(January - June 2008)
For Policyholders
SEMI-ANNUAL FUND REPORT (Januar y - June 2008)
SemiAnnual
Funds
Report
For Policyholders
CONTENTS
PERFORMANCE REPORT/PORTFOLIO STATEMENT
AIA Growth Fund
AIA Regional Equity Fund
AIA Regional Fixed Income Fund
AIA Money Market Fund
AIA Global Equity Fund
AIA Global Bond Fund
AIA U.S. Equity Fund
AIA Global Balanced Fund
AIA European Equity Fund
AIA Global Technology Fund
AIA International HealthCare Fund
AIA Acorns of Asia Fund
AIA Managed Portfolios
AIA Greater China Balanced/Equity Fund
AIA India Equity Fund
AIA India Balanced/Opportunities Fund
AIA Japan Balanced/Equity Fund
AIA Emerging Market Balanced/Equity Fund
AIA Global Resources Fund
2
7
12
16
19
23
27
31
43
47
51
55
61
74
80
84
90
96
102
BALANCE SHEET/INCOME STATEMENT
AIA Growth Fund
AIA Regional Equity Fund
AIA Regional Fixed Income Fund
AIA Money Market Fund
AIA Global Equity Fund
AIA Global Bond Fund
AIA U.S. Equity Fund
AIA Global Balanced Fund
AIA European Equity Fund
AIA Global Technology Fund
AIA International HealthCare Fund
AIA Acorns of Asia Fund
AIA Portfolio 30 Fund
AIA Portfolio 50 Fund
AIA Portfolio 70 Fund
AIA Portfolio 100 Fund
AIA Greater China Balanced Fund
AIA Greater China Equity Fund
AIA India Balanced Fund
AIA India Equity Fund
AIA India Opportunities Fund
AIA Japan Balanced Fund
AIA Japan Equity Fund
AIA Emerging Markets Equity Fund
AIA Emerging Markets Balanced Fund
AIA Global Resources Fund
106
107
108
109
110
111
112
113
114
115
116
117
118
119
120
121
122
123
124
125
126
127
128
129
130
131
NOTES TO THE FINANCIAL STATEMENTS
132
Fund returns in Singapore dollars on a bid-to-bid price basis with net dividends reinvested. Past performance is not indicative of future results. Certain information
may be based on information received from sources we consider reliable but does not represent that such information is accurate or complete and it may not be
relied upon as such. Any opinions, projections, forecasts and forward-looking statements presented herein are valid only as of the date of this document and are
subject to change. This letter is for your information only and does not have regard to the specific investment objectives, financial situation and particular needs of
any persons. We are not soliciting or recommending any action based on any information in this document.
Semi-Annual Fund Report for Policyholders
1
AIA
Growth Fund
PERFORMANCE REPORT
Overview
Asian equities endured a weak first-half of 2008, along with major
equity markets around the world, as sentiment remained edgy due to
the ongoing housing and financial crisis in the US. The Singapore
stock market, in similar vein, encountered selling pressure on
concerns over the macroeconomic issues of slowing growth and high
inflation threatening to work its way through deteriorating corporate
earnings. Fixed income markets in Asia and Singapore also had to
endure a difficult first half. Corporate bonds had to contend with the
US credit crisis while government bond yields rose on inflation fears.
Market Review
The FTSE AW Singapore Index fell 13.6% during the first six months
of the year. The stock market reached a 52-week low in March when
the US credit crunch deepened and brought Bear Sterns to its knees,
stoking fears of far reaching consequences of the financial crisis.
Stocks bounced after the US Federal Reserve orchestrated a rescue
of Bear Sterns and implemented various liquidity supports to the
financial markets. The rally gave way, however, when surging energy
and food costs sent inflation spiraling to higher levels across the
world, sparking stagflation fears. In response, central bankers
deliberated tighter monetary policies and numerous Asian
governments scaled back on fuel subsidies. For instance, not only
did India hike domestic energy prices but it also increased interest
rates twice in June. Fears over further losses and new rounds of
capital raising by US and Europe financial institutions also sapped
sentiment.
In Singapore, economic growth has moderated while inflation
pressures have intensified. GDP growth has decelerated from 6.9%
in the first quarter to 1.9% in the second quarter (based on advance
estimates). On the other hand, the Consumer Price Index (CPI) has
hovered at 7.5%, the highest level since the early 1980s. For the full
year, the official projection is for GDP growth to ease to 4-6% from
last year’s 7.7%, while the CPI is forecast to rise from 2.1% last year
to 6-7%.
Banking stocks – which were the first to be hit by the credit crunch
last year -enjoyed relative out-performance year-to-date. This
occurred as concerns over banks’ CDO exposures were alleviated by
aggressive provisioning coverage. In addition, strong double-digit
loans growth helped to draw investors’ interest. In contrast, Singapore
Exchange (SGX) became a victim of sluggish market trading activities
with its share price taking a beating.
The property sector underperformed the market on lackluster demand,
prompting developers to delay new launches and lower prices.
Capitaland’s share price bucked the trend, however, reflecting its
diversified asset and earnings base. The offshore/marine stocks also
retraced their gains, although Sembcorp Marine managed to outpace
the market. Investors became more cautious about the sector’s
prospects as Cosco and Ausgroup issued warnings over order
cancellations and earnings losses respectively. The sector’s earnings
outlook was also deemed less attractive due to rising steel costs and
slower orderbook momentum.
Semi-Annual Fund Report for Policyholders
2
Commodities and Resource stocks eg. Straits Asia Resources, Noble
Group and plantation counters – were well sought after by investors
as their earnings benefited from rising product prices.
Telecommunication stocks out-performed the market by virtue of
their low beta and strong cash flows. For the transportation sector,
the main bugbears were concerns over fuel costs and demand. Apart
from SMRT which rose on a pick up in passenger ridership, the other
stocks – Comfort Delgro, SIA, NOL and STX – saw share prices
retreating. Technology stocks generally lost ground due to a weaker
demand outlook and a sliding US dollar.
The FTSE Straits Times China Index slid 45.3%, significantly worse
than the broad market. By and large, S-chips’ earnings traction was
weak, reflecting their susceptibility to rising raw material costs and
execution issues. The weak market sentiment also resulted in a
significant valuation derating of this sector, often perceived to have a
higher risk profile.
Corporate bonds spreads globally widened on fears that the
continuing decline in US house prices, rising foreclosures, additional
write-downs by major financial institutions and contraction in
lending, would lead to a downward spiral. While government bonds
fared relatively better than corporate bonds as a result of buying
support from investors shifting into safe haven assets, government
bond markets in the region and Singapore were not spared from
volatility due to surging inflation. As in the region, domestic inflation
continued to climb pressured by high crude oil, commodities and
food prices and a low unemployment rate. From 4.4% in December
2007, the CPI surged to 6.5% in January and climbed further to a
26-year high of 7.5% in April and remained at that elevated level till
end June. A strong currency bias by the local central bank to combat
accelerating domestic inflation and a weak USD continued to put
upward pressure on the SGD, which strengthened to an all-time high
of SGD1.3460/USD1.00, exceeding the previous high reached
before the Asian crisis. Continued appreciation of the SGD currency
drew strong capital inflows, keeping short-term rates low. The onemonth interbank rate fell sharply from about 2% as at end 2007 to
a low of 0.8% in April. Aggressive US Fed rate cuts, decline in UST
yields, strong domestic liquidity, low short-term rates and global risk
aversion provided strong buying support for Singapore Government
Securities (SGS), resulting in the yield on the benchmark 10-year
SGS falling sharply to a low of about 2% in mid March from end
December 2007 level of 2.7%. However, the confluence of inflation
fears, rising UST yields and the weak results of a re-opening of
a government bond issue led to a major sell-off in the
government bond market in the second quarter. The yield on
the 10-year benchmark Singapore Government Securities
(SGS) surged to almost 4% before easing to close the first half
at 3.6% for a rise of 0.9%.
Fund Performance and Review
For the first half of 2008, the AIA Growth Fund registered a decline of
14.11%, versus the benchmark decline of 9.60%.
AIA
Growth Fund
PERFORMANCE REPORT
On the equities portion, several factors contributed to the
underperformance. The underweight position in banks and resources
sectors, coupled with the overweight in property and S-chips caused
the portfolio to underperform the benchmark. The mitigating factor
was the higher level of cash held through the period, which softened
the impact of the falling market on the portfolio.
Outlook
At time of writing, concerns over repercussions from the global credit
crunch and US housing crisis continue to linger. Asset prices, such
as real estate and equities, which had ridden higher on easy liquidity
conditions during the last few years are now suffering from the effects
of de-leveraging in the financial system. Rising inflation is also
becoming a complicating issue for the global economy, which by now
may be too beleaguered by the credit crisis to absorb higher input
costs without a deterioration in growth prospects. The latest reading
of the OECD Composite Leading Indicator continues to depict a poor
economic outlook, and has yet to show signs of bottoming. Moreover,
there is a risk that monetary policies may turn more restrictive in
order to combat inflation, which would stifle the rehabilitation of the
global economy and financial markets.
As a small and open economy, Singapore is unlikely to escape
unscathed from exogenous shocks and macro risks in the global
economy. The corporate earnings cycle has become less attractive
due to slower demand growth, cost pressures and unfavourable
foreign exchange rates. The ability of the Singapore stock market to
make constructive gains is more challenging than in the last five
years. Stock picking will focus on seeking out stocks with defensive
qualities. In addition, stocks with strong niche that lend themselves
to earnings resilience, such as selected healthcare and offshore/
marine stocks, will also be favoured.
Taking a longer-term perspective, the current downbeat sentiment
offers opportunities to pick up quality companies at more
attractive prices. While mindful of the possible volatility in the
near-term, the Fund will position itself for long-term gains
judiciously.
Semi-Annual Fund Report for Policyholders
3
AIA
Growth Fund
FUND PERFORMANCE
Period
3-month
6-month
1-year
3-year ^
5-year ^
Since inception ^
As at 30 JUNE 2008
Fund
%
Benchmark*
%
Over (Under)
Performance
%
(2.01)
(14.11)
(14.37)
(13.72)
16.36
6.03
(1.95)
(9.60)
(8.87)
10.99
12.45
3.41
(0.06)
(4.51)
(5.50)
2.73
3.91
2.62
^ Annualised Returns
* Benchmark Details:
Inception to December 97 - 80% Customer Equity Index (80% SESALL + 20% MSCI Sing) 20% 1 mth SIBOR (mid)
January 98 to August 98 - 50% MSCI Sing + 30% MSCI Malay + 20% 1 mth SIBOR (bid)
September 98 to November 99 - 80% MSCI Sing + 20% 1 mth SIBOR (bid)
December 99 to April 11, 01 - 80% SES AII Index + 20% 1 mth SIBOR (bid)
From April 12, 01 onwards - 70% SES AII Index@ + 30% JP Morgan Singapore Government Bond Index AII (All Sectors)
From 01 July 06 onwards - 70% FTSE Singapore Total; Return + 30% JP Morgan Singapore Government Bond Index All (All Sectors)
PORTFOLIO STATEMENTS
Country Allocation
As at 30 JUNE 2008
Market Value
SGD
% of Net
Asset Value
Singapore
Germany
China
USA
Hong Kong
UK
South Korea
France
Indian
Indonesia
Pakistan
Others
519,820,454
21,689,890
20,087,715
19,229,904
9,412,500
9,267,813
6,713,900
5,126,000
2,147,939
1,320,900
573,866
4,664,388
76.09
3.17
2.94
2.81
1.38
1.36
0.98
0.75
0.31
0.19
0.08
0.68
Portfolio of Investment
Other net assets
620,055,269
63,135,863
90.76
9.24
Total
683,191,132
100.00
Market Value
SGD
% of Net
Asset Value
Banking & Finance
Real Estate
Agricultural
Telecom
Engineering
Transport
Manufacturing
Education
Sovereign
Energy
Basic Materials
Others
247,149,517
110,172,336
41,515,600
41,118,050
40,745,620
40,493,700
36,830,915
21,387,370
10,750,766
8,523,600
3,778,350
17,589,445
36.18
16.13
6.08
6.02
5.96
5.93
5.39
3.13
1.57
1.25
0.55
2.57
Portfolio of Investment
Other net assets
620,055,269
63,135,863
90.76
9.24
Total
683,191,132
100.00
Industry Allocation
Semi-Annual Fund Report for Policyholders
4
AIA
Growth Fund
PORTFOLIO STATEMENTS
Asset Class
Equities
Fixed Income Securities
Other Net Assets
Credit Rating of Debt Securities
Aaa
Aa1
Aa2
Aa3
A1
A2
A3
Baa1
Baa2
Ba2
B1
B2
Not rated
Top 10 Holdings As At 30 June 2008
DBS GROUP HOLDINGS LTD
UNITED OVERSEAS BANK LTD
SINGAPORE TELECOM
OVERSEA-CHINESE BANKING-ORD
KEPPEL CORPORATION LIMITED
WILMAR INTERNATIONAL LTD
RAFFLES EDUCATION CORP LTD
SINGAPORE EXCHANGE LTD
CITY DEVELOPMENTS LTD
CAPITALAND LIMITED
Top 10 Holdings As At 30 June 2007
DBS GROUP HOLDINGS LTD
SINGAPORE TELECOM
KEPPEL CORPORATION LIMITED
UNITED OVERSEAS BANK LTD
RAFFLES EDUCATION CORP LTD
CAPITALAND LIMITED
CITY DEVELOPMENTS LTD
SINGAPORE AIRLINES LTD
OVERSEA-CHINESE BANKING-ORD
SINGAPORE EXCHANGE LTD
As at 30 JUNE 2008
Market Value
SGD
% of Net
Asset Value
471,074,956
148,980,313
63,135,863
68.95
22.81
9.24
683,191,132
100.00
Market Value
SGD
% of Net
Asset Value
19,269,100
3,786,840
32,352,800
23,968,150
6,926,850
7,124,154
10,213,500
678,300
5,637,753
657,900
663,000
573,866
47,106,500
2.82
0.55
4.74
3.51
1.01
1.04
1.49
0.10
0.83
0.10
0.10
0.08
6.90
Market Value
SGD
% of Net
Asset Value
47,338,600
42,360,500
36,625,350
32,680,000
29,944,320
25,603,600
21,018,000
19,589,850
18,157,920
17,088,600
6.93
6.20
5.36
4.78
4.38
3.75
3.08
2.87
2.66
2.50
Market Value
SGD
% of Net
Asset Value
46,740,000
34,399,500
29,500,000
29,436,000
28,892,160
27,232,200
24,652,500
22,259,200
21,777,000
18,169,200
6.52
4.80
4.12
4.11
4.03
3.80
3.44
3.11
3.04
2.54
Semi-Annual Fund Report for Policyholders
5
AIA
Growth Fund
OTHER INFORMATION
Exposure To Derivatives
As at 30 JUNE 2008
Market Value
SGD
% of Net
Asset Value
Realised
Gains/(Losses)
SGD
Unrealised
Gains/(Losses)
SGD
(20,308)
(0.00)
747,554
(20,308)
Forward foreign exchange contracts
Investment In Collective Investment Schemes
N/A
Borrowings
N/A
Total Redemptions and Subscriptions
SGD
Total amount of redemptions
Total amount of subscriptions
63,019,287
107,320,328
Related-Party Transactions
N/A
Expense Ratios
30 June 2008
30 June 2007
1.29%
1.29%
30 June 2008
30 June 2008
20.93%
23.06%
Local Fund
Note:
Expense ratio does not include insurance coverage, brokerage and other transaction costs, performance fee, foreign
exchange gains/losses, front or back end loads arising from the purchase or sale of collective investment schemes
and tax deducted at source or arising out of income received.
Turnover Ratios
Local Fund
Note:
The turnover ratio is calculated based on the lesser of portfolio purchases and sales of the underlying investments
expressed as a percentage over the average net asset value.
Any Material Information That Will Adversely Impact The Valuation Of The Fund
NIL
Soft Dollar Commissions
NIL
Semi-Annual Fund Report for Policyholders
6
AIA
Regional Equity Fund
PERFORMANCE REPORT
Overview
The Asia ex Japan (AeJ) region, represented by the MSCI Far East Free
ex Japan benchmark, suffered a fall of 23.6% (in Singapore Dollar
terms) during the first-half of the year. This was the region’s worst
performance for the period since 1992, when there was a similar
sharp decline of more than 20% against a backdrop of a deflating
asset bubble in Japan.
This slump came amidst a very difficult period for financial markets
globally. Indeed, both equities and bonds in the United States have
fallen in tandem for only the sixth time since the savings & loans
crisis of the 1990s.
Ironically, this is against a backdrop of a global economy that is still
showing signs of robustness. Indeed, the International Monetary
Fund (IMF), in its recently published “World Economic Outlook” report,
actually raised its forecast for global growth to 4.1% for 2008,
compared to an earlier assessment of 3.7% that it projected in April.
It was of the opinion that the slowdown linked to tightening credit
conditions in the first-quarter of this year was less severe than
anticipated.
Nonetheless, the underlying fear in markets has been the onset of
stagflation – stagnating economic growth in an environment of
heightening inflation. Concerns about the latter have been triggered
by sharp rises in food and energy prices. As an illustration, a gauge of
19 commodities via the Reuters/Jefferies CRB Index showed a 49
percent climb in the past year, exceeding the record 48 percent
annual gain in 1973.
With the view that central banks would have no leeway but to hike
interest rates to contain such inflationary pressures, this has led to
concurrent worries about their impact on growth.
This unpalatable scenario has underpinned a very visible withdrawal
of portfolio investment funds from the region. According to data
provided by Citigroup Global Markets, the year-to-date net outflows
have risen to about US$13 billion.
Market Review
All markets in the region fell during the first-half of 2008, although in
varying degrees. A key feature has been the volatile movements
experienced by markets and its constituent sectors.
Overall, stock prices have exhibited a downward bias on account of
worries about a possible recession in America and its impact on
global growth, widening credit spreads, and the advent of inflationary
pressures.
The sharpest declines among countries within AeJ have been
registered by the Philippines and China. The former has been
grappling with rising food prices, specifically rice, on which there is
significant import dependency. There have also been concerns about
the budget deficit situation, and how government plans to raise debt
funding might de-stabilize the local bond markets.
In China, with inflation running at its highest level in more than ten
years, worries have abounded about a possible hard economic
landing as the authorities have adopted a tighter monetary policy
stance to contain price pressures. In addition, investor sentiment has
been unsettled by a series of natural disasters, including the recent
earthquake in Sichuan.
Elsewhere, both Thailand and Taiwan actually achieved positive
returns in the early part of the year. Investors in Taiwan responded
positively to the emphatic electoral victory of the Kuomintang in the
general election held in March. This was seen as paving the way for
normalizing and deepening economic ties with China, which would
then benefit the domestic economy through encouraging crossborder investments. For Thailand, the lifting of official capital
restrictions generated a short-term salutary effect. However, both
countries subsequently succumbed to similar negative sentiment
that had pervaded its regional counterparts.
Fund Performance
In the first half of 2008, the AIA Regional Equity Fund registered a
decline of 25.97%, versus the benchmark decline of 22.91%.
In terms of country allocation, the performance of the Fund was
dragged down by the underweight position in Singapore and Taiwan.
While both markets fell, they did so by a smaller amount than other
markets. On that same token, the overweight position in stocks
exposed to China, via H-shares and S-chips, also hampered the
Fund’s performance. One mitigating factor was the higher level of
cash held through the review period, which cushioned the fall of the
portfolio.
Outlook
The immediate outlook for the region’s financial markets remains
murky at the time of writing. Consequently, sentiment swings among
investors should continue to feature.
Inflation continues to be a major risk in investors’ mindset. For
instance, consumer prices in Europe have recently accelerated to
their fastest in more than 16 years. In the United States, the June
consumer price index recorded an annual rise of 5%, the largest
increase since 1991.
As highlighted earlier, in order to combat this, central banks globally
will probably need to hike interest rates further, and such action
could lead to economies around the world experiencing reduced
growth next year. In addition, for many emerging markets, including
Asia’s, where inflationary pressures are seen to be even stronger, the
IMF believes tighter monetary policies have to be also complemented
by less pro-growth fiscal measures.
Nervousness among investors will also not be alleviated by continual
negative news relating to the troubled property sector in the United
States. For instance, the most recent episode concerned the financial
challenges faced by two key institutions, the Federal National
Semi-Annual Fund Report for Policyholders
7
AIA
Regional Equity Fund
PERFORMANCE REPORT
Mortgage Association (Fannie Mae) and the Federal Home Loan
Mortgage Corporation (Freddie Mac). This pair constitutes the largest
source of home financing in America, through either owning or
guaranteeing around half of the US$12 trillion in home loans
outstanding. Their demise would have deepened the worst housing
recession in nearly 25 years. Thus the authorities in the US have had
to assemble a rescue plan to stem a loss of confidence in the two
firms.
From a strategic perspective, this action is in keeping with the
determination of central banks and governments globally to initiate
measures to prevent a prolonged recession. This should provide a
good prop for markets.
Simiarly, the longer-run investment case for AeJ remains. The industrial
transformation of China and India should continue to progress. China
has already overtaken the United Kingdom’s as the world’s fourthbiggest economy, and is poised to edge out Germany as the thirdlargest by 2009. The growth of this duo will provide complementary
benefits for the region.
To underline the trend, in a recent survey conducted by consultant
KPMG International, which polled corporate investment strategists
from more than 300 of the biggest multinational companies, China
was expected to overtake the United States as the world’s leading
recipient of corporate investment in the next five years. It should also
become the most influential country in information technology,
industrial products and mining. As for India, it should see the largest
growth in its share of foreign investment overall.
Demographically, the region also has the advantage of having a rising
proportion of households with strong middle-class aspirations. The
high savings rate (at an estimated 30% overall) also provides a
potential platform for achieving a more sustainable economic
expansion going forward through growth in domestic consumption.
Countries in the region are also striving to make themselves more
economically efficient through on-going infrastructure development
and renewal, which will further underpin growth.
Thus, while more short- term pain is expected for the regional markets,
the fundamental underpinnings portend a positive longer term
outlook. We will continue to monitor and evaluate opportunities
carefully in order to best position the portfolio.
Semi-Annual Fund Report for Policyholders
8
AIA
Regional Equity Fund
FUND PERFORMANCE
Period
3-month
6-month
1-year
3-year ^
5-year ^
Since inception ^
As at 30 JUNE 2008
Fund
%
Benchmark*
%
Over (Under)
Performance
%
(7.93)
(25.97)
(21.21)
8.48
15.35
13.02
(7.75)
(22.91)
(15.40)
10.94
16.24
4.29
(0.18)
(3.07)
(5.81)
(2.46)
(0.89)
8.73
^ Annualised Returns
* Benchmark Details:
Inception to December 2000 - MSCI AC Far East Free ex Japan Gross
From January 2001 onwards - MSCI AC Far East Free ex Japan, DTR (Net)
PORTFOLIO STATEMENTS
Country Allocation
As at 30 JUNE 2008
Market Value
SGD
% of Net
Asset Value
China
South Korea
HongKong
Taiwan
Singapore
Malaysia
Indonesia
Philippines
Thailand
India
136,777,052
141,380,289
106,406,207
102,562,418
38,007,940
30,894,620
25,364,359
7,110,504
18,769,541
5,670,778
21.60
22.33
16.81
16.20
6.00
4.88
4.01
1.12
2.96
0.90
Portfolio of Investment
Other net assets
612,943,707
20,199,777
96.81
3.19
Total
633,143,484
100.00
Market Value
SGD
% of Net
Asset Value
Electronics
Banking & Finance
Manufacturing
Basic Materials
Real Estate
Energy
Telecom
Construction
Leisure
Transport
Others
Agriculture
94,422,101
114,907,920
74,174,521
72,017,995
40,377,358
56,298,433
54,927,379
24,872,181
25,469,784
24,301,057
21,881,225
9,293,753
14.91
18.15
11.72
11.37
6.38
8.89
8.68
3.93
4.02
3.84
3.46
1.47
Portfolio of Investment
Other net assets
612,943,707
20,199,777
96.81
3.19
Total
633,143,484
100.00
Industry Allocation
Semi-Annual Fund Report for Policyholders
9
AIA
Regional Equity Fund
PORTFOLIO STATEMENTS
Asset Class
Equities
Other Net Assets
Credit Rating of Debt Securities
Not rated
Top 10 Holdings As At 30 June 2008
CHINA MOBILE LTD
SAMSUNG ELECTRONICS
HUTCHISON WHAMPOA LIMITED
CHINA LIFE INSURANCE CO LTD-H
POSCO
UNITED OVERSEAS BANK LTD
CNOOC LTD
TAIWAN SEMICONDUCTOR MANUFACTURING CO
HANG SENG BANK LTD
PT BUMI RESOURCES TBK
Top 10 Holdings As At 30 June 2007
SAMSUNG ELECTRONICS
HYUNDAI HEAVY INDUSTRIES
CHINA MOBILE LTD
CHINA LIFE INSURANCE CO LTD-H
GS ENGINEERING AND CONSTRUCTION CO LTD
HUTCHISON WHAMPOA LIMITED
TAIWAN SEMICONDUCTOR MANUFACTURING CO
POSCO
PETROCHINA CO LTD - H SHS
CHEUNG KONG (HOLDINGS) LTD
Semi-Annual Fund Report for Policyholders
10
As at 30 JUNE 2008
Market Value
SGD
% of Net
Asset Value
612,943,707
20,199,777
96.81
3.19
633,143,484
100.00
Market Value
SGD
% of Net
Asset Value
612,943,707
96.81
Market Value
SGD
% of Net
Asset Value
30,892,843
28,441,005
16,424,390
16,118,745
16,020,054
16,013,200
15,098,094
14,969,163
10,759,871
10,333,891
4.88
4.49
2.59
2.55
2.53
2.53
2.38
2.36
1.70
1.63
Market Value
SGD
% of Net
Asset Value
32,796,809
29,369,617
22,014,514
20,742,524
19,355,084
18,204,631
17,030,778
16,630,639
15,762,950
15,330,100
4.11
3.68
2.76
2.60
2.43
2.28
2.13
2.08
1.98
1.92
AIA
Regional Equity Fund
OTHER INFORMATION
Exposure To Derivatives
As at 30 JUNE 2008
Market Value
SGD
% of Net
Asset Value
Realised
Gains/(Losses)
SGD
Unrealised
Gains/(Losses)
SGD
0
0.00
(613,538)
0
Forward foreign exchange contracts
Investment In Collective Investment Schemes
N/A
Borrowings
N/A
Total Redemptions and Subscriptions
SGD
Total amount of redemptions
Total amount of subscriptions
56,506,220
71,788,909
Related-Party Transactions
N/A
Expense Ratios
30 June 2008
30 June 2007
1.33%
1.35%
30 June 2008
30 June 2007
60.16%
65.32%
Local Fund
Note:
Expense ratio does not include insurance coverage, brokerage and other transaction costs, performance fee, foreign
exchange gains/losses, front or back end loads arising from the purchase or sale of collective investment schemes
and tax deducted at source or arising out of income received.
Turnover Ratios
Local Fund
Note:
The turnover ratio is calculated based on the lesser of portfolio purchases and sales of the underlying investments
expressed as a percentage over the average net asset value.
Any Material Information That Will Adversely Impact The Valuation Of The Fund
NIL
Soft Dollar Commissions
NIL
Semi-Annual Fund Report for Policyholders
11
AIA
Regional Fixed Income Fund
PERFORMANCE REPORT
Portfolio Performance
For first-half 2008, the AIA Regional Fixed Income Fund (Fund)
registered a return of minus 1.76%, 47 basis points behind its
benchmark, the JP Morgan Singapore Government Bond Index (All
Sectors) which recorded a return of minus 1.29%.
Asset Class Overview
Global bonds faced a challenging first half with credit spreads
widening substantially while government bonds had to contend with
inflationary pressures. Financial markets were spooked by concerns
that the continuous decline in US house prices, rising foreclosures,
additional write-downs by financial institutions and contraction in
bank credit would lead to a downward spiral. The deterioration in
credit and liquidity conditions led the US Fed to cut rates aggressively.
The Fed unexpectedly cut its target rate by a large 75 basis points on
22 January, before its next scheduled meeting. This was followed by
three more rate cuts totalling 150 basis points, bringing the target
rate to 2% by end June. Doubts over the soundness of US financial
institutions were raised when Bear Stearns was taken over by JP
Morgan Chase with help from the Fed, at a massive discount to Bear
Stearn’s stated NAV. Heightened risk aversion, recessionary fears
and aggressive Fed rate cuts led to strong demand for US Treasuries
(UST). The yield on the 10-year UST Note fell to the year’s low of
3.3% in mid-March from last year’s close of 4.02%. However, UST
yields rebounded in the second quarter on inflation fears, to a high
of almost 4.3% before easing to close the first half at 4%. Weakness
in the US economy which is on the brink of recession mitigated the
spike in yields.
In Singapore, government bond yields were driven by the general
direction of US interest rates and inflationary concerns, while
corporate bond spreads were driven by credit events in the US. As in
the region, domestic inflation continued to climb, pressured by high
crude oil, commodities and food prices and a low unemployment
rate. From 4.4% in December 2007, the CPI surged to 6.5% in
January and climbed further to a 26-year high of 7.5% for each of the
3 months in the second quarter. A strong currency stance by the
local central bank to mitigate inflationary pressures and a weak USD
resulted in a strong SGD, drawing strong capital inflows and keeping
short-term rates low. The one-month interbank rate fell sharply from
about 2% as at end 2007 to a low of 0.8% in April. Aggressive US
Fed rate cuts, decline in UST yields, strong domestic liquidity, low
short-term rates and global risk aversion provided strong buying
support for Singapore Government Securities (SGS), driving the 10year SGS yield down to a low of about 2% in mid-March from 2.7%
as at end December 2007. However, the confluence of inflation
fears, rising UST yields in the second quarter and weak results of a
re-opening of a government bond issue led to a sharp sell-off in the
SGS market. The 10-year SGS yield surged to almost 4% before
easing to close the first half at 3.6% for a rise of 1.8%. Corporate
bond spreads were driven by credit events in the US, with spreads
widening significantly in the first quarter on worsening of the US
credit crisis and doubts over the soundness of US financial institutions.
Although efforts by the Fed and the government to contain the crisis
and successful capital raising by financial institutions led to partial
Semi-Annual Fund Report for Policyholders
12
recovery in credit markets, credit spreads ended the half year
significantly wider than last year’s closing levels.
Portfolio overview
In the earlier part of the year, the Fund had adopted a cautious
stance by maintaining a relatively high level of cash based on the
view that the low level of bond yields in an inflationary environment
would be unsustainable. The Fund reduced cash holdings by
participating in the re-opening of the 10-year benchmark SGS auction
and two primary issues by Standard Chartered and DBS Bank. The
Fund also participated in a number of USD-denominated primary
issues most of which performed well in the secondary market. Most
of these have been sold to lock in profits. Although the Fund’s
prudent cash positioning provided some cushion against the rise in
bond yields, the resumption of spread widening in the second quarter
especially in the financial sector and the equities market downturn
adversely affected the Fund’s holdings of corporate bonds, especially
those in the financial sector, and REITs. Even with the sharp correction
in prices, the Fund’s selective holdings of REITs, whose fundamentals
remain sound, have added to Fund performance over the longer
horizon.
Portfolio Outlook
With the US housing market downturn showing no signs of bottoming,
the near term outlook for the region’s financial markets remains
uncertain at the time of writing. The US credit crisis which stemmed
from the most severe housing downturn in decades will continue to
dominate investors’ concerns. In addition, markets will have to
contend with inflationary risks. Central banks are faced with the
dilemma of the need for tighter monetary policy to combat inflation
in the face of slowing economic growth. Credit spreads are expected
to remain wide until there are signs of a bottoming of the US housing
downturn. Taking a longer-term perspective, the Fund will continue to
judiciously add to positions, mindful that markets will remain volatile
in the near term. We would also like to take this opportunity to record
our deep appreciation to our unit-holders for their support of the
Fund.
AIA
Regional Fixed Income Fund
FUND PERFORMANCE
Period
3-month
6-month
1-year
3-year ^
5-year ^
Since inception ^
As at 30 JUNE 2008
Fund
%
Benchmark*
%
Over (Under)
Performance
%
(2.19)
(1.76)
(3.40)
2.55
3.37
4.73
(4.06)
(1.29)
1.20
2.12
2.00
3.99
1.87
(0.47)
(4.60)
0.43
1.37
0.73
^ Annualised Returns
* Benchmark Details:
Inception to December 00 - UOB Sing Govt Bond Index (AII)
January 01 to December 01 - JP Morgan Sing Bond Index (AII)
January 02 to December 02 - JP Morgan Sing Bond Index (AII)
PORTFOLIO STATEMENTS
Country Allocation
As at 30 JUNE 2008
Market Value
SGD
% of Net
Asset Value
Singapore
USA
UK
Germany
Australia
Hong Kong
India
South Korea
France
Indonesia
UAE
Pakistan
Others
654,770,447
46,281,354
45,489,818
21,505,210
18,192,300
8,871,000
7,378,079
5,014,000
3,075,600
2,641,800
2,437,000
1,096,493
9,475,715
69.89
4.94
4.86
2.30
1.94
0.95
0.79
0.54
0.33
0.28
0.26
0.12
1.01
Portfolio of Investment
Other net assets
826,228,816
110,691,682
88.19
11.81
Total
936,920,498
100.00
Market Value
SGD
% of Net
Asset Value
Banking & Finance
Real Estate
Sovereign
Transportation
Manufacturing
Energy
Others
375,090,666
272,552,104
102,593,845
24,753,000
20,747,900
24,046,501
6,444,800
40.03
29.09
10.95
2.64
2.21
2.57
0.69
Portfolio of Investment
Other net assets
826,228,816
110,691,682
88.19
11.81
Total
936,920,498
100.00
Industry Allocation
Semi-Annual Fund Report for Policyholders
13
AIA
Regional Fixed Income Fund
PORTFOLIO STATEMENTS
Asset Class
Equities
Fixed Income Securities
Other Net Assets
Credit Rating of Debt Securities
Aaa
Aa1
Aa2
Aa3
A1
A2
A3
Baa1
Baa2
Ba2
B1
B2
Not rated
Top 10 Holdings As At 30 June 2008
UNITED OVERSEAS BANK VRN S 30 SEPT16
QUEENSLEY HLDGS LTD-4.5PCT S 5 DEC 2009
CAPITAMALL TRUST
STANDARD CHART VAR S 10 APR23
ASCENDAS REAL ESTATE INVESTMENT TRUST
OVERSEAS CHINESE BANKING CORP 5PCT S 06 SEPT 2011
DBS CAP FUNDING VRN S 29 MAY49
SINGAPORE GOVT 4PCT S 1 SEP18
DBS BANK 6PCT NON CUMULATIVE PREFERENCE SHARES 29 JUN 2049
CITY DEVELOPMENTS LTD MTN 5.5PCT S 12 JUN 2010
Top 10 Holdings As At 30 June 2007
CAPITAMALL TRUST
ASCENDAS REAL ESTATE INVESTMENT TRUST
QUEENSLEY HLDGS LTD-4.5PCT S 5DEC 2009
OVERSEAS CHINESE BANKING CORP 5PCT S 06 SEPT 2011
DBS BANK 6PCT NON CUMULATIVE PREFERENCE SHARES 29 JUN 2049
CITY DEVELOPMENTS LTD MTN 5.5PCT S 12 JUN 2010
CAPITALAND COMMERCIAL 4.4PCT S 3 MAR 2011
SINGAPORE GOVT 3.625PCT S 01 JUL 2011
SINGAPORE GOVT 3.75PCT S 01 SEP 2016
SINGAPORE EXCHANGE LTD
Semi-Annual Fund Report for Policyholders
14
As at 30 JUNE 2008
Market Value
SGD
% of Net
Asset Value
179,351,954
646,876,862
110,691,682
19.14
69.36
11.81
936,920,498
100.00
Market Value
SGD
% of Net
Asset Value
128,689,952
10,774,760
130,587,900
68,131,500
5,387,550
12,848,554
50,367,300
6,097,901
14,076,397
1,315,800
1,326,000
1,096,493
255,399,955
13.74
1.15
13.94
7.27
0.58
1.37
5.38
0.65
1.50
0.14
0.14
0.12
27.26
Market Value
SGD
% of Net
Asset Value
65,817,600
41,106,600
40,146,730
38,520,000
37,908,130
37,000,800
36,223,200
36,221,500
36,210,000
32,398,100
7.02
4.39
4.28
4.11
4.05
3.95
3.87
3.87
3.86
3.46
Market Value
SGD
% of Net
Asset Value
67,891,200
54,353,600
50,429,820
41,410,000
38,156,400
37,400,000
32,894,100
29,850,000
21,674,543
21,430,000
7.75
6.21
5.76
4.73
4.36
4.27
3.76
3.41
2.47
2.45
AIA
Regional Fixed Income Fund
OTHER INFORMATION
Exposure To Derivatives
As at 30 JUNE 2008
Market Value
SGD
% of Net
Asset Value
Realised
Gains/(Losses)
SGD
Unrealised
Gains/(Losses)
SGD
(42,212)
(0.00)
1,403,218
(42,212)
Forward foreign exchange contracts
Investment In Collective Investment Schemes
N/A
Borrowings
N/A
Total Redemptions and Subscriptions
SGD
Total amount of redemptions
Total amount of subscriptions
97,644,621
213,505,703
Related-Party Transactions
N/A
Expense Ratios
30 June 2008
30 June 2007
0.88%
0.88%
30 June 2008
30 June 2007
15.96%
27.84%
Local Fund
Note:
Expense ratio does not include insurance coverage, brokerage and other transaction costs, performance fee, foreign
exchange gains/losses, front or back end loads arising from the purchase or sale of collective investment schemes
and tax deducted at source or arising out of income received.
