United Singapore Growth FundSemi Annual Report
for the half year ended 30 June 2017
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 MANAGEMENTLee Wai FaiCheo Chai HongGoh Yu MinThio Boon Kiat
TRUSTEEState Street Trust (SG) Limited168 Robinson Road#33-01, Capital TowerSingapore 068912
CUSTODIAN / ADMINISTRATOR / REGISTRARState Street Bank and Trust Company, acting through its Singapore Branch168 Robinson Road#33-01, Capital TowerSingapore 068912
AUDITORSPricewaterhouseCoopers LLP8 Cross Street#17-00, PWC BuildingSingapore 048424
SOLICITORS TO THE MANAGERTan Peng Chin LLC30 Raffles Place#11-00, Chevron HouseSingapore 048622
SOLICITORS TO THE TRUSTEEShook Lin & Bok LLP1 Robinson Road#18-00, AIA TowerSingapore 048542
United Singapore Growth Fund(Constituted under a Trust Deed in the Republic of Singapore)
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A) Fund Performance
Fund Performance/Benchmark Returns
3 mth%
Growth
6 mth%
Growth
1 yr%
Growth
3 yrAnn
CompRet
5 yrAnn
CompRet
10 yrAnn
CompRet
SinceInception
28 February1990Ann
CompRet
UnitedSingaporeGrowth Fund 3.92 14.51 18.47 1.44 4.42 0.13 6.32
Benchmark 3.72 13.82 17.55 2.68 5.62 2.19 4.79
Source: Lipper, a Thomson Reuters Company.
Note: The performance returns of the Fund are in Singapore dollar based on a NAV-to-NAV basis with dividends and distributions
reinvested, if any.
The benchmark of the Fund: Feb 90 – Dec 12: Straits Times Index; Jan 13 to Present: MSCI Singapore NR.
For the six months ended 30 June 2017, the net asset value of the Fund rose 14.51% compared with a 13.82% increase in thebenchmark MSCI Singapore Index.
The Fund’s outperformance for the period under review was largely attributed to positive stock and sector selection. Ouroverweight positions in theReal Estate, Financials andConsumer Staples sectors contributed positively. The Fund was alsounderweight on the Consumer Discretionary sector which underperformed.
On a stock basis, the Fund’s investments in Genting Singapore, UOL and City Developments added positively toperformance. Moreover the Fund’s off benchmark investments in Thai Beverage andHealth Management International alsoperformed well. In addition, the Fund benefited from investments in Global Logistics Properties and CWT, which were thesubject of M&A activity.
As at end June 2017, the Fund was fully invested. In terms of sectors, the Fund’s allocation stood at Financials (44.94%),RealEstate (19.65%), Consumer Discretionary (17.38%), Industrials (14.02%), Consumer Staples (3.87%) and Health Care(1.12%).
Economic and Market Review
Equity markets in Asia outperformed global markets for the first half of 2017. Emerging Markets (EM) as a whole outperformedDeveloped Markets, as appetite for higher yielding assets increased with improved global economic momentum and a weakerUS dollar.
Asia markets rallied in the first half of the year, driven by strong earnings particularly in the technology sector. The softening ofPresident Trump’s trade protectionism rhetoric calmed market fears on Asian exporters. Concerns of Sino-US tensions fadedafter a successful outcome between President Trump and President Xi.
The US Federal Reserve (Fed) hiked rates by quarter of a percentage point (25 basis points) in March and June, as it took agradual and predictable path to normalising interest rates. The US dollar weakened against other major currencies includingthe Euro, Japanese yen and most Asian currencies.
Closer to home, Singapore was the top performer in South East Asia.
TheSingaporemarket started the period under reviewona strong note, lifted by optimism that theworst of the slowdown in 2016was over. Moreover the market was also cheered by initial signs of an impending global growth recovery that would also benefitthe export oriented Singapore economy.
In particular, a recovery in GDP growth with strength in both the manufacturing and services sectors and government policyrelaxation in the residential property sector improved buyer sentiment. Accordingly this led to strong gains in the banks and realestate companies.
United Singapore Growth Fund(Constituted under a Trust Deed in the Republic of Singapore)
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A) Fund Performance (continued)
The market also experienced a flurry of mergers and acquisition (M&A) activity in the form of privatisations and acquisitions.This served to generate heightened investor interest as it highlighted the relative attractiveness of the Singapore market’svaluation multiples.
