uob united international bond fund 140813-v6 · 2013. 8. 28. · as of 30 june 2013, ... but the...

United International Bond FundSemi Annual Report

for the period 1st January to 30th June 2013

United International Bond Fund(Constituted under a Trust Deed in the Republic of Singapore)

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MANAGERUOB Asset Management LtdRegistered Address:80 Raffles PlaceUOB PlazaSingapore 048624Company Registration No. : 198600120Z

OPERATIONS ADDRESS80 Raffles Place#06-00, UOB Plaza 2Singapore 048624Tel: 1800 22 22 228

DIRECTORS OF UOB ASSET MANAGEMENTTerence Ong Sea EngCheo Chai HongThio Boon Kiat

TRUSTEE / REGISTRARHSBC Institutional Trust Services (Singapore) Limited21 Collyer Quay#10-02, HSBC BuildingSingapore 049320

CUSTODIANState Street Bank and Trust CompanyState Street Financial CenterOne Lincoln StreetBoston, Massachusetts 02111-2900United States of America

AUDITORSPricewaterhouseCoopers LLP8 Cross Street#17-00, PWC BuildingSingapore 048424

SOLICITORS TO THE MANAGERAllen & Gledhill LLPOne Marina Boulevard#28-00Singapore 018989 SOLICITORS TO THE TRUSTEEShook Lin & Bok LLP1 Robinson Road#18-00 AIA TowerSingapore 048542


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A) Fund Performance

Fund Performance

3 mth

%Growth

6 mth

%Growth

1 yr

%Growth

3 yrAnn

Comp Ret

5 yrAnn

Comp Ret

10 yr Ann

Comp Ret

Since Inception

29 September 1995Ann

Comp Ret

United International Bond Fund -11.32 -9.43 4.01 1.56 2.20 1.54 1.83

Source: Lipper, a Thomson Reuters Company.

Note: The performance returns of the Fund are in Singapore dollars based on a NAV-to-NAV basis with net dividends reinvested.

For the six months ended 30 June 2013, the Fund’s net asset value (NAV) decreased 9.4% in Singapore dollar terms. The Fund’s investment strategy seeks to preserve capital and generate stable income, while maintaining low volatility. Furthermore, the Fund targets a 2% dividend payout annually.

The Fund’s underperformance relatively to the major benchmarks was mainly due to its overweight exposure to both high grade bonds in China and high yield emerging markets credits which suffered heavily due to funds outflow cause by QE3 tapering. The Fund’s positions in convertible bonds and Chinese high yield bonds have contributed positively and have helped to cushion the losses.


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The following table summarized the returns of various asset classes:

Sovereign Bond Returns

YTD Return %

Local Currency US Dollar

United States -2.03 -2.03

1-3 years 0.03 0.03

3-5 years -1.23 -1.23

5-7 years -2.84 -2.84

7-10 years -4.19 -4.19

10+ years -7.89 -7.89

Germany -1.52 -2.91

1-3 years -0.26 -1.66

3-5 years -0.88 -2.27

5-7 years -1.14 -2.53

7-10 years -1.40 -2.79

10+ years -3.45 -4.81

Singapore -3.72 -7.27

1-3 years 0.17 -3.53

3-5 years -1.20 -4.84

5-7 years -4.28 -7.82

7-10 years -6.45 -9.90

10+ years -8.69 -12.06

Source: Citigroup World Government Bond Index, Yield Book

Global Credit June Return YTD Return

Asia ex Japan IG -2.65% -3.07%

US IG -1.47% -2.46%

EU IG -1.16% -1.25%

Asia ex Japan HY -2.75% -2.43%

US HY -2.58% 1.52%

EMBIG -5.03% -8.23%

Source: Citi Fixed Income Bond indices and JPM EMBIG

All returns are cumulative as of 30/06/2013


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At the end of the period, the Fund invested mostly in corporate bonds (72.6% of the portfolio), convertible bonds (27.4%) and Sovereign bonds (0%). By country classification, the Fund was invested as follows: Developed markets (37.1%), Asia ex Singapore (42.9%), Emerging Markets (2.6%) and Singapore (17.4%, including cash). In term of sector exposure, the portfolio is well diversified with an overweight in Chinese real estate (10.1%) and the FX exposures are 50% hedged back to SGD.

