MONTHLY FUND REVIEW
All data as at 30 November 2012 unless otherwise stated
Eastspring Investments
– Asian Property Securities Fund
1
2
FUND UPDATE
Investment objective
Eastspring Investments – Asian Property Securities Fund (the “Fund”) aims to maximize income and longterm total return by investing primarily in listed closed-ended Real Estate Investment Trusts and securities
of property-related companies, which are incorporated, listed in or have their area of primary activity in the
Asia Pacific Region. The Fund may also invest in depository receipts including American Depository
Receipts (ADRs) and Global Depository Receipts (GDRs), debt securities convertible into common shares,
preference shares and warrants.
COMMENTARY
Market overview3
Australia’s REITs paused for a breather in November following recent gains. The 17-member
S&P/ASX 200 A-REIT index fell 1.34% in November, its first month-on-month decline since August this
year. It underperformed the broader S&P/ASX 200 index, which shed 0.24% during the month.
Japan’s real estate and REITS stocks ended November with positive returns but underperformed the
broader market for the first time in three months. A rebound in external demand-linked sectors and focus on
the Yen’s weakness took hold of the market. The Topix Real Estate Index (TPREAL) advanced for a third
consecutive month in November, up 2.42% while the Topix Real Estate Investment Trust (TSREIT) rose for
a fourth month in a row, up 1.23%.
In Singapore, property developers and real estate investment trusts extended gains for a
sixth consecutive month in November driven by stocks with regional exposure. The FTSE Straits Times
Real Estate Index (FSTRE) gained 3.03% in November, outperforming both the FTSE Straits Real Estate
Investment Trust (FSTREI) and the broader Straits Times Index (FSSTI) which added 0.21% and 1.04%,
respectively, during the month. REITS underperformed property developers due to equity issuances. REITS
such as CapitaMall Trust and CapitaRetail China Trust (CRCT) have completed capital raisings recently.
In Hong Kong, the Hang Seng REIT rose for a sixth consecutive month in November, up 6.88% while the
Hang Seng Property Index gained 6.51%. Both indices outperformed the Hang Seng Index which advanced
1.80% during the month. Hong Kong’s property developers outperformed the broader market but
underperformed property investors as the announcement of Buyer’s Stamp Duty (BSD) and enhanced
Special Stamp Duty (SSD) on residential properties shifted investment demand to commercial property. As
a result of more restrictions for purchasing and re-selling residential properties, many investors transferred
their focus to commercial properties such as car parks, which are not affected by the new policies.
Fund performance
The Fund returned 1.4% (bid-to-bid basis) and outperformed the benchmark by 1.0% in November. The
one year NAV performance has been negatively impacted due to a Fair Value adjustment in November
2011. Since inception, the Fund has outperformed the benchmark by 1.7% p.a.
Total return, USD (%)
FUND PERFORMANCE
50
1 month
3 months
1 year
40
3 year*
5 years*
Since Inception*
34.3
30.3
26.6
30
20
15.4
9.9
10
4.4
1.4 0.4
17.7 16.1
7.9
0.0
0
-10
-1.5 -0.4 -1.9
-3.7
Fund (Offer-to-bid)
Fund (Bid-to-bid)
1.0
-0.7
MSCI AC Asia Pacific REIT Index
Source: Eastspring Investments (Singapore) Limited and RIMES. Class A share class; USD; net income
reinvested; Offer-bid includes 5.0% Initial Sales Charge w.e.f. 01 Aug 12 and 5.75% Initial Sales Charge
prior to 01 Aug 12. Inception Date: 28 Feb 07 *Annualised. Benchmark: MSCI AC Asia Pacific REIT Index.
Past performance is not necessarily indicative of the future or likely performance of the Fund.
Key contributors to performance
Westfield Group (structural underweight) and Westfield Retail Trust (Fund does not own) declined slightly for
the month and the positions benefitted the Fund. Ciputra Development was a key contributor to relative
performance in November. Its presales figure for the first 10 months of the year had more than doubled
compared to a year ago. The strong figure was due to strong prices and healthy launch pipeline.
Key detractors from performance
Like many of its peers in Hong Kong, the Link REIT kept getting more expensive as investors looking for
yield assets especially within Hong Kong space are running out of choice. The Fund does not own the stock
due to its pricey valuation and was a key detractor. Cache Logistics Trust and CapitaRetail China Trust
retracted slightly in November but both still registered good share price performances year to date.
Changes to the portfolio
During the month, there are no notable trades.
