The SB Asia ex Japan Equity Index Feeder Fund allows you to invest in one of the most promising economic regions in the world.
The SB Asia ex Japan Equity Index Feeder Fund aims to achieve income growth and investment returns that closely track the total return of the iShares Core MSCI Asia ex Japan ETF (“Target Fund”). The investment objective of the Target Fund is to provide investment results that, before fees and expenses, closely correspond to the performance of the MSCI All Country Asia ex Japan Index (“Underlying Index”). The Index provides investors exposure to large and mid-sized companies in emerging and developed Asian countries (excluding Japan).
The Target Fund adopts a representative sampling investment strategy to achieve its investment objective. Representative sampling creates a portfolio using a limited number of securities to replicate the characteristics of the index as closely as possible. The Target Fund invests primarily in securities included in the Underlying Index, or in securities that are not included in its Underlying Index, but which the Manager believes will help the iShares Core MSCI Asia ex Japan ETF achieve its investment objective.
Note: The Fund implemented a target fund switch last March 18, 2021, from MUFG Asia Pacific ex Japan Equity Stable Growth (MUFG as the Asset Manager) to iShares Core MSCI Asia ex Japn ETF (BlackRock Asset Management North Asia Limited as the Asset Manager).
SB Asia ex Japan Equity Index Feeder Fund is suitable for investors who:
|Fund Type*||Equity Index Feeder Fund|
|Inception Date||January 16, 2018|
|Benchmark*||MSCI All Country Asia ex Japan Index|
|Initial NAVPU||USD 1.00|
|Business Day||A day (other than a Saturday or Sunday) on which banks are generally open for the transaction of business in Manila, Philippines and is a Banking Day of the Target Fund|
|Order Date (T)*||Any Business Day within the Subscription Cut-Off Time and/or Redemption Cut-Off Time.|
|Trade Date (T)||A Business Day where the subscription and/or redemption order is executed. Order Date is the Trade Date.|
|Redemption & Subscription Cut-Off Time||Up to 1:30pm of any Business Day|
|Subscription Settlement Date||On Order Date|
|Redemption Settlement Date||Up to seven (7) Business Days after receipt of Redemption Notice and/or Redemption Confirmation within the Redemption Cut-Off Time.|
|Valuation Date||The Business Day at which the Fund’s assets are valued. In case of Subscription and/or Redemption, the Valuation Date is the Trade Date|
|Trust Fee (p.a.)*||Class A: 0.70% Class B: 0.50% Class F: 0.50%|
|Other Notes||Fund is not yet available in Security Bank Online
Applicable holidays for this Fund: Philippines & Hong Kong
*These took effect last March 18, 2021, i.e. amendments that were made in the Fund’s Declaration of Trust effective said date. For more details, you may email [email protected].
|Class||Minimum Initial Participation||Minimum Subsequent Participation||Minimum Redemption||Minimum Holding Amount|
Class A – This Unit Class is open to all individuals and institutions and it is recommended but not limited to those who want to invest in small amounts. This is for individuals and Institutions looking for the flexibility to be able to invest in small amounts with no commitments of additional future subscriptions.
Class B – This Unit Class is only open to institutional investors that are duly registered with Securities and Exchange Commission and existing under the laws of the Philippines, such as partnerships, corporations, government financial institutions, educational institutions, organizations, and foundations, all subscribing on their own behalf, and the structures which such Institutional investors put into place for the management of their own assets. This is for institutions who deal in very large amounts and foresee themselves making very large individual transactions.
Class F – This Unit Class is open to individual investors that meet the Minimum Initial Participation required for the F Unit Class. This is primarily intended for High Net Worth Individuals looking to invest in the amount of USD 5,000 and above and foresee themselves making additional investments in the amount of USD 1,000 and above.
*High Net Worth (HNI) refers to a Wealth Management customer
|Asset Class||Exchange Traded Fund (ETF)|
|Benchmark||MSCI AC Asia ex Japan Index|
|Inception Date||March 12, 2009|
|Fund Based Currency||USD|
BlackRock Fund Advisors
|Target Fund||iShares Core MSCI Asia ex Japan ETF|
|Total Target Fund Fee||0.28%|
|Taiwan Semiconductor Manufacturing||7.10%|
|Tencent Holdings Ltd.||6.20%|
|Alibaba Group Holding ADR||5.87|
|Samsung Electronics Ltd.||4.70%|
|AIA Group Ltd.||2.07%|
|Reliance Industries Ltd.||1.03%|
|China Construction Bank Corp.||1.01%|
|Hong Kong Exchanges and Clearing||0.90%|
|Period||1 Month||3 Month||6 Month||1 Year||2 years|
*Full redemption on Dec 10, 2020
Interest Rate Risk – This is the possibility for the Fund to experience losses due to changes in interest rates. The purchase and sale of a debt instrument may result in profits or losses because the value of a debt instrument changes inversely with prevailing interest rates. The Fund’s investment portfolio, being marked-to-market, is affected by the changes in interest rates thereby affecting the values of the fixed-income investments of the Fund such as government securities and corporate bonds. Interest rate changes may affect the prices of fixed income securities inversely, i.e. as interest rates rise, bonds prices fall and when interest rates decline, bond prices rise. As the prices of the bonds held by the Fund adjust to a rise or a drop in interest rates, the Fund’s share price measure by the NAVPU will decline or increase accordingly.
