united global ipo fund - united overseas bank · state street bank and trust company, acting...

United Global IPO FundAnnual Report

for the financial year ended31st December 2017

MANAGERUOB Asset Management LtdRegistered Address:80 Raffles PlaceUOB PlazaSingapore 048624Company Registration No. : 198600120ZTel: 1800 22 22 228

DIRECTORS OF UOB ASSET MANAGEMENTLee Wai FaiEric Tham Kah JinPeh Kian HengThio Boon Kiat

TRUSTEEState Street Trust (SG) Limited168 Robinson Road#33-01, Capital TowerSingapore 068912

CUSTODIAN / ADMINISTRATOR / REGISTRARState Street Bank and Trust Company, acting through its Singapore Branch168 Robinson Road#33-01, Capital TowerSingapore 068912

AUDITORPricewaterhouseCoopers LLP7 Straits View, Marina OneEast Tower, Level 12Singapore 018936

United Global IPO Fund(Constituted under a Trust Deed in the Republic of Singapore)

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A) Fund Performance

Fund Performance/Benchmark Returns

3 mth%

Growth

6 mth%

Growth

1 yr%

Growth

3 yrAnn

CompRet

5 yrAnn

CompRet

10 yrAnn

CompRet

SinceInception

06 December2004Ann

CompRet

United Global IPOFund 8.61 13.32 21.70 1.55 -5.29 -7.35 -1.77

Benchmark 1.46 2.95 6.00 6.00 6.00 6.00 6.00

Source: Lipper, a Thomson Reuters Company.

Note: The performance returns of the Fund are in Singapore Dollar based on a NAV-to-NAV basis with dividends and distributionsreinvested, if any.The Benchmark of the Fund: The performance of the Fund will be measured against an absolute return benchmark of 6% perannum.

For the 12 months ended 31 December 2017, the net asset value of the Fund rose 21.70%, outperforming the absolute returnbenchmark by 15.70% which rose 6.00% in SGD terms.

The outperformance of the Fund was due to strong performance of the Fund’s equity holdings, particularly in InformationTechnology, Health Care and Consumers Discretionary stocks, such as Alibaba, Arista Networks, Weibo, Momo,Paycom Software and Crompton Greaves, Samsung Biologis and Celltrion Healthcare. This more than offset negativedetractors in the Energy and Materials sectors, such as Cemex Holdings, Vermilion Energy, Cone Midstream Partners,Rice Midstream Partners, Serba Dinamik and some other selected stocks such as Shanghai Fudan Zhanjiang, PlanetFitness and China Jinjiang Environment.

The Fund increased equity holdings over the period to take advantage of the robust equity environment. By mid-year we were90% invested and by year end 97% invested with minimal cash. We added weights to Korea, especially in Health Care whichwere seeing strong market momentum and also in Europe which was seeing good signs of economic recovery. We bought intosome new initial public offerings (IPOs), but our focus was mainly in the secondary market in stocks that had recently gone IPOin the last 3 years, which already had some track record and we believed had more re-rating potential.

As at December 2017, the Fund had the following country asset allocation:China (25.70%),Singapore (19.54%),HongKong(13.66%), South Korea (12.58%), United States (11.58%), India (4.89%) and others (9.41%), with the remainder in cash(2.64%).

Economic and Market Review

Global equity markets rose throughout 2017. EmergingMarkets (EM) as a whole outperformedDevelopedMarkets, as appetitefor higher yielding assets increased with improved global economic momentum and a weaker US Dollar.

The strong rally in Asia and emerging markets was driven by better than expected economic data and strong earningsparticularly in technology, but there was solid earnings beat across the board too in materials, consumer and financials. InChina, the government’s supply side reforms, capacity rationalisation and resilient demand significantly boosted industrialprofits, while consumption and services continued to be strong.

The US Federal Reserve (Fed) hiked rates by quarter of a percentage point (25 basis points) in March and June and Decemberand started the process of unwinding quantitative easing. However, the US Dollar has continued to weaken against most majorcurrencies amidst modest US economic activity and muted inflation.

On the geopolitical front, markets brushed off concerns on North Korea’s defiant missile launches, US President Trump’s legalwoes and welcomed the election of Pro-EU French President Macron.

Global economic indicators were strong throughout 2017. After a mid-year retreat, global purchasing manufacturers’ indices(PMIs) generally rebounded to year highs. Gains were driven by domestic business investment, and increased US householdspending. Asian economic indicators were generally strong over the period. In China, both the official and Caixin factory figure


-2-

A) Fund Performance (continued)

were well above 50 throughout 2017, defying the naysayers’ expectations. In India, manufacturing activity strengthened asgrowth concerns from demonetisation policy and the goods and services (GST) roll-out receded. North Asian exports pickedup strongly. Korea and Taiwan kick-started a new production cycle of mobile handsets launches.

Global equities ended the year up 15.1% inSingaporeDollar terms. Asia ex-Japan and emergingmarketswere themajor driverswith the indices up 31.0% and 27% respectively. The US gained 12.6%, Europe was up 16.7% and Japan up 15%.

For the review period, we participated in the IPOs of Singapore listedHRNet andAPACRealty; in Korea,Celltrion HealthcareandCTKCosmetics; in Hong Kong and China,China Literature and Yixin Group. We were very active in the secondary postIPO market. We added stocks that had recently gone IPO across Korea, China, Europe and Singapore and across varioussectors in Health Care, Consumer Discretionary, Information Technology, Energy, Financials and REITs.

Outlook and Fund Strategy

The global equitymarkets have been buoyant in 2017with economic activity picking up in themajor economies, particularly Asiaand Europe. The backdrop of a slightly weaker US Dollar has helped fuel a continued rally in emerging markets, particularlyAsia, where we have tilted the Fund’s exposure.

The outlook for 2018 remains bright given the positive earnings momentum globally, benign inflation and a muted interest rateoutlook. Emerging market valuations particularly Asia are still not expensive relative to history and the rest of the World.

