.16% 0.11%

Please refer to the Fund Reports of Global Equity Fund and Global Bond Fund for details on the turnover and expense ratios.



48 I NTUC INCOME



S$ (mil)Asset Backed Securities 2.0Basic Materials 5.3Communications 8.0Consumer, Cyclical 7.9Consumer, Non-cyclical 15.2Diversified 5.0Energy 3.2Financial 38.6Funds 20.2Government 51.0Industrial 9.5Mortgage Securities 10.9Technology 4.2Utilities 1.7

Total 182.7


S&P’s rating or its equivalent S$ (mil) % of NAVAAA 29.3 16.1AA+ 2.4 1.3AA 2.1 1.2AA- 4.4 2.4A+ 4.1 2.2A 4.2 2.3A- 4.8 2.6BBB+ 2.1 1.2BBB 4.7 2.6BBB- 1.5 0.8BB+ 1.2 0.6BB 0.9 0.5BB- 0.1 0.0B+ 0.0 0.0B- 0.7 0.4CCC+ 0.2 0.1CCC 0.9 0.5CCC- 0.1 0.1CC 0.8 0.4D 0.1 0.0Unrated 25.5 14.0

Total 90.0 49.5



S$ (mil)Singapore Equity 22.7Global Equity 69.9Singapore Bond 21.4Global Bond 68.6Cash/Others -0.9

Total 181.8


Total 182.7



Singapore Bond 11.8%

Global Bond 37.8%

Cash/Others -0.5%

Global Equity 38.4%

Singapore Equity 12.5%North America 39.6%

Europe 35.7%

Others 2.0%

Asia 22.7%

Funds 11.1%

Mortgage Securities 6.0%Technology 2.3%



Diversified 2.8%Energy 1.7%

Financial 21.1%

Communications 4.4%Basic Materials 2.9%Asset Backed Securities 1.1%Utilities 0.9%

Government 27.9%

Industrial 5.2%

NTUC INCOME I 49









Units in issue 117,741,679Net asset value per unit - at the beginning of the year 1.475- as of 30 June 2012 1.544

Exposure to DerivativesMore information can be found in the respective Fund Reports of Singapore Equity Fund, Singapore Bond Fund, Global Equity Fund and Global Bond Fund.


Global Equity Fund 70.6 38.8

Global Bond Fund 65.1 35.8



BorrowingsNil.

Related Party DisclosureMore information can be found in the respective Fund Reports of Singapore Equity Fund, Singapore Bond Fund, Global Equity Fund and Global Bond Fund.

Soft Dollar Commission or ArrangementMore Information can be found in the respective Fund Reports of Singapore Equity Fund, Singapore Bond Fund, Global Equity Fund and Global Bond Fund.

ConflictofInterestsMore Information can be found in the respective Fund Reports of Singapore Equity Fund, Singapore Bond Fund, Global Equity Fund and Global Bond Fund.






50 I NTUC INCOME

GLOBAL MANAGED FUND (CONSERVATIVE)


Investment ScopeThe Conservative Fund is invested in NTUC Income’s core funds in the following proportions: Singapore Equity (5%), Global Equity (25%), Singapore Bond (20%), and Global Bond (50%). The fund is denominated in Singapore Dollars.

Fund Details as of 30 June 2012Launch Date 2 January 2003Fund Size S$12.90 millionInitial Sales Charge 3.5% (an extra 0.5% bonus unit will be given for all single premium and top-ups)Annual Management Charge Charges at core fund levels as follow: Singapore Equity: 0.65% p.a. Singapore Bond: 0.5% p.a. Global Equity: 1.25% p.a. Global Bond: 0.85% p.a. Based on the above management fees charged to the respective Core Funds, the computed effective management fee applicable is 0.87% p.a. Inclusion in CPFIS Yes (CPF OA and CPF SA)CPFIS Risk Classification Medium to High Risk, Broadly DiversifiedBenchmark 5% FTSE Straits Times Index (FTSE STI) 25% MSCI World Index in Singapore Dollars 20% UOB Long Bond Index 50% Barclays Global Aggregate in Singapore Dollars



(mil)% of Net


(mil)% of Net

Asset Value

Global Bond Fund 6.7 51.7* Global Bond Fund 6.7 49.1*

Global Equity Fund 2.8 21.7 Global Equity Fund 3.2 23.5


Singapore Equity Fund 0.7 5.4 Singapore Equity Fund 0.8 5.9

*Please refer to the Fund Report of Global Bond Fund for the top 10 holdings. Important: Any differences in the total and percentage of the Net Asset figures are the result of rounding off.




(annualised)5-year

(annualised)10-year


(annualised)

Global Managed Fund (Conservative) 0.7% 0.3% 4.2% 4.0% 6.6% 1.9% N.A. 4.4%

Benchmark 1.0% -0.1% 3.4% 4.4% 6.2% 2.3% N.A. 4.6%

NTUC INCOME I 51




Market Review

Global Bond







Market Outlook







IndexedPerformance


Benchmark Fund

90

100

110

120

130

140

150

160



52 I NTUC INCOME






Global Equity







NTUC INCOME I 53












RisksThe risk in the Conservative Fund is diversified by investing in a mixture of local and global bonds and equities. As the fund has investments in equities and bonds, it is subject to (1) equity risk which includes market risk, company risk, selection risk, currency risk and counter party risk; and (2) debt risk which includes interest rate sensitivity, credit risk, changes in debt rating and credit rating, currency risk and sovereign risk. This is not an exhaustive list of risks.




As of 30 June 2012 1.05% 0.00%

As of 30 June 2011 1.05% 0.00%

Please refer to the Fund Report of Global Bond Fund for details on the turnover and expense ratios.



54 I NTUC INCOME




Total 13.0



Total 9.5 73.8




S$ (mil)Singapore Equity 0.7Global Equity 2.8Singapore Bond 2.5Global Bond 7.0Cash/Others -0.1

Total 12.9


Total 13.0


Singapore Bond 19.2%

Global Equity 21.4%

Singapore Equity 5.3%

Global Bond 54.6%

Cash/Others -0.5%

North America 43.6%

Europe 31.3%

Others 2.3%

Asia 22.8%

Government 41.5%

Technology 1.3%

Basic Materials 1.6%Asset Backed Securities 1.6%

Utilities 1.4%

Energy 1.2%

Financial 21.8%

Funds 6.2%

Diversified 1.5%Consumer, Non-cyclical 4.9%

Communications 2.8%Consumer, Cyclical 2.8%

Industrial 2.9%Mortgage Securities 8.6%

NTUC INCOME I 55















BorrowingsNil.


