Nikko AM Shenton Short Term Bond Fund (S$)

I used Supplementary Retirement Scheme (SRS) fund to invest in the above-named fund in the beginning of 2005. I recently redeemed the fund some seven and half years later.

The fund was formerly known as DBS Enhanced Income Fund before DBS Asset Management was sold to Nikko Asset Management in September 2011.

The objective of the fund to invest in short-term global bonds and its benchmark is to beat the 3-month SIBOR rate. “The Fund undertakes an active approach to managing the trade-off between its liquidity needs and return. Through prudent duration management and careful credit selection, the Fund provides yield enhancement to fixed deposit returns.” (Source: Product Highlight Sheet)

Since its inception in September 2000 (12 years later), the annual growth rate was 2.20% on bid-to-bid basis with dividends and distributions reinvested, beating benchmark (1.42%).

Coming back to my sale if this fund recently. I bought the fund at NAV $1.10210 and sold at NAV $1.32582. The return on compounded basis was 2.49% per year. I preserved my principal sum and got return of 2.49% p.a. This return is nothing to shout about but I kept my principal sum in the SRS account. There is no diminution in value which could be an outcome in a volatile bond market during the global financial crisis in 2008/09.

Copyright © 2012, limkimtong for Living Investment

The material presented is intended to be general and written in layman’s language as much as it is possible. The author shall not be liable for any direct or consequential loss arising from any use of material written. Please seek professional advice from your financial advisor or financial institutions on material written covering financial matters.

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1 Response to Nikko AM Shenton Short Term Bond Fund (S$)

  1. FloridaAdvisor says:

    I would still conclude that bond investments as well as stock investments are somewhat dangerous right now. In fact at any given time, there is some level of risk associated with any investment. It’s the nature of investing. Risk is a funny thing. When the stock market is rip roaring, most everyone is willing to take a little more risk than they really should, and when the market is depressed, most are so fearful that little to no level of risk can be tolerated. Neither of these extremes makes for good investing. Thanks for the post.

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