Turnover Ratios
Local Fund
Note:
The turnover ratio is calculated based on the lesser of portfolio purchases and sales of the underlying investments
expressed as a percentage over the average net asset value.
Any Material Information That Will Adversely Impact The Valuation Of The Fund
NIL
Soft Dollar Commissions
NIL
Semi-Annual Fund Report for Policyholders
15
AIA
Money Market Fund
PERFORMANCE REPORT
The SGD one-month inter-bank rate (“SGD rate”) traded at the yearto-date’s high of 1.88% in the beginning of 2008. On the back of
strong liquidity and capital inflows, an appreciating SGD as well as 3
US Fed rate cuts in the first quarter, the SGD rate slid to 0.875% in
mid-March. The SGD rate inched higher to 1.00% at the end of the
first quarter on the back of reports that local banks were borrowing in
the inter-bank market as well as a short-lived weakening of the SGD.
For the second quarter, a stronger SGD against the USD to curb
inflation, flushed liquidity and a 4th US Fed rate cut in end April
continued to place downward pressure on the SGD rate, with short
spikes in April and May reflecting market expectation of a lower
likelihood of further Fed rate cut and huge volatility in the US rates.
The SGD rate ended the first half of 2008 at 0.8125%, being the
year-to-date’s low.
Semi-Annual Fund Report for Policyholders
16
AIA
Money Market Fund
FUND PERFORMANCE
As at 30 JUNE 2008
Period
Fund
%
Benchmark*
%
Over (Under)
Performance
%
3-month
6-month
1-year
3-year ^
5-year ^
Since inception ^
0.19
0.38
1.16
1.96
1.36
1.05
0.15
0.39
1.36
2.24
1.68
1.54
0.04
0.00
(0.20)
(0.28)
(0.33)
(0.49)
^ Annualised Returns
* Benchmark Details:
Since Inception - 1 week SIBOR (Bid)
PORTFOLIO STATEMENTS
Country Allocation
As at 30 JUNE 2008
Market Value
SGD
% of Net
Asset Value
Other net assets
151,758,178
100.00
Total
151,758,178
100.00
Market Value
SGD
% of Net
Asset Value
Other net assets
151,758,178
100.00
Total
151,758,178
100.00
Market Value
SGD
% of Net
Asset Value
133,842,699
17,915,479
88.19
11.81
151,758,178
100.00
Market Value
SGD
% of Net
Asset Value
-
-
Market Value
SGD
% of Net
Asset Value
-
0.00
Market Value
SGD
% of Net
Asset Value
-
0.00
Industry Allocation
Asset Class
Cash and Equivalent
Other Net Assets
Credit Rating of Debt Securities
-
Top 10 Holdings As At 30 June 2008
-
Top 10 Holdings As At 30 June 2007
-
Semi-Annual Fund Report for Policyholders
17
AIA
Money Market Fund
OTHER INFORMATION
Exposure To Derivatives
As at 30 JUNE 2008
Market Value
SGD
% of Net
Asset Value
Realised
Gains/(Losses)
SGD
Unrealised
Gains/(Losses)
SGD
N/A
Investment In Collective Investment Schemes
N/A
Borrowings
N/A
Total Redemptions and Subscriptions
SGD
Total amount of redemptions
Total amount of subscriptions
409,335,152
497,915,581
Related-Party Transactions
N/A
Expense Ratios
30 June 2008
30 June 2007
0.32%
0.33%
30 June 2008
30 June 2007
0.00%
0.00%
Local Fund
Note:
Expense ratio does not include insurance coverage, brokerage and other transaction costs, performance fee, foreign
exchange gains/losses, front or back end loads arising from the purchase or sale of collective investment schemes
and tax deducted at source or arising out of income received.
Turnover Ratios
Local Fund
Note:
The turnover ratio is calculated based on the lesser of portfolio purchases and sales of the underlying investments
expressed as a percentage over the average net asset value.
Any Material Information That Will Adversely Impact The Valuation Of The Fund
NIL
Soft Dollar Commissions
NIL
Semi-Annual Fund Report for Policyholders
18
AIA
Global Equity Fund
PERFORMANCE REPORT
The AIA Global Equity Fund returned –13.55% for the six months
ended 30 June 2008. The benchmark, MSCI World DTR Net (USD)
returned –15.72% for the same period.
Asset Class Overview**
Global stocks had their worst yearly start since 2002 amid
accelerating troubles in the financial and housing sectors; increasing
evidence of a recession in the United States; and worries about the
potential for accelerating inflation and unemployment. The US
Federal Reserve continued to provide liquidity to the financial system
in a bid to simultaneously stimulate frozen credit and lending markets
and avoid a recession, or at least a long and drawn out recession. The
Fed also coordinated a rescue “firesale” of US investment bank Bear
Stearns to JP Morgan to try to avoid the potential repercussions of
such a large failure.
We are cautious on equities overall and have increased our overweight
in the United States and maintained our underweight in Europe due
to the incipient risks of a stronger Euro, higher inflation and downwardrevised corporate earnings. In addition, we have increased Japan
from an underweight to a neutral stance based on its relatively
attractive valuation and therefore downside protection vis-à-vis the
rest of the world.
**Source: AIG Global Investment Corp.
July 2008
Global equity markets suffered from now familiar economic headwinds
in the second quarter: slowing growth, rising unemployment, tight
credit markets and inflationary pressures from booming commodity
prices. Positive performance from Energy and Materials stocks, which
benefit in the short run from higher prices for commodities, counter
balanced steep drops in Financials, Consumer Discretionary and
Industrials. Overall, the MSCI AC World Index dropped. This drop was
paced by a negative return in Europe and a negative return in
Emerging Asia, while the commodities-intensive regions of Latin
America, EMEA and Australia/New Zealand performed well.
Portfolio Review**
The portfolio underperformed the benchmark MSCI AC World DTR Net
Index. This underperformance came primarily from stock selection in
Latin America, Japan and Europe. Stock picking in North America
and Emerging Asia performed well for the fund. Japanese industrials
performed very well as they have been able to benefit simultaneously
from growing markets in Southeast Asia and China, and they also
pass rising commodity and goods prices on to domestic consumers.
The portfolio outperformed the benchmark index on the strength of
stock selection and regional/sector allocation. The portfolio’s
underweight position in Financials and its overweight positions in
Materials and Energy boosted relative performance significantly. On a
regional basis, North America, Europe and EMEA all delivered positive
contribution to performance.
Portfolio Outlook**
The crisis in US financial markets and the associated economic
weakness continues to weigh on equity market sentiment. Inflation
and the extent to which high energy and food prices will impair
consumption are now among the chief concerns as well. Likely deleveraging in financial markets along with inflation and anemic or
negative growth is a bearish scenario for equities. For a more
sustained upturn in equity markets, we may have to await a
stabilization of economic conditions, not only in the United States,
but also in Europe.
At the moment, economic conditions are getting worse and not better.
Semi-Annual Fund Report for Policyholders
19
AIA
Global Equity Fund
FUND PERFORMANCE
Period
3-month
6-month
1-year
3-year ^
5-year ^
10-year ^
Since inception ^
As at 30 JUNE 2008
Fund
%
Benchmark*
%
Over (Under)
Performance
%
0.73
(13.55)
(15.50)
3.51
8.75
N/A
(1.72)
(2.97)
(15.72)
(19.40)
2.32
6.98
N/A
(0.33)
3.70
2.17
3.90
1.20
1.78
N/A
(1.39)
^ Annualised Returns
* Benchmark Details:
Note: Fund launch date - 18 March 2000. Fund returns in SGD, bid-to-bid, net dividends reinvested
PORTFOLIO STATEMENTS
Investment In Collective Investment Scheme
As at 30 JUNE 2008
Market Value
SGD
% of Net
Asset Value
44,580,169
100.14
Market Value
SGD
% of Net
Asset Value
Asia/Pacific
Latin America
Europe
US & Canada
Australia
Russia
Other countries
66,098,293
18,138,303
125,191,103
238,534,046
8,435,914
6,935,580
15,199,869
13.02
3.57
24.66
46.98
1.66
1.37
2.99
Portfolio of Investment
Other net assets
478,533,108
29,155,978
94.26
5.74
Total
507,689,086
100.00
Market Value
SGD
% of Net
Asset Value
Consumer Discretionary
Consumer Staples
Energy
Financials
Health Care
Industrials
Information Technology
Materials
Telecomm Services
Utilities
38,201,298
36,995,395
75,483,812
76,096,335
46,738,329
60,759,349
54,495,350
62,171,021
14,169,365
13,422,854
7.52
7.29
14.87
14.99
9.21
11.97
10.73
12.25
2.79
2.64
Portfolio of Investment
Other net assets
478,533,108
29,155,978
94.26
5.74
Total
507,689,086
100.00
AIG Global Equity Fund
AIG GLOBAL EQUITY FUND
Country Allocation**
Industry Allocation**
Semi-Annual Fund Report for Policyholders
20
AIA
Global Equity Fund
PORTFOLIO STATEMENTS
As at 30 JUNE 2008
Asset Class**
Market Value
SGD
% of Net
Asset Value
Equities
Other Net Assets
478,533,108
29,155,978
94.26
5.74
507,689,086
100.00
Market Value
SGD
% of Net
Asset Value
14,215,294
12,692,227
11,169,160
11,169,160
9,646,093
9,646,093
9,646,093
9,646,093
8,630,714
8,123,025
2.80
2.50
2.20
2.20
1.90
1.90
1.90
1.90
1.70
1.60
Market Value
SGD
% of Net
Asset Value
16,151,253
15,553,058
14,356,669
12,562,086
12,562,086
11,963,891
10,767,502
10,767,502
10,767,502
10,767,502
2.70
2.60
2.40
2.10
2.10
2.00
1.80
1.80
1.80
1.80
Top 10 Holdings As At 30 June 2008**
Chevron Corp (US)
Halliburton Co (US)
Air Products & Chemicals Inc (US)
Chubb Corp (US)
SPDR Trust Series 1 (US)
Wal Mart Stores Inc (US)
Disney Walt Prodtns (US)
Petroleo Brasileiro (BR)
International Business Machines (US)
Thermo Fisher Scientific (US)
Top 10 Holdings As At 30 June 2007**
Exxon Mobil Corp (US)
Air Products & Chemicals Inc (US)
JP Morgan Chase & Co (US)
Boeing Co (US)
Citigroup Inc (US)
Hartford Financial Svcs Gr (US)
Unicredito Italiano (IT)
Travelers Companies (US)
United Technologies (US)
AT&T Inc (US)
** Information extracted from the underlying AIG Global Equity Fund
Semi-Annual Fund Report for Policyholders
21
AIA
Global Equity Fund
OTHER INFORMATION
Exposure To Derivatives
As at 30 JUNE 2008
Market Value
SGD
% of Net
Asset Value
Realised
Gains/(Losses)
SGD
Unrealised
Gains/(Losses)
SGD
75
0.00
(27,393)
75
Forward foreign exchange contracts
Borrowings
N/A
Total Redemptions and Subscriptions
SGD
Total amount of redemptions
Total amount of subscriptions
3,855,253
2,595,273
Related-Party Transactions
Total purchases in AIG Global Equity Fund
Total sales in AIG Global Equity Fund
Expense Ratios
Local Fund*
Underlying Fund:
AIG Global Equity Fund**
1,836,303
9,750,671
30 June 2008
30 June 2007
1.66%
1.66%
1.11%
1.11%
30 June 2008*
30 June 2007*
3.55%
3.54%
88.46%
98.66%
Note: Expense ratio does not include insurance coverage, brokerage and other transaction costs, performance fee, foreign
exchange gains/losses, front or back end loads arising from the purchase or sale of collective investment schemes
and tax deducted at source or arising out of income received.
* include underlying expense ratio
** Based on unaudited draft accounts
Turnover Ratios
Local Fund
Underlying Fund:
AIG Global Equity Fund
Note: The turnover ratio is calculated based on the lesser of portfolio purchases and sales of the underlying investments
expressed as a percentage over the average net asset value.
*Based on unaudited draft accounts
Any Material Information That Will Adversely Impact The Valuation Of The Fund
NIL
Soft Dollar Commissions
The Manager has entered into soft commission arrangements with selected brokers where it obtains services from third parties. These services relate essentially to
research and price information, performance measurement, portfolio valuations and analysis, all of which are believed to be helpful in the overall discharge of the
Manager's duties to clients. As such services generally benefit all of the Manager's clients in terms of input into the investment decision making process, the soft credits
utilized are not allocated on a specific client basis. The Manager further confirms that trades were executed on the best available terms and there was no churning of
trades.
Semi-Annual Fund Report for Policyholders
22
AIA
Global Bond Fund
PERFORMANCE REPORT
Portfolio Performance
The AIA Global Bond Fund returned –1.67% for the six months ended
30 June 2008. The benchmark, Citigroup World Government Bond
(Unhedged) Index, returned –0.62% for the same period.
Asset Class Overview**
US bond yields fell in the first quarter on the back of further Central
Bank easing and the deteriorating economic picture in US. The FOMC
eased a total 200bps during the quarter, taking its target for the
Federal Funds rate to 2.25%. The evidence from the US housing,
employment and business sentiment underpinned those moves. The
increasing risk aversion also drove Government bond yields lower as
investors sought the “risk free” nature of these assets. Euro zone
yields also fell driven by the momentum of the US market but
underperformed the US as evidence of spreading economic weakness
appeared weak. Coupled with a rising inflation picture in the Euro
zone the ECB maintained their hawkish stance.
US bond yields rose in the second quarter in expectation that the
Fed’s easing cycle was close to an end and there may be potential
tightening in the second half of the year due to the deteriorating
inflation picture. Euro zone yields also rose driven by the momentum
of the US market and the hawkish stance of the ECB. The Euro zone
economic picture deteriorated especially in Italy and Spain but high
inflation within the area forced the ECB to maintain a tough stance
on policy rates. FX markets saw further depreciation of the US dollar
in April. USD/EUR hit a historic high again although as the market
re-assessed likely FOMC towards the possibility of tightening the USD
saw some recovery. Credit and Libor spreads tightened in April as
recession fears faded from the market before widening again in June
as the equity market weakened and the fear of losses at financial
institutions came to the fore again.
especially in April when several financial institutions announced
better than expected earnings statements and excessive pessimism
about the global economy faded away.
Portfolio Outlook**
The outlook provided by our duration factor matrix, incorporating
fundamental, value and technical indicators suggests that both the
US and Euro market look slightly expensive. In the short term we
expect a downward adjustment to ECB rate hike expectations and
favour a tactical overweight position in the Euro area coupled with a
curve steepening bias. With regards FX strategy we maintain an
overweight US dollar position versus UK Sterling in light of further
relative fundamental deterioration of the UK economy and are biased
to add to the position on any near term Sterling strength.
Within Europe we prefer to overweight the Norwegian Krona in light of
positive Norwegian economic conditions which are supported by the
crude oil price and a possible rate hike by the central bank on the
back of renewed inflation pressures. We keep an overweight Australian
dollar which is also supported by the (basics) commodity market.
With regards to credit strategy, whilst from a risk management
standpoint we may reduce the allocation to non-government bonds,
we will continue to exploit opportunities, especially in the new-issue
arena to enhance returns.
** Source: AIG Investments Europe Ltd.
July 2008
Portfolio Overview**
Interest rate strategy contributed positively during the quarter. While
keeping roughly neutral duration through the first quarter, we
implemented curve steepening positions both in the US and Euro
area. The US position was closed in early March with the bond yield
spread having widened almost 100bps from trade inception. The
Fund maintained the same position in the Euro area where the yield
curve showed little response in light of generally hawkish ECB rhetoric
which we continue to believe will need to be tempered.
Interest rate strategy contributed negatively during the second
quarter. Whilst keeping minor long duration risk through the second
quarter, we kept curve steepening positions in the Euro area expecting
that ECB would change its hawkish rhetoric in the face of the slowing
economic activity in the Euro area. The Eurozone yield curve flattened
significantly in response to this. In terms of FX strategy an underweight
allocation to UK sterling versus the US dollar contributed positively,
upon which we partly took profit in mid May and re-opened in mid
June. Overweight allocations to both the Australian dollar and Norway
Krone versus the EUR and underweight Canadian dollar versus US
dollar also provided positive returns. We kept the exposure to nongovernment bonds in this quarter, which made a positive contribution
Semi-Annual Fund Report for Policyholders
23
AIA
Global Bond Fund
FUND PERFORMANCE
Period
3-month
6-month
1-year
3-year ^
5-year ^
10-year ^
Since inception ^
As at 30 JUNE 2008
Fund
%
Benchmark*
%
Over (Under)
Performance
%
(6.37)
(1.67)
0.76
(2.65)
(1.53)
N/A
1.32
(5.55)
(0.62)
4.05
(1.07)
0.09
N/A
3.47
(0.81)
(1.05)
(3.29)
(1.59)
(1.62)
N/A
(2.15)
^ Annualised Returns
* Benchmark Details:
Note: Fund launch date - 18 March 2000. Fund returns in SGD, bid-to-bid, net dividends reinvested
PORTFOLIO STATEMENTS
Investment In Collective Investment Scheme
As at 30 JUNE 2008
Market Value
SGD
% of Net
Asset Value
9,780,175
99.97
Market Value
SGD
% of Net
Asset Value
878,977
1,879,498
1,512,346
53,819,517
39,119,081
1,417,388
11,094,994
992,216
22,895,043
668,187
0.63
1.35
1.09
38.63
28.08
1.02
7.96
0.71
16.43
0.48
Portfolio of Investment
Other net assets
134,277,246
5,045,428
96.38
3.62
Total
139,322,674
100.00
Market Value
SGD
% of Net
Asset Value
878,977
1,879,498
1,512,346
50,678,741
39,119,081
1,417,388
11,094,994
992,216
22,895,043
3,808,963
0.63
1.35
1.09
36.38
28.08
1.02
7.96
0.71
16.43
2.73
Portfolio of Investment
Other net assets
134,277,246
5,045,428
96.38
3.62
Total
139,322,674
100.00
AIG Global Bond Fund
AIG Global Bond Fund
Country Allocation**
Australia
Canada
Denmark
Europe
Japan
Poland
United Kingdom
Sweden
United States
Other Countries
Currency Allocation**
AUD
CAD
DKK
EUR
JPY
PLZ
GBP
SEK
USD
Utilities
Semi-Annual Fund Report for Policyholders
24
AIA
Global Bond Fund
PORTFOLIO STATEMENTS
Asset Class**
Fixed Income Securities
Other Net Assets
Top 10 Holdings As At 30 June 2008**
2.625% Treasury (United States) 30/Apr/2010 (US)
2.00% Japan (Government Of) 20/Mar/2025 (JP)
1.60% Japan (Government Of) 20/Jun/2014 (JP)
4.25% Germany (Fed Rep Of) 04/Jan/2014 (DE)
1.30% Japan (Government Of) 20/Jun/2012 (JP)
1.40% Japan (Government Of) 20/Dec/2015 (JP)
4.25% Netherlands (Kingdom Of) 15/Jul/2013 (NL)
3.75% Italy (Rep Of) 01/Aug/2016 (IT)
0.8% Japan (Government Of) 20/Mar/2013 (JP)
8% Treasury (United States) 07/Jun/2021 (US)
Top 10 Holdings As At 30 June 2007**
5.25% Germany (Fed Rep) 04/Jul/2010 (DE)
1.4% Japan (Government Of) 20/Dec/2015 (JP)
5.5% Netherlands (Kingdom) 15/Jul/2010 (NL)
2.0% Japan (Government Of) 20/Mar/2025 (JP)
5.25% United States Treasury Bond 15/Feb/2029 (US)
4.25% United Kingdom (Government) 07/Mar/2011 (GB)
4.25% Belgium (Kingdom) 28/Sep/2014 (BE)
4.0% Sweden (Kingdom Of) 01/Dec/2009 (SE)
2.125% Fed Natl Mort Assc 09/Oct/2007 (US)
5.5% Norway (Kingdom Of) 15/May/2009 (NO)
As at 30 JUNE 2008
Market Value
SGD
% of Net
Asset Value
134,277,246
5,045,428
96.38
3.62
139,322,674
100.00
Market Value
SGD
% of Net
Asset Value
6,966,134
5,990,875
5,154,939
5,154,939
4,736,971
4,458,326
3,761,712
3,343,744
3,204,422
3,065,099
5.00
4.30
3.70
3.70
3.40
3.20
2.70
2.40
2.30
2.20
Market Value
SGD
% of Net
Asset Value
4,630,339
4,550,506
4,311,005
2,953,837
2,634,503
2,634,503
2,395,003
2,315,170
2,315,170
2,075,669
5.80
5.70
5.40
3.70
3.30
3.30
3.00
2.90
2.90
2.60
** Information extracted from the underlying AIG Global Equity Fund
Semi-Annual Fund Report for Policyholders
25
AIA
Global Bond Fund
OTHER INFORMATION
Exposure To Derivatives
As at 30 JUNE 2008
Market Value
SGD
% of Net
Asset Value
Realised
Gains/(Losses)
SGD
Unrealised
Gains/(Losses)
SGD
(72)
(0.00)
(3,844)
(72)
Forward foreign exchange contracts
Borrowings
N/A
Total Redemptions and Subscriptions
SGD
Total amount of redemptions
Total amount of subscriptions
1,726,401
1,838,283
Related-Party Transactions
Total purchases in AIG Global Bond Fund
Total sales in AIG Global Bond Fund
Expense Ratios
Local Fund*
Underlying Fund:
AIG Global Bond Fund**
1,974,575
2,173,302
30 June 2008
30 June 2007
1.55%
1.61%
0.78%
0.83%
30 June 2008
30 June 2007
19.49%
12.36%
114.66%
221.30%
Note: Expense ratio does not include insurance coverage, brokerage and other transaction costs, performance fee, foreign
exchange gains/losses, front or back end loads arising from the purchase or sale of collective investment schemes
and tax deducted at source or arising out of income received.
* include underlying expense ratio
** Based on unaudited draft accounts
Turnover Ratios
Local Fund
Underlying Fund:
AIG Global Bond Fund*
Note: The turnover ratio is calculated based on the lesser of portfolio purchases and sales of the underlying investments
expressed as a percentage over the average net asset value.
*Based on unaudited draft accounts
Any Material Information That Will Adversely Impact The Valuation Of The Fund
N/A
Soft Dollar Commissions
N/A
Semi-Annual Fund Report for Policyholders
26
AIA
U.S. Equity Fund
PERFORMANCE REPORT
The AIA US Equity Fund returned –18.89% for the six months ended
30 June 2008. The benchmark, Standard & Poor’s 500 Total Return,
returned –16.65% for the same period.
Market Overview**
The S&P 500 has fallen for five consecutive months for only the
seventh time in the past 85 years. During the first quarter, all sectors
returned negative performance, but the best performing sectors in
the fund were Industrials and Materials. The worst performing sectors
were Telecom Services and Information Technology. The portfolio
benefited from positions in International Business Machine and Tyco
International.
In June the U.S. markets reversed the positive trends of April and May
with the S&P 500 down, the worst monthly performance in six years.
The markets were concerned about inflation in the economy and the
continued weakness in the financial markets. During this quarter, the
best performing sectors in the fund were Energy and Utilities. The
worst performing sectors were Financials and Industrials. The
portfolio benefited from positions in Anheuser Busch and Charles
Schwab.
While the shift towards tighter monetary policy in the US is unlikely in
the near future, the apparent weakness in the global economy
continues to be worrisome. In the light of this observation, we
continue to avoid areas of the market where expectations have not
incorporated a weakening in global growth. We are still inclined to
opportunistically concentrate on companies whose fundamentals
have bottomed or whose growth will be less impacted by rising input
costs. **Source: AIG Global Investment Corp.
July 2008
Note: the Underlying Fund was changed from AIG American Equity Fund to AIG US
Large Cap Research Enhanced Fund effective 18 May 2007
Market Outlook**
The market continued its volatile nature in the first quarter as the
Dow had its sixth 300 point up day since September. Bonds were big
winners during March as the stock versus bond underperformance
was the worst since the third quarter of 2002. The quarter’s equity
performance was characterised by negative news from financial
companies that were partially offset by JP Morgan’s emergency
acquisition of Bear Stearns, the Fed’s rate cuts and the Fed’s opening
of the discount window to a broader group. In terms of factors, the
only real discernable winner was the continued domination of Large
Cap stocks over Small Caps.
In the second quarter, the current credit crisis continued to plague
the market as investors remained concerned about greater writedowns at financial institutions coupled with an ever-softening housing
market. Rising commodity input costs advanced an already
pessimistic outlook for the consumer discretionary sector. Worries
about a global slowdown drove down industrial stocks. In terms of
factors, the only real discernable winner was the continued domination
of Large Cap stocks over Small Caps.
Semi-Annual Fund Report for Policyholders
27
AIA
U.S. Equity Fund
FUND PERFORMANCE
Period
3-month
6-month
1-year
3-year ^
5-year ^
10-year ^
Since inception ^
As at 30 JUNE 2008
Fund
%
Benchmark*
%
Over (Under)
Performance
%
(5.07)
(18.89)
(24.15)
(6.09)
(2.16)
N/A
(8.20)
(4.07)
(16.65)
(22.74)
(3.42)
1.09
N/A
(4.14)
(1.00)
(2.24)
(1.41)
(2.67)
(3.25)
N/A
(4.06)
^ Annualised Returns
* Benchmark Details:
Note: Fund launch date - 18 March 2000. Fund returns in SGD, bid-to-bid, net dividends reinvested
PORTFOLIO STATEMENTS
Investment In Collective Investment Scheme
As at 30 JUNE 2008
Market Value
SGD
% of Net
Asset Value
16,365,077
99.76
Market Value
SGD
% of Net
Asset Value
US
Bermuda
Other countries
209,310,700
1,369,172
1,329,106
98.31
0.64
0.62
Portfolio of Investment
Other net assets
212,008,978
890,616
99.58
0.42
Total
212,899,594
100.00
Market Value
SGD
% of Net
Asset Value
Consumer Discretionary
Consumer Staples
Energy
Financials
Health Care
Industrials
Information Technology
Materials
Telecom Services
Utilities
15,764,988
27,014,184
32,522,177
28,084,829
27,635,370
23,051,736
32,004,875
8,582,123
6,069,817
11,278,878
7.40
12.69
15.28
13.19
12.98
10.83
15.03
4.03
2.85
5.30
Portfolio of Investment
Other net assets
212,008,978
890,616
99.58
0.42
Total
212,899,594
100.00
AIG US Large Cap Research Enhanced Fund
AIG US Large Cap Research Enhanced Fund
Country Allocation**
Industry Allocation**
Semi-Annual Fund Report for Policyholders
28
AIA
U.S. Equity Fund
PORTFOLIO STATEMENTS
As at 30 JUNE 2008
Asset Class**
Market Value
SGD
% of Net
Asset Value
Equities
Other Net Assets
212,008,978
890,616
99.58
0.42
212,899,594
100.00
Market Value
SGD
% of Net
Asset Value
8,941,783
7,877,285
7,664,385
7,238,586
6,812,787
6,599,887
6,599,887
5,961,189
4,683,791
4,257,992
4.20
3.70
3.60
3.40
3.20
3.10
3.10
2.80
2.20
2.00
Market Value
SGD
% of Net
Asset Value
6,200,098
5,373,419
3,995,619
3,582,279
3,168,939
3,168,939
3,168,939
3,031,159
2,893,379
2,617,819
4.50
3.90
2.90
2.60
2.30
2.30
2.30
2.20
2.10
1.90
Top 10 Holdings As At 30 June 2008**
SPDR Trust Series 1 (US)
Wal Mart Stores Inc (US)
Halliburton Co (US)
Chevron Corp (US)
Chubb Corp (US)
Coca Cola Co (US)
Constellation Energy (US)
Exxon Mobil Corp (US)
Oracle Systems Corp (US)
Barr Pharmaceuticals Inc (US)
Top 10 Holdings As At 30 June 2007**
Exxon Mobil Corp (US)
General Elec Co (US)
AT&T Inc (US)
Bank of America Corp (US)
Chevron Corp (US)
Pfizer Inc (US)
Johnson & Johnson (US)
JP Morgan Chase & Co (US)
International Business Machines Corporation (US)
Wells Fargo & Company (US)
** Information extracted from the underlying AIG US Large Cap Research Enhanced Fund
Note: The Underlying Fund was changed from AIG American Equity Fund to AIG US Large Cap Research Enhanced Fund effective 18 May 2007.
Semi-Annual Fund Report for Policyholders
29
AIA
U.S. Equity Fund
OTHER INFORMATION
Exposure To Derivatives
As at 30 JUNE 2008
Market Value
SGD
% of Net
Asset Value
Realised
Gains/(Losses)
SGD
Unrealised
Gains/(Losses)
SGD
(110)
(0.00)
506
(110)
Forward foreign exchange contracts
Borrowings
N/A
Total Redemptions and Subscriptions
SGD
Total amount of redemptions
Total amount of subscriptions
1,689,810
1,694,933
Related-Party Transactions
Total Purchases in AIG US Large Cap Research Enhanced Fund
Total Sales in AIG US Large Cap Research Enhanced Fund
Expense Ratios
Local Fund*
Underlying Fund:
AIG US Large Cap Research Enhanced Fund **
2,581,085
4,518,609
30 June 2008
30 June 2007
1.72%
1.74%
1.15%
1.19%
30 June 2008
30 June 2007
13.14%
5.83%
74.96%
149.01%
Note: Expense ratio does not include insurance coverage, brokerage and other transaction costs, performance fee, foreign
exchange gains/losses, front or back end loads arising from the purchase or sale of collective investment schemes
and tax deducted at source or arising out of income received.
* include underlying expense ratio
** Based on unaudited draft accounts
Turnover Ratios
Local Fund
Underlying Fund:
AIG US Large Cap Research Enhanced Fund
Note: The turnover ratio is calculated based on the lesser of portfolio purchases and sales of the underlying investments
expressed as a percentage over the average net asset value.
*Based on unaudited draft accounts
Any Material Information That Will Adversely Impact The Valuation Of The Fund
N/A
Soft Dollar Commissions
The Manager has entered into soft commission arrangements with selected brokers where it obtains services from third parties. These services relate essentially to
research and price information, performance measurement, portfolio valuations and analysis, all of which are believed to be helpful in the overall discharge of the
Manager’s duties to clients. As such services generally benefit all of the Manager’s clients in terms of input into the investment decision making process, the soft credits
utilized are not allocated on a specific client basis. The Manager further confirms that trades were executed on the best available terms and there was no churning of
trades.
Semi-Annual Fund Report for Policyholders
30
AIA
Global Balanced Fund
PERFORMANCE REPORT
Fund Performance
The AIA Global Balanced Fund returned –9.65% for the six months
ended 30 June 2008. The benchmark returned –10.36% for the
same period.
Fund / Portfolio Overview**
During the period under review, the equity market as measured by
MSCI World (Price) Index dropped by 16.70% in SGD term. The bond
markets as measured by Citigroup World Government Bond Index
dropped by 0.87% in SGD term.
Financial markets worldwide continue to suffer considerable
headwinds. Resurgent inflation has now been added to earlier
concerns about the health of the financial system and the threats to
growth. Our view remains that the systemic risks to the worldwide
financial system have been greatly reduced through the measures
introduced by the Federal Reserve, as well as other Central Banks
and authorities.
As far as our outlook is concerned, because there is only a small
probability that a major financial institution will fail, creating a
snowball effect, the most pessimistic scenarios for financial turmoil
and economic contraction can be taken off the table. However, this
does not mean that the crisis in the credit markets is over. Because
the fundamental situation for credits is still deteriorating, we should
probably brace ourselves for further turbulence over the next several
quarters.
While credit conditions are still worsening, it is important to point out
factors over time that will potentially lead to stability and eventual
recovery. Focusing on the U.S. housing market, in particular,
demographics remain the key consideration. U.S. household formation
is still progressing at a good pace. This means that the perceived
surplus in the housing market may be eliminated faster than what is
now reflected in the discounted securities markets. We should also
take into account that, from a historical perspective, with the recent
decline in home prices, affordability is now at inexpensive levels.
Even if we can start seeing the light at the end of the tunnel for the
U.S. residential property market, U.S. consumer sentiment is likely to
remain depressed for quite some time. In addition to housing, high
oil prices are clearly depressing consumer spending. However, some
relief to overall growth is starting to appear for U.S. external trade.
Already, this factor is contributing significantly to GDP, and this
positive trend is likely to remain in effect for quite some time. This
continuing trend will, of course, support employment and corporate
profits, and it may also keep the overall economy out of recession.
As for other major regions of the world, the current trends point more
towards a significant slowdown than an outright decline. As in North
America, the state of corporate balance sheets can be characterized
as unusually strong in Japan and Europe, as well as in most Emerging
Markets.
widespread recession, equity markets are starting to look interesting.
Sustained strong performance, however, is likely to be delayed until
most of the turbulence in the credit markets is behind us. Meanwhile,
we think that opportunities in the credit markets themselves are likely
to present better near-term risk-reward opportunities.
From a medium-term perspective, accelerating inflation may
constitute a more serious threat to financial markets than either
credit issues or the risks to economic growth. These risks are
particularly acute for many Emerging Markets. Here, growth continues
strongly, and inflationary forces are gathering momentum. Some
countries have already started to tighten monetary policies, but, so
far, general measures can be characterized as “too little too late.”
In the near term, these Emerging Markets are likely to continue
delivering strong GDP growth, strong corporate profits and
outperforming equity markets. In the longer term, though, a lack of
decisive action could threaten the sustainability of good economic
growth.
In Developed Markets, inflation and growth are more evenly balanced.
However, this also means increasing uncertainty about the future
course of monetary policies and could spell more volatility for
financial markets worldwide.
Fund / Portfolio Performance**
Both equities and bonds portion displayed negative return because
of the volatile market. For the equities portion of the fund, European
equities have displayed relatively better performance and
outperformed the benchmark by 7.68%. South East Asia lagged the
rest of the region in terms of performance because of high inflation
problem.
Market Outlook and Strategy**
The crisis in US financial markets and the associated economic
weakness continues to weigh on equity market sentiment. Inflation
and the extent to which high energy and food prices will impair
consumption are now among the chief concerns as well. Likely deleveraging in financial markets along with inflation and anemic or
negative growth is a bearish scenario for equities. For a more
sustained upturn in equity markets, we may have to await a
stabilization of economic conditions, not only in the United States,
but also in Europe.
As for bond markets, the outlook provided by our duration factor
matrix, incorporating fundamental, value and technical indicators
suggests that both the US and Euro market look slightly expensive. In
the short term we expect a downward adjustment to ECB rate hike
expectations and favour a tactical overweight position in the Euro
area coupled with a curve steepening bias.
