United Global Financials Fund - uobam.com.sg · DISCOVER FINANCIAL SERVICES INC 1,241,581 3.87...

UnitedGlobalFinancialsFundAnnual Report

for the financial year ended 30th June 2018

MANAGERUOB Asset Management LtdRegistered Address:80 Raffles PlaceUOB PlazaSingapore 048624Company Registration No. : 198600120ZTel: 1800 22 22 228

DIRECTORS OF UOB ASSET MANAGEMENTLee Wai FaiEric Tham Kah JinPeh Kian HengThio Boon Kiat

TRUSTEEState Street Trust (SG) Limited168 Robinson Road#33-01, Capital TowerSingapore 068912

CUSTODIAN / ADMINISTRATOR / REGISTRARState Street Bank and Trust Company, acting through its Singapore Branch168 Robinson Road#33-01, Capital TowerSingapore 068912

AUDITORPricewaterhouseCoopers LLP7 Straits View, Marina OneEast Tower, Level 12Singapore 018936

United Global Financials Fund(Constituted under a Trust Deed in the Republic of Singapore)

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A) Fund Performance

Fund Performance/Benchmark Returns

3 mth%

Growth

6 mth%

Growth

1 yr%

Growth

3 yrAnn

CompRet

5 yrAnn

CompRet

10 yrAnn

CompRet

SinceInception

12 July 1996Ann

CompRet

United Global Financials Fund 0.11 -2.81 5.36 6.97 8.27 3.83 5.08Benchmark -0.48 -4.24 3.49 7.38 10.11 3.58 4.42

Source: Morningstar.

Note: The performance returns of the Fund are in Singapore Dollar based on a NAV-to-NAV basis, with dividends and distributionsreinvested, if any.The benchmark of the Fund: Jul 96 – Present: MSCI World Finance.

For the twelve months to June 2018, the Fund advanced 5.36%, compared with a 3.49% rise in thebenchmark MSCI World Finance, in Singapore Dollar terms.

The Fund outperformed the benchmark due to a combination of favorable stock selection and positiveallocation effects, which off-set negative currency contributions.

The Fund continues hold a significant exposure to larger US banks which benefit from rising interestrates. The Fund continues to retain positions in selected European banks that are seeing improvementsin profitability driven by credit improvement and efficiency gains. The Fund also targets selected emergingmarket banks that are seeing strong credit growth.

Bank earnings are seeing a positive effect from rising interest rates and quantitative tapering. The Fundhad an overweight position in US financials, which continue to be the biggest beneficiaries of monetarynormalisation. The reduction in corporate tax rates in the US is also a significant catalyst for bankearnings given the mostly domestic orientation of US banks.

Financial sector performance:

MSCI World Finance Index advanced modestly in the twelve month period ended June 2018, up by3.49%. The financial sector lagged the broader market, which advance by 10.6% in the same period. Theperiod of relatively strong performance evidenced in the second half of 2017 reversed in early 2018 overconcerns over higher interest rates, a stronger US Dollar, weakness in EM and concerns over growth andtrade.


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A) Fund Performance (continued)

Performance by sub-sector and region for the period ended June 2018:

By sub-sector: Banks advanced by 1.3%, Diversified Financials rose by 2.1%, and Insuranceincreased by 0.7%, all in Singapore Dollar terms.

By region: the US climbed by 8.4%, Asia (ex. Japan)1 increased by 8.5%, while Canada advanced by6.5%. Meanwhile, Europe and Japan fell by 2.9% each, whileAustralia dipped by 0.7%, all in SingaporeDollar terms.

1MSCI AC Asia (ex. Japan) Finance Index (Note: the Fund benchmark excludes emerging markets)

Performance Contribution:

Key contributions to performance include: Mastercard (US), Visa (US), T. Rowe Price (US),Progressive Corp (US) and Cedicorp (Peru).

Key detractors from performance include: BBVA (Spain), Banco Santander (Spain), UBS Group(Switzerland), Siam Commercial Bank (Thailand), and Franklin Resources (US).

Asset Allocation:

As at 30 June 2018, the sub-sector exposure of the Fund was as follows: Banks (59.4%), DiversifiedFinancials (24.0%), Insurance (6.6%), Software & Services2 (10.5%), and Net Liquidity (-0.5%).

Portfolio(%)

Benchmark(%)

ActiveWeight(Pct Pts)

Banks 59.4 52.1 +7.3Diversified Financials 24.0 25.6 -1.6Insurance 6.6 22.3 -15.7Software & Services 10.5 - +10.5Net Liquidity -0.5 - -0.5Total 100.0 100.0

2Software & Services reflects holdings in financial processing companies (Visa, MasterCard and Paypal)


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The geographic exposure of the Fund was as follows: US (50.4%), Canada (3.6%), Europe (26.1%),Japan (0.3%), Australia & New Zealand (1.3%), Asia Pacific (ex. Japan) (11.1%), Latin America andEMEA3 (7.7%) and Net Liquidity (-0.5%).

Portfolio(%)

Benchmark(%)

ActiveWeight(Pct Pts)

US 50.4 49.3 +1.1Canada 3.6 8.3 -4.7Europe 26.1 26.4 -0.3Japan 0.3 6.1 -5.8Australia & New Zealand 1.3 5.8 -4.5Asia (ex. Japan) - Developed - 4.1 -4.1Asia (ex. Japan) - Emerging 11.1 - +11.1Latin America 6.4 - +6.4EMEA 1.3 - +1.3Net Liquidity -0.5 - -0.5Total 100.0 100.0

3EMEA represents Eastern Europe, Middle East and Africa


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Top Holdings:

As at 30 June 2018, the top holdings of the Fund were as follows:

Company Country Sub-Sector Weight (%)

Banco Bilbao Vizcaya Argentaria SA Spain Banks 5.06MasterCard Inc. US Software & Services 5.05UBS Group AG Switzerland Diversified Financials 5.04Visa Inc. US Software & Services 5.03Banco Santander SA Spain Banks 4.81Bank of Ireland Group Plc Ireland Banks 4.65US Bancorp US Banks 4.59Wells Fargo & Co. US Banks 4.52PNC Financial Services Group Inc US Banks 4.00Suntrust Banks Inc. US Banks 2.96Sub-total top 10 45.71

Outlook and Fund Strategy

The global economic outlook remains favorable. Growth has accelerated in most regions, most notably inthe US. The International Monetary Fund (IMF) revised up its expectations for global growth for 2018 to3.9% in its April update (from 3.6% in July 2017). The bulk of this upgrade was due to better expectedgrowth for advanced economies, which was revised up to 2.5% (1.9% in July 2017).