China’s economic recovery has continued throughout 2017, even as China’s central bank stepped up efforts in tighteningfinancial conditions to rein in leverage, control property prices and slow down infrastructure investments. While we still expectChina’s economic growth to moderate going forward, we believe the market will be more resilient this time. There has been astructural improvement in corporate earnings, cash flows and subsequently non- performing loans, given supply side reformsand capacity rationalisation. Pricing power has returned to China as seen in the strong positive rebound in the producer priceindex (PPI) after many years in negative territory. There are bright spots in the market, such as the Information Technology,Consumer Discretionary and Health Care sectors, which will still grow strongly despite the expected moderation in overallgrowth.

Our investment focus is on companies and sectorswhich are seeing strong earnings growth and upgrades, aswell as yield playslike REITs.

Weare seeingmore new IPO issues coming into themarket nowgiven the buoyant equity environment, but their quality ismixed.Valuations for many good primary issues have been expensive and difficult to get meaningful allocations. We will be selectivetowards new IPO issues and also continue to look for opportunities in the secondary market.


-3-

B) Investments at fair value and as a percentage of net asset value (“NAV”) as at 31 December2017 under review classified by

i) Country

Fair Value(S$)

% of NAV

Australia 145,676 2.57

Canada 121,345 2.14

China 1,455,092 25.70

France 266,432 4.70

Hong Kong 773,448 13.66

India 276,880 4.89

Singapore 1,106,629 19.54

South Korea 712,465 12.58

United States 655,467 11.58

Portfolio of investments 5,513,434 97.36

Other net assets/(liabilities) 149,307 2.64

Total 5,662,741 100.00

ii) Industry

Fair Value(S$)

% of NAV

Consumer Discretionary 601,797 10.63

Energy 121,345 2.14

Financials 1,153,856 20.37

Health Care 756,979 13.37

Information Technology 1,592,011 28.11

Real Estate 951,705 16.81

Telecommunication Services 300,600 5.31

Utilities 35,141 0.62



Total 5,662,741 100.00

iii) Asset Class

Fair Value(S$) % of NAV

Quoted equities 5,513,434 97.36


Total 5,662,741 100.00


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B) Investments at fair value and as a percentage of net asset value (“NAV”) as at 31 December2017 under review classified by (continued)

iv) Credit rating of quoted bonds

N/A

C) Top Ten Holdings

10 largest holdings as at 31 December 2017

Fair Value(S$)

Percentage oftotal net assetsattributable tounitholders

%

ALIBABA GROUP HOLDING LTD 506,958 8.95

CELLTRION HEALTHCARE CO LTD 470,152 8.30

ARISTA NETWORKS INC 440,761 7.79

AIA GROUP LTD 341,823 6.04

NETLINK NBN TRUST 300,600 5.31

CROMPTON GREAVES CONSUMER ELECTRICALS LTD 276,880 4.89

SANDS CHINA LTD 275,920 4.87

MANULIFE US REAL ESTATE INVESTMENT TRUST 271,997 4.80

AMUNDI SA 266,432 4.70

WEIBO CORP 248,875 4.39

10 largest holdings as at 31 December 2016

Fair Value

Percentage oftotal net assetsattributable tounitholders

(S$) %

VERMILION ENERGY INC 304,615 5.98

ALIBABA GROUP HOLDING LTD 279,090 5.48

SANDS CHINA LTD 251,182 4.93

AIA GROUP LTD 244,568 4.80

ARISTA NETWORKS INC 195,725 3.84

CEMEX HOLDINGS PHILIPPINES INC 193,547 3.80

EGIS TECHNOLOGY INC 190,063 3.73

DAVE & BUSTER’S ENTERTAINMENT INC 178,941 3.52

SHANGHAI FUDAN-ZHANGJIANG BIO-PHARMACEUTICAL CO LTD 169,045 3.32

CONE MIDSTREAM PARTNERS LP 163,309 3.21

D) Exposure to derivatives

i) Fair value of derivative contracts and as a percentage of NAV as at 31 December 2017

N/A


-5-

D) Exposure to derivatives (continued)

ii) There was a net realised loss of SGD 2,439 on derivative contracts during the financial year ended 31 December 2017.

iii) Net gains/(losses) on outstanding derivative contracts marked to market as at 31 December 2017

N/A

E) Amount and percentage of NAV invested in other schemes as at 31 December 2017

Please refer to the Statement of Portfolio.

F) Amount and percentage of borrowings to NAV as at 31 December 2017

N/A

G) Amount of redemptions and subscriptions for the financial year ended 31 December 2017

Total amount of redemptions SGD 632,541

Total amount of subscriptions SGD 155,978

H) The amount and terms of related-party transactions for the financial year ended 31December2017

Please refer to Note 8 of the Notes to the Financial Statements.

I) Expense ratios


J) Turnover ratios


K) Any material information that will adversely impact the valuation of the scheme such ascontingent liabilities of open contracts

N/A

L) For schemes which invest more than 30% of their deposited property in another scheme, thefollowing key information on the second-mentioned scheme (“the underlying scheme”)1

should be disclosed as well

i) Top 10 holdings at fair value and as percentage of NAV as at 31 December 2017 and 31 December 2016

N/A

ii) Expense ratios for the financial year ended 31 December 2017 and 31 December 2016

N/A


-6-

L) For schemes which invest more than 30% of their deposited property in another scheme, thefollowing key information on the second-mentioned scheme (“the underlying scheme”)1should be disclosed as well (continued)

iii) Turnover ratios for the financial year ended 31 December 2017 and 31 December 2016

N/A

1 Where the underlying scheme is managed by a foreign manager which belongs to the same group of companies as, or has aformal arrangement or investment agreement with, the Singapore manager, the above information should be disclosed on theunderlying scheme. In other cases, such information on the underlying scheme should be disclosed only if it is readily availableto the Singapore manager.

