We Read a 36-Page Bond Fund Report. Here Are the 5 Most Surprising Things We Found
Introduction: Beyond the Ticker Symbol
Have you ever invested in an Exchange-Traded Fund (ETF), perhaps even using your CPF funds, and based your decision largely on its name? It’s a common shortcut. But what story does the fine print tell?
We decided to find out by diving deep into the 36-page annual report for the Amova SGD Investment Grade Corporate Bond Index ETF for the fiscal year ending June 30, 2025. While these documents are notoriously dense and formal, they contain fascinating details about where an investor’s money is actually going.
Here are the five most impactful and counter-intuitive takeaways we found, distilled from the report.
1. It’s an SGD Fund with a Surprisingly Global Reach
A common assumption for a Singapore Dollar (SGD) denominated bond fund is that it would primarily hold bonds from Singaporean companies and institutions. While that’s mostly true, it’s not the whole picture.
According to the fund’s Statement of Portfolio, Singapore-based holdings make up the majority at 68.81% of net assets. However, the report reveals significant international exposure, providing a layer of geographical diversification you might not expect. The fund’s non-Singaporean holdings include:
- Europe: 19.29%
- Hong Kong: 4.34%
- Australia: 4.22%
- Canada: 1.43%
This global reach reduces country-specific risk, even while your investment remains denominated in SGD—a valuable feature that isn’t obvious from the fund’s name alone.
🧠 What this means for you: You’re getting built-in international diversification against country-specific shocks without taking on currency risk, a sophisticated feature for an SGD-denominated fund.
2. You’re Lending Money to Banks and the Institutions That Run Singapore
The term “Corporate Bond ETF” might evoke images of lending to commercial companies like airlines or retailers. While the fund does hold bonds from those sectors, the two largest industry allocations tell a different story.
The “By Industry (Summary)” table reveals that the top exposures for June 30, 2025, are:
- Banking: 31.21%
- Government: 21.42%
Digging into the individual holdings makes this even more tangible. When you invest in this fund, you are lending money to foundational entities like HSBC, United Overseas Bank, and government-linked agencies responsible for public housing (HDB) and national transport infrastructure (LTA). This means your investment is directly helping to finance Singapore’s public housing flats and build its MRT lines and highways—you are literally lending to the physical infrastructure you see and use every day.
🧠 What this means for you: Your capital is funding the bedrock of Singapore’s economy. This concentration in highly-rated financial and government-linked entities provides a layer of perceived stability that is different from lending to more cyclical commercial enterprises.
3. “Index Tracking” Doesn’t Mean Mindless Copying
Many investors believe an index fund is a purely passive vehicle that mechanically buys every single security in its target index. This fund, however, operates with more nuance.
The report’s “About” section explains that the fund uses a “representative sampling strategy.” This means it invests in a sample of securities from the index that share a similar investment profile, but it doesn’t necessarily hold all of them.
The most surprising detail is the flexibility given to the fund manager. The fund can invest up to 20% of its value in securities that are not in the index at all (“non-Index Securities”), as long as they meet certain criteria, such as being investment-grade SGD bonds. This flexibility means you are not just buying a passive replicator; you are trusting the manager to make tactical decisions to enhance returns or manage risk, blurring the line between passive and active management.
🧠 What this means for you: This isn’t a set-and-forget robot. The fund’s structure gives the manager leeway to potentially navigate market changes or seize opportunities outside the strict confines of the index, offering a blend of passive cost-efficiency with a dose of active oversight.
4. Its Annual Running Cost is Remarkably Low
An investment’s expense ratio is one of the most critical factors impacting long-term returns. It’s the annual fee that all funds charge to cover their operational costs.
According to “Note 10. Financial ratios,” this ETF’s Total Expense Ratio for the 2025 financial year was just 0.26%. To put that in perspective, for every S$10,000 you invest, the fund’s operating cost is just S$26 per year.
This low cost is a key benefit of the ETF structure. For a bond fund, where expected returns are typically more modest than for equities, minimizing fees is absolutely essential. A lower expense ratio means a greater portion of the fund’s returns stays in the investor’s pocket, compounding over time.
🧠 What this means for you: In the world of bond investing where every basis point counts, this low fee structure is a powerful tailwind. It ensures that more of the bond’s coupon payments and capital appreciation flow directly to you, rather than being eroded by high management costs.
5. It’s a “Boring” Investment That Delivered Solid Performance
Investment-grade corporate bonds are often considered a stable, conservative—and perhaps “boring”—asset class compared to the volatility of the stock market. But stable doesn’t have to mean stagnant.
The fund’s “PERFORMANCE SUMMARY” table shows that for the 1-year period ending June 30, 2025, it delivered a strong 8.27% return. An analyst, however, never looks at performance in a vacuum. The fund’s benchmark, the iBoxx SGD Non-Sovereigns Large Cap Investment Grade Index, returned 8.76% over the same period. The fund trailed its benchmark by just 0.49%, and its 0.26% expense ratio accounts for over half of that difference—a textbook example of how fees directly impact returns.
This performance has clearly resonated with investors. The fund’s net assets grew by S$197.1 million over the year, from S$585.7 million to S$782.8 million. A closer look at the “STATEMENT OF MOVEMENTS OF UNITHOLDERS’ FUNDS” reveals that while S$49.7 million of this growth came from the fund’s performance, the majority—a hefty S$169.9 million—came from net new investments.
🧠 What this means for you: The fund delivered strong absolute returns, but its performance relative to the benchmark is a clear lesson in the impact of fees. It demonstrates that even with a low expense ratio, costs are a direct drag on performance, reinforcing the importance of scrutinizing every fee in your portfolio.
Conclusion: The Story in the Fine Print
A quick glance at the ticker symbol for this fund tells you it’s a Singapore Dollar bond ETF. But the annual report tells a much richer story. It reveals an investment that is more global, more foundational to the local economy, more strategically managed, and more cost-effective than its simple name might suggest.
The details hidden in an investment’s annual report can paint a much clearer picture than its label ever could. Whether you’re investing with cash or your CPF funds, the story behind the ticker is what truly matters. What surprising truths might be hiding in your own portfolio?
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