Market conditions, however, have become more challenging as the central banks continue to normalisemonetary policy. The US Federal Reserve (Fed) is leading towards normalisation. While this is a clearpositive for US bank earnings, this shift has caused volatility for financial markets. Concurrently, the USadministration has adopted a more confrontational approach toward trade. After having implementedtariffs on imported steel from several trading partners, trade policy pivoted to China. President Trump’strade team announced several tariff measures designed to counter the US’s persistent trade deficit withChina (seeking to negotiate more favorable terms for market access and greater protections forintellectual property).

The shift in tone on trade, at a time of monetary policy normalization in the US, a stronger US Dollar andde-leveraging in China, placed pressure on emerging market asset classes. While evidence suggeststhat fundamentals for growth have broadly held up, we will continue to monitor the effects of thewithdrawal of global liquidity, as well as the impact of trade tariffs on emerging markets.

The Fund allocates capital to higher growth segments, with particular emphasis on payment services,asset management and securities services. The cyclical headwinds that were negatively impacting thelatter two segments are abating. The pickup in growth and the broad recovery of financial asset values isbenefitting both asset managers and securities servers. Meanwhile, higher interest rates should benefitthe asset servicers with their large liquid cash balances.


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Over the past year, the Fund gradually increased exposure to Europe. While the opportunity set amongEuropean banks is somewhat narrow, the Fund has targeted specific opportunities in companies thathave restructured their balance sheets and repositioned to recover profitability.

The Fund continues to hold positions in selected emerging market financials. The focus is on stronginstitutions in economies with lower levels of household and corporate debt, favorable demographictrends and strong growth prospects.

After many years of balance sheet repair, asset quality improvement and risk re-pricing, banks are for thefirst time starting to experience regulatory tail-winds. Healthier balance sheets are encouragingregulators to allow the stronger institutions to increase their capital return programs (dividend and sharerepurchase). This is most apparent in the US. However, it is also evident in Europe as banks that hadpreviously been paying dividends via share issuance (to preserve capital) start to shift to cashdistributions.

The Fund’s ongoing strategy and investment approach remains unchanged. Namely using bottom upanalysis to identify and invest in high quality businesses that should deliver superior growth opportunitiesin the years ahead. The Fund actively seeks to invest in companies with tested client centric businessmodels that have been able to deliver differentiated growth and profitability.

The current backdrop is generally favorable for the financial sector. The normalisation of interest rates islikely to remain a tailwind for the foreseeable future. However, we continue to monitor both economic,market and credit conditions for signs of a turn. We will of course be mindful of any change in conditionsthat could alter this favorable backdrop.

We expect that over the medium to long term, the sector should continue to yield good investmentopportunities for investors, especially as interest rates return to more normal levels.


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B) Investments at fair value and as a percentage of net asset value (“NAV”) as at 30 June 2018under review classified by

i) Country

Fair Value(S$)

% of NAV

Australia 418,070 1.25Canada 1,194,533 3.57Colombia 716,628 2.14Czech Republic 271,922 0.81India 1,232,927 3.69Indonesia 1,710,084 5.12Ireland 1,552,355 4.65Japan 95,943 0.29Mexico 730,893 2.19Peru 705,988 2.11Poland 175,127 0.52Spain 3,632,428 10.87Switzerland 2,904,019 8.69Thailand 751,715 2.25United Kingdom 639,756 1.91United States 16,855,876 50.43Portfolio of investments 33,588,264 100.49Other net assets/(liabilities) (165,041) (0.49)Total 33,423,223 100.00

ii) Industry

Fair Value(S$)

% of NAV

Financials 30,073,008 89.97Information Technology 3,515,256 10.52Portfolio of investments 33,588,264 100.49Other net assets/(liabilities) (165,041) (0.49)Total 33,423,223 100.00


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B) Investments at fair value and as a percentage of net asset value (“NAV”) as at 30 June 2018under review classified by (continued)

iii) Asset Class

Fair Value(S$) % of NAV

Quoted equities 33,588,264 100.49Other net assets/(liabilities) (165,041) (0.49)Total 33,423,223 100.00

iv) Credit rating of quoted bonds

N/A

C) Top Ten Holdings

10 largest holdings as at 30 June 2018

Fair Value(S$)

Percentage oftotal net assetsattributable tounitholders

%

BANCO BILBAO VIZCAYA ARGENTARIA SA 1,692,169 5.06MASTERCARD INC 1,688,117 5.05UBS GROUP AG 1,683,520 5.04VISA INC 1,679,539 5.03BANCO SANTANDER SA 1,608,257 4.81BANK OF IRELAND GROUP PLC 1,552,355 4.65US BANCORP 1,534,551 4.59WELLS FARGO & CO 1,511,849 4.52PNC FINANCIAL SERVICES GROUP INC 1,335,514 4.00SUNTRUST BANKS INC 990,201 2.96


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C) Top Ten Holdings (continued)

10 largest holdings as at 30 June 2017

Fair Value

Percentage oftotal net assetsattributable tounitholders

(S$) %

WELLS FARGO & CO 1,449,534 4.52US BANCORP 1,429,721 4.46MASTERCARD INC 1,379,552 4.31PNC FINANCIAL SERVICES GROUP INC 1,375,418 4.29VISA INC 1,355,770 4.23UBS GROUP AG 1,330,886 4.15BANCO BILBAO VIZCAYA ARGENTARIA SA 1,312,002 4.10BANK OF IRELAND GROUP PLC 1,300,263 4.06DISCOVER FINANCIAL SERVICES INC 1,241,581 3.87BANCO SANTANDER SA 1,000,512 3.12

D) Exposure to derivatives

i) Fair value of derivative contracts and as a percentage of NAV as at 30 June 2018

Contract orunderlyingprincipalamount

Positivefair value % of NAV

Negativefair value % of NAV

$ $ $

Foreign currency contracts 938 - - - -*

* denotes amount less than 0.01%

ii) There was a net realised loss of SGD 54,053 on derivative contracts during the financial year ended30 June 2018.

iii) There was a net unrealised gain of SGD 0 on outstanding derivative contracts marked to market asat 30 June 2018.

E) Amount and percentage of NAV invested in other schemes as at 30 June 2018

N/A


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F) Amount and percentage of borrowings to NAV as at 30 June 2018

N/A

G) Amount of redemptions and subscriptions for the financial year ended 30 June 2018

Total amount of redemptions SGD 35,354,006Total amount of subscriptions SGD 35,484,466

H) The amount and terms of related-party transactions for the financial year ended 30 June 2018

Please refer to Note 9 of the Notes to the Financial Statements.