M) Soft dollar commissions/arrangements

UOB Asset Management has entered into soft dollars arrangements with selected brokers from whom products andservices are received from third parties. The products and services relate essentially to computer hardware and softwareto the extent that they are used to support the investment decision making process, research and advisory services,economic and political analyses, portfolio analyses including performance measurements, market analyses, data andquotation services, all of which are believed to be helpful in the overall discharge of UOB Asset Management’s duties toclients. As such services generally benefit all of UOB Asset Management’s clients in terms of input into the investmentdecision making process, the soft credits utilised are not allocated on a specific client basis. The Manager confirms thattrades were executed on a best execution basis and there was no churning of trades.

N) Where the scheme offers pre-determined payouts, an explanation on the calculation of theactual payouts received by participants and any significant deviation from thepre-determined payouts

N/A


-7-

REPORT OF THE TRUSTEE

The Trustee is under a duty to take into custody and hold the assets of United Global IPO Fund (the “Fund”) in trust for theunitholders. In accordance with the Securities and Futures Act (Cap. 289), its subsidiary legislation and the Code on CollectiveInvestment Schemes, the Trustee shall monitor the activities of the Manager for compliance with the limitations imposed on theinvestment and borrowing powers as set out in the Trust Deed in each annual accounting year and report thereon to unitholdersin an annual report.

To the best knowledge of the Trustee, the Manager has, in all material respects, managed the Fund during the financial yearcovered by these financial statements, set out on pages 12 to 31, in accordance with the limitations imposed on the investmentand borrowing powers set out in the Trust Deed.

For and on behalf of the TrusteeSTATE STREET TRUST (SG) LIMITED

Authorised signatory29 March 2018


-8-

STATEMENT BY THE MANAGER

In the opinion of UOBAssetManagement Ltd, the accompanying financial statements set out on pages 12 to 31, comprising theStatement of Total Return, Statement of Financial Position, Statement of Movements of Unitholders’ Funds, Statement ofPortfolio andNotes to the Financial Statements are drawn up so as to present fairly, in all material respects, the financial positionand portfolio holdings of United Global IPO Fund (the “Fund”) as at 31 December 2017, and the financial performance andmovements of unitholders’ funds for the year then ended in accordance with the recommendations of Statement ofRecommended Accounting Practice 7 “Reporting Framework for Unit Trusts” issued by the Institute of Singapore CharteredAccountants. At the date of this statement, there are reasonable grounds to believe that the Fundwill be able tomeet its financialobligations as and when they materialise.

For and on behalf of the ManagerUOB ASSET MANAGEMENT LTD

THIO BOON KIATAuthorised signatory29 March 2018


-9-

INDEPENDENT AUDITOR’S REPORT TO THE UNITHOLDERS OF UNITED GLOBAL IPO FUND

Our Opinion

In our opinion, the accompanying financial statements of United Global IPO Fund (the “Fund”), are properly drawn up inaccordance with the recommendations of Statement of Recommended Accounting Practice 7 “Reporting Framework for UnitTrusts” issued by the Institute of Singapore Chartered Accountants, so as to present fairly, in all material respects, the financialposition and portfolio holdings of the Fund as at 31 December 2017, and of the financial performance and movements ofunitholders’ funds for the financial year ended on that date.

What we have audited

The financial statements of the Fund comprise:

• the Statement of Total Return for the financial year ended 31 December 2017;

• the Statement of Financial Position as at 31 December 2017;

• the Statement of Movements of Unitholders’ Funds for the financial year ended 31 December 2017;

• the Statement of Portfolio as at 31 December 2017; and

• the notes to the financial statements, including a summary of significant accounting policies.

Basis for Opinion

We conducted our audit in accordance with Singapore Standards on Auditing (“SSAs”). Our responsibilities under thosestandards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Independence

We are independent of the Fund in accordance with the Accounting and Corporate Regulatory Authority Code of ProfessionalConduct and Ethics for Public Accountants and Accounting Entities (“ACRA Code”) together with the ethical requirements thatare relevant to our audit of the financial statements in Singapore, and we have fulfilled our other ethical responsibilities inaccordance with these requirements and the ACRA Code.

Other Information

The Fund’s Manager (the “Manager”) is responsible for the other information. The other information comprises all sections ofthe annual report but does not include the financial statements and our auditor’s report thereon.

Our opinion on the financial statements does not cover the other information and we do not and will not express any form ofassurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so,consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in theaudit, or otherwise appears to be materially misstated. If, based on the work we have performed on the other information, weconclude that there is a material misstatement of this other information, we are required to report that fact. We have nothingto report in this regard.

Responsibilities of the Manager for the Financial Statements

The Manager is responsible for the preparation and fair presentation of these financial statements in accordance with therecommendations of Statement of Recommended Accounting Practice 7 “Reporting Framework for Unit Trusts” issued by theInstitute of Singapore Chartered Accountants and for such internal control as the Manager determines is necessary to enablethe preparation of financial statements that are free from material misstatement, whether due to fraud or error.

-10-


INDEPENDENT AUDITOR’S REPORT TO THE UNITHOLDERS OF UNITED GLOBAL IPO FUND

In preparing the financial statements, the Manager is responsible for assessing the Fund’s ability to continue as a goingconcern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unlessthe Manager either intends to terminate the Fund or to cease the Fund’s operations, or has no realistic alternative but to do so.

The Manager’s responsibilities include overseeing the Fund’s financial reporting process.

Auditor’s Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from materialmisstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assuranceis a high level of assurance, but is not a guarantee that an audit conducted in accordancewith SSAswill always detect amaterialmisstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in theaggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financialstatements.

As part of an audit in accordance with SSAs, we exercise professional judgement and maintain professional scepticismthroughout the audit. We also:

• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, designand perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than forone resulting from error, as fraudmay involve collusion, forgery, intentional omissions,misrepresentations, or the overrideof internal control.

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriatein the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Fund’s internal control.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and relateddisclosures made by the Manager.

