Amundi Bond Global Aggregate Fund - Amundi Malaysia
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Amundi Bond
Global Aggregate
Unaudited Quarterly Report
Fund 30 June 2021AMUNDI BOND GLOBAL AGGREGATE FUND
CONTENTS PAGE(S)
GENERAL INFORMATION ABOUT THE FUND 3
MANAGER’S REPORT 4-5
UNAUDITED STATEMENT OF FINANCIAL POSITION 6
UNAUDITED STATEMENT OF COMPREHENSIVE INCOME 7
UNAUDITED STATEMENT OF CHANGES IN NET ASSETS
8
ATTRIBUTABLE TO UNIT HOLDERS
UNAUDITED STATEMENT OF CASH FLOWS 9
NOTES TO THE UNAUDITED FINANCIAL STATEMENTS 10 - 13
STATEMENT BY THE MANAGER
14
2AMUNDI BOND GLOBAL AGGREGATE FUND
GENERAL INFORMATION ABOUT THE FUND
Launch and Commencement Date
The Amundi Bond Global Aggregate Fund (the “Fund”) was launched on 3 September 2015
and commenced on 1 March 2016.
Fund Name, Category, Type
Fund Name Amundi Bond Global Aggregate Fund
Fund Category Wholesale - Feeder fund (fixed income)
Fund Type Growth and income
Investment Objective
The Fund aims to achieve investment returns by investing in the Target Fund which aims to
outperform the Bloomberg Barclays Global Aggregate Hedged (USD) index.
Investment Policy and Strategy
The Fund will invest a minimum of 90% of the net asset value (“NAV”) of the Fund in the Target
Fund; the balance of the Fund will be invested in liquid assets.
As the Fund is a wholesale feeder fund, the investments of the Fund will consist of a single
collective investment scheme, i.e. the Target Fund. During the last quarter of 2019, the Target
Fund’s name was changed to ‘Amundi Funds Global Aggregate Bond’ in line with the changes
to its prospectus and this was reflected accordingly in the First Supplementary Information
Memorandum issued on 20 th September 2019 by Amundi Malaysia Sdn. Bhd. (”the Manager”).
The Manager will monitor the investment objective of the Target Fund to ensure that it is
consistent with the investment objective of the Fund. In view of the aforesaid, the Fund will not
undertake any temporary defensive position. Accordingly, the Fund’s performance will be
directly correlated to the performance of the Target Fund subject to the Fund’s currency
hedging strategy being successful.
As the Target Fund is denominated in United States Dollar, the Manager intends to employ
hedging by investing in currency forwards to reduce the Fund’s exposure to foreign exchange
fluctuations.
If and when the Manager considers the investment in the Target Fund is unable to meet the
objective of the Fund, the Manager may choose to replace the Target Fund with another
collective investment scheme that is deemed more appropriate. The Manager will seek unit
holders’ approval before any such changes are made.
The asset allocation of the Fund will be as follows:
Minimum 90% of the NAV of the Fund will be invested in the Target Fund;
Up to 10% of the NAV of the Fund will be invested in liquid assets.
Distribution Policy and Distribution Mode
In line with the distribution policy of the Target Fund, it is intended that the Fund will distribute
income at least once a year, subject to availability of income. Distribution will be reinvested as
additional units of the Fund at the NAV per unit on the distribution payment date
3AMUNDI BOND GLOBAL AGGREGATE FUND
MANAGER’S REPORT
Market Review
The quarter saw a confirmation of the strong global growth momentum as developed
economies further reopened. The economic rebound in many countries may have been more
rapid than feared a year ago, but there are still many risks to the outlook for both growth and
inflation. COVID-19 remains the biggest downside risk: until vaccines become more
widespread around the world and the risk of new variants, some countries will face restrictions
on domestic mobility and disruptions to activity. Globally, any activity that involves people
crossing international borders is still severely restricted.
In the US, the Biden’s administration outlined two additional spending packages: the $2.3
trillion American Jobs Plan (for infrastructure), and the $1.8 trillion American Families Plan (for
more equitable recovery) on the top of many key tax credits from the Rescue bill being
extended or made permanent. The period under review ended on very strong economic data.
In the US, both manufacturing and services PMIs rose to their highest levels on record,
highlighting a buoyant consumer spending and rising inputs costs, both precursors of
inflationary pressure. In addition, headline inflation surprised to 4.2% year-on-year in May and
5.0% in June. Late in the quarter, the FOMC made its first hawkish turn, with a signal of slower
asset purchases ahead and an indication of possible rate rises in 2023.