I) Expense ratios


J) Turnover ratios


K) Any material information that will adversely impact the valuation of the scheme such ascontingent liabilities of open contracts

N/A

L) For schemes which invest more than 30% of their deposited property in another scheme, thefollowing key information on the second-mentioned scheme (“the underlying scheme”)1should be disclosed as well

i) Top 10 holdings at fair value and as percentage of NAV as at 30 June 2018 and 30 June 2017

N/A

ii) Expense ratios for the financial year ended 30 June 2018 and 30 June 2017

N/A

iii) Turnover ratios for the financial year ended 30 June 2018 and 30 June 2017

N/A

1 Where the underlying scheme is managed by a foreign manager which belongs to the same group of companies as, or hasa formal arrangement or investment agreement with, the Singapore manager, the above information should be disclosed onthe underlying scheme. In other cases, such information on the underlying scheme should be disclosed only if it is readilyavailable to the Singapore manager.


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M) Soft dollar commissions/arrangements

UOB Asset Management has entered into soft dollars arrangements with selected brokers fromwhom products and services are received from third parties. The products and services relateessentially to computer hardware and software to the extent that they are used to support theinvestment decision making process, research and advisory services, economic and politicalanalyses, portfolio analyses including performance measurements, market analyses, data andquotation services, all of which are believed to be helpful in the overall discharge of UOB AssetManagement’s duties to clients. As such services generally benefit all of UOB Asset Management’sclients in terms of input into the investment decision making process, the soft credits utilised are notallocated on a specific client basis. The Manager confirms that trades were executed on a bestexecution basis and there was no churning of trades.

N) Where the scheme offers pre-determined payouts, an explanation on the calculation of theactual payouts received by participants and any significant deviation from thepre-determined payouts

N/A


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REPORT OF THE TRUSTEE

The Trustee is under a duty to take into custody and hold the assets of United Global Financials Fund (the“Fund”) in trust for the unitholders. In accordance with the Securities and Futures Act (Cap. 289), itssubsidiary legislation and the Code on Collective Investment Schemes, the Trustee shall monitor theactivities of the Manager for compliance with the limitations imposed on the investment and borrowingpowers as set out in the Trust Deed in each annual accounting year and report thereon to unitholders inan annual report.

To the best knowledge of the Trustee, the Manager has, in all material respects, managed the Fundduring the financial year covered by these financial statements, set out on pages 17 to 45, in accordancewith the limitations imposed on the investment and borrowing powers set out in the Trust Deed.

For and on behalf of the TrusteeSTATE STREET TRUST (SG) LIMITED

Authorised signatory21 September 2018


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STATEMENT BY THE MANAGER

In the opinion of UOB Asset Management Ltd, the accompanying financial statements set out on pages17 to 45, comprising the Statement of Total Return, Statement of Financial Position, Statement ofMovements of Unitholders’ Funds, Statement of Portfolio and Notes to the Financial Statements aredrawn up so as to present fairly, in all material respects, the financial position and portfolio holdings ofUnited Global Financials Fund (the “Fund”) as at 30 June 2018, and the financial performance andmovements of unitholders’ funds for the year then ended in accordance with the recommendations ofStatement of Recommended Accounting Practice 7 “Reporting Framework for Unit Trusts” issued by theInstitute of Singapore Chartered Accountants. At the date of this statement, there are reasonablegrounds to believe that the Fund will be able tomeet its financial obligations as and when theymaterialise.

For and on behalf of the ManagerUOB ASSET MANAGEMENT LTD

THIO BOON KIATAuthorised signatory21 September 2018


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INDEPENDENT AUDITOR’S REPORT TO THE UNITHOLDERS OF UNITED GLOBAL FINANCIALSFUND

Our Opinion

In our opinion, the accompanying financial statements of United Global Financials Fund (the “Fund”), areproperly drawn up in accordance with the recommendations of Statement of Recommended AccountingPractice 7 “Reporting Framework for Unit Trusts” issued by the Institute of Singapore CharteredAccountants, so as to present fairly, in all material respects, the financial position and portfolio holdings ofthe Fund as at 30 June 2018, and of the financial performance and movements of unitholders’ funds forthe financial year ended on that date.

What we have audited

The financial statements of the Fund comprise:

• the Statement of Total Return for the financial year ended 30 June 2018;

• the Statement of Financial Position as at 30 June 2018;

• the Statement of Movements of Unitholders’ Funds for the financial year ended 30 June 2018;

• the Statement of Portfolio as at 30 June 2018; and

• the notes to the financial statements, including a summary of significant accounting policies.

Basis for Opinion

We conducted our audit in accordance with Singapore Standards on Auditing (“SSAs”). Ourresponsibilities under those standards are further described in the Auditor’s Responsibilities for the Auditof the Financial Statements section of our report.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis forour audit opinion.

Independence

We are independent of the Fund in accordance with the Accounting and Corporate Regulatory AuthorityCode of Professional Conduct and Ethics for Public Accountants and Accounting Entities (“ACRA Code”)together with the ethical requirements that are relevant to our audit of the financial statements inSingapore, and we have fulfilled our other ethical responsibilities in accordance with these requirementsand the ACRA Code.

Other Information

The Fund’s Manager (the “Manager”) is responsible for the other information. The other informationcomprises all sections of the annual report but does not include the financial statements and our auditor’sreport thereon.


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Our opinion on the financial statements does not cover the other information and we do not and will notexpress any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other informationand, in doing so, consider whether the other information is materially inconsistent with the financialstatements or our knowledge obtained in the audit, or otherwise appears to be materially misstated. If,based on the work we have performed on the other information, we conclude that there is a materialmisstatement of this other information, we are required to report that fact. We have nothing to report inthis regard.

Responsibilities of the Manager for the Financial Statements

The Manager is responsible for the preparation and fair presentation of these financial statements inaccordance with the recommendations of Statement of Recommended Accounting Practice 7“Reporting Framework for Unit Trusts” issued by the Institute of Singapore Chartered Accountants andfor such internal control as the Manager determines is necessary to enable the preparation of financialstatements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the Manager is responsible for assessing the Fund’s ability tocontinue as a going concern, disclosing, as applicable, matters related to going concern and using thegoing concern basis of accounting unless the Manager either intends to terminate the Fund or to ceasethe Fund’s operations, or has no realistic alternative but to do so.

The Manager’s responsibilities include overseeing the Fund’s financial reporting process.

Auditor’s Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole arefree from material misstatement, whether due to fraud or error, and to issue an auditor’s report thatincludes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that anaudit conducted in accordance with SSAs will always detect a material misstatement when it exists.Misstatements can arise from fraud or error and are considered material if, individually or in theaggregate, they could reasonably be expected to influence the economic decisions of users taken on thebasis of these financial statements.

As part of an audit in accordance with SSAs, we exercise professional judgement and maintainprofessional scepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the financial statements, whether due tofraud or error, design and perform audit procedures responsive to those risks, and obtain auditevidence that is sufficient and appropriate to provide a basis for our opinion. The risk of notdetecting a material misstatement resulting from fraud is higher than for one resulting from error,as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the overrideof internal control.


