UOB Asia Pacific Green Real Estate Investment Trust ETF

Portfolio review

The investment objective of the UOB Asia Pacific Green REIT ETF (“Fund”) is to closely track the performance of the iEdge-UOB Asia Pacific Yield Focus Green REIT Index (“Index”) before expenses deduction.

From its establishment on November 23, 2021, to July 31, 2022, the pension fund closely tracked the Index, with very minimal performance variance due to expenses and initial deployment.

UOB Asia Pacific Green Real Estate Investment Trust ETF

Comparison of the fund's net asset value to the Index from November 23, 2021, to July 31, 2022.

Source: UOBAM/Bloomberg, July 31, 2022

The Index has outperformed its non-green peers S&P Asia Pacific REIT Index by 3.09% year-to-date (YTD).

Comparison between the iEdge-UOB APAC Yield Focus Green REIT Index and its peer index from December 31, 2021, to July 31, 2022.

Source: UOBAM/Bloomberg, July 31, 2022

Past performance is not indicative of future performance. Performance figures are not annualized.

Market Review

Global stocksFollowing the dovish prospect of the Fed's rate hike in the USA, a rebound occurred in July 2022 (MSCI All Country World Index: up 6.5% in Singapore dollar terms). Risk assets surged as the market's interpretation of the dovish Fed indicated a slower pace of rate hikes. The Fed once again raised rates by 75 basis points, bringing the cumulative rate hike for the year to 1.5%. The US dollar weakened, and the yield on the 10-year US Treasury bond fell by 36 basis points to 2.65%. Asian stocks lagged behind global markets (Morgan Stanley Capital International All Country Asia Pacific Index: 1.3%) due to weakness in the China/Hong Kong markets, causing the real estate market to fall into distress.

Bank of Japan (Japan's central bank) maintained its mild monetary policy stance, widening its policy divergence with most developed economies that have shifted to tightening mode. The Bank of Japan raised its 2022 fiscal year core Consumer Price Index (CPI) inflation forecast to 2.3%, 1.4% for 2023, and 1.3% for 2024. The GDP growth outlook for the 2022 fiscal year was revised down to 2.4% (previously 2.9%), while the growth outlook for the 2023 fiscal year was slightly raised to 2% (previously 1.9%). Yoshihide Suga, the incumbent Prime Minister, and leader of the Liberal Democratic Party, won the upper house election by a landslide two days after the assassination of former Prime Minister Shinzo Abe.

Singapore's GDP for the second quarter of 2022 is forecasted to grow by 4.8% year-on-year (4% in the first quarter of 2022), lower than the market's expectation of 5.4%. The low base effect caused by tightening COVID-19 restrictions in the second quarter of 2021 contributes to this growth. Core CPI increased by 0.7% month-on-month in June 2022, with a year-on-year increase of 4.4%, outpacing expectations. Overall inflation rose by 1% m/m, 6.7% y/y. Inflation pressures are broad-based, including sectors such as services, food, retail, and utilities. The Monetary Authority of Singapore (MAS) expects core inflation to peak between 4% and 4.5% and has revised its forecast for 2022 to 3% to 4% (previously 2.5% to 3.5%). MAS views inflation as a greater risk than economic slowdown. In a non-cyclical move on July 14, 2022, it tightened monetary policy by adjusting the midpoint of the Singapore dollar nominal effective exchange rate band upwards.

Australia's overall inflation rate rose by 1.8% q/q in the second quarter of 2022, with a 6.1% y/y increase. This marks the second-highest reading since the introduction of the Goods and Services Tax (GST). The labor market continues to tighten, with the unemployment rate dropping to 3.5% in June 2022. The Reserve Bank of Australia (RBA) raised the cash rate by 50 basis points on July 6, 2022, to 1.35%, in line with market expectations.

The Hong Kong Monetary Authority raised the benchmark interest rate by 75 basis points to 2.75% to curb inflation. Advanced GDP for the second quarter of 2022 declined by 1.4% year-on-year, weaker than the market's expectation of -0.2%. The government is considering easing travel restrictions from the current 7-day quarantine upon entry to a shorter isolation period and introducing a dual-color health code system.

Prospects and positioning

Despite negative factors such as rising interest rates and bond yields in the background of escalating geopolitical risks and concerns about stagnation, the REITs market still rebounded in July 2022. Despite macro headwinds, the fundamentals at the real estate level remain supportive. The adjusted industry valuations still remain relatively attractive, supporting the strong outlook for REITs industry profit growth.

In July 2022, the fund's performance was boosted by the Australian market while the Hong Kong market was the main drag. The chart below shows the latest national funding status of the fund as of July 31.

National Funding

Data Source: UOBAM, July 31, 2022

The fund aims to closely track the performance of the pre-expense index. The index is reviewed semi-annually in March and September. The results of the index review take effect on the fourth Monday of the review month. The recent index review was on March 28, 2022, when the fund's rebalancing will take effect on the same day to closely track the index. The fund aims to distribute income quarterly. Not guaranteed to be issued in New Dollars. Distributions can be made from income, capital gains, and/or capital. This relates to the disclosure distribution policy in the fund prospectus. For more information, please refer to www.uobam.com.sg. The most recent dividend distribution date was June 29, 2022.