**Source: AIG Global Investment Group
July 2008
Against this background of declining growth and the avoidance of a
Semi-Annual Fund Report for Policyholders
31
AIA
Global Balanced Fund
FUND PERFORMANCE
Period
3-month
6-month
1-year
3-year ^
5-year ^
10-year ^
Since inception ^
As at 30 JUNE 2008
Fund
%
Benchmark*
%
Over (Under)
Performance
%
(1.88)
(9.65)
(11.81)
1.06
4.18
N/A
0.59
(4.36)
(10.36)
(12.26)
(0.58)
3.24
N/A
1.19
2.49
0.71
0.45
1.64
0.95
N/A
(0.60)
^ Annualised Returns
* Benchmark Details:
Note: Fund launch date - 11 December 2000. Fund returns in SGD, bid-to-bid, net dividends reinvested
PORTFOLIO STATEMENTS
Investment In Collective Investment Scheme
As at 30 JUNE 2008
Market Value
SGD
% of Net
Asset Value
2,172,495
60,812,050
13,049,250
80,360,684
43,466,769
48,283,156
0.87
24.38
5.23
32.21
17.42
19.35
248,144,404
99.47
Market Value
SGD
% of Net
Asset Value
China & Hong Kong
Singapore
India
South Korea
Australia
Taiwan
Malaysia
Thailand
Indonesia
Philippines
Sri Lanka
Cash
162,224,968
127,660,735
94,069,265
77,534,585
71,831,416
50,078,871
48,587,604
48,453,954
47,281,961
15,024,935
4,178,588
14,061,250
21.32
16.76
12.37
10.20
9.43
6.58
6.38
6.37
6.21
1.98
0.55
1.85
Total
760,988,131
100.00
Aberdeen Pacific Equity Fund
AIG International Funds - Singapore Bond Fund
AIG Japan New Horizon Fund
AIG US Large Cap Research Enhanced Fund
Fidelity Funds - Fidelity European Aggressive Fund
Fidelity Funds - Fidelity International Bond Fund
ABERDEEN PACIFIC EQUITY FUND
Country Allocation**
Semi-Annual Fund Report for Policyholders
32
AIA
Global Balanced Fund
PORTFOLIO STATEMENTS
Industry Allocation**
As at 30 JUNE 2008
Market Value
SGD
% of Net
Asset Value
Diversified
Banking & Finance
Information Technology
Telecoms
Real Estate
Resources
Insurance
Conglomerate
Consumer & Retails
Oil
Materials
Entertainment
Utility
Cash
366,743,330
99,019,391
66,274,908
43,342,412
36,208,526
35,948,339
28,176,437
18,167,206
16,875,006
12,503,351
8,679,352
7,706,640
7,281,982
14,061,250
48.18
13.02
8.71
5.70
4.76
4.72
3.70
2.39
2.22
1.64
1.14
1.01
0.96
1.85
Total
760,988,131
100.00
Market Value
SGD
% of Net
Asset Value
746,926,881
14,061,250
98.15
1.85
760,988,131
100.00
Market Value
SGD
% of Net
Asset Value
77,843,366
74,508,724
55,264,973
48,587,604
48,453,954
47,281,961
35,948,339
32,913,364
28,176,437
24,891,021
10.22
9.79
7.26
6.38
6.37
6.21
4.72
4.33
3.70
3.27
Market Value
SGD
% of Net
Asset Value
77,804,938
76,634,577
74,883,712
47,725,566
47,559,158
46,632,121
40,065,653
31,768,214
27,596,148
26,276,960
9.60
9.45
9.24
5.88
5.86
5.75
4.94
3.92
3.40
3.24
Asset Class**
Equities
Cash
Top 10 Holdings As At 30 June 2008**
Aberdeen Singapore Equity Fund
Aberdeen China Opportunities Fund
AG - India Opportunities Fund
Aberdeen Malaysian Equity Fund
Aberdeen Thailand Equity Fund
Aberdeen Indonesia Equity Fund
Rio Tinto
Samsung Electronics prf
QBE Insurance
Taiwan Semiconductor
Top 10 Holdings As At 30 June 2007**
Aberdeen China Opportunities Fund
AG - India Opportunities Fund
Aberdeen Singapore Equity Fund
Aberdeen Malaysian Equity Fund
Aberdeen Thailand Equity Fund
Aberdeen Indonesia Equity Fund
Samsung Electronics Pref
Rio Tinto
QBE Insurance
Taiwan Semiconductor
**Information extracted from the Singapore registered Aberdeen Pacific Equity Fund
Semi-Annual Fund Report for Policyholders
33
AIA
Global Balanced Fund
PORTFOLIO STATEMENTS
AIG INTERNATIONAL FUNDS - SINGAPORE BOND FUND
Country Allocation**
As at 30 JUNE 2008
Market Value
SGD
% of Net
Asset Value
China
Germany
Hong Kong
India
Indonesia
Kazakhstan
Pakistan
Singapore
South Korea
Malaysia
United Kingdom
United States
1,388,800
7,631,458
25,370,777
9,438,438
1,325,753
6,094,983
1,207,204
379,259,095
6,073,874
464,422
47,244,904
72,963,896
0.21
1.17
3.90
1.44
0.20
0.94
0.19
58.36
0.93
0.07
7.27
11.23
Portfolio of Investment
Other net assets
558,463,604
91,572,080
85.91
14.09
Total
650,035,684
100.00
Market Value
SGD
% of Net
Asset Value
Airlines
Banks
Electric Power & Gas
Finance
Government
Industrial
Real Estate
Oil & Gas
Hotel
Infrastructure
Shipping
7,417,564
198,149,345
12,616,063
56,635,659
100,907,160
22,933,114
143,929,216
6,094,983
1,966,500
494,000
7,320,000
1.14
30.47
1.94
8.71
15.54
3.53
22.13
0.94
0.30
0.08
1.13
Portfolio of Investment
Other net assets
558,463,604
91,572,080
85.91
14.09
Total
650,035,684
100.00
Market Value
SGD
% of Net
Asset Value
483,506,837
74,956,767
91,572,080
74.38
11.53
14.09
650,035,684
100.00
Industry Allocation**
Asset Class**
Fixed Income Securities
Real Estate Investment Trust and Preference Shares
Other Net Assets
Semi-Annual Fund Report for Policyholders
34
AIA
Global Balanced Fund
PORTFOLIO STATEMENTS
As at 30 JUNE 2008
Top 10 Holdings As At 30 June 2008**
Market Value
SGD
% of Net
Asset Value
DBS Cap Funding 5.75% 29 May 2049
Standard Chartered 5.25% 10 Apr 2023
Singapore Govt Bond 4% 01 Sep 2018
OCBC 3.78% 28 Nov 2017
Capitamall Trust
Morgan Stanley 4% 23 Oct 2017
HSBC 3.18% 24 Nov 2008
DBS Bank 4.47% 15 Jul 2021
Ascendas Real Estate Investment Trust
Capitaland Treasury Ltd 4.35% 31 Oct 2019
39,420,000
38,011,000
36,686,000
19,226,000
19,197,000
16,248,000
15,144,000
15,127,000
14,754,000
13,797,000
6.06
5.85
5.64
2.96
2.95
2.5
2.33
2.33
2.27
2.12
Top 10 Holdings As At 30 June 2007**
Market Value
SGD
% of Net
Asset Value
24,759,000
19,627,000
17,465,000
15,090,000
13,170,000
12,820,000
11,989,000
11,743,000
10,838,000
10,683,000
4.58
3.63
3.23
2.79
2.43
2.37
2.22
2.17
2.00
1.97
Market Value
USD
% of Net
Asset Value
Japan
549,135,122
95.67
Portfolio of Investment
Other net assets
549,135,122
24,847,783
95.67
4.33
Total
573,982,905
100.00
Industry Allocation**
Market Value
USD
% of Net
Asset Value
Consumer Discretionary
Consumer Staples
Energy
Financials
Health Care
Industrials
Information Technology
Materials
Telecom Services
101,227,568
42,964,332
0
78,273,720
55,890,973
147,030,929
98,152,412
18,209,321
7,385,867
17.64
7.49
0.00
13.64
9.74
25.62
17.10
3.17
1.29
Portfolio of Investment
Other net assets
549,135,122
24,847,783
95.67
4.33
Total
573,982,905
100.00
Capitamall Trust
Ascendas Real Estate Investment Trust
DBS Bank 4.47% 15 Jul 2021
HSBC Singapore 3.18% 24 Nov 2008
Queensley Holdings Ltd 4.5% 05 Dec 2009
Singapore Govt Bond 3.625% 01 Jul 2014
ABN Amro Bank 0% 11 Jul 2007
DBS Group Hldgs 6% Non Cum Pref Shs
Singapore Govt Bond 3.75% 01 Sep 2016
Swedbank 3.445% 28 Feb 2008
** Information extracted from the underlying AIG International Funds - Singapore Bond Fund
AIG JAPAN NEW HORIZON FUND
Country Allocation**
Semi-Annual Fund Report for Policyholders
35
AIA
Global Balanced Fund
PORTFOLIO STATEMENTS
As at 30 JUNE 2008
Asset Class**
Market Value
USD
% of Net
Asset Value
Equities
Other Net Assets
549,135,122
24,847,783
95.67
4.33
573,982,905
100.00
Market Value
USD
% of Net
Asset Value
41,326,769
31,569,060
28,125,162
27,551,179
24,681,265
20,663,385
19,515,419
18,941,436
17,219,487
16,071,521
7.20
5.50
4.90
4.80
4.30
3.60
3.40
3.30
3.00
2.80
Market Value
USD
% of Net
Asset Value
57,966,019
34,209,454
32,308,928
31,358,666
31,358,666
30,408,403
29,458,141
28,507,878
28,507,878
26,607,353
6.10
3.60
3.40
3.30
3.30
3.20
3.10
3.00
3.00
2.80
Market Value
USD
% of Net
Asset Value
US
Bermuda
Other countries
209,310,700
1,369,172
1,329,106
98.31
0.64
0.62
Portfolio of Investment
Other net assets
212,008,978
890,616
99.58
0.42
Total
212,899,594
100.00
Top 10 Holdings As At 30 June 2008**
Nintendo Co Ltd (JP)
Sumitomo Mitsui Financial Group Inc. (JP)
Mitsui & Co (JP)
Japan Steel Works (JP)
Japan Tobacco Inc (JP)
Terumo Corp (JP)
Takeda Pharmaceutical Co (JP)
Daiichi Sankyo Co Ltd (JP)
Toyota Motor Corp (JP)
Komatsu Ltd (JP)
Top 10 Holdings As At 30 June 2007**
Toyota Motor Corp (JP)
Japan Steel Works (JP)
Japan Tobacco Inc (JP)
Nikon Corp (JP)
Toshiba Corp (JP)
Sumco Corporation (JP)
Mizuho Financial Group (JP)
Elpida Memory Inc (JP)
Nomura Research Inst (JP)
Mitsui O.S.K.Lines (JP)
** Information extracted from the underlying AIG Japan New Horizon Fund AIG US LARGE CAP RESEARCH ENHANCED FUND
Country Allocation**
Semi-Annual Fund Report for Policyholders
36
AIA
Global Balanced Fund
PORTFOLIO STATEMENTS
Industry Allocation**
As at 30 JUNE 2008
Market Value
USD
% of Net
Asset Value
Consumer Discretionary
Consumer Staples
Energy
Financials
Health Care
Industrials
Information Technology
Materials
Telecom Services
Utilities
15,764,988
27,014,184
32,522,177
28,084,829
27,635,370
23,051,736
32,004,875
8,582,123
6,069,817
11,278,878
7.40
12.69
15.28
13.19
12.98
10.83
15.03
4.03
2.85
5.30
Portfolio of Investment
Other net assets
212,008,978
890,616
99.58
0.42
Total
212,899,594
100.00
Asset Class**
Market Value
USD
% of Net
Asset Value
Equities
Other Net Assets
212,008,978
890,616
99.58
0.42
212,899,594
100.00
Market Value
USD
% of Net
Asset Value
8,941,783
7,877,285
7,664,385
7,238,586
6,812,787
6,599,887
6,599,887
5,961,189
4,683,791
4,257,992
4.20
3.70
3.60
3.40
3.20
3.10
3.10
2.80
2.20
2.00
Market Value
USD
% of Net
Asset Value
6,200,098
5,373,419
3,995,619
3,582,279
3,168,939
3,168,939
3,168,939
3,031,159
2,893,379
2,617,819
4.50
3.90
2.90
2.60
2.30
2.30
2.30
2.20
2.10
1.90
Top 10 Holdings As At 30 June 2008**
SPDR Trust Series 1 (US)
Wal Mart Stores Inc (US)
Halliburton Co (US)
Chevron Corp (US)
Chubb Corp (US)
Coca Cola Co (US)
Constellation Energy (US)
Exxon Mobil Corp (US)
Oracle Systems Corp (US)
Barr Pharmaceuticals Inc (US)
Top 10 Holdings As At 30 June 2007**
Exxon Mobil Corp (US)
General Elec Co (US)
AT&T Inc (US)
Bank of America Corp (US)
Chevron Corp (US)
Pfizer Inc (US)
Johnson & Johnson (US)
JP Morgan Chase & Co (US)
International Business Machines Corporation (US)
Wells Fargo & Company (US)
** Information extracted from the underlying AIG US Large Cap Research Enhanced Fund
Note: The Underlying Fund was changed from AIG American Equity Fund to AIG US Large Cap Research Enhanced Fund effective 18 May 2007. Semi-Annual Fund Report for Policyholders
37
AIA
Global Balanced Fund
PORTFOLIO STATEMENTS
FIDELITY FUNDS - EUROPEAN AGGRESSIVE FUND
Country Allocation**
As at 30 JUNE 2008
Market Value
EURO
% of Net
Asset Value
743,380,950
720,507,690
396,469,840
388,845,420
285,915,750
274,479,120
163,925,030
141,051,770
141,051,770
114,366,300
114,366,300
99,117,460
80,056,410
72,431,990
68,619,780
7,624,420
19.50
18.90
10.40
10.20
7.50
7.20
4.30
3.70
3.70
3.00
3.00
2.60
2.10
1.90
1.80
0.20
Portfolio of Investment
Other net assets
3,812,210,000
-
100.00
-
Total
3,812,210,000
100.00
Industry Allocation**
Market Value
EURO
% of Net
Asset Value
Materials
Energy
Utilities
Industrials
Financials
Consumer Discretionary
Information Technology
Telecommunication Services
Other
2,070,030,030
560,394,870
415,530,890
339,286,690
228,732,600
137,239,560
41,934,310
11,436,630
7,624,420
54.30
14.70
10.90
8.90
6.00
3.60
1.10
0.30
0.20
Portfolio of Investment
Other net assets
3,812,210,000
100.00
-
-
Total
3,812,210,000
100.00
Asset Class**
Market Value
EURO
% of Net
Asset Value
European Equities
Emerging Markets Equities
UK Equities
Other (Cash, Property, Uninvested)
2,024,283,510
1,036,921,120
743,380,950
7,624,420
53.10
27.20
19.50
0.20
Total
3,812,210,000
100.00
UNITED KINGDOM
GERMANY
RUSSIA
ISRAEL
NETHERLANDS
NORWAY
BERMUDA
OTHER
FRANCE
SWITZERLAND
FINLAND
AUSTRIA
BELGIUM
LUXEMBOURG
ITALY
OTHER
Semi-Annual Fund Report for Policyholders
38
AIA
Global Balanced Fund
PORTFOLIO STATEMENTS
Top 10 Holdings As At 30 June 2008**
As at 30 JUNE 2008
Market Value
EURO
% of Net
Asset Value
388,845,420
255,418,070
228,732,600
163,925,030
156,300,610
152,488,400
141,051,770
129,615,140
125,802,930
118,178,510
10.20
6.70
6.00
4.30
4.10
4.00
3.70
3.40
3.30
3.10
Market Value
EURO
% of Net
Asset Value
189,860,671
157,384,504
154,886,337
129,904,670
119,912,003
112,417,503
107,421,169
94,930,336
82,439,502
77,443,168
7.60
6.30
6.20
5.20
4.80
4.50
4.30
3.80
3.30
3.10
Market Value
SGD
% of Net
Asset Value
JAPAN
UNITED KINGDOM
USA
GERMANY
CANADA
OTHER
FINLAND
FRANCE
GRAND CAYMAN (UK OVERSEAS TER)
IRELAND
NETHERLANDS
LUXEMBOURG
HONG KONG
CZECH REPUBLIC
AUSTRALIA
MULTI-NATIONAL
KOREA (SOUTH)
MALAYSIA
POLAND
NORWAY
12,173,977
10,864,947
8,312,339
5,956,086
3,599,832
3,207,123
3,076,220
2,683,511
2,356,254
2,159,899
1,963,545
1,636,287
1,439,933
1,178,127
1,047,224
916,321
785,418
719,966
719,966
654,515
18.60
16.60
12.70
9.10
5.50
4.90
4.70
4.10
3.60
3.30
3.00
2.50
2.20
1.80
1.60
1.40
1.20
1.10
1.10
1.00
Portfolio of Investment
Other net assets
65,451,490
-
100.00
-
Total
65,451,490
100.00
ISRAEL CHEMICAL
GAZPROM O A O ADR (UK)
YARA INTERNATIONAL
SEADRILL
EURASIAN NATURAL RESOURCES
THYSSEN KRUPP
VEDANTA RESOURCES
RWE
NEW WORLD RESOURCES (UK)
E.ON
Top 10 Holdings As At 30 June 2007**
E.ON
ELECTRICITE DE FRANCE
JSC MMC NORILSK NICKEL 'ADR'
ACCIONA
SIEMENS
STATOIL ASA
BHP BILLITON
NOKIA
DELHAIZE FRERES & CIE LE LION
BG GROUP
**Information extracted from the underlying Fidelity Funds - European Aggressive Fund
FIDELITY FUNDS - INTERNATIONAL BOND FUND II
Country Allocation**
Semi-Annual Fund Report for Policyholders
39
AIA
Global Balanced Fund
PORTFOLIO STATEMENTS
Industry Allocation**
As at 30 JUNE 2008
Market Value
SGD
% of Net
Asset Value
Government
Financials
Energy
Industrials
Telecommunication Services
Consumer Staples
Consumer Discretionary
Health Care
Information Technology
Utilities
Materials
33,642,066
27,162,369
1,505,384
1,178,127
850,869
261,806
261,806
196,354
196,354
130,903
65,451
51.40
41.50
2.30
1.80
1.30
0.40
0.40
0.30
0.30
0.20
0.10
Total
65,451,490
100.00
Market Value
SGD
% of Net
Asset Value
All Bonds
Other (Cash, Property, Uninvested)
64,731,524
719,966
98.90
1.10
Total
65,451,490
100.00
Market Value
SGD
% of Net
Asset Value
5,432,474
4,123,444
3,403,478
3,076,220
1,963,545
1,963,545
1,505,384
1,178,127
1,178,127
1,178,127
8.30
6.30
5.20
4.70
3.00
3.00
2.30
1.80
1.80
1.80
Market Value
SGD
% of Net
Asset Value
7,711,638
4,252,212
3,026,998
2,450,427
2,234,213
1,729,713
1,729,713
1,513,499
1,513,499
1,513,499
10.70
5.90
4.20
3.40
3.10
2.40
2.40
2.10
2.10
2.10
Asset Class**
Top 10 Holdings As At 30 June 2008**
JAPAN #10 CPI 1.1% 10/12/2016
UK TREASURY 8% 07/06/2021
CANADA 3.75% 01/06/2012
FINLAND 3.875% 15/09/2017
JAPAN #207 0.9% 22/12/2008
GERMANY 4.25% 04/01/2014 0303
BA COVERED BOND 4.125% 05/04/2012
FRANCE OAT 4% 25/04/2018
CZECH REPUBLIC 6.55% 05/10/2011 36
JAPAN #35 FRN 20/07/2020
Top 10 Holdings As At 30 June 2007**
FINLAND 3.875% 15/09/2017
JAPAN #10 CPI 1.1% 10/12/2016
JAPAN #207 0.9% 22/12/2008
USTN 2% I/L 15/07/2014
FRANCE OAT 3.75% 25/04/2017
UK TREASURY 8% 07/06/2021
CANADA 4% 01/06/2016
BA COVERED BOND 4.125% 05/04/2012
JAPAN #16 2.5% 20/09/2034
CAISSE D'AMORT DETTE SOC 4.125% 25/04/20
** Information extracted from the underlying Fidelity Funds - International Bond Fund
Semi-Annual Fund Report for Policyholders
40
AIA
Global Balanced Fund
OTHER INFORMATION
Exposure To Derivatives
Forward foreign exchange contracts
As at 30 JUNE 2008
Market Value
SGD
% of Net
Asset Value
Realised
Gains/(Losses)
SGD
Unrealised
Gains/(Losses)
SGD
1667
0.00
(11,976)
1667
Borrowings
N/A
Total Redemptions and Subscriptions
SGD
Total amount of redemptions
Total amount of subscriptions
22,243,061
3,478,922
Related-Party Transactions
Total Purchases in AIG International Funds - Singapore Bond Fund
Total Purchases in AIG Japan New Horizon Fund
Total Purchases in AIG US Large Cap Research Enhanced Fund
Total Purchases in Fidelity Funds - Euro Aggressive Fund
Total Purchases in Aberdeen Pacific Equity
Total Purchases in Fidelity Funds - International Bond Fund II
14,076,700
4,281,649
17,597,665
5,130,300
1,448,515
13,648,092
Total Sales in AIG International Funds - Singapore Bond Fund
Total Purchases in AIG Japan New Horizon Fund
Total Purchases in AIG US Large Cap Research Enhanced Fund
Total Purchases in Fidelity Funds - Euro Aggressive Fund
Total Purchases in Aberdeen Pacific Equity
Total Purchases in Fidelity Funds - International Bond Fund II
20,053,909
7,693,959
30,466,693
30,501,882
1,324,679
Expense Ratios
Local Fund*
Underlying Funds:
ABERDEEN PACIFIC EQUITY FUND**
AIG INTERNATIONAL FUNDS - SINGAPORE BOND FUND***
AIG JAPAN NEW HORIZON FUND
AIG US LARGE CAP RESEARCH ENHANCED FUND
FIDELITY FUNDS - EUROPEAN AGGRESSIVE FUND
FIDELITY FUNDS - INTERNATIONAL BOND FUND
Note:
*
**
***
#
@
17,803,374
30 June 2008
30 June 2007
1.78%
1.79%
1.91%#
1.10%
1.12%
1.15%
1.91%@
1.15%@
2.06%#
1.15%
1.11%
1.19%
1.92%@
1.15%@
Expense ratio does not include insurance coverage, brokerage and other transaction costs, performance fee, foreign exchange gains/losses, front or back end loads arising from the purchase or sale of collective investment schemes and tax deducted at source or arising out of income received.
Include underlying fund expense ratio
Based on unaudited draft accounts
Expense ratios as of 30 June 2008 and 31 December 2007 respectively
Expense ratios as of 31 March 2008 and 31 March 2007 respectively
Expense ratios as of 30 April 2008 and 31 October 2007 respectively
Semi-Annual Fund Report for Policyholders
41
AIA
Global Balanced Fund
OTHER INFORMATION
Turnover Ratios
Local Fund
Underlying Fund:
ABERDEEN PACIFIC EQUITY FUND
AIG INTERNATIONAL FUNDS - SINGAPORE BOND FUND
AIG JAPAN NEW HORIZON FUND
AIG US LARGE CAP RESEARCH ENHANCED FUND
FIDELITY FUNDS - EUROPEAN AGGRESSIVE FUND
FIDELITY FUNDS - INTERNATIONAL BOND FUND***
Note:
*
**
#
@
As at 30 JUNE 2008
30 June 2008
30 June 2007
19.25%
25.96%
7.78%#
15.44%
71.05%
74.96%
118.98%@
109.51%@
11.88%#
40.55%**
151.2%**
288.07%
104.73%@
20.01%@
The turnover ratio is calculated based on the lesser of portfolio purchases and sales of the underlying investments
expressed as a percentage over the average net asset value.
Turnover ratios as of 31 March 2008 and 31 March 2007 respectively
Turnover ratios as of 30 June 2008 and 31 December 2007 respectively
Tuurnover ratios as of 31 March 2008 and 31 March 2007 respectively
Turnover ratios as of 30 April 2008 and 31 October 2007 respectively
Any Material Information That Will Adversely Impact The Valuation Of The Fund
N/A
Soft Dollar Commissions
The following funds did not engage in soft dollar arrangements:
- Aberdeen Pacific Equity Fund
- AIG International Fund - Singapore Bond Fund
- AIG Japan New Horizon Fund
Soft Dollar Commissions for the Fidelity Funds - European Aggressive Fund & Fidelity Funds - International Bond Fund:
The Investment Manager of the sub-funds of Fidelity Funds that are included under the CPF Investment Scheme is Fidelity Fund Management Limited. Fidelity Fund
Management Limited may, from time to time, delegate its investment management functions to a company within the Fidelity organisation (“sub-managers”). Fidelity
Fund Management Limited and/or any sub-manager may effect transactions by or through the agency of another person with whom the Investment Manager and/or
any sub-manager have an arrangement under which that party will from time to time provide to or procure for the Investment Manager and/or any sub-manager goods,
services or other benefits (such as research and advisory services), comprising computer hardware associated with specialised software, performance measurement,
etc. The nature of which is such that their provision can reasonably be expected to benefit Fidelity Funds as a whole and may contribute to an improvement in the
performance of Fidelity Funds or of the Investment Manager and/or any sub-manager in providing services to Fidelity Funds and for which no direct payment is made
but instead the Investment Manager and/or any sub-manager undertake to place business with that party.
For the avoidance of doubt, such goods and services do not include travel, accommodation, entertainment, general administrative goods or services, general office
equipment or premises, membership fees, employee salaries or direct money payments. From 1st July, 2004, only Investment Research was eligible to be paid with
soft commissions. The Investment Manager and/or any sub-manager shall not retain the benefit of any cash commission rebate (being repayment of a cash commission
made by a broker or dealer to the Investment Manager and/or any sub-manager) paid or payable from any such broker or dealer in respect of any business placed
with such broker or dealer by the Investment Manager and/or any sub-manager for or on behalf Fidelity Funds. Any such cash commission rebate from any such broker
or dealer will be held by the Investment Manager and/or any sub-manager for the account of Fidelity Funds. With respect to the sub-funds of Fidelity Funds that are
included under the CPF Investment Scheme, a broker or dealer with whom the Investment Manager and/or any sub-manager has an arrangement as described above
may execute trades for other collective investment schemes managed by the Investment Manager and/or any sub-manager.
The Investment Manager confirms that the trades were executed in accordance with the Investment Manager’s best execution policy and there was no churning of
trades.
Soft Dollar Commissions for the AIG US Large Cap Research Enhanced Fund:
The Manager has entered into soft commission arrangements with selected brokers where it obtains services from third parties. These services relate essentially to
research and price information, performance measurement, portfolio valuations and analysis, all of which are believed to be helpful in the overall discharge of the
Manager’s duties to clients. As such services generally benefit all of the Manager’s clients in terms of input into the investment decision making process, the soft credits
utilized are not allocated on a specific client basis. The Manager further confirms that trades were executed on the best available terms and there was no churning of
trades
Semi-Annual Fund Report for Policyholders
42
AIA
European Equity Fund
PERFORMANCE REPORT
The AIA European Equity Fund returned –18.01% for the six months
ended 30 June 2008. The benchmark, MSCI Europe DTR Net returned
–17.12% for the same period.
Asset Class Overview**
Over the first quarter of 2008 European equity markets lost almost a
fifth of their value. The decline was driven in principal by a worsening
of the situation facing banks in the US and Europe. Full year 2007
results have been accompanied by large asset write downs by many
of these companies. These difficulties have been accompanied by
clearly worsening economic data from the US and most European
countries. The US housing market, which began falling in 2007,
continued to slide and appeared to be taking its toll on the consumer.
Confidence levels fell sharply since the beginning of the year and
many retailers reported weaker than expected sales.
In the second quarter, unlike the Federal Reserve and the Bank of
England, the European Central Bank (ECB) has resisted calls to lower
interest rates. Unfortunately the perilous state of the European (if not
Global) financial system means that significant increases in funding
rates could have disastrous effects for some banks who now rely on
wholesale funding to meet their capital requirements.
The inflationary pressure comes on several fronts but is particularly
driven by the dramatic increases in commodity prices over the past
year or so. Oil, steel and many soft commodities (for example corn)
have all seen prices pushed up by the strong global demand and
slow supply side response. Speculators have also been using
commodities as a means of hedging a falling US dollar which has
added further upward pressure. On the positive side we have
valuation. Equity valuations do not looked stretched against where
they have traded in the past 10 years, despite downgrades to analyst’s
2008 forecasts.
Portfolio Outlook**
As mentioned above there exists a high degree of uncertainty over
the outlook for the developed Western European economies for the
remainder of 2008 and into 2009. Economic growth is slowing in
many European economies as a result of headwinds from a stronger
Euro, rising energy costs, tighter credit markets, and in some cases
falling property prices. It is difficult to predict the extent and duration
of the slowdown at this stage, but with the central bankers hands
effectively tied a speedy resolution appears to be unlikely. However,
the fall in share prices to date already reflects this to some degree
and so any signs of improvement could lead to significant swings in
prices.
On most valuation metrics relative to historic levels, and when
compared to other asset classes, equities remain attractive at this
stage. In this environment we continue to look for and find attractively
valued stocks with solid earnings progression within our universe.
** Source: AIG Investments Europe Ltd.
July 2008
Portfolio Overview**
The most volatile sector in the European equity market in the first
quarter has been Financials. The portfolio’s underweight position
here has benefited performance through much of the period. However,
in January this positive position was more than offset by a number of
poorly performing stocks in other sectors. After the very weak January
performance the portfolio steadily outperformed and significantly
closed the gap with the positive contributions from February and
March.
The most volatile sector in the European equity market in the second
quarter has been Financials. The portfolio’s underweight position
here has benefitted performance through much of the period. Despite
the significant share price falls in this sector, we remain sceptical
regarding the outlook and prefer to avoid the companies with
uncertain funding strategies. In an environment of rising inflationary
pressures and an uncertain consumer outlook we have been investing
in companies which offer good pricing power and are low exposure to
the increasing raw material costs. The current environment offers
opportunities to invest in high quality companies with strong
prospects, at attractive valuations.
Semi-Annual Fund Report for Policyholders
43
AIA
European Equity Fund
FUND PERFORMANCE
Period
3-month
6-month
1-year
3-year ^
5-year ^
10-year ^
Since inception ^
As at 30 JUNE 2008
Fund
%
Benchmark*
%
Over (Under)
Performance
%
(4.74)
(18.01)
(23.51)
3.77
8.00
N/A
(0.37)
(5.47)
(17.12)
(21.16)
5.71
11.27
N/A
3.79
0.73
(0.89)
(2.35)
(1.95)
(3.27)
N/A
(4.15)
^ Annualised Returns
* Benchmark Details:
Note: Fund launch date - 11 December 2000. Fund returns in SGD, bid-to-bid, net dividends reinvested
PORTFOLIO STATEMENTS
Investment In Collective Investment Scheme
As at 30 JUNE 2008
Market Value
USD
% of Net
Asset Value
5,650,106
99.61
Market Value
USD
% of Net
Asset Value
634,902
9,875,323
15,252,789
19,334,395
4,323,261
925,685
9,210,792
215,895
9,507,666
9,222,000
6,418,170
30,913,573
2,955,180
0.52
8.03
12.41
15.73
3.52
0.75
7.49
0.18
7.73
7.50
5.22
25.15
2.40
Portfolio of Investment
Other net assets
118,789,630
4,149,157
96.63
3.37
Total
122,938,788
100.00
Market Value
USD
% of Net
Asset Value
Consumer Discretionary
Consumer Staples
Energy
Financials
Health Care
Industrials
Information Technology
Materials
Telecom Services
Utilities
9,406,951
8,308,147
16,887,134
24,777,141
9,804,896
14,766,739
4,219,408
14,623,004
6,991,958
9,004,254
7.65
6.76
13.74
20.15
7.98
12.01
3.43
11.89
5.69
7.32
Portfolio of Investment
Other net assets
118,789,630
4,149,157
96.63
3.37
Total
122,938,788
100.00
AIG Europe Fund
AIG Europe Fund
Country Allocation**
Austria
Benelux
France
Germany
Greece
Ireland
Italy
Portugal
Scandinavia
Spain
Switzerland
UK
Other countries
Industry Allocation**
Semi-Annual Fund Report for Policyholders
44
AIA
European Equity Fund
PORTFOLIO STATEMENTS
As at 30 JUNE 2008
Asset Class**
Market Value
USD
% of Net
Asset Value
Equities
Other Net Assets
118,789,630
4,149,157
96.63
3.37
122,938,788
100.00
Market Value
USD
% of Net
Asset Value
4,917,552
3,442,286
3,319,347
2,950,531
2,950,531
2,827,592
2,581,715
2,581,715
2,581,715
2,581,715
4.00
2.80
2.70
2.40
2.40
2.30
2.10
2.10
2.10
2.10
Market Value
USD
% of Net
Asset Value
9,779,621
5,297,295
4,482,326
4,278,584
4,278,584
3,667,358
3,667,358
3,463,616
3,463,616
3,259,874
4.80
2.60
2.20
2.10
2.10
1.80
1.80
1.70
1.70
1.60
Top 10 Holdings As At 30 June 2008**
BP (GB)
Banco Santander SA (ES)
Allianz SE (DE)
Arcelormittal (FR)
Vodafone Group (GB)
Siemens AG (DE)
Tecnicas Reunidas SA (ES)
Gazprom (RU)
K&S AG (DE)
Vivendi SA (FR)
Top 10 Holdings As At 30 June 2007**
streetTRACKS MSCI Europe (FR)
Allianz SE (DE)
Michelin (CGDE) (FR)
SAP AG (DE)
Merck KGAA (DE)
BP (GB)
Parmalat S.P.A (IT)
Nestle SA (CH)
Alcatel-Lucent (FR)
Inmarsat (GB)
** Information extracted from the underlying AIG Europe Fund
Semi-Annual Fund Report for Policyholders
45
AIA
European Equity Fund
OTHER INFORMATION
Exposure To Derivatives
As at 30 JUNE 2008
Market Value
SGD
% of Net
Asset Value
Realised
Gains/(Losses)
SGD
Unrealised
Gains/(Losses)
SGD
0
0.00
3,129
0
Forward foreign exchange contracts
Borrowings
N/A
Total Redemptions and Subscriptions
SGD
Total amount of redemptions
Total amount of subscriptions
993,884
667,617
Related-Party Transactions
Total purchases in AIG Europe Fund
Total sales in AIG Europe Fund
Expense Ratios
Local Fund*
Underlying Fund:
AIG Europe Fund**
Note:
*
**
5,657,932
5,852,337
30 June 2008
30 June 2007
1.87%
1.90%
1.19%
1.16%
Expense ratio does not include insurance coverage, brokerage and other transaction costs, performance fee, foreign exchange gains/losses, front or back end loads arising from the purchase or sale of collective investment schemes and tax deducted at source or arising out of income received.
Include underlying fund expense ratio
Based on unaudited draft accounts
Turnover Ratios
Local Fund
Underlying Fund:
AIG Europe Fund
Note: The turnover ratio is calculated based on the lesser of portfolio purchases and sales of the underlying investments
expressed as a percentage over the average net asset value.
Any Material Information That Will Adversely Impact The Valuation Of The Fund
N/A
Soft Dollar Commissions
N/A
Semi-Annual Fund Report for Policyholders
46
30 June 2008
30 June 2007
81.80%
5.23%
95.99%
253.66%
AIA
Global Technology Fund
PERFORMANCE REPORT
Fund Performance
AIA Global Technology Fund returned –15.11% for the six months
ended 30 June 2008. Its benchmark, the Merrill Lynch Technology
100 Index returned –17.41% for the same period.
Market Overview**
U.S. stock markets continued to endure heightened volatility and
heavy losses during the second quarter. Investor concerns included
the health of the financial system, domestic and global growth, as
well as continuing problems in the credit markets. Oil prices, which
have roughly doubled in the past year, remained elevated. Many
equities not even tied to the energy sector were hit hard by recordbreaking spikes in oil prices, a weak U.S. dollar, and fears about both
inflation and recession.
Technology stocks, which had otherwise weathered the downturn in
previous quarters, succumbed to heavy selling, although certain
technology-related companies, including those involved in mobile
telecommunications and the Internet, held up well overall. Middlecapitalization stocks generally outperformed small- and large-cap
stocks during the period, and investors favored growth stocks over
value-oriented equities.
