SB US Equity Index Feeder Fund

The US Equity Feeder Fund allows you to
invest in the world’s biggest economy.

About the Fund

The SB US Equity Index Feeder Fund aims to invest in large, mid, and small cap US equities with diversified growth and value styles through a Target Fund. The Fund seeks to track the performance of the CRSP US Total Market Index.

We will be changing our Fund’s custodian from HSBC to Standard Chartered as part of our continuous efforts in finding the best rates for our customers. The shift shall lower our fund administration costs, ultimately boosting the returns of our Funds. This will be reflected in the KIDS as of April 2019.

Client Sustainability

The SB US Equity Feeder Fund is suitable for investors who:

  • Have an aggressive risk tolerance
  • Seek potentially higher returns through investments in US stocks and who can tolerate high price volatilities
  • Have the possibility to be exposed to capital losses given the volatile nature of the US equity market
  • Have an investment horizon of three to five (3-5) years
Fund Type Equity Index Feeder Fund
Inception Date July 2, 2018
Benchmark CRSP US Total Market 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 Vanguard Total Stock Market ETF (the “Target Fund”). Target Fund Name: Vanguard Total Stock Market ETF
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: 0.71% Class B: 0.51% Class F: 0.51%
Other Notes

Applicable holidays for this Fund: US, Singapore, and Philippine holidays

Class Minimum Initial Participation Minimum Subsequent Participation Minimum Redemption Minimum Holding Amount
Class A USD1,000.00 USD500.00 USD500.00 USD1,000.00
Class B USD5,000.00 USD1,000.00 USD1,000.00 USD5,000.00
Class F USD5,000.00 USD1,000.00 USD1,000.00 USD5,000.00

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

Investment Commentary (as of April 2020)

  • As of this writing, US Covid-19 cases reached 1.29mn with total deaths reaching 76,500. An analysis prepared by several Trump administration departments projects that the number of Covid-19 deaths will increase to about 3,000 each day by early June. The interagency report from the U.S. departments of Homeland Security, and Health and Human Services, also reportedly forecasts that the U.S. will see about 200,000 new Covid-19 cases each day by the end of this month.
  • S&P 500 P/Es are rising and was trading at 21.95x 2020 PE, but credit markets are still pricing in a higher degree of risk. This mismatch between credit spreads and P/Es is an outlier relative to history, but the elevated level of the P/E for the Index may be a reflection of the still-high valuations for growth stocks.
  • Some optimistic messages coming from series that have anticipated a trough in EPS: P/Es are expanding, and leading indicators, like weekly jobless claims, are falling. Both signs that a trough in EPS is likely in the offing. Meanwhile, expectations for growth have rebounded in April, and U.S. Economic Surprises appear to be bottoming.
  • 66% of S&P500 companies beat EPS estimates. The overall EPS growth has improved since the start of the season, now printing at -9% year-over-year, but earnings beats have not picked up. The percentage of companies beating EPS estimates still stands at 10-year lows. At a sector level, Materials, Discretionary and Financials are showing double-digit negative EPS growth. Revenue growth is flat.
  • US GDP fell at a 4.8% annual rate in the 1st Quarter. This is the first decline since 2014, and the worst quarterly contraction since 2008, when the country was in a deep recession.
  • The pandemic has ravaged the US labor market, and 1 in 5 American workers have filed for first-time unemployment benefits since mid-March, when lockdown measures took effect across the country. Another 3.2 million Americans filed initial jobless claims for the week ending May 2, after factoring in seasonal adjustments. That brings the total number of seasonally-adjusted initial claims filed since mid-March to 33.5 million. Initial claims are considered a proxy for layoffs or furloughs, and that level represents about 21% of the March labor force.

Target Fund Information and Performance

QUICK FACTS

Target Fund Vanguard Total Stock Market ETF
Benchmark CRSP US Total Market Index
Expense ratio 0.04%
Dividend schedule Quarterly
ETF total net assets $91,862 million
Fund total net assets $662,577 million
Inception date May 24, 2001

TOP TEN HOLDINGS (as of 31 Mar 2020)

Microsoft Corp. 4.8%
Apple Inc. 4.0%
Amazon.com Inc. 3.3%
Alphabet Inc. 2.7%
Facebook Inc. 1.6%
Berkshire Hathaway Inc. 1.4%
Johnson & Johnson 1.4%
Visa Inc. 1.1%
Procter & Gamble Co. 1.1%
JP Morgan Chase & Co. 1.0%

RATES AND RANKING (as of 31 Mar 2020)

VTI (Inception 05/24/2001) Quarter Year to date 1 year 3 years 5 years 10 years Since inception
Net asset value (NAV) return -20.89% -20.89% -9.26% 3.99% 5.74% 10.15% 6.17%
Market price return -20.85 -20.85 -9.22 4.00 5.73 10.16 6.18
Spliced Total Stock Market Index -20.88 -20.88 -9.24 3.99 5.74 10.17 6.19

Dow Jones U.S. Total Stock Market Index (formerly known as the Dow Jones Wilshire 5000 Index) through April 22, 2005; MSCI US Broad Market Index through June 2, 2013; and CRSP US Total Market Index thereafter.

How to order

  1. You need to have an SB Dollar Account to invest. No dollar account yet? Click here to open an account.
  2. Fill up the UITF Application Form completely.
  3. Wait for a call from our investment specialist.

Why Invest?

Diversification

Investments (and risk) are spread across various assets industry-wide.

Liquidity

You can subscribe and redeem on any banking day.

Affordability

You can start investing in UITFs with just $1,000 (SB dollar account required).

Transparency

You can check the value of your investment daily with NAVPU.

Want to invest in the SB US Equity Feeder Fund?

Key Risks

Interest Rate Risk – The possibility of an investment to experience losses due to change in interest rates.

Market/Price Risk – The possibility for an investor to experience losses due to changes in the market prices.

Liquidity Risk – The possibility for an investor to experience losses due to inability to sell or convert assets into cash immediately or in instances where conversion to cash is possible but at a loss.

Credit Risk/Default Risk – The possibility for an investor to experience losses due to borrower’s failure to pay principal and/or interest in a timely manner.

Reinvestment Risk – The possibility of having lower returns of earnings when maturing funds or the interest earnings of funds are reinvested.

Foreign Exchange Risk – The possibility of an investment to experience losses due to fluctuations in foreign exchange rates.

Country Risk – The possibility of an investment to experience losses from an investment in a security issued by a foreign country due to changes in political, economic, and or social structures.

Other Risks – For Feeder Funds, the possibility of an investment to experience losses due to the Target Fund investing in emerging markets that may carry a higher risk than developed markets.

Taxation
  • Except when specifically required by law, the Trustee shall have no responsibility to withhold income or other taxes on revenues from the Fund.
  • Each participant should consult its own tax advisor as to the specific tax consequences of his/her investment in and redemption of units of participation in the Fund, including the applicability and effect of local and national laws of the Philippines, as well as consequences arising under the laws of any other taxing jurisdiction.
Disclaimer

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.

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