EASTSPRING INVESTMENTS - ASIAN HIGH YIELD BOND FUND - December 2020
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EASTSPRING INVESTMENTS -
ASIAN HIGH YIELD BOND FUND
December 2020
eastspring.com
eastspring.us/offshoreadvisor
2
LEADING ASSET MANAGER IN ASIA
LEVERAGING OUR ASIAN DNA TO CAPITALISE ON GLOBAL OPPORTUNITIES
1994 One of the
USD 248bn 300+ INVESTMENT DEEP INSIGHTS
Founded 1994 in Managing USD 248bn
PROFESSIONALS^ LARGEST INTO ASIA
Singapore (HQ) and assets on behalf of
100% owned by institutional and individual
Unrivalled on-the-ground ASIAN ASSET Our investment teams'
investment presence in Asia deep understanding of
Prudential plc (UK) investors globally MANAGERS Asian markets, provides us
and a major Asian Fixed with a unique perspective
Income player for global investments
United
Kingdom
Luxembourg
Japan
United States China* South Korea
Taiwan
India* Hong Kong*
Thailand*
Vietnam
Malaysia
Singapore
Indonesia
Investment and Sales & Client Service office
Sales & Client Service Office
Joint venture
Source: Eastspring Investments. As at 31 December 2020. ^Including joint ventures and sales offices in the US, UK and
Luxembourg. AUM size by contracted sales. Note: bn = billion.
STRICTLY PRIVATE AND CONFIDENTIAL. FOR PROFESSIONAL INVESTORS ONLY.
3
A DIVERSIFIED AND GROWING GLOBAL ASSET MANAGER
AUM Growth (USD bn)
2% 7% 241 248
193
47% 12% CAGR 188
40% 146
131
99 121
95
81 78
51%
Fixed Income Equity Quant
Others ^ Investment Solutions (IS)
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Internal Life 56% Third Party 44%
AUM USD248bn
Source: Eastspring Investments as at 31 December 2020. AUM includes Joint Ventures AUM based on % of ownership
*Joint ventures: India - ICICI Prudential Asset Management Co Ltd, Hong Kong - Bank of China International – Prudential Asset
Management and China - CITIC-Prudential Fund Management Co Ltd. ^ Others – include Alternative assets and money market
funds. Note: bn = billion.
STRICTLY PRIVATE AND CONFIDENTIAL. FOR PROFESSIONAL INVESTORS ONLY.
4 EXTENSIVE LOCAL PRESENCE IN ASIA ONSHORE ASSET MANAGEMENT ACROSS ASIA Sources: Singapore and Hong Kong (Morningstar), Malaysia (Lipper), Thailand (Association of Investment Management Companies), Korea (Korea Financial Investment Association), India (Association of Mutual Funds in India), Japan (Investment Trusts Association, Japan), Taiwan (Securities Investment Trust & Consulting Association of R.O.C.), China (Wind), Indonesia (Otoritas Jasa Keuangan), Vietnam (State Securities Commission of Vietnam). All markets as of December 2020. Eastspring JVs include HK, India and China. Japan reflects Publicly Offered Investment Trusts market presence. China reflects public mutual funds market presence. Vietnam reflects open-ended mutual funds market presence only. *Market presence based on whether the AMCs offer onshore domiciled mutual funds. Market ranking based on 100% shareholdings. STRICTLY PRIVATE AND CONFIDENTIAL. FOR PROFESSIONAL INVESTORS ONLY.
5
INVESTMENT CAPABILITIES OVERVIEW
Fixed Investment Quantitative
Equities Income Solutions Strategies
AUM of AUM of AUM of AUM of
USD 25bn USD 62bn USD 115bn* USD 3.5bn
Key capabilities: Key capabilities: Key capabilities: Key capabilities:
GEM Concentrated Value EM Debt Multi Asset Global Low Vol
Japan Concentrated Value Asian HY Solutions Asian Low Vol
China A Growth Asia Fixed Income Multi-Factor
Greater China Asian Sustainable
Asia ex – Japan China RMB
Number of Inv. Number of Inv. Number of Inv. Number of Inv.
professionals: 31 professionals: 22 professionals: 12 professionals: 8
Avg. yrs experience: Avg. yrs experience: Avg. yrs experience: Avg. yrs experience:
18 15 14 13
Source: Eastspring Investments as at 31 December 2020. AUM for investment teams are internally calculated and includes advisory
mandates. There might be double counting of assets within the individual investment teams. The figures above do not reflect joint venture
assets under management. *Including sub-funds managed by other teams and investments into Eastspring SICAV funds. Note: bn =
billion.
STRICTLY PRIVATE AND CONFIDENTIAL. FOR PROFESSIONAL INVESTORS ONLY.
6
FOCUSED - FIXED INCOME INVESTMENT CAPABILITIES
Strategy Name Asian High Yield Bond China Onshore Bond Global Emerging Markets Bond
JPMorgan Asia Credit – Non JPMorgan Emerging Markets Bond Index -
Benchmark Investment Grade Index Markit iBoxx ALBI China Onshore Bond index Global Diversified
Invests primarily in USD–
Invests primarily in China onshore bonds Invests primarily in hard currency
denominated below investment
Investment Objective across different sectors, including government denominated bonds issued by government
grade bonds issued by Asian
corporate, quasi-sovereign and and non-government bond sectors; Moderate and quasi-government entities within
sovereign flexibility to go into non-RMB securities Emerging Markets
Investment Style Benchmark-aware Benchmark-unconstrained Benchmark-aware
AuM (USD mn) 468.3 434.2 2,251.6
Incepted :December 2019
Strategy Inception Oct 2011 Investment Start Date : Apr 2011
21 February 2020
Lead PM Wai Mei Leong Guan Yi Low with advisory from China WFOE Eric Fang
Current YTM (%)+ 7.72 3.37 4.29
Current Duration (yrs)+ 3.50 5.45 8.44
Credit Quality Bias High Yield Investment Grade High Yield
Key Investment Parameters *
Duration Range +/- 1.5 years from BM duration N/A +/- 1 year from BM duration
Not applicable; Max 20%in non-BM
Max Country Weight countries Up to 35% for single country of risk ex. China +/- 5% BM Weight
Max 20% in corporates (ex Quasi-
Max Sector Weight Max 33% in IG, non-rated and cash N/A sovereigns)
Up to 10% per currency with exception of
Currency Limits Max 20% in non-USD exposures CNY/CNH; Max aggregate non-CNY/CNH Max 10% in non-USD exposures
exposure: 30%
Min. Portfolio Average Not more than 3 notches below BM Aggregate non-investment grade bond exposure Not more than 1 notch below BM rating
Credit Rating* rating (Linear) limit: Max 30% (Linear)
Source: Eastspring Investments, as of 31 December 2020. +The computation of yield to maturity and average duration includes cash and
derivatives securities.; * Internal guidelines, subject to changes at fund managers’ discretion
STRICTLY PRIVATE AND CONFIDENTIAL. FOR PROFESSIONAL INVESTORS ONLY.7
FOCUSED - FIXED INCOME INVESTMENT CAPABILITIES
Strategy Name Asian USD Bond Asia Sustainable Bond Asian Total Return
Benchmark JPMorgan Asia Credit Index Unconstrained Unconstrained
Invests in a mix of green, social and sustainability
Invests primarily in USD –denominated (“GSS”) bonds and other debt securities issued by Invests primarily in a mix of USD and
bonds issued by Asian corporate, quasi- Emerging Asian governments, quasi-governments, domestic Asian bonds and currencies;
Investment Objective
sovereign and sovereign, including both corporates or supranational, which are aligned to flexibility to implement tactical
high yield and investment grade internal Environmental, Social and Governance overlays
(“ESG”) principles
Investment Style Benchmark-aware Absolute return targeted Absolute return targeted
AuM (USD mn) 3,334.2 73.3 92.7
Strategy Inception Dec 2002 Dec 2019 Nov 2017
Lead PM Wai Mei Leong Rong Ren Goh Guan Yi Low
Current YTM (%)+ 4.43 4.20 6.27
Current Duration (yrs)+ 5.57 4.39 4.00
Credit Quality Bias Investment Grade Investment Grade Investment Grade
Key Investment Parameters *
Duration Range +/- 1 year from BM duration Below 5 years -1y to 8y
Max Country Weight +/- 10% BM Weight 35% 30%
Sovereign: Max 35% for single issuer Max non-investment grade
Max Sector Weight Not applicable exposure: 30%
IG/HY Corporate: Max 10% for single issuer
Up to 10% per currency with exception of USD
Currency Limits Max 10% in non-USD exposures (subject to an aggregate limit of 20% for non-USD Aggregate net short FX: 30%
exposures)
Min. Portfolio Average Not more than 1 notch below BM rating Max non-investment grade N.A.
