SEMI-ANNUAL FUND REPORT - income.com.sg

1 S E M I- A NNUAL. F UN D R EPO R T. FOR THE HALF YEAR AS OF. 30 JUNE 2018. Contents CIO's Message 2 Thematic Funds Summary of Fund Performance Asian Bond Fund 72. As of 30 June 2018 3. Asian Income Fund 79. Global Income Fund 84. Core Funds Global Technology Fund 90. Global Bond Fund 4 Prime Fund 94. Global Equity Fund 9 Takaful Fund 99. Singapore Bond Fund 14. Singapore Equity Fund 18. Financial Statements Capital and Income Account 103. Managed Funds Balance Sheet 105. Asia Managed Fund 22 Notes to the Financial Statements 107. Global Managed Fund (Balanced) 27. Global Managed Fund (Conservative) 34. Global Managed Fund (Growth) 41. Singapore Managed Fund 48. Target Maturity Funds AIM Now 52. AIM 2025 56. AIM 2035 60. AIM 2045 64. Specialised Funds Money Market Fund 68. 1st September 2018. CIO Message Dear Policyholder Since the beginning of the year, we have seen global growth slowed down and division among major economies as compared to the strong momentum in 2017.

2 Headwinds and risks to global growth are rising, mainly in the forms of rising interest rates globally and compounded by several geopolitical issues. The global economic outlook is clouded by trade tension after the announcement of trade tariffs imposed by US on China and retaliatory moves by the Chinese authority. There are also signs of China's economy slowdown due to the tightening credit condition. For Singapore, final 1st quarter gross domestic product grew by year-on-year mainly attributed by robust growth in services industry. With the improving macroeconomic backdrop, Monetary Authority of Singapore, in its April 2018 Monetary Policy Statement, increased the slope of the SGD Nominal Effective Exchange Rate policy band slightly from zero percent previously and the authority expected core inflation to gradually rise to upper half of its 1-2% forecast range.

3 Heading into the 2nd half of the year, the markets are likely to remain uncertain and to be constrained by persistent and rising trade protectionism risks, shifting expectations of monetary policy normalisation in advanced economies and deleveraging cycle in China. Nonetheless, the best strategy to achieve long-term return on investment is still to focus on diversification and periodic rebalancing of one's portfolio in this market environment that stresses cautious optimism. I am glad to share that our Investment-Linked Policy (ILP) funds continue to perform well among the peers as 80% of them were ranked in 1st and 2nd quartile in their Morningstar categories in 1st half of 2018 period. Our ILP funds were also represented in the Lipper Leader categories. Amongst them, the Global Managed Fund (Growth) and Prime Fund obtained the Lipper Leader.

4 Status in the following categories Consistent Return , Expense and Total Return - respectively in 1st quarter of 2018. The Singapore Bond Fund and Takaful Fund achieved Lipper Leader in three categories, namely Consistent Return , Total Return . and Preservation in the same review. The latest SEMI-ANNUAL Fund REPORT for the financial period ended June 2018 can be downloaded at You may also access your Investment-Linked Policy statement via me@income, our online customer portal at To request for a copy of the Fund REPORT , please call our Customer Service Hotline at 67881122/67881777 or email us at Mark Wang Chief Investment Officer Income SEMI-ANNUAL Fund REPORT 2|for the half year as of 30 June 2018. Summary of Fund Performance as of 30 June 2018. Performance Launch Fund Size Performance (2 years . Date (S$ million) (1 year). Cumulative).

5 Core Funds Global Bond Fund Jan-03 122 Global Equity Fund Apr-98 251 Singapore Bond Fund Mar-00 317 Singapore Equity Fund Jan-03 156 Managed Funds Asia Managed Fund Sep-95 147 Global Managed Fund (Balanced) Jan-03 170 Global Managed Fund (Conservative) Jan-03 12 Global Managed Fund (Growth) Jan-03 251 Singapore Managed Fund May-94 85 Target Maturity Funds AIM Now Sep-09 76 AIM 2025 Sep-09 17 AIM 2035 Sep-09 23 AIM 2045 Sep-09 28 Specialised Funds Money Market Fund May-06 15 Thematic Funds Asian Bond Fund May-16 32 Asian Income Fund May-14 655 Global Income Fund Mar-15 90 Global Technology Fund Aug-00 89 Prime Fund Aug-73 256 Takaful Fund Sep-95 20 Average Return Notes: 1. The Global Managed Funds are invested in our Core Funds in the following ratios: Growth: Singapore Equity (15%), Global Equity (55%), Singapore Bond (10%) and Global Bond (20%).

