Important Risk Disclosure for PAIF

  • ABF Pan Asia Bond Index Fund ("PAIF") is an exchange traded bond fund which seeks to provide investment returns that corresponds closely to the total return of the Markit iBoxx ABF Pan-Asia Index ("Index"), before fees and expenses, and its return may deviate from that of the Index.
  • PAIF primarily invests in local currency government and quasi-government bonds in eight Asian markets, comprising of China, Hong Kong, Indonesia, Korea, Malaysia, Philippines, Singapore and Thailand.
  • Investment involves risks, including risks of exposure to bonds in both developed and emerging Asia markets. Investors may lose part or all of their investments.
  • PAIF is not "actively managed" and will not try to "beat" the market it tracks.
  • The Executives' Meeting of East Asia and Pacific Central Banks group (the "EMEAP") member central banks and monetary authorities are like any other investors in PAIF and each of them may dispose of their respective interest in the Units they hold. There are no guarantees that the EMEAP member central banks and monetary authorities will continue to be investors in PAIF.
  • The trading price of PAIF may differ from the underlying net asset value per share.
  • PAIF may not be suitable for all investors. Investors should not invest based on this marketing material only. Investors should read the PAIF's prospectus, including the risk factors, take into consideration of the product features, their own investment objectives, risk tolerance level etc and seek independent financial and professional advices as appropriate prior to making any investment.
ASIAN FIXED
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FOR THE NEXT LEVEL.

CELEBRATING 15 YEARS OF HISTORY, 15 YEARS OF GROWTH

Today we are celebrating the 15th anniversary of ABF Pan Asia Bond Index Fund (PAIF), the region's first and largest Asian fixed income ETF1. Launched in 2005, PAIF pioneered the Asian fixed income ETF industry. It provides an innovative, easy-to-access and cost-efficient solution to invest in a diversified portfolio of Asian local currency government bonds in one single trade.

15 FACTS ABOUT PAIF

1

PAIF is the first Asian local currency bond ETF.

2

In 2005, PAIF was launched as part of an important initiative by Asia Pacific's 11 leading central banks and monetary authorities to strengthen the region's bond markets.

3

PAIF is benchmarked to the Markit iBoxx ABF Pan-Asia Index.

4

PAIF invests in the sovereign and quasi-sovereign local currency bonds of eight major Asian economies, including China, Hong Kong, Indonesia, Korea, Malaysia, Philippines, Singapore and Thailand.

5

Domiciled in Singapore, PAIF was listed in Hong Kong in 2005 (SEHK stock code: 2821) and cross-listed in Japan in 2009 (TSE stock code: 1349).

6

PAIF is currently the largest fixed income ETF in Asia Pacific1.

7

Since launching, PAIF's assets under management has grown more than 3.5-fold to US$3.6 billion2.

8

PAIF has been generating positive returns since its inception, delivering an annualized return of 4.31%3.

9

PAIF has delivered positive returns in 12 out of the past 15 calendar years4.

10

PAIF provides investors with a potential stream of income, with the current yield at 2.59% per annum5 (Dividend amount or dividend rate is not guaranteed).

11

Offering easy and low-cost access to Asia's local bond markets, PAIF allows investors to diversify their portfolios with more than 350 local currency bonds in one single trade2.

12

With relatively low expense ratio of 0.19%6, investors can keep more of what they earn.

13

PAIF's portfolio has an average credit quality of A+2.

14

China's local bonds comprise around 25% of PAIF's exposure2, which allows the fund to benefit from the gradual opening up of China's bond market and the inclusion of Chinese bonds in global indices.

15

PAIF is a crucial part of the initiative to develop Asia's local bond markets. It started to participate in securities lending in June 2018 to deepen secondary market liquidity.

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Publication

Asian Fixed Income: Graduating from Emerging Market School

Asian bonds may still be a pupil in the broader emerging market asset class but in many ways they have already pulled ahead of many of their contemporaries. In this whitepaper, we will take a retrospective look at the Asian bond markets – specifically the local-currency space – exploring how it has matured into a class of its own and become a new global core holding. We will also look towards the future and make a case for why we believe Asian local currency fixed income remains a valuable addition to a portfolio.