Soft Dollar Commission or ArrangementMore information can be found in the respective Fund Reports of Singapore Equity Fund, Singapore Bond Fund, Global Equity Fund and Global Bond Fund.

ConflictofInterestsMore information can be found in the respective Fund Reports of Singapore Equity Fund, Singapore Bond Fund, Global Equity Fund and Global Bond Fund.







56 I NTUC INCOME

GLOBAL MANAGED FUND (GROWTH)


Investment ScopeThe Growth Fund is invested in NTUC Income’s core funds in the following proportions: Singapore Equity (15%), Global Equity (55%), Singapore Bond (10%), and Global Bond (20%). The fund is denominated in Singapore Dollars.

Fund Details as of 30 June 2012Launch Date 2 January 2003Fund Size S$241.83 millionInitial Sales Charge 3.5% (an extra 0.5% bonus unit will be given for all single premium and top-ups)Annual Management Charge Charges at core fund levels as follow: Singapore Equity: 0.65% p.a. Singapore Bond: 0.5% p.a. Global Equity: 1.25% p.a. Global Bond: 0.85% p.a. Based on the above management fees charged to the respective Core Funds, the computed effective management fee applicable is 1.005% p.a. Inclusion in CPFIS Yes (CPF OA) CPFIS Risk Classification Medium to High Risk, Broadly DiversifiedBenchmark 15% FTSE Straits Times Index (FTSE STI) 55% MSCI World Index in Singapore Dollars 10% UOB Long Bond Index 20% Barclays Global Aggregate in Singapore Dollars

The Annual Management Charge is not guaranteed and may be reviewed from time-to-time. However it shall not exceed 2.0% of the fund balance at any point of time.


(mil)% of Net


(mil)% of Net

Asset Value

Global Equity Fund 126.8 52.4* Global Equity Fund 140.5 53.9*

Global Bond Fund 47.4 19.6 Singapore Equity Fund 51.0 19.6

Singapore Equity Fund 45.2 18.7 Global Bond Fund 46.6 17.9


*Please refer to the Fund Report of Global Equity Fund for the top 10 holdings.Important: Any differences in the total and percentage of the Net Asset figures are the result of rounding off.




(annualised)5-year

(annualised)10-year


(annualised)

Global Managed Fund (Growth) 1.8% -2.9% 4.9% -1.4% 5.9% -3.1% N.A. 4.8%

Benchmark 2.4% -2.3% 4.4% 0.6% 6.9% -1.8% N.A. 5.3%

NTUC INCOME I 57




Market Review

Global Bond







Market Outlook







IndexedPerformance


Benchmark Fund


100

125

150

175

200


58 I NTUC INCOME






Global Equity







NTUC INCOME I 59












RisksThe risk in the Growth Fund is diversified by investing in a mixture of local and global bonds and equities. As the fund has investments in equities and bonds, it is subject to (1) equity risk which includes market risk, company risk, selection risk, currency risk and counter party risk; and (2) debt risk which includes interest rate sensitivity, credit risk, changes in debt rating and credit rating, currency risk and sovereign risk. This is not an exhaustive list of risks.




As of 30 June 2012 1.25% 2.33%

As of 30 June 2011 1.23% 1.99%

Please refer to the Fund Report of Global Equity Fund for details on the turnover and expense ratios.



60 I NTUC INCOME


Sector Allocation as of 30 June 2012 Credit Rating of Debt Securities


Total 240.9


Total 70.9 29.3




S$ (mil)Singapore Equity 44.5Global Equity 125.5Singapore Bond 20.9Global Bond 50.0Cash/Others 0.9

Total 241.8


Total 240.9


Singapore Bond 8.6%

Global Bond 20.7%

Cash/Others 0.4%

Global Equity 51.9%

Singapore Equity 18.4%

North America 34.8%

Europe 38.3%

Others 1.6%

Asia 25.3%

Government 16.5%

Technology 3.1% Basic Materials 3.9%Asset Backed Securities 0.6%Utilities 0.7%

Energy 2.2%

Financial 21.0%Funds 15.1%

Diversified 3.8%


Communications 5.8%Consumer, Cyclical 5.7%Industrial 7.1%

Mortgage Securities 3.3%

NTUC INCOME I 61








Units in issue 154,905,415Net asset value per unit - at the beginning of the year 1.488- as of 30 June 2012 1.561







BorrowingsNil.


Soft Dollar Commission or ArrangementMore information can be found in the respective Fund Reports of Singapore Equity Fund, Singapore Bond Fund, Global Equity Fund and Global Bond Fund.

ConflictofInterestsMore information can be found in the respective Fund Reports of Singapore Equity Fund, Singapore Bond Fund, Global Equity Fund and Global Bond Fund.







62 I NTUC INCOME

PRIME FUND

Investment Objective To achieve long-term capital appreciation by investing in stocks and fixed income securities in the region, including North Asian and South-East Asian countries. The strategy is to be value oriented.

Investment ScopeThe investment scope is Singapore (30%), Hong Kong (20%) and Thailand (10%) stocks and regional bonds (40%). The fund is denominated in Singapore Dollars.

Fund Details as of 30 June 2012Launch Date 2 August 1973Fund Size S$203.16 millionInitial Sales Charge 3.5% (an extra 0.5% bonus unit will be given for all single premium and top-ups)Annual Management Charge 1.0% p.a.Inclusion in CPFIS Yes (CPF OA and CPF SA)CPFIS Risk Classification Medium to High Risk, Narrowly Focused – Regional – AsiaBenchmark 30% FTSE Straits Times Index (FTSE STI) 20% Hang Seng Index in Singapore Dollars 10% Stock Exchange of Thailand Index in Singapore Dollars 40% Singapore 3-month Deposit Rate



(mil)% of Net


Asset Value

Singapore Bond Fund 74.9 36.9* Singapore Bond Fund 85.6 39.0*

United Overseas Bank Ltd 6.5 3.2 DBS Group Holdings Ltd 8.8 4.0

DBS Group Holdings Ltd 6.2 3.1 HSBC Holdings Plc 8.2 3.7

HSBC Holdings Plc 5.1 2.5 United Overseas Bank Ltd 6.7 3.0

Singapore Telecommunications Ltd 5.0 2.4 China Construction Bank 4.5 2.1

Keppel Corp Ltd 4.7 2.3 Oversea-Chinese Banking Corp 4.2 1.9

AIA Group Ltd 4.1 2.0 Jardine Matheson Holdings 4.1 1.9

CNOOC LTD 4.0 2.0 Industrial & Commercial Bank of China 4.0 1.8

Jardine Matheson Holdings 3.6 1.8 CNOOC LTD 3.5 1.6

Sun Hung Kai Properties Ltd 3.2 1.6 Keppel Corp Ltd 3.1 1.4

*Please refer to the Fund Report of Singapore Bond Fund for the top 10 holdings.Important: Any differences in the total and percentage of the Net Asset figures are the result of rounding off.