6 Balanced: Singapore Equity (10%), Global Equity (40%), Singapore Bond (15%) and Global Bond (35%). Conservative: Singapore Equity (5%), Global Equity (25%), Singapore Bond (20%) and Global Bond (50%). 2. The returns are calculated on a bid-to-bid basis, in Singapore Dollar terms. All dividends are re-invested. Fees and charges payable through premium deduction or units cancellation are excluded from the calculation. 3. Past performance of the funds is not indicative of future performance. Actual returns are also not guaranteed. The bid prices and returns can fluctuate, just like the overall fluctuations of stock and bond markets. Our funds are subjected to market risks, which we have diversified across many quality investments. Income SEMI-ANNUAL Fund REPORT 3| for the half year as of 30 June 2018. Global Bond Fund INVESTMENT OBJECTIVE.

7 To provide a medium- to long-term rate of return by investing mainly in global bonds. INVESTMENT SCOPE. The sub-fund will invest mainly in global government and corporate bonds, mortgage backed securities and asset backed securities. The portfolio will have an average investment grade rating by Standard and Poor's and the manager is allowed to have some currency exposure. The sub-fund is denominated in Singapore Dollars. With effect from 29 April 2016, we have broadened the investment scope from an average A' rating to allow the portfolio to have an average investment grade rating by Standard and Poor's, and to allow the manager to have some currency exposure in the portfolio. FUND DETAILS AS OF 30 JUNE 2018. Launch Date 2 January 2003. Fund Size S$ million Initial Sales Charge (an extra bonus unit will be given for all single premium and top-ups).

8 Annual Management Fee Custodian Citibank Dealing Frequency Every business day Inclusion in CPFIS Yes (CPF OA and CPF SA). CPFIS Risk Classification Low to Medium Risk, Broadly Diversified Investment Manager NTUC Income Insurance Co-operative Limited Sub Investment Manager Amundi Singapore Limited Benchmark Barclays Global Aggregate hedged to Singapore Dollars Structure Single Fund The Annual Management Fee is not guaranteed and may be reviewed from time to time. However, it shall not exceed of the sub-fund balance at any point of time. TOP 10 HOLDINGS. % of % of S$ Ne t S$ Ne t June 2018 June 2017. (mi l ) A sse t (mi l ) A sse t V a l ue V a l ue Deutschland Rep 150228 BTPS 010627 US Treasury Note 150227 Singapore Government Bonds 4% 010918 TSY INFL IX N/B 150422 Deutschland Rep 150846 US Treasury Note 151120 Mexican Bonos De Desarrollo 131142 Singapore Government Bonds 4% 010918 Singapore Government Bonds 011017 Japan Govt 20-yr 201229 US Treasury Note 3% 151145 US Treasury Infl.

9 Index Bond 150126 Japan Govt 10-yr 201226 US Treasury Note 3% 150545 Bonos Del Estado 300427 Deutschland Rep 150846 Japan Govt 20-yr 201229 US Treasury Infl. Index Bond 150247 US Treasury Infl. Index Bond 150126 Important: Any differences in the total and percentage of the Net Asset figures are the result of rounding off. FUND MANAGER. NTUC Income Insurance Co-operative Limited is the Investment Manager of the sub-fund. Amundi Singapore Limited is the Sub- Investment Manager of the sub-fund. 4|. Income SEMI-ANNUAL Fund REPORT for the half year as of 30 June 2018. Global Bond Fund NTUC Income Insurance Co-operative Limited (Income) Volatility Income was established in 1970 to provide affordable 3- y e a r (a nnua l i se d). insurance for workers in Singapore. Today, over two million Gl o ba l B o nd F und people in Singapore look to Income for trusted advice and Calculated using bid-bid prices in Singapore Dollar terms, with dividends solutions when making their most important financial and distributions reinvested.

10 Decisions. Our wide network of advisers and partners provide life, health and general insurance to serve the protection, MARKET REVIEW. savings and investments needs of customers across all Market Review segments of society. The year started with generalised sell-offs and central bank actions. Trade tensions rose after the announcement of As a social enterprise, Income is committed to making some import tariff increases. The European Central Bank insurance accessible, affordable and sustainable for all. (ECB) released hawkish minutes from their December As of 30 June 2018, Income had S$ billion in assets meeting, the Bank of Japan (BOJ) announced the reduction under management. Our financial strength and diversified by 10 billion yen of long-term Japan government bonds investment portfolio is reflected by our strong credit ratings purchases, and its Governor, Mr.