• Conclude on the appropriateness of theManager’s use of the going concern basis of accounting and, based on the auditevidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubton the Fund’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required todraw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures areinadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of ourauditor’s report. However, future events or conditions may cause the Fund to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, andwhether the financial statements represent the underlying transactions and events in a manner that achieves fairpresentation.

We communicate with the Manager regarding, among other matters, the planned scope and timing of the audit and significantaudit findings, including any significant deficiencies in internal control that we identify during our audit.

PricewaterhouseCoopers LLPPublic Accountants and Chartered Accountants

Singapore, 2 March 2018

-11-


9

STATEMENT OF TOTAL RETURNFor the financial year ended 31 December 2017

2017 2016

Note $ $

Income

Dividends 100,331 72,543

Interest 2,679 6,564

Total 103,010 79,107

Less: Expenses

Management fee 8 79,908 79,879

Trustee fee 8 5,025 5,000

Audit fee 19,743 18,600

Registrar fee 8 15,072 15,000

Valuation fee 8 6,659 6,656

Custody fee 8 6,139 4,978

Transaction costs 19,198 29,747

Interest expenses - 131

Other expenses 68,180 24,604

Total 219,924 184,595

Net income/(losses) (116,914) (105,488)

Net gains/(losses) on value of investments

Net gains/(losses) on investments 1,181,051 (24,996)

Net gains/(losses) on financial derivatives (2,439) -

Net foreign exchange gains/(losses) (2,476) (3,614)

1,176,136 (28,610)

Total return/(deficit) for the year before income tax 1,059,222 (134,098)

Less: Income tax 3 (10,518) (7,690)

Total return/(deficit) for the year 1,048,704 (141,788)


The accompanying notes form an integral part of these financial statements.-12-

STATEMENT OF FINANCIAL POSITIONAs at 31 December 2017

2017 2016

Note $ $

Assets

Portfolio of investments 5,513,434 3,639,770

Sales awaiting settlement 10,905 -

Receivables 4 7,942 13,900

Cash and bank balances 289,449 314,294

Fixed deposits - 1,250,459

Total assets 5,821,730 5,218,423

Liabilities

Payables 5 158,989 127,823

Total liabilities 158,989 127,823

Equity

Net assets attributable to unitholders 6 5,662,741 5,090,600



STATEMENT OF MOVEMENTS OF UNITHOLDERS’ FUNDSFor the financial year ended 31 December 2017

2017 2016

Note $ $Net assets attributable to unitholders at the beginning of the financialyear 5,090,600 5,858,142

Operations

Change in net assets attributable to unitholders resulting from operations 1,048,704 (141,788)

Unitholders’ contributions/(withdrawals)

Creation of units 155,978 72,044

Cancellation of units (632,541) (697,798)

Change in net assets attributable to unitholders resulting from net creationand cancellation of units (476,563) (625,754)

Total increase/(decrease) in net assets attributable to unitholders 572,141 (767,542)

Net assets attributable to unitholders at the end of the financial year 6 5,662,741 5,090,600



STATEMENT OF PORTFOLIOAs at 31 December 2017

Holdings at Fair value at

Percentage oftotal net assetsattributable tounitholders at

31 December2017

31 December2017$

31 December2017%

By Geography - Primary

Quoted Equities

AUSTRALIA

VIVA ENERGY REIT 61,667 145,676 2.57

CANADA

VERMILION ENERGY INC 2,500 121,345 2.14

CHINA

3SBIO INC 50,000 131,122 2.32

ALIBABA GROUP HOLDING LTD 2,200 506,958 8.95

CHINA HUARONG ASSET MANAGEMENT CO LTD 250,000 157,705 2.79

CHINA INTERNATIONAL CAPITAL CO 70,000 194,580 3.44

CHINA JINJIANG ENVIRONMENT HOLDINGS CO LTD 51,300 35,141 0.62

CHINA LITERATURE LTD 200 2,850 0.05

CHINA RAILWAY SIGNAL & COMMUNICATION CO LTD 170,000 177,861 3.14

WEIBO CORP 1,800 248,875 4.39

TOTAL CHINA 1,455,092 25.70

FRANCE

AMUNDI SA 2,350 266,432 4.70

HONG KONG

AIA GROUP LTD 30,000 341,823 6.04

CHINA RESOURCES PHARMACEUTICAL CO LTD 90,000 155,705 2.75

SANDS CHINA LTD 40,000 275,920 4.87

TOTAL HONG KONG 773,448 13.66

INDIA

CROMPTON GREAVES CONSUMER ELECTRICALS LTD 48,000 276,880 4.89

SINGAPORE

APAC REALTY LTD 190,000 166,250 2.93

FRASERS LOGISTICS & INDUSTRIAL TRUST 160,000 185,600 3.28

KEPPEL DC REIT 127,400 182,182 3.22




Holdings at Fair value at

Percentage oftotal net assetsattributable tounitholders at

31 December2017

31 December2017$

31 December2017%

By Geography - Primary (continued)

Quoted Equities

SINGAPORE (continued)

MANULIFE US REAL ESTATE INVESTMENT TRUST 224,895 271,997 4.80

NETLINK NBN TRUST 360,000 300,600 5.31

TOTAL SINGAPORE 1,106,629 19.54

SOUTH KOREA

CELLTRION HEALTHCARE CO LTD 3,468 470,152 8.30

CTK COSMETICS CO LTD 1,000 48,997 0.87

ING LIFE INSURANCE KOREA LTD 2,900 193,316 3.41

TOTAL SOUTH KOREA 712,465 12.58

UNITED STATES

ARISTA NETWORKS INC 1,400 440,761 7.79

PAYCOM SOFTWARE INC 2,000 214,706 3.79

TOTAL UNITED STATES 655,467 11.58

Total Equities 5,513,434 97.36



Net assets attributable to unitholders 5,662,741 100.00




Percentage oftotal net assetsattributable tounitholders at31 December

2017%


2016%

By Geography - Primary (Summary)