(annualised)5-year

(annualised)10-year


(annualised)

Prime Fund 1.7% -2.6% 5.1% -4.2% 5.4% 1.3% 7.8% 8.8%

Benchmark 2.0% -1.7% 5.8% -0.5% 6.4% 1.6% 7.0% N.A.

Changes to benchmarks during the life of the fund: Since inception to 31 Mar 98 - 33.33% DBS50, 33.33% KLCI, 33.33% Singapore 3-Month Deposit rate

NTUC INCOME I 63


PRIME FUND

Important: The comparison to the benchmark commenced from December 1994 even though the inception date for Prime fund was August 1973.


Market ReviewMSCI Asia ex-Japan rose 4.5% in 1H12, as equities rebounded sharply following the results of the EU summit. Singapore was the best performing market, +12.7%. Indonesia was the worst performing market, declined by 5.2%.

The Straits Times Index rose 8.8% in 1H. Non-oil domestic exports expanded 6.8% in June from a year ago, led by pharmaceuticals which surged 24% year-on-year. Inflation rebounded to 5.3% year-on-year in June, while core inflation stayed at 2.7%. Industrial production rose 7.6% year-on-year in June. With 2Q manufacturing growth of 4.5%, 2Q GDP growth would have expanded a sluggish +2.3% year-on-year. With the balance of risks shifted to growth, the Monetary Authority of Singapore may ease back to a “modest and gradual” slope.

The Hong Kong market gained 3.3% in 1H12. China’s June economic data continued to show sluggish growth momentum in 2Q. 2Q GDP rose 7.6% year-on-year. Industrial production rose 9.5% year-on-year in June, compared to 9.6% year-on-year in May. On domestic demand, retail sales value rose 13.7% year-on-year in June. Inflation wise, China’s June CPI inflation

eased to 2.2% year-on-year, led by softening food price inflation. A reflection that the government is getting increasingly concerned about growth, the People’s Bank of China announced an asymmetric rate cut to the commercial banks’ interest rates.

We remain positive on equities as Euro news looks for a change to be pointing in the right direction, lowering the tail risk of financial crisis. The cycle looks good for equities, with falling inflation, policy easing, stabilizing growth and low valuations.

Our focus is on finding companies with strong earnings growth, solid balance sheet and quality management. We will continually re-assess the companies’ fundamental in the coming months.

RisksThe risk in the Prime Fund is diversified by investing in a mixture of Asian equities & bonds. As the fund has investments in equities and bonds, it is subject to (1) equity risk which includes market risk, company risk, selection risk, currency risk and counter party risk; and (2) debt risk which includes interest rate sensitivity, credit risk, changes in debt rating and credit rating, currency risk and sovereign risk. This is not an exhaustive list of risks.




As of 30 June 2012 0.93% 54.40%

As of 30 June 2011 0.94% 51.46%

Please refer to the Fund Report of Singapore Bond Fund for details on the turnover and expense ratios.


IndexedPerformance

Cumulative Performance From December 1994

Benchmark Fund

Dec-94 Dec-96 Dec-98 Dec-00 Dec-02 Dec-04 Dec-06 Dec-08 Dec-10 Jun-1250

75

100

125

150

175

200

225

250


64 I NTUC INCOME

PRIME FUND


S$ (mil)Corporate Bonds 28.3Government Bonds 28.1Statutory Board Bonds 12.7Equities 126.5Cash/Others 7.4

Total 203.2

S$ (mil)Singapore 128.5Hong Kong 48.9Thailand 18.3

Total 195.7


S$ (mil)Basic Materials 4.7Communications 8.9Consumer, Cyclical 19.3Consumer, Non-cyclical 8.0Diversified 12.5Energy 12.6Financial 80.6Government 35.4Industrial 10.2Utilities 3.6

Total 195.7



Total 69.2 34.1



Equities 62.3%


Cash/Others 3.7% Statutory Board Bonds 6.3%

Government Bonds 13.9% Thailand 9.4%

Hong Kong 25.0%

Singapore 65.6%



Energy 6.4%

Diversified 6.4%

Financial 41.2%

Government 18.1%

Basic Materials 2.4%

Industrial 5.2%Utilities 1.8%

Communications 4.6%

NTUC INCOME I 65


PRIME FUND









Exposure to DerivativesThere is no exposure to derivatives.



BorrowingsNil.


Soft Dollar Commission or ArrangementThe Manager did not retain for its own account cash or commission rebates arising out of transactions executed in or outside Singapore. Soft dollar commission/arrangement had been received/entered into by the Manager in respect of the ILP. The soft dollar commission/arrangement relates essentially to research services, economic and political analyses, portfolio analyses, market analyses, data and quotation services, computer hardware and software used for and in support of the investment process. The Manager did not accept or enter into soft dollar commission/arrangement unless such commission/arrangement would, in the opinion of Manager, assist the Manager in the management of the ILP. The Manager confirmed that trades were made on best execution basis and there was no churning of trades. The said brokers had also executed trades for other ILPs managed by the Manager.







66 I NTUC INCOME

SINGAPORE MANAGED FUND

Investment ObjectiveTo achieve long-term capital appreciation by investing in stocks and fixed income securities in Singapore. The strategy is to be value oriented.

Investment ScopeThe fund is fully invested in Singapore stocks (60%) and bonds (40%). The fund is denominated in Singapore Dollars.

