The Fund is a globally-diversified balanced fund that is accessible to all investors. The Fund offers a clear cost advantage whereby the cost of investing* is capped at 0.50% per annum (p.a.). The Fund is designed for SGD-based investors and utilizes both passive and active strategies to better weather business cycles. The Fund is also tailored for different risk profiles: there are two portfolios – Standard portfolio for lower risk appetite and Growth portfolio for higher risk appetite.

*Cost of investing refers to TER (Total Expense Ratio). The total expense ratio (TER) is the sum of various identified operating expenses charged on an ongoing basis to the fund’s assets as a percentage of the fund’s average net asset value calculated over a 12-month period at the close of the annual and semi-annual financial statements of the fund.

The Fund aims to generate capital appreciation over the long term by investing primarily in a diversified portfolio of active funds and Exchange Traded Funds (ETFs), across different geographical regions and asset classes. There are two portfolios for the Fund – Standard and Growth.

The Standard portfolio targets a below average level of portfolio risk and will be invested in a mix of asset classes that aims to suit an investor with a below average tolerance for risk.

The Growth portfolio targets an above average level of portfolio risk and will be invested in a mix of asset classes that aims to suit an investor with an above average tolerance for risk.

Active management involves having fund managers spotting the best opportunities, with the aim of outperforming the market compared to a specific benchmark. Active fund managers are backed by resources such as a team of researchers and analysts to provide them with the best chance of outperformance.

Passive management does not involve stock picking as it mirrors the investment holdings on an index and its performance. With passive management, costs of management are reduced as there is no need for extensive research, and hence passively managed funds are generally cheaper to purchase than active ones.

Our strategy seeks to combine the benefits of passive and active investing. The Fund will utilize active managers in markets that are less efficient where there are opportunities for outperformance and passive ETFs where markets are more efficient.

The total expense ratio (TER) is a measure of the cost of investing (of a fund) to the investor. The total expense ratio (TER) is the sum of various identified operating expenses charged on an ongoing basis to the fund’s assets as a percentage of the fund’s average net asset value calculated over a 12-month period at the close of the annual and semi-annual financial statements of the fund. The size of the total expense ratio (TER) is important to investors as the costs come out of the fund, affecting investors’ return.

For example, if a fund generates a return of 7% for the year, but has a TER of 2%, the 7% gain is greatly diminished, to about 5%.

These are two portfolios created to cater to different risk appetites. For Growth, there will be a higher exposure to equities – 70% allocation to equities and 30% to bonds. For Standard, it will be the opposite, – 70% allocation to bonds and 30% to equities. Both portfolios have customized reference benchmarks to reflect the different risk profiles.

The management fee is 0.25% p.a. Coupled with a cap of 0.5% p.a. for TER, we are able to produce a cost advantage of 1.0% p.a. (absolute difference) over the industry average of 1.5% p.a. (Morningstar category: Global Flexible Allocation, 31 December 2017).

We are able to achieve cost advantage by keeping our management fee low and avoiding charging two layers of management fees. We are also able to persuade our service providers to partake in our low-cost exercise.

No, the management fee of 0.25% p.a. is charged only once, as the underlying active funds’ management fees will be fully rebated**. This rebate will be done on a monthly basis.

**Rebate will only be for underlying Lion Global Investors’ funds.

The strategy will utilize active allocation with risk-based rebalancing to improve risk-adjusted returns. This active allocation serves two functions – to bring portfolios back to intended allocations and adjust portfolios as economic outlook and risk aversion change.

Instead of following the typical market capitalization benchmark allocation, we are utilizing GDP-weighted equity allocation. Our view is that global equity allocation based on market capitalization is concentrated in US equity and is not reflective of global GDP contribution. A GDP-weighted equity allocation better captures the growth potential of growth areas in the world for example, China.

Currency hedging is performed to minimize foreign exchange risk of the bond allocation. Since the portfolio is designed for SGD investors, SGD-hedging reduces investors’ exposure to other currencies.

The portfolios will be rebalanced actively to adapt to changes in market environment.

Firstly, the total expense ratio of the Fund is capped at 0.5% p.a., which is significantly lower than other similar global funds. For an investor, this cost saving alone would lead to higher return through compounding effect over time.

Secondly, the Fund also offers a low minimum investment amount of SGD100.

Thirdly, the Fund combines active and passive strategies so as to utilize active managers in markets where there are opportunities for outperformance and passive ETFs where markets are more efficient.

The minimum initial investment amount is SGD100.

The management fee is 0.25% p.a. for both Standard and Growth portfolios.

There is only one share class for both Standard and Growth portfolios – SGD Class (Accumulation).

This Fund is not positioned to be a dividend-paying fund so we do not intend to make any distributions.

For any interest in purchase or sales of units of the Fund, please contact our participating partners.

For more information about the Fund, please visit the fund page or contact our participating partners..