A CHANCE TO TRADE IN GOVERNMENT BONDS NEW FUND LETS THEM
DO SO WITH A MINIMUM INVESTMENT OF $1,000 AND TRANSACT ON THE
SGX
Source: Today Online
posted on: 25 Aug 2005
THE ABF Singapore Bond Index Fund, Singapore's first exchange
traded bond
fund saw a lively turnout at a seminar held on Tuesday in
conjunction with
the fund's Initial Public Offer (IPO).
Managed by DBS Asset Management, the Fund will initially invest in
a
portfolio of high quality, Singapore Government and
quasi-Government
bonds+. The portfolio will closely mirror the basket of bonds in
the iBoxx
ABF Singapore Bond Index. The index currently has about 35 bond
issues.
Mr Ronald Howe, in his opening address, spoke of the increasing
demand for
Asian bonds from both Asian and developed market investors. The
Singapore
bond market is also well positioned to benefit from such inflow of
funds.
DBS Asset Management explained to the seminar attendees that
investors
with a minimum investment of $1,000 will buy into a portfolio of
high
credit quality Singapore Government bonds and quasi-Government
bonds.
Typically investors would require a larger outlay of capital to get
the
same diversification.
The Fund, once it is listed on the Singapore Exchange from Aug 31,
2005,
will also offer convenience and accessibility to investors.
Investors can
buy and sell Fund units traded on the SGX through their
regular
stockbrokers just as they would for any other listed stocks.
Investors will also benefit from the low cost of the Fund. Unlike
normal
unit trusts, there is no sales charge. Management fee is set at
0.15 per
cent per annum of the net asset value. However normal brokerage
fees are
applicable for trades done via the stock exchange.
Mr Howe commented that the Fund is designed for investors who
prefer lower
risk and lower cost. Investors seeking a better return than bank
deposits
or to lower the risk of their investment from equities may wish
to
consider this Fund.
The IPO, which started on Aug 15, will end at noon on Aug 26.
Applications
for the IPO can be done at any DBS/POSB ATMs. The prospectus is
available
at any DBS branch.
+The fund may in future invest in bonds denominated in Singapore
dollars
issued by other Asian governments, agencies of other Asian
governments, or
other quasi-Asian government entities if the composition of the
iBoxx
ABF Singapore Bond Index includes such bonds. In that event, the
credit
risk of the investments of the Fund may differ from its credit risk
now.
The prospectus is available at all DBS and POSB branches when the
offer
or invitation is made. Investors should read the prospectus
before
deciding to subscribe for or purchase units in the Fund.
The value of the Fund and the income from them, if any, may fall or
rise.
The annual distributions are dependent on the Fund's performance
and not
guaranteed. Investors may only redeem units with the Manager under
certain
specified conditions and the listing of the Fund on the Stock
Exchange of
Singapore does not guarantee a liquid market for the units.
Closing date at noon today (26 Aug)
was at the retail seminar at DBS auditorium the day before, where
DBS was promoting the fund's IPO. The fund started with 330mil and
grew to 335mil.
The fund manager was answering a lot of tough questions regarding
how much dividend yield and capital gain he would project. The past
gains were mainly due to the flattening of the yield curve.
Those who are interested to reduce the volatility of their stock
portfolio, may want to have a look at this stock (which invest in
bonds). 