Credit Rating* (Linear) exposure: 30%
Source: Eastspring Investments, as of 31 December 2020. +The computation of yield to maturity and average duration includes cash and
derivatives securities.; * Internal guidelines, subject to changes at fund managers’ discretion
STRICTLY PRIVATE AND CONFIDENTIAL. FOR PROFESSIONAL INVESTORS ONLY.8
AWARD WINNING FIXED INCOME CAPABILITIES
2020 2019 2018 2017
Asian High Asian Local
Asian Asian Currency
Bond Bond Yield Bond
Bond
House House Fund Fund
“Best of the Best” “Best of the Best” Best Fund over five years Best Fund Manager Bond Asia
Regional Awards Regional Awards Bond USD – High Yield Pacific Local Currency Category
(Awarded by Asia Asset (Awarded by Asia Asset
Management) Category Low Guan Yi
Management)
(Awarded by Refinitiv Lipper Fund (Awarded by Citywire Asia)
Award)
Top 5 Investment Houses in Asia
Asian Local – Asian Local Bond Currency
Singapore Asian Local Category Rank 1st
Currency Select Bond Currency (Awarded by The Asset Benchmark
Bond Bond Research)
Fund Fund
Fund Most Astute Investors
Asian Local Bond Currency
Best Asian Fixed Income Fund, Best Fund over 3 & 5 years Portfolio managers,
Local Currency Bond SGD Top 5 Investment Houses in Cheong Wei Ming (No. 3),
(Awarded by Asia Asset Management) (Awarded by Refinitiv Lipper Fund Asia – Asian Local Bond Danny Tan (No. 6) and Guan Yi
Award) Currency Category Rank 1st Low (Highly commended)
(Awarded by The Asset Benchmark
Research)
(Awarded by The Asset Benchmark
Research)
Sources: Refinitiv Lipper (April 2019 and April 2017), Citywire (April 2016), The Asset Benchmark Research (November 2016, July 2017),
Asia Asset Management (2015, 2019 and 2020), Asian Investor Asset Management (June 2015), and unless otherwise stated.
STRICTLY PRIVATE AND CONFIDENTIAL. FOR PROFESSIONAL INVESTORS ONLY.9
WHY EASTSPRING?
Pursuit of alpha through a differentiated,
DIVERSITY OF
Asian lens OUR PEOPLE AND
PERSPECTIVES
History of operating in some of the most
diverse, illiquid and inefficient markets
positions us well for emerging and
developed markets investment
56% 40% of female
Alignment of interests and history of of our workforce representation in our
is female Executive Management
investing alongside our clients
Committee
Commitment of seed capital to innovate
new strategies and willingness to
customize solutions for clients
27
nationalities
Risk management is embedded in our
DNA with a long history of managing
liability-linked assets
As of 31 December 2020.
STRICTLY PRIVATE AND CONFIDENTIAL. FOR PROFESSIONAL INVESTORS ONLY.ASIAN HIGH YIELD FIXED INCOME OVERVIEW
11 WHY INVEST IN ASIAN HIGH YIELD Compelling absolute yields and yield advantage vs. other high yield markets Attractive valuations, relatively wide spreads, improving fundamentals and liquidity Continued issuance growth, domestic demand, and institutional ownership Lower default rates compared with most high yield markets Complementary diversification versus US and European high yield markets Attractive risk/reward profile
12
ASIAN HIGH YIELD
CHARACTERISTICS VS. OTHER HIGH YIELD MARKETS
US HY Euro HY MARKET CAPITALISATION –
Asian HY
Corporate Corporate ASIAN HIGH YIELD (US$ ‘BILLION)
Market Cap 200
188,075 1,543,269 431,172
(US$ MN)
180
No. Of Issues 365 2,030 706
160
Yield-to-Worst 7.01 4.24 2.88
(%) 140
120
Effective 2.23 3.67 3.50
Duration (Years)
100
Average Credit B+ B+ BB- 80
Rating
60
Credit Spreads* 679 386 355
(bps) 40
Real Estate 56.0 Energy 13.4 Banking 12.0
20
Top 3 Industry Basic 10.1 Media 9.2 Automotive 11.6
Exposures (%) Industry 0
Banking 7.9 Basic 9.1 Telecom 10.7
Industry
Source: Eastspring Investments, Bank of America Merrill Lynch Indexes from Bloomberg, as at 31 December 2020. *Refers to
option-adjusted spreads (vs Govt). Note : IG = Investment Grade, HY = High Yield. Past performance is not necessarily indicative
of the future performance.
STRICTLY PRIVATE AND CONFIDENTIAL. FOR PROFESSIONAL INVESTORS ONLY.13
ABOUT THE ASIAN HIGH YIELD BOND MARKET
Rising share of local demand for Asian bonds provides a cushion from capital flight from investors
outside the region.
Volatility of Asian high yield bond has declined since Global Financial Crisis (GFC)
ROLLING 3-YEAR ANNUALISED VOLATILITY ASIA HIGH YIELD NEW ISSUE ALLOCATION
BY GEOGRAPHY
18% 100%
16% 90%
14% 80%
12% 70%
10% 60%
50%
8%
40%
6%
30%
4%
20%
2%
10%
0%
0%
Jul-14
Jan-09
Oct-11
Jun-15
May-16
Mar-18
Feb-19
Jan-20
Dec-09
Nov-10
Sep-12
Aug-13
Apr-17
Dec-20
US Europe Asia
Asian High Yield Bonds Global Bonds
LHS Source: Bloomberg, JPMorgan, FTSE, 31 December 2020; Asian High Yield Bonds: JPMorgan Asia Credit Index – Non
Investment Grade; Global Bonds: FTSE World Government Bond Index.
RHS Chart Source: J.P. Morgan; Bond Radar, Bloomberg, JP Morgan estimates, December 2020.
Past performance is not necessarily indicative of the future or likely performance.14
YIELD ADVANTAGE VS. OTHER ASSET CLASSES
STILL ATTRACTIVE
AVERAGE
AVERAGE YIELD (%) YIELD PER UNIT
CREDIT
OF DURATION (%)
QUALITY
Asian HY Corp 7.0 3.1 B+
50% EM Corporate + 50% EM
Sovereign (Hard Currency) 4.3 0.6 BBB-
US HY Corp 4.2 1.2 B+
Asian USD Bonds 3.1 0.6 BBB
EUR HY Corp 2.9 0.8 BB-
Asian Local Bonds 2.8 0.4 A
Asian IG Corp 2.2 0.4 A-
US IG Corp 1.8 0.2 A-
Developed Gov Bonds* 0.3 0.0 AA
EUR IG Corp 0.2
0.0 A-
Source: Bloomberg, Eastspring Investments, BofAML, Citigroup, Markit iBoxx as at 31 December 2020. * Data as of 30 September 2020. Asian HY Corp as represented
by BofA Merrill Lynch Asian Dollar High Yield Corp Index. Asian IG Corp as represented by BofA Merrill Lynch Asian Dollar Investment Grade Corp Index. US IG Corp and
US HY Corp as represented by BofA Merrill Lynch US Corp and High Yield Indices respectively, Asian Local Bonds as represented by the Markit iBoxx Asian Local Bond
Index, Asian USD Bonds as represented by BofA Merrill Lynch Asian Dollar Index, Developed Govt bonds represented by Citigroup World Government Bond index. EUR
HY Corp and EUR IG Corp represented by BofA Merrill Lynch Euro High Yield and Euro Corporate Indices respectively. 50% EM Corp + 50% EM Sov (Hard currency) as
represented by JP Morgan EMBI Global Diversified Index + JP Morgan CEMBI Broad Diversified Index. HY= High Yield, IG = Investment Grade. Average yield for
corporate bonds are based on yield to worst. Please note that there are limitations to the use of such indices as proxies for the past performance in the respective asset
classes/sector. The historical performance or forecast presented in this slide is not indicative of and should not be construed as being indicative of or otherwise used as a
proxy for the future or likely performance.