In Europe, employment also improved with Eurozone employment rate edging lower from 8.1%
in April to 7.9% in May. After touching 2.0% in April, European consumer price inflation fell
back down to 1.9% in May, reflecting that in many places precautions have risen slightly amid
cases of the Delta Covid-19 variant. On the other hand, the US treasury vs. German Bund
spread tightened, notably with 10 year US Treasuries yields dropping from 1.73% to 1.47%.
Through the quarter, government bond yields saw mixed performance with 10 year US treasury
yields falling by 27 bps to end the month at 1.47%. Australian 10 year government bond yields
also enjoyed strong performance as they fell by 26 bps over the quarter. In Europe,
government bond yields generally rose with the German 10 year bond yield rising by 9 bps to -
0.21%. In the periphery regions, Italy and Portugal saw their yields rise by 15 bps and 16 bps
respectively. Most developed markets currencies appreciated against the USD with the
exception of the NOK, NZD, AUD and JPY.
Review of the Fund Performance During The Period
Performance calculated up to 30 June 2021
Amundi Bond Global
Aggregate Fund 3 Months 1 year Since 4 November 2016
RM class 1.18% 4.75% 20.17%
USD class 1.05% 4.20% 14.75%
Bloomberg Barclays Global
Aggregate Hedged (USD) 0.98% 0.08% 16.17%
index.
NA = Not Available
Source: Amundi Malaysia Sdn Bhd
4AMUNDI BOND GLOBAL AGGREGATE FUND
Performance Commentary
During the second quarter of 2021, the returns of the portfolio were positive and above the
benchmark. The key drivers of relative returns are discussed below.
G10 Sovereign bond positions made a neutral contribution in Q2 2021:
Duration: overall underweight exposure to duration was negative as key market yields
bucked the expected trend and fell.
Country allocation: a relative preference for US treasuries versus German bunds was the
largest contributor over the quarter as US treasuries significantly outperformed German
bunds
Yield curve: a barbell strategy on the USD curve (overweight 2 years and overweight 30
years) added as 30 year rates saw a strong rally.
Bond selection: overweight allocations to Italy and Spain detracted as they
underperformed Germany. Inflation linked treasuries also underperformed as inflation
expectations were pared back.
Credit positions made a positive contribution to relative performance in Q2 2021:
Credit: yield spreads on investment grade corporate bonds versus government bonds fell
over the quarter as global corporate bonds outperformed equivalent government bonds,
adding to relative returns. Lower tier financial bonds also enjoyed strong performance
versus government bonds.
Emerging markets: both hard currency and local currency denominated emerging markets
bonds enjoyed strong absolute and relative performance versus developed markets
government bonds, making them contributors to returns.
Currency positions were positive contributors to relative performance in Q2 2021:
USD exposure: underweight the USD earlier in the period, and then overweight exposure
later in the period added to returns.
Inter-bloc (CAD and AUD vs. JPY and EUR) allocations: negative contribution, as the
AUD was the worst developed markets currency performer.
Intra bloc currency allocations: overweight NOK vs. the CHF and GBP was negative as
the NOK was the second worst developed markets currency performer.
Emerging markets currencies: Selective allocations to emerging markets currencies like
BRL, MXN, RUB, INR, IDR and PLN added as they appreciated later in the quarter against
a basket of developed markets currencies.
Global growth forecasts have been revised up from 5.6% to 5.9% for 2021 and from 4.1% to
4.2% for 2022, with all of that increase coming from the advanced economies in Europe, North
America and Asia.
In the US, over the past year, the enormous size of the US fiscal stimulus has been larger than
anywhere else in the world, but the bulk of the latest third package delivered by the Biden
administration, the American Rescue Plan, largely affected the economy in the first half of this
year. Its spending will be spread over the rest of the decade and the President is hoping they
will be partly paid for by taxes on companies and higher earners. The Fed fiscal policy is
expected to start tapering its asset purchases in December 2021. Rates are not expected to
rise before the end of 2022 and could start increasing around mid-2023.