Outlook and Fund Strategy
Asia is seeing improving returns on equity (ROEs) and upward revisions in corporate earnings after many years, led by cyclicalsas global growth recovers. China’s economic recovery looks to have stabilised with the Purchasing Managers Index (PMI)above 50 and the rebound in the PPI after many years in negative territory. Despite the Fed raising rates, the US dollar hasweakened slightly as questions arise over the execution of Trump’s fiscal stimulus policies and economic indicators point to amild recovery. This has helped Asian currencies and markets.
The US market has remained resilient in spite of relatively soft US economic data, elevated valuations and President Trump’slegal troubles. China economic growth activity moderated after accelerating late last year till the first quarter 2017 as theauthorities tightened monetary conditions to control financial leverage. However, recent data points to continued economicstabilisation rather than growth rolling. We are still in the first year of earnings recovery after many years of suppressed profitgrowth. Hence, we remain constructive on Asian markets.
Similarly the outlook forSingapore remains positive. Recentmacro data continue to showa recoverywhich should support bothGDP growth and corporate earnings. These factors are likely to keep the Singaporemarket on a good footing in the second halfof 2017. However we note that global volatility on both a political and growth basis remains a concern and that the Singaporemarket’s valuations, while still not expensive, appear to have factored in a significant part of the positive recovery at this stage.
We believe that the long-term structural growth potential in Singapore, driven by its well-established trade links and strategicgeographical location, makes the market an attractive investment destination. Our strategy is to take advantage of thesestructural opportunities by investing in companies that have sound business models, are positioned in segments offeringattractive growth and that have demonstrated operational and financial discipline in the way they manage their businesses.
United Singapore Growth Fund(Constituted under a Trust Deed in the Republic of Singapore)
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B) Investments at fair value and as a percentage of net asset value (“NAV”) as at 30 June 2017under review classified by
i) Country
Fair Value(S$)
% of NAV
Hong Kong 1,168,560 1.76
Singapore 64,749,550 97.73
Thailand 990,000 1.49
Portfolio of investments 66,908,110 100.98
Other net assets/(liabilities) (651,990) (0.98)
Total 66,256,120 100.00
ii) Industry
Fair Value(S$)
% of NAV
Consumer Discretionary 11,513,950 17.38
Consumer Staples 2,564,500 3.87
Financials 29,777,034 44.94
Health Care 742,500 1.12
Industrials 9,292,197 14.02
Real Estate 13,017,929 19.65
Portfolio of investments 66,908,110 100.98
Other net assets/(liabilities) (651,990) (0.98)
Total 66,256,120 100.00
iii) Asset Class
Fair Value(S$) % of NAV
Quoted equities 66,908,110 100.98
Other net assets/(liabilities) (651,990) (0.98)
Total 66,256,120 100.00
iv) Credit rating of quoted bonds
N/A
United Singapore Growth Fund(Constituted under a Trust Deed in the Republic of Singapore)
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C) Top Ten Holdings
10 largest holdings as at 30 June 2017
Fair Value(S$)
Percentage oftotal net assetsattributable tounitholders
%
DBS GROUP HOLDINGS LTD 10,370,000 15.65
OVERSEA-CHINESE BANKING CORP LTD 9,603,100 14.49
UNITED OVERSEAS BANK LTD 8,556,134 12.91
SINGAPORE TELECOMMUNICATIONS LTD 8,363,500 12.62
CAPITALAND LTD 2,450,000 3.70
GLOBAL LOGISTIC PROPERTIES LTD 2,402,400 3.63
KEPPEL CORP LTD 2,390,200 3.61
UOL GROUP LTD 2,139,200 3.23
GENTING SINGAPORE PLC 1,953,000 2.95
SINGAPORE TECHNOLOGIES ENGINEERING LTD 1,729,600 2.61
10 largest holdings as at 30 June 2016
Fair Value
Percentage oftotal net assetsattributable tounitholders
(S$) %
SINGAPORE TELECOMMUNICATIONS LTD 9,499,000 15.30
DBS GROUP HOLDINGS LIMITED 8,668,000 13.96
OVERSEA-CHINESE BANKING CORPORATION LIMITED 6,430,600 10.36
UNITED OVERSEAS BANK LTD 5,894,400 9.49
CAPITALAND LTD 2,609,500 4.20
KEPPEL CORPORATION LIMITED 1,925,000 3.10
GLOBAL LOGISTIC PROPERTIES LTD 1,841,100 2.97
UOL GROUP LIMITED 1,747,200 2.81
THAI BEVERAGES CO. LTD 1,547,000 2.49
WILMAR INTERNATIONAL LIMITED 1,532,200 2.47
United Singapore Growth Fund(Constituted under a Trust Deed in the Republic of Singapore)
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D) Exposure to derivatives
i) fair value of derivative contracts and as a percentage of NAV as at 30 June 2017
Contract orunderlyingprincipalamount
Positivefair value % of NAV
Negativefair value % of NAV
$ $ $
Foreign currency contracts 137,626 - - 59 -*
* denotes amount less than 0.01%
ii) There was a net realised loss of SGD 919 on derivative contracts during the financial period from 01 January 2017 to30 June 2017.