Market/Price Risk – This is the possibility for the Fund to experience losses due to changes in market prices of equities or bonds. It is the exposure to the uncertain market value of these investments due to price fluctuations. It is the risk of the Fund to lose value due to a decline in securities prices, which may sometimes happen rapidly. The value of investments fluctuates over a given time period because of general market conditions, economic changes, or other events that impact large portions of the market such as political events, natural calamities, etc. As a result, the NAVPU may increase to make a profit or decrease to incur a loss.
Liquidity Risk – This is the possibility for the Fund to experience losses due to the inability to sell or convert the investments into cash immediately or in instances where conversion to cash is possible but at a loss. This may be caused by different reasons such as trading in securities with small or few outstanding issues, absence of buyers, limited buy/sell activity or an underdeveloped capital market. Liquidity risk occurs when certain investments in the Fund’s portfolio may be difficult or impossible to sell at a particular time which may prevent allowing withdrawal from the account with until its assets can be converted to cash. Even government securities which are the most liquid fixed income securities may be subjected to liquidity risk particularly when a sizeable volume is involved.
Credit Risk/Default Risk – This is the possibility for the Fund to experience losses due to a borrower’s or issuer’s failure to pay principal and/or interest in a timely manner on instruments such as bonds, loans, or other forms of security which the borrower issued. This inability of the borrower/issuer to make good on its financial obligations may be a result of adverse changes in its financial condition, thus, lowering credit quality of the security, and consequently lowering the price (market/price risk) which contributes to the difficulty in selling such security in the open market (liquidity risk). The decline in the value of the Fund happens when the default/failure of the issuer to pay its obligation would make the price of the security go down and may make the security difficult to sell. When this happens, the Fund’s NAVPU will be affected by a decline in value.
Counterparty Risk – This is the possibility for the Fund to be exposed to risks relating to the credit standing of its counterparties and to their ability to fulfill the conditions of the contracts it enters into with them. In the event of a bankruptcy or insolvency of a counterparty, the Fund could experience delays in liquidating the position and incur losses, including declines in the value of its investment during the period in which the fund seeks to enforce its rights, inability to realize gains on its investment during such period and fees and expenses incurred in enforcing its rights under the contracts. There is also a possibility that the above contracts are terminated due, for instance, to bankruptcy, supervening illegality or change in the tax or accounting laws relative to those at the time the contracts were originated.
Reinvestment Risk – This is the risk associated with the possibility of having lower returns or earnings when maturing funds or the interest earnings of funds are reinvested. Investors in the UITF who redeem and realize their gains run the risk of reinvesting their funds in an alternative investment outlet with lower yields. Similarly, SBC-Trust is faced with the risk of not being able to find good or better alternative investment outlets as some of the securities in the fund matures.
In the case of foreign currency-denominated security or in case investing in Target Funds through Feeder Funds that are foreign currency denominated funds, the UITF is also exposed to the following risks:
Foreign Exchange Risk – This is the possibility for the Fund to experience losses due to fluctuations in foreign exchange rates. The exchange rates depend upon a variety of global and local factors such as interest rates, economic performance, and political developments. It is the risk of the Fund to currency fluctuations when the value of such investments denominated in currencies other than the base currency (Peso) depreciates. Conversely, it is the risk of the Fund to lose value when the base currency (Peso) appreciates. The NAVPU of a peso-denominated Fund invested in foreign currency-denominated securities may decrease to incur losses when the peso appreciates.
Country Risk – This is the possibility for the Fund to experience losses arising from investments in securities issued by/in foreign countries due to changes in the political, economic, and social structures of such countries. There are risks in foreign investments due to the possible internal and external conflicts, currency devaluations, foreign ownership limitations, and fiscal/monetary policies of the foreign country involved which are difficult to predict but must be taken into account in making such investments.
Emerging Markets Risk – The possibility for the Fund to invest in less developed or emerging markets. Investing in emerging markets may carry a higher risk than investing in developed markets. The securities markets of less developed or emerging markets are generally smaller, less developed, less liquid and more volatile than the securities markets of developed markets. The risk of significant fluctuations in the Net Asset Value and of the suspension of redemptions in these types of funds may be higher than for funds investing in major markets.
Equity Risk – The value of the Fund that invests in equity and equity-related securities will be affected by the economic, political, market, sectoral, and issuer-specific changes. Such changes may adversely affect securities, regardless of the Fund’s specific performance. Additionally, different industries, financial markets, and securities can react differently to these changes. Such fluctuations of the Fund’s value are often exacerbated in the short-term as well. The risk that one or more companies in the Fund’s portfolio will fall, or fail, or rise, can adversely affect the overall portfolio performance in any given period.
Stock Market Cyclical and Concentration Risk – Stock markets tend to move in cycles, with periods of rising prices and periods of falling prices that will affect the Fund’s performance. In addition, the Fund’s targeted actual index may, at times, become focused in stocks of a particular market sector, which would subject the Fund to proportionately higher exposure to the risks of that sector.
Index Sampling Risk – The possibility that the securities selected for the Fund, in the aggregate, will not provide investment performance matching that of the Fund’s targeted actual index and its respective composition given the margin of variance allowed for the Fund.
The contents herein are intended for general information purposes only and should not be used as basis for making decisions nor should it be regarded as a substitute for specific professional advice. No representation or warranty as to its accuracy, reasonableness, or completeness, express or implied, is hereby made. The views and opinions expressed in this article does not pertain to the any opinion, representation or position of SBC Trust in whole or in part. SBC Trust denies any liability that may arise out of any loss or may result in actual, direct, indirect, special, incidental or consequential damage from the use or reliance on any information provided.