ESG (Environmental, Social, and Governance) Impact

Green Impacts Dashboard

The Green Impact Dashboard (GID) measures the green tilt [4] providing the level of positive sustainability impact for the fund. It compares the fund's performance to the non-green tilt APAC REIT index. Both indices hold the same assets, but the latter does not include the green tilt. We measure the fund's green impact from 4 indicators: greenhouse gas emissions, energy consumption, water consumption, and green building certifications.

这个仪表板表明绿色倾斜为基金提供了积极的绿色影响，我们的投资者可以很容易地监测具体的影响。

资料来源:UOBAM，GRESB，2022年7月

*DCR:在设计、建造和/或翻新时获得有效的绿色建筑证书

**行动：有效的绿色建筑认证

[1]房地产投资信托

[2]交易所买卖基金

[3]费用包括成本、费用或其他收费。

[4]绿色倾斜是指精选REITs在ETF/指数内的权重。选定REITs的权重可以根据GRESB环境表现和发展组成部分（“ENVI”）在每个指数审查日期增加、减少或保持不变除了由独立研究公司GRESB评估的整体GRESB评分之外，还可以奖励较环保的REITs，惩罚较不环保的REITs。

Unless otherwise stated, all statistical data cited in the report are from Bloomberg as of July 31, 2022.

Important Notice and Disclaimer

This document is for general reference only. This announcement does not constitute a unit ("Unit") or investment advice or advice, nor an offer or invitation to sell or purchase units of UOB Asia Pacific Green ESG REIT ETF ("Fund"), and its preparation does not take into account the specific objectives, financial situation, or needs of any particular recipient of this announcement.

The information contained in this document, including any data, forecasts, and related assumptions, is based on several assumptions, management forecasts, and analysis of existing data, reflecting the general situation as of the date of this document and the views of UOB Asset Management Ltd. ("UOBAM"), all of which are subject to change without notice. When preparing this document, UOBAM relies on and assumes the accuracy and completeness of all information obtained from public sources or reviewed by UOBAM without independent verification. While the information provided in this report is believed to be reliable, UOBAM makes no express or implied representations or warranties, nor assumes any responsibility or liability for its completeness or accuracy. In no event does any content in this document constitute a continuing representation or imply any changes affecting the Fund. The Company does not make any statements or commitments regarding the performance or investment returns of the Fund. The past performance of the Fund or UOBAM, as well as any past performance or forecasts, projections, or predictions of economic trends or securities markets, do not necessarily represent the future or potential performance of the Fund or UOBAM. The value of Fund units and their income (if any) may both decrease and increase, and due to the investment policies and/or portfolio management techniques adopted by the Fund, there may be significant volatility. Investment in units involves risks, including the potential loss of the invested amount, and does not constitute the responsibility, deposit, endorsement or guarantee or insurance of Oversea-Chinese Banking Corporation Limited ("UOB"), UOBAM, or any of its affiliates, associates or subsidiaries ("UOB Group"), or the Fund distributors. The Fund may use or invest in financial derivative instruments, and you should be aware of the risks associated with investing in financial derivative instruments as stated in the prospectus of the Fund. The UOB Group may have interests in such entities and may provide or seek to provide brokerage and other investment or securities-related services to the Fund.

Investors should note that unlike traditional unit trusts, investors cannot redeem their units directly through UOBAM, but must redeem through participating dealers directly or through stockbrokers, with the redemption amount must meet a minimum threshold higher than that required for redeeming units of traditional unit trusts. The list of participating dealers can be found at www.uobam.com.sg. Therefore, investors may only realize the value of their units by selling them on the Singapore Exchange ("SGX"). Investors should also note that any listing and quotation of units on the SGX do not guarantee the market liquidity of such units.

Investing in unit trusts involves investment risk and exchange rate risk, including the potential loss of the invested principal. Investors should first read the prospectus of the Fund, which can be obtained from UOBAM or any appointed agent or distributor, and then decide whether to subscribe to or purchase any units. You may wish to seek advice from a financial adviser before committing to investing in any units. If you choose not to do so, you should carefully consider whether the Fund is suitable for you.

The Fund is not sponsored, endorsed, sold, or promoted by iEdge-UOB APAC Yield Focus Green REIT Index ("Index") or any of its affiliates, and SGX and/or its affiliates do not make any express or implied guarantees or representations regarding the results obtained from using the Index and/or the Index in general at any specific date or time or any other numbers managed, calculated, and published by SGX. SGX will not be responsible to anyone for any errors (whether due to negligence or other reasons) in relation to the Fund and the Index, nor is there an obligation to notify anyone of any errors. "SGX" is a trademark of SGX and is used under license. All intellectual property rights in this Index are owned by SGX.

"SGX" is a trademark of the Singapore Exchange and is used under license. All intellectual property rights of this Index belong to the Singapore Exchange.

The use of the name, logo, or trademark of UOB in this document does not represent the opinion of UOB. UOB is not the offeror or manager of the fund, nor will it assume any investment or advisory role towards UOB due to the use of the term "UOB" in the fund name. UOB is not responsible for the performance of the fund, nor is it involved in the management of the fund with UOB. UOB does not provide any advice or opinions, and the preparation of this document does not take into account the specific objectives, financial situation, or needs of any particular person who may receive this document. UOB is not responsible for any errors in this document or reliance on this document.

This advertisement or publication has not been reviewed by the Monetary Authority of Singapore.

UOB Asset Management Ltd. Reg. No. 198600120Z

Share from UOBAM

Hold positions statistics.