As of 30 June 2013, the Fund’s average duration was 3.75 years with a yield to maturity of 9.36% while the average rating of the bonds in the portfolio is below investment grade.

Market Review

The recent market movements have been focused on the Fed’s outlook in the last FOMC meeting which was more hawkish than expected. While the Fed changed little on the first rate cut expectation, it upgraded the growth outlook and reduced the unemployment forecast for the next three years. It is worth noting that the debate is not about Fed tightening- rather it is about a tapering of bond purchases. A flow-on effect from the view that Fed may begin the process sooner than expected has lifted the US long-term yields over the recent weeks. US Treasury 10-year has rallied 90 bps since the start of the year and volatility took center stage post the FOMC meeting. The non-farm payroll reports were in line with the Fed’s expectation, and pointed towards a start in the tapering process later this year. Although inflation was still significantly below Fed’s 2% target - touching 1.1% in April, the underlying factors (like temporary drop in prices for medical care) are believed to be more transitory. The economic data so far this year has shown growth to be resilient in spite of the fiscal tightening. We may see a soft patch later this year, but the recovery should strengthen into 2014, led by housing and business investment.

The leading indicators in Eurozone have started to turn a corner after deteriorating since the start of the year. Also the tail-end risks have been on the side-line only with a few hiccups since the beginning of the year. Italy had an electoral stalemate in the first quarter but the risk was contained as eventually a coalition between centre-left, centrist and centre-right was formed. Portugal also recently saw some volatility followed by the resignation of two senior members of their coalition but the issue was later resolved through a revised coalition agreement between the ruling party, PSD and the junior coalition party, CDS. Even though the risk of re-election has been avoided, due to a recent cabinet reshuffling in favour of CDS, the political commitment towards austerity remained to be seen. Spain also continued to make progress on its Banking sector reform with Euro 60 billion of the Euro 100 billion bailout facility still available for potential further bank recapitalizations. The terms of Cyprus bailout were also finalized after Cyrus requested for help last year, approving Euro 10 billion of support making it the fifth country under EU-IMF program.

As was widely expected, ECB did cut interest rates by 25 bps to 0.5% from 0.75%. The ECB kept the deposit rate at zero but indicated possibility of negative interest rates in the future. Absence of tools like QE and credit easing facilities like other central banks has got ECB to consider rolling out negative interest rates. But we don’t think ECB is likely to take this step in the near future as the implications for such policy would be huge for the money market industry and banking system stability (small banks with weak net interest rate margins may become less competitive). The development around the formation of a single EU bank supervisory system is also progressing as the draft laws around its formation were approved by the parliament. We expect it to be a positive long term development but will be followed with lot of negotiations before getting finalized.


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Fitch downgraded UK this April to AA+ from AAA. UK is currently witnessing gradual improvement in growth with triple dip recession fears sub-siding. Mark Carney took over as the governor of Bank of England and in his first meeting communicated his dovish stand signaling that MPC could start to provide forward guidance about the future path of interest rates. Also inflation has been contained since the start of the year, with Consumer Price Index rising 2.7% yoy this May, drifting closer to Bank of England’s 2% target. The recent economic indicators are also pointing that the economy is moving in the right direction with the rise in business optimism, growth in service sector and confidence in the housing market.

As for Asia and EM, growth indicators such as exports, industrial production and PMI started to show sign of weakness in recent releases. The US Feb QE3 tapering talk has caused the Asia and EM FX rates to depreciate substantially against the USD. This has caused some of the Asia and EM countries (Indonesia and Brazil) to raise interest rate to cushion the FX impact and preemptive move to control inflation.

Outlook and Strategy

The Fed QE3 tapering had sent the fixed income market into a tailspin. Not only did rates widen, but the credit spreads gave back all its gains since QE3 started. In addition, China’s liquidity squeeze that sent the interbank rates skyrocketing also caused market players to downgrade on China growth which also leads to downgrade in EM markets. We are now changing our base case to a lower China GDP growth of 7-7.5%, a muddle-through in Europe with greater political noises in Italy and now Portugal and a stronger US GDP growth of 2.5-3%.