iii) There was a net unrealised loss of SGD 59 on outstanding derivative contracts marked to market as at 30 June 2017.
E) Amount and percentage of NAV invested in other schemes as at 30 June 2017
Please refer to the Statement of Portfolio.
F) Amount and percentage of borrowings to NAV as at 30 June 2017
N/A
G) Amount of redemptions and subscriptions for the financial period from 01 January 2017 to30 June 2017
Total amount of redemptions SGD 5,607,355
Total amount of subscriptions SGD 3,029,943
H) The amount and terms of related-party transactions for the financial period from 01 January2017 to 30 June 2017
i) As at 30 June 2017, the Fund maintained current accounts with State Street Bank and Trust Company as follows:
Bank balances SGD 518,795
United Singapore Growth Fund(Constituted under a Trust Deed in the Republic of Singapore)
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H) The amount and terms of related-party transactions for the financial period from 01 January2017 to 30 June 2017 (continued)
ii) Purchase/holdings of UOBAM unit trusts by UOB or its affiliated companies as at 30 June 2017
Holdings of United Singapore Growth Fund – as at 30 June 2017 were as follows:
Affiliated CompaniesNo. ofUnits
Unit PriceSGD
MarketValueSGD
a) GrowthPath Portfolios - GrowthPath 2020 533,931.03 3.446 1,839,926.33
b) GrowthPath Portfolios - GrowthPath 2030 435,946.11 3.446 1,502,270.30
c) GrowthPath Portfolios - GrowthPath 2040 1,567,718.11 3.446 5,402,356.61
d) GrowthPath Portfolios - GrowthPath Today 150,832.63 3.446 519,769.24
iii) Investment in Initial Public Offerings managed by UOB Group
N/A
iv) As at 30 June 2017, the brokerage income earned by UOB Kay Hian Pte Ltd was SGD 3,820.
I) Expense ratios
2017 2016
$ $
Total operating expenses 728,234 810,952
Average daily net asset value 63,835,638 64,710,912
Expense ratio 1.14% 1.25%
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 Fund’s expense ratio at 30 June 2017was based on total operating expenses divided
by the average net asset value respectively for the year. The total operating expenses do not include (where applicable)
brokerage and other transaction 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
2017 2016
$ $
Lower of total value of purchases or sales 6,833,726 6,900,867
Average daily net assets value 65,739,513 62,602,080
Turnover ratio 10.40% 11.02%
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 divided by the average daily net asset value.
United Singapore Growth Fund(Constituted under a Trust Deed in the Republic of Singapore)
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K) Any material information that will adversely impact the valuation of the scheme such ascontingent liabilities of open contracts
N/A
L) For schemes which invest more than 30% of their deposited property in another scheme, thefollowing 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 2017 and 30 June 2016
N/A
ii) expense ratios for the financial period ended 30 June 2017 and 30 June 2016
N/A
iii) turnover ratios for the financial period ended 30 June 2017 and 30 June 2016
N/A
1 where the underlying scheme is managed by a foreign manager which belongs to the same group of companies as, or has aformal arrangement or investment agreement with, the Singapore manager, the above information should be disclosed on theunderlying scheme. In other cases, such information on the underlying scheme should be disclosed only if it is readily availableto the Singapore manager.
