Fullerton Asia Income Return Fund - Class B (USD ...

1 Fullerton Asia Income Return Fund - Class B (USD) August 2018. Investment Objective Inception date 15 Apr 2013. The investment objective of the Fund is to generate regular Income and long term capital appreciation for investors by investing in equities, fixed Income , cash and other permissible investments. Fund size USD million Investment Focus and Approach Base Currency The Fund intends to invest primarily in Class I - USD Distribution share Class of Fullerton Lux Funds - USD. Asian Bonds ("LABF"), which is denominated in USD, for exposure to fixed Income ; and the Class I - USD Distribution share Class of Fullerton Lux Funds Asia Growth & Income Equities ("LAGI"), which is Pricing Date denominated in USD, for exposure to equities. The Managers may, from time to time and at their sole 31 Aug 2018. discretion, vary the percentage of the Net Asset Value of the Fund that is invested in LABF and LAGI.

2 NAV*. The Fund may also invest in collective investment schemes and other investment funds (including USD exchange traded funds ("ETFs")), securities and/or hold cash, in accordance with its investment objective and asset allocation strategy, as the Managers deem appropriate. The Managers may use FDIs Management fee (including, without limitation, treasury, bond or equities futures, interest rate swaps and foreign exchange Currently forwards) in respect of the Fund for hedging and efficient portfolio management purposes. The Fund may Expense Ratio also invest in other Authorised Investments. (For financial year Performance (%) ended 31 Mar 2018). #. Distributions paid per unit Fund (bid-to-bid) Mar 2018: USD 130 Apr 2018: USD 120. May 2018: USD Jun 2018: USD 110 Jul 2018: USD Aug 2018: USD 100. Minimum Initial Investment 90 None Apr 13 Aug 14 Aug 15 Aug 16 Aug 17 Aug 18.

3 Minimum Subsequent SI. Ann. SI. Ann. Investment 1 mth 3 mths 6 mths 1 yr 3 yrs 5 yrs Ret. Vol. None Fund (bid-to-bid) Preliminary Charge Fund (offer-to-bid) NA Up to 4%. Dealing day Returns of more than 1 year are annualised. Returns are calculated on a single pricing basis in USD with net dividends and distributions (if any) reinvested. Offer-to-bid returns include an assumed preliminary Daily, up to 5pm (Singapore time). charge of 4% which may or may not be charged to investors. Bloomberg Code Fullerton Total Return Fund (FTRF) updated its name to Fullerton Asia Income Return (FAIR) on 21 FULFTRB SP. December 2017. Source: Fullerton Fund Management Company Ltd and Bloomberg. ISIN Code SG9999010219. Market Review For additional information on Investor sentiment turned more cautious in August, as a US-Turkey political spat negatively impacted Fullerton and its funds, please Turkish asset markets.

4 This spilled over to countries with weaker balance of payments in emerging contact: markets. US-China trade tensions continued to simmer. Fullerton Fund Management Investment Outlook Company Ltd 3 Fraser Street Our central scenario remains global recovery will regain traction, despite weaker growth momentum in #09-28 DUO Tower 1H18. Consumption has stayed generally firm. Capital expenditure has picked up, albeit unevenly. This Singapore 189352. bears watching as corporates are concerned over global trade tensions. As global inflation remains largely contained, we still expect central banks to scale back accommodation only gradually. T +65 6808 4688. F +65 6820 6878. Specifically, US GDP growth has rebounded to a 4% pace (annualized), after dipping to in 1Q18. US consumer confidence has remained steadfast, reflecting healthy job prospects. Private capital spending is up, given strong corporate earnings.

5 Moreover, President Trump's fiscal spending and tax UEN: 200312672W. cuts should cushion pullbacks in private domestic demand. We expect the pace of Fed rate hikes to stay gradual, as it is prepared to tolerate some overshoot on inflation. * Figures have been truncated to 2. decimal places. The official price is In contrast, Eurozone growth momentum has slowed. This reflects concerns over US-Europe trade published on Fullerton 's website. #. relations as well as the new populist government in Italy. As global financial conditions are still sufficiently Please refer to our website for accommodative, we maintain Eurozone recovery has not been derailed. In addition, the European more details. Central Bank has macro leeway to stay supportive if needed. In Japan, economic growth momentum has eased too while inflation remains below target. Hence, we expect the Bank of Japan to stay dovish relative to the Fed and ECB.

