Download Report

BDO UNIBANK, INC. – TRUST AND INVESTMENTS GROUP
BDO PESO BOND FUND
KEY INFORMATION AND INVESTMENT DISCLOSURE STATEMENT
Month Ended February 27, 2015
FUND FACTS
Classification: Medium Term Bond Fund Trust Fee: 1.0% p.a.
Launch Date: April 1, 2005
Initial NAVPU: PHP1,000.00
Minimum Investment: PHP10,000.00
Minimum Additional Investment:
PHP10,000.00
Minimum Holding Period: 30 calendar
days
Bloomberg Ticker: BDOPBF <Index>
Early Redemption Fee: 0.50% of Original
Participation Amount
Net Asset Value per Unit (NAVPU):
Dealing Period: Up to 12:00nn of any
PHP1,854.1497
banking day
Total Fund NAV: PHP2.693 Billion
Redemption Settlement: One (1) banking
day after the notice of redemption is
NAVPU Availability: Every trading day at received
7:00 p.m.
FEES*
Trustee Fees:
0.0778%
Custodianship Fees:
0.0028%
External Auditor Fees:
0.0002%
Financial Information Service Fees:
0.0004%
*As a percentage of average daily NAV for the month valued at PHP 2.698 Billion.
BDO Trust and Investments Group
Standard Chartered Bank, Citibank
Punongbayan & Araullo
Bloomberg, Reuters
INVESTMENT OBJECTIVE AND STRATEGY
The Fund aims for capital preservation and income generation by investing in short to long-term bonds and other similar fixed
income securities. The Fund’s benchmark is the HSBC 1-5Yr Bond Index.
CLIENT SUITABILITY
A client profiling process should be performed prior to participating in the Fund to guide the prospective investor if the Fund is
suited to his/her investment objectives and risk tolerance. Clients are advised to read the Declaration of Trust/Plan Rules of the
Fund, which may be obtained from the Trustee, before deciding to invest.
The BDO Peso Bond Fund is primarily suitable for individual and corporate investors with moderate risk appetite and who are
looking for higher yields and are willing to take the attendant risks due to the nature of the Fund’s investments.
Participants/trustors are recommended to stay invested in the Fund for at least three (3) years.
KEY RISKS AND RISK MANAGEMENT
You should not invest in this Fund if you do not understand or are not comfortable with the accompanying risks.
Interest Rate Risk. This is the possibility for an investor to experience losses due to changes in interest rates. The purchase and
sale of a debt instrument may result in profit or loss because the value of a debt instrument changes inversely with prevailing
interest rates.
Market/Price Risk. This is the possibility for an investor to experience losses due to changes in market prices of securities. It is
the exposure to the uncertain market value of a portfolio due to price fluctuations.
Liquidity Risk. This is the possibility for an investor to experience losses due to the inability to sell or convert assets into cash
immediately or in instances where conversion to cash is possible but at a loss.
Credit Risk/Default Risk. This is the possibility for an investor to experience losses due to a borrower’s failure to pay the principal
and/or interest in a timely manner on instruments such as bonds, loans, or other forms of security, which the borrower issued.
Reinvestment Risk. This is the risk associated with the possibility of having lower returns or earnings when maturing funds or the
interest earnings of funds are reinvested.
THE UIT FUND IS NOT A DEPOSIT AND IS NOT INSURED BY THE PHILIPPINE DEPOSIT INSURANCE CORPORATION
(PDIC).
RETURNS CANNOT BE GUARANTEED AND HISTORICAL NAVPU IS FOR ILLUSTRATION OF NAVPU
MOVEMENTS/FLUCTUATIONS ONLY.
WHEN REDEEMING, THE PROCEEDS MAY BE WORTH LESS THAN THE ORIGINAL INVESTMENT AND ANY LOSSES
WILL BE SOLELY FOR THE ACCOUNT OF THE CLIENT.
THE TRUSTEE IS NOT LIABLE FOR ANY LOSS UNLESS UPON WILLFUL DEFAULT, BAD FAITH OR GROSS
NEGLIGENCE.
For more information, visit our website at www.bdo.com.ph/trust or call (02) 840-7000 locals 4265 / 4244 / 4035 / 7032
or email us at [email protected]
BDO UNIBANK, INC. – TRUST AND INVESTMENTS GROUP
BDO PESO BOND FUND
KEY INFORMATION AND INVESTMENT DISCLOSURE STATEMENT (Page 2)
Month Ended February 27, 2015
FUND PERFORMANCE AND STATISTICS
AS OF FEBRUARY 27, 2015
(Purely for reference purposes and is not a guarantee of future results)
NAVPU over the past 12 months
Highest
PHP 1,858.2678
Lowest
PHP 1,795.3925
Fund’s NAVPu vs Benchmark & Risk Free Rate
Statistics
Weighted Ave. Duration
1,900
1,800
1,700
1,600
1,500
1,400
1,300
1,200
1,100
1,000
1-Apr-05
BDO Peso Bond Fund
HSBC 1-3Yr/1-5Yr Bond Index (net)
91-d T-Bill Auction Rate (net)
27-Feb-15
Cumulative Performance (%)
Period
BDOPBF1
Risk-Free
Rate4
0.10%
0.29%
0.20%
1.04%
2.43%
6.23%
27.49%
2.45%
Benchmark2/3
-0.17%
0.12%
One Month Ago3
3
0.69%
0.67%
Three Months Ago
3
1.34%
0.77%
Year to Date
2
3.10%
2.36%
One Year Ago
2
12.33%
8.75%
Three Years Ago
29.02%
18.31%
Five Years Ago2
Since Inception
85.41%
64.24%
5
6.33%
5.06%
CAGR Since Inception
1
Past performance is not indicative of future performance.