M) Soft dollar commissions/arrangements
UOB Asset Management has entered into soft dollars arrangements with selected brokers from whom products andservices are received from third parties. The products and services relate essentially to computer hardware and softwareto 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 andquotation services, all of which are believed to be helpful in the overall discharge of UOB Asset Management’s duties toclients. As such services generally benefit all of UOB Asset Management’s clients in terms of input into the investmentdecision making process, the soft credits utilised are not allocated on a specific client basis. The Manager confirms thattrades were executed on a best execution basis and there was no churning of trades.
N) Where the scheme offers pre-determined payouts, an explanation on the calculation of theactual payouts received by participants and any significant deviation from thepre-determined payouts
N/A
United Singapore Growth Fund(Constituted under a Trust Deed in the Republic of Singapore)
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STATEMENT OF TOTAL RETURNFor the half year ended 30 June 2017 (Un-audited)
30 June 30 June
2017 2016
$ $
Income
Dividends 971,232 1,031,992
Interest 195 10
Other income 45,060 -
Total 1,016,487 1,032,002
Less: Expenses
Management fee 325,823 312,256
Trustee fee 12,197 12,490
Audit fee 16,895 8,305
Registrar fee 7,490 7,490
Custody fee 6,102 10,926
Transaction costs 81,327 54,406
Other expenses 41,907 57,915
Total 491,741 463,788
Net income/(losses) 524,746 568,214
Net gains/(losses) on value of investments
Net gains/(losses) on investments 8,264,560 (585,112)
Net gains/(losses) on financial derivatives (978) -
Net foreign exchange gains/(losses) (5,728) (2,527)
8,257,854 (587,639)
Total return/(deficit) for the period before income tax 8,782,600 (19,425)
Less: Income tax (21,494) (14,789)
Total return/(deficit) for the period 8,761,106 (34,214)
United Singapore Growth Fund(Constituted under a Trust Deed in the Republic of Singapore)
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STATEMENT OF FINANCIAL POSITIONAs at 30 June 2017 (Un-audited)
30 June 31 December
2017 2016
$ $
Assets
Portfolio of investments 66,908,110 61,198,504
Receivables 38,921 189,350
Cash and bank balances 518,795 478,321
Total assets 67,465,826 61,866,175
Liabilities
Payables 431,752 206,890
Distribution payable 777,895 808,964
Financial derivatives at fair value 59 -
Total liabilities 1,209,706 1,015,854
Equity
Net assets attributable to unitholders 66,256,120 60,850,321
United Singapore Growth Fund(Constituted under a Trust Deed in the Republic of Singapore)
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STATEMENT OF MOVEMENTS OF UNITHOLDERS’ FUNDSFor the half year ended 30 June 2017 (Un-audited)
30 June 31 December
2017 2016
$ $Net assets attributable to unitholders at the beginning of the financialperiod/year 60,850,321 65,854,902
Operations
Change in net assets attributable to unitholders resulting from operations 8,761,106 2,087,181
Unitholders’ contribution/(withdrawal)
Creation of units 3,029,943 4,616,486
Cancellation of units (5,607,355) (10,056,786)
Change in net assets attributable to unitholders resulting from net creation andcancellation of units (2,577,412) (5,440,300)
Distributions (777,895) (1,651,462)
Total increase/(decrease) in net assets attributable to unitholders 5,405,799 (5,004,581)
Net assets attributable to unitholders at the end of the financial period/year 66,256,120 60,850,321
United Singapore Growth Fund(Constituted under a Trust Deed in the Republic of Singapore)
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STATEMENT OF PORTFOLIOAs at 30 June 2017 (Un-audited)
Holdings at Fair value at