We continue to be underweight in the developed markets’ core government bonds as the Fed’s tapering will likely cause the yield curve to steepen further. As such we will keep overall duration of the portfolio short until we see stabilization in US Treasury. Despite the slower growth expectation for EM and Asia, we continue to be positive on the outlook for corporate credits in Asia and EM as we expect recovering global growth especially US and Japan could cushion further deterioration on the corporate credit matrix. We believe that policy makers will enact reforms to boost domestic demand on a structural basis, especially in China and India. In addition, both HY and IG Asia corporate credits yields have widened substantially due to poor liquidity in the fixed income market which we think should normalize once the US Treasury volatility dies down.

We continue to favour Chinese HY developer as prices of Chinese property bonds were driven to attractive levels as the market weakened over the past month. The fundamentals remain solid for the sector as presales numbers are coming in as expected and there seems to be no further policy tightening by the China government unless we see spike up in housing prices. In addition, most of the issuers have pre-funded their funding needs in the first half of the year when the sector funding cost was the lowest. As such, we are more likely heading into a volatile period, rather than staring at a crisis.

Disclosures

As the Fund is in SGD and the benchmark is in US dollar (USD), we had an overlay of currency hedges in the second half of the year, but the effect was largely neutral on the portfolio. Our global exposure to financial derivatives is calculated based on the commitment approach. This is done by adding the exposure of each financial derivative (for those with and without netting arrangement) and cash collateral values under certain cases.


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B) Investments at fair value and as a percentage of NAV as at 30 June 2013 under review classified by

Fair Value % of NAV (S$) i) Country

Quoted Bonds Australia 1,455,552 7.54Belgium 271,545 1.41Brazil 1,299,906 6.73Chile 1,818,011 9.41 China 4,096,764 21.22 France 241,526 1.25 Hong Kong 2,753,275 14.26 India 533,320 2.76 Indonesia 873,655 4.52 Mexico 1,255,755 6.50 Russia 262,556 1.36 Singapore 1,677,538 8.69 Switzerland 479,448 2.48 United Arab Emirates 244,512 1.27 Accrued interest receivable on fixed income securities 372,944 1.93

Portfolio of investments 17,636,307 91.33Other net assets 1,674,940 8.67

Total 19,311,247 100.00

ii) Industry

Consumer Discretionary 1,493,338 7.73Energy 2,371,918 12.29Financials 9,798,264 50.75Government 574,772 2.97Industrials 1,342,597 6.95Materials 1,682,474 8.71Accrued interest receivable on fixed income securities 372,944 1.93

Portfolio of investments 17,636,307 91.33Other net assets 1,674,940 8.67

Total 19,311,247 100.00


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B) Investments at fair value and as a percentage of NAV as at 30 June 2013 under review classified by (continued)

Fair Value % of NAV (S$)

iii) Asset Class

Fixed Income 17,636,307 91.33Other net assets 1,674,940 8.67

Total 19,311,247 100.00

iv) Credit rating of debt securities of S&P

A 2,468,727 12.77BBB 4,972,025 25.75BB 1,674,904 8.67B 1,572,446 8.15D 490,832 2.54NR 6,084,429 31.52Accrued interest receivable on fixed income securities 372,944 1.93

Total 17,636,307 91.33

v) Credit rating of debt securities of Moody’s

Aa 356,181 1.84A 2,108,603 10.91Baa 4,670,572 24.19B 2,676,521 13.87Caa 608,784 3.15Ca 643,028 3.33NR 6,199,674 32.11Accrued interest receivable on fixed income securities 372,944 1.93

Total 17,636,307 91.33


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C) Top Ten Holdings

The top 10 holdings as at 30 June 2013 and 30 June 2012

10 largest holdings at 30 June 2013 Pecentage of total net assets attributable to Fair Value unitholders (S$) %