Quoted Equities

Australia 2.57 3.04

Canada 2.14 5.98

China 25.70 21.03

France 4.70 -

Hong Kong 13.66 9.73

India 4.89 2.14

Philippines - 3.80

Singapore 19.54 8.22

South Korea 12.58 -

Taiwan - 3.73

United States 11.58 13.83

Portfolio of investments 97.36 71.50

Other net assets/(liabilities) 2.64 28.50

Net assets attributable to unitholders 100.00 100.00




Fair value at31 December

2017$


2017%


2016%

By Industry - Secondary

Quoted Equities

Consumer Discretionary 601,797 10.63 14.68

Energy 121,345 2.14 9.19

Financials 1,153,856 20.37 7.70

Health Care 756,979 13.37 3.32

Information Technology 1,592,011 28.11 18.74

Materials - - 3.80

Real Estate 951,705 16.81 11.26

Telecommunication Services 300,600 5.31 -

Utilities 35,141 0.62 2.81

Portfolio of investments 5,513,434 97.36 71.50

Other net assets/(liabilities) 149,307 2.64 28.50

Net assets attributable to unitholders 5,662,741 100.00 100.00



These notes form an integral part of and should be read in conjunction with the accompanying financial statements.

1 General

UnitedGlobal IPOFund (the “Fund”) is a Singapore-registered trust fund constituted under a Trust Deed dated 12October 2004between UOB Asset Management Ltd (the “Manager”) and HSBC Institutional Trust Services (Singapore) Limited (the “RetiredTrustee”). The Deed is governed by the laws of the Republic of Singapore.

With effect from 1 April 2017, the Trustee of the Fund has changed from HSBC Institutional Trust Services (Singapore) Limitedto State Street Trust (SG) Limited (the “Trustee”).

The investment objective of the Fund is to achieve medium to long term capital appreciation by investing primarily in IPOs,post-IPO listed securities, interest bearing debt securities and/or deposits. The Fund may also invest up to 10% of its assets inpre-IPO securities. There is no target industry or sector for the investments of the Fund and may invest across all markets andsectors. The Fund will invest in post-IPO listed securities, IPOs and pre-IPO securities.

Subscriptions and redemptions of the units are denominated in theSingaporeDollar and theUnitedStatesDollar. Investorsmaysubscribe in the United States Dollar at the applicable rate of exchange from the Singapore Dollar.

2 Significant accounting policies

(a) Basis of preparation

The financial statements have been prepared under the historical cost convention, modified by the revaluation of financialassets held at fair value through profit or loss, and in accordance with the recommendations of Statement of RecommendedAccounting Practice 7 “Reporting Framework for Unit Trusts” issued by the Institute of Singapore Chartered Accountants.

The Fund has adopted the following Singapore Financial Reporting Standards (“FRS”) and related amendments in accordancewith the recommendations of the RAP 7 issued in March 2017 for annual periods beginning on or after 1 July 2016:

(i) Consolidation and disclosure of interests in other entities

FRS 110 “Consolidated financial statements”FRS 112 “Disclosure of interests in other entities”Amendments to FRS 110, FRS 112 and FRS 27 “Investment entities”

FRS 110 and the amendments define an investment entity and introduce an exception from the consolidation requirements forinvestments entities.

FRS 112 and the amendments require entities to disclose significant judgements and assumptions made in determiningwhether the entity controls, jointly controls, significantly influences or has some interests in other entities. Entities are alsorequired to provide disclosure around certain “structured entities”. The amendments to FRS 112 introduce new disclosurerequirements related to investment entities.

(ii) Offsetting financial assets and liabilities disclosures

Amendments to FRS 32 “Financial instruments: Presentation - Offsetting financial assets and financial liabilities”Amendments to FRS 107 “Disclosures - Offsetting financial assets and financial liabilities”

The amendments to FRS 32 provide clarification on the offsetting criteria in FRS 32 and address inconsistencies in theirapplication.

The amendments to FRS 107 require additional disclosures to enable users of the financial statements to evaluate the effector the potential effects of netting arrangements, including rights of set-off associated with an entity’s recognised financialassets and recognised financial liabilities, on the entity’s financial position.


NOTES TO THE FINANCIAL STATEMENTS

For the financial year ended 31 December 2017

-19-

2 Significant accounting policies (continued)

(a) Basis of preparation (continued)

(ii) Offsetting financial assets and liabilities disclosures (continued)

The adoption of these new or amended FRS impacted the Fund’s level of disclosures in certain of the above noted areas, butdid not result in substantial changes to the accounting policies of the Fund and had no material effect on the amounts reportedfor the current or prior years.

(b) Recognition of income

Dividend income is recognised when the right to receive payment is established. Interest income is recognised on a timeproportion basis using the effective interest method.

(c) Investments

Investments are classified as financial assets at fair value through profit or loss.

(i) Initial recognition

Purchases of investments are recognised on the trade date. Investments are recorded at fair value on initial recognition.

(ii) Subsequent measurement

Investments are subsequently carried at fair value. Net changes in fair value on investments are included in the Statement ofTotal Return in the year in which they arise.

(iii) Derecognition

Investments are derecognised on the trade date of disposal. The resultant realised gains and losses on the sale of investmentsare computed on the basis of the difference between the weighted average cost and selling price gross of transaction costs,and are taken up in the Statement of Total Return.

(d) Basis of valuation of investments

The fair value of financial assets and liabilities traded in active markets is based on quoted market prices at the close of tradingon the financial year end date. The quoted market price used for investments held by the Fund is the last traded market pricefor both financial assets and financial liabilities where the last traded price falls within the bid-ask spread. In circumstanceswhere the last traded price is not within the bid-ask spread, the Manager will determine the point within the bid-ask spread thatis most representative of fair value.

