SECURITY BANK CORPORATION

SB Peso Bond Fund

Key Information and Investment Disclosure Statement
Month Ended 31 January 2020

FUND FACTS

Classification: Long Term Bond Net Asset Value Per Unit: 1.884264
Fund
Launch Date: 1 July 2005 Total Fund NAV: Php1,353.55 million
Minimum Investment: Php 10,000 Dealing Period: 9:00 am – 1:30 pm any banking day
Minimum Additional Investment: Php 5,000 Trust Fee: 1.00% p.a.
Minimum Holding Period: None Redemption Settlement: Two (2) banking days after the
Bloomberg Ticker: SBPSUIT PM Equity redemption date
FEES*

Trustee Fee Custodianship External Auditor Fee

0.0849% 0.0017% 0.0001%

Security Bank Corporation SCB SGV & Co.

*As a percentage of average daily NAV for the month valued at Php1,386.70 million.

INVESTMENT OBJECTIVE AND STRATEGY

SB Peso Bond Fund (formerly “SB Secure Peso Fund”) aims to achieve long term growth by diversifying mainly into
medium to long term fixed income securities such as government securities, select corporate bonds and/or notes and
other marketable instruments (“FI Securities”). The Fund aims to surpass its benchmark which is 90% Markit iBoxx ALBI
Philippines (Domestic) + 10% O/N Special Savings Account Rate (net of withholding tax).

CLIENT SUITABILITY
A client profiling process should be performed prior to participating in the Fund to guide the prospective investor if the
Fund is suited to his/her investment objectives and risk tolerance. Clients are advised to read the Declaration of
Trust/Plan Rules of the Fund, which may be obtained from the Trustee, before deciding to invest.
SB Peso Bond Fund is suitable only for investors who:
• Have a moderate risk tolerance.
• Are aware of potentially higher returns in fixed income securities apart from deposits & deposit substitutes.
• Have the possibility to be exposed to capital losses given the volatile nature of the bond markets.
• Have an investment horizon of at least one (1) year.

KEY RISKS AND RISK MANAGEMENT

You should not invest in this Fund if you do not understand or are not comfortable with the accompanying risks.

Market | Price Risk – The possibility for an investor to experience losses due to changes in market prices of securities.

Liquidity Risk – The possibility for an investor to experience losses due to inability to sell or convert assets into cash
immediately or in instances where conversion to cash is possible but at a loss.
Credit Risk – The possibility for an investor to experience losses due to a borrower’s failure to pay principal and/or interest
in a timely manner.
Reinvestment Risk – The possibility of having lower returns or earnings when maturing funds or the interest earnings of
funds are reinvested.
Interest Rate Risk – The possibility for an investor to experience losses due to changes in interest rates.

 THE UIT FUND IS NOT A DEPOSIT AND IS NOT INSURED BY THE PHILIPPINE DEPOSIT INSURANCE
CORPORATION (PDIC).
 RETURNS CANNOT BE GUARANTEED AND HISTORICAL NAVPU IS FOR ILLUSTRATION OF NAVPU
MOVEMENTS/FLUCTUATIONS ONLY.
 WHEN REDEEMING, THE PROCEEDS MAY BE WORTH LESS THAN THE ORIGINAL INVESTMENT AND ANY LOSSES
WILL BE SOLELY FOR THE ACCOUNT OF THE CLIENT.
 THE TRUSTEE IS NOT LIABLE FOR ANY LOSS UNLESS UPON WILLFUL DEFAULT, BAD FAITH OR GROSS
NEGLIGENCE.

For more information, visit our website at www.securitybank.com or call (02) 8888 7371 email us at trustmarketing@securitybank.com

SB FUNDS | SB PESO BOND FUND

FUND PERFORMANCE AND STATISTICS AS OF 31 JANUARY 2020
For reference purposes only and not a guarantee of future returns.
NAVPU Graph NAVPU over the past 12 months

SB Peso Bond Fund Highest 1.885206

1.9500 Benchmark
Lowest 1.624158

Statistics

1.8500 *Volatility, Past Year 4.66%

**Sharpe Ratio 2.76
1.7500 ***Information Ratio 0.83
Weighted Average Duration 6.50
1.6500
*Volatility measures the degree to which the fund fluctuates vis-à-vis its

1.5500 average return over a period of time.