Fund Details as of 30 June 2012Launch Date 1 May 1994Fund Size S$90.24 millionInitial Sales Charge 3.5% (an extra 0.5% bonus unit will be given for all single premium and top-ups)Annual Management Charge 1.0% p.a.Inclusion in CPFIS Yes (CPF OA and CPF SA)CPFIS Risk Classification Medium to High Risk, Narrowly Focused – Country – SingaporeBenchmark 60% FTSE Straits Times Index (FTSE STI) 40% Singapore 3-month Deposit Rate



(mil)% of Net


(mil)% of Net

Asset Value

Singapore Bond Fund 33.5 37.1* Singapore Bond Fund 36.0 36.1*

United Overseas Bank Ltd 6.1 6.7 DBS Group Holdings Ltd 8.8 8.8

DBS Group Holdings Ltd 5.1 5.7 United Overseas Bank Ltd 6.9 6.9

Singapore Telecommunications Ltd 4.5 4.9 Oversea-Chinese Banking Corp 4.5 4.5

Keppel Corp Ltd 4.1 4.6 Jardine Matheson Holdings 4.2 4.2

Jardine Matheson Holdings 3.7 4.1 Singapore Exchange Ltd 3.2 3.2

Oversea-Chinese Banking Corp 3.1 3.5 Keppel Corp Ltd 3.1 3.1

Jardine Cycle & Carriage Ltd 2.8 3.1 Singapore Telecommunications Ltd 2.5 2.5

Wilmar International Ltd 2.6 2.9 Genting Singapore 2.5 2.5

Jardine Strategic Holdings Ltd 2.5 2.8 Singapore Airlines Ltd 2.4 2.4

*Please refer to the Fund Report of Singapore Bond Fund for the top 10 holdings.Important: Any differences in the total and percentage of the Net Asset figures are the result of rounding off.




(annualised)5-year

(annualised)10-year


(annualised)

Singapore Managed Fund 2.2% -2.4% 6.0% -4.5% 6.6% 1.5% 8.1% 6.1%

Benchmark 2.3% -1.8% 6.4% -2.3% 6.7% 0.7% 7.1% 4.0%

Changes to benchmarks during the life of the fund: Since inception to 31 Mar 98 - 60% DBS50, 40% Singapore 3-Month Deposit rate

NTUC INCOME I 67




Market ReviewThe Straits Times Index rose 8.8% in 1H, driven by positive U.S. economic data and improved liquidity in Europe. Financials was the best performing sector, +17.8%. Consumer staples was the worst performing sector, -19.5%. Non-oil domestic exports expanded 6.8% in June from a year ago, improving slightly from the +3.2% in May. Growth was led by pharmaceuticals which surged 24% year-on-year. Inflation rebounded to 5.3% year-on-year in June, while core inflation stayed at 2.7%. Industrial production rose 7.6% year-on-year in June, led by biomedical output. With 2Q manufacturing growth of 4.5%, 2Q GDP growth would have expanded a sluggish +2.3% year-on-year. With the balance of risks shifted to growth from inflation, the Monetary Authority of Singapore may ease back to a “modest and gradual” slope. Singapore loans growth moderated to 20.9% year-on-year in June. Corporate loans continued to slow while trade finance picked up the slack. General commerce loans, rose by 34% year-on-year and +2% sequentially. Loan growth momentum will continue to moderate in 3Q12, given high prior-year base.

In the property sector, property prices are starting to move up again. 2Q12 private residential price index was up 0.4% sequentially, led by the prime segment. The pace of foreign buying

accelerated in April – May. With residential prices continuing to rise, the risk of further property measures has increased.

Going forward, we remain positive. Post the 1Q earnings release, the earnings momentum continued to improve. We prefer quality stocks to ride the recovery, with preference for Offshore & Marine and stocks which provide sustainable yield.

We remain focused on quality blue chips and sustainable yields. Our focus is on finding companies with strong earnings growth, solid balance sheet and quality management. We will continually re-assess the companies’ fundamental in the coming months.

RisksThe risk in the Singapore Managed Fund is diversified by investing in the Singapore equity and bond markets. As the fund has investments in equities and bonds, it is subject to (1) equity risk which includes market risk, company risk, selection risk, currency risk and counter party risk; and (2) debt risk which includes interest rate sensitivity, credit risk, changes in debt rating and credit rating, currency risk and sovereign risk. This is not an exhaustive list of risks.




As of 30 June 2012 0.92% 31.97%

As of 30 June 2011 0.95% 51.17%

Please refer to the Fund Report of Singapore Bond Fund for details on the turnover and expense ratios.


IndexedPerformance


Benchmark Fund

May-94 Mar-97 Jan-00 Nov-02 Sep-05 Jul-08 May-11 Jun-1250

100

150

200

250

300

350


68 I NTUC INCOME



S$(mil)Corporate Bonds 12.7Government Bonds 12.6Statutory Board Bonds 5.7Equities 56.4Cash/Others 2.9

Total 90.2


S$(mil)Communications 5.1Consumer, Cyclical 9.5Consumer, Non-cyclical 6.7Diversified 10.9Energy 0.4Financial 34.4Government 15.9Industrial 3.1Utilities 1.3

Total 87.3


S&P’s rating or its equivalent S$(mil) % of NAVAAA 13.9 15.4AA- 1.1 1.2A+ 2.8 3.1A 1.3 1.4A- 1.3 1.4BBB+ 1.3 1.4BBB 1.5 1.7BB+ 0.4 0.5Unrated 7.5 8.3

Total 31.0 34.3




Cash/Others 3.2%

Equities 62.5%



Financial 39.4%

Government 18.2%

Industrial 3.6%

Energy 0.5%

Utilities 1.5%


Communications 5.8%

Diversified 12.4%


NTUC INCOME I 69














BorrowingsNil.


Soft Dollar Commission or ArrangementThe Manager did not retain for its own account cash or commission rebates arising out of transactions executed in or outside Singapore. Soft dollar commission/arrangement had been received/entered into by the Manager in respect of the ILP. The soft dollar commission/arrangement relates essentially to research services, economic and political analyses, portfolio analyses, market analyses, data and quotation services, computer hardware and software used for and in support of the investment process. The Manager did not accept or enter into soft dollar commission/arrangement unless such commission/arrangement would, in the opinion of Manager, assist the Manager in the management of the ILP. The Manager confirmed that trades were made on best execution basis and there was no churning of trades. The said brokers had also executed trades for other ILPs managed by the Manager.







70 I NTUC INCOME

TAKAFUL FUND

Investment ObjectiveTo achieve long-term capital appreciation by investing in a diversified global portfolio of equity securities issued by companies considered to be in compliance with Islamic guidelines. This fund is designed based on Islamic principles.

Investment ScopeThe fund invests in the global equity markets in instruments that are Syariah compliant. The fund is denominated in Singapore Dollars.

Fund Details as of 30 June 2012Launch Date 1 September 1995Fund Size S$21.19 millionInitial Sales Charge 3.5% (an extra 0.5% bonus unit will be given for all single premium and top-ups)Annual Management Charge 1.0% p.a.Inclusion in CPFIS N.A. CPFIS Risk Classification N.A.Benchmark S&P BMI Global Shari’ah Index in Singapore Dollars The Annual Management Charge is not guaranteed and may be reviewed from time-to-time. However, it shall not exceed 2.0% of the fund balance at any point of time.