(e) Foreign currency translation

(i) Functional and presentation currency

The Fund’s investors are mainly from Singapore with the subscriptions and redemptions of the units denominated in theSingapore Dollar and the United States Dollar.

The performance of the Fund is measured and reported to the investors in the Singapore Dollar. The Manager considers theSingapore Dollar as the currency of the primary economic environment in which the Fund operate. The financial statements arepresented in the Singapore Dollar, which is the Fund’s functional and presentation currency.




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2 Significant accounting policies (continued)

(e) Foreign currency translation (continued)

(ii) Transactions and balances

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of thetransactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation atyear-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the Statementof Total Return. Translation differences on non-monetary financial assets and liabilities are also recognised in the Statementof Total Return within “Net gains/losses on investments”.

(f) Expenses charged to the Fund

All direct expenses relating to the Fund are charged directly to the Statement of Total Return. In addition, certain expensesshared by all unit trusts managed by the Manager are allocated to each fund based on the respective fund’s net asset value.

(g) Financial derivatives

Financial derivatives including forwards and swapsmay be entered into for the purposes efficient portfoliomanagement, tacticalasset allocation or specific hedging of financial assets held as determined by theManager and in accordance with the provisionof the Trust Deed and the Code on Collective Investment Schemes.

Financial derivatives outstanding on the financial year end date are valued at the forward rate or at the current market pricesusing the �mark-to-market� method, as applicable, and the resultant gains and losses are taken up in the Statement of TotalReturn.

(h) Distributions

The Manager has the absolute discretion to determine whether a distribution is to be made. In such an event, an appropriateamount will be transferred to a distribution account, to be paid out on the distribution date. The amount shall not be treated aspart of the property of the Fund. Distributions are accrued for at the financial year end date if the necessary approvals havebeen obtained and a legal or constructive obligation has been created.

3 Income tax

2017 2016

$ $

Singapore income tax 2,063 -

Overseas income tax 8,455 7,690

Total income tax 10,518 7,690

The Fundwas granted the status of Designated Unit Trust (“DUT”) in Singapore. The Trustee of the Fund ensures that the Fundfulfill their reporting obligations under the DUT Scheme.

Under the DUT Scheme, subject to certain conditions and reporting obligations being met, certain income of the DUT Fund isnot taxable in accordance with Sections 35(12) and 35(12A) of the Income Tax Act. Such income includes:

(i) gains or profits derived from Singapore or elsewhere from the disposal of securities;

(ii) interest (other than interest for which tax has been deducted under Section 45 of the Income Tax Act);




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3 Income tax (continued)

(iii) dividends derived from outside Singapore and received in Singapore;

(iv) gains or profits derived from foreign exchange transactions, transactions in futures contracts, transactions in interest rateor currency forwards, swaps or option contracts and transactions in forwards, swaps or option contracts relating to anysecurities or financial index;

(v) discount, prepayment fee, redemption premium and break cost from qualifying debt securities issued during theprescribed period; and

(vi) distributions from foreign unit trusts derived from outside Singapore and received in Singapore.

The Singapore income tax represents tax deducted at source for Singapore sourced dividends. The overseas income taxrepresents tax withheld on foreign sourced income.

The Fund is required to recognise a tax liability when it is probable that the tax laws of foreign countries require a tax liabilityto be assessed on the Fund’s gains on investments sourced from such foreign countries, assuming the relevant taxingauthorities have full knowledge of all the facts and circumstances. The tax liability is then measured at the amount expected tobe paid to the relevant taxation authorities using the tax laws and rates that have been enacted or substantively enacted by theend of the financial year. There is sometimes uncertainty about the way enacted tax law is applied to offshore investment funds.This creates uncertainty about whether or not a tax liability will ultimately be paid by the Fund. Therefore when measuring anyuncertain tax liabilities management considers all of the relevant facts and circumstances available at the time which couldinfluence the likelihood of payment, including any formal or informal practices of the relevant tax authorities.

As at 31 December 2017 and 2016, the Fund has uncertain taxes exposure with respect to gains on investment of which thetax liability is estimated to be nil.While this represents theManager’s best estimate, the estimated value could differ significantlyfrom the amount ultimately payable.

4 Receivables

2017 2016

$ $

Amounts receivable for creation of units 390 3,282

Dividends receivable 572 869

Interests receivable - 246

Other receivables 6,980 9,503

7,942 13,900




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5 Payables

2017 2016

$ $

Amount payable for cancellation of units 109,698 82,713

Amount due to the Manager 23,173 21,513

Amount due to Trustee 1,274 1,246

Tax payables 143 -

Other creditors and accrued expenses 24,701 22,351

158,989 127,823

6 Units in issue

During the financial year ended 31 December 2017 and 2016, the numbers of units issued, redeemed and outstanding wereas follows:

2017 2016

Units at the beginning of the financial year 8,177,719 9,203,930

Units created 225,858 117,905

Units cancelled (918,830) (1,144,116)

Units at the end of the financial year* 7,484,747 8,177,719

*Included above are units denominated in USD 43,664 52,492

$ $

Net assets attributable to unitholders 5,662,741 5,090,600

Net assets value per unit 0.756 0.622




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6 Units in issue (continued)

A reconciliation of the net assets attributable to unitholders per unit per the financial statements and the net assets attributableto unitholders per unit for issuing/redeeming units at the financial year end date is prepared below:

2017 2016

$ $

Net assets attributable to unitholders per financial statements per unit 0.756 0.622Effect of movement in the net asset value between the last dealing date and the endof the reporting period* 0.001 -

Net assets attributable to unitholders for issuing/redeeming per unit 0.757 0.622

* The net asset value for the purpose of processing unit subscription and redemption was established in accordance with the

methodology indicated in the Fund’s Prospectus. This item reflects the movement in net asset value between such date and the end

of the financial year.