BLD INVESTMENTS CB 8.625% DUE 23/03/2015 1,217,568 6.31CORPBANCA 3.125% DUE 15/01/2018 1,214,010 6.29IFC DEVELOPMENT CORP TRS 2.375% DUE 21/05/2019 1,178,336 6.10BESTGAIN REAL ESTATE 2.625% DUE 13/03/2018 1,158,273 6.00LINC ENERGY LTD CB 7.00% DUE 10/04/2018 1,015,769 5.26CHINA PRECIOUS METAL RE CB 7.25% DUE 04/02/2018 996,108 5.16KAISA GROUP HOLDINGS LTD 8.875% DUE 19/03/2018 958,906 4.97YUEXIU REIT MTN CO 3.10% DUE 14/05/2018 947,890 4.91CENTRAL CHINA REAL EST 6.50% DUE 04/06/2018 801,249 4.15GTL TRADE FINANCE INC 7.25% DUE 20/10/2017 686,366 3.55

10 largest holdings at 30 June 2012 Pecentage of total net assets attributable to Fair Value unitholders (S$) %

YANCOAL INTL RES DEV 5.73% DUE 16/05/2022 2,429,906 7.11MORGAN STANLEY 4.75% DUE 22/03/2017 2,298,235 6.72SOCIETE GENERALE 9.375% DUE 29/09/2049 1,774,002 5.19BLD INVESTMENTS CB 8.625% DUE 23/03/2015 1,740,029 5.09PALADIN ENERGY LTD CB 6% DUE 30/04/2017 1,703,732 4.98ENERCOAL RESOURCES PTE CB 9.25% DUE 05/08/2014 1,667,429 4.88BUMI INVESTMENT PTE LTD 10.75% DUE 06/10/2017 1,653,447 4.84SANTOS FINANCE LTD 8.25% DUE 22/09/2070 1,571,690 4.60MAF GLOBAL SECURITIES 5.25% DUE 05/07/2019 1,530,786 4.48PETROLEOS DE VENEZUELA 5.25% DUE 12/04/2017 1,452,403 4.25


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D) Exposure to derivatives

i) fair value of derivative contracts and as a percentage of NAV as at 30 June 2013

Contract or Positive Negative underlying fair fair principal value % of NAV value % of NAV amount $ $ $ Forward foreign exchange contracts 10,369,686 55,601 0.29 46,443 0.24

ii) There was a net gain of SGD 105,621 on derivative contracts realised for the period 1 January 2013 to 30 June 2013

iii) There was a net gain of SGD 9,158 on outstanding derivative contracts marked to market as at 30 June 2013

E) Amount and percentage of net asset value (NAV) invested in other schemes as at 30 June 2013

N/A

F) Amount and percentage of borrowings to net asset value (NAV) as at 30 June 2013

N/A

G) Amount of redemptions and subscriptions for the period 01 January 2013 to 30 June 2013

Total amount of redemptions SGD 10,742,836Total amount of subscriptions SGD 6,473,638

H) The amount and terms of related-party transactions for the period 01 January 2013 to 30 June 2013

i) As at 30 June 2013 the Fund maintained current accounts with the United Overseas Bank Limited as follows:

Bank balances SGD 72,007


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H) The amount and terms of related-party transactions for the period 01 January 2013 to 30 June 2013 (continued)

ii) Purchase/holdings of UOBAM unit trusts by UOB or its affiliated companies as at 30 June 2013

Holdings of United International Bond Fund as at 30 June 2013 were as follows:

Affiliated Companies No. of Units Unit Price Market Value SGD SGD

a) UNION Offshore Insurance Fund 1,540,413.57 0.964 1,484,958.68 b) UNION Singapore Insurance Fund 880,236.32 0.964 848,547.81 c) United Global Dividend Balanced Fund 9,056,234.27 0.964 8,730,209.84

iii) Investment in Initial Public Offerings managed by UOB Group

N/A

iv) As at 30 June 2013 there was no brokerage income earned by UOB Kay Hian Pte Ltd

I) Expense ratios

30 June 2013 0.97%30 June 2012 0.98%

Note : The expense ratio has been computed based on the guidelines laid down by the Investment Management Association of Singapore (“IMAS”). The calculation of the expense ratio at 30 June 2013 was based on total operating expenses of $272,895 (2012: $364,272) divided by the average net asset value of $28,167,761 (2012: $37,196,013) for the year. The total operating expenses do not include (where applicable) brokerage and other transactions costs, performance fee, interest expense, distribution paid out to unitholders, foreign exchange gains/losses, front or back end loads arising from the purchase or sale of other funds and tax deducted at source or arising out of income received. The Fund does not pay any performance fee. The average net asset value is based on the daily balances.