Market Outlook**
Recently, technology stocks have been outperforming other sectors,
with companies reporting solid earnings from increasing global sales,
particularly in emerging markets. This has helped boost profits at a
time when U.S. corporate IT spending has been on a slowdown. In
addition, the technology sector’s low exposure to commodities helps
shield it from the unprecedented rise in commodity prices and the
negative effect it is having on profit margins in many industries.
The managers continue to monitor the technology sector for
opportunities to acquire undervalued companies with strong
fundamentals and attractive valuations. Many companies in this
sector remain fundamentally sound. Compared to a few years back,
companies have more cash on their balance sheets, some of which
is being used for stock buybacks and dividend payouts. Additionally,
profitable technology companies with pristine balance sheets have
been, and will continue to be, attractive to private equity and strategic
investors, supporting the sector over the longer term.
**Source: Franklin Templeton Investments
July 2008
Selection in the computers and peripherals, Internet software and
services, and electronic equipment and instruments industries of the
information technology sector contributed to relative outperformance
during the second quarter. A top relative contributor was NetLogic
Microsystems, which announced record first quarter 2008 results
from increased demand for knowledge-based processors and
physical layer products.
F5 Networks, a provider of application delivery networking products,
climbed following a favorable second quarter earnings report issued
late April, benefiting fund relative performance.
Synaptics, which is not held by the benchmark, also benefited relative
returns during the period. The company, a maker of electronic touch
sensors for cell phones and portable entertainment products,
reported a fiscal third quarter 2008 year-over-year increase in net
revenue of approximately 23% from double-digit growth in both its PC
and non-PC markets.
Visa, which launched its IPO in April, reported a 22% increase in
fiscal second quarter revenue on strong growth in payment volume
and transactions globally, supporting the stock. Visa is the world’s
largest consumer payment-system operator and is well positioned to
benefit from the global trend in cashless payments.
Not having positions in several benchmark holdings detracted from
relative returns. The benchmark benefited from stock appreciation of
Jabil Circuit, a provider of worldwide electronic manufacturing
services, which saw its fiscal third quarter profit rise 516%; global
semiconductor company Marvell Technology, which released positive
first quarter results; and information technology company EDS, which
received a buyout offer from Hewlett-Packard
Semi-Annual Fund Report for Policyholders
47
AIA
Global Technology Fund
FUND PERFORMANCE
Period
3-month
6-month
1-year
3-year ^
5-year ^
10-year ^
Since inception ^
As at 30 JUNE 2008
Fund
%
Benchmark*
%
Over (Under)
Performance
%
7.32
(15.11)
(15.79)
(0.44)
2.80
N/A
(7.48)
2.54
(17.41)
(22.60)
(0.80)
3.82
N/A
(4.68)
4.78
2.30
6.81
0.36
(1.03)
N/A
(2.81)
* Inception to August 2001 - Pacific Stock Exchange 100 (PSE 100) Index
From September 2001 - Merrill Lynch 100 Technology Index
^ Annualised Returns
Note: Fund launch date - 11 December 2000. Fund returns in SGD, bid-to-bid, net dividends reinvested
PORTFOLIO STATEMENTS
Investment In Collective Investment Scheme
As at 30 JUNE 2008
Market Value
SGD
% of Net
Asset Value
64,269,900
100.05
Market Value
USD
% of Net
Asset Value
Finland
Cayman Islands
Canada
Japan
China
United States
1,934,000
1,396,000
2,832,000
1,595,000
1,620,441
115,692,000
1.40
1.01
2.04
1.15
1.17
83.53
Portfolio of Investment
Other net asset
125,069,441
13,430,000
90.30
9.70
Total
138,499,441
100.00
Market Value
USD
% of Net
Asset Value
1,232,645
8,268,417
25,817,778
35,332,689
41,675,964
2,742,289
5,941,626
2,091,342
1,966,692
0.89
5.97
18.64
25.51
30.09
1.98
4.29
1.51
1.42
Portfolio of Investment
Other net assets
125,069,441
13,430,000
90.30
9.70
Total
138,499,441
100.00
Franklin Templeton Investment Funds - Franklin Technology Fund
Country Allocation**
Industry Allocation**
Capital Goods
Pharmaceuticals Biotechnology & Life Sciences
Semiconductors & Semiconductor Equipment
Software & Services
Technology Hardware & Equipment
Consumer Durables & Apparel
Telecommunication Services
Retailing
Media
Semi-Annual Fund Report for Policyholders
48
AIA
Global Technology Fund
PORTFOLIO STATEMENTS
Asset Class**
Equities
Fixed Income Securities
Top 10 Holdings As At 30 June 2008
QUALCOMM INC
AMERICAN TOWER CORP
CISCO SYSTEMS INC
GOOGLE INC
AGILENT TECHNOLOGIES INC
MICROSEMI CORP
APPLE INC
MAXIM INTEGRATED PRODUCTS INC
NETLOGIC MICROSYSTEMS INC
RESEARCH IN MOTION LTD
Top 10 Holdings As At 30 June 2007
U.S. Treasury Bill, 07/19/07
U.S. Treasury Bill, 07/26/07
Microsemi Corp
U.S. Treasury Bill, 08/02/07
Google Inc., A
American Tower Corp., A
Apple Inc
Microchip Technology Inc
VeriSign Inc
Harris Corp
As at 30 JUNE 2008
Market Value
USD
% of Net
Asset Value
125,069,441
13,430,000
90.30
9.70
138,499,441
100.00
Market Value
USD
% of Net
Asset Value
4,014,258
3,877,056
3,842,336
3,807,700
3,682,915
3,646,118
3,529,625
3,405,610
3,005,696
2,832,948
2.90
2.80
2.77
2.75
2.66
2.63
2.55
2.46
2.17
2.05
Market Value
USD
% of Net
Asset Value
6,467,420
5,998,955
5,296,257
5,140,102
4,034,004
3,929,901
3,578,552
3,305,281
3,266,242
2,953,932
4.97
4.61
4.07
3.95
3.10
3.02
2.75
2.54
2.51
2.27
Semi-Annual Fund Report for Policyholders
49
AIA
Global Technology Fund
OTHER INFORMATION
Exposure To Derivatives
As at 30 JUNE 2008
Market Value
SGD
% of Net
Asset Value
Realised
Gains/(Losses)
SGD
Unrealised
Gains/(Losses)
SGD
(408)
(0.00)
(7,338)
(408)
Forward foreign exchange contracts
Borrowings
N/A
Total Redemptions and Subscriptions
SGD
Total amount of redemptions
Total amount of subscriptions
8,684,654
2,476,449
Related-Party Transactions
N/A
Expense Ratios
30 June 2008
30 June 2007
1.87%
1.87%
30 June 2008
30 June 2007
0.69%
129.00%
0.07%
161.81%
Local Fund*
Underlying Fund:
Franklin Templeton Investment Funds - Franklin Technology Fund
Note:
Expense ratio does not include insurance coverage, brokerage and other transaction costs, performance fee, foreign
exchange gains/losses, front or back end loads arising from the purchase or sale of collective investment schemes
and tax deducted at source or arising out of income received.
Turnover Ratios
Local Fund
Underlying Fund:
Note:
The turnover ratio is calculated based on the lesser of portfolio purchases and sales of the underlying investments
expressed as a percentage over the average net asset value.
Any Material Information That Will Adversely Impact The Valuation Of The Fund
N/A
Soft Dollar Commissions
The Franklin Templeton Investment Funds - Franklin Technology Fund into which the Franklin Templeton Funds - Franklin Technology Fund feeds, paid US$137,310 in
commission dollars generated from portfolio transactions to pay for goods or services provided by third parties under a soft dollar arrangement. All goods and services
acquired with the soft dollar commission were for the benefit of the unit trust. The broker(s), who has executed trades for other funds managed by the Investment
Manager, had executed the trades on best available terms and there was no churning of trades.
Semi-Annual Fund Report for Policyholders
50
AIA
International HealthCare Fund
PERFORMANCE REPORT
Fund Performance
The AIA International Healthcare Fund returned –17.22% for the six
months ended 30 June 2008. The benchmark returned –15.16% for
the same period.
Market Overview **
Global equity markets struggled during the period in response to a
deluge of economic and financial concerns, including higher oil
prices, continued credit market instability, and increased inflationary
fears. Health care stocks also fell, though they did outperform the
broader market. The MSCI World Health Care Index lost 10.3%
compared to a 10.6% decline in the MSCI World Index. Within health
care, pharmaceuticals and particularly medical services
underperformed, while medical equipment stocks fared better and
biotechnology demonstrated strong outperformance.
Portfolio Review **
Detracting from returns for the period were positions in WellPoint,
Schering-Plough and Nobel Biocare.
Shares of Schering-Plough plummeted as results of the ENHANCE
study on Vytorin and Zetia were announced, and a panel discussion
of cardiologists at the American College of Cardiologists (ACC) gave
a highly critical review of the findings, advising that the drugs be used
after alternative cholesterol-lowering therapies. We believe the full
study results exposed no additional negative revelations that were
not already presented in the study’s preliminary findings in January
2008. However, the reporting of the study findings at the ACC was
more of an extremely negative edict than a balanced scientific
discussion. The media publicity was a replay of the negative coverage
after the January 2008 preliminary announcement and we assume
the market for these products will take another substantial hit. We
sold the entire Schering-Plough position on the news.
Contributing to performance were our holdings in Gilead Sciences,
Alcon and Luminex. Shares of Gilead Sciences were strong after a
safety board recommended that certain AIDS patients taking part in
a study of GlaxoSmithKline’s Epzicom consider switching to Gilead
Sciences Truvada. An independent Data and Safety Monitoring Board
recently found that for patients with high levels of HIV, treatment
regimens containing Epzicom were less effective at controlling the
virus than regimens containing Truvada. The board also found that
patients with high levels of HIV treated with Epzicom developed side
effects such as body aches and high cholesterol more quickly.
Market Outlook and Fund Strategy**
Health care’s traditionally defensive nature makes it a relatively
attractive sector in the face of an increasingly precarious economic
environment. In addition, major secular trends, particularly an aging
global population, will support increased spending on many areas of
health care for the foreseeable future. In this environment, costcutting is important and we continue to emphasize in the Portfolio
several companies that should benefit from the significant wave of
generic drug utilization.
Early in the year, regulatory setbacks, data controversies, negative
headlines and unrealistic management expectations resulted in
negative earnings revisions for several companies in major areas
within health care, namely managed care and pharmaceuticals.
These company-specific issues initially cast a pall over the entire
sector. However, more recently, health care industries and stocks with
consistent stable growth and solid fundamentals have shown relative
strength. We would continue to favor stocks that exhibit such criteria,
particularly those that we believe will exceed consensus
expectations.
**Source: Alliance Bernstein L.P.
July 2008
We eliminated the position in Nobel Biocare, as the company reported
very disappointing sales and earnings results for the first quarter of
2008 and dramatically lowered its previous growth forecast through
2010.
WellPoint announced that earnings per share for 2008 are expected
to increase only 4%-8% instead of the previously expected 15%
increase, due to higher-than-expected medical costs in 2007 that
had to be reserved against, as well as a continuation of that higher
trend in 2008. Management now estimates that medical cost trends
in 2007 and 2008 will be about 50 basis points higher, at 8%, than
previously thought. Also, state budget cuts in California will impact
Medicaid reimbursement in that state beginning 1 July 2008 and
enrollment growth in the fully insured business, combined with an
exit from the Connecticut Medicaid business, will penalize full year
enrollment growth by about 300,000 members compared to previous
expectations. Given the magnitude of the shortfall, we were caught off
guard and proceeded to significantly reduce our position following
the news.
Semi-Annual Fund Report for Policyholders
51
AIA
International HealthCare Fund
FUND PERFORMANCE
Period
3-month
6-month
1-year
3-year ^
5-year ^
10-year ^
Since inception ^
As at 30 JUNE 2008
Fund
%
Benchmark*
%
Over (Under)
Performance
%
(0.03)
(0.17)
(0.21)
(0.06)
(0.01)
N/A
(0.02)
(0.02)
(0.15)
(0.20)
(0.05)
(0.01)
N/A
(0.04)
(0.01)
(0.02)
(0.01)
(0.00)
0.00
N/A
0.03
* MSCI World Health Care Index
^ Annualised Returns
Note: Fund launch date - 12 March 2001. Fund returns in SGD, bid-to-bid, net dividends reinvested
PORTFOLIO STATEMENTS
Investment In Collective Investment Scheme
As at 30 JUNE 2008
Market Value
SGD
% of Net
Asset Value
44,276,318
100.05
Market Value
SGD
% of Net
Asset Value
India
Israel
Russia
Switzerland
United States
5,234,572
36,497,104
4,413,510
87,560,182
274,522,045
1.30
8.70
1.10
21.00
65.80
Portfolio of Investment
Other net assets
408,227,413
8,871,183
97.90
2.13
Total
417,098,596
100.03
Market Value
SGD
% of Net
Asset Value
Biotechnology
Drugs
Medical Products
Medical Services
84,017,628
165,010,994
102,062,247
57,136,544
20.10
39.60
24.50
13.70
Portfolio of Investment
Other net assets
408,227,413
8,871,183
97.90
2.10
Total
417,098,596
100.00
ACM International Health Care Fund
Country Allocation**
Industry Allocation**
Semi-Annual Fund Report for Policyholders
52
AIA
International HealthCare Fund
PORTFOLIO STATEMENTS
As at 30 JUNE 2008
Asset Class **
Market Value
SGD
% of Net
Asset Value
Equities
Other Net Assets
408,227,413
8,871,183
97.90
2.10
417,098,596
100.00
Market Value
SGD
% of Net
Asset Value
36,497,104
32,883,580
31,580,242
31,404,645
22,570,820
21,796,530
21,783,300
21,570,400
19,195,008
18,584,939
8.70
7.90
7.60
7.50
5.40
5.20
5.20
5.20
4.60
4.50
Market Value
SGD
% of Net
Asset Value
59,305,707
33,331,140
31,303,800
30,138,894
30,062,892
29,723,909
29,612,032
29,341,136
27,522,386
27,413,584
10.22
5.75
5.40
5.20
5.18
5.12
5.10
5.06
4.74
4.73
Top 10 Holdings As At 30 June 2008 **
Teva Pharmaceutical Industries
Alcon
Roche Holding
Gilead Sciences
Baxter International
Becton Dickinson
Genentech
Medco Health Solutions
Aetna
Merck
Top 10 Holdings As At 30 June 2007 **
Wellpoint Inc
Merck & Co. Inc.
Teva Pharmaceutical-sp Adr
Alcon Inc
Roche Holding Ag-genusschein
Wyeth
Schering-plough Corp
Gilead Sciences, Inc
Nobel Biocare Holding Ag
Allergan Inc
** Information extracted from the Luxemborg-registered ACM International Health Care Fund
Semi-Annual Fund Report for Policyholders
53
AIA
International HealthCare Fund
OTHER INFORMATION
Exposure To Derivatives
As at 30 JUNE 2008
Market Value
SGD
% of Net
Asset Value
Realised
Gains/(Losses)
SGD
Unrealised
Gains/(Losses)
SGD
(419)
(0.00)
(16,660)
(419)
Forward foreign exchange contracts
Borrowings
N/A
Total Redemptions and Subscriptions
SGD
Total amount of redemptions
Total amount of subscriptions
8,291,452
2,284,197
Related-Party Transactions
Total Purchases in ACM International Healthcare Fund
Total Sales in ACM International Healthcare Fund
Expense Ratios
Local Fund*
Underlying Fund: ACM International Health Care Fund
Note:
*
#
561,104
16,481,217
30 June 2008
30 June 2007
2.28%
1.47%#
2.18%
1.40%#
Expense ratio does not include insurance coverage, brokerage and other transaction costs, performance fee, foreign exchange gains/losses, front or back end loads arising from the purchase or sale of collective investment schemes and tax deducted at source or arising out of income received.
Include underlying fund expense ratio
As at 30 May 2008 and 30 May 2007 respectively Turnover Ratios
Local Fund
Underlying Fund: ACM International Health Care Fund
Note:
30 June 2008
30 June 2007
0.96%
9.52%@
0.80%
4.37%@
The turnover ratio is calculated based on the lesser of portfolio purchases and sales of the underlying investments
expressed as a percentage over the average net asset value.
Any Material Information That Will Adversely Impact The Valuation Of The Fund
N/A
Soft Dollar Commissions
AllianceBernstein L.P. (formerly known as Alliance Capital Management L.P.), the Investment Manager of the underlying fund did receive and has entered into soft
dollar commission arrangements with brokers relating to portfolio of the underlying fund that invest in equity securities, in respect of which certain goods and services
used to support the investment decision making process were received.
The soft commission arrangements were entered into on the basis that the execution of transactions on behalf of the underlying fund will be consistent with best
execution standards and the brokerage rates will not be in excess of customary institutional full-service brokerage rates. The goods and services received include
specialist industry, company and consumer research. The nature of the goods and services received is such that the benefits provided under the arrangement must
be those which assist in the provision of investment services to the underlying fund and may contribute to an improvement in the underlying fund’s performance.
For the avoidance of doubt, such goods and services do not include travel, accommodations, entertainment, general administrative goods or services, general office
equipment or premises, membership fees, employees' salaries or direct money payments.
Semi-Annual Fund Report for Policyholders
54
AIA
Acorns of Asia Fund
PERFORMANCE REPORT
Fund Performance
The AIA Acorns of Asia Fund returned –18.45% for the six months
ended 30 June 2008. The benchmark returned –14.24% for the
same period.
Overview**
The Asia ex Japan (AeJ) region, represented by the MSCI Far East Free
ex Japan benchmark, suffered a fall of 22.9% (in Singapore Dollar
terms) during the first-half of the year. This was the region’s worst
stock-market performance for the period since 1992, when there was
a similar sharp decline of more than 20% against a backdrop of a
deflating asset bubble in Japan. Fixed income markets in Asia also
had to endure a challenging first-half. Corporate bonds had to
contend with the US credit crisis while government bond yields rose
on inflation fears.
This slump came amidst a very difficult period for financial markets
globally. Indeed, both equities and bonds in the United States have
fallen in tandem for only the sixth time since the savings & loans
crisis of the 1990s.
Ironically, this is against a backdrop of a global economy that is still
showing signs of robustness. Indeed, the International Monetary
Fund (IMF), in its recently published “World Economic Outlook” report,
actually raised its forecast for global growth to 4.1% for 2008,
compared to an earlier assessment of 3.7% that it projected in April.
It was of the opinion that the slowdown linked to tightening credit
conditions in the first-quarter of this year was less severe than
anticipated.
Nonetheless, the underlying fear in markets has centred on the onset
of stagflation as we head into 2009 – stagnating economic growth in
an environment of heightening inflation. Concerns about the latter
have been triggered by sharp rises in food and energy prices. As an
illustration, a gauge of 19 commodities via the Reuters/Jefferies CRB
Index showed a 49% climb in the past year, exceeding the record
48% annual gain in 1973.
With the view that central banks would have no leeway but to hike
interest rates to contain such inflationary pressures, this has led to
concurrent worries about their impact on growth.
This unpalatable scenario has underpinned a very visible withdrawal
of portfolio investment funds from the region. According to data
provided by Citigroup Global Markets, the year-to-date net outflows
have risen to about US$13 billion.
Under these trying circumstances, the Acorns of Asia Fund (the
“Fund”) lost -18.41% (before upfront sales charges) and -20.86%
(net of upfront sales charges) during the first-half of the year,
compared to the composite benchmark’s fall of -14.24%.
Market Review**
All markets in the region fell during the first-half of 2008, although to
varying degrees. A key feature has been the volatile movements
experienced by markets and its constituent sectors.
Overall, stock prices have exhibited a downward bias on account of
worries about a possible recession in America and its impact on
global growth, widening credit spreads, and the advent of inflationary
pressures.
The sharpest declines among countries within AeJ have been
registered by the Philippines (-41.5%) and China (-30.5%). The
former has been grappling with rising food prices, specifically rice, on
which there is significant import dependency. There have also been
concerns about the budget deficit situation, and how government
plans to raise debt funding might de-stabilize the local bond
markets.
In China, with inflation running at its highest level in more than ten
years, worries have abounded about a possible hard economic
landing as the authorities have adopted a tighter monetary policy
stance to contain price pressures. In addition, investor sentiment has
been unsettled by a series of natural disasters, including the recent
earthquake in Sichuan.
Elsewhere, both Thailand and Taiwan actually achieved positive
returns in the early part of the year. Investors in Taiwan initially
responded to the emphatic electoral victory of the Kuomintang the
general election held in March. This was seen as paving the way for
normalizing and deepening economic ties with China, which would
then benefit the domestic economy through encouraging crossborder investments. For Thailand, the lifting of official capital
restrictions generated a short-term salutary effect. However, both
countries subsequently succumbed to similar negative sentiment
that has pervaded its regional counterparts (Thailand – 14.1%;
Taiwan –11.1%).
Corporate bonds spreads globally widened in the first-half on fears
that the continuing decline in US house prices, rising foreclosures,
additional write-downs by major financial institutions and contraction
in lending, would lead to a downward spiral. While government bonds
fared relatively better than corporate bonds as a result of buying
support from investors shifting into safe haven assets, government
bond markets in the region were not spared from volatility due to
surging inflation.
The Fund’s performance during the first-half was hampered by the
difficult market conditions, particularly via its equity exposure to
China, the Philippines, Korea and Taiwan. Having a relatively ample
level of cash afforded some protection, but was not sufficient to
offset the downdraft in stock prices. In addition, the Fund’s holdings
of fixed income instruments were also affected by the general weak
sentiment.
Market Outlook**
The immediate outlook for the region’s financial markets remains
murky at the time of writing. Consequently, sentiment swings among
investors should continue to feature.
Semi-Annual Fund Report for Policyholders
55
AIA
Acorns of Asia Fund
PERFORMANCE REPORT
Inflation continues to be a major risk in investors’ mindset. For
instance, consumer prices in Europe have recently accelerated at
their fastest pace in more than 16 years. In the United States, the
June consumer price index recorded an annual rise of 5%, the largest
increase since 1991.
As highlighted earlier, in order to combat this, central banks globally
will probably need to hike interest rates further, and such actions
could lead to economies around the world experiencing reduced
growth next year. In addition, for many emerging markets, including
Asia’s, where inflationary pressures are seen to be even stronger, the
IMF believes tighter monetary policies have to be also complemented
by less pro-growth fiscal measures.
Nervousness among investors will also not be alleviated by
continual negative news relating to the troubled property sector in
the United States. For instance, the most recent episode concerned
the financial challenges faced by two key institutions, the Federal
National Mortgage Association (Fannie Mae) and the Federal Home
Loan Mortgage Corporation (Freddie Mac). This pair constitutes the
largest source of home financing in America, through either owning
or guaranteeing around half of the US$12 trillion in home loans
outstanding. Their demise would have deepened the worst housing
recession in nearly 25 years. Thus the authorities in the US have
had to assemble a rescue plan to stem a loss of confidence in the
two firms.
From a strategic perspective, this action is in keeping with the
determination of central banks and governments globally to initiate
measures to prevent a prolonged recession. This should provide a
good prop for markets.
Simiarly, the longer-run investment case for AeJ remains. The industrial
transformation of China and India should continue to progress. China
has already overtaken the United Kingdom’s as the world’s fourthbiggest economy, and is poised to edge out Germany as the third
largest by 2009. The growth of this duo will provide complementary
benefits for the region.
To underline the trend, in a recent survey conducted by consultant
KPMG International, which polled corporate investment strategists
from more than 300 of the biggest multinational companies, China
was expected to overtake the United States as the world’s leading
recipient of corporate investment in the next five years. It should also
become the most influential country in information technology,
industrial products and mining. As for India, it should see the largest
growth in its share of foreign investment overall.
Demographically, the region also has the advantage of having a
rising proportion of households with strong middle-class
aspirations. The high savings rate (at an estimated 30% overall)
also provides a potential platform for achieving a more
sustainable economic expansion going forward through growth
in domestic consumption. Countries in the region are also
striving to make themselves more economically efficient through
Semi-Annual Fund Report for Policyholders
56
on-going infrastructure development and renewal, which will
further underpin growth.
Thus, while more short-term negativity is expected for the regional
markets, the fundamental underpinnings portend a positive longerterm outlook. We will continue to search for and evaluate opportunities
that could benefit the portfolio in the event of any market turnaround.
We would also like to take this opportunity to record our deep
appreciation to our unit-holders for their support of the Fund.
**Source: AIG Global Investment Corporation (Singapore) Ltd
July 2008
AIA
Acorns of Asia Fund
FUND PERFORMANCE
Period
3-month
6-month
1-year
3-year^
5-year^
10-year^
Since inception^
As at 30 JUNE 2008
Fund
%
Benchmark*
%
Over (Under)
Performance
%
(5.76)
(18.45)
(17.37)
4.23
11.78
N/A
11.08
(6.09)
(14.24)
(8.14)
7.87
10.81
N/A
11.34
0.33
(4.20)
(9.23)
(3.64)
0.97
N/A
(0.26)
* 60% MSCI AC Far East Free ex-Japan Index (DTR Net) & 40% JP Morgan Sing Govt. Bond Index All
^ Annualised Returns
Note: Fund launch date - 31 August 2001. Fund returns in SGD, bid-to-bid, net dividends reinvested. PORTFOLIO STATEMENTS
As at 30 JUNE 2008
Investment In Collective Investment Scheme
Market Value
SGD
% of Net
Asset Value
AIG International Funds - Acorns of Asia Balanced Fund
1,005,655,708
100.03
Country Allocation**
Market Value
SGD
% of Net
Asset Value
210,794,683
346,427,979
169,778,919
135,743,643
120,284,572
67,513,674
3,386,480
26,909,756
35,813,367
34,870,812
31,673,892
7,893,722
36,945,924
722,259
3,328,503
2,439,638
15.80
26.00
12.74
10.15
9.01
5.06
0.26
2.01
2.69
2.60
2.37
0.59
2.77
0.06
0.25
0.18
Portfolio of Investment
Other net assets
1,234,527,823
99,572,292
92.54
7.46
Total
1,334,100,115
100.00
South Korea
Singapore
China
Taiwan
Indonesia
Hong Kong
Kazakhstan
Philippines
United States
Malaysia
Thailand
Germany
United Kingdom
Pakistan
India
United Arab Emirates
Semi-Annual Fund Report for Policyholders
57
AIA
Acorns of Asia Fund
PORTFOLIO STATEMENTS
Industry Allocation**
As at 30 JUNE 2008
Market Value
SGD
% of Net
Asset Value
20,249,342
2,439,638
17,918,985
145,951,377
43,897,905
61,676,948
10,444,336
14,869,217
25,188,663
4,836,190
174,072,913
37,694,692
63,698,609
5,358,751
79,162,607
19,519,680
38,917,750
15,459,873
7,413,857
34,336,448
9,517,321
19,554,463
66,500,666
8,117,117
6,591,793
5,753,253
150,501,728
6,353,379
17,840,857
14,304,185
2,440,000
43,287,706
4,939,948
3,220,265
42,097,623
10,399,738
1.52
0.18
1.35
10.94
3.28
4.62
0.78
1.11
1.89
0.36
13.04
2.82
4.78
0.40
5.95
1.47
2.92
1.16
0.56
2.57
0.71
1.46
5.00
0.61
0.49
0.43
11.30
0.48
1.34
1.07
0.18
3.24
0.37
0.24
3.15
0.77
Portfolio of Investment
Other net assets
1,234,527,823
99,572,292
92.54
7.46
Total
1,334,100,115
100.00
Agribusiness
Airlines
Auto
Banks
Chemicals
Coal
Conglomerates
Construction Material
Consumer Product
Electric Power & Gas
Electronics
Engineering & Construction
Finance
Food
Government
Hotel
Industrial Others
Infrastructure
Insurance
Machinery
Manufacturing
Mining
Oil & Gas
Pharmaceutical
Plantation
Property
Real Estate
Refining
Retail
Shipbuilding
Shipping
Steel
Telecommunications
Textiles & Apparel
Transportation
Utilities
Semi-Annual Fund Report for Policyholders
58
AIA
Acorns of Asia Fund
PORTFOLIO STATEMENTS
Asset Class **
As at 30 JUNE 2008
Market Value
SGD
% of Net
Asset Value
807,343,944
362,691,241
64,492,638
99,572,292
60.48
27.22
4.84
7.46
1,334,100,115
100.00
Top 10 Holdings As At 30 June 2008 **
Market Value
SGD
% of Net
Asset Value
DBS Cap Funding 5.75% 29 May 2049
Standard Chartered 5.25% 10 Apr 2023
PT United Tractors
Queensley Hldgs Ltd 4.5% 05 Dec 2009
PT Tambang Batubara Bukit Asam
Singapore Govt Bond 3.625% 01 Jul 2014
Singapore Govt Bond 3.75% 01 Sep 2016
PT Astro Agro Lestari
United Overseas Bank Ltd 4.1% 03 Sep 2019
Capitamall Trust
32,366,000
32,163,000
24,964,000
24,136,000
21,268,000
21,103,000
20,781,000
20,249,000
19,325,000
19,057,000
2.43
2.41
1.87
1.81
1.59
1.58
1.56
1.52
1.45
1.43
Top 10 Holdings As At 30 June 2007 **
Market Value
SGD
% of Net
Asset Value
24,759,000
24,313,973
22,745,245
22,083,948
21,879,480
21,771,000
21,676,603
21,366,497
20,909,343
20,460,745
1.89
1.85
1.73
1.68
1.67
1.66
1.65
1.63
1.59
1.56
Equities
Fixed Income Securities
Real Estate Investment Trusts and Preference Shares
Other Net Assets
CapitaMall Trust
Queensley Hldgs Ltd 4.5% 05 Dec 2009
Innolux Display Corporation
PT United Tractors
Ascendas Real Estate Investment Trust
Keppel Corp Ltd
Singapore Govt Bond 3.75% 01 Sep 2016
Singapore Govt Bond 3.625% 01 Jul 2014
UOB Ltd 4.1% 03 Sep 2019
Bank Mandiri
** Information extracted from the underlying AIG International Funds - Acorns of Asia Balanced Fund
Semi-Annual Fund Report for Policyholders
59
AIA
Acorns of Asia Fund
OTHER INFORMATION
Exposure To Derivatives
As at 30 JUNE 2008
Market Value
SGD
% of Net
Asset Value
Realised
Gains/(Losses)
SGD
Unrealised
Gains/(Losses)
SGD
N/A
Borrowings
N/A
Total Redemptions and Subscriptions
SGD
Total amount of redemptions
Total amount of subscriptions
86,358,466
170,862,252
Related-Party Transactions
Total purchases in AIG International Funds - Acorns of Asia Balanced Fund
Total sales in AIG International Funds - Acorns of Asia Balanced Fund
Expense Ratios
155,055,800
24,679,597
30 June 2008
30 June 2007
1.67%
1.65%
1.75%
1.73%
30 June 2008
30 June 2007
2.26%
33.71%
3.72%
34.71%
Local Fund*
Underlying Fund: AIG International Funds - Acorns of Asia Balanced Fund**
Note:
*
**
Expense ratio does not include insurance coverage, brokerage and other transaction costs, performance fee, foreign exchange gains/losses, front or back end loads arising from the purchase or sale of collective investment schemes and tax deducted at source or arising out of income received.
Include underlying fund expense ratio
Based on unaudited draft accounts Turnover Ratios
Local Fund
Underlying Fund: AIG International Funds - Acorns of Asia Balanced Fund**
Note: The turnover ratio is calculated based on the lesser of portfolio purchases and sales of the underlying investments
expressed as a percentage over the average net asset value.
** Based on unaudited draft accounts Any Material Information That Will Adversely Impact The Valuation Of The Fund
N/A
Soft Dollar Commissions
In the normal course of business, the Managers shall be entitled to receive soft dollar benefits from selected brokers, in relation to equity transactions, from whom
products and services were received from third parties. These brokers may also execute trades for other clients managed by the Manager. The goods and services
received generally benefit the entire Managers’ clients and trades are executed on the best available terms with no excessive churning. Goods and services received
can reasonably be expected to assist in the provision of the investment services and include research and advisory services, economic and political analyses, portfolio
analyses, market analyses, data and quotation services, custodial services and computer hardware and software used in the support of the investment process of the
Managers.
Semi-Annual Fund Report for Policyholders
60
AIA
Managed Portfolios
PERFORMANCE REPORT
Fund / Portfolio Overview**
During the period under review, the equity market as measured by
MSCI AC World (Net) Index dropped by 15.72% in SGD term. The
bond markets as measured by JP Morgan SGD Unhedged Index
dropped by 1.29% in SGD term.
Financial markets worldwide continue to suffer considerable
headwinds. Resurgent inflation has now been added to earlier
concerns about the health of the financial system and the threats to
growth. Our view remains that the systemic risks to the worldwide
financial system have been greatly reduced through the measures
introduced by the Federal Reserve, as well as other Central Banks
and authorities.
As far as our outlook is concerned, because there is only a small
probability that a major financial institution will fail, creating a
snowball effect, the most pessimistic scenarios for financial turmoil
and economic contraction can be taken off the table. However, this
does not mean that the crisis in the credit markets is over. Because
the fundamental situation for credits is still deteriorating, we should
probably brace ourselves for further turbulence over the next several
quarters.
While credit conditions are still worsening, it is important to point out
factors over time that will potentially lead to stability and eventual
recovery. Focusing on the U.S. housing market, in particular,
demographics remain the key consideration. U.S. household formation
is still progressing at a good pace. This means that the perceived
surplus in the housing market may be eliminated faster than what is
now reflected in the discounted securities markets. We should also
take into account that, from a historical perspective, with the recent
decline in home prices, affordability is now at inexpensive levels.
Even if we can start seeing the light at the end of the tunnel for the
U.S. residential property market, U.S. consumer sentiment is likely to
remain depressed for quite some time. In addition to housing, high
oil prices are clearly depressing consumer spending. However, some
relief to overall growth is starting to appear for U.S. external trade.
Already, this factor is contributing significantly to GDP, and this
positive trend is likely to remain in effect for quite some time. This
continuing trend will, of course, support employment and corporate
profits, and it may also keep the overall economy out of recession.
As for other major regions of the world, the current trends point more
towards a significant slowdown than an outright decline. As in North
America, the state of corporate balance sheets can be characterized
as unusually strong in Japan and Europe, as well as in most Emerging
Markets.
From a medium-term perspective, accelerating inflation may
constitute a more serious threat to financial markets than either
credit issues or the risks to economic growth. These risks are
particularly acute for many Emerging Markets. Here, growth continues
strongly, and inflationary forces are gathering momentum. Some
countries have already started to tighten monetary policies, but, so
far, general measures can be characterized as “too little too late.”
In the near term, these Emerging Markets are likely to continue
delivering strong GDP growth, strong corporate profits and
outperforming equity markets. In the longer term, though, a lack of
decisive action could threaten the sustainability of good economic
growth.
In Developed Markets, inflation and growth are more evenly balanced.
However, this also means increasing uncertainty about the future
course of monetary policies and could spell more volatility for
financial markets worldwide.
Portfolio Performance**
Both equities and bonds portion displayed negative return because
of the volatile market. For the equities portion of the fund, Japan
equities have displayed relatively better performance. South East
Asia lagged the rest of the region in terms of performance because
of high inflation problem.
Market Outlook and Strategy**
The crisis in US financial markets and the associated economic
weakness continues to weigh on equity market sentiment. Inflation
and the extent to which high energy and food prices will impair
consumption are now among the chief concerns as well. Likely deleveraging in financial markets along with inflation and anemic or
negative growth is a bearish scenario for equities. For a more
sustained upturn in equity markets, we may have to await a
stabilization of economic conditions, not only in the United States,
but also in Europe.
As for bond markets, the outlook provided by our duration factor
matrix, incorporating fundamental, value and technical indicators
suggests that both the US and Euro market look slightly expensive. In
the short term we expect a downward adjustment to ECB rate hike
expectations and favour a tactical overweight position in the Euro
area coupled with a curve steepening bias.
**Source: AIG Global Investment Group
July 2008
Against this background of declining growth and the avoidance of a
widespread recession, equity markets are starting to look interesting.
