Fund Update – LionGlobal All Seasons Funds

 

The LionGlobal All Seasons Funds (Standard and Growth) were launched in 2018 to aim to help investors tide through all seasons of market volatility.

In view of the changing investment climate, we would like to highlight the tactical asset allocation adjustment that we will be making to the LionGlobal All Seasons Fund (Standard) and LionGlobal All Seasons Fund (Growth) while maintaining diversification across asset classes and regions.

The structural disinflationary forces that were prevalent in recent decades have been shifting in an inflationary direction. These underlying trends emerged even before Covid-19 hit, but were accelerated by pandemic-related disruptions. We are witnessing a reversal of globalisation, where companies that have historically relied on the low operational costs in China, are looking to reshore and diversify their supply chains amidst growing geopolitical tensions and disruptions caused by COVID. This is further supported by China’s weakening demographic trends, rising wages and environmental costs of decarbonisation, which suggest that it may not be able to maintain its manufacturing competitiveness in the long run. A lower population growth and a shrinking workforce in developed markets, along with tighter curbs on immigration have also led to a mismatch of skill sets and in turn led to a demand for higher wages. Globally, the rising wealth inequality has morphed into populist and progressive policies that seek to raise the minimum wages for the lower income workers. In addition to the commodity price shock driven by the protracted Russia-Ukraine war, the sanctions placed on Russian exports is likely to last for a long time if we take the example of Iran, which has been under US sanctions for more than 40 years. Therefore, companies globally are likely to be faced with a rising cost structure and the longer-term inflation outlook is skewed to the upside.

Historically, commodities are good diversifiers to hedge in an inflationary environment. Global supplies of oil and metals are likely to remain tight, exacerbated by the war in Ukraine and sanctions against Russia. On the other hand, demand remains resilient on the back of the post-pandemic economic reopening and ongoing recovery in Chinese demand. As a result, prices are likely to remain higher for longer, and thus the fund will seek to add exposure to commodities to combat the stubbornly high global inflation.

Following the growth-focused equity market dominance over the past decade, we are also seeing a revival in value. There are numerous crosscurrents facing markets today including elevated inflation, tightening monetary policy and growing downside growth concerns. These conditions have pushed equity markets into increasingly defensive plays, with sectors such as energy, materials and healthcare outperforming their growth counterparts since the start of the year. As markets brace for stagflation or a potential recession, this rotation is expected to continue, with value holding onto its lead. Furthermore, the valuation gap between growth and value remains historically stretched, in favor of the latter. In particular, defensive value stocks with stable earnings and cash flows, and high dividend yields are poised for sustained outperformance against the backdrop of rising rates and persistently high inflation. Therefore, the LionGlobal All Seasons Fund (Standard) and LionGlobal All Seasons Fund (Growth) may rebalance part of its exposure towards value to capitalise on the value spread.

 

Download Report

 

Disclaimer

This advertisement or publication has not been reviewed by the Monetary Authority of Singapore. It is for information only, and is not a recommendation, offer or solicitation for the purchase or sale of any capital markets products or investments and does not have regard to your specific investment objectives, financial situation, tax position or needs.

You should read the prospectus and Product Highlights Sheet of the relevant fund which are available and may be obtained from Lion Global Investors Limited (“LGI”) or any of its distributors, consider if a fund is suitable for you and seek such advice from a financial adviser if necessary, before deciding whether to invest in the fund. Applications for units in our funds must be made on forms accompanying the prospectus.

