FUND AND MARKET REVIEW. The fund dropped 3.57% since inception,
underperforming the benchmark, which delivered 4.76% in the same period. The
fund ...
May 2008
Lion Capital Multi Income Fund Review & Update FUND AND MARKET REVIEW
The fund dropped 3.57% since inception, underperforming the benchmark, which delivered 4.76% in the same period. The fund has so far paid out 6.5 cents per unit for the past 1 year. The fund has been affected by the overall market downtown since November 2007, due to downgrades in economic growth in Asia as a result of worries over US sub-prime problems, the broad US economy, and rising inflation across the region.
Lion Capital Multi Income Fund (Bid-Bid) Lion Capital Multi Income Fund (Offer-Bid) 1 Month SIBID + 2% （Benchmark)
1 Mth 31/03/08 30/04/08 % Chg 1.46 -3.61 0.23
3 Mths 31/01/08 30/04/08 % Chg 0.60 -4.43 0.75
6 Mths 31/10/07 30/04/08 % Chg -8.91 -13.47 1.75
1 Year 30/04/07 30/04/08 % Chg -3.85 -8.66 3.88
Since Inception to 30/04/08 % Chg A.G.R. -3.57 -3.01 -8.39 -7.11 4.76 3.99
Source: Morningstar, SGD, dividends reinvested net of all charges
When comparing the fund to the other equity indices, the fund has outperformed the overall market by 4 to 22%. The fund has outperformed the equity market as it has a higher allocation to cash and bonds. Comparitive Returns
Lion Capital Multi Income Fund MSCI World MSCI AC Asia Pacific exJapan MSCI China MSCI India MSCI Singapore
Current Correction 2/11/2007 30/04/2008 % Chg Outperformed by -8.02 -13.07 -18.69 -30.40 -20.50 -12.39
5.05 10.67 22.38 12.48 4.37
Source: Morningstar as at 30 April 2008, SGD, bid-bid pricing basis for Lion Capital Multi Income Fund, dividends reinvested net of all charges.
Currently, the asset allocation of the fund is about 49.1% in equities, about 38.1% in bonds and about 12.8% in cash and cash equivalent (As at 30 April 2008). The fund continues to maintain cash reserves for tactical allocations where opportunities arise. The portfolio has added to its income generating assets in order to improve the ability to deliver income going forward.
STRATEGY AND OUTLOOK With the corrections since the start of the year, valuations in most markets are fair, with pockets of cheapness in some markets and sectors, especially in Asia. The high growth economies of the region, such as China, are likely to moderate but are not likely to be derailed. Currently, equities are reasonably priced and earnings yields are high relative to bond yields. In view of the uncertainties in the near term, the fund is balanced in its equity and bond exposures, and continues to maintain cash reserves for tactical allocations where opportunities arise. The portfolio holds mainly defensive high yield names and we remain confident of our selection. While volatility is likely to remain high, we do also see increasing opportunities in both bond and equity market as the adjustment to a slower growth environment takes place. There will be a broader range in equity allocation in view of the market volatility and to make tactical allocations where opportunities arise. We prefer high quality names in financials, telecoms, technology, healthcare, property, REITs and business trusts. We are maintaining the bulk of our high yielding stocks in Singapore, and have built positions in Japan for its attractive valuation and Taiwan, which has potential as the cross trade relationship improves. On our fixed income portfolio, we remain constructive on Singapore bonds. Though real yields are low to negative, the likely appreciation of the real effective exchange rate is likely to support the relative value of Singapore dollar bonds. We continue to prefer the short end of the yield curve as the strong Singapore dollar is likely to mitigate the pressure on short-term rates whilst long-term rates curve tend to reflect inflation expectations and tend to correlate with US Treasuries and market volatility. We have also been adding positions in high grade non Singapore dollar bonds, like New Zealand, Australian and Sterling Pound. Lastly, the fund will also seek to write covered call options where appropriate. DISCLAIMER: This publication is for information only and does not have regard to your specific investment objectives, financial situation or particular needs. You should read the prospectus, available from Lion Capital Management Limited (“Lion Capital”) or its distributors, before deciding whether to subscribe for or purchase units of the Fund. Investments in the Fund are not obligations of, deposits in, guaranteed or insured by Lion Capital or any of its affiliates and are subject to investment risks, including the possible loss of the principal amount invested. The value of units in the Fund and the income accruing to the units, if any, may fall or rise. Past performance of the Fund and Lion Capital and any economic or market predictions, projections or forecasts, are not necessarily indicative of future or likely performance. Any opinion or view presented is subject to change without notice. Lion Capital shall not be liable for any losses or damages of any kind howsoever arising from you acting on any information herein. You may wish to seek advice from a financial adviser before making a commitment to purchase the Fund. In the event that you choose not to seek advice from a financial adviser, you should consider whether the Fund is suitable for you. This publication may be translated into the Chinese language. In the event of any ambiguity, discrepancy or omission between the English and Chinese versions, the English version shall apply and prevail. In the event of any ambiguity, discrepancy or omission between this publication and the prospectus, the contents of the prospectus shall apply and prevail.
Lion Capital Management Limited Incorporated in the Republic of Singapore One George Street #08-01 Singapore 049145 Tel: (65)6417-6800 Fax: (65)6417-6806 www.lioncapital.com.sg Co Reg No.: 198601745D A member of the OCBC Group