**Sharpe Ratio is used to characterize how well the return of a Fund
31-Jan-19 31-May-19 30-Sep-19 31-Jan-20 compensates the investor for the level of risk taken. The higher the number,
the better.
***Information Ratio measures reward-to-risk efficiency of the portfolio
relative to the benchmark. The higher the number, the higher the reward per
unit of risk.

Top 10 Holdings
Cumulative Performance Series Coupon Maturity %
Period 1Mo 3Mo 6Mo 1Y 3Y FXTN 20-23 6.75% 1/24/2039 25.29%
FXTN 10-64 6.88% 1/10/2029 24.29%
Fund 0.67% 1.92% 3.97% 19.46% 11.78%
Benchmark -0.34% 1.10% 2.46% 15.97% 10.50% FXTN 20-17 8.00% 7/19/2031 22.96%

BPI 2020 6.80% 3/6/2020 2.66%

Portfolio Composition
Less than 1 year
SMB 2022 6.60% 4/2/2022 1.73%
22.8% SMB 2021 5.50% 4/2/2021 1.52%
Gov't
1 to 3 years 4.6%
Securities CBC 2021 5.32% 6/6/2021 1.19%
72.8%
3 to 5 years 0.1% SMC 2020 5.25% 5/25/2020 0.61%
Cash & Other 5 to 7 years 0.1% SMPH 2020 5.10% 3/1/2020 0.60%
7 to 10 years 24. 3%
CPG 2020 6.69% 3/2/2020 0.60%
Corp. Issues Receivables Longer than 10
18.0%
9.2% 48.3%
years

Portfolio Composition is based on total assets of the Fund.

OUTLOOK AND STRATEGY

Local GS market corrected in the early part of the month, especially the short end of the curve, as players took profits due to the lack
of positive catalysts. Demand was dampened by new supply from a 3-year FXTN re-issue and from a new 3-year RTB issuance. For
the former, the Bureau of Treasury re-opened the FXTN 3-24 where only 37.346 bn was tendered vs the 30 bn targeted issue size,
and only 16.586 bn was accepted at a rate of 4.014%. In the latter part of the month, the new 3-year RTB 3-10 issuance received a
total of 149.827 bn bids vis-a-vis 135 bn in awards during the auction at a coupon of 4.375%. After the public offer period, total RTB 3-
10 to be issued was over 300 bn. As a result, yields closed higher by around 15 – 40 bps in the short end and in the belly, while the
long end of the curve was around 5 – 20 bps lower.

Outlook and Strategy: Inflation in January was higher than expected at 2.9% (2.8% consensus, 2.5% previous) continuing the upward
trend as expected. The BSP reduced their policy rates by another 25 bps during their first meeting of the year, as the manageable
inflation environment allowed them room for a preemptive policy rate reduction to support market confidence amid the possible
negative impact of the Black swan events to Consumption. We expect yields to trade range bound given the lack of near-term
catalysts, with a slight downward bias mainly due to the risk-off sentiment from the corona virus.
INVESTMENT POLICY / PROSPECTIVE INVESTMENTS
The Fund may be invested and reinvested in investments allowed under regulations issued by the Bangko Sentral Ng Pilipinas (the
“BSP”) relating to investment quality and their being subject to marked-to-market valuation, where deemed applicable thereof and shall
be in the form of any of the following :
(1) Fixed income securities issued by or guaranteed by the Philippine government or the Bangko Sentral ng Pilipinas; (2) Exchange listed
fixed income securities; (3) Marketable instruments that are traded in an organized exchange; (4) Fixed Income Securities and Loans
traded in an organized market; (5) Loans arising from repo agreements which are transacted through an exchange recognized by the
SEC; (6) Savings accounts and/or time deposits in any bank or financial institution, including Security Bank Corporation provided the bank
observe the principle of best execution and no purchase/sale be made with related counterparties without considering at least 2 (two)
competitive quotes from other sources; (7) The Fund may avail of financial derivatives solely for the purpose of hedging risk exposure of
the existing investments of the Fund, in accordance with existing BSP hedging guidelines and the Trustee’s risk management and
hedging policy approved by the Trust Committee and disclosed to fund participants; (8)
Such other tradable investment outlets/categories as the BSP may allow.
RELATED TRANSACTIONS
The Fund has no investments with Security Bank Corporation.
For more information, visit our website at www.securitybank.com or call (02) 8888 7371 email us at trustmarketing@securitybank.com