(mil)% of Net


(mil)% of Net

Asset Value

Apple Inc 0.95 4.5 Pepsico Inc 0.54 2.2

Nestle SA 0.42 2.0 Anglo American Plc 0.49 2.0

Coca Cola Co 0.39 1.8 Oracle Corp 0.43 1.8

Anglo American Plc 0.35 1.7 Mosaic Co 0.39 1.6

Oracle Corp 0.34 1.6 Danone 0.38 1.5

Unilever NV 0.33 1.6 Worthington Industries 0.37 1.5

Mosaic Co 0.33 1.5 Exxon Mobil 0.35 1.4

Exxon Mobil 0.32 1.5 Nestle SA 0.34 1.4

FedEx Corp 0.31 1.5 BP Plc 0.33 1.4

Qualcomm Inc 0.27 1.3 Teva Pharmaceutical 0.30 1.2


Fund ManagerNTUC Income Insurance Co-operative Limited is the Investment Manager of the fund. Wellington International Management Company Pte Ltd is the Sub-Investment Manager of the fund.



Wellington International Management Company Pte Ltd (WIM)WIM is the Investment Manager of the Global Islamic Research Equity Strategy. WIM is an affiliate of Wellington Management Company, LLP (WMC) which was founded in 1928. Funds under management totaled US$720 billion (as of 30 June 2012). WMC is America’s oldest and largest independent investment management firm and has invested in the world’s fixed income markets for over 70 years. It manages mutual funds, corporate and public retirement plans, insurance entities, endowments, and investment partnerships globally. Headquartered in Boston, Massachusetts, it has a presence in numerous cities including Boston, Radnor, Chicago, San Francisco, London, Frankfurt, Singapore, Sydney, Tokyo, Beijing and Hong Kong.


(annualised)5-year

(annualised)10-year


(annualised)

Takaful Fund 1.8% -5.5% 2.9% -4.1% 8.5% -2.1% 5.1% -1.1%

Benchmark1 2.2% -4.3% 2.9% -1.0% 8.9% -1.3% 5.6% 0.8%

Changes to benchmarks during the life of the fund: Since 1 Jul 2010 to 16 Dec 2010 - 60% S&P Global BMI Shariah Index, 20% FTSE STI, 16% HSI, 4% SET; Since Oct 2002 to Jun 2010 - 60% DJ Islamic Index, 20% FTSE STI, 16% HSI, 4% SET; Since Jun 2001 to Sep 2002 - 60% MSCI World, 20% FTSE STI, 16% HSI, 4% SET; Since Apr 1998 to May 2001 - 50% FTSE STI, 40% HSI, 10% SET; Since Apr 1997 to Mar 1998 - 50% FTSE STI, 50% KLCI; Since inception to Mar 1997 - 33.33% DBS 50, 33.33% KLCI, 33.33% Singapore 3-Month Deposit rate

NTUC INCOME I 71


TAKAFUL FUND


1 Note to our Policyholders on Revision of Benchmark Return:Effective from 1 April 2011, dividend reinvested has been included in the returns of the Benchmark to achieve a better comparison of the Fund performance against its Benchmark. The historical Benchmark returns for the period from 1 July 2010 to 31 March 2011 have therefore been revised.

Market Review


During the 2nd quarter of 2012, investor sentiment was clouded by two major issues. The 1st issue was the continuing financial crisis in the euro area. From early in the year, concerns mounted in relation to the ability and willingness of the government of Greece to abide by the strict budgetary conditions that had been imposed on it by the ‘Troika’ of the European Union (EU), European Central Bank (ECB) and International Monetary Fund (IMF) as a condition for financial assistance. In the 2nd quarter, investors were increasingly worried about the implications of the massive bad debts of banks in Spain. The 2nd issue was the clear signs of deceleration in the global economy. It was apparent that much of Europe was in recession, and signs of a slowing in the US as well as in each of the four largest emerging markets economies (China, India, Brazil and Russia). In many emerging markets, purchasing managers indices (PMIs) and other indicators pointed to softening in demand.

During the period, the US Federal Reserve (Fed), the ECB, the Bank of England, the People’s Bank of China and many other central banks cut official interest rates and/or undertook unorthodox measures to boost demand at a time that, in most countries, inflationary pressures were clearly falling. A highlight, at the very end of June, was the Euro Summit in Brussels, where four decisions were made. The decisions were: a €120bn fiscal stimulus; the establishment of a pan-European bank regulator, which would operate under the ECB; ‘flexible and efficient’ use of money from the European Stability Mechanism (ESM) to stabilise financial markets; and, the potential for money from the

ESM to be advanced directly to banks (as opposed to national governments). The last decision, if implemented, it should break the nexus between the problems of banks (in Spain, especially) and the financial positions of national governments.







In conclusion, developments in the Eurozone, particularly concerning Greece and Spain, will continue to affect investor sentiment. Although policymakers are slowly moving toward the

IndexedPerformance


Benchmark Fund

Sep-95 Mar-98 Sep-00 Mar-03 Sep-05 Mar-08 Sep-10 Jun-1225

50

75

100

125

150


72 I NTUC INCOME

TAKAFUL FUND

goal of making the Eurozone a viable economic entity over the long term, but the process will likely be stressful and characterised by ongoing market volatility.

RisksAs the fund has investments concentrating in equities, it is subject to equity risk which includes market risk, company risk, selection risk, currency risk and counter party risk. This is not an exhaustive list of risks.





As of 30 June 2012 1.14% 69.46%

As of 30 June 2011 1.32% 177.65%




Total 21.2


Total 20.8


S$ (mil)Basic Materials 2.2Communications 1.2Consumer, Cyclical 2.1Consumer, Non-cyclical 5.8Energy 3.2Industrial 3.0Technology 3.2Utilities 0.1

Total 20.8Important: Any differences in the total and percentage of the Net Asset figures are the result of rounding off.

Equities 98.3%

Cash/Others 1.7%

North America 65.2%

Others 5.2%

Europe 22.8%

Asia 6.8%

Industrial 14.5% Basic Materials 10.6%

Technology 15.5%

Communications 5.7%

Utilities 0.4%


Energy 15.6% Consumer, Cyclical 10.0%

NTUC INCOME I 73


TAKAFUL FUND

Credit Rating of Debt SecuritiesThere are no debt securities under the Takaful Fund.










S$% of Net



(Losses) S$

Forwards – – (925) –


BorrowingsNil.