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• Obtain an understanding of internal control relevant to the audit in order to design auditprocedures that are appropriate in the circumstances, but not for the purpose of expressing anopinion on the effectiveness of the Fund’s internal control.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accountingestimates and related disclosures made by the Manager.

• Conclude on the appropriateness of the Manager’s use of the going concern basis of accountingand, based on the audit evidence obtained, whether a material uncertainty exists related to eventsor conditions that may cast significant doubt on the Fund’s ability to continue as a going concern.If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’sreport to the related disclosures in the financial statements or, if such disclosures are inadequate,to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date ofour auditor’s report. However, future events or conditions may cause the Fund to cease to continueas a going concern.

• Evaluate the overall presentation, structure and content of the financial statements, including thedisclosures, and whether the financial statements represent the underlying transactions andevents in a manner that achieves fair presentation.

We communicate with the Manager regarding, among other matters, the planned scope and timing of theaudit and significant audit findings, including any significant deficiencies in internal control that we identifyduring our audit.

PricewaterhouseCoopers LLPPublic Accountants and Chartered Accountants

Singapore, 21 September 2018


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STATEMENT OF TOTAL RETURN

For the financial year ended 30 June 2018

2018 2017Note $ $

IncomeDividends 809,483 719,911Interest 561 52Total 810,044 719,963

Less: ExpensesManagement fee 9 524,004 496,750Trustee fee 9 12,287 12,853Audit fee 14,099 14,102Registrar fee 9 15,010 15,055Valuation fee 9 43,667 42,172Custody fee 9 56,023 21,232Transaction costs 128,372 134,418Other expenses 111,515 95,284Total 904,977 831,866

Net income/(losses) (94,933) (111,903)

Net gains/(losses) on value of investments and financialderivativesNet gains/(losses) on investments 1,546,698 9,861,374Net gains/(losses) on financial derivatives (54,053) 16,905Net foreign exchange gains/(losses) 28,931 196,711

1,521,576 10,074,990

Total return/(deficit) for the year before income tax 1,426,643 9,963,087Less: Income tax 3 (166,295) (143,029)Less: Capital gains tax 3 (16,184) (5,229)Total return/(deficit) for the year 1,244,164 9,814,829


The accompanying notes form an integral part of these financial statements.

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STATEMENT OF FINANCIAL POSITION

As at 30 June 2018

2018 2017Note $ $

AssetsPortfolio of investments 33,588,264 30,678,488Sales awaiting settlement - 68,239Receivables 4 90,250 1,327,601Cash and bank balances 926,544 617,564Financial derivatives at fair value 6 - 671Total assets 34,605,058 32,692,563

LiabilitiesPayables 5 1,181,835 643,958Financial derivatives at fair value 6 - 6Total liabilities 1,181,835 643,964

EquityNet assets attributable to unitholders 7 33,423,223 32,048,599



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STATEMENT OF MOVEMENTS OF UNITHOLDERS’ FUNDS


2018 2017Note $ $

Net assets attributable to unitholders at the beginning ofthe financial year 32,048,599 31,922,518

OperationsChange in net assets attributable to unitholders resulting fromoperations 1,244,164 9,814,829

Unitholders’ contributions/(withdrawals)Creation of units 35,484,466 25,818,444Cancellation of units (35,354,006) (35,507,192)

Change in net assets attributable to unitholders resulting fromnet creation and cancellation of units 130,460 (9,688,748)

Total increase/(decrease) in net assets attributable tounitholders 1,374,624 126,081

Net assets attributable to unitholders at the end of thefinancial year 7 33,423,223 32,048,599



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STATEMENT OF PORTFOLIO

As at 30 June 2018

Holdings at Fair value at

Percentage oftotal net assetsattributable tounitholders at

30 June2018

30 June2018$

30 June2018%

By Geography - Primary

Quoted equities

AUSTRALIAAUSTRALIA & NEW ZEALAND BANKINGGROUP 3,000 85,349 0.25MAGELLAN FINANCIAL GROUP LTD 7,500 176,047 0.53PLATINUM ASSET MANAGEMENT LTD 27,000 156,674 0.47

TOTAL AUSTRALIA 418,070 1.25

CANADAROYAL BANK OF CANADA 5,250 538,681 1.61THE BANK OF NOVA SCOTIA 8,500 655,852 1.96

TOTAL CANADA 1,194,533 3.57

COLOMBIABANCOLOMBIA SA 11,000 716,628 2.14

CZECH REPUBLICKOMERCNI BANKA AS 4,750 271,922 0.81

INDIAAXIS BANK LTD 38,000 386,282 1.16HDFC BANK LTD ADR 2,200 315,028 0.94HOUSING DEVELOPMENT FINANCE CORP 14,000 531,617 1.59

TOTAL INDIA 1,232,927 3.69



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As at 30 June 2018



30 June2018

30 June2018$

30 June2018%

By Geography - Primary (continued)Quoted equities

INDONESIABANK MANDIRI PERSERO TBK PT 300,000 195,533 0.59PT BANK NEGARA INDONESIA (PERSERO)TBK. 1,150,000 771,429 2.31PT BANK RAKYAT INDONESIA (PERSERO)TBK. 2,750,000 743,122 2.22

TOTAL INDONESIA 1,710,084 5.12

IRELANDBANK OF IRELAND GROUP PLC 145,000 1,552,355 4.65

JAPANCREDIT SAISON CO LTD 2,000 42,937 0.13SUMITOMO MITSUI FINANCIAL GROUP 1,000 53,006 0.16

TOTAL JAPAN 95,943 0.29

MEXICOGRUPO FINANCIERO BANORTE SAB DECV 90,000 730,893 2.19

PERUCREDICORP LTD 2,300 705,988 2.11

POLANDPOWSZECHNA KASA OSZCZEDNOSCIBANK POLSKI SA 13,000 175,127 0.52



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As at 30 June 2018



30 June2018

30 June2018$

30 June2018%


SPAINBANCO BILBAO VIZCAYA ARGENTARIA SA 175,000 1,692,169 5.06BANCO SANTANDER SA 220,000 1,608,257 4.81BANKINTER SA 25,000 332,002 1.00

TOTAL SPAIN 3,632,428 10.87

SWITZERLANDCHUBB LTD 2,000 346,384 1.04PARTNERS GROUP HOLDING AG 875 874,115 2.61UBS GROUP AG 80,000 1,683,520 5.04

TOTAL SWITZERLAND 2,904,019 8.69

THAILANDKASIKORNBANK PCL - FOREIGN 38,000 312,786 0.94THE SIAM COMMERCIAL BANK PCL 90,000 438,929 1.31

TOTAL THAILAND 751,715 2.25

UNITED KINGDOMADMIRAL GROUP PLC 10,000 343,381 1.03HSBC HOLDINGS PLC 14,000 179,112 0.53STANDARD LIFE ABERDEEN PLC 20,000 117,263 0.35