7 Financial risk management

The Fund’s activities expose it to a variety of market risks (including currency risk, interest rate risk and price risk), credit riskand liquidity risk. The Fund’s overall risk management programme seeks to minimise potential adverse effects on the Fund’sfinancial performance. The Fund may use futures contracts, financial options contracts and/or foreign currency contractssubject to the terms of the Trust Deed to moderate certain risk exposures. Specific guidelines on exposures to individualsecurities and certain industries are in place for the Fund at any time as part of the overall financial risk management to reducethe Fund’s risk exposures.

TheFund’s assets principally consist of financial instruments such as equity investments and cash. They are held in accordancewith the published investment policies of the Fund. The allocation of assets between the various types of investments isdetermined by the Manager to achieve its investment objectives.

(a) Market risk

Market risk is the risk of loss arising from uncertainty concerning movements in market prices and rates, including observablevariables such as interest rates, credit spreads, exchange rates, and others that may be only indirectly observable such asvolatilities and correlations. Market risk includes such factors as changes in economic environment, consumption pattern andinvestor’s expectation etc. which may have significant impact on the value of the investments. The Fund’s investments aresubstantially dependent on changes in market prices and are monitored by the Manager on a regular basis so as to assesschanges in fundamentals and valuation. Although the Manager makes reasonable efforts in the choice of investments, eventsbeyond reasonable control of the Manager could affect the prices of the underlying investments and hence the asset value ofthe Fund.Guidelines are set to reduce theFund’s risk exposures tomarket volatility such as diversifying the portfolio by investingacross various geographies, alternatively, the Fund may be hedged using derivative strategies.

(i) Foreign exchange risk

The Fund has monetary financial assets and liabilities denominated in currencies other than the Singapore Dollar and it maybe affected favourably or unfavourably by exchange rate regulations or changes in the exchange rates between the SingaporeDollar and such other currencies. The Manager may at his discretion, implement a currency management strategy either toreduce currency volatility or to hedge the currency exposures of the Fund.




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7 Financial risk management (continued)

(a) Market risk (continued)

(i) Foreign exchange risk (continued)

The table below summarises the Fund’s exposure to foreign currencies at the end of the financial year.

As at 31 December 2017SGD USD HKD Others Total$ $ $ $ $

Assets

Portfolio of investments 869,773 1,804,642 1,437,566 1,401,453 5,513,434

Sales awaiting settlement 10,905 - - - 10,905

Receivables 6,980 390 - 572 7,942

Cash and bank balances 263,401 26,047 - 1 289,449

Total Assets 1,151,059 1,831,079 1,437,566 1,402,026 5,821,730

Liabilities

Payables 158,847 - - 142 158,989

Total Liabilities 158,847 - - 142 158,989

Net currency exposure 992,212 1,831,079 1,437,566 1,401,884

As at 31 December 2016SGD USD HKD TWD PHP Others Total$ $ $ $ $ $ $

AssetsPortfolio ofinvestments 442,109 1,634,334 916,194 190,063 193,547 263,523 3,639,770

Receivables 10,140 2,892 - - - 868 13,900

Fixed deposits 1,250,459 - - - - - 1,250,459Cash and bankbalances 298,387 15,906 - - - 1 314,294

Total Assets 2,001,095 1,653,132 916,194 190,063 193,547 264,392 5,218,423

Liabilities

Payables 127,823 - - - - - 127,823

Total Liabilities 127,823 - - - - - 127,823

Net currencyexposure 1,873,272 1,653,132 916,194 190,063 193,547 264,392




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(a) Market risk (continued)

(i) Foreign exchange risk (continued)

Investments, which is the significant item in the Statement of Financial Position is exposed to currency risk and other price risk.The other price risk sensitivity analysis includes the impact of currency risk on non-monetary investments. The Fund’s netfinancial assets comprise significantly non-monetary investments, hence currency risk sensitivity analysis has not beenperformed on the remaining financial assets.

(ii) Price risk

Price risk is the risk of potential adverse changes to the value of financial investments because of changes inmarket conditionsand volatility in security prices.

The table below summarises the impact of increases/decreases from the Fund’s investments in equities on the Fund’s netassets attributable to unitholders at 31 December 2017 and 2016. The analysis is based on the assumption that the indexcomponents within the benchmark increased/decreased by a reasonable possible shift, with all other variables held constantand that the fair value of the Fund’s investments moved according to the historical correlation with the index.

Benchmark component

2017Net impact tonet assets

attributable tounitholders

2016Net impact tonet assets

attributable tounitholders

$ % $ %

MSCI AC WORLD 694,693 20 480,450 20

(iii) Interest rate risk

Interest rate risk is the risk that the value of a financial instrument will fluctuate due to changes in market interest rates.

Investment funds that invest in equity securities may be subject to interest rate risk as any interest rate change may affect theequity risk premium though at varying degrees. Tomanage this risk, theManager analyses how interest rate changesmay affectdifferent industries and securities and then seeks to adjust the Fund’s portfolio investments accordingly. However, the effectsof changes in interest rates on the Fund’s portfolio may not be quantified as the relationship between the interest rates and thevalue of equity securities is indirect.

Other than the cash and bank balances which are at short term market interest rates, and therefore subject to insignificantinterest rate risk, the Fund’s financial assets and liabilities are largely non-interest bearing.

Hence, no sensitivity analysis has been presented separately.

(b) Liquidity risk

The Fund is exposed to daily cash redemptions and disbursements for the settlements of purchases. The Manager thereforeensures that the Fund maintains sufficient cash and cash equivalents and that it is able to obtain cash from the sale ofinvestments held to meet its liquidity requirements. Reasonable efforts will be taken to invest in securities which are traded ina relatively active market and which can be readily disposed of.

The Fund’s investments in listed securities are considered to be readily realisable as are listed on established regional stockexchanges.




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(b) Liquidity risk (continued)

The table below analyses the Fund’s financial liabilities into relevant maturity groupings based on the remaining period at thefinancial year end date to the contractual maturity date. The amounts in the table are the contractual undiscounted cash flows.Balances due within 12 months equal their carrying balances, as the impact of discounting is not significant.