Sustained strong performance, however, is likely to be delayed until
most of the turbulence in the credit markets is behind us. Meanwhile,
we think that opportunities in the credit markets themselves are likely
to present better near-term risk-reward opportunities.
Semi-Annual Fund Report for Policyholders
61
AIA
Managed Portfolios
FUND PERFORMANCE
PORTFOLIO 30
Period
3-month
6-month
1-year
3-year^
5-year^
10-year^
Since inception^
As at 30 JUNE 2008
Fund
%
Benchmark*
%
Over (Under)
Performance
%
(2.63)
(6.59)
(9.46)
1.13
3.43
N/A
3.08
(3.68)
(4.85)
(4.10)
2.41
3.47
N/A
3.66
1.05
(1.74)
(5.36)
(1.28)
(0.04)
N/A
(0.58)
Fund
%
Benchmark*
%
Over (Under)
Performance
%
(3.86)
(9.76)
(12.63)
0.03
2.88
N/A
1.95
(3.64)
(7.65)
(7.87)
2.11
4.46
N/A
3.87
(0.22)
(2.11)
(4.77)
(2.08)
(1.58)
N/A
(1.92)
Fund
%
Benchmark*
%
Over (Under)
Performance
%
(4.42)
(12.86)
(16.31)
(0.46)
2.96
N/A
1.08
(3.43)
(10.55)
(11.98)
2.22
5.54
N/A
3.86
(0.99)
(2.32)
(4.33)
(2.67)
(2.58)
N/A
(2.78)
Fund
%
Benchmark*
%
Over (Under)
Performance
%
(4.81)
(18.42)
(19.40)
(1.16)
3.40
N/A
(0.34)
(2.97)
(15.72)
(19.40)
2.69
7.44
N/A
3.48
(1.84)
(2.70)
(3.87)
(3.85)
(4.05)
N/A
(3.82)
* 25% MSCI AC World Free Index & 75% JP Morgan Sing Bond Index
PORTFOLIO 50
Period
3-month
6-month
1-year
3-year^
5-year^
10-year^
Since inception^
* 45% MSCI AC World Free Index & 40% JP Morgan Sing Bond Index & 15% Salomon World Govt Bond Index
PORTFOLIO 70
Period
3-month
6-month
1-year
3-year^
5-year^
10-year^
Since inception^
* 65% MSCI AC World Free Index & 20% JP Morgan Sing Bond Index & 15% Salomon World Govt Bond Index
PORTFOLIO 100
Period
3-month
6-month
1-year
3-year^
5-year^
10-year^
Since inception^
* MSCI AC World Free Index ^ Annualised Returns
Note: Fund launch date - 8 March 2002. Fund returns in SGD, bid-to-bid, net dividends reinvested
Semi-Annual Fund Report for Policyholders
62
AIA
Managed Portfolios
PORTFOLIO
STATEMENTS
FUND PERFORMANCE
PORTFOLIO 30
Investment In Collective Investment Scheme
AIG US Large Cap Research Enhanced Fund
AIG Europe Fund
AIG Japan New Horizon Fund
AIG South East Asia Fund
AIG International Funds - Singapore Bond Fund
PORTFOLIO 50
Investment In Collective Investment Scheme
AIG US Large Cap Research Enhanced Fund
AIG Europe Fund
AIG Global Bond Fund
AIG Japan New Horizon Fund
AIG South East Asia Fund
AIG International Funds - Singapore Bond Fund
PORTFOLIO 70
Investment In Collective Investment Scheme
AIG US Large Cap Research Enhanced Fund
AIG Europe Fund
AIG Global Bond Fund
AIG Japan New Horizon Fund
AIG South East Asia Fund
AIG International Funds - Singapore Bond Fund
PORTFOLIO 100
Investment In Collective Investment Scheme
AIG US Large Cap Research Enhanced Fund
AIG Europe Fund
AIG Japan New Horizon Fund
AIG South East Asia Fund
As at 30 JUNE 2008
Market Value
SGD
% of Net
Asset Value
2,108,125
1,178,081
264,146
160,316
13,128,730
12.41
6.93
1.55
0.94
77.26
16,839,398
99.10
Market Value
SGD
% of Net
Asset Value
7,089,118
4,004,042
5,167,954
84,458
952,115
13,692,929
21.94
12.39
15.99
0.26
2.95
42.38
30,990,616
95.91
Market Value
SGD
% of Net
Asset Value
12,307,368
6,803,492
6,095,777
1,867,340
1,456,082
8,017,768
33.30
18.41
16.49
5.05
3.94
21.69
36,547,827
98.88
Market Value
SGD
% of Net
Asset Value
4,926,852
2,660,145
818,692
562,388
54.10
29.21
8.99
6.18
8,968,077
98.48
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63
AIA
Managed Portfolios
FUND PERFORMANCE
As at 30 JUNE 2008
AIG US Large Cap Research Enhanced Fund
Country Allocation**
Market Value
USD
% of Net
Asset Value
US
Bermuda
Other countries
209,310,700
1,369,172
1,329,106
98.31
0.64
0.62
Portfolio of Investment
Other net assets
212,008,978
890,616
99.58
0.42
Total
212,899,594
100.00
Market Value
USD
% of Net
Asset Value
Consumer Discretionary
Consumer Staples
Energy
Financials
Health Care
Industrials
Information Technology
Materials
Telecom Services
Utilities
15,764,988
27,014,184
32,522,177
28,084,829
27,635,370
23,051,736
32,004,875
8,582,123
6,069,817
11,278,878
7.40
12.69
15.28
13.19
12.98
10.83
15.03
4.03
2.85
5.30
Portfolio of Investment
Other net assets
212,008,978
890,616
99.58
0.42
Total
212,899,594
100.00
Asset Class**
Market Value
USD
% of Net
Asset Value
Equities
Other Net Assets
212,008,978
890,616
99.58
0.42
212,899,594
100.00
Market Value
USD
% of Net
Asset Value
8,941,783
7,877,285
7,664,385
7,238,586
6,812,787
6,599,887
6,599,887
5,961,189
4,683,791
4,257,992
4.20
3.70
3.60
3.40
3.20
3.10
3.10
2.80
2.20
2.00
Industry Allocation**
Top 10 Holdings As At 30 June 2008**
SPDR Trust Series 1 (US)
Wal Mart Stores Inc (US)
Halliburton Co (US)
Chevron Corp (US)
Chubb Corp (US)
Coca Cola Co (US)
Constellation Energy (US)
Exxon Mobil Corp (US)
Oracle Systems Corp (US)
Barr Pharmaceuticals Inc (US)
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64
AIA
Managed Portfolios
PORTFOLIO STATEMENTS
Top 10 Holdings As At 30 June 2007**
Exxon Mobil Corp (US)
General Elec Co (US)
AT&T Inc (US)
Bank of America Corp (US)
Chevron Corp (US)
Pfizer Inc (US)
Johnson & Johnson (US)
JP Morgan Chase & Co (US)
International Business Machines Corporation (US)
Wells Fargo & Company (US)
As at 30 JUNE 2008
Market Value
USD
% of Net
Asset Value
6,200,098
5,373,419
3,995,619
3,582,279
3,168,939
3,168,939
3,168,939
3,031,159
2,893,379
2,617,819
4.50
3.90
2.90
2.60
2.30
2.30
2.30
2.20
2.10
1.90
** Information extracted from the underlying AIG US Large Cap Research Enhanced Fund
Note: The Underlying Fund was changed from AIG American Equity Fund to AIG US Large Cap Research Enhanced Fund
effective 18 May 2007. AIG EUROPE FUND
Country Allocation**
Market Value
USD
% of Net
Asset Value
634,902
9,875,323
15,252,789
19,334,395
4,323,261
925,685
9,210,792
215,895
9,507,666
9,222,000
6,418,170
30,913,573
2,955,180
0.52
8.03
12.41
15.73
3.52
0.75
7.49
0.18
7.73
7.50
5.22
25.15
2.40
Portfolio of Investment
Other net assets
118,789,630
4,149,158
96.63
3.37
Total
122,938,788
100.00
Market Value
USD
% of Net
Asset Value
Consumer Discretionary
Consumer Staples
Energy
Financials
Health Care
Industrials
Information Technology
Materials
Telecom Services
Utilities
9,406,951
8,308,147
16,887,134
24,777,141
9,804,896
14,766,739
4,219,408
14,623,004
6,991,958
9,004,254
7.65
6.76
13.74
20.15
7.98
12.01
3.43
11.89
5.69
7.32
Portfolio of Investment
Other net assets
118,789,630
4,149,158
96.63
3.37
Total
122,938,788
100.00
Austria
Benelux
France
Germany
Greece
Ireland
Italy
Portugal
Scandinavia
Spain
Switzerland
UK
Other countries
Industry Allocation**
Semi-Annual Fund Report for Policyholders
65
AIA
Managed Portfolios
PORTFOLIO STATEMENTS
As at 30 JUNE 2008
Asset Class**
Market Value
USD
% of Net
Asset Value
Equities
Other Net Assets
118,789,630
4,149,158
96.63
3.37
122,938,788
100.00
Market Value
USD
% of Net
Asset Value
4,917,552
3,442,286
3,319,347
2,950,531
2,950,531
2,827,592
2,581,715
2,581,715
2,581,715
2,581,715
4.00
2.80
2.70
2.40
2.40
2.30
2.10
2.10
2.10
2.10
Market Value
USD
% of Net
Asset Value
9,779,621
5,297,295
4,482,326
4,278,584
4,278,584
3,667,358
3,667,358
3,463,616
3,463,616
3,259,874
4.80
2.60
2.20
2.10
2.10
1.80
1.80
1.70
1.70
1.60
Market Value
USD
% of Net
Asset Value
878,977
1,879,498
1,512,346
53,819,517
39,119,081
1,417,388
11,094,994
992,216
22,895,043
668,187
0.63
1.35
1.09
38.63
28.08
1.02
7.96
0.71
16.43
0.48
Portfolio of Investment
Other net assets
134,277,246
5,045,428
96.38
3.62
Total
139,322,674
100.00
Top 10 Holdings As At 30 June 2008**
BP (GB)
Banco Santander SA (ES)
Allianz SE (DE)
Arcelormittal (FR)
Vodafone Group (GB)
Siemens AG (DE)
Tecnicas Reunidas SA (ES)
Gazprom (RU)
K&S AG (DE)
Vivendi SA (FR)
Top 10 Holdings As At 30 June 2007**
StreetTracks MSCI Europe (FR)
Allianz SE (DE)
Michelin (CGDE) (FR)
SAP AG (DE)
Merck KGAA (DE)
BP (GB)
Parmalat S.P.A (IT)
Nestle SA (CH)
Alcatel-Lucent (FR)
Inmarsat (GB)
** Information extracted from the underlying AIG Europe Fund
AIG GLOBAL BOND FUND
Country Allocation**
Australia
Canada
Denmark
Europe
Japan
Poland
United Kingdom
Sweden
United States
Other Countries
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66
AIA
Managed Portfolios
PORTFOLIO STATEMENTS
Currency Allocation**
As at 30 JUNE 2008
Market Value
USD
% of Net
Asset Value
878,977
1,879,498
1,512,346
50,678,741
39,119,081
1,417,388
11,094,994
992,216
22,895,043
3,808,963
0.63
1.35
1.09
36.38
28.08
1.02
7.96
0.71
16.43
2.73
Portfolio of Investment
Other net assets
134,277,246
5,045,428
96.38
3.62
Total
139,322,674
100.00
Market Value
USD
% of Net
Asset Value
134,277,246
5,045,428
96.38
3.62
139,322,674
100.00
Market Value
USD
% of Net
Asset Value
6,966,134
5,990,875
5,154,939
5,154,939
4,736,971
4,458,326
3,761,712
3,343,744
3,204,422
3,065,099
5.00
4.30
3.70
3.70
3.40
3.20
2.70
2.40
2.30
2.20
Market Value
USD
% of Net
Asset Value
4,630,339
4,550,506
4,311,005
2,953,837
2,634,503
2,634,503
2,395,003
2,315,170
2,315,170
2,075,669
5.80
5.70
5.40
3.70
3.30
3.30
3.00
2.90
2.90
2.60
AUD
CAD
DKK
EUR
JPY
PLZ
GBP
SEK
USD
Other Currencies
Asset Class**
Fixed Income Securities
Other Net Assets
Top 10 Holdings As At 30 June 2008**
2.625% Treasury (United States) 30/Apr/2010 (US)
2.00% Japan (Government Of) 20/Mar/2025 (JP)
1.60% Japan (Government Of) 20/Jun/2014 (JP)
4.25% Germany (Fed Rep Of) 04/Jan/2014 (DE)
1.30% Japan (Government Of) 20/Jun/2012 (JP)
1.40% Japan (Government Of) 20/Dec/2015 (JP)
4.25% Netherlands (Kingdom Of) 15/Jul/2013 (NL)
3.75% Italy (Rep Of) 01/Aug/2016 (IT)
0.8% Japan (Government Of) 20/Mar/2013 (JP)
8% Treasury (United States) 07/Jun/2021 (US)
Top 10 Holdings As At 30 June 2007**
5.25% Germany (Fed Rep) 04/Jul/2010 (DE)
1.4% Japan (Government Of) 20/Dec/2015 (JP)
5.5% Netherlands (Kingdom) 15/Jul/2010 (NL)
2.0% Japan (Government Of) 20/Mar/2025 (JP)
5.25% United States Treasury Bond 15/Feb/2029 (US)
4.25% United Kingdom (Government) 07/Mar/2011 (GB)
4.25% Belgium (Kingdom) 28/Sep/2014 (BE)
4.0% Sweden (Kingdom Of) 01/Dec/2009 (SE)
2.125% Fed Natl Mort Assc 09/Oct/2007 (US)
5.5% Norway (Kingdom Of) 15/May/2009 (NO)
** Information extracted from the underlying AIG Global Bond Fund
Semi-Annual Fund Report for Policyholders
67
AIA
Managed Portfolios
PORTFOLIO STATEMENTS
As at 30 JUNE 2008
AIG JAPAN NEW HORIZON FUND
Country Allocation**
Market Value
USD
% of Net
Asset Value
Japan
549,135,122
95.67
Portfolio of Investment
Other net assets
549,135,122
24,847,783
95.67
4.33
Total
573,982,905
100.00
Industry Allocation**
Market Value
USD
% of Net
Asset Value
Consumer Discretionary
Consumer Staples
Financials
Health Care
Industrials
Information Technology
Materials
Telecom Services
101,227,568
42,964,332
78,273,720
55,890,973
147,030,929
98,152,412
18,209,321
7,385,867
17.64
7.49
13.64
9.74
25.62
17.10
3.17
1.29
Portfolio of Investment
Other net assets
549,135,122
24,847,783
95.67
4.33
Total
573,982,905
100.00
Asset Class**
Market Value
USD
% of Net
Asset Value
Equities
Other Net assets
549,135,122
24,847,783
95.67
4.33
573,982,905
100.00
Market Value
USD
% of Net
Asset Value
41,326,769
31,569,060
28,125,162
27,551,179
24,681,265
20,663,385
19,515,419
18,941,436
17,219,487
16,071,521
7.20
5.50
4.90
4.80
4.30
3.60
3.40
3.30
3.00
2.80
Top 10 Holdings As At 30 June 2008**
Nintendo Co Ltd (JP)
Sumitomo Mitsui Financial Group Inc. (JP)
Mitsui & Co (JP)
Japan Steel Works (JP)
Japan Tobacco Inc (JP)
Terumo Corp (JP)
Takeda Pharmaceutical Co (JP)
Daiichi Sankyo Co Ltd (JP)
Toyota Motor Corp (JP)
Komatsu Ltd (JP)
Semi-Annual Fund Report for Policyholders
68
AIA
Managed Portfolios
PORTFOLIO STATEMENTS
Top 10 Holdings As At 30 June 2007**
As at 30 JUNE 2008
Market Value
USD
% of Net
Asset Value
57,966,019
34,209,454
32,308,928
31,358,666
31,358,666
30,408,403
29,458,141
28,507,878
28,507,878
26,607,353
6.10
3.60
3.40
3.30
3.30
3.20
3.10
3.00
3.00
2.80
Market Value
USD
% of Net
Asset Value
28,806,268
68,743,364
13,325,095
9,933,758
8,623,678
28,396,646
49,627,356
43,506,623
10,823,367
20,027,681
9.67
23.08
4.47
3.34
2.90
9.54
16.67
14.61
3.63
6.73
Portfolio of Investment
Other net assets
281,813,836
15,976,123
94.64
5.36
Total
297,789,959
100.00
Market Value
USD
% of Net
Asset Value
Consumer Discretionary
Consumer Staples
Energy
Financials
Health Care
Industrials
Information Technology
Materials
Telecomm Services
Utilities
22,088,568
11,540,277
36,122,897
58,997,726
2,770,230
49,852,868
49,999,411
19,439,518
20,036,964
10,965,376
7.42
3.88
12.13
19.81
0.93
16.74
16.79
6.53
6.73
3.68
Portfolio of Investment
Other net assets
281,813,836
15,976,123
94.64
5.36
Total
297,789,959
100.00
Toyota Motor Corp (JP)
Japan Steel Works (JP)
Japan Tobacco Inc (JP)
Nikon Corp (JP)
Toshiba Corp (JP)
Sumco Corporation (JP)
Mizuho Financial Group (JP)
Elpida Memory Inc (JP)
Nomura Research Inst (JP)
Mitsui O.S.K.Lines (JP)
** Information extracted from the underlying AIG Japan New Horizon Fund
AIG SOUTH EAST ASIA FUND
Country Allocation**
China
Hong Kong
Indonesia
Malaysia
Philippines
Singapore
South Korea
Taiwan
Thailand
Others
Industry Allocation**
Semi-Annual Fund Report for Policyholders
69
AIA
Managed Portfolios
PORTFOLIO STATEMENTS
As at 30 JUNE 2008
Asset Class**
Market Value
USD
% of Net
Asset Value
Equities
Other Net Assets
281,813,836
15,976,123
94.64
5.36
297,789,959
100.00
Market Value
USD
% of Net
Asset Value
13,400,548
12,804,968
10,422,649
7,742,539
7,444,749
6,849,169
6,551,379
5,955,799
5,658,009
5,658,009
4.50
4.30
3.50
2.60
2.50
2.30
2.20
2.00
1.90
1.90
Market Value
USD
% of Net
Asset Value
14,508,536
10,276,880
8,765,574
8,161,052
8,161,052
6,952,007
6,649,746
6,347,485
6,347,485
6,045,223
4.80
3.40
2.90
2.70
2.70
2.30
2.20
2.10
2.10
2.00
Market Value
SGD
% of Net
Asset Value
1,388,800
Top 10 Holdings As At 30 June 2008**
Samsung Electronic (KR)
China Mobile Ltd (CN)
Cnooc Limited (CN)
PTT Public Company (TH)
Sembcorp Marine (SG)
Hon Hai Precision Industry Co Ltd (TW)
Industrial and Commercial Bank of China (CN)
Sun Hung Kai Properties (HK)
Singapore Telecommunications (SG)
PT Bumi Resources Tbk (ID)
Top 10 Holdings As At 30 June 2007**
Samsung Electronic (KR)
Daelim Industrial (KR)
Megaworld Corp (PH)
Keppel Corp (SG)
Hon Hai Precision Industry Co Ltd (TW)
Hopewell Hldgs (HK)
Cnooc Ltd (CN)
PTT Public Company (TH)
Sembcorp Marine (SG)
Nine Dragons Paper Holdings (CN)
** Information extracted from the underlying AIG South East Asia Fund
AIG INTERNATIONAL FUNDS - SINGAPORE BOND FUND
Country Allocation**
China
Germany
Hong Kong
India
Indonesia
Kazakhstan
Pakistan
Singapore
South Korea
Malaysia
United Kingdom
United States
1,325,753
6,094,983
1,207,204
379,259,095
6,073,874
464,422
47,244,904
72,963,896
0.21
1.17
3.90
1.44
0.20
0.94
0.19
58.36
0.93
0.07
7.27
11.23
Portfolio of Investment
Other net assets
558,463,604
91,572,080
85.91
14.09
Total
650,035,684
100.00
Semi-Annual Fund Report for Policyholders
7,631,458
25,370,777
9,438,438
70
AIA
Managed Portfolios
PORTFOLIO STATEMENTS
Industry Allocation**
As at 30 JUNE 2008
Market Value
SGD
% of Net
Asset Value
Airlines
Banks
Electric Power & Gas
Finance
Government
Industrial
Real Estate
Oil & Gas
Hotel
Infrastructure
Shipping
7,417,564
198,149,345
12,616,063
56,635,659
100,907,160
22,933,114
143,929,216
6,094,983
1,966,500
494,000
7,320,000
1.14
30.47
1.94
8.71
15.54
3.53
22.13
0.94
0.30
0.08
1.13
Portfolio of Investment
Other net assets
558,463,604
91,572,080
85.91
14.09
Total
650,035,684
100.00
Market Value
SGD
% of Net
Asset Value
483,506,837
74,956,767
91,572,080
74.38
11.53
14.09
650,035,684
100.00
Top 10 Holdings As At 30 June 2008**
Market Value
SGD
% of Net
Asset Value
DBS Cap Funding 5.75% 29 May 2049
Standard Chartered 5.25% 10 Apr 2023
Singapore Govt Bond 4% 01 Sep 2018
OCBC 3.78% 28 Nov 2017
Capitamall Trust
Morgan Stanley 4% 23 Oct 2017
HSBC 3.18% 24 Nov 2008
DBS Bank 4.47% 15 Jul 2021
Ascendas Real Estate Investment Trust
Capitaland Treasury Ltd 4.35% 31 Oct 2019
39,420,000
38,011,000
36,686,000
19,226,000
19,197,000
16,248,000
15,144,000
15,127,000
14,754,000
13,797,000
6.06
5.85
5.64
2.96
2.95
2.5
2.33
2.33
2.27
2.12
Top 10 Holdings As At 30 June 2007**
Market Value
SGD
% of Net
Asset Value
24,759,000
19,627,000
17,465,000
15,090,000
13,170,000
12,820,000
11,989,000
11,743,000
10,838,000
10,683,000
4.58
3.63
3.23
2.79
2.43
2.37
2.22
2.17
2.00
1.97
Asset Class**
Fixed Income Securities
Real Estate Investment Trust and Preference Shares
Other Net Assets
Capitamall Trust
Ascendas Real Estate Investment Trust
DBS Bank 4.47% 15 Jul 2021
HSBC Singapore 3.18% 24 Nov 2008
Queensley Holdings Ltd 4.5% 05 Dec 2009
Singapore Govt Bond 3.625% 01 Jul 2014
ABN Amro Bank 0% 11 Jul 2007
DBS Group Hldgs 6% Non Cum Pref Shs
Singapore Govt Bond 3.75% 01 Sep 2016
Swedbank 3.445% 28 Feb 2008
** Information extracted from the underlying AIG International Funds - Singapore Bond Fund
Semi-Annual Fund Report for Policyholders
71
AIA
Managed Portfolios
OTHER INFORMATION
Exposure To Derivatives
Forward foreign exchange contracts:
AIA Portfolio 30
AIA Portfolio 50
AIA Portfolio 70
AIA Portfolio 100
As at 30 JUNE 2008
Market Value
SGD
% of Net
Asset Value
Realised
Gains/(Losses)
SGD
Unrealised
Gains/(Losses)
SGD
0
0
397
31
0.00
0.00
0.00
0.00
609
6,080
1,448
6,088
0
0
397
31
Redemptions
SGD
Subscriptions
SGD
1,971,834
2,953,588
3,474,599
1,066,805
2,040,916
1,688,144
2,499,456
466,793
Borrowings
N/A
Total Redemptions and Subscriptions
AIA Portfolio 30
AIA Portfolio 50
AIA Portfolio 70
AIA Portfolio 100
Related-Party Transactions
SGD
Total purchases in AIG US Large Cap Research Enhanced Fund^
Total purchases in AIG Europe Fund
Total purchases in AIG Japan New Horizon Fund
Total purchases in AIG South East Asia Fund
Total purchases in AIG International Funds - Singapore Bond Fund
Total purchases in AIG Global Fund
4,701,742
2,253,902
1,744,479
813,074
6,299,750
2,724,499
Total sales in AIG US Large Cap Research Enhanced Fund
Total sales in AIG Europe Fund
Total sales in AIG Japan New Horizon Fund
Total sales in AIG South East Asia Fund
Total sales in AIG International Funds - Singapore Bond Fund
Total sales in AIG Global Fund
8,129,918
5,171,161
3,187,420
1,888,487
8,611,643
3,849,583
Expense Ratios
AIA Portfolio 30*
AIA Portfolio 50*
AIA Portfolio 70*
AIA Portfolio 100*
30 June 2008
30 June 2007
1.15%
1.69%
1.75%
1.80%
1.48%
1.73%
1.73%
1.80%
Underlying Funds:
AIG US Large Cap Research Enhanced Fund^
1.15%
AIG Europe Fund
1.19%
AIG Global Bond Fund
0.78%
AIG Japan New Horizon Fund
1.12%
AIG South East Asia Fund
1.20%
AIG International Funds - Singapore Bond Fund
1.10%
Note: Expense ratio does not include insurance coverage, brokerage and other transaction costs, performance fee, foreign exchange gains/losses, front or back end loads arising from the purchase or sale of collective investment schemes and tax deducted at source or arising out of income received.
*
Include underlying fund expense ratio
^
Based on unaudited draft accounts Semi-Annual Fund Report for Policyholders
72
1.19%
1.16%
0.83%
1.11%
1.21%
1.15%
AIA
Managed Portfolios
OTHER INFORMATION
Turnover Ratios
AIA Portfolio 30
AIA Portfolio 50
AIA Portfolio 70
AIA Portfolio 100
Underlying Funds:
AIG US Large Cap Research Enhanced Fund^
AIG Europe Fund
AIG Global Bond Fund
AIG Japan New Horizon Fund
AIG South East Asia Fund
AIG International Funds - Singapore Bond Fund
As at 30 JUNE 2008
30 June 2008
30 June 2007
17.34%
18.11%
18.85%
13.49%
11.64%
9.76%
11.62%
13.00%
74.96%
95.99%
114.66%
71.05%
25.56%
15.44%
288.07%
253.66%
221.30%
151.20%
64.88%
40.55%
Note: The turnover ratio is calculated based on the lesser of portfolio purchases and sales of the underlying investments
expressed as a percentage over the average net asset value.
^
Based on unaudited draft accounts Any Material Information That Will Adversely Impact The Valuation Of The Fund
N/A
Soft Dollar Commissions
The following funds did not engage in soft dollar arrangements during the period ended 30 June 2008:
- AIG International Funds - Singapore Bond Fund
- AIG Japan New Horizon Fund
- AIG Global Bond Fund
- AIG Europe Fund
Soft dollars commissions for the AIG US Large Cap Research Enhanced Fund and the AIG South East Asia Fund:
The Manager has entered into soft commission arrangements with selected brokers where it obtains services from third parties. These services relate essentially to
research and price information, performance measurement and portfolio valuations, analysis and administration, all of which are believed to be helpful in the overall
discharge of the Manager’s duties to clients. As such services generally benefit all of the Manager’s clients in terms of input into the investment decision making
process, the soft credits utilized are not allocated on a specific client basis. The Manager further confirms that trades were executed on the best available terms and
there was no churning of trades.
Semi-Annual Fund Report for Policyholders
73
AIA
Greater China Balanced/Equity Fund
PERFORMANCE REPORT
The AIA Greater China Equity Fund returned –26.69% for the six
months ended 30 June 2008. The benchmark, MSCI Golden Dragon
DTR Net, returned –23.98% for the same period.
Asset Class Overview**
The first quarter was a volatile and challenging quarter for Asian
markets, with Hong Kong and China being the worst performing
markets and Taiwan being the best. Worries of a US recession,
widening credit spreads, the slowing global economic growth caused
many markets to experience their biggest drops in years. In China,
there was a massive sell-off in January, followed by a rebound in
February. In Hong Kong, buoyant domestic economy generated hefty
revenue for the government.
However, robust economic data and strong fundamentals in early
2008 were both overwhelmed by rising economic uncertainty. Risk
appetite has evaporated with the exploding global credit crisis and
the market questioning whether China can grow independently of the
rest of the world’s demand. In Taiwan, KMT’s emphatic victory in the
March general election is encouraging, as it gives a strong mandate
to normalise and deepen economic ties with China. It will encourage
investment in Taiwan’s domestic economy and reduce its reliance on
cyclical exporters as well.
The second quarter was another challenging quarter for the Greater
China markets, with all three markets recording negative returns. The
worst performance came from Taiwan as it played catch-up to the
region’s poor performance after the initial post-election euphoria
wore off. Like most of the other Asian markets, the quarter saw strong
rallies in April before a broad market sell-off in the Greater China
markets in June. Investor sentiment was negatively impacted as
energy prices rose to record highs and worries of fresh write-downs in
the financial sector started re-emerging.
Inflation continues to be a key concern for the Greater China region
although headline figures are much higher for China than those for
Hong Kong and Taiwan. Inflation figures are likely to come off a little
in 2H08 in China due to stabilizing food prices and the high base
effect. However, inflation remains high when compared to recent
years. With fuel prices having been recently lifted in June, we may see
further margin erosion in many industries. Coupled with the protracted
slowdown in the U.S. and slowing growth out of Europe, we expect to
see some deceleration in the healthy economic growth in the Greater
China region.
Portfolio Overview**
During the quarter, the Fund decreased its cash level. It maintained
its overweight position in China while remaining underweight in Hong
Kong and Taiwan. In terms of sectors, the fund was overweight in
Energy, Industrials, Consumer Discretionary and Consumer Staples
while being underweight in Materials, Financials, Information
Technology, Telecommunication Services and Utilities.
During the second quarter, the Fund decreased its cash level. The
Fund shifted to neutral positions in both China and Taiwan while
Semi-Annual Fund Report for Policyholders
74
maintaining its underweight position in Hong Kong. In terms of
sectors, the fund was overweight in Energy, Basic Materials, Consumer
Discretionary and Consumer Staples while being underweight in
Industrials, Financials, Information Technology, Telecommunication
Services and Utilities.
Portfolio Outlook**
Conviction levels remain low given the macro uncertainty in the
markets as high inflation and lower economic growth played havoc on
investor sentiment. The countries in the Greater China region continue
to report headline inflation figures that remain at high levels when
compared to recent years, with the rise mainly due to rising food and
commodity prices. Given the concerns over energy prices and
inflation, we believe that market sentiment will remain weak over the
summer months.
Furthermore, we may begin to see more negative earnings revision as
analysts factor in higher commodity prices in the medium term. As
such, we believe that markets will continue to have downside risk in
the short term. On a more positive note, we are beginning to see
value in the Greater China markets so this may help limit the amount
of downside in the coming months.
**Source: AIG Global Investment Corporation (Asia) Ltd.
July 2008
AIA
Greater China Balanced/Equity Fund
FUND PERFORMANCE
AIA GREATER CHINA BALANCED FUND
Period
3-month
6-month
1-year
3-year ^
5-year ^
10-year ^
Since inception ^
As at 30 JUNE 2008
Fund
%
Benchmark*
%
Over (Under)
Performance
%
(7.40)
(19.57)
(14.77)
6.92
10.31
N/A
10.48
(5.82)
(14.79)
(14.77)
6.92
10.31
N/A
10.48
(1.58)
(4.78)
(8.43)
(0.41)
0.04
N/A
(0.10)
Fund
%
Benchmark*
%
Over (Under)
Performance
%
(10.16)
(26.69)
(19.68)
10.11
14.43
N/A
14.58
(7.38)
(23.98)
(13.06)
9.81
15.14
N/A
15.58
(2.78)
(2.72)
(6.61)
0.30
(0.71)
N/A
(1.01)
* 60% MSCI Golden Dragon DTR Net & 40% JP Morgan Sing Govt Bond Index All
AIA GREATER CHINA EQUITY FUND
Period
3-month
6-month
1-year
3-year ^
5-year ^
10-year ^
Since inception ^
* MSCI Golden Dragon DTR Net ^ Annualised Returns
Note: Fund launch date - 21 January 2003. Fund returns in SGD, bid-to-bid, net dividends reinvested
PORTFOLIO STATEMENTS
AIA GREATER CHINA BALANCED FUND
Investment In Collective Investment Scheme
As at 30 JUNE 2008
Market Value
SGD
% of Net
Asset Value
301,473,066
170,451,946
63.90
36.13
471,925,012
100.03
Market Value
SGD
% of Net
Asset Value
447,932,475
100.07
Market Value
USD
% of Net
Asset Value
China
Hong Kong
Taiwan
Other Countries
174,161,490
190,645,483
211,238,404
50,460,204
27.02
29.58
32.77
7.83
Portfolio of Investment
Other net asset
626,505,581
18,059,004
97.20
2.80
Total
644,564,585
100.00
AIG Greater China Equity Fund
AIG International Funds - Singapore Bond Fund
AIA GREATER CHINA EQUITY FUND
Investment In Collective Investment Scheme
AIG Greater China Equity Fund
AIG GREATER CHINA EQUITY FUND
Country Allocation**
Semi-Annual Fund Report for Policyholders
75
AIA
Greater China Balanced/Equity Fund
PORTFOLIO STATEMENTS
As at 30 JUNE 2008
Industry Allocation**
Market Value
USD
% of Net
Asset Value
Consumer Discretionary
Consumer Staples
Energy
Financials
Industrials
Information Technology
Materials
Telecom Services
Utilities
67,192,724
19,452,998
72,442,840
189,542,998
46,399,003
113,159,438
47,144,545
59,323,813
11,847,221
10.42
3.02
11.24
29.41
7.20
17.56
7.31
9.20
1.84
Portfolio of Investment
Other net assets
626,505,581
18,059,004
97.20
2.80
Total
644,564,585
100.00
Asset Class**
Market Value
USD
% of Net
Asset Value
Equities
Other Net Assets
626,505,581
18,059,004
97.20
2.80
644,564,585
100.00
Market Value
USD
% of Net
Asset Value
46,408,650
21,915,196
20,626,067
18,047,808
17,403,244
16,758,679
16,114,115
15,469,550
14,180,421
14,180,421
7.20
3.40
3.20
2.80
2.70
2.60
2.50
2.40
2.20
2.20
Market Value
USD
% of Net
Asset Value
32,907,683
21,731,489
20,489,689
19,868,790
18,006,091
16,764,291
15,522,492
13,659,793
13,038,893
13,038,893
5.30
3.50
3.30
3.20
2.90
2.70
2.50
2.20
2.10
2.10
Top 10 Holdings As At 30 June 2008**
China Mobile Ltd (CN)
China Life Insurance (CN)
Cnooc Limited (CN)
Cheung Kong (HK)
Petrochina Co (CN)
Sun Hung Kai Properties (HK)
Hon Hai Precision Industry Co (TW)
China Construction Bank (CN)
Taiwan Fertilizer Co (TW)
Ambassador Hotel (TW)
Top 10 Holdings As At 30 June 2007**
China Mobile Ltd (CN)
Foxconn Technology Co (TW)
Hon Hai Precision Industry Co Ltd. (TW)
China Life Insurance (CN)
Nine Dragons Paper Holdings (CN)
Tripod Technology (TW)
Cheung Kong (HK)
Petrochina Co (CN)
Mediatek Inc (TW)
China Comm Constr (CN)
** Information extracted from the underlying AIG Greater China Equity Fund Semi-Annual Fund Report for Policyholders
76
AIA
Greater China Balanced/Equity Fund
PORTFOLIO STATEMENTS
AIG INTERNATIONAL FUNDS - SINGAPORE BOND FUND
Country Allocation**
As at 30 JUNE 2008
Market Value
SGD
% of Net
Asset Value
Germany
Hong Kong
India
Indonesia
Japan
Netherlands
Pakistan
Philippines
Singapore
Sweden
United Kingdom
United States
Others
6,631,376
22,696,948
9,895,030
11,676,134
3,242,934
11,989,560
4,455,696
2,024,081
158,384,523
10,682,855
11,778,714
31,446,129
86,996,069
1.23
4.20
1.82
2.16
0.60
2.22
0.82
0.37
29.26
1.97
2.18
5.81
16.08
Portfolio of Investment
Other net assets
371,900,048
169,278,627
68.72
31.28
Total
541,178,675
100.00
Market Value
SGD
% of Net
Asset Value
Airlines
Banks
Electric Power & Gas
Finance
Government
Industrial
Telecommunications
Real Estate
Utilities
Hotel
Infrastructure
Shipping
5,087,211
121,977,985
2,969,650
27,689,380
59,045,472
5,074,963
801,674
129,311,670
7,685,320
2,460,000
786,500
9,010,224
0.94
22.55
0.54
5.12
10.91
0.94
0.15
23.89
1.42
0.45
0.15
1.66
Portfolio of Investment
Other net assets
371,900,048
169,278,627
68.72
31.28
Total
541,178,675
100.00
Market Value
SGD
% of Net
Asset Value
284,903,980
86,996,068
169,278,627
52.64
16.08
31.28
541,178,675
100.00
Industry Allocation**
Asset Class**
Fixed Income Securities
Real Estate Investment Trust and Preference Shares
Other Net Assets
Semi-Annual Fund Report for Policyholders
77
AIA
Greater China Balanced/Equity Fund
PORTFOLIO STATEMENTS
As at 30 JUNE 2008
Top 10 Holdings As At 30 June 2008**
Market Value
SGD
% of Net
Asset Value
DBS Cap Funding 5.75% 29 May 2049
Standard Chartered 5.25% 10 Apr 2023
Singapore Govt Bond 4% 01 Sep 2018
OCBC 3.78% 28 Nov 2017
Capitamall Trust
Morgan Stanley 4% 23 Oct 2017
HSBC 3.18% 24 Nov 2008
DBS Bank 4.47% 15 Jul 2021
Ascendas Real Estate Investment Trust
Capitaland Treasury Ltd 4.35% 31 Oct 2019
39,420,000
38,011,000
36,686,000
19,226,000
19,197,000
16,248,000
15,144,000
15,127,000
14,754,000
13,797,000
6.06
5.85
5.64
2.96
2.95
2.5
2.33
2.33
2.27
2.12
Top 10 Holdings As At 30 June 2007**
Market Value
SGD
% of Net
Asset Value
24,759,000
19,627,000
17,465,000
15,090,000
13,170,000
12,820,000
11,989,000
11,743,000
10,838,000
10,683,000
4.58
3.63
3.23
2.79
2.43
2.37
2.22
2.17
2.00
1.97
Capitamall Trust
Ascendas Real Estate Investment Trust
DBS Bank 4.47% 15 Jul 2021
HSBC Singapore 3.18% 24 Nov 2008
Queensley Holdings Ltd 4.5% 05 Dec 2009
Singapore Govt Bond 3.625% 01 Jul 2014
ABN Amro Bank 0% 11 Jul 2007
DBS Group Hldgs 6% Non Cum Pref Shs
Singapore Govt Bond 3.75% 01 Sep 2016
Swedbank 3.445% 28 Feb 2008
** Information extracted from the underlying AIG International Funds - Singapore Bond Fund
Semi-Annual Fund Report for Policyholders
78
AIA
Greater China Balanced/Equity Fund
OTHER INFORMATION
Exposure To Derivatives
As at 30 JUNE 2008
Market Value
SGD
% of Net
Asset Value
Realised
Gains/(Losses)
SGD
Unrealised
Gains/(Losses)
SGD
487,499
0
0.10
0.00
(161,907)
49,458
487,499
0
Redemptions
SGD
Subscriptions
SGD
39,974,586
80,559,371
70,516,076
82,761,084
Forward foreign exchange contracts:
AIA Greater China Balanced
AIA Greater China Equity
Borrowings
N/A
Total Redemptions and Subscriptions
AIA Greater China Balanced Fund
AIA Greater China Equity Fund
Related-Party Transactions
SGD
Total purchases in AIG Greater China Equity Fund
Total purchases in AIG International Funds - Singapore Bond Fund
122,711,064
28,662,800
Total sales in AIG Greater China Equity Fund
Total sales in AIG International Funds - Singapore Bond Fund
Expense Ratios
50,515,561
4,531,500
30 June 2008
30 June 2007
AIA Greater China Balanced*
AIA Greater China Equity*
1.66%
1.68%
1.68%
1.69%
Underlying Funds:
AIG Greater China Equity Fund**
AIG International Funds - Singapore Bond Fund**
1.16%
1.10%
1.17%
1.15%
Note:
*
**
Expense ratio does not include insurance coverage, brokerage and other transaction costs, performance fee, foreign exchange gains/losses, front or back end loads arising from the purchase or sale of collective investment schemes and tax deducted at source or arising out of income received.