TOTAL UNITED KINGDOM 639,756 1.91



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As at 30 June 2018



30 June2018

30 June2018$

30 June2018%


UNITED STATESAMERICAN EXPRESS CO 6,500 868,549 2.60BANK OF AMERICA CORP 22,000 845,615 2.53BB&T CORP 3,500 240,712 0.72DISCOVER FINANCIAL SERVICES INC 8,750 840,035 2.51FRANKLIN RESOURCES INC 4,000 174,801 0.52JPMORGAN CHASE & CO 6,500 923,499 2.76MASTERCARD INC 6,300 1,688,117 5.05METLIFE INC 2,500 148,621 0.45NORTHERN TRUST CORP 6,250 876,816 2.62PAYPAL HOLDINGS INC 1,300 147,600 0.44PNC FINANCIAL SERVICES GROUP INC 7,250 1,335,514 4.00STATE STREET CORP 6,750 856,765 2.57SUNTRUST BANKS INC 11,000 990,201 2.96T ROWE PRICE GROUP INC 5,200 823,101 2.46THE ALLSTATE CORP 5,500 684,457 2.05THE PROGRESSIVE CORP 8,500 685,534 2.05US BANCORP 22,500 1,534,551 4.59VISA INC 9,300 1,679,539 5.03WELLS FARGO & CO 20,000 1,511,849 4.52

TOTAL UNITED STATES 16,855,876 50.43

Total Equities 33,588,264 100.49

Portfolio of investments 33,588,264 100.49Other net assets/(liabilities) (165,041) (0.49)Net assets attributable to unitholders 33,423,223 100.00



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As at 30 June 2018

Percentage oftotal net assetsattributable tounitholders at30 June2018%


By Geography - Primary (Summary)Quoted equities

Australia 1.25 2.46Canada 3.57 4.35Colombia 2.14 1.91Czech Republic 0.81 0.51India 3.69 5.31Indonesia 5.12 4.71Ireland 4.65 4.06Japan 0.29 0.42Mexico 2.19 1.92Peru 2.11 1.93Poland 0.52 0.68Spain 10.87 7.22Switzerland 8.69 8.09Thailand 2.25 1.99United Kingdom 1.91 1.97United States 50.43 48.19Portfolio of investments 100.49 95.72Other net assets/(liabilities) (0.49) 4.28Net assets attributable to unitholders 100.00 100.00



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As at 30 June 2018

Fair value at30 June2018$



By Industry - SecondaryQuoted equities

Financials 30,073,008 89.97 85.80Information Technology 3,515,256 10.52 9.92Portfolio of investments 33,588,264 100.49 95.72Other net assets/(liabilities) (165,041) (0.49) 4.28Net assets attributable to unitholders 33,423,223 100.00 100.00



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These notes form an integral part of and should be read in conjunction with the accompanying financialstatements.

1 General

United Global Financials Fund (the “Fund”) is a Singapore-registered trust fund constituted under a TrustDeed dated 31 January 1996 between UOB Asset Management Ltd (the “Manager”) and HSBCInstitutional Trust Services (Singapore) Limited (the “Retired Trustee”). The Trust Deed is governed by thelaws of the Republic of Singapore.

With effect from 1 April 2017, the Trustee of the Fund has changed from HSBC Institutional TrustServices (Singapore) Limited to State Street Trust (SG) Limited (the “Trustee”).

The Fund is included by the Central Provident Fund (“CPF”) Board under the CPF Investment Scheme(“CPFIS”) - Ordinary account for subscription by unitholders using their CPF monies. However,unitholders should note that the Fund is included under List B of the CPFIS funds. Funds included in ListB of CPFIS are not allowed to accept new CPF monies.

The primary activity of the Fund is that of investment trading. The Fund’s investment objective is toachieve long-term capital appreciation by investing, primarily, in securities issued by banks, financecompanies, insurers and other corporations which carry on the business of financial services or whichderive their revenues from subsidiaries carrying on the business of banking and/or financial services.

Subscriptions and redemptions of the units are denominated in the Singapore Dollar and theUnited States Dollar. Investors may subscribe in the United States Dollar at the applicable rate ofexchange from the Singapore Dollar.

2 Significant accounting policies

(a) Basis of preparation

The financial statements have been prepared under the historical cost convention, modified by therevaluation of financial assets held at fair value through profit or loss, and in accordance with therecommendations of Statement of Recommended Accounting Practice 7 “Reporting Framework for UnitTrusts” issued by the Institute of Singapore Chartered Accountants.

(b) Recognition of income

Dividend income is recognised when the right to receive payment is established. Interest income isrecognised on a time proportion basis using the effective interest method.


NOTES TO THE FINANCIAL STATEMENTS


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2 Significant accounting policies (continued)

(c) Investments

Investments are classified as financial assets at fair value through profit or loss.

(i) Initial recognition

Purchases of investments are recognised on the trade date. Investments are recorded at fair value oninitial recognition.

(ii) Subsequent measurement

Investments are subsequently carried at fair value. Net changes in fair value on investments are includedin the Statement of Total Return in the year in which they arise.

(iii) Derecognition

Investments are derecognised on the trade date of disposal. The resultant realised gains and losses onthe sale of investments are computed on the basis of the difference between the weighted average costand selling price gross of transaction costs, and are taken up in the Statement of Total Return.

(d) Basis of valuation of investments

The fair value of financial assets and liabilities traded in active markets is based on quoted market pricesat the close of trading on the financial year end date. The quoted market price used for investments heldby the Fund is the last traded market price for both financial assets and financial liabilities where the lasttraded price falls within the bid-ask spread. In circumstances where the last traded price is not within thebid-ask spread, theManager will determine the point within the bid-ask spread that is most representativeof fair value.

(e) Foreign currency translation

(i) Functional and presentation currency

The Fund’s investors are mainly from Singapore with the subscriptions and redemptions of the unitsdenominated in the Singapore Dollar and the United States Dollar.

The performance of the Fund is measured and reported to the investors in the Singapore Dollar. TheManager considers the Singapore Dollar as the currency of the primary economic environment in whichthe Fund operate. The financial statements are presented in the Singapore Dollar, which is the Fund’sfunctional and presentation currency.




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2 Significant accounting policies (continued)

(e) Foreign currency translation (continued)

(ii) Transactions and balances

Foreign currency transactions are translated into the functional currency using the exchange ratesprevailing at the dates of the transactions. Foreign exchange gains and losses resulting from thesettlement of such transactions and from the translation at year-end exchange rates of monetary assetsand liabilities denominated in foreign currencies are recognised in the Statement of Total Return.Translation differences on non-monetary financial assets and liabilities are also recognised in theStatement of Total Return within “Net gains/losses on investments”.