STRICTLY PRIVATE AND CONFIDENTIAL. FOR PROFESSIONAL INVESTORS ONLY.15
WHY ASIAN HIGH YIELD BONDS
CREDIT FUNDAMENTALS REALTIVELY GOOD SHAPE
Asian credits entered into the sell-off in relatively good shape; liquidity was generally adequate.
However, Covid-19 will impact some companies more than others; There will be winners and
losers emerging from this episode.
NET LEVERAGE OF ASIAN HIGH YIELD VS. EM AND DM HIGH YIELD
6.0x Global EM HY US HY European HY Global EM Emerging Asia
5.4x 3.5x Europe Latin America
4.8x Middle East & Africa
5.0x 4.3x 3.0x
4.1x 4.0x 4.0x
3.8x 3.7x 3.7x 3.7x 3.7x 3.6x 2.5x
Net Leverage
4.0x 2.5x
Net Leverage
4.0x 2.2x
3.0x 3.7x 3.7x 3.8x 3.6x 3.5x 3.6x 2.0x
3.3x 3.4x 3.5x 1.7x
3.1x 3.1x 3.0x 3.0x 1.5x 1.5x
2.6x 2.6x 2.6x
2.0x 2.5x
2.1x 2.2x 2.3x 1.0x 2.0x 1.8x
1.9x 1.8x 1.9x
1.7x 1.5x 1.5x 1.5x 1.6x 1.7x 1.8x 1.5x
1.0x 1.1x 1.3x 1.3x
1.1x 0.5x
0.0x 0.0x
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 LTM 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 LTM
Source: JPMorgan, Bloomberg, June 2020, LTM includes partial 1Q 20 results. Past performance is not necessarily indicative of
the future or likely performance of the portfolio.
STRICTLY PRIVATE AND CONFIDENTIAL16
MARKET OUTLOOK
… AND VERSUS US HIGH YIELD
RELATIVE VALUE VERSUS US HIGH YIELD
2.6
2.4
2.2
2.0
1.8
1.6
1.4
1.2
1.0
0.8
Sep-11
Dec-10
Dec-11
Sep-12
Dec-12
Sep-13
Dec-13
Sep-14
Dec-14
Sep-15
Dec-15
Sep-16
Dec-16
Jun-17
Sep-17
Dec-17
Sep-18
Dec-18
Sep-19
Dec-19
Sep-20
Dec-20
Mar-11
Mar-12
Mar-13
Mar-14
Mar-15
Mar-16
Mar-17
Mar-18
Mar-19
Mar-20
Jun-11
Jun-12
Jun-13
Jun-14
Jun-15
Jun-16
Jun-18
Jun-19
Jun-20
Asia - US "B: Rated Spread Multiple Average
Source: Bloomberg, JPMorgan, ICE Benchmark Administration Limited (IBA), 15 January 2021 (daily data); JPMorgan Asia Credit Index – B sub-
index; ICE BofAML US High Yield B Option-Adjusted Spread retrieved from FRED, Federal Reserve Bank of St. Louis; August 1, 2018. HY: High
Yield. * Spread differential between Asian HY B rated and US HY B rated. Please note that there are limitations to the use of such indices as
proxies for the past performance in the respective asset classes/sector. The historical performance or forecast present in this slide is not indicative
of and should not be construed as being indicative of or otherwise used as a proxy for the future or likely performance of the fund.
STRICTLY PRIVATE AND CONFIDENTIAL17
ATTRACTIVE VALUATIONS VS. OTHER CREDIT MARKETS &
HISTORY
SPREAD TO WORST (BPS) OVER THE LAST 10 YEARS
1600
1400 High Low Current Ave
1200
1000
800
677
600
400 390 358
277 283
200 163
98 92
0
US IG Eur IG Asian USD Asian USD US HY Eur HY EM USD Sov EM USD
IG HY Corp
Source: Eastspring Investments, Bloomberg, as at 31 December 2020. US, EUR and Asian USD Investment Grade and High Yield
corporates represented by ICE BofA US Corporate Index, US High Yield index, Euro Corporate index, Euro high yield index, Asian Dollar
Investment Grade index, Asian Dollar High Yield index respectively. EM USD Sovereign and Corporates are represented by ICE BofA US
Emerging Markets External Sovereign Index and US Emerging Markets External Debt Sovereign & Corporate Plus Index respectively.
STRICTLY PRIVATE AND CONFIDENTIAL. FOR PROFESSIONAL INVESTORS ONLY.18
MARKET OUTLOOK
VALUATIONS ARE STILL RELATIVELY ATTRACTIVE
Historically, investors entering the Asian high yield corporate markets at yield levels of 7-8%
achieve a median return of 7.1% over rolling 3 years period.
HISTORICAL ASIAN HIGH YIELD CORPORATE BOND
YIELDS % AND SPREADS BPS (5-YEAR)
1700 18
Average 3-Year Rolling Returns % ann.
1500 16 (Jun 2007 to current)
AHY
1300 14 Yield
at Entry Min. Median Max
1100 12
900 10 9% 5.7% 13.1% 30.1%
Option-Adjusted Spreads bps
BAML Asian US$ HY Corp Yields %, RHS
Source: ICE BofAML Asian Dollar High Yield Corporate index as of 10 October 2020 (weekly data). The historical performance or forecast
presented in this slide is not indicative of and should not be construed as being indicative of or otherwise used as a proxy for the future or likely
performance of the portfolio. Please note that there are limitations to the use of such indices as proxies for the past performance in the respective
asset classes/sector. The historical performance or forecast present in this slide is not indicative of and should not be construed as being
indicative of or otherwise used as a proxy for the future or likely performance of the portfolio.19
MANAGEABLE DEFAULT RISKS
Default risks for 2021 are expected to moderate given the stronger macroeconomic outlook.
However, China’s credit tightening measures and an uneven global recovery path are still likely
to result in idiosyncratic risks.
HISTORICAL HIGH YIELD CORPORATE DEFAULT RATES (%)
18.0
16.0
14.0
12.0
10.0
8.0
6.0
4.0
2.0
0.0
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021F
Asia Emerging Europe Latin America
US Asia Average (2.4) Emerging Europe Average (3.7)
Latin America Average (4.6) US Average (3.4)
Source: JP Morgan, 6 January 2021; based on par value of defaulted bonds and excluding 100% quasi-sovereigns. Note: Average
default rates are calculated from 2009-2020. Past performance is not necessarily indicative of the future or likely performance of
the portfolio.
STRICTLY PRIVATE AND CONFIDENTIAL. FOR PROFESSIONAL INVESTORS ONLY.20
RISK RETURN PROFILE
FAVOURABLE RISK-ADJUSTED RETURNS
RISK/RETURN PERFORMANCE OF ASIAN BONDS SHARPE RATIO *
VS. OTHER ASSET CLASSES (SINCE DEC 2000) (Return minus risk-free rate, divided by volatility, ann.)