Less than 3months

3 months to1 year

Over1 year

$ $ $

As at 31 December 2017

Payables 158,989 - -

Less than 3months

3 months to1 year

Over1 year

$ $ $

As at 31 December 2016

Payables 127,823 - -

(c) Credit risk

The Fund takes on exposure to credit risk, which is the risk that a counterparty will be unable to pay amounts in full when due.The Fund’s credit risk is concentrated on cash and bank balances, and amounts or securities receivable on the sale andpurchase of investments respectively. In order to mitigate exposure to credit risk, all transactions in listed securities aresettled/paid for upon delivery and transacted with approved counterparties using an approved list of brokers that are regularlyassessed and updated by the Manager.

The table below summarises the credit rating of banks and custodians in which the Fund’s assets are held as at 31 December2017 and 2016.

The credit ratings are based on the Viability ratings published by Fitch.

Credit ratingas at 31December2017

Credit ratingas at 31December2016

Bank and custodian

State Street Bank and Trust Company aa- aa-

Bank

Australia and New Zealand Banking Group Limited n/a aa-

United Overseas Bank Limited n/a aa-

The maximum exposure to credit risk at the financial year end date is the carrying amount of the portfolio of investments andcash and bank balances as presented in Statement of Financial Position.




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(d) Capital management

The Fund’s capital is represented by the net assets attributable to unitholders. The Fund strives to invest the subscriptions ofredeemable participating units in investments that meet the Fund’s investment objectives while maintaining sufficient liquidityto meet unitholder redemptions.

(e) Fair value estimation

The Fund classifies fair value measurements using a fair value hierarchy that reflects the significance of the inputs used inmaking the measurements. The fair value hierarchy has the following levels:

• Quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1).

• Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (that is,as prices) or indirectly (that is, derived from prices) (Level 2).

• Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs) (Level 3).

The following table analyses within the fair value hierarchy, the Fund’s financial assets and liabilities (by class) measured at fairvalue at 31 December 2017 and 2016:

Level 1 Level 2 Level 3 Total$ $ $ $

As at 31 December 2017Assets

Portfolio of investments

- Quoted equities 5,513,434 - - 5,513,434

Total 5,513,434 - - 5,513,434

Level 1 Level 2 Level 3 Total

$ $ $ $As at 31 December 2016Assets

Portfolio of investments

- Quoted equities 3,639,770 - - 3,639,770

Total 3,639,770 - - 3,639,770

Investments whose values are based on quoted market prices in active markets, and therefore classified within Level 1,comprise listed equities. The Fund does not adjust the quoted price for these instruments.

Except for cash and bank balances which are classified as Level 1, the Fund’s assets and liabilities not measured at fair valueat 31 December 2017 and 2016 have been classified as Level 2. The carrying amounts of these assets and liabilitiesapproximate their fair values as at the financial year end date.




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8 Related party transactions

(a) TheManager and the Trustee of the Fund areUOBAssetManagement Ltd andState Street Trust (SG) Limited respectively.State Street Trust (SG) Limited replaced HSBC Institutional Trust Services (Singapore) Limited as the Trustee with effect from1 April 2017. The Manager is a subsidiary of United Overseas Bank Limited while the Trustee is a subsidiary of State StreetBank and Trust Company.

Management fee and valuation fee are paid to the Manager for the financial year. Trustee fee and registrar fee were paid to theRetired Trustee for the period from 1 January 2017 to 31 March 2017.

With effect from 1 April 2017, trustee fee is paid to the Trustee while registrar fee and custody fee are paid to State Street Bankand Trust Company, Singapore Branch.

These fees paid or payable by the Fund shown in the Statement of Total Return and in the respective Notes to the FinancialStatements are on terms set out in the Trust Deed. All other related party transactions are shown elsewhere in the financialstatements.

(b) As at the end of the financial year, the Fund maintained the following accounts with the related parties:

2017 2016

$ $

State Street Bank and Trust Company, Singapore Branch

Cash and bank balances 289,449 -

United Overseas Bank Limited

Cash and bank balances - 7,631

Fixed deposits - 500,230

(c) The following transactions took place during the financial year between the Fund and related parties at terms agreedbetween the parties:

2017 2016

$ $

State Street Bank and Trust Company, Singapore Branch

Bank charges 529 -

United Overseas Bank Limited

Bank charges 50 50

Interest income - 245

The Hongkong and Shanghai Banking Corporation Limited

Bank charges 255 -




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8 Related party transactions (continued)

(d) UOB Kay Hian Pte Ltd is an affiliated company of United Overseas Bank Limited.

During the financial year, the Fund has brokerage fee paid or payable to UOB Kay Hian Pte Ltd as follows:

2017 2016

$ $

Brokerage charges - 411




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9 Financial ratios

2017 2016$ $

Total operating expenses 199,434 150,968Average daily net asset value 5,329,559 5,311,969Expense ratio1 3.74% 2.84%

Lower of total value of purchases or sales 2,418,560 3,853,129Average daily net assets value 5,329,559 5,311,969Turnover ratio2 45.38% 72.54%

1 The expense ratio has been computed based on the guidelines laid down by the Investment Management Association of Singapore

(“IMAS”). The calculation of the Fund’s expense ratio at financial year end was based on total operating expenses divided by the

average net asset value respectively for the financial year. The total operating expenses do not include (where applicable) brokerage

and other transactions costs, performance fee, interest expense, distribution paid out to unitholders, foreign exchange gains/losses,

front or back end loads arising from the purchase or sale of other funds and tax deducted at source or arising out of income received.

The Fund does not pay any performance fee. The average net asset value is based on the daily balances.2 The portfolio turnover ratio is calculated in accordance with the formula stated in the Code on Collective Investment Schemes. The

calculation of the portfolio turnover ratiowas based on the lower of the total value of purchases or sales of the underlying investments

divided by the average daily net asset value.




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