J) Turnover ratios

30 June 2013 393.91%30 June 2012 588.12%

Note : The portfolio turnover ratio is calculated in accordance with the formula stated in the Code on Collective Investment Schemes. The calculation of the portfolio turnover ratio was based on the lower of the total value of purchases or sales of the underlying investments, being purchases of $100,923,284 (2012: purchases of $215,138,086) divided by the average daily net asset value of $25,621,107 (2012: $36,580,456).

K) Any material information that will adversely impact the valuation of the scheme such as contingent liabilities of open contracts

N/A


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L) For schemes which invest more than 30% of their deposited property in another scheme, the following key information on the second-mentioned scheme (“the underlying scheme”)1 should be disclosed as well

i) top 10 holdings at fair value and as percentage of NAV as at 30 June 2013 and 30 June 2012

N/A ii) expense ratios for the period ended 30 June 2013 and 30 June 2012 N/A iii) turnover ratios for the period ended 30 June 2013 and 30 June 2012

N/A

M) Soft dollar commissions/arrangements

UOB Asset Management has entered into soft dollars arrangements with selected brokers from whom products and services are received from third parties. The products and services relate essentially to computer hardware and software to the extent that they are used to support the investment decision making process, research and advisory services, economic and political analyses, portfolio analyses including performance measurements, market analyses, data and quotation services, all of which are believed to be helpful in the overall discharge of UOB Asset Management’s duties to clients. As such services generally benefit all of UOB Asset Management’s clients in terms of input into the investment decision making process, the soft credits utilised are not allocated on a specific client basis. The Manager confirms that trades were executed on a best execution basis and there was no churning of trades.

There are no soft dollars, rebates, commissions or other money incentives generated by the Fund.

1 where the underlying scheme is managed by a foreign manager which belongs to the same group of companies as, or has a formal arrangement or investment agreement with, the Singapore manager, the above information should be disclosed on the underlying scheme. In other cases, such information on the underlying scheme should be disclosed only if it is readily available to the Singapore manager.


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STATEMENT OF TOTAL RETURN For the half year ended 30 June 2013 (Un-audited)

30 June 30 June 2013 2012 $ $

Income Interest 11 60

Less: Expenses Management fee 63,492 91,316 Trustee fee 5,079 7,300 Audit fee 6,299 6,332 Registrar fee 7,490 7,490 Valuation fee 15,873 22,812 Custody fee 18,425 11,630 Interest expenses 940 1,702 Other expenses 30,933 30,308

148,531 178,890

Net loss (148,520) (178,830)

Net gains or losses on value of investments and financial derivatives Net (loss)/gain on investments (2,535,451) 3,873,228 Net gain on forward foreign exchange contracts 287,491 961,043 Net loss on future contracts (172,712) (327,564)Net foreign exchange loss (188,185) (224,882)

(2,608,857) 4,281,825

Total (deficit)/return for the period before income tax (2,757,377) 4,102,995 Less: Income tax (12,084) (10,282)

Total (deficit)/return for the period after income tax before distribution (2,769,461) 4,092,713


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STATEMENT OF FINANCIAL POSITION As at 30 June 2013 (Un-audited)

30 June 31 December 2013 2012 $ $

ASSETSPortfolio of investments 17,636,307 25,501,099 Receivables 27,164 600,976 Margin deposit - 237,475 Sales awaiting settlement 1,380,953 547,284 Cash and bank balances 1,160,923 1,410,604 Financial derivatives at fair value 55,601 371,139

Total Assets 20,260,948 28,668,577

LIABILITIES Payables 257,978 73,025 Purchases awaiting settlement 645,280 1,015,489 Financial derivatives at fair value 46,443 185,716 Distribution payable - 1,044,441