Soft Dollar Commission or ArrangementThe Managers did not retain for its own account cash or commission rebates arising out of transactions executed in or outside Singapore. Soft dollar commission/arrangement had been received/entered into by the Sub-Investment Manager in respect of the ILP. The soft dollar commission/arrangement relates essentially to research services used for and in support of the investment process. The Sub-Investment Manager did not accept or enter into soft dollar commission/arrangement unless such commission/ arrangement would, in the opinion of the Sub-Investment Manager, assist the Sub-Investment Manager in the management of the ILP. The Sub-Investment Manager confirmed that the trades were executed on a best execution basis and there was no churning of trades.

ConflictofInterestsThe Managers did not encounter any conflict of interests in the management of the fund.






74 I NTUC INCOME

GLOBAL TECHNOLOGY FUND

Investment Objective TTo achieve long-term capital growth by investing globally in technology or technology-related industries.

Investment ScopeThe fund is fully invested in global technology equities. The fund is denominated in Singapore Dollars.

Fund Details as of 30 June 2012Launch Date 1 August 2000Fund Size S$63.95 millionInitial Sales Charge 3.5% (an extra 0.5% bonus unit will be given for all single premium and top-ups)Annual Management Charge 1.25% p.a.Inclusion in CPFIS Yes (CPF OA) CPFIS Risk Classification Higher Risk, Narrowly Focused – Sector – TechnologyBenchmark Merrill Lynch 100 Technology Index in Singapore Dollars



(mil)% of Net


(mil)% of Net

Asset Value

VMware Inc 3.2 5.0 VMware Inc 4.1 5.3

Ultimate Software Group Inc 3.1 4.9 Cognizant Technology 3.9 5.1

Salesforce.com Inc 3.1 4.8 Arm Holdings Plc 3.7 4.8

Apple Inc 3.0 4.8 Salesforce.com Inc 3.7 4.8

Arm Holdings Plc 2.8 4.3 Cavium Inc 3.0 3.9

Amazon.com Inc 2.3 3.6 Fortinet Inc 2.9 3.8

Cognizant Technology 2.3 3.6 Aruba Networks Inc 2.7 3.5

Fortinet Inc 2.3 3.5 Alliance Data Systems 2.5 3.2

Alliance Data Systems 2.0 3.2 Baidu Inc 2.4 3.1

Google Inc 2.0 3.1 Ultimate Software Group Inc 2.3 3.0


Fund ManagerNTUC Income Insurance Co-operative Limited is the Investment Manager of the fund. The Fund is sub-managed by Trust Company of the West (TCW) Asset Management Company.



Trust Company of the West (TCW) Asset Management CompanyTCW was founded in 1971. Funds under management totalled US$127.3 billion (as of 30 June 2012). TCW has a staff of over 570 individuals, including 362 investment and administrative professionals. TCW offers strategies that invest in major world equity, fixed income and alternative markets, with offices in Los Angeles and New York. It has about 1,300 institutional and private clients. Using a bottom up research driven process, TCW seeks to identify companies with superior earnings growth and attractive stock market valuation.


(annualised)5-year

(annualised)10-year


(annualised)

Global Technology Fund 1.9% -10.1% 3.4% -4.8% 15.6% 0.6% 4.6% -10.4%

Benchmark 1.0% -12.4% 0.6% -8.7% 7.5% -3.4% 2.9% -5.1%

Changes to benchmarks during the life of the fund: Since inception to Mar 2009 - 100% NASDAQ Composite Index

NTUC INCOME I 75




Market Review

Market OverviewFor the first half of 2012, the S&P 500 returned 5.92% in Singapore dollar terms. On the technology front, the Merrill Lynch Technology 100 Index increased 3.48%, while the NASDAQ Composite gained 1.65% and the Russell 3000 Technology Index gained 1.10% year-to-date in Singapore dollar terms. US equities started the year by posting their best first quarter in fourteen years, however, since late March, the US equity markets entered a period very much like the second half of 2011. The market was once again in a “risk-off” phase, where microeconomic realities were overshadowed by the continued sluggish pace of global economic growth. This was due to the slow-motion unravelling of the Eurozone, slowing BRIC growth, and domestic policy concerns (most recently the “Fiscal Cliff” and looming Presidential election). Certainly, recent high-frequency US macro data (e.g., ISM, employment) have pointed to very weak domestic growth. At the same time, however, commercial bank lending and housing are showing signs of healing, and corporate profits and balance sheets remain excellent.

The portfolio outperformed the Merrill Lynch Technology 100 benchmark for the first half of 2012. Standout contributors in software were names such as Ultimate Software, Salesforce.com, Concur Technologies and NetSuite, while Apple and Statasys helped in computers and peripherals, Alliance Data Systems contributed in IT services and Youku helped in internet software and services. Internet catalog and retail name Amazon.com was a notable contributor in our consumer holdings as were medical device company DexCom and robotic surgery company Intuitive Surgical in health care. On the other hand, detractors of note included ARM Holdings in semiconductors, Aruba Networks in communications equipment, Take-Two Interactive in software, Google in internet software and services, FARO Technologies in electronic equipment and instruments, and Fusion-io in computers and peripherals. Likewise, two online travel companies, Ctrip.

com (China) and MakeMyTrip.com (India), detracted along with iRobot.

Reviewing the first half of the year’s technology developments, we saw the social networking company Facebook and its IPO dominating much of the headlines. Likewise, long-time technology bellwethers such as Apple, Google, Amazon and Microsoft have been mainstays in the media as they have continued releasing new devices, launching new software and operating systems and establishing new cloud-based initiatives. Yahoo! And Research in Motion both had management change-ups, however Yahoo!’s CEO stepped down after questions about his resume surfaced. Some of the notable acquisitions announced throughout the first half of 2012 were: Cisco’s acquisition of software company NDS Group for $5 billion; SAP’s agreement to acquire cloud computing software company Ariba for $4.3 billion; Oracle’s acquisition of HR software company Taleo for $1.9 billion; Dell’s acquisition of data security firm SonicWALL for $1.25 billion; Microsoft’s acquisition of social networking company Yammer for $1.2 billion; Chinese online video company Youku’s acquisition of competitor Toudou for $1.1 billion; Facebook’s acquisition of photo sharing application Instagram for $1 billion.

Market OutlookOur manager currently believes there is a significant disconnect between the underlying fundamentals of the companies in the portfolio and their stock performance. We see the day-to-day performance of the market in general, and our portfolio specifically, driven largely by macroeconomic news, rumours and sentiment; but not by the changes in underlying company fundamentals.