Percentage oftotal net assetsattributable tounitholders at
30 June2017
30 June2017$
30 June2017%
By Geography - Primary
Quoted Equities
HONG KONG
HONGKONG LAND HOLDINGS LTD 70,000 709,353 1.07
JARDINE STRATEGIC HOLDINGS LTD 8,000 459,207 0.69
TOTAL HONG KONG 1,168,560 1.76
SINGAPORE
ASCENDAS REAL ESTATE INVESTMENT TRUST 514,900 1,343,889 2.03
CAPITALAND COMMERCIAL TRUST 600,000 996,000 1.50
CAPITALAND LTD 700,000 2,450,000 3.70
CAPITALAND MALL TRUST 340,000 671,500 1.01
CITY DEVELOPMENTS LTD 120,000 1,287,600 1.94
COMFORTDELGRO CORP LTD 740,000 1,702,000 2.57
CWT LTD 320,000 713,600 1.08
DBS GROUP HOLDINGS LTD 500,000 10,370,000 15.65
FRASERS LOGISTICS & INDUSTRIAL TRUST 650,000 702,000 1.06
GENTING SINGAPORE PLC 1,800,000 1,953,000 2.95
GLOBAL LOGISTIC PROPERTIES LTD 840,000 2,402,400 3.63
HEALTH MANAGEMENT INTERNATIONAL LTD 1,100,000 742,500 1.12
HRNETGROUP LTD 281,000 250,090 0.38
JARDINE CYCLE & CARRIAGE LTD 27,000 1,197,450 1.81
KEPPEL CORP LTD 380,000 2,390,200 3.61
MANULIFE US REAL ESTATE INVESTMENT TRUST 255,000 315,987 0.48
OVERSEA-CHINESE BANKING CORP LTD 890,000 9,603,100 14.49
SATS LTD 250,000 1,277,500 1.93
SEMBCORP INDUSTRIES LTD 250,000 770,000 1.16
SINGAPORE EXCHANGE LTD 170,000 1,247,800 1.88
SINGAPORE TECHNOLOGIES ENGINEERING LTD 470,000 1,729,600 2.61
SINGAPORE TELECOMMUNICATIONS LTD 2,150,000 8,363,500 12.62
UNITED OVERSEAS BANK LTD 370,075 8,556,134 12.91
UOL GROUP LTD 280,000 2,139,200 3.23
WILMAR INTERNATIONAL LTD 470,000 1,574,500 2.38
TOTAL SINGAPORE 64,749,550 97.73
United Singapore Growth Fund(Constituted under a Trust Deed in the Republic of Singapore)
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STATEMENT OF PORTFOLIOAs at 30 June 2017 (Un-audited)
Holdings at Fair value at
Percentage oftotal net assetsattributable tounitholders at
30 June2017
30 June2017$
30 June2017%
By Geography - Primary (continued)
Quoted Equities
THAILAND
THAI BEVERAGE PCL 1,100,000 990,000 1.49
Total Equities 66,908,110 100.98
Portfolio of investments 66,908,110 100.98
Other net assets/(liabilities) (651,990) (0.98)
Net assets attributable to unitholders 66,256,120 100.00
United Singapore Growth Fund(Constituted under a Trust Deed in the Republic of Singapore)
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STATEMENT OF PORTFOLIOAs at 30 June 2017 (Un-audited)
Percentage oftotal net assetsattributable tounitholders at30 June2017%
Percentage oftotal net assetsattributable tounitholders at31 December
2016%
By Industry - Primary (Summary)
Quoted Equities
Hong Kong 1.76 1.68
Singapore 97.73 97.35
Thailand 1.49 1.54
Portfolio of investments 100.98 100.57
Other net assets/(liabilities) (0.98) (0.57)
Net assets attributable to unitholders 100.00 100.00
United Singapore Growth Fund(Constituted under a Trust Deed in the Republic of Singapore)
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STATEMENT OF PORTFOLIOAs at 30 June 2017 (Un-audited)
Fair value at30 June2017$
Percentage oftotal net assetsattributable tounitholders at30 June2017%
Percentage oftotal net assetsattributable tounitholders at31 December
2016%
By Industry - Secondary
Quoted Equities
Consumer Discretionary 11,513,950 17.38 2.36
Consumer Staples 2,564,500 3.87 4.31
Financials 29,777,034 44.94 42.42
Health care 742,500 1.12 2.05
Industrials 9,292,197 14.02 16.76
Real Estate 13,017,929 19.65 19.59
Telecommunication Services - - 13.08
Portfolio of investments 66,908,110 100.98 100.57
Other net assets/(liabilities) (651,990) (0.98) (0.57)
Net assets attributable to unitholders 66,256,120 100.00 100.00
United Singapore Growth Fund(Constituted under a Trust Deed in the Republic of Singapore)
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United Singapore Growth Fund(Constituted under a Trust Deed in the Republic of Singapore)
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