(f) Financial derivatives

Financial derivatives including forwards and swaps may be entered into for the purposes of efficientportfolio management, tactical asset allocation or specific hedging of financial assets held as determinedby the Manager and in accordance with the provision of the Trust Deed and the Code on CollectiveInvestment Schemes.

Financial derivatives outstanding on the financial year end date are valued at the forward rate or at thecurrent market prices using the “mark-to-market” method, as applicable, and the resultant gains andlosses are taken up in the Statement of Total Return.

(g) Distributions

The Manager has the absolute discretion to determine whether a distribution is to be made. In such anevent, an appropriate amount will be transferred to a distribution account, to be paid out on the distributiondate. The amount shall not be treated as part of the property of the Fund. Distributions are accrued forat the financial year end date if the necessary approvals have been obtained and a legal or constructiveobligation has been created.

(h) Offsetting financial instruments

Financial assets and liabilities are offset and the net amount reported in the Statement of FinancialPosition when there is a legally enforceable right to offset the recognised amounts and there is anintention to settle on a net basis, or realise the asset and settle the liability simultaneously. The legallyenforceable right must not be contingent on future events and must be enforceable in the normal courseof business and in the event of default, insolvency or bankruptcy of the Fund or the counterparty.




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3 Income tax

2018 2017$ $

Overseas income tax 166,295 143,029Capital gains tax 16,184 5,229

The Fund was granted the status of Designated Unit Trust (“DUT”) in Singapore. The Trustee of the Fundensures that the Fund fulfill their reporting obligations under the DUT Scheme.

Under the DUT Scheme, subject to certain conditions and reporting obligations being met, certainincome of the DUT Fund is not taxable in accordance with Sections 35(12) and 35(12A) of the IncomeTax Act. Such income includes:

(i) gains or profits derived from Singapore or elsewhere from the disposal of securities;

(ii) interest (other than interest for which tax has been deducted under Section 45 of the Income TaxAct);

(iii) dividends derived from outside Singapore and received in Singapore;

(iv) gains or profits derived from foreign exchange transactions, transactions in futures contracts,transactions in interest rate or currency forwards, swaps or option contracts and transactions inforwards, swaps or option contracts relating to any securities or financial index;

(v) discount, prepayment fee, redemption premium and break cost from qualifying debt securitiesissued during the prescribed period; and

(vi) distributions from foreign unit trusts derived from outside Singapore and received in Singapore.

The overseas income tax represents tax withheld on foreign sourced income. Capital gains tax representtax on capital gains sourced from India.




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3 Income tax (continued)

The Fund is required to recognise a tax liability when it is probable that the tax laws of foreign countriesrequire a tax liability to be assessed on the Fund’s gains on investments sourced from such foreigncountries, assuming the relevant taxing authorities have full knowledge of all the facts and circumstances.The tax liability is then measured at the amount expected to be paid to the relevant taxation authoritiesusing the tax laws and rates that have been enacted or substantively enacted by the end of the financialyear. There is sometimes uncertainty about the way enacted tax law is applied to offshore investmentfunds. This creates uncertainty about whether or not a tax liability will ultimately be paid by the Fund.Therefore when measuring any uncertain tax liabilities management considers all of the relevant factsand circumstances available at the time which could influence the likelihood of payment, including anyformal or informal practices of the relevant tax authorities.

As at 30 June 2018 and 2017, the Fund has uncertain taxes exposure with respect to gains on investmentof which the tax liability is estimated to be nil. While this represents the Manager’s best estimate, theestimated value could differ significantly from the amount ultimately payable.

4 Receivables

2018 2017$ $

Amounts receivable for creation of units 46,553 1,251,648Dividends receivable 43,697 48,599Other receivables - 27,354

90,250 1,327,601

5 Payables

2018 2017$ $

Amount payable for cancellation of units 993,356 459,751Amount due to the Manager 152,091 128,017Amount due to Trustee 3,242 2,757Tax payables 16,262 9,617Other creditors and accrued expenses 16,884 43,816

1,181,835 643,958




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6 Fair value of financial derivatives

Financial derivatives contracts comprise foreign currency contracts for the sale and purchase of foreigncurrencies. The contract or underlying principal amounts of these financial derivatives and theircorresponding gross positive or negative fair values at the financial year end date are analysed below.

2018 2017Contract orunderlyingprincipalamount

Positivefair value

Negativefair value

Contract orunderlyingprincipalamount

Positivefair value

Negativefair value

$ $ $ $ $ $

Foreign currency contracts 938 - -* 99,120 671 6

* denotes amount less than 1

7 Units in issue

During the financial year ended 30 June 2018 and 2017, the numbers of units issued, redeemed andoutstanding were as follows:

2018 2017

Units at the beginning of the financial year 12,540,929 16,597,210Units created 12,972,472 11,188,869Units cancelled (13,108,315) (15,245,150)Units at the end of the financial year* 12,405,086 12,540,929

*Included above are units denominated in USD 3,202,128 2,333,991

$ $

Net assets attributable to unitholders 33,423,223 32,048,599Net assets value per unit 2.694 2.555




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7 Units in issue (continued)

A reconciliation of the net assets attributable to unitholders per unit per the financial statements and thenet assets attributable to unitholders per unit for issuing/redeeming units at the financial year end date isprepared below:

2018 2017$ $

Net assets attributable to unitholders per financial statements per unit 2.694 2.555Effect of under provision of tax 0.001 -Under accrual for legal and professional fee - 0.002Effect of bid/ask price adjustment (0.001) -Net assets attributable to unitholders for issuing/redeeming per unit 2.694 2.557

8 Financial risk management

The Fund’s activities expose it to a variety of market risks (including currency risk, interest rate risk andprice risk), credit risk and liquidity risk. The Fund’s overall risk management programme seeks tominimise potential adverse effects on the Fund’s financial performance. The Fund may use futurescontracts, financial options contracts and/or foreign currency contracts subject to the terms of the TrustDeed to moderate certain risk exposures. Specific guidelines on exposures to individual securities andcertain industries are in place for the Fund at any time as part of the overall financial risk management toreduce the Fund’s risk exposures.

The Fund’s assets principally consist of financial instruments such as equity investments and cash. Theyare held in accordance with the published investment policies of the Fund. The allocation of assetsbetween the various types of investments is determined by the Manager to achieve its investmentobjectives.




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8 Financial risk management (continued)

(a) Market risk

Market risk is the risk of loss arising from uncertainty concerning movements in market prices and rates,including observable variables such as interest rates, credit spreads, exchange rates, and others thatmay be only indirectly observable such as volatilities and correlations. Market risk includes such factorsas changes in economic environment, consumption pattern and investor’s expectation etc. which mayhave significant impact on the value of the investments. The Fund’s investments are substantiallydependent on changes in market prices and are monitored by the Manager on a regular basis so as toassess changes in fundamentals and valuation. Although the Manager makes reasonable efforts in thechoice of investments, events beyond reasonable control of the Manager could affect the prices of theunderlying investments and hence the asset value of the Fund. Guidelines are set to reduce the Fund’srisk exposures to market volatility such as diversifying the portfolio by investing across variousgeographies, alternatively, the Fund may be hedged using derivative strategies.