2
The Fund's benchmark is the HSBC 1-3Yr Bond Index, commencing August
31, 2005
3
The Fund's benchmark is the HSBC 1-5Yr Bond Index, commencing October
15, 2014.
4
Refers to 91-day T-Bill rates
5
Compounded Annual Growth Rate (CAGR) measures how fast an
investment would have grown over time if it grew at a steady rate instead of
actual varying rates.
Volatility, Past 1 Year
Sharpe Ratio9
Information Ratio10
Weighted Ave.Yield (net)11
8
Volatility measures the degree to which the
Fund fluctuates vis-à-vis its average return over
a period of time.
9
Sharpe Ratio is used to characterize how well
the return of a Fund compensates the investor
for the level of risk taken. The higher the
number, the better.
10
Information Ratio measures reward-to-risk
efficiency of the portfolio relative to the
benchmark. The higher the number, the higher
the reward per unit of risk.
11
Net of taxes and trust fees
Portfolio Composition
Corp
Bonds
30.50%
Short-term
deposits
0.03%
GS
57.92%
Corp
Bonds
34.51%
Top Ten Holdings (%)
Coupon Rate
Maturity
January 2015
SDA
11.55%
6
Issue
4.26
2.27%
0.91
0.27
2.29%
8
February 2015
% of Portfolio
FXTN
3.87500%
11/22/19
4.12500%
08/20/24
FXTN
7
2.50000%
03/12/15
SDA
5.00000%
08/18/18
FXTN
2.50000%
03/13/15
SDA
6.60000%
04/02/22
San Miguel Bond 2022
3.50000%
03/20/21
FXTN
8.00000%
07/19/31
FXTN
6.27310%
06/08/19
Filinvest Bond 2019
San Miguel Bond 2019
5.93000%
04/02/19
Total
6
The complete list of portfolio holdings is available upon request
7
BSP Special Deposit Account
7.50%
7.02%
6.51%
6.49%
6.34%
4.02%
4.01%
3.67%
3.38%
3.26%
52.21%
SDA
12.85%
Short-term
deposits
1.07%
GS
51.57%
BDO UNIBANK, INC. – TRUST AND INVESTMENTS GROUP
BDO PESO BOND FUND
KEY INFORMATION AND INVESTMENT DISCLOSURE STATEMENT (Page 3)
Month Ended February 27, 2015
Best Performance (Past Five Years)
Inclusive Dates
02/26/2010 – 02/03/2015
Biggest Gain
29.32%
No. of Days to Achieve
1,803 days
Maximum Drawdown and Recovery in NAVPUs12 (Past Five Years)
Maximum Drawdown Period
Biggest Loss
Recovery Period (days)
51 days
01/04/2011 – 02/28/2011
-2.08%
12
Maximum Drawdown is the maximum percentage loss that a fund incurs over a time period.
Maximum Drawdown Period is the length of time the maximum drawdown occurs.
Recovery Period is the length of time taken by a fund to surmount its maximum drawdown.
OTHER DISCLOSURES
INVESTMENT POLICY / PROSPECTIVE INVESTMENTS
The Fund may invest in deposits in the trustee’s bank or in other banks, securities issued or guaranteed by the Philippine
Government or the BSP, tradable securities issued by any supranational entity and exchange-listed fixed income securities.
Subject to BSP guidelines and the Trustee's Trust Committee approval, the Fund may also avail itself of financial derivative
instruments solely for the purpose of hedging risk exposures, as well as invest in other tradable outlets/categories as may be
deemed suitable for the Fund.
OUTLOOK AND STRATEGY
January Consumer Price Index (CPI) further fell to 2.4% from the previous month's 2.7%, failing to reflect the slight increase in oil
prices, which rose to $60/barrel. While other countries such as China and Indonesia began cutting rates, citing the need to monitor
global trends of policy rate cuts, the BSP maintained its policy stance. Yields of government securities rose after bids for the 10yr
auction was rejected, pushing the yields of securities maturing 2024 up by 13 basis points. Belly securities slightly increased up to
10 basis points, while the longer part of the curve remained stable. PBF's portfolio was further rebalanced during the month,
increasing the Fund's duration.
RELATED PARTY TRANSACTIONS
The Fund has investments and trade transactions with BDO Unibank, Inc., its subsidiaries and related parties, as follows:
BDO Unibank, Inc.
SM Group
SM Investments Corp.
Transaction
Time Deposit Placement
Investment in Bonds
Market Value (PHP Mln)
55.84
Investments in the said outlets were approved by the Trust Committee. Likewise, all related party transactions are conducted on an
arm’s length and best execution basis and within established limits.