12.0%
Asian USD Bonds 1.12
Asia ex Japan
Asian High Yield Bonds 1.05
10.0% Asian High Equities
Yield Bonds
US Treasuries 1.01
Return (Annualised %)
Global Emerging
Asian Local Bonds 0.95
8.0% Market Bonds
USD US High Yield US Equities Global Emerging Market Bonds 0.88
Asian USD Bonds
Bonds
Global Equities US High Yield Bonds 0.78
6.0%
Asian Local
Bonds Global Government Bonds 0.68
US Equities 0.48
4.0% US
Treasuries Global
Government Asian ex Japan Equities 0.47
Bonds
Global Equities 0.40
2.0%
0.0% 5.0% 10.0% 15.0% 20.0% 25.0%
Risk, (Std Dev, annualised %)
Please note that there are limitations to the use of such indices as proxies for the past performance in the respective asset classes/sector. The historical performance or forecast
presented in this slide is not indicative of and should not be construed as being indicative of or otherwise used as a proxy for the future or likely performance of the portfolio
Source: Bloomberg, Eastspring Investments, from end December 2000 to end December 2020, in USD, based on monthly data; *Based on risk-free rate of 3-
Month Intercontinental Exchange London Interbank Offered rate (“LIBOR”). Various markets are represented by following indices : Asian High Yield Bonds – JP
Morgan (“JPM”) Asia Credit Index (“JACI”) High Yield Index, Asian USD Bonds – JACI Asia Credit Index, Asian Local Bonds – Markit iBoxx Asian Local Bond
Index, Global Government Bonds – Citi World Govt Bond, US High Yield Bonds – Bank of America Merrill Lynch(“BofAML”) US High Yield, Global Emerging
Market Bonds – JPM Emerging Markets Bond Investment Grade, Asian ex Japan Equities – Morgan Stanley Composite Index (“MSCI”) Asia Ex Japan, Global
Equities – MSCI AC World US$, US Equities – Standard & Poor 500 Index, US Treasuries represented by Citi US Broad Investment-Grade Treasury/Agency
Index.
STRICTLY PRIVATE AND CONFIDENTIAL. FOR PROFESSIONAL INVESTORS ONLY.FIXED INCOME TEAM, PHILOSOPHY & PROCESS
22
FIXED INCOME EXPERIENCED & STABLE INVESTMENT TEAM
Portfolio Management Portfolio Management Portfolio Management
Life / Solutions Credit Credit Research
Local Rates
Danny Tan (21) Wai Mei Leong (21) Wei Ming Cheong (25) Yong Hong Tan^^ (19)
Investment Director Investment Director Investment Director Credit Manager
Kenneth Lee (7) Eric Fang (17) Guilherme Maciel de Li Ping Yeo^ (26)
Portfolio Manager Portfolio Manager Barros (14) Senior Credit Analyst
Portfolio Manager
Rong Ren Goh (13) Jerry Gwee^ (18)
Boon Peng Ooi # (33) Peerampa Janjumratsang^ (8) Senior Credit Analyst
Head of ES Portfolio Strategies Portfolio Manager Portfolio Manager
Matthew Kok (3) Elvin Tan (15)
Portfolio Manager Senior Credit Analyst
Marvin Kwong (14)
Senior Credit Analyst
Other Investment Support Personnel Shao Keng Ang (12)
Senior Credit Analyst
Guan Yi Low (23)
Ginny Wong (19) Senior Dealer 1
Head of Fixed Income Lee Wai Meng (9)
Vivian Ting (21) Senior Dealer 1
Senior Credit Analyst
Matthew Valath (10) Dealer 1
Tricia Wong (19) Client Portfolio Manager 2
Valerie Yan (4)
Chung Yuh Ang (8) Client Portfolio Manager3 Credit Analyst
Shirley Fong (12) Portfolio Specialist 3
Jacelyn Wu (17) Investment Analyst 4 Ng Kah Wee (3)
Credit Analyst
Credit Research: China (WFOE)
Portfolio managers have an average 16 years of investment William Xin (18)**
Head of Fixed Income
experience and 9 years of experience within the firm
USD62.4* billion of assets under management Janet Lu (11)
Analyst
Source: Eastspring Investments, 1 January 2021. Years of relevant investment experience in brackets (xx). ^Li Ping Yeo, Jerry Gwee and Peerampa Janjumratsang
assume both credit research and portfolio management responsibilities. ^^Yong Hong Tan oversees the credit analyst team. **Secondary reporting line to CIO, Fixed
Income and direct reporting to General Manager, Eastspring China. 1Direct reporting to Head of Central Dealing Desk. 2Direct reporting to Head of Client Portfolio
Managers. 3Direct reporting to Client Portfolio Manager of Fixed Income, Tricia Wong. 4Direct reporting to Investment Director (Fixed Income), Danny Tan. #Boon Peng is
also CEO of Eastspring Singapore and oversees the Equities and Quantitative Strategies teams as well. *As of end December 2020.
STRICTLY PRIVATE AND CONFIDENTIAL. FOR PROFESSIONAL INVESTORS ONLY.23
FIXED INCOME TEAM-BASED RESEARCH APPROACH
USD62.4b Asset Under Management*
Global Macro
Asian Interest Rates 14+ years of fixed income experience
and Currencies
Boon Peng/ Rong
Ren/Guan Yi: G3 and Wei Ming/ Rong Ren : 21 Investment Professionals
Asian rates and currencies
broad interest rate and
Guilherme : GEM rates & 2 Credit Analysts based in
macro views China
currencies
Wei Ming:
Kenneth : Phil & Thai
Commodities rates
700+ Issuers^
Guan Yi: under coverage
Formulation of
Investment
views
Credits Bottom-up &
Wai Mei: Asian Credits Industry Trends
Eric: Global Emerging Credit Analysts: Bottom- Combining
Sovereign/Quasi-Sov up analysis of best of top-down
Markets companies and credit & bottom up
sectors
Strong track record
of credit selection
Source: Eastspring Investments, 31 December 2020. Years of relevant investment experience in brackets (xx).*As of end December 2020.
^Research coverage included corporate, sovereign and quasi-sovereign issuers.
STRICTLY PRIVATE AND CONFIDENTIAL. FOR PROFESSIONAL INVESTORS ONLY.24 FIXED INCOME INVESTMENT PHILOSOPHY Fundamentals, Valuation and Technical factors are the basis for well-informed investment decisions and alpha generation A medium-term investment horizon provides patient investors opportunities to take advantage of dislocations in fair value Investment opportunities are created by identifying cyclical extremities in interest rates and credit spreads Value opportunities arise due to shifts in investor risk perception, resulting in the mispricing of assets relative to fundamentals STRICTLY PRIVATE AND CONFIDENTIAL. FOR PROFESSIONAL INVESTORS ONLY.
25
FIXED INCOME INVESTMENT PROCESS
A rigorous investment process comprising four broad stages
1
INVESTMENT
1 Macroeconomic and market research to determine the
investment outlook and ascertain the fair value of the broad
interest rate, credit and currency markets
OUTLOOK &
FAIR VALUE
4
ANALYSIS
2 Fundamental, valuation and technical analyses of relevant
markets are combined to determine the portfolio’s:
Duration and yield curve strategy
RISK 2 Currency strategy
ASIAN STRATEGY
CONTROL
AND FIXED FORMULATION Credit strategy
REVIEW INCOME
Portfolio is constructed in line with the duration/yield curve,
3
PORTFOLIO
3 sector, credit and currency risk preferences of the team, as
well as the client’s risk preferences and objectives
CONSTRUCTION
Portfolios’ risk exposures are reviewed in real time and
4 discussed during weekly and quarterly team meetings
Performance and risk exposures also reviewed on a quarterly
basis with the Investment Risk Oversight Committee
Source: Eastspring Investments (Singapore) Limited
STRICTLY PRIVATE AND CONFIDENTIAL. FOR PROFESSIONAL INVESTORS ONLY.26
FIXED INCOME INVESTMENT PROCESS
A rigorous investment process comprising four broad stages
MACRO ANALYSIS Analysis & View Assessing Value in Bond Market &
AND DURATION Formulation Bond Markets Duration Strategy
Economic & inflation Monetary policy Duration position
MANAGEMENT outlook pricing versus benchmark
Projected monetary Yield curve slope & Yield curve
policy action forward yield curve strategy
Global interest rate analysis Relative value of
outlook Absolute & real yield bond markets
levels vs history Credit & swap
Supply & demand spread strategy
dynamics
Source: Eastspring Investments.