RisksAs the fund has investments concentrating in the global technology sector, it is subject to equity risk which includes market risk, company risk, selection risk, currency risk and counter party risk. This is not an exhaustive list of risks




As of 30 June 2012 1.28% 28.69%

As of 30 June 2011 1.35% 104.68%


IndexedPerformance


Benchmark Fund

Oct-00 Apr-02 Oct-03 Apr-05 Oct-06 Apr-08 Oct-09 Apr-11 Jun-120

25

50

75

100

125


76 I NTUC INCOME




Total 63.9


Total 62.2


S$ (mil)Communications 15.1Consumer, Cyclical 1.2Consumer, Non-cyclical 6.4Energy 1.6Industrial 2.4Technology 35.5

Total 62.2


Equities 97.3%

Cash/Others 2.7%

Asia 1.2%Europe 7.0%

North America 90.5%

Others 1.4%


Industrial 3.9%Energy 2.6%

Technology 57.0%

Communications 24.2%Consumer, Non-cyclical 10.3%

NTUC INCOME I 77



Credit Rating of Debt SecuritiesThere are no debt securities under the Technology Fund.











BorrowingsNil.


Soft Dollar Commission or ArrangementThe managers did not retain, for their own account, cash or commission rebates arising out of transactions executed in or outside Singapore. Soft dollar commission/arrangement had been received/entered into by the Sub-Investment Manager in respect of the ILP. The soft dollar commission/arrangement relates essentially to research services, economic and political analyses, portfolio analyses, market analyses, data and quotation services, computer hardware and software used for and in support of the investment process. The Sub-Investment Manager did not accept or enter into soft dollar commission/arrangement unless such commission/arrangement would, in the opinion of the Sub-Investment Manager, assist the Sub-Investment Manager in the management of the ILP. The Sub-Investment Manager confirmed that trades were made on best execution basis and there was no churning of trades.

ConflictofInterestsThe managers did not encounter any conflict of interests in the management of the fund.






78 I NTUC INCOME

MONEY MARKET FUND

Investment ObjectiveTo achieve a return that is better than short-term cash deposits while maintaining liquidity and security of capital.

Investment ScopeThis fund invests mainly in good quality money market instruments and short- term bonds which include bank deposits, government and statutory board securities, certificates of deposit and corporate bonds. The fund is denominated in Singapore dollars. Non-SGD denominated investments, if any will be hedged to the Singapore dollar.

This fund may be suitable for investors seeking for yield enhancement to their SGD deposit.

We advise all investors to consider the fund’s objectives, risks, charges and expenses carefully before investing in any ILP sub funds. Our insurance advisers would be able to help you with your investment choices. Do note that the purchase of a unit in this money market fund is not the same as placing funds on deposit with a bank or deposit-taking financial institution.

Fund Details as of 30 June 2012Launch Date 1 May 2006Fund Size S$32.84 millionAnnual Management Charge 0.25% p.a.Inclusion in CPFIS N.A.CPFIS Risk Classification N.A.Benchmark Singapore 3-month Interbank Bid Rate



(mil)% of Net


(mil)% of Net

Asset Value

Singapore Treasury Bill 300812 5.0 15.2 Singapore Treasury Bill 180811 6.0 16.4

Housing & Development Board 1.795% 030712 4.8 14.6 Singapore Treasury Bill 280711 5.0 13.7



Singapore Treasury Bill 270912 2.0 6.1 SMRT Corp 3.27% 141211 1.8 4.9

KFW 1.86% 130812 1.5 4.6 BNP Paribas 0.81% 230811 1.7 4.8

HSBC Singapore 1.6% 071013 1.3 3.8 General Electric Cap 3.485% 080312 1.2 3.3

Standard Chartered Bank 2.22% 050713 1.0 3.1 Morgan Stanley 3.585% 231012 1.0 2.8

Morgan Stanley 3.585% 231012 1.0 3.1 Singapore Airlines Ltd 4.15% 191211 1.0 2.8

Hana Bank 1.15% 050712 1.0 3.1 Joynote Ltd 3.76% 261011 1.0 2.8


Fund Manager NTUC Income Insurance Co-operative LimitedEstablished in 1970 to provide affordable insurance to workers in Singapore, NTUC Income is today a market leader in life, health, annuity and motor insurance. It has about 1200 financial advisers and over 1500 employees and is committed to serving the needs of over two million customers. NTUC Income has over S$28.5 billion of assets under management (as of 30 June 2012).



(annualised)5-year

(annualised)10-year


(annualised)

Money Market Fund 0.0% 0.1% 0.4% 0.3% 0.5% 0.9% N.A. 1.3%

Benchmark 0.0% 0.1% 0.1% 0.2% 0.3% 0.7% N.A. 1.1%

NTUC INCOME I 79


MONEY MARKET FUND


Market ReviewMoney market rates remained all time low for the first six months of 2012 with Singapore overnight rate averaging 2.5 basis points amid flush liquidity. In April 2012, with elevated economic activities and inflation risk tilting to the upside, the Monetary Authority of Singapore (MAS) increased slightly the slope of Singapore dollar nominal effective exchange rate (NEER) band with no change to the level at which the band is centred and also restore a narrower policy band. The Singapore dollar strengthened 2.4% over the six month period ended June 2012 to close at 1.26 against the greenback.

Singapore's June 2012 consumer price inflation (CPI) rose to 5.3% year-on-year. The main drivers for June's pickup were increases in the costs of transport and accommodation. The cost of transport rose 8.7% year-on-year driven by the increase in Certificate of Entitlements (COEs) premiums. The housing costs also picked up to 9.7% year-on-year. MAS announced that it expects 2012 inflation to come in at the upper half of 3.5-4.5% forecast range. The CPI forecast was 2.5-3.5% at the start of the year. Looking ahead to the October MAS policy review, the central bank is expected to maintain its current policy and is unlikely to flatten the slope barring a significant deterioration in the domestic economy. The second quarter advance GDP growth expanded 1.9% year-on-year and inflation is expected to fall in the second half. Asian nations have reduced interest rates to shield their economies from the protracted European sovereign-debt crisis. Singapore's economy growth will continue to be affected as the external environment is uncertain and global economy outlook remains weak. Singapore is expected to continue benefiting from the

fund inflows into the Asian region thereby keeping the domestic system flushed with liquidity and short term interest rates low. The Federal Reserve is also determined to keep the front end of US interest rate anchored at current low levels for an extended period to stimulate the economy. We continue to favour short-term corporate bonds for the yield pick-up in view of the steady credit fundamentals and supportive technical picture.

RisksYou should be aware that past performance is not indicative of future performance. The value of the units may rise or fall as the performance of the fund changes.