Total Liabilities 949,701 2,318,671

EQUITY Net assets attributable to unitholders 19,311,247 26,349,906


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STATEMENT OF MOVEMENTS OF UNITHOLDERS’ FUNDSFor the half year ended 30 June 2013 (Un-audited)

30 June 31 December 2013 2012 $ $

Net assets attributable to unitholders at the beginning of financial period/year 26,349,906 36,027,813 Operations Change in net assets attributable to unitholders resulting from operations (2,769,461) 7,743,000

Unitholders’ contributions/(withdrawals) Creation of units 6,473,638 4,426,113 Cancellation of units (10,742,836) (20,802,579)

Change in net assets attributable to unitholders resulting from net creation and cancellation of units (4,269,198) (16,376,466)

Distribution - (1,044,441)

Total decrease in net assets attributable to unitholders (7,038,659) (9,677,907)

Net assets attributable to unitholders at the end of financial period/year 19,311,247 26,349,906


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STATEMENT OF PORTFOLIOAs at 30 June 2013 (Un-audited)

Percentage of total net assets Nominal attributable to holdings at Fair value at unitholders at 30 June 30 June 30 June 2013 2013 2013 $ %By Geography - Primary Quoted Bonds

AUSTRALIA LINC ENERGY LTD CB 7.00% DUE 10/04/2018 1,000,000 1,015,769 5.26 PALADIN ENERGY LTD CB 6% DUE 30/04/2017 400,000 439,783 2.28

TOTAL AUSTRALIA 1,455,552 7.54

BELGIUM AGEAS CAPITAL ASIA LTD 4.125% DUE 25/04/23 250,000 271,545 1.41

BRAZIL GTL TRADE FINANCE INC 7.25% DUE 20/10/2017 500,000 686,366 3.55 OGX PETROLEO E GAS PARTI 8.5% DUE 01/06/2018 1,500,000 613,540 3.18

TOTAL BRAZIL 1,299,906 6.73

CHILE BANCO DE CRED E INVER 3% DUE 13/09/2017 200,000 247,820 1.28 BANCO SANTANDER CHILE 3.875% DUE 20/9/2022 300,000 356,181 1.84 CORPBANCA 3.125% DUE 15/01/2018 1,000,000 1,214,010 6.29

TOTAL CHILE 1,818,011 9.41

CHINABESTGAIN REAL ESTATE 2.625% DUE 13/03/2018 1,000,000 1,158,273 6.00 CENTRAL CHINA REAL EST 6.50% DUE 04/06/2018 700,000 801,249 4.15 IFC DEVELOPMENT CORP TRS 2.375% DUE 21/05/2019 1,000,000 1,178,336 6.10 KAISA GROUP HOLDINGS LTD 8.875% DUE 19/03/2018 800,000 958,906 4.97

TOTAL CHINA 4,096,764 21.22

FRANCERCI BANQUE SA 3% DUE 16/04/2018 250,000 241,526 1.25


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STATEMENT OF PORTFOLIOAs at 30 June 2013 (Un-audited) Percentage of total net assets Nominal attributable to holdings at Fair value at unitholders at 30 June 30 June 30 June 2013 2013 2013 $ %By Geography – Primary (continued)Quoted Bonds

HONG KONG BLT INTERNATIONAL CORP CB 12% DUE 10/02/2015* 1,000,000 126,830 0.66 CHINA PRECIOUS METAL RE CB 7.25% DUE 04/02/2018 7,000,000 996,108 5.16 CRCC YUXIANG LTD 3.50% DUE 16/05/2023 600,000 682,447 3.53 YUEXIU REIT MTN CO 3.10% DUE 14/05/2018 800,000 947,890 4.91

TOTAL HONG KONG 2,753,275 14.26

INDIA JAIPRAKASH ASSOCIATES CB 5.75% DUE 08/09/2017 500,000 533,320 2.76

INDONESIA BERAU COAL ENERGY PT 7.25% DUE 13/03/2017 250,000 302,826 1.57 ONGKO INTL FIN CO BV 10.5% DUE 31/12/2049 DF* 500,000 - - PT PERTAMINA 6.0% DUE 03/05/2042 500,000 570,829 2.95