(i) Foreign exchange risk

The Fund has monetary financial assets and liabilities denominated in currencies other than theSingapore Dollar and it may be affected favourably or unfavourably by exchange rate regulations orchanges in the exchange rates between the Singapore Dollar and such other currencies. The Managermay at his discretion, implement a currency management strategy either to reduce currency volatility orto hedge the currency exposures of the Fund.




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(a) Market risk (continued)

(i) Foreign exchange risk (continued)

The table below summarises the Fund’s exposure to foreign currencies at the end of the financial year.

As at 30 June 2018USD CHF EUR IDR SGD Others Total$ $ $ $ $ $ $

AssetsPortfolio ofinvestments 18,939,905 2,557,635 5,184,783 1,710,084 - 5,195,857 33,588,264Receivables 68,500 - - - 8,932 12,818 90,250Cash and bankbalances 113,341 - - - 575,243 237,960 926,544Total Assets 19,121,746 2,557,635 5,184,783 1,710,084 584,175 5,446,635 34,605,058

LiabilitiesPayables 461,530 - - - 718,508 1,797 1,181,835Total Liabilities 461,530 - - - 718,508 1,797 1,181,835

Net Assets 18,660,216 2,557,635 5,184,783 1,710,084 (134,333) 5,444,838Foreign currencycontracts (notionalvalue) - - - - 938 (938)Net currencyexposure 18,660,216 2,557,635 5,184,783 1,710,084 (133,395) 5,443,900




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As at 30 June 2017USD CHF EUR IDR SGD Others Total$ $ $ $ $ $ $

AssetsPortfolio ofinvestments 17,586,553 1,993,305 3,612,777 1,510,764 - 5,975,089 30,678,488Sales awaitingsettlement - - - 68,239 - - 68,239Receivables 28,215 - - - 1,279,001 20,385 1,327,601Cash and bankbalances 131,630 - - - 409,964 75,970 617,564Total Assets 17,746,398 1,993,305 3,612,777 1,579,003 1,688,965 6,071,444 32,691,892

LiabilitiesPayables 6,143 - - - 633,966 3,849 643,958Total Liabilities 6,143 - - - 633,966 3,849 643,958

Net Assets 17,740,255 1,993,305 3,612,777 1,579,003 1,054,999 6,067,595Foreign currencycontracts (notionalvalue) (4,668) - - (68,909) 95,120 (21,543)Net currencyexposure 17,735,587 1,993,305 3,612,777 1,510,094 1,150,119 6,046,052

Investments, which is the significant item in the Statement of Financial Position, exposed to currency risk,other price risk and interest risk. Price risk sensitivity analysis includes the impact of currency risk onnon-monetary investments. Consequently, currency risk sensitivity analysis is prepared and disclosedonly for monetary assets and liabilities. The table below summarises the sensitivity of the Fund’smonetary assets and liabilities to changes in foreign exchange movements as at 30 June 2018 and 2017.The analysis is based on the assumptions that the functional currency increased / decreased to therelevant foreign exchange rates as disclosed below. This represents the manager’s best estimate of areasonable possible shift in the foreign exchange rates, having regard to historical volatility of those rates.




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Currency

2018Net impact tonet assets

attributable tounitholders



$ % $ %USD (13,984) 5 8,942 6

(ii) Price risk

Price risk is the risk of potential adverse changes to the value of financial investments because ofchanges in market conditions and volatility in security prices.

The table below summarises the impact of increases/decreases from the Fund’s investments in equitieson the Fund’s net assets attributable to unitholders at 30 June 2018 and 2017. The analysis is based onthe assumption that the index components within the benchmark increased/decreased by a reasonablepossible shift, with all other variables held constant and that the fair value of the Fund’s investmentsmoved according to the historical correlation with the index.

Benchmark component





$ % $ %

MSCI World Finance 5,427,631 20 5,583,485 20

(iii) Interest rate risk

Interest rate risk is the risk that the value of a financial instrument will fluctuate due to changes in marketinterest rates.




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(iii) Interest rate risk (continued)

Investment funds that invest in equity securities may be subject to interest rate risk as any interest ratechange may affect the equity risk premium though at varying degrees. To manage this risk, the Manageranalyses how interest rate changesmay affect different industries and securities and then seeks to adjustthe Fund’s portfolio investments accordingly. However, the effects of changes in interest rates on theFund’s portfolio may not be quantified as the relationship between the interest rates and the value ofequity securities is indirect.

Other than the cash and bank balances which are at short term market interest rates, and thereforesubject to insignificant interest rate risk, the Fund’s financial assets and liabilities are largely non-interestbearing.

Hence, no sensitivity analysis has been presented separately.

(b) Liquidity risk

The Fund is exposed to daily cash redemptions and disbursements for the settlements of purchases. TheManager therefore ensures that the Fund maintains sufficient cash and cash equivalents and that it isable to obtain cash from the sale of investments held to meet its liquidity requirements. Reasonableefforts will be taken to invest in securities which are traded in a relatively active market and which can bereadily disposed of.

The Fund’s investments in listed securities are considered to be readily realisable as they are listed onestablished regional stock exchanges.




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(b) Liquidity risk (continued)

The table below analyses the Fund’s financial liabilities into relevant maturity groupings based on theremaining period at the financial year end date to the contractual maturity date. The amounts in the tableare the contractual undiscounted cash flows. Balances due within 12 months equal their carryingbalances, as the impact of discounting is not significant.

Less than 3months

3 months to1 year

Over1 year

$ $ $

As at 30 June 2018Payables 1,181,835 - -

Less than 3months

3 months to1 year

Over1 year

$ $ $As at 30 June 2017Payables 643,958 - -Financial derivatives at fair value- Foreign currency contracts 6 - -

(c) Credit risk

The Fund takes on exposure to credit risk, which is the risk that a counterparty will be unable to payamounts in full when due. The Fund’s credit risk is concentrated on cash and bank balances, andamounts or securities receivable on the sale and purchase of investments respectively. In order tomitigate exposure to credit risk, all transactions in listed securities are settled/paid for upon delivery andtransacted with approved counterparties using an approved list of brokers that are regularly assessedand updated by the Manager.




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(c) Credit risk (continued)

The table below summarises the credit rating of banks and custodians in which the Fund’s assets areheld as at 30 June 2018 and 2017.

The credit ratings are based on the Viability ratings published by Fitch.

