A snapshot of portfolio allocation:
| Morgan fund | Templeton fund | |
| Top countries | US 51.6%
UK 4.7% Spain 4.5% |
South Korea 14.7%
Mexico 12.7% Uruguay 7.9% |
| Top
Sectors |
Government bonds 24.9%
Mortgage securities 19.0% Financial securities 13.5%
|
International government/agency (investment grade) 55.8%
International government/agency (non-investment) 10.5% Sovereign bonds (non-investment grade) 9.4% |
| Top
Currency |
US dollar 98.3%
British pound 0.9% Brazilian real 0.9% |
US dollar 72%
South Korean won 16.5% Mexican peso 16.0% |
| AUM |
$1.2bn |
$31.6bn |
| Number of holdings |
503 |
489 |
| Cash |
2.7% |
16.7% |
Source: Fund fact sheets on 31 May
Performance review
Both funds have outperformed the category of global fixed income products in Singapore universe over various periods until 31 May, as seen in the table below. But the Morgan fund fared better than the Templeton vehicle over one-year and six-month periods.
| 1-month | 3-month | 6-month | 1-year | |
| The Morgan fund | (-) 0.38% | (-) 0.6% | 1.3% | 0.7% |
| The Templeton fund | 0.03% | (-) 0.2% | (-) 1.4% | (-) 1.2% |
| Singapore mutual-fixed interest global | (-) 0.96% | (-) 0.7% | (-) 2.4% | (-) 5.2% |
Source: FE Analytics
Over a three-year period, the Templeton fund outperformed the Morgan vehicle.
| 3-year | 5-year | 10-year | |
| The Morgan fund |
19.9% |
|
|
| The Templeton fund |
22.6% |
36.3% |
139.3% |
| Singapore mutual-fixed interest global |
5.4% |
18.6% |
43.3% |
Source: FE Analytics
“In the short-term, the Morgan Stanley fund could have benefited more from the good performance of high yield corporate bonds.
“Over the medium-term, the Templeton fund has benefited due to some of its contrarian strategy plays,” said Ng.
For example, the Templeton fund started betting on Irish debt in the second half of 2011, he explained.
“Throughout the PIIGS [Portugal, Italy, Ireland, Greece and Spain] financial crisis, yields on Irish debt rose to about 15%. Yields fell to around 4% by the end of 2012,” Ng added.
The falling bond yield boosted the valuation of the portfolio, contributing to higher returns.
In terms of calendar year performance, the Morgan fund outperformed the Templeton fund year-to-date as well as in 2014.
|
|
Morgan fund |
Templeton fund |
| Year-to-date |
1.1% |
0.5% |
| 2014 |
4.8% |
(-) 0.3% |
| 2013 |
1.8% |
3.5% |
| 2012 |
15.5% |
19.8% |
Source: FE Analytics
“The majority of the Morgan Stanley fund’s positions were denominated in US dollars. The fund benefitted more [than the Templeton fund] from the dollar rally in 2014,” Ng said.