STRICTLY PRIVATE AND CONFIDENTIAL. FOR PROFESSIONAL INVESTORS ONLY.27
FIXED INCOME INVESTMENT PROCESS
A rigorous investment process comprising four broad stages
Top-down Credit Bottom-up Credit Credit Strategy
Outlook Selection
Economic Assess credit strength Credit allocation
environment and default risk versus benchmark
PROPRIETARY Credit condition Establish Internal Credit sector
Credit Rating (ICR) allocation
CREDIT ANALYSIS Credit migration and
default trend Relative value Value opportunities
& STRATEGY Corporate earnings analysis and calculate
implied credit default
Supply-demand
levels
Risk appetite
Market liquidity
Sector comparison
Cross-market
comparison
Source: Eastspring Investments.
STRICTLY PRIVATE AND CONFIDENTIAL. FOR PROFESSIONAL INVESTORS ONLY.28
TOP-DOWN MACROECONOMIC THEMES
Identify thematic drivers – event Portfolio flow trends into EM and Asia
risks, asset class trends , secular/ region
structural trends Investor positioning – DM vs. EM / Asia
Assess correlations across assets Technical/price signals – Risk assets
and currencies
BOTTOM-UP CURRENCY ANALYSIS
Fundamentals Valuations Technicals
CURRENCY Economic fundamentals Structural valuation
models (eg.
Investor positions – high
level of long or shorts in
MANAGEMENT Monetary policy outlook
Fiscal policy trends
Fundamentals / Real
effective exchange rate)
a currency
Investor sentiment & risk
appetite: risk seeking /
Current account trends Interest rate carry avoidance behaviour
relative to volatility Technical/ price signals:
Eg. MACD, RSI, Trend
Interest rate differentials Channels, Charting
CURRENCY STRATEGIES
Strategic overlays
Relative value and total return assessment
Determine currency positioning relative to benchmark or absolute basis
Tactical overlays
Exploit opportunities arising from market noise and idiosyncrasies prevalent in FX markets.
Risk management due to near term headwinds identified.
Overlays applied to create synthetic bond positions that deliver better risk-adjusted carry, and
lower transaction costs.
Source: Eastspring Investments.
STRICTLY PRIVATE AND CONFIDENTIAL. FOR PROFESSIONAL INVESTORS ONLY.29
PORTFOLIO RISK CONTROLS & REVIEW
REGULAR INVESTMENT MEETING
Our core framework for managing MEETING FREQUENCY PURPOSE DISCUSSION TOPICS
investment risks involves: Local rates and FX
Investment markets updates and Broad macro updates
Meeting Weekly review of key Individual LCY and FX markets
Appropriate risk sizing for (Rates/FX) portfolio risk Discussion on portfolio strategies
exposures
positions and risk control at
outset. Monitoring of positions Discussion and Updates on credit sector meetings
Investment and new issuance activity
update of credit-
with appropriate stop/review Meeting Weekly specific issues and Highlight material issuer
(Credit) developments developments or credit risks
levels Ad-hoc topical / sectoral discussion
Macro and G3 interest rate markets
Comprehensive real time Formulation of Commodity markets
Strategy At least three investment strategy Individual Asian LCY and FX
portfolio monitoring and risk Meeting times a year for the next 3-6 markets
reports months Asian credit markets
Sector / credit focus
Regular portfolio and risk RISK OVERSIGHT MEETINGS
oversight meetings to discuss Monthly One-on-One Quarterly Investment
Quarterly Risk Oversight
with Head of Investment Management Meeting
market and credit risks in light of Strategies with CIOs (IMM)
Review
economic and market Attended by Head of
Attended by Head of Attended by Investment
developments. Investment Strategies Investment Strategies,
Risk team, Head of
and CIO of Fixed Head of Investment
Investment Strategies, and
Income team Solutions and all CIOs of
CIO of Fixed Income team
respective asset classes
Ongoing ad hoc analysis and reviews by Risk Oversight function covering emerging issues
Source: Eastspring Investments. The above views are subject to change at the fund manager’s discretion without prior notice.ASIAN HIGH YIELD FIXED INCOME STRATEGY
31
ASIAN HIGH YIELD FIXED INCOME STRATEGY
KEY INVESTMENT PROFESSIONALS
CREDIT RESEARCH TEAM Investment/
Credit Primary Responsibility Firm
Research (Credit Research Coverage) Experience
(years)
China properties, China Investment Grade
Yong Hong Tan corporates, Korea corporates,
19 / 10
(Credit Manager) Australia/Europe/Japan corporates
PORTFOLIO MANAGEMENT China local government financing vehicles
Investment/ William Xin* (LGFV) and Hong Kong HY/Taiwan 18 / 6
Firm corporates
Name Designation Responsibilities
Experience India high yield corporates and other non-
(years) Elvin Tan Asia Emerging Market corporates & 15 / 2
financials
Chief Investment SGD property, China/Hong Kong and
Guan Yi Low, 23 / 13 Marvin Kwong 14 / 7
CFA Officer, Team oversight financial institutions, Indon property issuers
Fixed Income
Malaysia/MYR corporates and other banks
Shao Keng Ang & financial institutions
12 / 13
Wai Mei Portfolio Management of Asian 21 / 13 China central state owned enterprises
Leong Manager USD Credit funds Janet Lu (SOE) and China HY non-property issuers 11 / 1
/ industrials, Macao corporates
Management of Asian Credit research of Hong Kong IG
Valerie Yan Corporates and Singapore properties
3 /32
Strategy Objectives Key Characteristics
JACI Asia Credit
Focused on opportunities in the Asian (JACI) – Non
USD high yield corporate bond market Benchmark
Investment Grade
Credit selection key source of value Index
add with duration decisions secondary Average +/- 1.5 year
Benchmark-aware strategy with duration benchmark duration
moderate flexibility to invest in local Up to 20% in non-
ASIAN HIGH YIELD currency denominated bonds and Country limit
benchmark countries
corporate credits.
FIXED INCOME Seeks to outperform the benchmark by Sector limit N.A.
STRATEGY 50-75 bps pa, with less risk/volatility.