Credit ratingas at 30 June

2018

Credit ratingas at 30 June

2017Bank and custodianState Street Bank and Trust Company aa- aa-

Counterparty of foreign currency contractsState Street Bank and Trust Company aa- aa-

The maximum exposure to credit risk at the financial year end date is the carrying amount of the portfolio

of investments and cash and bank balances as presented in Statement of Financial Position.

(d) Capital management

The Fund’s capital is represented by the net assets attributable to unitholders. The Fund strives to investthe subscriptions of redeemable participating units in investments that meet the Fund’s investmentobjectives while maintaining sufficient liquidity to meet unitholder redemptions.

(e) Fair value estimation

The Fund classifies fair value measurements using a fair value hierarchy that reflects the significance ofthe inputs used in making the measurements. The fair value hierarchy has the following levels:

• Quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1).

• Inputs other than quoted prices included within Level 1 that are observable for the asset or liability,either directly (that is, as prices) or indirectly (that is, derived from prices) (Level 2).

• Inputs for the asset or liability that are not based on observable market data (that is, unobservableinputs) (Level 3).




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(e) Fair value estimation (continued)

The following table analyses within the fair value hierarchy, the Fund’s financial assets and liabilities (byclass) measured at fair value at 30 June 2018 and 2017:

Level 1 Level 2 Level 3 Total$ $ $ $

As at 30 June 2018AssetsPortfolio of investments- Quoted equities 33,588,264 - - 33,588,264

Total 33,588,264 - - 33,588,264

Level 1 Level 2 Level 3 Total$ $ $ $

As at 30 June 2017AssetsPortfolio of investments- Quoted equities 30,678,488 - - 30,678,488

Financial derivatives at fair value - 671 - 671Total 30,678,488 671 - 30,679,159

LiabilitiesFinancial derivatives at fair value - 6 - 6Total - 6 - 6

Investments whose values are based on quoted market prices in active markets, and therefore classifiedwithin Level 1, comprise listed equities. The Fund does not adjust the quoted price for these instruments.

Financial instruments that trade in markets that are not considered to be active but are valued based onquoted market prices, dealer quotations or alternative pricing sources supported by observable inputsare classified within Level 2.

Except for cash and bank balances which are classified as Level 1, the Fund’s assets and liabilities notmeasured at fair value at 30 June 2018 and 2017 have been classified as Level 2. The carrying amountsof these assets and liabilities approximate their fair values as at the financial year end date.




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(f) Offsetting financial assets and financial liabilities

Financial assets and liabilities are offset and the net amount reported in the Statement of FinancialPosition when there is a legally enforceable right to offset the recognised amounts and there is anintention to settle on a net basis or realise the asset and settle the liability simultaneously. The gross andnet positions of financial assets and liabilities that have been offset in the Statement of Financial Positionare disclosed in the first three columns of the tables below.

Financial assets Effects of offsetting on the Statementof Financial Position

Related amount not offset

Grossamounts offinancialassets

Grossamountsset off in

theStatement

ofFinancialPosition

Net amountof

financialassets

presentedin the

Statementof

FinancialPosition

Financialinstruments

Collateralpledged/received Net amount

$ $ $ $ $ $30 June 2018Derivative financialinstruments 938 (938) - - - -Total 938 (938) - - - -

30 June 2017Derivative financialinstruments 99,792 (99,121) 671 (6) - 665Total 99,792 (99,121) 671 (6) - 665




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(f) Offsetting financial assets and financial liabilities (continued)

Financial liabilities Effects of offsetting on the Statementof Financial Position

Related amounts not offset

Grossamounts offinancialliabilities

Grossamountsset off in

theStatement

ofFinancialPosition

Net amountof

financialliabilitiespresented

in theStatement

ofFinancialPosition

Financialinstruments

Collateralpledged/received Net amount

$ $ $ $ $ $

30 June 2018Derivative financialinstruments 938 (938) - - - -Total 938 (938) - - - -

30 June 2017Derivative financialinstruments 99,127 (99,121) 6 (6) - -Total 99,127 (99,121) 6 (6) - -




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9 Related party transactions

(a) The Manager and the Trustee of the Fund are UOB Asset Management Ltd and State Street Trust(SG) Limited respectively. State Street Trust (SG) Limited replaced HSBC Institutional Trust Services(Singapore) Limited as the Trustee with effect from 1 April 2017. The Manager is a subsidiary of UnitedOverseas Bank Limited while the Trustee is a subsidiary of State Street Bank and Trust Company.

Management fee and valuation fee are paid to theManager for the financial year. Trustee fee and registrarfee were paid to the Retired Trustee for the period from 1 July 2016 to 31 March 2017.

With effect from 1 April 2017, trustee fee is paid to the Trustee while registrar fee and custody fee are paidto State Street Bank and Trust Company, Singapore Branch.

These fees paid or payable by the Fund shown in the Statement of Total Return and in the respectiveNotes to the Financial Statements are on terms set out in the Trust Deed. All other related partytransactions are shown elsewhere in the financial statements.

(b) As at the end of the financial year, the Fund maintained the following accounts with the relatedparties:

2018 2017$ $

State Street Bank and Trust Company, Singapore BranchCash and bank balances 926,544 617,564




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9 Related party transactions (continued)

(c) The following transactions took place during the financial year between the Fund and related partiesat terms agreed between the parties:

2018 2017$ $

State Street Bank and Trust Company, Singapore BranchBank charges - 1,438Interest income 561 -

United Overseas Bank LimitedBank charges 12,817 4,633




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10 Financial ratios

2018 2017$ $

Total operating expenses 776,605 660,118Average daily net asset value 34,981,373 33,111,196Expense ratio1 2.22% 1.99%

Lower of total value of purchases or sales 27,021,979 23,985,568Average daily net assets value 34,981,373 33,111,196

Turnover ratio2 77.25% 72.44%

1 The expense ratio has been computed based on the guidelines laid down by the Investment Management Association ofSingapore (“IMAS”). The calculation of the Fund’s expense ratio at financial year end was based on total operating expensesdivided by the average net asset value respectively for the financial year. The total operating expenses do not include (whereapplicable) brokerage and other transactions costs, performance fee, interest expense, distribution paid out to unitholders, foreignexchange gains/losses, front or back end loads arising from the purchase or sale of other funds and tax deducted at source orarising out of income received. The Fund does not pay any performance fee. The average net asset value is based on the dailybalances.

2 The portfolio turnover ratio is calculated in accordance with the formula stated in the Code on Collective Investment Schemes.The calculation of the portfolio turnover ratio was based on the lower of the total value of purchases or sales of the underlyinginvestments divided by the average daily net asset value.




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United Global Financials Fund - uobam.com.sg · DISCOVER FINANCIAL SERVICES INC 1,241,581 3.87...

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