BDO Peso Fixed Income Fund

BDO UNIBANK, INC. – TRUST AND INVESTMENTS GROUP
BDO PESO FIXED INCOME 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 29, 2005
Initial NAVPU: PHP1,000.00
Bloomberg Ticker: BDOPFIF <Index>
Early Redemption Fee: 0.50% of Original
Participation Amount
Minimum Investment: PHP10,000.00
Net Asset Value per Unit (NAVPU):
Dealing Period: Up to 12:00nn of any
PHP1,927.7701
banking day
Minimum Additional Investment:
Total Fund NAV: PHP6.266 Billion
Redemption Settlement: One (1) banking
PHP10,000.00
day after the notice of redemption is
Minimum Holding Period: 30calendar
NAVPU Availability: Every trading day at received
days
7:00 p.m.
Others: Available via the Easy Investment Plan (EIP), which allows the build up of funds through regular participation of at least
PHP1,000 per contribution.
FEES*
Trustee Fees:
0.0780%
Custodianship Fees:
0.0041%
External Auditor Fees:
0.0002%
Financial Information Service Fees:
0.0004%
*As a percentage of average daily NAV for the month valued at PHP 6.565 Billion.
BDO Trust and Investments Group
Standard Chartered Bank, Citibank
Punongbayan & Araullo
Bloomberg, Reuters
INVESTMENT OBJECTIVE AND STRATEGY
The Fund aims to provide a high level of income with preservation of principal and maintenance of liquidity by investing in a
combination of short to long-term 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 Fixed Income 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 that come with portfolios that may have investments with
longer tenors.
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 investments@bdo.com.ph
BDO UNIBANK, INC. – TRUST AND INVESTMENTS GROUP
BDO PESO FIXED INCOME 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 1,934.5173
Lowest
PHP 1,863.7996
Fund’s NAVPu vs Benchmark & Risk Free Rate
Statistics
Weighted Ave. Duration
4.35
7
2.64%
Volatility, Past 1 Year
0.83
Sharpe Ratio8
9
-0.12
Information Ratio
10
2.31%
Weighted Ave.Yield (net)
7
Volatility measures the degree to which the
Fund fluctuates vis-à-vis its average return over
a period of time.
8
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.
9
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.
10
Net of taxes and trust fees
2,000
BDO Peso Fixed Income Fund
HSBC 1-5Yr Bond Index (net)
91-d T-Bill Auction Rate (net)
1,800
1,600
1,400
1,200
1,000
29-Apr-05
27-Feb-15
Cumulative Performance (%)
Period
BDOPFIF1
Risk-Free
Rate3
0.10%
0.29%
0.20%
1.04%
2.43%
6.23%
26.96%
2.42%
Benchmark2
One Month Ago
-0.16%
0.12%
Three Months Ago
0.67%
0.67%
Year to Date
1.63%
0.77%
One Year Ago
3.22%
3.59%
Three Years Ago
12.89%
10.80%
Five Years Ago
35.77%
23.01%
Since Inception
92.78%
71.28%
6.80%
5.54%
CAGR4 Since Inception
1
Past performance is not indicative of future performance.
2
The Fund's benchmark is the HSBC 1-5Yr Bond Index, commencing August
31, 2005
3
Refers to 91-day T-Bill rates
4
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.
Portfolio Composition
January 2015
Corp Bonds
34.79%
SDA
15.28%
Short-term
deposits
0.03%
Corp Bonds
36.45%
Top Ten Holdings5 (%)
Issue
Coupon Rate
Maturity
GS
49.90%
February 2015
% of Portfolio
FXTN
3.87500%
11/22/19
FXTN
4.12500%
08/20/24
6
SDA
2.50000%
03/12/15
SDA
2.50000%
03/13/15
FXTN
5.00000%
08/18/18
FXTN
3.50000%
03/20/21
San Miguel Bond 2022
6.60000%
04/02/22
FXTN
8.00000%
07/19/31
San Miguel Bond 2019
5.93000%
04/02/19
FXTN
4.75000%
07/19/19
Total
5
The complete list of portfolio holdings is available upon request
6
BSP Special Deposit Account
8.00%
7.43%
6.44%
6.39%
4.89%
4.12%
4.06%
3.55%
3.36%
3.03%
51.29%
SDA
12.84%
Short-term
deposits
0.01%
GS
50.70%
BDO UNIBANK, INC. – TRUST AND INVESTMENTS GROUP
BDO PESO FIXED INCOME FUND
KEY INFORMATION AND INVESTMENT DISCLOSURE STATEMENT (Page 3)
Month Ended February 27, 2015
Best Performance (Past Five Years)
Inclusive Dates
02/26/2010 – 05/20/2013
Biggest Gain
37.53%
No. of Days to Achieve
1,179 days
Maximum Drawdown and Recovery in NAVPUs11 (Past Five Years)
Maximum Drawdown Period
Biggest Loss
Recovery Period (days)
69 days
01/04/2011 – 02/17/2011
-2.85%
11
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, exchange-listed fixed income securities and
collective investment plans of the trustee/other trustees. Subject to BSP guidelines and the Trustee's Trust Committee approval,
the Fund may also avail of financial derivative instruments solely for the purpose of hedging risk exposures, as well as invest in
other tradable investment 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. PFIF began to take profits from the sale of the belly securities,
shifting the Fund to the longer end of the curve.
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)
176.82
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.