Why invest in Asian Local Currency Bonds?

Favourable risk-return profile
The macro fundamentals of many Asian governments remain robust, and they will likely continue to be a growth driver as the global economy recovers. Investors, therefore, have an opportunity to obtain a good yield pickup without taking on excessive risk. In fact, Asian bonds have historically demonstrated a risk-return profile that is proportional to that of US Treasuries.
Potential for additional yield via local currency appreciation
We expect currency appreciation will continue to be an important source of potential returns moving forward. Current US-dollar strength has depressed currency gains in Asian local currency bonds, but over the medium to long term, there is a good chance of a rebound. In the meantime, dollar strength presents attractive entry opportunities for Asian local currency bonds.
A 'back to basics' diversified portfolio construction strategy
In the increasingly interconnected world, correlations between Asian local currency bonds and other major asset classes have inevitably risen. Still, they remain low enough to allow such assets to add valuable diversification benefits to investors' portfolios.

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OUR INSIGHTS

Sources

  • Bloomberg, as of 31 May 2020.
  • State Street Global Advisors, as of 31 May 2020.
  • State Street Global Advisors, as of 31 May 2020. Past performance information is not indicative of future performance. Investors may not get back the full amount invested. The computation basis of the annualized performance is based on net-of-fees returns in USD terms on NAV-to-NAV basis, with all distributions reinvested. Fund Inception Date: 29 June 2005. Past performance information: -0.09% (Year-to-date as of 31 May 2020), 7.91% (2019), 0.11% (2018), 9.35% (2017), -0.54% (2016) and -3.35% (2015).
  • State Street Global Advisors, as of 31 May 2020. The computation basis of the calendar-year performance is based on calendar year end, NAV-to-NAV, with dividend reinvested. Calendar-year performance shows by how much the PAIF increased or decreased in value during the calendar year being shown. Performance data has been calculated in USD, including ongoing charges and excluding subscription fee and redemption fee you might have to pay.
  • State Street Global Advisors, as of 31 May 2020. Current yield = (Total Dividend Per Unit in the Past 12 Months / Closing NAV Per Unit) x 100%. Dividend amount or dividend rate is not guaranteed.
  • Bloomberg, as of 31 May 2020. The ongoing charges figure is based on expenses for the year ended 30 June 2019. This figure may vary from year to year. The ongoing charges figure is calculated by adding the applicable charges and payments deducted from the assets of the PAIF and then dividing by the PAIF's average net asset value for the financial year.

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Markit Trademark

The Markit iBoxx ABF Pan-Asia Index (the "Index") referenced herein is the property of Markit Indices Limited ("Index Sponsor") and has been licensed for use in connection with the ABF Pan Asia Bond Index Fund ("PAIF"). Each party acknowledges and agrees that the PAIF is not sponsored, endorsed or promoted by the Index Sponsor. The Index Sponsor make no representation whatsoever, whether express or implied, and hereby expressly disclaim all warranties (including, without limitation, those of merchantability or fitness for a particular purpose or use), with respect to the Index or any data included therein or relating thereto, and in particular disclaim any warranty either as to the quality, accuracy and/or completeness of the Index or any data included therein, the results obtained from the use of the Index and/or the composition of the Index at any particular time on any particular date or otherwise and/or the creditworthiness of any entity, or the likelihood of the occurrence of a credit event or similar event (however defined) with respect to an obligation, in the Index at any particular time on any particular date or otherwise. The Index Sponsor shall not be liable (whether in negligence or otherwise) to the parties or any other person for any error in the Index, and the Index Sponsor is under no obligation to advise the parties or any person of any error therein.

The Index Sponsor makes no representation whatsoever, whether express or implied, as to the advisability of purchasing of selling the PAIF, the ability of the Index to track relevant markets' performances, or otherwise relating to the Index or any transaction or product with respect thereto, or of assuming any risks in connection therewith. The Index Sponsor has no obligation to take the needs of any party into consideration in determining, composing or calculating the Index. No party purchasing or selling the PAIF, nor the Index Sponsor, shall have any liability to any party for any act or failure to act by the Index Sponsor in connection with the determination, adjustment, calculation or maintenance of the Index.

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