Investments in our funds are not obligations of, deposits in, guaranteed or insured by LGI or any of its affiliates and are subject to investment risks including the possible loss of the principal amount invested. The performance of a fund is not guaranteed and the value of units in a fund and the income accruing to the units, if any, may rise or fall. Past performance, payout yields and payments as well as any predictions, projections, or forecasts are not necessarily indicative of the future or likely performance, payout yields and payments of a fund. Any extraordinary performance may be due to exceptional circumstances which may not be sustainable. Dividend distributions, which may be either out of income and/or capital, are not guaranteed and subject to LGI’s discretion. Any such dividend distributions will reduce the available capital for reinvestment and may result in an immediate decrease in the net asset value of the fund. Any references to specific securities are for illustration purposes and are not to be considered as recommendations to buy or sell the securities. It should not be assumed that investment in such specific securities will be profitable. There can be no assurance that any of the allocations or holdings presented will remain in the fund at the time this information is presented. Any information (which includes opinions, estimates, graphs, charts, formulae or devices) is subject to change or correction at any time without notice and is not to be relied on as advice. You are advised to conduct your own independent assessment and investigation of the relevance, accuracy, adequacy and reliability of any information or contained herein and seek professional advice on them. No warranty is given and no liability is accepted for any loss arising directly or indirectly as a result of you acting on such information. The fund may, where permitted by the prospectus, invest in financial derivative instruments for hedging purposes or for the purpose of efficient portfolio management. LGI, its related companies, their directors and/or employees may hold units of a fund and be engaged in purchasing or selling units of a fund for themselves or their clients.

©Lion Global Investors® Limited (UEN/ Registration No. 198601745D). All rights reserved. LGI is a Singapore incorporated company, and is not related to any corporation or trading entity that is domiciled in Europe or the United States (other than entities owned by its holding companies).

company.

Share this post

Other INSIGHTS

  The LionGlobal All Seasons Funds (Standard and Growth) were launched in 2018 to aim to help investors tide through all seasons of market volatility.

View More »

What is the difference between a Unit Trust and an ETF? Both Unit Trusts (also known as Mutual Funds in the United States) and ETFs

View More »

Our 2022 outlook piece at the beginning of the year was titled “Road Bumps Ahead” and markets have corrected since. Our view is that there

View More »

Volatility has been the name of the investing game in 2022. Markets across board – equities, bonds, credit and cryptocurrencies – continue to face selling

View More »

What are your current views on the Japanese equity market? What are some of the potential opportunities in the market and what are the risks

View More »

What is it? The 50/30/20 rule was coined by Elizabeth Warren (ex US senator) and explained in her book “All Your Worth: The Ultimate Lifetime

View More »

This advertisement or publication has not been reviewed by the Monetary Authority of Singapore. By accessing or downloading any of the information or publications provided within LGI Direct, you are deemed to have consented to the Terms of Use (see below) and the conditions and disclaimers on the basis of which, they are here provided.

Comparing the TER cost for 20 years

Here’s the difference a low cost advantage makes to cost savings

Here's how much you pay

$190,272.13
Selected TER 1.00% p.a.

$99,912.57
LionGlobal All Seasons Fund 0.5% p.a.

By investing a fund with low TER

You may save $90,359.56 over 20 years based on an initial investment of $1,000,000 compared with a TER of 0.5% p.a.

It is enough to provide for a monthly expenditure of $3,000 over the next 2 years and 6 months.

Here's how much you pay

$271,950.61
Selected TER 1.50% p.a.

$99,912.57
LionGlobal All Seasons Fund 0.5% p.a.

By investing a fund with low TER

You may save $172,038.04 over 20 years based on an initial investment of $1,000,000 compared with a TER of 0.5% p.a.

It is enough to provide for a monthly expenditure of $3,000 over the next 4 years and 9 months.

Here's how much you pay

$345,744.19
Selected TER 2.00% p.a.

$99,912.57
LionGlobal All Seasons Fund 0.5% p.a.

By investing a fund with low TER

You may save $ 245,831.62 over 20 years based on an initial investment of $1,000,000 compared with a TER of 0.5% p.a.

It is enough to provide for a monthly expenditure of $3,000 over the next 6 years and 9 months.

TER (Total Expense Ratio) 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 for all the p.a. tabs (1.0%, 1.5%, 2.0%).

The above scenarios are for illustration purpose only. Past performance, as well as any prediction, projection or forecast on the economy, securities market or the economic trends of the markets are not necessarily indicative of the future or likely performance of the funds. Calculations based purely on costs with no market movement or investment returns.