Single Issuer
Non Sovereigns: the
higher of 5% or
OVERVIEW Limit benchmark weight
+3% points
Average not more
Investment Team Average rating than 3 notches below
benchmark
Non-USD
Lead Portfolio Manager: Leong Wai Max 20%
exposure
Mei
Strategy
October 2011
Investment team: Inception Date
11 Portfolio Managers* Fund Size USD 468.3 million
8 Credit Analysts
1 Quantitative Analyst Currency USD
Source: Eastspring Investments, 31 December 2020; *Li Ping , Peerampa and Jerry Gwee assume both credit research and
portfolio management responsibilities. The portfolio characteristics are subject to change at the fund manager’s discretion without
notice. Past performance is not necessary indicative of the future or likely performance of the Strategy.33
WHAT WE LOOK FOR IN ASIAN HIGH YIELD CREDITS
Assessment of the issuer’s ability to repay debt Quantitative
Qualitative Debt levels
Issuer’s sector characteristics Cash flow / liquidity
Business position Profitability
Management quality Margins
Corporate governance Debt structuring / covenants
DEBT ANALYSIS VS. EQUITY ANALYSIS
(both require fundamental analysis to ascertain the sustainability
of a company’s business)
Debt Analysis Equity Analysis
Focus on whether company can pay Focus on a company’s growth possibilities and
us back creation of shareholders' value
Analysis of a company’s solvency, stability of Analysis of earnings growth trend, dividend
income and protection provided for debt holders policy, Return on Equity
Bond valuations driven by interest rate trends and Determination of equity fair value driven by
company-specific risk premium determined based forward-looking earnings growth forecasts or
on company’s financial and qualitative factors underlying asset values
Source: Eastspring Investments34
ROBUST CREDIT SELECTION PROCESS
Credit and sector selection key alpha
generators
Duration positioning also a key 1. Meeting with
performance consideration management
2. Fundamental
Credit Strategy analysis
1 Sector Allocation 5. Site visits, - Business profile
(Allocation across sovereign/ ongoing monitoring
and annual review - Financial profile
corporate/quasi-sovereign, Investment - Internal Credit
Grade vs. High Yield, etc.) CREDIT SELECTION Rating
PROCESS
Security Selection
(Selection of credits to mitigate default
risks and to pick securities which offer
attractive risk-return trade off)
Duration Strategy 4. Technical analysis 3. Valuation analysis
(Implementation of US interest rate - Demand dynamics - Relative value
2 views, i.e., overweight/ underweight - Supply risk - Default probability
duration)
Source: Eastspring Investments35
ROBUST CREDIT SELECTION PROCESS
DEFAULTS IN ASIAN USD BOND MARKET IN 2019 & YTD 2020
Year Issuer Country Sector
Huiyuan Juice China Consumer
Kangde Xin China Industrial
Despite the moderate MIE Holdings China Oil & Gas
rise in Asian bond New Cotai Macau Consumer
2019 China Minsheng Investment China Diversified
default rate since GCX Limited India TMT
2018, we believe our Haikou Meilan Airport China Infrastructure
Delta Merlin Dunia Textile Indonesia Consumer
rigorous credit Tewoo China Industrials
Huachen Energy China Utilities
selection has helped Qinghai Provincial Investment China Diversified
our funds to avoid PKU Founder China TMT
extreme drawdowns Tunghsu Group China TMT
Jain Irrigation India Industrial
due to idiosyncratic Yida China China Real Estate
factors PKU Resources China Real Estate
Dr Peng China TMT
Garuda India Transport
YTD
Yihua Enterprise China Consumer
2020
MNC Investama Indonesia TMT
Zhongrong Xinda China Diversified
Geo Energy Indonesia Metal & Mining
Hilong Holding China Oil & Gas
MIE Holdings China Oil & Gas
Tahoe Group China Real Estate
Jiansu Nantong Sanj Intl China Industrial
Modernland Realty Indonesia Real Estate
Source: JPMorgan report, 14 October 202036
CREDIT SELECTION EXAMPLE
Hsin Chong Group Holdings Limited is an investment holding company, primarily
provides building construction and civil engineering services.
We avoided credits issued by China construction
company Hsin Chong Group on concerns with
over the company’s corporate governance, high
leverage, quality and valuation of real estate HSINCG8 ¾ 05/18 Corp
assets, and operating performance. 120
After an analyst site visit, we believed there was a 100
mismatch in the quality of real estate projects and
reported asset values; 80
We identified suspicious connected transactions 60
between the company and its non-executive
40
chairman.
20
The issuer missed a coupon payment due in May
2017 on its US$300m 8.75% senior notes, 0
maturing on May 18 2018.
Nov-15
Mar-16
Nov-16
Mar-17
Sep-15
Jan-16
Sep-16
Jan-17
Jul-17
May-15
Jul-15
May-16
Jul-16
May-17
Source: Eastspring Investments, Bloomberg, February 2019. This above examples are included for illustrative purposes only and
do not constitute recommendations to buy/sell the above securities.37
EASTSPRING INVESTMENTS - ASIAN HIGH YIELD BOND FUND
PORTFOLIO POSITIONING OVERVIEW1
Characteristics Portfolio Benchmark Country Breakdown Portfolio Benchmark
China 54.3 54.1
Av Duration (years)^ 3.5 3.1
India 11.7 10.1
Current yield (%)^ 7.0 6.6
Indonesia 8.9 4.5
Yield to maturity (%)^ 7.7 6.9 Philippines 7.1 5.7
Yield to worst (%)^ 7.3 6.8 Sri Lanka 3.8 2.8
No. of issues 333 553 Singapore 3.0 0.5
No. of issuers 148 297 Macau 2.6 4.4
Hong Kong 2.5 10.0
Av. Credit Rating B+ B+
Pakistan 1.7 1.7
Sector Breakdown Portfolio Benchmark Others 3.8 6.4
Cash 0.7 -
High Yield 83.1 86.5 Total 100.0 100.0
Corporate
Investment Grade 6.8 0.8 Currency Breakdown Portfolio Benchmark
High Yield 6.4 6.0 US Dollar 93.4 100.0
Government Indonesian Rupiah 2.0 -
Investment Grade 0.2 0.0 Singapore Dollar 1.8 -
Indian Rupee 1.3 -
High Yield 0.9 6.7
Quasi South Korean Won 0.5 -
Government Malaysian Ringgit 0.4 -
Investment Grade 1.8 0.0
HK Delivered Chinese
0.3 -
Cash 0.7 0.0 Renminbi (Yuan)
Hong Kong Dollar 0.3 -
Total 100.0 100.0 Total 100.0 100.0
Source: Eastspring Investments, J.P. Morgan, 31 December 2020 (based on internal data). Benchmark: JACI Non-Investment Grade Index.
Note: 1Portfolio positioning is subject to change without prior notice. The above does not constitute a recommendation of any
security/sector/industry. The historical performance is not indicative of the future or likely performance of Eastspring Investments or the
Portfolio. ^The computation of yield to maturity, yield to worst, average duration and current yield includes cash and derivatives securities.
STRICTLY PRIVATE AND CONFIDENTIAL. FOR PROFESSIONAL INVESTORS ONLY.38
EASTSPRING INVESTMENTS - ASIAN HIGH YIELD BOND FUND
CREDIT RATING & SECTOR BREAKDOWN1
Credit Ratings
Portfolio Benchmark Relative
by External
Agencies^ SECTOR BREAKDOWN (%) **
AA 0.0 0.0 0.0
AA- 0.0 0.0 0.0
A+ 0.4 0.0 0.4
A 0.6 0.0 0.6
BBB+ 0.4 0.0 0.4
BBB 1.2 0.0 1.2
BBB- 6.1 0.8 5.4
IG sub-total 8.8 0.8 8.1
BB+ 3.5 8.3 -4.7
BB 3.9 12.6 -8.8
BB- 19.9 15.5 4.4
B+ 13.1 11.9 1.2
B 22.2 16.1 6.0
B- 7.8 6.4 1.5
CCC+ 4.9 3.2 1.8
CCC 0.0 0.1 -0.1
CCC- 0.3 0.2 0.0
CC 0.0 0.0 0.0
D 0.6 0.0 0.6
NR 14.2 24.8 -10.6
HY sub-total 90.5 99.2 -8.8
Cash 0.7 0.0 0.7
Total 100.0 100.0 0.0
Source: Eastspring Investments, J.P. Morgan, 31 December 2020 (based on internal data). Benchmark: JACI Non-Investment Grade Index. Note:
1Portfolio positioning is subject to change without prior notice. The above does not constitute a recommendation of any security/sector/industry.
The historical performance is not indicative of the future or likely performance of Eastspring Investments or the Portfolio. ^Based on credit ratings
assigned by external credit rating agencies, S&P, Moody’s or Fitch only. ** Extracted from factsheet as of end November 2020 data.
