The Global Bond Fixed Maturity 2025 Fund (“The Fund”) has an attractive indicative net yield of 3% p.a over a fixed 4-year period. This yield can be boosted to over 10% p.a. with portfolio financing. (See details below)
Why use portfolio financing to subscribe to Fixed Maturity Funds?
The Fund will be launching in a few weeks. If you are keen to subscribed, please indicate your interest above. In particular, portfolio financing will take a few days to arrange, so it would be best to secure the loan facility early.
Note that The Fund is classified as a Specified Investment Product and is available to Accredited Investors or if you invest a minimum of S$200,000.
Fixed Maturity Funds are usually available through private banks only. InvestDIY is proud to be the exclusive distributor in Singapore offering this tranche of Aberdeen Standard Fixed Maturity Fund!
Have a question you need answered?
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Indicate your interest above. If you wish to apply for portfolio financing, we will send your information to CIMB to set up an appointment.
We will invite you to fill an online application form once the Initial Offering Period starts.*
Transfer your funds into the trading account within the Initial Offering Period.
Near the fund inception date, you will receive a notification to authorise the trade. Please authorise it in order to proceed.
Note: The propsectus, PHS and all relevant documents will be available on this web page once the Initial Offering Period starts. The links to documents will also be emailed to you after you complete the online application form (Step 2 above).
Portfolio financing is commonly applied to Fixed Maturity Funds to boost returns because of the expected yield differential. Check out our case study on how this works below. Portfolio financing on your existing unit trusts++ can be provided by CIMB or you may have other credit facilities that provide you with low financing cost.
Ms. A, has $100,000 in existing investments with iFast and uses portfolio financing to invest in Aberdeen Standard's Global Bond Fixed Maturity Fund. These funds are in the CIMB Approved Funds List and have a Loan-to-Value ratio of 70%.
Ms. A is able to obtain a loan-to-value of 70% on her existing $100,000 assets with iFast. Subject to CIMB's credit review, this means that she is able to borrow up to $70,000.
E女士 Ms. A
Ms. A decides to invest a total of $72,000 into The Fund, using $70,000 from the financing provided by CIMB and an additional $2,000 cash.
Each year, she gets $216 in dividends net of fees and loan interest repayments+. This means that Ms. A will get over 10% p.a. based on her cash investment of $2,000!
Total Investment Amount
Expected dividend per year for 4 years after fees and loan interest repayment
(Based on cash outlay and high dividend from total investment)
+ Assuming 3% p.a. return on The Fund, less fees and loan repayment at 1 month SIBOR + 1.25%. 1 month SIBOR rate published by The Association of Banks in Singapore was 0.28126% as at 2 March 2021.
The Fund has a 4-year term provides an indicative return of 3% p.a.
|Fund date inception||12 April 2021|
|Maturity date||4 years from inception|
|Subscriptions/redemptions||Closed for subscriptions after inception; Daily liquidity for redemption|
Yes, a redemption charge or dilution adjustment will apply. **
|Wrap fee p.a.||
With portfolio financing on iFast:
AUM at or below S$500,000: 60 bps p.a.
AUM above S$500,000: 50 bps p.a.
Without portfolio financing on FAME:
20 bps p.a.
Platform fee p.a.
With portfolio financing on iFast:
First S$100,000: 28bps
Next S$150,000: 25bps
Next S$250,000: 20bps
Above S$500,000: 10bps
AUM above S$1m with iFast: Waived
Without portfolio financing on FAME:
1. Will the fund definitely launch?
The fund will launch only if there is a total minimum amount of US$100m from all its investors. So there is a chance that the fund will not launch.
2. What happens to my money if The Fund is not launched?
Your monies will be returned to your trading account with no penalties.
3. I already have a FAME account tagged to InsureDIY. Do I need another account?
No, you do not need to set up another account unless you wish to use portfolio financing through iFast. However, if you intend to invest less than S$200,000 in The Fund, we will request documentation from you to evidence that you are an Accredited Investor.
4. Why do I have to apply for a wrap account? I already have an account with iFast/FAME with another advisor.
* You will be asked to complete the online application form when the Initial Offering Period starts. As part of the application, a wrap account will be opened for you.
The wrap account is on a platform run by iFast if you choose to pledge your assets under the iFast platform for portfolio financing and on FAME if you choose not to portfolio finance with iFast.
The platform is authorised to collect monies during the Initial Offering Period and to execute trades with fund managers like Aberdeen Standard. Your monies will be held in custody in trust. We do not collect your funds or handle your money directly.
As we are working with Aberdeen exclusively to distribute The Fund in Singapore, you would need to open a iFast / FAME account that is tagged to us so that we can help to execute the trade. The Fund is not available through any other distributor in Singapore.
5. Can I choose to use the iFast platform if I do not want to use portfolio financing.
We are able to offer a heavily discounted wrap fee under FAME. So if you do not wish to portfolio finance through iFast, then you will be directed to set up an account with FAME.
6. Is the return or capital guaranteed?
The Fund invests in about 50 issuers to ensure that it is not overly exposed to any one issuer. While this reduces the risk of defaults, both the return and capital are not guaranteed for this product and the value of the units in the scheme and the income accruing to the units, if any, may fall or rise.
7. What is the minimum and maximum invesment amounts?
The minimum invesment is S$20,000. There is no maximum investment amount.
8. Is there a penalty if I redeem my funds during the 4-Year period?
** The penalty is either the redemption charge or the dilution adjustment. The redemption charge is as follows:
|Years to Maturity Date||Redemption charge as a percentage of relevant share price (maximum)|
If the sum of:
(a) any dealing charges; and/or
(b) any bid/offer spread applied
is greater than the redemption charge, then the dilution charge will be applied. Please see details in documentation that will be provided during the Initial Offering Period.
9. What should I know about using portfolio financing?
++Like any other collateralised loan, there will be a margin call should the value of your assets used as collateral fall below the Loan-to-Value. It is therefore not advisable to drawdown entirely on the loan facility extended to you. The minimum facility limit will be S$50,000 and the maximum S$5m.
In addition, CIMB will be assessing your overall credit worthiness and there is no guarantee that CIMB will extend financing to you prior to their confirmation. CIMB will review your annual salary and other assets, but the collateral will be based on the fund value of the approved unit trusts under the iFast platform.
To qualify, you will need an existing portfolio with iFast that you are willing to pledge and open an iFast account with us and CIMB. If your current adviser has an active re-balancing strategy for you, they should be informed that you have pledged your assets.
You may have other credit facilities that provide you with low financing cost that you may wish to activate for the purposes of investing into The Fund.
10. Do I qualify as an Accredited Investor? Are only Accredited Investors allowed to invest in The Fund?
You would qualify as an Accredited Investor if:
As required by the regulations, we will be requesting documentary proof of the above before you can proceed to invest in The Fund.
You will also be able to invest in The Fund if you are not an Accredited Investor if your investment amount is S$200,000 and above.
11. When should I be thinking about investing into such fixed maturity funds?
If you are keen on savings or investment products and have enough assets such that this investment is not a substantial part of your portfolio, you can consider investing in fixed maturity funds.
In addition, there should not be any factors that are expected to impact you net assets significantly. e.g. expect to use the funds to purchase property soon.
This product provides an indicative return that is higher than guaranteed return products and fixed deposits, but it also has no guarantees.
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