Include underlying fund expense ratio
Based on unaudited draft accounts Turnover Ratios
AIA Greater China Balanced
AIA Greater China Equity
Underlying Funds:
AIG Greater China Equity Fund
AIG International Funds - Singapore Bond Fund**
30 June 2008
30 June 2007
2.15%
7.80%
1.39%
5.51%
13.26%
15.44%
37.57%
40.55%
Note: The turnover ratio is calculated based on the lesser of portfolio purchases and sales of the underlying investments
expressed as a percentage over the average net asset value.
** Based on unaudited draft accounts Any Material Information That Will Adversely Impact The Valuation Of The Fund
N/A
Soft Dollar Commissions
AIG International Fund - Singapore Bond Fund did not engage in soft dollar arrangements.
Soft dollar commissions for the AIG Greater China Equity Fund:
The Manager has entered into soft commission arrangements with selected brokers where it obtains services from third parties. These services relate essentially to
research and price information, performance measurement and portfolio valuations, analysis and administration, all of which are believed to be helpful in the overall
discharge of the Manager’s duties to clients. As such services generally benefit all of the Manager’s clients in terms of input into the investment decision making
process, the soft credits utilized are not allocated on a specific client basis. The Manager further confirms that trades were executed on the best available terms and
there was no churning of trades.
Semi-Annual Fund Report for Policyholders
79
AIA
India Equity Fund
PERFORMANCE REPORT
The AIA India Equity Fund returned –41.89% for the six months ended
30 June 2008. The benchmark, MSCI India, returned –44.67% for the
same period.
Asset Class Overview**
Indian equity markets fell and underperformed the region significantly
in the last quarter. The reason for this fall can be attributed to global
equity weakness but the reason for underperforming regional markets
is more company specific. The quarterly results had been weaker
than expected causing earnings downgrades. The reason for earnings
downgrades were varied primarily among them was execution delays
among engineering companies. Subsequently other problems
cropped up like exposure of banks to leveraged debt, derivative
losses among corporates, farm loan waiver of $15 billion by the
government, etc. We also saw inflation hit 6.5% as the quarter ended
from 4-4.5% levels. This raised expectations of further tightening of
monetary policy. Consensus earnings still are expecting a double
digit earnings growth for this year. Downgrades due to slower
economic growth can further put pressure on price earnings
multiples.
In the second quarter, Indian equity markets fell broadly in line with
the regional market. The primary reason is rising inflation which has
risen from 4-5% levels to reach 11.5%. This has prompted the Central
Bank to tighten the interest rates.
A review of basic economic sectors shows some divergence between
sectors. Personal consumption remains healthy because of very high
employment levels though it is tempered by higher interest rates. On
the other hand, export oriented companies are benefiting from a
weaker local currency albeit it is tempered by global economic
slowdown. At the same time, infrastructure projects are witnessing
slowdown in implementation because of tight capacity constraints
and stretched balance sheet of developers.
Portfolio Overview**
In the first quarter, we have carried out some significant changes to
the portfolio by adding some defensive names in media and
pharmaceuticals, reducing exposure to construction companies and
global cyclical commodities. We are as of now trying to reposition the
portfolio to take advantage of the broad market fall where though
most of the stocks fell for genuine reasons, many fell in sympathy.
These stocks which have no change in fundamentals but still have
fallen with the market are stocks which the portfolio will overweight
itself in.
In the second quarter, we have carried out some significant changes
to the portfolio by adding some defensive names in Consumer
Staples, Telecom and Pharmaceuticals, reducing exposure to
Industrials. We were holding greater than normal cash levels
throughout the quarter which we deployed by the end of the quarter
and now our cash levels have been nearly exhausted.
Portfolio Outlook**
We are very pleased with our portfolio at this juncture. It has a lot of
Semi-Annual Fund Report for Policyholders
80
very high quality companies which have faced harsh business
environments successfully in the past. We also think that the current
valuations are reasonable for these companies. We have seen in the
past that it is in times of such harsh environments that these
companies have consolidated and strengthened their position in
their respective industries. We expect them to do the same. Though
the headline news is still negative for global equities we believe that
most of the negative news has been priced into our portfolio stocks.
Having seen in the past we know that if periods of overvaluation can
exist so can periods of undervaluation and we are carefully scanning
the situation to take advantage of any such mispricing of good
companies to add to our portfolio
**Source: AIG Global Investment Corporation (Asia) Ltd.
July 2008
AIA
India Equity Fund
FUND PERFORMANCE
Period
3-month
6-month
1-year
3-year ^
5-year ^
10-year ^
Since inception ^
As at 30 JUNE 2008
Fund
%
Benchmark*
%
Over (Under)
Performance
%
(19.89)
(41.89)
(19.16)
N/A
N/A
N/A
10.49
(20.84)
(44.67)
(22.81)
N/A
N/A
N/A
13.42
0.95
2.78
3.64
N/A
N/A
N/A
(2.93)
* MSCI India Index
^ Annualised Returns
Note: Fund launch date - 10 August 2005. Fund returns in SGD, bid-to-bid, net dividends reinvested. PORTFOLIO STATEMENTS
Investment In Collective Investment Scheme
As at 30 JUNE 2008
Market Value
SGD
% of Net
Asset Value
108,392,230
100.05
Market Value
USD
% of Net
Asset Value
India
216,958,831
96.33
Portfolio of Investment
Other net assets
216,958,831
8,254,350
96.33
3.67
Total
225,213,181
100.00
Market Value
USD
% of Net
Asset Value
Consumer Discretionary
Consumer Staples
Energy
Financials
Health Care
Industrials
Information Technology
Materials
Telecom Services
Utilities
20,435,352
17,241,718
14,432,101
26,082,791
33,593,905
48,065,060
33,116,596
10,359,784
10,581,082
3,050,441
9.07
7.66
6.41
11.58
14.92
21.34
14.70
4.60
4.70
1.35
Portfolio of Investment
Other net assets
216,958,831
8,254,350
96.33
3.67
Total
225,213,181
100.00
AIG India Equity Fund
Country Allocation**
Industry Allocation**
Semi-Annual Fund Report for Policyholders
81
AIA
India Equity Fund
PORTFOLIO STATEMENTS
As at 30 JUNE 2008
Asset Class**
Market Value
SGD
% of Net
Asset Value
Equities
Other Net Assets
216,958,831
8,254,350
96.33
3.67
225,213,181
100.00
Market Value
SGD
% of Net
Asset Value
18,917,907
16,890,989
14,413,644
13,738,004
12,161,512
11,035,446
9,684,167
9,458,954
9,233,740
7,657,248
8.40
7.50
6.40
6.10
5.40
4.90
4.30
4.20
4.10
3.40
Market Value
SGD
% of Net
Asset Value
11,562,472
9,672,452
6,670,657
5,670,058
5,114,170
5,114,170
5,002,993
4,669,460
4,558,282
4,335,927
10.40
8.70
6.00
5.10
4.60
4.60
4.50
4.20
4.10
3.90
Top 10 Holdings As At 30 June 2008**
Infosys Technologies Ltd (IN)
ABB Ltd (IN)
ITC Ltd (IN)
Reliance Industries Ltd (IN)
Sun Pharmaceuticals Ltd (IN)
Bharti Airtel Ltd (IN)
Sun Pharma Advanced Research Company Ltd (IN)
Bharat Electronics Ltd (IN)
Container Corp (IN)
Glaxo SmithKline Pharmaceuticals Ltd (IN)
Top 10 Holdings As At 30 June 2007**
ABB Ltd (IN)
Bharat Heavy Elect Ltd (IN)
Reliance Industries Ltd (IN)
Bharat Electronics Ltd (IN)
Larsen & Toubro Ltd (IN)
Shree Cement Ltd (IN)
Sun Pharmaceuticals ltd (IN)
Gujarat State Petronet (IN)
Ambuja Cements Ltd (IN)
Acc Limited (IN)
** Information extracted from the underlying AIG India Equity Fund
Semi-Annual Fund Report for Policyholders
82
AIA
India Equity Fund
OTHER INFORMATION
Exposure To Derivatives
As at 30 JUNE 2008
Market Value
SGD
% of Net
Asset Value
Realised
Gains/(Losses)
SGD
Unrealised
Gains/(Losses)
SGD
1,314
0.00
64,263
1,314
Forward foreign exchange contracts
Borrowings
N/A
Total Redemptions and Subscriptions
SGD
Total amount of redemptions
Total amount of subscriptions
113,546,205
117,586,952
Related-Party Transactions
SGD
Total purchases in AIG India Equity Fund
Total sales in AIG India Equity Fund
Expense Ratios
Local Fund*
Underlying Fund:
AIG India Equity Fund**
Note:
*
**
139,251,153
118,793,623
30 June 2008
30 June 2007
1.68%
1.80%
1.28%
1.28%
Expense ratio does not include insurance coverage, brokerage and other transaction costs, performance fee, foreign exchange gains/losses, front or back end loads arising from the purchase or sale of collective investment schemes and tax deducted at source or arising out of income received.
Include underlying fund expense ratio
Based on unaudited draft accounts Turnover Ratios
Local Fund
Underlying Fund:
AIG India Equity Fund*
30 June 2008
30 June 2007
84.81%
25.06%
46.29%
66.05%
Note: The turnover ratio is calculated based on the lesser of portfolio purchases and sales of the underlying investments
expressed as a percentage over the average net asset value.
*Based on unaudited draft accounts
Any Material Information That Will Adversely Impact The Valuation Of The Fund
N/A
Soft Dollar Commissions
The Manager has entered into soft commission arrangements with selected brokers where it obtains services from third parties. These services relate essentially to
research and price information, performance measurement and portfolio valuations, analysis and administration, all of which are believed to be helpful in the overall
discharge of the Manager’s duties to clients. As such services generally benefit all of the Manager’s clients in terms of input into the investment decision making
process, the soft credits utilized are not allocated on a specific client basis. The Manager further confirms that trades were executed on the best available terms and
there was no churning of trades.
Semi-Annual Fund Report for Policyholders
83
AIA
India Balanced/Opportunities Fund
PERFORMANCE REPORT
Fund Performance
The AIA India Opportunities Fund returned –32.83% for the six
months ended 30 June 2008. The benchmark returned –44.79% for
the same period.
The AIA India Balanced Fund returned –22.34% for the six months
ended 30 June 2008. The benchmark returned –29.19% for the
same period.
Market Overview**
Indian equities fell sharply in the six months under review, on the
back of accelerating inflation fears and slowing domestic growth. The
MSCI India index lost 45% (in Sing dollar terms) during the period,
the worst performer in Asia. At the start of the year, investors were still
cautiously optimistic. Economic growth appeared strong and the
country’s relatively low dependence on foreign trade seemed to offer
some immunity to the deteriorating global credit crunch. But the
surge in global commodity prices, led by crude oil, put it on the
defensive.
With costs jumping to more than US$130 per barrel, and imports
making up more than 70% of its needs, the government was forced
to cut back on petrol and diesel subsidies. This added to existing cost
pressures. The Reserve Bank of India (RBI) twice raised short-term
interest rates, to their highest in six years. It also increased the banks’
reserve requirements by four times. In June, wholesale prices jumped
by more than 11% year-on-year. This put the central bank on a
collision course with the government, whose March budget included
a waiver of US$15 billion worth of loans to farmers and income tax
breaks for the middle class. While this proved popular, it put further
pressure on the rapidly rising budget deficit.
The effect of these opposing measures has yet to be seen in full.
Economic growth in the fiscal year ended March slowed for the first
time in three years, reflecting decelerating export growth and a
decline in consumer spending on durables. Industrial activity,
dampened by high interest rates, is also on a slowing trend.
Companies have been affected in different ways. Some have pricing
power and have been able to raise output and sales; others have
been hit by rising raw material and borrowing costs. Among our
holdings, corporate earnings were largely positive. ICICI Bank’s net
profits rose 34%, on healthy net interest income growth; Satyam
benefited from higher sales; Tata Power’s growth was driven by its
power and coal businesses, and Infosys announced a bullish
guidance, despite the challenging environment.
From a share price perspective, companies in the more defensive
sectors, such as pharmaceuticals, saw strong gains over the period.
Our holdings Sun Pharmaceutical, GlaxoSmithKline and Piramal
Healthcare have been resilient. Over these six months, the falling
rupee has also helped to shore up the earnings of technology
companies, such as Satyam Computer and Infosys.
Semi-Annual Fund Report for Policyholders
84
Market Outlook and Strategy**
Indian equity markets are likely to stay volatile. After the euphoria
of the past few years, expectations are having to adjust downwards.
We are concerned about inflation, which could remain persistently
high over the coming months. The government’s populist policies
have made this worse and it now seems most concerned about its
survival (with coalition partners able to force a general election at
any time). While we remain comfortable with India’s long-term
prospects, we remain cautious in the short-term in light of these
economic and political headwinds.
**Source: Aberdeen Asset Management Asia Limited
July 2008
AIA
India Balanced/Opportunities Fund
FUND PERFORMANCE
AIA INDIA BALANCED FUND
Period
3-month
6-month
1-year
3-year ^
5-year ^
10-year ^
Since inception ^
As at 30 JUNE 2008
Fund
%
Benchmark*
%
Over (Under)
Performance
%
(10.96)
(22.34)
(13.64)
N/A
N/A
N/A
4.12
(13.88)
(29.19)
(12.26)
N/A
N/A
N/A
10.18
2.91
(6.85)
(1.38)
N/A
N/A
N/A
(6.07)
Fund
%
Benchmark*
%
Over (Under)
Performance
%
(17.18)
(32.38)
(0.20)
N/A
N/A
N/A
3.09
(21.12)
(44.79)
(23.41)
N/A
N/A
N/A
10.82
3.95
11.96
3.33
N/A
N/A
N/A
(7.73)
* 60% MSCI India Index & 40% JP Morgan Sing Govt Bond Index All
Note: Fund launch date - 10 August 2005. Fund returns in SGD, bid-to-bid, net dividends reinvested
AIA INDIA OPPORTUNITIES FUND
Period
3-month
6-month
1-year
3-year ^
5-year ^
10-year ^
Since inception ^
* MSCI India Index ^ Annualised Returns
Note: Fund launch date - 6 December 2005. Fund returns in SGD, bid-to-bid, net dividends reinvested
PORTFOLIO STATEMENTS
AIA INDIA BALANCED FUND
Investment In Collective Investment Scheme
As at 30 JUNE 2008
Market Value
SGD
% of Net
Asset Value
217,273,545
157,115,966
57.89
41.86
374,389,511
99.76
Market Value
SGD
% of Net
Asset Value
269,682,558
100.38
ABERDEEN INDIA OPPORTUNITIES FUND
Country Allocation**
Market Value
USD
% of Net
Asset Value
India
Cash
2,257,818,037
3,439,274
98.88
1.12
Total
2,261,257,311
100.00
Aberdeen India Opportunities Fund
AIG International Funds - Singapore Bond Fund
AIA INDIA OPPORTUNITIES FUND
Investment In Collective Investment Scheme
Aberdeen India Opportunities Fund
Semi-Annual Fund Report for Policyholders
85
AIA
India Balanced/Opportunities Fund
PORTFOLIO STATEMENTS
As at 30 JUNE 2008
Industry Allocation**
Market Value
USD
% of Net
Asset Value
Information Technology
Financials
Healthcare
Consumer Staples
Consumer Discretionary
Utilities
Materials
Industrials
Energy
Property
594,317,446
469,171,353
266,929,153
195,456,085
175,516,960
157,679,423
155,630,274
105,664,830
69,646,999
67,805,514
28.99
18.13
11.68
8.56
7.69
5.46
6.82
4.63
4.50
2.42
3,439,274
1.12
Total
2,261,257,311
100.00
Asset Class**
Market Value
USD
% of Net
Asset Value
Equity
Cash
2,257,818,037
3,439,274
98.88
1.12
2,261,257,311
100.00
Market Value
USD
% of Net
Asset Value
220,441,846
213,221,392
186,587,411
150,783,998
113,813,230
103,462,852
89,436,378
86,183,452
83,312,032
76,922,585
9.65
9.34
8.17
6.60
4.99
4.53
3.92
3.77
3.65
3.37
Market Value
USD
% of Net
Asset Value
220,459,939
206,224,496
196,476,245
127,884,920
122,632,898
113,136,045
104,783,584
96,514,039
90,009,800
87,923,084
9.07
8.48
8.08
5.26
5.05
4.65
4.31
3.97
3.70
3.62
Top 10 Holdings As At 30 June 2008*
Infosys Technologies
Satyam Computer Services
HDFC
ICICI Bank
Tata Consultancy Services
Hero Honda
Grasim Industries
Sun Pharmaceutical Industries
Glaxo Smithkline
Piramal Healthcare
Top 10 Holdings As At 30 June 2007*
HDFC
ICICI Bank
Satyam Computer Services
Infosys Technologies
Hero Honda
Grasim Industries
ABB India
Tata Consultancy Services
Oil & Natural Gas
Tata Power
* All data refers to the underlying fund, Aberdeen Global - India Opportunities Fund. The underlying fund is not authorised for sale to the public in Singapore.
Semi-Annual Fund Report for Policyholders
86
AIA
India Balanced/Opportunities Fund
PORTFOLIO STATEMENTS
AIG INTERNATIONAL FUNDS - SINGAPORE BOND FUND
Country Allocation**
As at 30 JUNE 2008
Market Value
SGD
% of Net
Asset Value
China
Germany
Hong Kong
India
Indonesia
Kazakhstan
Pakistan
Singapore
South Korea
Malaysia
United Kingdom
United States
Others
1,388,800
7,631,458
25,370,777
9,438,438
1,325,753
6,094,983
1,207,204
379,259,095
6,073,874
464,422
47,244,904
72,963,896
86,996,069
0.21
1.17
3.90
1.44
0.20
0.94
0.19
58.36
0.93
0.07
7.27
11.23
16.08
Portfolio of Investment
Other net asset
558,463,604
91,572,080
85.91
14.09
Total
650,035,684
100.00
Market Value
SGD
% of Net
Asset Value
Airlines
Banks
Electric Power & Gas
Finance
Government
Industrial
Real Estate
Oil & Gas
Hotel
Infrastructure
Shipping
7,417,564
198,149,345
12,616,063
56,635,659
100,907,160
22,933,114
143,929,216
6,094,983
1,966,500
494,000
7,320,000
1.14
30.47
1.94
8.71
15.54
3.53
22.13
0.94
0.30
0.08
1.13
Portfolio of Investment
Other net asset
558,463,604
91,572,080
85.91
14.09
Total
650,035,684
100.00
Industry Allocation**
Semi-Annual Fund Report for Policyholders
87
AIA
India Balanced/Opportunities Fund
PORTFOLIO STATEMENTS
Asset Class**
As at 30 JUNE 2008
Market Value
SGD
% of Net
Asset Value
483,506,837
74,956,767
91,572,080
74.38
11.53
14.09
650,035,684
100.00
Top 10 Holdings As At 30 June 2008**
Market Value
SGD
% of Net
Asset Value
DBS Cap Funding 5.75% 29 May 2049
Standard Chartered 5.25% 10 Apr 2023
Singapore Govt Bond 4% 01 Sep 2018
OCBC 3.78% 28 Nov 2017
Capitamall Trust
Morgan Stanley 4% 23 Oct 2017
HSBC 3.18% 24 Nov 2008
DBS Bank 4.47% 15 Jul 2021
Ascendas Real Estate Investment Trust
Capitaland Treasury Ltd 4.35% 31 Oct 2019
39,420,000
38,011,000
36,686,000
19,226,000
19,197,000
16,248,000
15,144,000
15,127,000
14,754,000
13,797,000
6.06
5.85
5.64
2.96
2.95
2.5
2.33
2.33
2.27
2.12
Top 10 Holdings As At 30 June 2007**
Market Value
SGD
% of Net
Asset Value
24,759,000
19,627,000
17,465,000
15,090,000
13,170,000
12,820,000
11,989,000
11,743,000
10,838,000
10,683,000
4.58
3.63
3.23
2.79
2.43
2.37
2.22
2.17
2.00
1.97
Fixed Income Securities
Real Estate Investment Trust and Preference Shares
Other net assets
Capitamall Trust
Ascendas Real Estate Investment Trust
DBS Bank 4.47% 15 Jul 2021
HSBC Singapore 3.18% 24 Nov 2008
Queensley Holdings Ltd 4.5% 05 Dec 2009
Singapore Govt Bond 3.625% 01 Jul 2014
ABN Amro Bank 0% 11 Jul 2007
DBS Group Hldgs 6% Non Cum Pref Shs
Singapore Govt Bond 3.75% 01 Sep 2016
Swedbank 3.445% 28 Feb 2008
** Information extracted from the underlying AIG International Funds - Singapore Bond Fund
Semi-Annual Fund Report for Policyholders
88
AIA
India Balanced/Opportunities Fund
OTHER INFORMATION
As at 30 JUNE 2008
Realised
Gains/(Losses)
SGD
Unrealised
Gains/(Losses)
SGD
Total Redemptions and Subscriptions
Redemptions
SGD
Redemptions
SGD
AIA India Balanced Fund
AIA India Opportunities Fund
11,237,160
294,865,319
105,743,116
319,617,752
Exposure To Derivatives
Market Value
SGD
% of Net
Asset Value
NIL
Borrowings
N/A
Related-Party Transactions
SGD
Total purchases in AIG International Funds - Singapore Bond Fund
Total sales in AIG International Funds - Singapore Bond Fund
59,732,500
2,206,600
Total purchases in AIG International Funds - Aberdeen India Opportunities Fund
Total sales in AIG International Funds - Aberdeen India Opportunities Fund
Expense Ratios
AIA India Balanced Fund*
AIA India Opportunities Fund*
Underlying Funds:
Abrerdeeen India Opportunities Fund
AIG International Funds - Singapore Bond Fund**
402,000,200
287,214,242
30 June 2008
30 June 2007
1.78%
1.65%
1.94%
2.05%
1.90%#
1.10%
2.05%#
1.15%
Note: Expense ratio does not include insurance coverage, brokerage and other transaction costs, performance fee, foreign exchange gain/losses, front or back end loads arising from the purchase or sale of collective investment schemes and tax deducted at source or arising out of income received. *Including underlying fund expense ratio
**Based on unaudited draft accounts
# As of 31 March 2008 & 31 March 2007 respectively
Turnover Ratios
30 June 2008
30 June 2007
AIA India Balanced Fund
AIA India Opportunities Fund
1.56%
86.98%
0.45%
14.10%
Underlying Funds:
Abrerdeeen India Opportunities Fund
AIG International Funds - Singapore Bond Fund**
4.85%#
15.44%
8.39%#
17.28%
Note: The turnover ratio is calculated based on the lesser of portfolio purchases and sales of the underlying investments expressed as a percentage over the average net asset value.
**Based on unaudited draft accounts
# As of 31 March 2008 & 31 March 2007 respectively
Any Material Information That Will Adversely Impact The Valuation Of The Fund
N/A
Soft Dollar Commissions
The Managers do not receive soft commissions or cash rebates from dealing on Aberdeen India Opportunities Fund.
Semi-Annual Fund Report for Policyholders
89
AIA
Japan Balanced/Equity Fund
PERFORMANCE REPORT
Portfolio Performance
The AIA Japan Equity Fund returned –15.53% for the six months
ended 30 June 2008. The benchmark, MSCI Japan DTR Net, returned
–10.61% for the same period.
Asset Class Overview**
Japan’s TOPIX with dividends index plunged in the first quarter in
local currency. Japanese markets fell on growing concerns the subprime problem was affecting the economy and consumer spending
would remain sluggish in the US. The market extended its losses after
the Japanese yen strengthened against the US dollar on speculation
the FRB would decrease interest rates to sustain the economy.
Domestic demand-related such as food producers and electric power
and gas suppliers outperformed exporters such as auto-related
companies and consumer electrics companies. While resourcesrelated stocks such as trading firms and shipping companies also
limited the losses, financial sectors such as Real Estate Developers,
Security Brokerage firms and Banks retreated on concern about
global credit crunch.
Japan’s TOPIX with dividends index rose in the second quarter in local
currency. Japanese markets advanced on expectation the credit crisis
was about to settle down in the U.S. as JP Morgan Chase & Co.
rescued Bear Sterns Cos. Some investors were shifting their money to
equities from fixed incomes on expectation rising inflation risks would
push interest rates higher. Weakening Japanese yen against the US
dollar also helped the markets rebound. However, concerns about
slowing economy renewed by record oil prices and highlighted by
credit market writedown risks of global financial firms limited the
gains in the late quarter. Material related-sectors such as pulp &
paper, steel makers, trading firms and shipping companies
outperformed against the sectors suffering from rising material costs
such as tire makers and electric & gas suppliers.
Portfolio Overview**
In the first quarter, the Fund maintained its overweight positions in
both the cyclical growth sectors and stable growth sectors. The
cyclical growth sectors include resources-related companies such as
Mitsubishi Corp and Mitsui OSK. We expect commodity prices
including coal and iron ore keep rising thanks to tight balance
between the limited supply and robust demand in emerging markets.
Among the cyclical growth sectors, we, however, reduced our
overweight position into the discretionary sectors such as autorelated and consumer electronics companies toward the end of the
period because of intensifying concerns about the sluggish consumer
spending in the U.S.
The Fund maintained its overweight positions in both cyclical growth
sectors such as trading companies and stable growth sectors
including pharmaceutical companies. However, we raised its
domestic-related stocks that are economic defensive such as Seven
Bank who focuses on transaction business and NTT Docomo, a
leading mobile phone carrier, to reduce the Fund’s sensitivity to
economic cycle in the late quarter. We sold several holdings such as
JGC and Nippon Electric Glass to take profits and other holdings such
Semi-Annual Fund Report for Policyholders
90
as Kirin Holdings, NOK and Suzuki whose earnings outlooks
deteriorated. We used the proceeds to purchase Lawson and Nissha
Printing. Lawson, an operator of a chain of convenience stores, plans
to return its profits to its shareholders by increasing dividends. Nissha
Printing is a leading company in touch panel markets used for cellular
phones. We also made rebalancing in the auto sector from Toyota to
Honda and Mazda. While Toyota is suffering from worsening demand
for large SUV, Honda and Mazda is benefiting from increasing demand
for compact cars.
Portfolio Outlook**
We should watch closely inflation risks widespread globally that will
cause economic slowdown. There remains a concern about credit
markets sparked by the sub-prime mortgage loan in the US. However,
our long-term view about the markets remains optimistic. 1) The
economic damage from the sub-prime problem is limited for Japanese
companies. 2) They benefit from robust growth in emerging countries.
3) Rebounding US dollar against the Japanese yen after US
Government announced the strong US dollar benefits the country is
positive for Japanese exporters. 4) Japanese companies are raising
dividends, buying-back their shares. 5) Companies seek growth
drivers through M&A.
While we will hold a balance between cyclical growth sectors and
stable growth companies to weather fragile markets for a while, we
are looking for a good chance to invest in companies at attractive
valuation.
** Source: AIG Global Investment Corporation (Japan) Ltd.
July 2008
AIA
Japan Balanced/Equity Fund
FUND PERFORMANCE
AIA JAPAN BALANCED FUND
Period
3-month
6-month
1-year
3-year ^
5-year ^
10-year ^
Since inception ^
As at 30 JUNE 2008
Fund
%
Benchmark*
%
Over (Under)
Performance
%
(2.08)
(9.00)
(15.54)
N/A
N/A
N/A
(7.21)
(0.88)
(6.74)
(12.99)
N/A
N/A
N/A
(4.29)
(1.20)
(2.26)
(2.54)
N/A
N/A
N/A
(2.92)
Fund
%
Benchmark*
%
Over (Under)
Performance
%
(2.08)
(15.53)
(25.57)
N/A
N/A
N/A
(14.69)
1.05
(10.61)
(25.57)
N/A
N/A
N/A
(14.69)
(3.14)
(4.92)
(3.79)
N/A
N/A
N/A
(5.09)
* 60% MSCI Japan DTR Net & 40% JP Morgan Sing Govt Bond Index All
AIA JAPAN EQUITY FUND
Period
3-month
6-month
1-year
3-year ^
5-year ^
10-year ^
Since inception ^
* MSCI Japan DTR Net ^ Annualised Returns
Note: Fund launch date - 9 March 2006. Fund returns in SGD, bid-to-bid, net dividends reinvested
PORTFOLIO STATEMENTS
AIA JAPAN BALANCED FUND
Investment In Collective Investment Scheme
As at 30 JUNE 2008
Market Value
SGD
% of Net
Asset Value
9,695,219
13,007,746
42.68
57.27
22,702,965
99.95
Market Value
SGD
% of Net
Asset Value
AIG Japan New Horizon Fund
20,617,621
100.03
AIG JAPAN EQUITY FUND
Country Allocation**
Market Value
USD
% of Net
Asset Value
Japan
549,135,122
95.67
Portfolio of Investment
Other net assets
549,135,122
24,847,783
95.67
4.33
Total
573,982,905
100.00
AIG Japan New Horizon Fund
AIG International Funds - Singapore Bond Fund
AIA JAPAN EQUITY FUND
Investment In Collective Investment Scheme
Semi-Annual Fund Report for Policyholders
91
AIA
Japan Balanced/Equity Fund
PORTFOLIO STATEMENTS
As at 30 JUNE 2008
Industry Allocation**
Market Value
USD
% of Net
Asset Value
Consumer Discretionary
Consumer Staples
Financials
Health Care
Industrials
Information Technology
Materials
Telecom Services
101,227,568
42,964,332
78,273,720
55,890,973
147,030,929
98,152,412
18,209,321
7,385,867
17.64
7.49
13.64
9.74
25.62
17.10
3.17
1.29
Portfolio of Investment
Other net assets
549,135,122
24,847,783
95.67
4.33
Total
573,982,905
100.00
Asset Class**
Market Value
USD
% of Net
Asset Value
Equities
Other net assets
549,135,122
24,847,783
95.67
4.33
573,982,905
100.00
Market Value
USD
% of Net
Asset Value
41,326,769
31,569,060
28,125,162
27,551,179
24,681,265
20,663,385
19,515,419
18,941,436
17,219,487
16,071,521
7.20
5.50
4.90
4.80
4.30
3.60
3.40
3.30
3.00
2.80
Market Value
USD
% of Net
Asset Value
57,966,019
34,209,454
32,308,928
31,358,666
31,358,666
30,408,403
29,458,141
28,507,878
28,507,878
26,607,353
6.10
3.60
3.40
3.30
3.30
3.20
3.10
3.00
3.00
2.80
Top 10 Holdings As At 30 June 2008**
Nintendo Co Ltd (JP)
Sumitomo Mitsui Financial Group Inc. (JP)
Mitsui & Co (JP)
Japan Steel Works (JP)
Japan Tobacco Inc (JP)
Terumo Corp (JP)
Takeda Pharmaceutical Co (JP)
Daiichi Sankyo Co Ltd (JP)
Toyota Motor Corp (JP)
Komatsu Ltd (JP)
Top 10 Holdings As At 30 June 2007**
Toyota Motor Corp (JP)
Japan Steel Works (JP)
Japan Tobacco Inc (JP)
Nikon Corp (JP)
Toshiba Corp (JP)
Sumco Corporation (JP)
Mizuho Financial Group (JP)
Elpida Memory Inc (JP)
Nomura Research Inst (JP)
Mitsui O.S.K.Lines (JP)
** Information extracted from the underlying AIG Japan New Horizon Fund
Semi-Annual Fund Report for Policyholders
92
AIA
Japan Balanced/Equity Fund
PORTFOLIO STATEMENTS
AIG INTERNATIONAL FUNDS - SINGAPORE BOND FUND
Country Allocation**
As at 30 JUNE 2008
Market Value
SGD
% of Net
Asset Value
China
Germany
Hong Kong
India
Indonesia
Kazakhstan
Pakistan
Singapore
South Korea
Malaysia
United Kingdom
United States
1,388,800
7,631,458
25,370,777
9,438,438
1,325,753
6,094,983
1,207,204
379,259,095
6,073,874
464,422
47,244,904
72,963,896
0.21
1.17
3.90
1.44
0.20
0.94
0.19
58.36
0.93
0.07
7.27
11.23
Portfolio of Investment
Other net asset
558,463,604
91,572,080
85.91
14.09
Total
650,035,684
100.00
Market Value
SGD
% of Net
Asset Value
Airlines
Banks
Electric Power & Gas
Finance
Government
Industrial
Real Estate
Oil & Gas
Hotel
Infrastructure
Shipping
7,417,564
198,149,345
12,616,063
56,635,659
100,907,160
22,933,114
143,929,216
6,094,983
1,966,500
494,000
7,320,000
1.14
30.47
1.94
8.71
15.54
3.53
22.13
0.94
0.30
0.08
1.13
Portfolio of Investment
Other net asset
558,463,604
91,572,080
85.91
14.09
Total
650,035,684
100.00
Industry Allocation**
Semi-Annual Fund Report for Policyholders
93
AIA
Japan Balanced/Equity Fund
PORTFOLIO STATEMENTS
Asset Class**
As at 30 JUNE 2008
Market Value
SGD
% of Net
Asset Value
483,506,837
74,956,767
91,572,080
74.38
11.53
14.09
650,035,684
100.00
Top 10 Holdings As At 30 June 2008**
Market Value
SGD
% of Net
Asset Value
DBS Cap Funding 5.75% 29 May 2049
Standard Chartered 5.25% 10 Apr 2023
Singapore Govt Bond 4% 01 Sep 2018
OCBC 3.78% 28 Nov 2017
Capitamall Trust
Morgan Stanley 4% 23 Oct 2017
HSBC 3.18% 24 Nov 2008
DBS Bank 4.47% 15 Jul 2021
Ascendas Real Estate Investment Trust
Capitaland Treasury Ltd 4.35% 31 Oct 2019
39,420,000
38,011,000
36,686,000
19,226,000
19,197,000
16,248,000
15,144,000
15,127,000
14,754,000
13,797,000
6.06
5.85
5.64
2.96
2.95
2.5
2.33
2.33
2.27
2.12
Top 10 Holdings As At 30 June 2007**
Market Value
SGD
% of Net
Asset Value
24,759,000
19,627,000
17,465,000
15,090,000
13,170,000
12,820,000
11,989,000
11,743,000
10,838,000
10,683,000
4.58
3.63
3.23
2.79
2.43
2.37
2.22
2.17
2.00
1.97
Fixed Income Securities
Real Estate Investment Trust and Preference Shares
Other Net Assets
Capitamall Trust
Ascendas Real Estate Investment Trust
DBS Bank 4.47% 15 Jul 2021
HSBC Singapore 3.18% 24 Nov 2008
Queensley Holdings Ltd 4.5% 05 Dec 2009
Singapore Govt Bond 3.625% 01 Jul 2014
ABN Amro Bank 0% 11 Jul 2007
DBS Group Hldgs 6% Non Cum Pref Shs
Singapore Govt Bond 3.75% 01 Sep 2016
Swedbank 3.445% 28 Feb 2008
** Information extracted from the underlying AIG International Funds - Singapore Bond Fund
Semi-Annual Fund Report for Policyholders
94
AIA
Japan Balanced/Equity Fund
OTHER INFORMATION
Exposure To Derivatives
As at 30 JUNE 2008
Market Value
SGD
% of Net
Asset Value
Realised
Gains/(Losses)
SGD
Unrealised
Gains/(Losses)
SGD
406
140
0.00
0.00
7,802
15,707
406
140
Redemptions
SGD
Redemptions
SGD
4,880,631
5,724,936
1,315,245
1,768,650
Forward foreign exchange contracts:
AIA Japan Balanced
AIA Japan Equity
Borrowings
N/A
Total Redemptions and Subscriptions
AIA Japan Balanced Fund
AIA Japan Equity Fund
Related-Party Transactions
SGD
Total purchases in AIG Japan New Horizon Fund
Total purchases in AIG International Funds - Singapore Bond Fund
299,866
136,300
Total Sales in AIG Japan New Horizon Fund
Total sales in AIG International Funds - Singapore Bond Fund
Expense Ratios
28,839,371
5,860,900
30 June 2008
30 June 2007
AIA Japan Balanced*
AIA Japan Equity*
1.67%
1.68%
1.67%
1.63%
Underlying Funds:
AIG Japan New Horizon Fund**
AIG International Funds - Singapore Bond Fund**
1.12%
1.10%
1.11%
1.15%
Note:
*
**
Expense ratio does not include insurance coverage, brokerage and other transaction costs, performance fee, foreign exchange gains/losses, front or back end loads arising from the purchase or sale of collective investment schemes and tax deducted at source or arising out of income received.