5AMUNDI BOND GLOBAL AGGREGATE FUND
In the Eurozone, there will be less of a step down in the fiscal accommodation next year, both
because it was much smaller than in the US in 2021 and because of the EUR750bn Next
Generation EU fund (NGEU) in 2022. In emerging markets, the stimulus packages have
generally been smaller than in developed markets economies, with a couple of exceptions
Brazil and Russia, countries with higher inflation expectations and that have also raised rates
this year by 225 bps and 125 bps, respectively.
COVID-19 is still the main downside risk; restrictions imposed in response to the latest wave
have affected the most the growth forecast in Southeast Asian countries and India. Vaccine
rollout divergences continue, though, which means differing vulnerabilities to the Delta variant.
In Europe, the vaccination pace has been quite strong, a high proportion of the population is
already vaccinated in the US, UK and Israel, whereas in Africa, supply is a major issue, with
less than 2% of the population having been vaccinated. On the flip side, the biggest upside risk
is still a more rapid drawdown of the huge stock of savings accumulated over the past year.
That could mean a much stronger consumer rebound, adding to the demand pressures on
inflation.
Portfolio Positioning of the Target Fund
Headline duration remained at around half of the benchmark duration, with the bulk of the
underweight coming from net-short allocations to German bunds. The Investment Manager
remained with an underweight allocation to US treasuries, although this is also a relative
preference for US treasuries over German bunds. In Europe, Italy and France are the main
overweight positions after the Investment Manager cut most of its’ Spain overweight allocation.
Compared to the last quarter, the Investment Manager added more exposure to inflation linked
bonds and increased exposure from 2.8% to 6.3% spread across US, German and Australian
inflation linked government bonds. This represents just over 20% of the total portfolio duration
risk. Overweight exposure to high quality investment grade corporate bond exposure remained
stable at around 45% compared to a benchmark weight of 21% as the outlook continues to
improve. Within the Investment Manager’s emerging markets exposure, exposure was further
reduced to 10%, split 6.5% in hard currency, 1.7% in local currency denominated sovereign
bonds and 1.8% in emerging markets quasi-sovereign bonds, this partly reflects reductions due
to ESG rebalancing, following the fund’s approval as SFDR Article 8. Within currencies, the
Investment Manager actively managed the USD exposure, and the Investment Manager went
from an underweight allocation at the beginning to an overweight allocation at the end of the
quarter. The Investment Manager continues to hold long-positions in currencies like the NOK
and CAD that could benefit from rising oil prices as the recovery takes hold. The Investment
Manager retains exposure to high yielding emerging markets currencies like the BRL, RUB,
INR and MXN where the Investment Manager expects to see inflation and growth recover at
well above an average pace.
6AMUNDI BOND GLOBAL AGGREGATE FUND
UNAUDITED STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2021
30/06/2021 30/06/2020
Note RM RM
ASSETS
Investment 1 7,608,856 16,097,889
Forward foreign currency contracts 2 13,173 (26,794)
Cash at bank 22,216 257,246
Amount due from Manager - -
Amount due from Brokers - -
TOTAL ASSETS 7,644,245 16,328,341
LIABILITIES
Amount due to Manager 7,692 16,093
Amount due to Brokers - -
Amount due to Trustee 128 268
Other payables and accruals 13,177 13,203
TOTAL LIABILITIES (EXCLUDING NET ASSETS
ATTRIBUTABLE TO UNIT HOLDERS) 20,997 29,564
NET ASSETS ATTRIBUTABLE TO UNIT HOLDERS 7,623,248 16,298,777
REPRESENTED BY:
UNITHOLDERS' CAPITAL 6,461,232 15,353,544
(ACCUMULATED LOSSES) / RETAINED EARNINGS 1,162,016 945,233
7,632,248 16,298,777
NET ASSETS ATTRIBUTABLE TO UNITHOLDERS
- RM CLASS 5,098,534 9,437,927
- USD CLASS 2,524,714 6,860,850
7,623,248 16,298,777
UNITS IN CIRCULATION
- RM CLASS 4,383,915 8,399,068
- USD CLASS 561,017 1,520,964
4,944,932 9,920,032
NET ASSET VALUE PER UNIT IN MYR
- RM CLASS 1.1630 1.1237
- USD CLASS 4.8264 4.5109
NET ASSET VALUE PER UNIT IN RESPECTIVE
CURRENCIES
- RM CLASS 1.1630 1.1237
- USD CLASS 1.0844 1.0533
The accompanying notes form an integral part of the financial statements.