The money market fund is not a capital guaranteed fund. We do not guarantee the amount of capital invested or return received. Although the fund manager seeks to preserve the principal value, we do not assure that the ILP sub-fund can fully meet its objective.

However, since the fund is invested mainly in the interbank market, ie the money is lent to banks. A small portion of the fund is invested with well rated corporations. The fund is well diversified with a large number of borrowers.

The money is invested in short term deposits, with a maximum duration of three years. The average duration is likely to be around six months. This ensures that the investments will not be adversely affected by a large change in the interest rate.

The manager intends to hedge its foreign currency exposure.Financial derivatives in the ILP fund are used for hedging purposes. The global exposure of the ILP fund to financial derivatives or embedded financial derivatives is calculated using the commitment approach described in and in accordance with the provisions of the Code on Collective Investment Schemes.

NTUC Income’s ILP funds are not suited for any short term speculation. You should not expect to obtain any short term gains from investing in NTUC Income’s ILP funds. It is important that your investment suits your risk appetite. You may wish to consult your financial adviser before investing in any ILP funds.


As of 30 June 2012 0.33% 21.50%

As of 30 June 2011 0.33% 17.65%


IndexedPerformance


Benchmark Fund

May-06 Aug-07 Nov-08 Feb-10 May-11 Jun-1290

100

110

120


80 I NTUC INCOME

MONEY MARKET FUND


S$ (mil)Corporate Bonds 13.2Government Bonds 12.0Statutory Board Bonds 6.8Cash/Others 0.9

Total 32.8

S$ (mil)Singapore 19.3Europe 4.1North America 2.5Others 6.0

Total 32.0


S$ (mil)Diversified 1.0Financial 13.4Government 16.8Utilities 0.8

Total 32.0

S&P's rating or its equivalent S$ (mil) % of NAVAAA 11.5 35.0AA 2.0 6.1AA- 0.8 2.3A+ 3.5 10.8A 3.6 10.9A- 2.0 6.1BBB+ 1.0 3.1Unrated 7.6 23.1

Total 32.0 97.4

Term to Maturity of Investments




Term to maturity S$ (mil) 1 - 30 days 8.7 31 - 60 days 4.5 61 - 90 days 8.8 91 - 120 days 1.8121 - 180 days 2.8 > 180 days 6.3

Total 32.8


Cash/Others 2.6%

Statutory Board Bonds 20.7%Government Bonds 36.5%

Others 18.8%

North America 7.9%

Singapore 60.5%Europe 12.8%

Diversified 3.1%

Financial 42.0%

Utilities 2.4%

Government 52.5%

>180 days 19.3%1-30 days 26.4%

91-120 days 5.5%

121-180 days 8.4%

61-90 days 26.7%

31-60 days 13.7%

NTUC INCOME I 81


MONEY MARKET FUND










S$% of Net



(Losses) S$

Forwards (11,400) 0.03 (116,047) 173,760


BorrowingsNil.



ConflictofInterestsThe Manager did not encounter any conflict of interests in the management of the fund.






82 I NTUC INCOME

GUIDE TO YOUR INVESTMENT-LINKED PLAN POLICY STATEMENT

We provide a policy statement to keep you updated on your investment(s) twice a year. Here is a guide to help you understand your statement better.

Description of Transaction Details

Ad hoc Top-up Amount of ad-hoc top-up premium paid.

Additional Risk Premium Mortality charge applicable under IP1, IP2 and IB1 plans only.

Advisory Charges The charge covers the commission paid to the adviser.

Closing Balance The number of units in each fund at the end of the statement period.

Distribution Reinvestment Amount reinvested into the policy after the semi-annual payout.

Free Fund Units Amount of units allocated to offset bid-offer spread for single premium investments.

Fund Switch in Value of amount switched into the fund.

Fund Switch out Value of amount switched out of the fund.

Opening Balance The number of units in each fund at the start of the statement period.

Policy Fees Covers the cost of issuance and policy administration (both at initial and on-going).

Regular Premium Amount of regular premium paid based on the premium frequency chosen.

Regular Top-up Amount of regular single premium top-up paid based on the premium frequency chosen.

Rider Premium Premium deducted via units for rider coverage.

Unit Adjustment Adjustment made to existing fund units.

Withdrawal Value of withdrawal of units from each fund.

Frequently Asked Questions

Q1 Where can I check the latest fund prices?A1 Our Investment-Linked Plans (ILPs) funds are valued daily. The latest prices of our ILPs funds are available on NTUC Income’s

website at www.income.com.sg/fund/coopprices.asp. They are also published in major Singapore newspapers.

Q2 Where can I get updated financial reports on my fund?A2 The financial year end of NTUC Income’s ILPs funds is 31 December of each year.

You can find the annual audited financial statements and/or the semi annual statements in the Semi-annual Report and Relevant Audited Report available on NTUC Income’s website at www.income.com.sg/fund/coopprices.asp. Alternatively, you can contact us at our 24-hour General Enquires Hotline 63 INCOME (6788 1777) or email us at [email protected] to request for a hard copy.

Q3 How do I make additional investment(s) to existing or new funds?A3 You will be required to complete and submit the ‘Investment-Linked Plan Policy Top-Up Form’ at any of our branches or you can

fax the form to us at 6338 1500.

Alternatively, you can access me@income via www.income.com.sg or approach your insurance adviser for advice.

The minimum top-up amount is $1,000 or $2,500 per transaction depending on your plan type. For FlexiCash policy, the minimum top-up amount is $500.

Q4 How do I switch to another fund?A4 You will be required to complete and submit the ‘Investment-Linked Plan Policy Switching Form’ at any of our branches or you

can fax the form to us at 6338 1500.

Alternatively, you can approach your insurance adviser for advice.

The minimum value per switching transaction is $1,000. The number of free switches will depend on the plan you purchased.

Q5 How do I make a withdrawal?A5 You will be required to complete and submit the ‘Application for Withdrawal of Investment-Linked Policy Form’ at any of our

branches.

Alternatively, you can access me@income via www.income.com.sg or approach your insurance adviser for advice.

The minimum amount to be maintained in the policy is $2,000 or $3,500 depending on your plan type. For FlexiCash policy, the minimum to be maintained in the policy is $5,000.

For withdrawals, the proceeds will be transferred to your agent bank, CPF or SRS account directly. For policies purchased by cash, you will receive the proceeds via cheque. All withdrawals will be processed & completed within 5 working days.

semi-annual fund report - ntuc · pdf fileto provide a medium- to long-term rate of return by...

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