Glossary

Bond An instrument of debt issued by a corporation or government to raise capital. Bonds are interest bearing and promise to pay the holder a specified sum of money at its maturity plus interest at given intervals.

Bond Price Expressed as a % of the par value of a bond.

Call Provision Call Provision allows the issuer to call back the bond prior to maturity.

Coupon Rate The annual coupon payments divided by the bond’s face (or par) value.

Convexity A measure of the relationship between bond duration and interest rates. May also be referred to as a measure of the non-linear (or second order) relationship of bond prices to changes in interest rates.

Creation Dealing Deadline The time by which all orders to create units must be received by the Receiving Agent. Otherwise, the orders will be deemed to be received the next Dealing Day.

Creation Unit Units of the exchange traded fund (ETF) may be subscribed and redeemed through Authorized Participants in multiples of a Creation Unit.

Current Yield The annual coupon payments divided by the current bond price.

Custodian A financial institution that holds the securities of the fund for safekeeping, to protect unitholders from theft or loss.

Dealing Day Any day on which commercial banks are open for business in Singapore and Hong Kong, the Stock Exchange of Hong Kong is open for normal trading, and the Markit iBoxx ABF Pan-Asia Index is compiled and published.

Dilution Levy is an allocation of the funds trading costs paid by professional investors, the proceeds are held within the fund. The levy is used to protect the majority of investors from costs of trading by a minority.

Duration A measure of the sensitivity of the price of a bond to a change in interest rates. May also be referred to as the average maturity of bond coupon and principal repayments.

EMEAP Refers to The Executives' Meeting of East Asia and Pacific Central Banks, comprising the Central Banks and Monetary Authorities in the Asia-Pacific region: Reserve Bank of Australia, People's Bank of China, Monetary Authority of Hong Kong, Bank Indonesia, Bank of Japan, Bank of Korea, Bank Negara Malaysia, Reserve Bank of New Zealand, Bangko Sentral ng Pilipinas, Monetary Authority of Singapore and Bank of Thailand.

Exchange Traded Fund (ETF) An investment product that tracks an index, commodity or basket of assets in a similar manner to an index mutual fund, but trades like a stock on an exchange.

Ex-Dividend Date Dealing day falling immediately before the 15th day of December and June or such determined by the Manager with the approval of the Trustee.

Fixed Rate Bond A bond that pays a set level of interest until its maturity.

Floating-Rate Bond Also known as a variable-rate bond, a floating-rate bond pays coupons calculated based on variable rates, meaning rates that periodically change according to the rise and fall of its reference benchmark.

Fund Manager Responsible for determining and implementing the fund’s investment strategy and trading activities

Hard Currency Emerging Market Bond A bond issued by an emerging market country or corporation in major currencies such as the US dollar or euros.

Junk Bond Also known as a high yield or sub-investment grade bond. Defined as a bond with a rating below investment grade (i.e. BBB-), as judged by the credit ratings agencies. Generally offers a higher yield than an investment grade bond, at a higher level of credit risk (including the risk of default).

Local Currency Bond A bond that is denominated in the currency of the country of issue.

Maturity Date The date on which final payment is due.

Par Value The value of a bond as expressed on its face value without consideration to any premium or discount. It also signifies the dollar value on which bond interest is figured. The principal amount at which the issuer contracts to redeem the bond at maturity.

Perpetual Bond Bonds that are never paid off and have no maturity dates.

Put Provision Put Provision enables investors to have an option to sell a bond back to the issuer at par value after a certain period prior to maturity.

Quasi-Sovereign Bond Comprises bonds issued by regions, agency, government-guaranteed, and supranational borrowers.

Receiving Agent Provides services in connection with the creation and redemption of exchange-traded fund (ETF) units by Authorized Participants, including receiving creation and redemption orders from and issuing settlement instructions to Authorized Participants, as well as facilitating the exchange of cash and units on the transaction settlement day.

Record Date Determined by the Fund Manager as the date for the purpose of determining the unitholders of record entitled to receive any distributions of dividends.

Redemption Dealing Deadline The time by which all orders to redeem units must be received by the Receiving Agent; otherwise, the orders will be deemed to be received the next Dealing Day.

Securities Lending The lending of securities (normally held in the fund) to borrowers on a temporary basis for a fee, with the objective of increasing returns for fund unitholders.

Sovereign Bond A bond issued by a central government.

Trading Lot Size A unit that measures a transaction amount. ETF shares may be bought or sold as multiples of this number of shares (or unit) in a transaction. May also be referred to as board lot size.

Transaction Date The date on which an order to create/redeem units is received by the Receiving Agent.

Trustee Has fiduciary responsibility over the assets of the fund to ensure they are managed in accordance with the conditions of the trust

Valuation Point The point in time when the net asset value (NAV) per share of an exchange-traded fund (ETF) is calculated.

Yield The rate of annual income return on an investment expressed as a percentage.

Yield Curve A graph that plots bond yields at various times to maturity.

Yield to Maturity The total return on a bond if the bond is held to maturity.

Zero-Coupon Bond This kind of bond is sold at a discount from its value, which means investors receive return in the form of capital appreciation over the life of the bond rather than interest installments.