STRICTLY PRIVATE AND CONFIDENTIAL. FOR PROFESSIONAL INVESTORS ONLY.39
EASTSPRING INVESTMENTS - ASIAN HIGH YIELD BOND FUND
TOP 10 HOLDINGS1
Portfolio Benchmark Relative Portfolio Benchmark Relative
By Issuers By Issues **
China Evergrande Group
China Evergrande Group 5.1 4.3 0.8 1.3 1.4 -0.1
8.75% 28-Jun-2025
Theta Capital Pte Ltd 6.75%
Kaisa Group Holdings Ltd 4.5 3.4 1.1 1.1 0.1 1.0
31-Oct-2026
Sri Lanka (Democratic Kaisa Group Holdings Ltd
3.6 2.8 0.8 1.0 1.1 -0.1
Socialist Republic Of) 9.375% 30-Jun-2024
Yuzhou Group Holdings Co China South City Holdings Ltd
3.4 1.7 1.7 1.0 0.1 0.9
Ltd 10.75% 11-Apr-2023
Zhenro Properties Group Ltd
Sunac China Holdings Ltd 3.2 2.5 0.7 1.0 0.0 1.0
12.5% 2-Jan-2021
US Dollar,
GMR Hyderabad International
CIFI Holdings Group Co Ltd 3.1 1.4 1.6 89.6 1.0 0.1 0.9
Airport Ltd 4.25% 27-Oct-2027
China South City Holdings Pakistan (Islamic Republic Of)
2.8 0.2 2.6 0.9 0.6 0.3
Ltd 6.875% 5-Dec-2027
Fantasia Holdings Group Co Agile Group Holdings Ltd
2.7 1.0 1.7 0.9 0.2 0.7
Ltd 7.875% 31-Dec-2049
Ronshine China Holdings Kaisa Group Holdings Ltd
2.5 1.0 1.5 0.9 0.4 0.5
Ltd 8.5% 30-Jun-2022
Country Garden Holdings Manila Water Co Inc 4.375%
2.2 0.0 2.2 0.9 0.2 0.7
Co Ltd 30-Jul-2030
Total 32.9 18.2 14.7 Total 10.0 4.3 5.7
Source: Eastspring Investments, J.P. Morgan, 31 December 2020 (internal data). Benchmark: JACI Non-Investment Grade Index. Note: 1Portfolio
positioning is subject to change without prior notice. The above does not constitute a recommendation of any security/sector/industry. The
historical performance is not indicative of the future or likely performance of Eastspring Investments or the Portfolio. ** Extracted from factsheet as
of end November 2020 data.
STRICTLY PRIVATE AND CONFIDENTIAL. FOR PROFESSIONAL INVESTORS ONLY.40
EASTSPRING INVESTMENTS - ASIAN HIGH YIELD BOND FUND
TRACK RECORD AS AT 31 DECEMBER 2020
Since
CLASS A (USD) 1 month 3 months YTD 1 year 3 years* 5 years*
inception*
Eastspring Investments
– Asian High Yield
-1.3 1.1 0.3 0.3 2.7 4.7 -1.3
Bond
(Bid-bid) (%)
JP Morgan Asia Credit
Index – Non Investment 1.8 4.2 3.4 3.4 3.7 5.4 1.8
Grade (%)
Overall
Rating
Source : US$; Returns are based in share class currency and computed using the NAV price on bid-bid basis with net income reinvested . The NAV
price is net of all fees, expenses and withholding taxes. Calendar year returns are based on the share class performance for the year and if the share
class is incepted during a particular year, the returns shown relate to the performance of the share class since its inception till end of that calendar year.
Fees and expenses vary among share classes, further information is available in the Prospectus. Inception Date : 9 July 2012.
Source: Eastspring Investments, Morningstar Ratings, as at 31 December 2020. Performance and benchmark values are rounded off
to 1 decimal place. *Annualised Benchmark: JACI Non-Investment Grade Index. Note: Funds are rated based on their risk-adjusted
returns.
STRICTLY PRIVATE AND CONFIDENTIAL. FOR PROFESSIONAL INVESTORS ONLY.41
ASIAN HIGH YIELD FIXED INCOME STRATEGY
COMPOSITE PERFORMANCE AS OF 31 DECEMBER 2020
Annualised
Composite Performance (USD, %) 1Y 3Y 5Y S.I. 2019 2018 2017
Asian High Yield Bond Composite (Gross) 4.61 5.04 6.86 7.32 13.77 -2.62 6.59
Asian High Yield Bond Composite (Net) 4.12 4.63 6.46 6.93 13.38 -2.96 6.22
JP Morgan Asian Non-investment Grade Credit 4.94 4.63 6.38 7.28 12.76 -3.20 6.92
Excess Return: -0.34 0.41 0.48 0.04 1.02 0.58 -0.33
Strategy Risk Statistics
Tracking Error (%) 3.00 1.83 1.59 1.50 0.82 0.97 0.93
Information Ratio -0.11 0.22 0.30 0.02 1.24 0.60 -0.32
Annualised Volatility (%) 18.54 11.18 8.99 7.79 4.60 4.62 2.87
The chart inserted above is for illustrative purpose only. Past performance is not indicative of the future or likely performance Gross composite returns are presented gross of investment management
fees and net of trading expenses. Additional information on other fees treatment are available upon request.
Source: Eastspring Investments, as at 31 December 2020. Note: Asian High Yield Bond C219 (Dec 2011). p.a. = per annum, yr = year, yrs = years,
S.I. = Since Inception. This is for information purposes only. It is not intended as an offer or solicitation for the purchase or sale of any financial
instrument, investment product, security or service.42
MORNINGSTAR PEER UNIVERSE RANKING – ASIAN HIGH YIELD
Generally second quartile performance
Source: Morningstar Direct (US offshore), as at 31 December 2020, for illustrative purpose only43
MORNINGSTAR PEER UNIVERSE RANKING – ASIAN HIGH YIELD
With more benign drawdowns
Source: Morningstar Direct (US offshore), as at 31 December 2020, for illustrative purpose onlyAPPENDIX
45
ASIAN HIGH YIELD BOND (JPM) COMPOSITE DECEMBER 2020 (USD)
Annualised figures
Rolling Period Data Calendar Year Data YTD 2020 2019 2018 2017 2016 2015 2014 2013
1m 1Y 2Y 3Y 4Y 5Y 6Y 7Y 8Y 9 Y S. I.
Composite Return - Net (%) 1.8 4.1 8.7 4.6 5.0 6.5 6.0 6.0 5.3 6.8 6.9 Composite Return - Net (%) 4.1 4.1 13.4 -3.0 6.2 12.4 3.5 6.2 0.4
Composite Return - Gross (%) 1.9 4.6 9.1 5.0 5.4 6.9 6.3 6.4 5.7 7.2 7.3 Composite Return - Gross (%) 4.6 4.6 13.8 -2.6 6.6 12.8 3.8 6.6 0.8
Benchmark Return (%) 2.0 4.9 8.8 4.6 5.2 6.4 6.2 6.2 5.6 7.2 7.3 Benchmark Return (%) 4.9 4.9 12.8 -3.2 6.9 11.2 5.2 6.1 2.0
Relative to Gross (%) -0.1 -0.3 0.3 0.4 0.2 0.5 0.2 0.2 0.0 0.0 0.0 Relative to Gross (%) -0.3 -0.3 1.0 0.6 -0.3 1.5 -1.4 0.5 -1.2
Composite 3-Year Annualised
Composite Annualised Volatility (%) N/A 18.5 13.3 11.2 9.7 9.0 8.6 8.1 8.0 7.8 7.8 11.2 11.2 4.4 4.5 5.0 5.4 6.0 6.1 N/A
Volatility (%)
Highest Return in Composite (%) 1.9 4.6 9.1 5.0 5.4 6.9 6.3 6.4 5.7 7.2 7.3 Benchmark 3-Year Annualised
9.6 9.6 4.0 3.9 3.8 4.1 5.0 5.4 N/A
Volatility (%)
Lowest Return in Composite (%) 1.9 4.6 9.1 5.0 5.4 6.9 6.3 6.4 5.7 7.2 7.3 Number of Portfolios 1 1 1 1 1 1 1 1 1
Tracking Error (%) N/A 3.0 2.2 1.8 1.6 1.6 1.7 1.6 1.6 1.5 1.5 Market Value at End, USD (bn) 0.47 0.47 0.36 0.21 0.20 0.17 0.15 0.15 0.18
Information Ratio N/A -0.1 0.1 0.2 0.1 0.3 0.1 0.1 0.0 0.0 0.0 Percentage of Firm’s Assets (%) N/A N/A 0.29 0.15 0.13 0.15 0.15 0.16 0.24
Eastspring Investments claims compliance with Global Investment Performance Standards (GIPS®) and has prepared and presented this report in compliance with the GIPS standards. To receive a
complete list and description the composites and/or a presentation that adheres to the GIPS standards, contact the relevant sales representatives or email institutional@eastspring.com.