7AMUNDI BOND GLOBAL AGGREGATE FUND
UNAUDITED STATEMENT OF COMPREHENSIVE INCOME FOR THE FINANCIAL PERIOD
ENDED 30 JUNE 2021
01/04/2021 01/04/2020
TO TO
30/06/2021 30/06/2020
RM RM
INVESTMENT INCOME
Net gain/(loss) from investment:
Financial assets at fair value through profit or loss
45,819
(“FVTPL”) -
Net realised foreign currency exchange gain/(loss) (2,026) (107)
Net realised gain/(loss) on forward foreign currency
(6,199)
contracts 256,141
Net unrealised gain/(loss) foreign currency exchange
64,680
gain 876,176
Net unrealised gain/(loss) on forward foreign currency
18,446
contracts (160,621)
Gross Income 120,720 971,589
EXPENDITURE
Manager’s fee 24,584 48,401
Trustee’s fee 410 807
Auditors’ remuneration 2,356 2,350
Tax agent’s fee 873 870
Other expenses 456 6
Total Expenditure 28,679 52,434
PROFIT / (LOSS) BEFORE FINANCE COST AND
92,041 919,155
TAXATION
Finance Cost (excluding increase in Net Asset
Attributable
to unitholders
- Class MYR -
- Class USD -
PROFIT / (LOSS) BEFORE TAXATION 92,041 919,155
Taxation - -
PROFIT / (LOSS) AFTER TAXATION AND TOTAL
COMPREHENSIVE INCOME FOR THE PERIOD 92,041 919,155
Profit after taxation is made up as follows:
Realised amount 8,915 (379,949)
Unrealised amount 83,126 1,299,104
92,041 919,155
The accompanying notes form an integral part of the financial statements.
8AMUNDI BOND GLOBAL AGGREGATE FUND
UNAUDITED STATEMENT OF CHANGES IN NET ASSETS ATTRIBUTABLE TO
UNITHOLDERS FOR THE FINANCIAL PERIOD ENDED 30 JUNE 2021
Retained
Unit holders' Total
earnings/
(Accumulated Net Asset
Capital
losses) value
RM RM RM
Balance as at 01 April 2021 8,089,353 1,069,975 9,159,328
Movement in Net Asset Value:
Total comprehensive income for
the financial period - 92,041 92,041
Creation of units:
- RM Class - - -
- USD Class - - -
Cancellation of units:
- RM Class (932,214) - (932,214)
- USD Class (695,907) - (695,907)
Reinvestment of distributions:
- RM Class - - -
- USD Class - - -
Distributions:
- RM Class - - -
- USD Class - - -
Balance as at 30 June 2021 6,461,232 1,162,016 7,632,248
The accompanying notes form an integral part of the financial statements.
9AMUNDI BOND GLOBAL AGGREGATE FUND
UNAUDITED STATEMENT OF CASH FLOWS FOR THE FINANCIAL PERIOD ENDED
30 JUNE 2021
01/04/2021 01/04/2020
TO TO
30/06/2021 30/06/2020
RM RM
CASH FLOWS FROM OPERATING AND INVESTING
ACTIVITIES
Proceeds from sale of investments 1,576,394 -
Dividend received - -
Purchase of investment - (51,851)
Manager’s fee paid (26,444) (48,897)
Trustee fee paid (441) (815)
Payment for other expenses (599) 52,405
Net realised foreign currency exchange gain/(loss) (6,199) (1,254)
Net realised gain/(loss) on forward foreign currency
(3,313)
contracts 256,140
Net cash used in operating and investing activities 1,539,398 205,728
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from creation of units 49,368 44,166
Payment for cancellation of units (1,803,270) (444,999)
Distribution paid - -
Net cash generated from financing activities (1,753,902) (400,833)
NET INCREASE/DECREASE IN CASH AND CASH
(214,504)
EQUIVALENTS (195,105)
CASH AND CASH EQUIVALENTS AT BEGINNING OF
FINANCIAL PERIOD 236,720 452,351
CASH AND CASH EQUIVALENTS AT END OF
FINANCIAL PERIOD 22,216 257,246
Cash and cash equivalents comprise:
Cash at bank 22,216 257,246
The accompanying notes form an integral part of the financial statements.