Include underlying fund expense ratio
Based on unaudited draft accounts Turnover Ratios
AIA Japan Balanced
AIA Japan Equity
Underlying Funds:
AIG Japan New Horizon Fund
AIG International Funds - Singapore Bond Fund**
30 June 2008
30 June 2007
1.14%
0.31%
5.73%
4.76%
71.05%
15.44%
112.48%
151.20%
Note: The turnover ratio is calculated based on the lesser of portfolio purchases and sales of the underlying investments
expressed as a percentage over the average net asset value.
** Based on unaudited draft accounts Any Material Information That Will Adversely Impact The Valuation Of The Fund
N/A
Soft Dollar Commissions
N/A
Semi-Annual Fund Report for Policyholders
95
AIA
Emerging Markets Balanced/Equity Fund
PERFORMANCE REPORT
The AIA Emerging Markets Equity Fund returned –14.87% for the six
months ended 30 June 2008. The benchmark, MSCI Emerging
Markets DTR Net, returned –16.51% for the same period.
Asset Class Overview**
Financial distress continued to resonate across markets this quarter
with the latest casualty, the US investment bank Bear Stearns. The US
Federal Reserve (Fed) was involved in coordinating JP Morgan’s
purchase of the bank and stimulating “frozen” credit markets. Overall,
investors fled for safe haven assets throughout the quarter and all
stock sectors and regions delivered negative absolute returns despite
the rosier start to the calendar year. Latin America’s regional index
was the best performer during the quarter driven by Chile, Argentina
and Mexico. Emerging Asia had the weakest quarter with China and
India performance contributing to poor returns. From a sector
standpoint, Materials, Staples and Information Technology were clear
outperformers while Financials detracted from performance.
In the second quarter, the price of commodities, especially energy
and food, continued to surge around the world leading major
commodity indices to all time high levels. The biggest contributor
was crude oil as prices continued to power upward with Brent crude
closing the second quarter at $139 per barrel, a gain of 48% year to
date after a 56% gain in 2007. The obvious result of the commodity
price rises, and one seen most acutely in emerging markets, continues
to be food and energy driven inflation. Central Banks around the
emerging world have tightened monetary policy as they grapple with
rising consumer price inflation. The measured responses so far
indicate attentiveness toward the issue, although policy challenges
remain significant. From a fiscal perspective, commodity price
increases have strained government budgets in those markets with
subsidies - several of these countries including China, India, and
Malaysia relented and raised domestic prices of diesel, gasoline, and
electricity.
In Brazil, the equity market rallied in April on the sovereign rating
increase to investment grade by Standard & Poor’s (which was
subsequently followed by Fitch’s upgrade). S&P cited predictable
economic policies, more mature institutions, and a lower external
debt profile in their upgrade. A strong earthquake hit the Sichuan
province of China in May; along with many lives lost, some economic
disruptions were seen in Mining, Utilities and other areas. Many
observers noted the effective and transparent Chinese government
response compared to previous crises. Also in China, the longawaited restructuring plan for Telecommunications companies was
formally announced. As expected, six companies will be combined
into three. Index provider MSCI completed their move towards their
new market capitalisation weighted and broadened indices at the
end of May.
Latin America was the best performer for the quarter. Emerging Asia
was the worst performer with India leading the region down. The
Energy sector outperformed across emerging markets, while
Industrials and Consumer Discretionary lagged.
Semi-Annual Fund Report for Policyholders
96
Portfolio Overview**
We made numerous country visits over the quarter, including Russia,
South Africa and Brazil. In Chile, we exited our last position as
increasing economic headwinds do not bode well for corporate
profits. We also moved to a small overweight of Thailand during the
quarter as it is one of the few markets which should see accelerating
economic and corporate earnings growth over the course of 2008.
Peru was another market where we increased our positions as
company visits continue to suggest positive earnings momentum in
that market. While our Chinese and Indian underweights contributed
positively to performance, some of our stocks in these markets did
not.
Our overweight of Russia and Israel and underweight of India
contributed to positive performance. From a stock selection
perspective, Materials companies including Israel Chemicals, Uralkali
(Russia), Gerdau (Brazil), and Exxaro (South Africa) were the largest
contributors.
Portfolio Outlook**
The earnings outlook in emerging markets remains relatively robust
although those numbers have softened in line with declines in the
rest of the world. The overall profit growth in emerging markets
remains above that of the developed world although we observe that
the risk of future margin compression, outside of the financial sector,
remains higher in emerging markets as policy efforts to address
macro imbalances are likely to be more constrained. We remain
constructive and believe market participants will continue to discern
between those countries and companies at risk versus those best
placed to withstand macroeconomic pressures.
**Source: AIG Global Investment Corp.
July 2008
AIA
Emerging Markets Balanced/Equity Fund
FUND PERFORMANCE
AIA JAPAN BALANCED FUND
Period
3-month
6-month
1-year
3-year ^
5-year ^
10-year ^
Since inception ^
As at 30 JUNE 2008
Fund
%
Benchmark*
%
Over (Under)
Performance
%
(0.74)
(10.66)
(5.30)
N/A
N/A
N/A
5.63
(2.76)
(10.10)
(2.89)
N/A
N/A
N/A
7.06
2.02
(0.55)
(2.41)
N/A
N/A
N/A
(1.43)
Fund
%
Benchmark*
%
Over (Under)
Performance
%
0.09
(14.87)
(5.79)
N/A
N/A
N/A
7.78
(2.23)
(16.51)
(6.95)
N/A
N/A
N/A
8.21
2.32
1.63
1.16
N/A
N/A
N/A
(0.44)
* 60% MSCI Emerging Markets DTR Net & 40% JP Morgan Sing Govt Bond Index All
AIA JAPAN EQUITY FUND
Period
3-month
6-month
1-year
3-year ^
5-year ^
10-year ^
Since inception ^
* MSCI Emerging Markets DTR Net ^ Annualised Returns
Note: Fund launch date - 11 April 2006. Fund returns in SGD, bid-to-bid, net dividends reinvested
PORTFOLIO STATEMENTS
AIA EMERGING MARKETS BALANCED FUND
Investment In Collective Investment Scheme
As at 30 JUNE 2008
Market Value
SGD
% of Net
Asset Value
142,616,723
228,992,525
38.37
61.62
371,609,248
99.99
Market Value
SGD
% of Net
Asset Value
336,881,432
100.05
Market Value
USD
% of Net
Asset Value
877,685,628
481,524,795
66,425,555
141,735,390
454,072,397
42.07
23.08
3.18
6.79
21.77
Portfolio of Investment
Other net assets
2,021,443,766
64,584,678
96.90
3.10
Total
2,086,028,444
100.00
AIG Global Emerging Markets Fund
AIG International Funds - Singapore Bond Fund
AIA EMERGING MARKETS EQUITY FUND
Investment In Collective Investment Scheme
AIG Global Emerging Markets Fund
AIA EMERGING MARKETS EQUITY FUND
Country Allocation**
Asia/Pacific
Latin America
Europe
Mid East & Africa
Other
Semi-Annual Fund Report for Policyholders
97
AIA
Emerging Markets Balanced/Equity Fund
PORTFOLIO STATEMENTS
As at 30 JUNE 2008
Industry Allocation**
Market Value
USD
% of Net
Asset Value
Consumer Discretionary
Consumer Staples
Energy
Financials
Health Care
Industrials
Information Technology
Materials
Telecom Services
168,992,699
124,642,223
449,609,522
296,768,159
75,804,141
167,314,900
187,933,627
371,642,436
178,736,058
8.10
5.98
21.55
14.23
3.63
8.02
9.01
17.82
8.57
Portfolio of Investment
Other net assets
2,021,443,766
64,584,678
96.90
3.10
Total
2,086,028,444
100.00
Asset Class**
Market Value
USD
% of Net
Asset Value
Equities
Other net assets
2,021,443,766
64,584,678
96.90
3.10
2,086,028,444
100.00
Market Value
USD
% of Net
Asset Value
160,624,190
123,075,678
58,408,796
56,322,768
52,150,711
39,634,540
39,634,540
35,462,484
35,462,484
33,376,455
7.70
5.90
2.80
2.70
2.50
1.90
1.90
1.70
1.70
1.60
Top 10 Holdings As At 30 June 2007**
Market Value
USD
% of Net
Asset Value
Petroleo Brasileiro (BR)
Gazprom (RU)
Samsung Electronic (KR)
Taiwan Semiconductor Manufacturing (TW)
Bharat Heavy Elect (IN)
Daelim Industrial (KR)
China Unicom (CN)
Sberbank Of Russia (RU)
Nine Dragons Paper (CN)
Usinas Siderurgicas de Minas Gerais SA (BR)
87,613,195
83,441,138
62,580,853
47,978,654
41,720,569
41,720,569
35,462,484
35,462,484
35,462,484
35,462,484
4.20
4.00
3.00
2.30
2.00
2.00
1.70
1.70
1.70
1.70
Top 10 Holdings As At 30 June 2008**
Petroleo Brasileiro (BR)
Gazprom (RU)
China Mobile (Hk) (CN)
ICL-Israel Chemicals Ltd (IL)
Samsung Electronic (KR)
Uralkaliy (RU)
MMX Mineracao E Metalic (BR)
China Unicom (CN)
PT Bumi Resources Tbk (ID)
Exxaro Resources (ZA)
** Information extracted from the underlying AIG Global Emerging Markets Fund
Semi-Annual Fund Report for Policyholders
98
AIA
Emerging Markets Balanced/Equity Fund
PORTFOLIO STATEMENTS
AIG INTERNATIONAL FUNDS - SINGAPORE BOND FUND
Country Allocation**
As at 30 JUNE 2008
Market Value
SGD
% of Net
Asset Value
Germany
Hong Kong
India
Indonesia
Japan
Netherlands
Pakistan
Philippines
Singapore
Sweden
United Kingdom
United States
Others
6,631,376
22,696,948
9,895,030
11,676,134
3,242,934
11,989,560
4,455,696
2,024,081
158,384,523
10,682,855
11,778,714
31,446,129
86,996,068
1.23
4.20
1.82
2.16
0.60
2.22
0.82
0.37
29.26
1.97
2.18
5.81
16.08
Portfolio of Investment
Other net asset
371,900,048
169,278,627
68.72
31.28
Total
541,178,675
100.00
Market Value
SGD
% of Net
Asset Value
Airlines
Banks
Electric Power & Gas
Finance
Government
Industrial
Telecommunications
Real Estate
Utilities
Hotel
Infrastructure
Shipping
5,087,211
121,977,985
2,969,650
27,689,380
59,045,472
5,074,963
801,674
129,311,670
7,685,320
2,460,000
786,500
9,010,223
0.94
22.55
0.54
5.12
10.91
0.94
0.15
23.89
1.42
0.45
0.15
1.66
Portfolio of Investment
Other net asset
371,900,048
169,278,627
68.72
31.28
Total
541,178,675
100.00
Industry Allocation**
Semi-Annual Fund Report for Policyholders
99
AIA
Emerging Markets Balanced/Equity Fund
PORTFOLIO STATEMENTS
Asset Class**
As at 30 JUNE 2008
Market Value
SGD
% of Net
Asset Value
284,903,980
86,996,068
169,278,627
52.64
16.08
31.28
541,178,675
100.00
Top 10 Holdings As At 30 June 2008**
Market Value
SGD
% of Net
Asset Value
DBS Cap Funding 5.75% 29 May 2049
Standard Chartered 5.25% 10 Apr 2023
Singapore Govt Bond 4% 01 Sep 2018
OCBC 3.78% 28 Nov 2017
Capitamall Trust
Morgan Stanley 4% 23 Oct 2017
HSBC 3.18% 24 Nov 2008
DBS Bank 4.47% 15 Jul 2021
Ascendas Real Estate Investment Trust
Capitaland Treasury Ltd 4.35% 31 Oct 2019
39,420,000
38,011,000
36,686,000
19,226,000
19,197,000
16,248,000
15,144,000
15,127,000
14,754,000
13,797,000
6.06
5.85
5.64
2.96
2.95
2.50
2.33
2.33
2.27
2.12
Top 10 Holdings As At 30 June 2007**
Market Value
SGD
% of Net
Asset Value
24,759,000
19,627,000
17,465,000
15,090,000
13,170,000
12,820,000
11,989,000
11,743,000
10,838,000
10,683,000
4.58
3.63
3.23
2.79
2.43
2.37
2.22
2.17
2.00
1.97
Fixed Income Securities
Real Estate Investment Trust and Preference Shares
Other Net Assets
Capitamall Trust
Ascendas Real Estate Investment Trust
DBS Bank 4.47% 15 Jul 2021
HSBC Singapore 3.18% 24 Nov 2008
Queensley Holdings Ltd 4.5% 05 Dec 2009
Singapore Govt Bond 3.625% 01 Jul 2014
ABN Amro Bank 0% 11 Jul 2007
DBS Group Hldgs 6% Non Cum Pref Shs
Singapore Govt Bond 3.75% 01 Sep 2016
Swedbank 3.445% 28 Feb 2008
** Information extracted from the underlying AIG International Funds - Singapore Bond Fund
Semi-Annual Fund Report for Policyholders
100
AIA
Emerging Markets Balanced/Equity Fund
OTHER INFORMATION
As at 30 JUNE 2008
Market Value
SGD
% of Net
Asset Value
Realised
Gains/(Losses)
SGD
Unrealised
Gains/(Losses)
SGD
(4,838)
(2,234)
(0.00)
(0.00)
(334,135)
(163,958)
(4,838)
(2,234)
Total Redemptions and Subscriptions
Redemptions
SGD
Redemptions
SGD
AIA Emerging Markets Balanced Fund
AIA Emerging Markets Equity Fund
23,252,743
44,571,001
107,536,147
75,659,834
Exposure To Derivatives
Forward foreign exchange contracts:
AIA Emerging Markets Balanced
AIA Emerging Markets Equity
Borrowings
N/A
Related-Party Transactions
SGD
Total purchases in AIG Global Emerging Markets Fund
Total purchases in AIG International Funds - Singapore Bond Fund
189,063,304
63,656,500
Total Sales in AIG Global Emerging Markets Fund
Total Sales in AIG International Funds - Singapore Bond Fund
Expense Ratios
11,293,355
402,900
30 June 2008
30 June 2007
AIA Emerging Markets Balanced*
AIA Emerging Markets Equity*
1.68%
1.66%
1.72%
1.69%
Underlying Funds:
AIG Global Emerging Markets Fund
AIG International Funds - Singapore Bond Fund**
1.15%
1.10%
1.13%
1.18%
Note:
*
**
Expense ratio does not include insurance coverage, brokerage and other transaction costs, performance fee, foreign exchange gains/losses, front or back end loads arising from the purchase or sale of collective investment schemes and tax deducted at source or arising out of income received.
Include underlying fund expense ratio
Based on unaudited draft accounts Turnover Ratios
AIA Emerging Markets Balanced
AIA Emerging Markets Equity
Underlying Funds:
AIG Global Emerging Markets Fund
AIG International Funds - Singapore Bond Fund**
Note:
***
**
30 June 2008
30 June 2007
0.67%
2.88%
0.00%
0.00%
34.84%
15.44%
96.84%***
40.55%
The turnover ratio is calculated based on the lesser of portfolio purchases and sales of the underlying investments
expressed as a percentage over the average net asset value.
Draft turnover ratios based on figures supplied by the administrative agent.
Based on unaudited draft accounts Any Material Information That Will Adversely Impact The Valuation Of The Fund
N/A
Soft Dollar Commissions
AIG International Fund - Singapore Bond Fund did not engage in soft dollar arrangements.
Soft dollar commissions for the AIG Global Emerging Markets Fund:
The Manager has entered into soft commission arrangements with selected brokers where it obtains services from third parties. These services relate essentially to
research and price information, performance measurement, portfolio valuations and analysis, all of which are believed to be helpful in the overall discharge of the
Manager’s duties to clients. As such services generally benefit all of the Manager’s clients in terms of input into the investment decision making process, the soft
credits utilized are not allocated on a specific client basis. The Manager further confirms that trades were executed on the best available terms and there was no
churning of trades.
Semi-Annual Fund Report for Policyholders
101
AIA
Global Resources Fund
PERFORMANCE REPORT
Fund Performance
AIA Global Resources Fund returned 0.82% for the six months ended
30 June 2008. Its benchmark returned 5.02% for the same period.
cash costs. This, we believe, will deliver excess returns over the full
commodity price cycle.
**Source: First State Investments (Singapore)
Market Overview**
The global mining market continued to perform strongly in the first
half of 2008 despite equity market volatility and concerns about the
global growth outlook. The HSBC Global Mining Index rose by 12.3%
in US dollar terms and the MSCI Energy Index by 7.9%. The market
was assisted by very strong oil prices and expectations of robust
earnings growth from mining companies.
Major commodities were mixed over the six months. Copper (+27.5%),
aluminium (+29.3%) and tin (+42.8%) rose very strongly, while lead
(-29.8%), nickel (-16.5%) and zinc (-18.5%) declined. The oil price
continued its relentless rise to above US$140 per barrel, an increase
of 45.8% over the period, while the gold price increased by 10.9% on
inflationary concerns.
Fund performance was helped by our holdings in diversified resource
companies BHP Billiton and Rio Tinto as investors showed a
preference for the diversity and size of the large diversified miners.
Potash Corporation of Saskatchewan also outperformed on
expectations that demand for fertilizers will continue to grow.
On the negative side, China Shenhua underperformed on rising cost
pressures and a constrained ability to take advantage of higher coal
prices. Precious metal miner Coeur D’Alene lagged on disappointing
production results and cost pressures and Andean Resources fell as
it raised equity despite a series of positive drilling and exploration
results.
We bought Freeport-McMoRan Copper & Gold which has assets in
Indonesia, the US and South America and is focused on organic
growth; and aluminium company Century Aluminium which has
interests in alumina and bauxite assets in the US and Jamaica, and
is growing aluminium capacity in Iceland. We also purchased Brazilian
oil and gas explorer Petrobras Energia for its enormous oil and gas
exploration activities, especially offshore Brazil.
We sold aluminium producer Alumina as energy prices increased its
cost base and Agrium, switching into Mosaic which has more attractive
potash and phosphate assets. Nickel miner Jubilee Mines was sold
following its takeover by Xstrata.
Market Outlook**
Despite positive long-term fundamentals for the sector, the fund
maintains a cautionary stance. We believe it is prudent to hold a
diversified portfolio of high quality companies with excellent ore
bodies. We favour the size, quality and relative valuations of Vale,
Rio Tinto and BHP Billiton which are focused on expanding
production volumes and are more able to cope with swings in
commodity prices. We maintain our investment philosophy of not
speculating on the direction of commodity prices, but retain our
‘long’ focus on quality companies which can deliver growth at low
Semi-Annual Fund Report for Policyholders
102
AIA
Global Resources Fund
FUND PERFORMANCE
Period
3-month
6-month
1-year
3-year^
5-year^
10-year^
Since inception
As at 30 JUNE 2008
Fund
%
Benchmark*
%
Over (Under)
Performance
%
7.50
0.82
17.63
N/A
N/A
N/A
28.15
11.49
5.02
30.80
N/A
N/A
N/A
49.10
(3.99)
(4.20)
(13.17)
N/A
N/A
N/A
(20.95)
*The Underlying fund refers to that of Singapore feeder’s funds, I.e. First State Global Resources Fund, an England and Wales Domiciled Funds
PORTFOLIO STATEMENTS
Investment In Collective Investment Scheme
As at 30 JUNE 2008
Market Value
SGD
% of Net
Asset Value
510,595,969
99.78
Market Value
SGD
% of Net
Asset Value
392,738,817
371,568,261
257,714,012
253,879,974
142,526,184
62,844,879
50,175,885
43,841,388
23,837,713
20,003,675
4,667,524
23.56
22.29
15.46
15.23
8.55
3.77
3.01
2.63
1.43
1.20
0.28
Portfolio of Investment
Other net assets
1,623,798,311
43,174,598
97.41
2.59
Total
1,666,972,909
100.00
Industry Allocation**
Market Value
SGD
% of Net
Asset Value
Diversifieds
Energy
Gold & Precious Metals
Metals
Coal
Other
Uranium
Exploration
561,769,870
345,563,484
318,058,431
168,864,356
91,350,115
87,682,775
45,508,360
5,000,919
33.70
20.73
19.08
10.13
5.48
5.26
2.73
0.30
Portfolio of Investment
Other net assets
1,623,798,311
43,174,598
97.41
2.59
Total
1,666,972,909
100.00
AIG First State Global Resources
Country Allocation**
UK
Canada
Australia
USA
Brazil
China
South Africa
Argentina
Korea
Indonesia
Russia
Semi-Annual Fund Report for Policyholders
103
AIA
Global Resources Fund
PORTFOLIO STATEMENTS
As at 30 JUNE 2008
Asset Class**
Market Value
SGD
% of Net
Asset Value
Equity
Cash
1,623,798,311
43,174,598
97.41
2.59
744,431,631
100.00
Market Value
SGD
% of Net
Asset Value
138,692,146
121,188,930
104,352,504
78,681,121
52,009,555
49,342,398
46,675,241
44,508,177
44,008,085
41,841,020
8.32
7.27
6.26
4.72
3.12
2.96
2.80
2.67
2.64
2.51
Market Value
SGD
% of Net
Asset Value
72,720,436
62,884,975
58,347,372
45,476,221
25,859,611
23,570,071
22,406,524
19,832,923
18,018,713
18,015,693
9.59
8.29
7.69
6.00
3.41
3.11
2.95
2.61
2.38
2.38
Top 10 Holdings As At 30 June 2008**
Vale
BHP Billiton Plc (UK)
Rio Tinto (UK)
Xstrata
Potash Corp
Goldcorp Inc
Rio Tinto (Australia)
Anglo American Plc
Petrobras Energia Participacio
Lihir Gold
Top 10 Holdings As At 30 June 2007**
CVRD
Rio Tinto
BHP Billiton Plc
Anglo American
China Shenhua Energy Co Ltd
Alcan
Alumina
Cameco Corp
Lihir Gold
Addax Petroleum
** Information from First State Global Resources
Semi-Annual Fund Report for Policyholders
104
AIA
Global Resources Fund
OTHER INFORMATION
Exposure To Derivatives
As at 30 JUNE 2008
Market Value
SGD
% of Net
Asset Value
Realised
Gains/(Losses)
SGD
Unrealised
Gains/(Losses)
SGD
(310)
0
0
(310)
Forward foreign exchange contracts:
Borrowings
N/A
Total Redemptions and Subscriptions
SGD
Total amount of redemptions
Total amount of subscriptions
298,350,082
445,224,940
Related-Party Transactions
SGD
Total Purchases of First State Global Growth Fund
Total Sales of First State Global Growth Fund
Expense Ratios
Local Fund*
Underlying Fund: First State Global Resources
Note:
*
206,098,187
893,535
30 June 2008
30 June 2007
1.74%
1.75%
1.73%
1.80%
Expense ratio does not include insurance coverage, brokerage and other transaction costs, performance fee, foreign exchange gains/losses, front or back end loads arising from the purchase or sale of collective investment schemes and tax deducted at source or arising out of income received.
In accordance with IMAS guidelines, expense ratio is stated on an annualised basis
Turnover Ratios
Local Fund
Underlying Fund: First State Global Resources
30 June 2008
30 June 2007
0.27%
23.10%
0.68%
26.60%
Any Material Information That Will Adversely Impact The Valuation Of The Fund
NIL
Soft Dollar Commissions
In order to allign with the policy of First State Investments internationally, the Investment Manager has ceased all of its soft dollar arragements previously made with
brokers with effect from 13 June 2005
Semi-Annual Fund Report for Policyholders
105
AIA
Growth Fund
BALANCE SHEET
Capital Account
As at 30 JUNE 2008 (UNAUDITED)
Notes
2008
$
Value of Fund at beginning of the year
744,431,631
Amount paid for creation of units
107,320,328
Amount paid for liquidation of units
- Withdrawal/surrender
- Mortality risk and other benefit charges
- Policy fee
(54,275,320)
(8,420,334)
(323,633)
Net cash into/(out of) Fund
44,301,041
Net realised gain/(loss) on sale of investments
Net realised gain/(loss) on foreign exchange
Net unrealised appreciation/(diminution) in value of investments
Net income/(loss) for the year
19,291,787
747,554
(134,261,483)
8,680,602
Value of Fund at end of the year
Represented by:
Current Assets
Bank balances and deposits
Equity shares
Fixed income securities
Investment income due and accrued
Income tax recoverable
683,191,132
2
3
55,622,630
471,074,956
148,980,313
2,683
8,076,008
683,756,590
Less: Current Liabilities
Amount due to AIA Singapore Life Fund
Forward contract
Due to brokers for investments purchased
Accrued investment expense
(199,413)
(20,308)
(185,954)
(159,783)
683,191,132
INCOME STATEMENT
Income
FROM 1 JANUARY 2008 TO 30 JUNE 2008 (UNAUDITED)
2008
$
Interest on deposits
Dividend on quoted equities
Interest on bonds
370,360
8,560,949
4,206,039
13,137,348
Less: Expenses
Investment expenses
Fund charges
(135,653)
(4,321,093)
(4,456,746)
Net income/(loss) for the year
The accompanying notes from part of these financial statements.
Semi-Annual Fund Report for Policyholders
106
8,680,602
AIA
Regional Equity Fund
BALANCE SHEET
Capital Account
As at 30 JUNE 2008 (UNAUDITED)
Notes
Value of Fund at beginning of the year
834,991,627
Amount paid for creation of units
71,788,909
Amount paid for liquidation of units
- Withdrawal/surrender
- Mortality risk and other benefit charges
- Policy fee
(54,045,998)
(1,879,060)
(581,162)
Net cash into/(out of) Fund
15,282,689
Net realised gain/(loss) on sale of investments
Net realised gain/(loss) on foreign exchange
Net unrealised appreciation/(diminution) in value of investments
Net income/(loss) for the year
9,709,359
(613,538)
(227,786,676)
1,560,023
Value of Fund at end of the year
Represented by:
Current Assets
Bank balances and deposits
Equity shares
Due from brokers for investments sold
Investment income due and accrued
Income tax recoverable
2008
$
633,143,484
2
19,291,223
612,943,707
758,268
2,968
1,161,651
634,157,817
Less: Current Liabilities
Amount due to AIA Singapore Life Fund
Due to brokers for investments purchased
Accrued investment expense
(115,386)
(521,785)
(377,162)
633,143,484
INCOME STATEMENT
Income
Interest on deposits
Dividend on quoted equities
FROM 1 JANUARY 2008 TO 30 JUNE 2008 (UNAUDITED)
2008
$
162,164
7,010,940
7,173,104
Less: Expenses
Investment expenses
Fund charges
Foreign tax withheld
(322,634)
(4,416,310)
(874,137)
(5,613,081)
Net income/(loss) for the year
1,560,023
The accompanying notes from part of these financial statements.
Semi-Annual Fund Report for Policyholders
107
AIA
Regional Fixed Income Fund
BALANCE SHEET
Capital Account
As at 30 JUNE 2008 (UNAUDITED)
Notes
2008
$
Value of Fund at beginning of the year
838,095,640
Amount paid for creation of units
213,505,703
Amount paid for liquidation of units
- Withdrawal/surrender
- Mortality risk and other benefit charges
- Policy fee
(96,084,211)
(1,210,702)
(349,708)
Net cash into/(out of) Fund
115,861,082
Net realised gain/(loss) on sale of investments
Net realised gain/(loss) on foreign exchange
Net unrealised appreciation/(diminution) in value of investments
Net income/(loss) for the year
1,889,796
1,403,218
(35,435,536)
15,106,298
Value of Fund at end of the year
936,920,498
Represented by:
Current Assets
Bank balances and deposits
Equity shares
Fixed income securities
Investment income due and accrued
Income tax recoverable
Amount due from AIA Singapore Life Fund
2
3
108,315,698
179,351,954
646,876,862
6,809,238
4,912,954
126,930
946,393,636
Less: Current Liabilities
Forward contract
Due to brokers for investments purchased
Accrued investment expense
(42,212)
(9,230,448)
(200,478)
936,920,498
INCOME STATEMENT
Income
FROM 1 JANUARY 2008 TO 30 JUNE 2008 (UNAUDITED)
2008
$
Interest on deposits
Dividend on quoted equities
Interest on bonds
525,652
3,932,923
14,650,521
19,109,096
Less: Expenses
Investment expenses
Fund charges
Foreign tax withheld
(143,761)
(3,859,037)
(321)
(4,002,798)
Net income/(loss) for the year
The accompanying notes from part of these financial statements.
Semi-Annual Fund Report for Policyholders
108
15,106,298
AIA
Global Equity Fund
BALANCE SHEET
Capital Account
As at 30 JUNE 2008 (UNAUDITED)
Notes
Value of Fund at beginning of the year
2008
$
52,634,851
Amount paid for creation of units
2,595,273
Amount paid for liquidation of units
- Withdrawal/surrender
- Mortality risk and other benefit charges
- Policy fee
(3,412,299)
(354,178)
(88,777)
Net cash into/(out of) Fund
(1,259,981)
Net realised gain/(loss) on sale of investments
Net realised gain/(loss) on foreign exchange
Net unrealised appreciation/(diminution) in value of investments
Net income/(loss) for the year
487,022
(27,393)
(7,186,496)
(128,715)
Value of Fund at end of the year
44,519,288
Represented by:
Current Assets
Bank balances and deposits
Unit trusts
Forward contract
2
179,966
44,580,169
75
44,760,210
Less: Current Liabilities
Amount due to AIA Singapore Life Fund
Due to brokers for investments purchased
Accrued investment expense
(100,630)
(112,382)
(27,910)
44,519,288
INCOME STATEMENT
Income
Interest on deposits
Less: Expenses
Investment expenses
Fund charges
FROM 1 JANUARY 2008 TO 30 JUNE 2008 (UNAUDITED)
2008
$
186
(12,819)
(116,082)
(128,901)
Net income/(loss) for the year
(128,715)
The accompanying notes from part of these financial statements.
Semi-Annual Fund Report for Policyholders
109
AIA
Global Bond Fund
BALANCE SHEET
Capital Account
As at 30 JUNE 2008 (UNAUDITED)
Notes
2008
$
Value of Fund at beginning of the year
9,866,408
Amount paid for creation of units
1,838,283
Amount paid for liquidation of units
- Withdrawal/surrender
- Mortality risk and other benefit charges
- Policy fee
(1,609,268)
(90,010)
(27,123)
Net cash into/(out of) Fund
111,883
Net realised gain/(loss) on sale of investments
Net realised gain/(loss) on foreign exchange
Net unrealised appreciation/(diminution) in value of investments
Net income/(loss) for the year
118,921
(3,844)
(270,173)
(40,209)
Value of Fund at end of the year
9,782,986
Represented by:
Current Assets
Bank balances and deposits
Unit trusts
Due from brokers for investments sold
2
69,137
9,780,175
19,854
9,869,166
Less: Current Liabilities
Amount due to AIA Singapore Life Fund
Forward contract
Accrued investment expense
(67,330)
(72)
(18,778)
9,782,986
INCOME STATEMENT
FROM 1 JANUARY 2008 TO 30 JUNE 2008 (UNAUDITED)
Income
2008
$
Interest on deposits
-
Less: Expenses
Investment expenses
Fund charges
(6,770)
(33,439)
(40,209)
Net income/(loss) for the year
The accompanying notes from part of these financial statements.