The Firm is defined as all portfolios, except those that are predominantly Private Equity portfolios, of Eastspring Investments (Singapore) Limited and Eastspring Investments (Hong-Kong) Limited (collectively referred to as "Eastspring
Investments"), which are business units within the Prudential Plc Group.
This composite includes a single portfolio that invest primarily in Asian High Yield fixed Income and managed to JACI Non-Investment Grade Index
This Composite was created on 1 Jan 12 and Composite Performance starts from 1 Dec 11. A full List of the Firm's Composites is available upon request.
No alteration of composite as presented here has occurred because of changes in personnel or other reasons at any time.
Eastspring Investments has been independently verified for the periods 1 Jan 1995 - 31 Dec 2009 and 1 Jan 2018 - 31 Dec 2018. The verification reports are available upon request.Verification assesses whether (1) the firm has
complied with all the composite construction requirements of the GIPS standards on a firm-wide basis and (2) the firms policies and procedures are designed to calculate and present performance in compliance with the GIPS standards.
Verification does not ensure the accuracy of any specific composite presentation.
The minimum fund size requirement for a fund to be included in a composite is USD3 million.
All returns are presented in Dollar. Market Values are presented in Dollar.
Policies for valuing portfolios, calculating performance and preparing compliant presentations are available upon request.
Performance results are presented gross of investment management fees and net of trading expenses. Treatment of other fees and withholding tax on dividends, interest income and capital gains varies for the underlying portfolios.
Additional information on other fees treatment are available upon request.
Portfolios within the composite has no or minimal derivatives exposure
If a fund has a cash flow or in-specie transfer (either in or out) that is greater than 10% of the opening balance of the fund, then the impact on portfolio performance has to be assessed to determine whether it should be held out-of-
structure. If the impact on performance is equal to or greater than 20 basis points, then the fund can be excluded from composite performance until it is back in structure. Additional information regarding the treatment of significant cash
flows is available upon request.
The highest % of management fee charged are as per below:
Equity Strategies : 2.00% per annum
Fixed Income Strategies : 1.25% per annum
Additional information regarding policies for calculating and reporting returns is available on request
The Firm total assets under management as of 31 December 2019 was USD125 billion.
Net composite returns shown do not represent actual net returns of underlying portfolios but are calculated net of the highest band fee (net down by 0.5% p.a.) in the tiered management fee schedule applicable to an institutional investor
investing in such a strategy. However, the firm reserves the right to change this fee structure and hence net composite returns might change without prior or subsequent notifications to current or potential investors
Effective 1st November 2018, Information Ratio is calculated as (Annualized Fund Return - Annualized Bench Return) / Tracking Error.
Prior to 1st November 2018, Information Ratio was calculated as (Average Annualized Excess Return / Tracking Error).
STRICTLY PRIVATE AND CONFIDENTIAL. FOR PROFESSIONAL INVESTORS ONLY.46
EASTSPRING INVESTMENTS – ASIAN HIGH
YIELD BOND FUND
SHARE CLASSES AVAILABLE FOR INVESTMENT
Inception *Minimum *Minimum
Class Currency Bloomberg ticker ISIN date initial investment subsequent investment
Class A USD ESAHAUI LX LU0801099465 09-Jul-12 USD500 USD50
Class Adm USD ESAHYAD LX LU0756523055 30-Mar-12 USD500 USD50
Class R USD ESAHYRU LX LU0865488281 12-April-19 USD500 USD50
Initial sales Annual Annual admin Initial sales Annual Annual Ongoing
Class charges% management fee% (max) charges% management admin fee% charges %
(max) fee% (max) (current) fee% (current) (current)
Class A 3.000 1.250 0.250 3.000 1.000 0.250 1.360
Class Adm 3.000 1.250 0.250 3.000 1.000 0.250 1.360
Class R None 0.625 0.250 None 0.500 0.250 0.860
Annual Ongoing charges vary from year to year and do not include portfolio transaction cost.
Class Distribution Dividend per dividend Ongoing charges are based on annualized expenses for the year ending December 2020.
Ex-date R-class shares are not sold directly to investors, but to financial intermediaries that serve
frequency share yield % investors. The intermediary executes the purchase of the funds on behalf of the investor,
as well as the sale and exchange. The Sales Charge may be modified for certain financial
intermediaries who submit trades on behalf of eligible investors. As allowed in the
Class A N.A N.A N.A N.A Prospectus, Eastspring and the financial intermediaries have agreed to waive the Sales
Charge for all purchases for the fee-based R share class. Always consult your financial
Class Adm Monthly 01-Mar-21 0.0494852 7.50 adviser. For more about charges, see the Prospectus.
Class R N.A N.A N.A N.A
Distributions are not guaranteed and may fluctuate. Past distributions are not necessarily indicative of future trends, which may be lower. Distribution payouts and its
frequency are determined by the Board of Directors, and can be made out of (a) income; or (b) net capital gains; or (c) capital of the Fund or a combination of any of (a)
and/or (b) and/or (c). The payment of distributions should not be confused with the Fund’s performance, rate of return or yield. Any payment of distributions by the Fund
may result in an immediate decrease in the net asset value per share. Funds with Monthly and Quarterly Distribution Frequency: Annualised Dividend yield = (Dividend
per share / Reference NAV at start of distribution period) x (No. of calendar days in a year / No. of calendar days in distribution period) x 100%. Funds with Yearly
Distribution Frequency: Annualised Dividend Yield = (Dividend amount / Total Net Assets) x (No. of calendar days in a year / No. of calendar days in distribution period)
x 100%. *Or their near equivalent in any major freely convertible currency of the amounts specified. "N.A.": This share class does not distribute dividends.
STRICTLY PRIVATE AND CONFIDENTIAL. FOR PROFESSIONAL INVESTORS ONLY.47
FIXED INCOME INVESTMENT TEAM PROFILE
Yrs of Yrs of Yrs of Yrs of
Portfolio Primary Responsibility (Credit
Primary Responsibilities Investment Firm Credit Research Investment Firm
Management Experience Experience Research Coverage) Experience Experience
Team oversight and management of
Guan Yi Low 23 13 China properties, China Investment
Asian Local bond, Total Return bond Yong Hong Tan
Grade corporates, Korea corporates, 19 10
and China Bond strategies (Credit Manager) Australia/Europe/Japan corporates;
Management of Asian, Singapore,
Wei Ming Cheong Indonesian bond strategies, as well as 25 15 Credit funds; Credit research of
SGD Cash strategies Li Ping Yeo^ China property and India Investment 26 3
Management of Hong Kong bond and Grade corporates
Danny Tan other solution-based/ credit-focused 21 17 Research coverage of Indonesia/IDR
strategies Jerry Gwee^ non property / industrials as well as 18 7
SGD non-property corporates
Management of Asian USD credit China local government financing
Wai Mei Leong 21 13
strategies William Xin* vehicles (LGFV) and Hong Kong 18 6
Management of Global Emerging HY/Taiwan corporates;
Markets Bond strategy, Fixed India high yield corporates and other
Eric Fang 17 13
Maturity products as well as selected Elvin Tan non-Asia Emerging Market 15 2
credit strategies corporates & financials
SGD property, China/Hong Kong and
Guilherme Maciel de Management of Global Emerging
14 2 Marvin Kwong financial institutions, Indon property 14 8
Barros Markets bond strategy
issuers;
Management of Global and Japan Malaysia/MYR corporates and other
bond strategies, as well as thematic / Shao Keng Ang 12 14
banks & financial institutions;
Rong Ren Goh Total Return strategies including Asian 13 5
Sustainable Bond, Capital Reserve China central and local state owned
funds enterprises (SOE) and China HY non-
Janet Lu 11 1
Management of Philippines Local/USD property issuers / industrials, Macao
Kenneth Lee bond and selected Asian USD credit 7 6 corporates
solution-based strategies
Wai Meng Lee Credit Research Support 9 2
Management of Thai bond strategies
Peerampa 8 4 Credit research of Hong Kong IG
Janjumratsang^ and Fixed Maturity products; Research 3You can also read
