Here’s what an actively managed fund with a very low total expense ratio looks like
Lion Global Investors’ latest fund, the LionGlobal All Seasons Fund, is an actively managed fund with a unique edge. It has a very low total expense ratio (TER) capped at 0.5% per annum, which addresses one of the key reservations investors often have about actively managed funds.
Here’s what the fund is all about.
Benefits of a balanced fund
The LionGlobal All Seasons Fund is a Singapore Dollar denominated, globally diversified, balanced fund, with a portfolio of funds and exchange traded funds (ETFs). Its balanced portfolio allows it to benefit from both expansionary and contractionary business cycles, as equities tend to do better in the former, while bonds and fixed income instruments tend to perform better in the latter.
The fund has two portfolio options to suit the risk appetite of different investors. The LionGlobal All Seasons Fund (Growth) has a 30/70 allocation to fixed income/equities, while the LionGlobal All Seasons Fund (Standard) has a 70/30 allocation to fixed income/equities.
The fixed income components in the portfolio currently comprises of the LionGlobal Short Duration Bond Fund, the LionGlobal Singapore Fixed Income Investment and LionGlobal Asia Bond Fund. The equity components in the portfolio include the LionGlobal Asia Pacific Fund, the LionGlobal Japan Growth Fund, the Vanguard S&P500 UCITS ETF and DB X-trackers Euro Stoxx 50 UCITS ETF.
The fund’s minimum initial subscription is S$100 and investors can subscribe to it using cash or Supplementary Retirement Scheme (SRS) monies.
Benefits of a Low Total Expense Ratio
The 0.5% cap on its TER translates to a $5 cost of investment for every $1000 invested, and includes an annual management fee of 0.25% p.a., which is much lower than other actively managed funds with a similar global investment mandate. The other components of the fund’s TER includes trustee fees, legal fees, audit fees, custodian fees, printing and distribution fees, and amortised expenses, but does not include brokerage and transaction costs.
“The LionGlobal All Seasons Fund was brought into existence primarily to create a simple, accessible and low-cost investment solution for investors at large. The term ‘all seasons’ is symbolic of the fact that the Fund is designed to better weather all economic cycles,” said Gerard Lee, CEO of Lion Global Investors.
“Research has shown that a lower TER is likely to lead to better returns over the longterm as a high cost of investment eats into investment returns. With the TER of the Fund capped at 0.5% p.a., investors will incur a lower cost of investment and this would increase their odds of earning better returns from their investment.”
“Through the funds and ETFs in the portfolio, investors can easily gain exposure to global equities and bonds. The Fund would appeal to long-term investors seeking a low-cost, well-diversified investment. Given LGI’s heritage and 32-year strong presence in the market, we are able to leverage our size to lower the costs from the underlying LGI funds that the Fund invests in, thereby resulting in a low TER,” concluded Lee.
Interested investors can learn more about the fund from Lion Global Investors, and apply for the fund at OCBC Bank branches, through the OCBC OneWealth™ app and OCBC Online Banking, as well as other online platforms including dollarDEX, FSMOne and POEMS.
(By Gwyneth Yeo)
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