TOTAL INDONESIA 873,655 4.52

MEXICOCORPORACION GEO SA DE CV 9.25% DUE 30/06/2020 900,000 490,832 2.54 DESARROLLADORA HOMEX SA 9.75% DUE 25/03/2020 1,500,000 608,784 3.15 UNITED MEXICAN STATES SERIES M20 10% DUE 05/12/2024 30,000 3,943 0.02 URBI DESARROLLOS URBANOS 9.75% DUE 03/02/2022 600,000 152,196 0.79

TOTAL MEXICO 1,255,755 6.50

RUSSIAVTB BANK (VTB CAPITAL SA) 6.0% DUE 12/04/2017 200,000 262,556 1.36

* Bond has defaulted prior to current financial period, and its fair value represents the Manager’s best estimate.


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STATEMENT OF PORTFOLIOAs at 30 June 2013 (Un-audited) Percentage of total net assets Nominal attributable to holdings at Fair value at unitholders at 30 June 30 June 30 June 2013 2013 2013 $ %By Geography – Primary (continued)Quoted Bonds

SINGAPORE BLD INVESTMENTS CB 8.625% DUE 23/03/2015 1,600,000 1,217,568 6.31 CAPITALAND LTD CB 1.85% DUE 19/06/2020 500,000 459,970 2.38

TOTAL SINGAPORE 1,677,538 8.69

SWITZERLANDUBS AG 4.75% DUE 22/05/2023 400,000 479,448 2.48

UNITED ARAB EMIRATESSIB SUKUK CO III LTD 2.95% DUE 16/04/2018 200,000 244,512 1.27

Accrued Interest Receivable on Fixed Income Securities* 372,944 1.93

Portfolio of investments 17,636,307 91.33 Other net assets 1,674,940 8.67

Net assets attributable to unitholders 19,311,247 100.00

* As at 31 December 2012, the accrued interest on bonds of $426,251 has been included in the respective country/sector totals. As at 30 June 2013, the accrued interest component has been shown separately following the revised Statement of Recommended Accounting Practice 7 “Reporting Framework for Unit Trusts” issued in June 2012 and applicable for accounting periods commencing on or after 30 June 2012.


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Percentage of Percentage of total net assets total net assets attributable to attributable to unitholders at unitholders at 30 June 31 December 2013 2012 % %By Geography - Primary (Summary) Quoted Bonds

Australia 7.54 9.48 Belgium 1.41 - Brazil 6.73 8.01 Chile 9.41 - China 21.22 13.69 France 1.25 3.72 Hong Kong 14.26 3.40 India 2.76 - Indonesia 4.52 10.22 Italy - 13.92 Mauritius - 3.68 Mexico 6.50 - Portugal - 2.62 Russia 1.36 1.52 Singapore 8.69 20.63 Switzerland 2.48 - Turkey - 2.82 United Arab Emirates 1.27 - United States - 3.07 Accrued Interest Receivable on Fixed Income Securities* 1.93 -

Portfolio of investments 91.33 96.78 Other net assets 8.67 3.22

Net assets attributable to unitholders 100.00 100.00



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Percentage of Percentage of total net assets total net assets attributable to attributable to Fair value at unitholders at unitholders at 30 June 30 June 31 December 2013 2013 2012 $ % %By Industry - SecondaryQuoted Bonds

Consumer Discretionary 1,493,338 7.73 2.08 Consumer Staples - - 3.68 Energy 2,371,918 12.29 23.81 Financials 9,798,264 50.75 47.19 Government 574,772 2.97 4.62 Industrials 1,342,597 6.95 0.51 Materials 1,682,474 8.71 8.56 Telecommunication Services - - 6.33 Accrued Interest Receivable on Fixed Income Securities* 372,944 1.93 - Portfolio of investments 17,636,307 91.33 96.78 Other net assets 1,674,940 8.67 3.22 Net assets attributable to unitholders 19,311,247 100.00 100.00



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