10AMUNDI BOND GLOBAL AGGREGATE FUND
NOTES TO THE UNAUDITED FINANCIAL STATEMENTS AS AT 30 JUNE 2021
1. INVESTMENT
30/06/2021 30/06/2020
RM RM
Financial assets at
FVTPL:
Foreign collective
investment scheme 7,608,856 16,097,889
01/04/2021 01/04/2020
TO TO
30/06/2021 30/06/2020
RM RM
Net gain/(loss) on financial assets at FVTPL
comprised:
− Net realised gain/(loss) on sale of investments 131,354 62,966
− Net realised gain/(loss) on foreign currency
exchange 1,621 13,980
− Net realised gain/(loss) on foreign currency exchange –
forward 86,762 (262,159)
− Net unrealised gain/(loss) on changes in fair value of
investment 61,898 361,988
− Net unrealised gain/(loss) on foreign currency fluctuation
of investment denominated in foreign currency –
Investment & Forward (10,488) (171,433)
271,147 5,342
Financial assets at FVTPL as at 30/06/2021 as are
follows:
Fair value as a
Fair value percentage of
Foreign collective No. Purchase as at net asset value
investment scheme of units cost 30/06/2021 as at 30/06/2021
RM RM %
Amundi Bond
Global Aggregate
1,637 7,282,689 7,608,856 99.81
Funds
Excess of fair value over cost 326,167
11AMUNDI BOND GLOBAL AGGREGATE FUND
NOTES TO THE UNAUDITED FINANCIAL STATEMENTS AS AT 30 JUNE 2021
(CONTINUED)
1. INVESTMENT (Continued)
Financial assets at FVTPL as at 31/03/2020 as are
follows:
Fair value as a
Fair value percentage of
Foreign collective No. Purchase as at net asset value
investment scheme of units cost 30/06/2020 as at 30/06/2020
RM RM %
Amundi Bond
Global Aggregate
3,403 15,140,240 16,097,889 98.77
Funds
Excess of fair value over cost 957,649
2. FORWARD FOREIGN CURRENCY CONTRACTS
Unquoted derivative instruments comprise forward currency contract. The financial period end
positive fair value represents the unrealized gain on the revaluation of forward currency
contract at the reporting date. The contract underlying principal amount of the forward currency
contract and the corresponding gross positive fair value at financial period end date is analysed
below:
Contract or
underlying
Maturity principal Fair value
date amount RM
30/06/2021
United States Dollar 30/07/2021 (1,197,289) 13,173
Unquoted derivative assets 13,173
Contract or
underlying
Maturity principal Fair value
date amount RM
30/06/2020
United States Dollar 30/07/2020 (9,238,843) (26,794)
Unquoted derivative assets (26,794)
12AMUNDI BOND GLOBAL AGGREGATE FUND
3. MANAGEMENT EXPENSE RATIO ("MER")
The Fund’s MER is as follows:
01/04/2021 01/04/2020
TO TO
30/06/2021 30/06/2020
% p.a. % p.a.
Manager’s fee 3.72 3.58
Trustee’s fee 0.06 0.06
Fund’s other expenses 0.50 0.30
Total MER 4.28 3.94
The MER of the Fund is the ratio of the sum of annualised fees and expenses incurred by the
fund to the average net asset value of the Fund, calculated on a daily basis.
4. PORTFOLIO TURNOVER RATIO (“PTR”)
01/04/2021 01/04/2020
TO TO
30/06/2021 30/06/2020
PTR (times) 0.08 -
The PTR of the Fund, which is the ratio of average total acquisitions and disposals of
investments to the average net asset value of the Fund calculated on a daily basis.
5. QUARTERLY REPORT
The quarterly report for the financial period from 01/04/2021 to 30/06/2021 is unaudited.
13AMUNDI BOND GLOBAL AGGREGATE FUND
STATEMENT BY THE MANAGER
The Investment Manager, Haizan bin Mohd Khir Johari and Edna Vimala Koshy, being two of
the directors of the Manager, Amundi Malaysia Sdn. Bhd, for Amundi Bond Global Aggregate
Fund do hereby state that, in the opinion of the Manager, the accompanying unaudited
statement of financial position, unaudited statement of comprehensive income, unaudited
statement of changes in net asset attributable to unit holders and unaudited statement of cash
flows are drawn up by applying the appropriate accounting policies so as to give a true and fair
view of the financial position of the Fund as at 30 June 2021.
Signed for and on behalf of the Manager.
....................................................................................
HAIZAN BIN MOHD KHIR JOHARI
....................................................................................
EDNA VIMALA KOSHY
Dated 24 August 2021
Kuala Lumpur, Malaysia
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