6 Investment Outlook(Cont'd). Emerging markets have faced some pressure since 2Q18, reflecting geopolitical uncertainty and higher oil prices. Hence, countries need to stay vigilant and ensure that macro policy stays credible and consistent. We still maintain that China will prioritise stability and will successfully avert a hard landing, despite trade tensions. Indeed, China policymakers have begun to increase infrastructure spending and boost onshore liquidity. We expect more reflationary measures ahead. On balance, we remain constructive on risk assets as the global macro and earnings outlook is still supportive. Valuations have improved. Investor positioning has lightened up too. However, worries over global trade tensions and Trump policy missteps will persist. We will utilize dynamic asset allocation and judiciously calibrate risk exposures so as to navigate market volatility.

7 We are also actively managing bond duration and foreign exchange exposures, given Fed policy risks. Bottom-up, we remain focused on Asian credits and stocks with good fundamentals. Investment Strategy We expect the contagion effect from falling Turkey and Argentina currencies to spread towards Asia. The Indonesian and Indian currencies are already significantly weaker despite higher domestic cash rates. This warrants a cautious approach and we have not increased our exposure to equity risk. Despite a difficult environment, we are able to identify investment opportunities. In August, we have further raised direct exposure to the US. dollar for the Singapore dollar share Class . We have also maintained a larger allocation to more defensive Asian equity markets such as Australia. Finally, as the cost of borrowing for Asian issuers has risen with higher US dollar and interest rates, we have increased our exposure to Asia High Yield bonds.

8 Sector Breakdown (Equities) Country Breakdown (Equities) Asset Allocation Consumer Discretionary Australia fixed Income Consumer Staples China Equities Energy Hong Kong Commodities Financials India Cash Health Care Indonesia Industrial Korea Information Technology Singapore Materials Taiwan Others Thailand US Ratings Breakdown ( fixed Income ) Country Breakdown ( fixed Income ). AAA Australia AA China A Hong Kong BBB India BB Indonesia B Japan CCC Korea CC Malaysia Singapore UK US Others Top 5 Holdings (Equities, as % of NAV) Top 5 Holdings ( fixed Income , as % of NAV). Invesco QQQ Trust Vanguard Long Term Treasury ETF SPDR STI ETF iShares 20 Year Treasury Bond iShares MSCI AUS ETF SPDR Portfolio Long Term Treasury Taiwan Semiconductor Manufacturing PCCW Capital No 4 Ltd Apr 2022 Alibaba Group Holding - ADR India Government Bond Jun 2019 Credit Rating : Where the security is not rated by external rating agencies, Fullerton 's internal rating methodology will apply.

9 Equities portion includes US ETF position of FI portion includes US ETF position of August 2018. Disclaimer: This publication is for information only and your specific investment objectives, financial situation and needs are not considered here. The value of units in the Fund and any accruing Income from the units may fall or rise. Any past performance, prediction or forecast is not indicative of future or likely performance. Any past payout yields and payments are not indicative of future payout yields and payments. Distributions (if any) may be declared at the absolute discretion of Fullerton Fund Management Company Ltd (UEN: 200312672W) ( Fullerton ) and are not guaranteed. Distribution may be declared out of Income and/or capital of the Fund, in accordance with the prospectus. Where distributions (if any) are declared in accordance with the prospectus, this may result in an immediate reduction of the net asset value per unit in the Fund.

10 Applications must be made on the application form accompanying the prospectus, which can be obtained from Fullerton or its approved distributors. You should read the prospectus and seek advice from a financial adviser before investing. If you choose not to seek advice, you should consider whether the Fund is suitable for you. The Fund may use or invest in financial derivative instruments. Please refer to the prospectus of the Fund for more information.