Semi-Annual Fund Report for Policyholders
110
(40,209)
AIA
Money Market Fund
BALANCE SHEET
Capital Account
Value of Fund at beginning of the year
Amount paid for creation of units
Amount paid for liquidation of units
- Withdrawal/surrender
- Mortality risk and other benefit charges
- Policy fee
Net cash into/(out of) Fund
Net income/(loss) for the year
As at 30 JUNE 2008 (UNAUDITED)
Notes
2008
$
62,785,061
497,915,581
(409,207,851)
(102,527)
(24,774)
88,580,428
392,689
Value of Fund at end of the year
151,758,178
Represented by:
Current Assets
Bank balances and deposits
Investment income due and accrued
Amount due from AIA Singapore Life Fund
133,842,699
17,165
17,902,618
151,762,482
Less: Current Liabilities
Accrued investment expense
(4,304)
151,758,178
INCOME STATEMENT
Income
Interest on deposits
Less: Expenses
Investment expenses
Fund charges
FROM 1 JANUARY 2008 TO 30 JUNE 2008 (UNAUDITED)
2008
$
580,652
(8,646)
(179,317)
(187,963)
Net income/(loss) for the year
392,689
The accompanying notes from part of these financial statements.
Semi-Annual Fund Report for Policyholders
111
AIA
U.S.Equity Fund
BALANCE SHEET
Capital Account
As at 30 JUNE 2008 (UNAUDITED)
Notes
Value of Fund at beginning of the year
2008
$
20,024,048
Amount paid for creation of units
1,694,933
Amount paid for liquidation of units
- Withdrawal/surrender
- Mortality risk and other benefit charges
- Policy fee
(1,489,828)
(152,520)
(47,462)
Net cash into/(out of) Fund
5,123
Net realised gain/(loss) on sale of investments
Net realised gain/(loss) on foreign exchange
Net unrealised appreciation/(diminution) in value of investments
Net income/(loss) for the year
(86,800)
506
(3,485,922)
(52,005)
Value of Fund at end of the year
16,404,950
Represented by:
Current Assets
Bank balances and deposits
Unit trusts
2
143,613
16,365,077
16,508,690
Less: Current Liabilities
Amount due to AIA Singapore Life Fund
Forward contract
Due to brokers for investments purchased
Accrued investment expense
(19,155)
(110)
(63,645)
(20,830)
16,404,950
INCOME STATEMENT
FROM 1 JANUARY 2008 TO 30 JUNE 2008 (UNAUDITED)
Income
2008
$
Interest on deposits
-
Less: Expenses
Investment expenses
Fund charges
(7,735)
(44,270)
(52,005)
Net income/(loss) for the year
The accompanying notes from part of these financial statements.
Semi-Annual Fund Report for Policyholders
112
(52,005)
AIA
Global Balanced Fund
BALANCE SHEET
Capital Account
As at 30 JUNE 2008 (UNAUDITED)
Notes
Value of Fund at beginning of the year
2008
$
295,440,520
Amount paid for creation of units
3,478,922
Amount paid for liquidation of units
- Withdrawal/surrender
- Mortality risk and other benefit charges
- Policy fee
(21,962,111)
(238,229)
(42,721)
Net cash into/(out of) Fund
(18,764,139)
Net realised gain/(loss) on sale of investments
Net realised gain/(loss) on foreign exchange
Net unrealised appreciation/(diminution) in value of investments
Net income/(loss) for the year
3,816,563
(11,976)
(30,354,263)
(655,702)
Value of Fund at end of the year
249,471,003
Represented by:
Current Assets
Bank balances and deposits
Unit trusts
Forward contract
Due from brokers for investments sold
2
1,468,719
248,144,404
1,667
387,099
250,001,889
Less: Current Liabilities
Amount due to AIA Singapore Life Fund
Accrued investment expense
(489,038)
(41,848)
249,471,003
INCOME STATEMENT
Income
Interest on deposits
FROM 1 JANUARY 2008 TO 30 JUNE 2008 (UNAUDITED)
2008
$
41
41
Less: Expenses
Investment expenses
Fund charges
(42,854)
(612,889)
(655,743)
Net income/(loss) for the year
(655,702)
The accompanying notes from part of these financial statements.
Semi-Annual Fund Report for Policyholders
113
AIA
European Equity Fund
BALANCE SHEET
Capital Account
As at 30 JUNE 2008 (UNAUDITED)
Notes
Value of Fund at beginning of the year
2008
$
7,251,214
Amount paid for creation of units
667,617
Amount paid for liquidation of units
- Withdrawal/surrender
- Mortality risk and other benefit charges
- Policy fee
(934,669)
(41,670)
(17,544)
Net cash into/(out of) Fund
(326,266)
Net realised gain/(loss) on sale of investments
Net realised gain/(loss) on foreign exchange
Net unrealised appreciation/(diminution) in value of investments
Net income/(loss) for the year
22,366
3,129
(1,256,652)
(21,671)
Value of Fund at end of the year
Represented by:
Current Assets
Bank balances and deposits
Unit trusts
Forward contract
5,672,120
2
85,718
5,650,106
374
5,736,198
Less: Current Liabilities
Amount due to AIA Singapore Life Fund
Due to brokers for investments purchased
Accrued investment expense
(9,925)
(35,373)
(18,780)
5,672,120
INCOME STATEMENT
FROM 1 JANUARY 2008 TO 30 JUNE 2008 (UNAUDITED)
Income
2008
$
Interest on deposits
-
Less: Expenses
Investment expenses
Fund charges
(6,297)
(15,374)
(21,671)
Net income/(loss) for the year
The accompanying notes from part of these financial statements.
Semi-Annual Fund Report for Policyholders
114
(21,671)
AIA
Global Technology Fund
BALANCE SHEET
Capital Account
As at 30 JUNE 2008 (UNAUDITED)
Notes
Value of Fund at beginning of the year
2008
$
82,809,410
Amount paid for creation of units
2,476,449
Amount paid for liquidation of units
- Withdrawal/surrender
- Mortality risk and other benefit charges
- Policy fee
(8,459,847)
(168,712)
(56,095)
Net cash into/(out of) Fund
(6,208,205)
Net realised gain/(loss) on sale of investments
Net realised gain/(loss) on foreign exchange
Net unrealised appreciation/(diminution) in value of investments
Net income/(loss) for the year
1,118,944
(7,332)
(13,455,429)
(16,987)
Value of Fund at end of the year
Represented by:
Current Assets
Bank balances and deposits
Unit trusts
Due from brokers for investments sold
64,240,401
2
149,124
64,269,900
16,320
64,435,344
Less: Current Liabilities
Amount due to AIA Singapore Life Fund
Forward contract
Due to brokers for investments purchased
Accrued investment expense
(133,372)
(408)
(24,901)
(36,262)
64,240,401
INCOME STATEMENT
FROM 1 JANUARY 2008 TO 30 JUNE 2008 (UNAUDITED)
Income
2008
$
Interest on deposits
-
Less: Expenses
Investment expenses
Fund charges
(16,981)
(6)
(16,987)
Net income/(loss) for the year
(16,987)
The accompanying notes from part of these financial statements.
Semi-Annual Fund Report for Policyholders
115
AIA
International HealthCare Fund
BALANCE SHEET
Capital Account
As at 30 JUNE 2008 (UNAUDITED)
Notes
Value of Fund at beginning of the year
2008
$
60,249,338
Amount paid for creation of units
2,284,197
Amount paid for liquidation of units
- Withdrawal/surrender
- Mortality risk and other benefit charges
- Policy fee
(8,024,044)
(193,385)
(74,023)
Net cash into/(out of) Fund
(6,007,255)
Net realised gain/(loss) on sale of investments
Net realised gain/(loss) on foreign exchange
Net unrealised appreciation/(diminution) in value of investments
Net income/(loss) for the year
1,305,906
(16,660)
(11,072,563)
(206,595)
Value of Fund at end of the year
Represented by:
Current Assets
Bank balances and deposits
Unit trusts
44,252,171
2
136,385
44,276,318
44,412,703
Less: Current Liabilities
Amount due to AIA Singapore Life Fund
Forward contract
Due to brokers for investments purchased
Accrued investment expense
(108,835)
(419)
(18,906)
(32,372)
44,252,171
INCOME STATEMENT
Income
FROM 1 JANUARY 2008 TO 30 JUNE 2008 (UNAUDITED)
2008
$
Interest on deposits
Less: Expenses
Investment expenses
Fund charges
34
(16,797)
(189,832)
(206,629)
Net income/(loss) for the year
The accompanying notes from part of these financial statements.
Semi-Annual Fund Report for Policyholders
116
(206,595)
AIA
Acorns of Asia Fund
BALANCE SHEET
Capital Account
As at 30 JUNE 2008 (UNAUDITED)
Notes
Value of Fund at beginning of the year
2008
$
1,136,309,984
Amount paid for creation of units
170,862,252
Amount paid for liquidation of units
- Withdrawal/surrender
- Mortality risk and other benefit charges
- Policy fee
(84,760,175)
(1,176,830)
(421,461)
Net cash into/(out of) Fund
84,503,786
Net realised gain/(loss) on sale of investments
Net unrealised appreciation/(diminution) in value of investments
Net income/(loss) for the year
3,284,385
(218,590,074)
(107,656)
Value of Fund at end of the year
1,005,400,425
Represented by:
Current Assets
Bank balances and deposits
Unit trusts
2
444,808
1,005,655,708
1,006,100,516
Less: Current Liabilities
Amount due to AIA Singapore Life Fund
Due to brokers for investments purchased
Accrued investment expense
(470,707)
(53,100)
(176,284)
1,005,400,425
INCOME STATEMENT
FROM 1 JANUARY 2008 TO 30 JUNE 2008 (UNAUDITED)
Income
2008
$
Interest on deposits
1,365
Less: Expenses
Investment expenses
Fund charges
(98,295)
(10,726)
(109,021)
Net income/(loss) for the year
(107,656)
The accompanying notes from part of these financial statements.
Semi-Annual Fund Report for Policyholders
117
AIA
Portfolio 30 Fund
BALANCE SHEET
Capital Account
As at 30 JUNE 2008 (UNAUDITED)
Notes
Value of Fund at beginning of the year
2008
$
18,096,992
Amount paid for creation of units
2,040,916
Amount paid for liquidation of units
- Withdrawal/surrender
- Mortality risk and other benefit charges
- Policy fee
(1,923,990)
(36,667)
(11,177)
Net cash into/(out of) Fund
69,082
Net realised gain/(loss) on sale of investments
Net realised gain/(loss) on foreign exchange
Net unrealised appreciation/(diminution) in value of investments
Net income/(loss) for the year
137,868
609
(1,280,308)
25,201
Value of Fund at end of the year
17,049,444
Represented by:
Current Assets
Bank balances and deposits
Unit trusts
Forward contract
Amount due from AIA Singapore Life Fund
2
191,140
16,839,398
141
18,765
17,049,444
INCOME STATEMENT
Income
FROM 1 JANUARY 2008 TO 30 JUNE 2008 (UNAUDITED)
2008
$
Interest on deposits
Less: Expenses
Investment expenses
-
25,201
25,201
Net income/(loss) for the year
The accompanying notes from part of these financial statements.
Semi-Annual Fund Report for Policyholders
118
25,201
AIA
Portfolio 50 Fund
BALANCE SHEET
Capital Account
As at 30 JUNE 2008 (UNAUDITED)
Notes
Value of Fund at beginning of the year
2008
$
37,021,961
Amount paid for creation of units
1,688,144
Amount paid for liquidation of units
- Withdrawal/surrender
- Mortality risk and other benefit charges
- Policy fee
(2,802,393)
(111,886)
(39,309)
Net cash into/(out of) Fund
(1,265,444)
Net realised gain/(loss) on sale of investments
Net realised gain/(loss) on foreign exchange
Net unrealised appreciation/(diminution) in value of investments
Net income/(loss) for the year
417,674
6,080
(3,753,845)
(113,427)
Value of Fund at end of the year
32,312,999
Represented by:
Current Assets
Bank balances and deposits
Unit trusts
2
1,404,286
30,990,616
32,394,902
Less: Current Liabilities
Amount due to AIA Singapore Life Fund
Accrued investment expense
(56,155)
(25,748)
32,312,999
INCOME STATEMENT
Income
Interest on deposits
Less: Expenses
Investment expenses
Fund charges
FROM 1 JANUARY 2008 TO 30 JUNE 2008 (UNAUDITED)
2008
$
9
(15,419)
(98,017)
(113,436)
Net income/(loss) for the year
(113,427)
The accompanying notes from part of these financial statements.
Semi-Annual Fund Report for Policyholders
119
AIA
Portfolio 70 Fund
BALANCE SHEET
Capital Account
As at 30 JUNE 2008 (UNAUDITED)
Notes
Value of Fund at beginning of the year
2008
$
43,289,511
Amount paid for creation of units
2,499,456
Amount paid for liquidation of units
- Withdrawal/surrender
- Mortality risk and other benefit charges
- Policy fee
(3,299,020)
(130,435)
(45,144)
Net cash into/(out of) Fund
(975,143)
Net realised gain/(loss) on sale of investments
Net realised gain/(loss) on foreign exchange
Net unrealised appreciation/(diminution) in value of investments
Net income/(loss) for the year
359,181
1,448
(5,583,760)
(128,587)
Value of Fund at end of the year
36,962,650
Represented by:
Current Assets
Bank balances and deposits
Unit trusts
Forward contract
2
606,287
36,547,827
397
37,154,511
Less: Current Liabilities
Amount due to AIA Singapore Life Fund
Due to brokers for investments purchased
Accrued investment expense
(93,550)
(71,853)
(26,458)
36,962,650
INCOME STATEMENT
Income
FROM 1 JANUARY 2008 TO 30 JUNE 2008 (UNAUDITED)
2008
$
Interest on deposits
Less: Expenses
Investment expenses
Fund charges
35
(15,703)
(112,919)
(128,622)
Net income/(loss) for the year
The accompanying notes from part of these financial statements.
Semi-Annual Fund Report for Policyholders
120
(128,587)
AIA
Portfolio 100 Fund
BALANCE SHEET
Capital Account
As at 30 JUNE 2008 (UNAUDITED)
Notes
Value of Fund at beginning of the year
11,763,769
Amount paid for creation of units
466,793
Amount paid for liquidation of units
- Withdrawal/surrender
- Mortality risk and other benefit charges
- Policy fee
(1,010,075)
(41,532)
(15,198)
Net cash into/(out of) Fund
(600,012)
Net realised gain/(loss) on sale of investments
Net realised gain/(loss) on foreign exchange
Net unrealised appreciation/(diminution) in value of investments
Net income/(loss) for the year
62,801
6,088
(2,092,264)
(33,856)
Value of Fund at end of the year
Represented by:
Current Assets
Bank balances and deposits
Unit trusts
Forward contract
2008
$
9,106,526
2
163,590
8,968,077
31
9,131,698
Less: Current Liabilities
Amount due to AIA Singapore Life Fund
Accrued investment expense
(5,283)
(19,889)
9,106,526
INCOME STATEMENT
Income
FROM 1 JANUARY 2008 TO 30 JUNE 2008 (UNAUDITED)
2008
$
Interest on deposits
Less: Expenses
Investment expenses
Fund charges
-
(8,233)
(25,623)
(33,856)
Net income/(loss) for the year
(33,856)
The accompanying notes from part of these financial statements.
Semi-Annual Fund Report for Policyholders
121
AIA
Greater China Balanced Fund
BALANCE SHEET
Capital Account
As at 30 JUNE 2008 (UNAUDITED)
Notes
Value of Fund at beginning of the year
551,771,987
Amount paid for creation of units
70,516,076
Amount paid for liquidation of units
- Withdrawal/surrender
- Mortality risk and other benefit charges
- Policy fee
(39,622,190)
(266,366)
(86,030)
Net cash into/(out of) Fund
30,541,490
Net realised gain / (loss) on sale of investments
Net realised gain / (loss) on foreign exchange
Net unrealised appreciation / (diminution) in value of investments
Net income / (loss) for the year
1,846,016
(161,907)
(110,884,142)
(1,338,365)
Value of Fund at end of the year
Represented by:
Current Assets
Bank balances and deposits
Unit trusts
Due from brokers for investments sold
2008
$
471,775,079
2
157,456
471,925,012
487,499
472,569,967
Less: Current Liabilities
Amount due to AIA Singapore Life Fund
Accrued investment expense
(704,263)
(90,625)
471,775,079
INCOME STATEMENT
FROM 1 JANUARY 2008 TO 30 JUNE 2008 (UNAUDITED)
Income
2008
$
Interest on deposits
1,043
Less: Expenses
Investment expenses
Fund charges
(57,834)
(1,281,574)
(1,339,408)
Net income/(loss) for the year
The accompanying notes from part of these financial statements.
Semi-Annual Fund Report for Policyholders
122
(1,338,365)
AIA
Greater China Equity Fund
BALANCE SHEET
Capital Account
As at 30 JUNE 2008 (UNAUDITED)
Notes
Value of Fund at beginning of the year
607,545,687
Amount paid for creation of units
82,761,084
Amount paid for liquidation of units
- Withdrawal/surrender
- Mortality risk and other benefit charges
- Policy fee
(79,643,144)
(650,950)
(265,277)
Net cash into/(out of) Fund
2,201,713
Net realised gain/(loss) on sale of investments
Net realised gain/(loss) on foreign exchange
Net unrealised appreciation/(diminution) in value of investments
Net income/(loss) for the year
10,569,528
49,458
(171,399,850)
(1,360,376)
Value of Fund at end of the year
Represented by:
Current Assets
Bank balances and deposits
Unit trusts
Due from brokers for investments sold
2008
$
447,606,160
2
146,771
447,932,475
727,728
448,806,974
Less: Current Liabilities
Amount due to AIA Singapore Life Fund
Accrued investment expense
(1,105,070)
(95,744)
447,606,160
INCOME STATEMENT
FROM 1 JANUARY 2008 TO 30 JUNE 2008 (UNAUDITED)
Income
2008
$
Interest on deposits
2,111
Less: Expenses
Investment expenses
Fund charges
(59,996)
(1,302,491)
(1,362,487)
Net income/(loss) for the year
(1,360,376)
The accompanying notes from part of these financial statements.
Semi-Annual Fund Report for Policyholders
123
AIA
India Equity Fund
BALANCE SHEET
Capital Account
As at 30 JUNE 2008 (UNAUDITED)
Notes
2008
$
Value of Fund at beginning of the year
182,200,425
Amount paid for creation of units
117,586,952
Amount paid for liquidation of units
- Withdrawal/surrender
- Mortality risk and other benefit charges
- Policy fee
(112,708,235)
(567,876)
(270,094)
Net cash into/(out of) Fund
4,040,747
Net realised gain/(loss) on sale of investments
Net realised gain/(loss) on foreign exchange
Net unrealised appreciation/(diminution) in value of investments
Net income/(loss) for the year
10,498,119
64,263
(88,108,040)
(361,820)
Value of Fund at end of the year
108,333,694
Represented by:
Current Assets
Bank balances and deposits
Unit trusts
Forward contract
Due from brokers for investments sold
2
434,229
108,392,230
1,314
11,962,427
120,790,200
Less: Current Liabilities
Amount due to AIA Singapore Life Fund
Accrued investment expense
(12,418,061)
(38,445)
108,333,694
INCOME STATEMENT
FROM 1 JANUARY 2008 TO 30 JUNE 2008 (UNAUDITED)
Income
2008
$
Interest on deposits
6,903
Less: Expenses
Investment expenses
Fund charges
(19,235)
(349,488)
(368,723)
Net income/(loss) for the year
The accompanying notes from part of these financial statements.
Semi-Annual Fund Report for Policyholders
124
(361,820)
AIA
India Opportunities Fund
BALANCE SHEET
Capital Account
As at 30 JUNE 2008 (UNAUDITED)
Notes
2008
$
Value of Fund at beginning of the year
368,250,545
Amount paid for creation of units
319,617,752
Amount paid for liquidation of units
- Withdrawal/surrender
- Mortality risk and other benefit charges
- Policy fee
(294,672,197)
(149,627)
(43,495)
Net cash into/(out of) Fund
24,752,433
Net realised gain/(loss) on sale of investments
Net unrealised appreciation/(diminution) in value of investments
Net income/(loss) for the year
17,406,162
(141,687,735)
(49,417)
Value of Fund at end of the year
Represented by:
Current Assets
Bank balances and deposits
Unit trusts
268,671,988
2
33,774,303
269,682,558
303,456,861
Less: Current Liabilities
Amount due to AIA Singapore Life Fund
Due to brokers for investments purchased
Accrued investment expense
(34,587,812)
(120,000)
(77,061)
268,671,988
INCOME STATEMENT
FROM 1 JANUARY 2008 TO 30 JUNE 2008 (UNAUDITED)
Income
2008
$
Interest on deposits
4,546
Less: Expenses
Investment expenses
Fund charges
(51,217)
(2,746)
(53,963)
Net income/(loss) for the year
(49,417)
The accompanying notes from part of these financial statements.
Semi-Annual Fund Report for Policyholders
125
AIA
India Balanced Fund
BALANCE SHEET
Capital Account
As at 30 JUNE 2008 (UNAUDITED)
Notes
2008
$
Value of Fund at beginning of the year
376,675,651
Amount paid for creation of units
105,743,116
Amount paid for liquidation of units
- Withdrawal/surrender
- Mortality risk and other benefit charges
- Policy fee
(10,993,269)
(191,627)
(52,263)
Net cash into/(out of) Fund
94,505,957
Net realised gain/(loss) on sale of investments
Net unrealised appreciation/(diminution) in value of investments
Net income/(loss) for the year
194,567
(95,669,297)
(412,629)
Value of Fund at end of the year
375,294,249
Represented by:
Current Assets
Bank balances and deposits
Unit trusts
2
949,757
374,389,511
375,339,268
Less: Current Liabilities
Amount due to AIA Singapore Life Fund
Accrued investment expense
(9,625)
(35,394)
375,294,249
INCOME STATEMENT
FROM 1 JANUARY 2008 TO 30 JUNE 2008 (UNAUDITED)
Income
2008
$
Interest on deposits
8,885
Less: Expenses
Investment expenses
Fund charges
(43,053)
(378,461)
(421,514)
Net income/(loss) for the year
The accompanying notes from part of these financial statements.
Semi-Annual Fund Report for Policyholders
126
(412,629)
AIA
Japan Balanced Fund
BALANCE SHEET
Capital Account
As at 30 JUNE 2008 (UNAUDITED)
Notes
Value of Fund at beginning of the year
2008
$
28,723,398
Amount paid for creation of units
1,315,245
Amount paid for liquidation of units
- Withdrawal/surrender
- Mortality risk and other benefit charges
- Policy fee
(4,851,039)
(25,138)
(4,454)
Net cash into/(out of) Fund
(3,565,386)
Net realised gain/(loss) on sale of investments
Net realised gain/(loss) on foreign exchange
Net unrealised appreciation/(diminution) in value of investments
Net income/(loss) for the year
(373,610)
7,802
(2,008,499)
(69,419)
Value of Fund at end of the year
22,714,287
Represented by:
Current Assets
Bank balances and deposits
Unit trusts
Forward contract
Due from brokers for investments sold
2
29,400
22,702,965
406
50,000
22,782,771
Less: Current Liabilities
Amount due to AIA Singapore Life Fund
Accrued investment expense
(48,517)
(19,967)
22,714,287
INCOME STATEMENT
Income
FROM 1 JANUARY 2008 TO 30 JUNE 2008 (UNAUDITED)
2008
$
Interest on deposits
Less: Expenses
Investment expenses
Fund charges
-
(7,393)
(62,026)
(69,419)
Net income/(loss) for the year
(69,419)
The accompanying notes from part of these financial statements.
Semi-Annual Fund Report for Policyholders
127
AIA
Japan Equity Fund
BALANCE SHEET
Capital Account
As at 30 JUNE 2008 (UNAUDITED)
Notes
Value of Fund at beginning of the year
2008
$
28,810,736
Amount paid for creation of units
1,768,650
Amount paid for liquidation of units
- Withdrawal/surrender
- Mortality risk and other benefit charges
- Policy fee
(5,654,774)
(55,366)
(14,796)
Net cash into/(out of) Fund
(3,956,285)
Net realised gain/(loss) on sale of investments
Net realised gain/(loss) on foreign exchange
Net unrealised appreciation/(diminution) in value of investments
Net income/(loss) for the year
(842,166)
15,707
(3,352,652)
(64,084)
Value of Fund at end of the year
20,611,256
Represented by:
Current Assets
Bank balances and deposits
Unit trusts
Forward contract
Due from brokers for investments sold
2
80,054
20,617,621
140
728
20,698,543
Less: Current Liabilities
Amount due to AIA Singapore Life Fund
Accrued investment expense
(66,597)
(20,690)
20,611,256
INCOME STATEMENT
Income
FROM 1 JANUARY 2008 TO 30 JUNE 2008 (UNAUDITED)
2008
$
Interest on deposits
Less: Expenses
Investment expenses
Fund charges
-
(6,211)
(57,873)
(64,084)
Net income/(loss) for the year
The accompanying notes from part of these financial statements.
Semi-Annual Fund Report for Policyholders
128
(64,084)
AIA
Emerging Markets Balanced Fund
BALANCE SHEET
Capital Account
As at 30 JUNE 2008 (UNAUDITED)
Notes
2008
$
Value of Fund at beginning of the year
324,141,784
Amount paid for creation of units
107,536,147
Amount paid for liquidation of units
- Withdrawal/surrender
- Mortality risk and other benefit charges
- Policy fee
(23,032,051)
(173,724)
(46,968)
Net cash into/(out of) Fund
84,283,404
Net realised gain/(loss) on sale of investments
Net realised gain/(loss) on foreign exchange
Net unrealised appreciation/(diminution) in value of investments
Net income/(loss) for the year
59,195
(334,135)
(35,592,996)
(917,080)
Value of Fund at end of the year
371,640,172
Represented by:
Current Assets
Bank balances and deposits
Unit trusts
Amount due from AIA Singapore Life Fund
2
344,657
371,609,248
2,406
371,956,311
Less: Current Liabilities
Forward contract
Due to brokers for investments purchased
Accrued investment expense
(4,838)
(261,646)
(49,655)
371,640,172
INCOME STATEMENT
FROM 1 JANUARY 2008 TO 30 JUNE 2008 (UNAUDITED)
Income
2008
$
Interest on deposits
3,499
Less: Expenses
Investment expenses
Fund charges
(39,067)
(881,512)
(920,579)
Net income/(loss) for the year
(917,080)
The accompanying notes from part of these financial statements.
Semi-Annual Fund Report for Policyholders
129
AIA
Emerging Markets Equity Fund
BALANCE SHEET
Capital Account
As at 30 JUNE 2008 (UNAUDITED)
Notes
Value of Fund at beginning of the year
2008
$
360,281,661
Amount paid for creation of units
75,659,834
Amount paid for liquidation of units
- Withdrawal/surrender
- Mortality risk and other benefit charges
- Policy fee
(44,020,885)
(386,204)
(163,912)
Net cash into/(out of) Fund
31,088,833
Net realised gain/(loss) on sale of investments
Net realised gain/(loss) on foreign exchange
Net unrealised appreciation/(diminution) in value of investments
Net income/(loss) for the year
1,404,888
(163,958)
(54,988,083)
(895,510)
Value of Fund at end of the year
336,727,831
Represented by:
Current Assets
Bank balances and deposits
Unit trusts
2
327,939
336,881,432
337,209,371
Less: Current Liabilities
Amount due to AIA Singapore Life Fund
Forward contract
Due to brokers for investments purchased
Accrued investment expense
(375,670)
(2,234)
(46,552)
(57,084)
336,727,831
INCOME STATEMENT
FROM 1 JANUARY 2008 TO 30 JUNE 2008 (UNAUDITED)
Income
2008
$
Interest on deposits
2,123
Less: Expenses
Investment expenses
Fund charges
(41,694)
(855,939)
(897,633)
Net income/(loss) for the year
The accompanying notes from part of these financial statements.
Semi-Annual Fund Report for Policyholders
130
(895,510)
AIA
Global Resources Fund
BALANCE SHEET
Capital Account
As at 30 JUNE 2008 (UNAUDITED)
Notes
2008
$
Value of Fund at beginning of the year
350,272,916
Amount paid for creation of units
445,224,940
Amount paid for liquidation of units
- Withdrawal/surrender
- Mortality risk and other benefit charges
- Policy fee
(297,769,447)
(412,646)
(167,989)
Net cash into/(out of) Fund
146,874,857
Net realised gain on sale of investments
Net unrealised appreciation/(diminution) in value of investments
Net (loss) for the period
18,276,984
(3,624,340)
(61,249)
Value of Fund at end of the year
Represented by:
Current Assets
Bank balances and deposits
Unit trusts
Due from brokers for investments sold
511,739,168
2
2,492,085
510,595,969
10,954,485
524,042,539
Less: Current Liabilities
Amount due to AIA Singapore Life Fund
Forward contract
Accrued investment expense
(12,267,523)
(310)
(35,538)
511,739,168
INCOME STATEMENT
Income
FROM 1 JANUARY 2008 TO 30 JUNE 2008 (UNAUDITED)
2008
$
Interest on deposits
Less: Expenses
Investment expenses
Fund charges
-
(43,541)
(17,708)
(61,249)
Net income/(loss) for the year
(61,249)
The accompanying notes from part of these financial statements.
Semi-Annual Fund Report for Policyholders
131
NOTES TO THE FINANCIAL STATEMENTS
As at 30 JUNE 2008
These notes form an integral part of and should be read in conjunction with the financial statements.
1. SIGNIFICANT ACCOUNTING POLICIES
Accounting Convention
The financial statements, expressed in Singapore dollars, are prepared in accordance with the historical cost convention, modified by the revaluation of investments
at market prices.
Income and Expenditure Recognition
Dividends are recognised as and when received. Other income and expenses are recognised on an accrual basis.
Investments
Quoted equities are valued at the last transacted price and fixed income securities are valued at the closing bid price prevailing at the balance sheet date. Unit trusts
are valued at prices quoted by the fund managers at the balance sheet date. The difference between the valuation and the original cost is included in the Capital
Account
Disposal of Investments
The cost of disposal of investment was determined on the weighted average cost basis. All gains and losses are taken up in the Capital Account.
Financial Derivatives
Financial derivatives are financial instruments which include swaps and options. Financial derivatives outstanding at the balance sheet date are measured at their
respective fair values provided by a financial service provider. The resulting unrealised gains or losses are taken to the Capital Account.
Foreign Currencies
Foreign currency monetary assets and liabilities are translated at exchange rates prevailing at balance sheet date. Foreign currency transactions are translated at
exchange rates on transaction dates. Differences in exchange are included in the Capital Account.
Mortality Risk and Other Benefit Charges, Policy Fees and Administration Fees
The mortality risk and other benefit charges, policy fees and administration fees are charged to the Capital Account.
Semi-Annual Fund Report for Policyholders
132
NOTES TO THE FINANCIAL STATEMENTS
2. EQUITY SHARES AND UNIT TRUSTS
As at 30 JUNE 2008
2008
$
AIA Growth Fund
Equity shares, at cost
357,505,317
Equity shares, at market value
471,074,956
AIA Regional Equity Fund
Equity shares, at cost
541,963,162
Equity shares, at market value
612,943,707
AIA Regional Fixed Income Fund
Equity shares, at cost
141,752,620
Equity shares, at market value
179,351,954
AIA Global Equity Fund
Unit trusts, at cost
36,359,266
Unit trusts, at market value
44,580,169
AIA Global Bond Fund
Unit trusts, at cost
8,552,601
Unit trusts, at market value
9,780,175
AIA U.S. Equity Fund
Unit trusts, at cost
19,117,050
Unit trusts, at market value
16,365,077
AIA Global Balanced Fund
Unit trusts, at cost
232,526,195
Unit trusts, at market value
248,144,404
AIA European Equity Fund
Unit trusts, at cost
5,503,924
Unit trusts, at market value
5,650,106
AIA Global Technology Fund
Unit trusts, at cost
52,450,552
Unit trusts, at market value
64,269,900
Semi-Annual Fund Report for Policyholders
133
NOTES TO THE FINANCIAL STATEMENTS
2. EQUITY SHARES AND UNIT TRUSTS
As at 30 JUNE 2008
2008
$
AIA International HealthCare Fund
Unit trusts, at cost
36,677,228
Unit trusts, at market value
44,276,318
AIA Acorns of Asia Fund
Unit trusts, at cost
Unit trusts, at market value
804,310,002
1,005,655,708
AIA Portfolio 30 Fund
Unit trusts, at cost
15,352,401
Unit trusts, at market value
16,839,398
AIA Portfolio 50 Fund
Unit trusts, at cost
28,344,710
Unit trusts, at market value
30,990,616
AIA Portfolio 70 Fund
Unit trusts, at cost
34,431,072
Unit trusts, at market value
36,547,827
AIA Portfolio 100 Fund
Unit trusts, at cost
8,800,382
Unit trusts, at market value
8,968,077
AIA Greater China Balanced Fund
Unit trusts, at cost
366,915,566
Unit trusts, at market value
471,925,012
AIA Greater China Equity Fund
Unit trusts, at cost
322,466,732
Unit trusts, at market value
447,932,475
Semi-Annual Fund Report for Policyholders
134
NOTES TO THE FINANCIAL STATEMENTS
2. EQUITY SHARES AND UNIT TRUSTS
As at 30 JUNE 2008
2008
$
AIA India Balanced Fund
Unit trusts, at cost
387,922,706
Unit trusts, at market value
374,389,511
AIA India Equity Fund
Unit trusts, at cost
155,823,734
Unit trusts, at market value
108,392,230
AIA India Opportunities Fund
Unit trusts, at cost
291,186,631
Unit trusts, at market value
269,682,558
AIA Japan Balance Fund
Unit trusts, at cost
24,124,004
Unit trusts, at market value
22,702,965
AIA Japan Equity Fund
Unit trusts, at cost
25,337,929
Unit trusts, at market value
20,617,621
AIA Emerging Markets Equity Fund
Unit trusts, at cost
266,951,777
Unit trusts, at market value
336,881,432
AIA Emerging Markets Balanced Fund
Unit trusts, at cost
336,867,329
Unit trusts, at market value
371,609,248
AIA Global Resources Fund
Unit trusts, at cost
474,854,810
Unit trusts, at market value
510,595,969
Semi-Annual Fund Report for Policyholders
135
NOTES TO THE FINANCIAL STATEMENTS
As at 30 JUNE 2008
3. FIXED INCOME SECURITIES
2008
$
AIA Growth Fund
Fixed income securities, at cost
152,843,907
Fixed income securities, at market value
148,980,313
AIA Regional Fixed Income Fund
Fixed income securities, at cost
653,160,912
Fixed income securities, at market value
646,876,862
4. TAXATION
No tax is payable on the gains accruing to the policyholders.
5. BID AND OFFER VALUE
Bid price
$
Offer price
$
2008
$
AIA Growth Fund
2.003
2.109
340,483,531
AIA Regional Equity Fund
3.563
3.751
177,841,551
AIA Regional Fixed Income Fund
1.564
1.647
599,050,631
AIA Money Market Fund
1.044
1.099
145,341,214
AIA Global Equity Fund
0.823
0.867
54,083,786
AIA Global Bond Fund
1.059
1.115
9,228,606
AIA U.S. Equity Fund
0.468
0.493
34,975,908
AIA Global Balanced Fund
0.993
1.046
251,042,451
AIA European Equity Fund
0.924
0.973
6,130,225
AIA Global Technology Fund
0.528
0.556
122,411,108
AIA International HealthCare Fund
0.846
0.891
52,250,560
AIA Acorns of Asia Fund
1.932
2.034
520,192,960
AIA Portfolio 30 Fund
1.148
1.209
14,792,468
AIA Portfolio 50 Fund
1.072
1.129
30,111,410
AIA Portfolio 70 Fund
1.016
1.070
36,357,543
AIA Portfolio 100 Fund
0.930
0.979
9,786,398
AIA Greater China Balanced Fund
1.627
1.713
289,749,186
AIA Greater China Equity Fund
1.980
2.085
225,917,957
AIA India Balanced Fund
1.064
1.120
352,258,422
AIA India Equity Fund
1.257
1.324
86,106,058
AIA India Opportunities Fund
1.027
1.082
261,455,785
AIA Japan Balanced Fund
0.799
0.841
28,388,964
AIA Japan Equity Fund
0.658
0.693
31,278,540
AIA Emerging Markets Equity Fund
1.122
1.182
299,745,843
AIA Emerging Markets Balanced Fund
1.073
1.130
346,105,718
AIA Global Resources Fund
1.348
1.419
379,574,811
Semi-Annual Fund Report for Policyholders
136
SemiAnnual
Funds
Report
(January - June 2008)
For Policyholders