Strategy and outlook
The fund manager continues to keep a strong eye on relative valuations which have tended to outperform in
the medium term. The fund manager is getting more constructive on Australian REITs given the lower
interest rate outlook and relatively more attractive valuations compared to REITs in Hong Kong and
Singapore which had run up a lot during the year. The fund manager remains convinced that the underlying
residential prices in Hong Kong will continue to be robust, and developer balance sheets are strong enough
to take advantage of landbanking and healthy asset turns. This is despite the negative noise around policies
– which has had limited fundamental impact. As a result, the Fund remains weighted in Hong Kong. For
Singapore, the Fund continues to stay invested in resilient high dividend names but is underweight
residential property due to the downside risks in residential prices. Regionally, the Fund will continue to
recycle out of defensive more expensive REIT names, especially in Singapore and Hong Kong, to selective
residential and landlord plays. The fund manager may build up more positions in Asean property names
where economic growth is more supportive, consumer debt is lower and provides more opportunity for
sustained long term growth.
** Country classification by MSCI
Notes:
1. Lipper Leaders fund ratings do not constitute and are not intended to constitute investment advice or an offer to sell or
the solicitation of an offer to buy any security of any entity in any jurisdiction. As a result, you should not make an
investment decision on the basis of this information. Rather, you should use the Lipper ratings for informational
purposes only. Certain information provided by Lipper may relate to securities that may not be offered sold or delivered
within the United States (or any State thereof) or to, or for the account or benefit of, United States persons. Lipper is
not responsible for the accuracy, reliability or completeness of the information that you obtain from Lipper. In addition,
Lipper will not be liable for any loss or damage resulting from information obtained from Lipper or any of its affiliates. ©
Thomson Reuters 2011. All rights reserved. Data as at 30 November 2012.
2. © 2011 Morningstar. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar and/or
its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely.
Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this
information. Data as at 30 November 2012.
3. Market data from Bloomberg, 30 November 2012
CONTACT DETAILS
Eastspring Investments (Singapore) Limited (UEN: 199407631H)
10 Marina Boulevard, #32-01 Marina Bay Financial Centre Tower 2, Singapore 018983
Tel: 6349 9711 Fax: 6509 5382
www.eastspringinvestments.com.sg
Important Information
This document is solely for information and may not be published, circulated, reproduced or distributed in whole or part
to any other person without the prior written consent of Eastspring Investments (Singapore) Limited (“the Manager”)
(UEN: 199407631H). This document is not an offer or solicitation of an offer for the purpose of investment units in the
Fund and nothing herein should be construed as a recommendation to transact in any investment product. Please note
that the securities mentioned are included for illustration purposes only. It should not be considered a recommendation to
purchase or sell any particular security. The securities discussed do not represent the fund's entire portfolio and in the
aggregate may represent only a small percentage of the Fund's portfolio holdings.
The fund(s) mentioned in this document is(are) sub-fund(s) of Eastspring Investments (“the SICAV”), an open-ended
investment company with variable capital (société d’investissement à capital variable) registered in the Grand Duchy of
Luxembourg on the official list of collective investment undertakings pursuant to part I of the Luxembourg law of 17
December 2010 relating to undertakings for collective investment (the "2010 Law") and the Directive 2009/65/EC of the
European Parliament and of the Council of 13 July 2009 (the "UCITS Directive").
Investors should be aware that investment in property is a long-term undertaking and there are specific risks associated
with investment in real estate investment trusts and property related securities of companies. These include the cyclical
nature of the real estate market, exposure to domestic and global macroeconomic cycles, increases in interest rates,
fluctuations in security prices owing to stock market movements and changes in investor sentiment, increases in property
taxes and operating expenses, depreciation in the value of buildings over time, variations in property prices and rental
income, changes in district values, changes in government policies with regards to real estate, regulatory limits on rents,
changes in zoning laws, environmental risks, related party risks, losses generating from casualty and natural
catastrophes (e.g. earthquakes), and changes in other real estate capital market factors.
Investors should note that the net asset value of this Fund is likely to have a high volatility due to its investment
policies or portfolio management techniques. The Fund may use derivative instruments for efficient portfolio
management or hedging purposes.
A prospectus in relation to the Fund is available and a copy of the prospectus may be obtained from the Manager and its
distribution partners. Investors should read the prospectus before deciding whether to subscribe for or purchase units in
the Fund. All application for units in the Fund must be made on the manner described in the prospectus. The value of
units in the Fund and the income accruing to the units, if any, may fall or rise. Past performance of the Fund/manager is
not necessarily indicative of the future performance of the Fund. The prediction, projection or forecast on the economy,
securities markets or the economic trends of the markets targeted by the Fund are not necessarily indicative of the future
or likely performance of the Fund. An investment in the Fund is subject to investment risks, including the possible loss of
the principal amount invested. Investors may wish to seek advice from a financial adviser before making a commitment
to invest in units of the Fund Whilst the Manager has taken all reasonable care to ensure that the information contained
in this document is not untrue or misleading at the time of publication, the Manager cannot guarantee its accuracy or
completeness. Any opinion or estimate contained in this document is subject to change without notice. The Manager is
an ultimately wholly-owned subsidiary of Prudential plc of the United Kingdom. Eastspring Investments (Singapore)
Limited and Prudential plc are not affiliated in any manner with Prudential Financial, Inc., a company whose principal
place of business is in the United States of America.
MM308/201212