Funds GreatLink - Great Eastern Life

GREATLINK STABLE BOND FUND report as at 31 December 2005
FUND FACTS
Inception Date 25 March 2002
Offer Price S$ 1.072
Bid Price S$ 1.019
Fund Size
S$ 21.65 mil
(Underlying Fund Size)
S$ 141.10 mil
Underlying Fund
Deutsche Lion Bond Fund
Fund Manager
Lion Capital Management
(wef 26 Sep 2005)
Sub Manager
Deutsche Asset Management
Bid-Offer Spread 5%
Fund Management Fee
0.50% p.a.
Valuation Frequency
Daily
Currency of Fund
Singapore Dollar
CPF Approved
CPFIS – OA & SA
Risk Category
Lower Risk / Broadly Diversified
Mercer Fund Rating as at 31 Dec 2005 ★★★★
S&P Fund Stars as at 31 Dec 2005 N.A
FUND OBJECTIVE & INVESTMENT STRATEGY
The Fund objective is to achieve an attractive return by
investing in single A and above quality investment grade bonds of
Singapore and major bonds markets such as the G7 countries and
Australia and New Zealand. The G7 countries are Canada, France,
Germany, Italy, Japan, UK and US.
This fund invests all or substantially into Deutsche Lion Bond
Fund.
PORTFOLIO WEIGHTINGS*
USA
6.2%
UK
2.9%
Malaysia
0.8%
Cash & others
11.1%
South Korea
10.6% Singapore
68.4%
MARKET REVIEW*
Bond yields in the US were higher over the year on the back
of healthy growth out of the US and the Federal Reserve's move
to raise Fed funds rates from 2.25% to 4.25%, a 200bp increase
in rates. US 10 and 2-year yields were 17bp and 134bp higher
respectively.
In Singapore, yields were higher, in line with the US, 10 and
2-year yields were 63bp and 111bp higher over the period.
Corporate bonds underperformed as swap rates rose more than
government bond yields.
The Fund gave positive returns over the period. The absolute
increase in yields negatively impacted the Fund. However, active
management of interest rate exposure and higher yielding securities
in the Fund added value to the Fund.
MARKET OUTLOOK*
We believe that growth in the US in 2006 is expected to be
healthy. Monetary conditions in the US are close to neutral and
we look for Fed funds to be raised to 4.5% in January 2006. Any
further hikes will be dependent on economic data going forward.
In our opinion, bonds in the US, especially the longer dated
bonds, are over-valued and we look for yields to trend higher.
Yields in Singapore are likely to move in line but will probably
outperform the US.
We are relatively defensive in interest rate positioning given
the expected volatility in the markets and that the balance of risk
is for rates to rise further. We will continue to focus on high
quality corporate bonds to enhance the yield.
FUND PERFORMANCE SINCE INCEPTION
Performance Review (Mar 2002 To Dec 2005)
109
108
+7.26
107
106
105
104
+4.06
103
102
101
100
99
Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec
02 02 02 02 03 03 03 03 04 04 04 04 05 05 05 05
––––– Greatlink Stable Bond Fund ––––– Benchmark Index
Benchmark: 6 Months SIBOR less 12.5bp
For Top 10 Investments refer to page 90.
Price Indexed
38
PERFORMANCE ON BID-BID BASIS (%)
3mths 6 mths 1 year 3 years 3 years Since Inception Since Inception
(annualised)
(annualised)
GreatLink Stable Bond Fund -0.10 -0.20 0.49 2.72 0.90 7.26 1.88
Benchmark Index 0.52 1.02 1.78 3.32 1.09 4.06 1.06
* Information relates to Deutsche Lion Bond Fund
NOTE: This factsheet is compiled by Great Eastern Life. The information presented is for informational use only. The performance of the Fund is not guaranteed and the value may increase or
decrease in accordance with the future experience of the Fund. Past returns are not necessarily a guide to future performance.