ABF Singapore Bond Index Fund: Semi-Annual Financial Review (Period Ending 31 December 2025)

The ABF Singapore Bond Index Fund, managed by Amova Asset Management Asia Limited, is Singapore’s first exchange traded bond fund, focusing on high-quality government and quasi-government bonds. This article reviews the fund’s performance, financial position, and key developments for the half-year ended 31 December 2025, with a focus on metrics and trends relevant to investors.

Key Financial Metrics

Performance Summary

Portfolio Composition and Credit Quality

• Sector Allocation: Sovereign bonds represent the largest allocation at 83.1%, followed by Real Estate (10.7%), Engineering Construction (4.1%), Finance (1.3%), and Electric (0.3%).
• Geographic Exposure: Predominantly Singapore (99.6%).
• Credit Ratings: 99.3% of the portfolio is rated Aaa (Moody’s), reflecting a very high credit quality.

Top 10 Holdings (as of 31 December 2025)

• Singapore Government Bond 3.5% 01/03/2027 – S\$77.3m (6.74%)
• Singapore Government Bond 2.875% 01/09/2030 – S\$71.9m (6.27%)
• Singapore Government Bond 2.25% 01/08/2036 – S\$70.7m (6.16%)
• Singapore Government Bond 2.875% 01/07/2029 – S\$62.3m (5.43%)
• Singapore Government Bond 2.75% 01/03/2046 – S\$61.6m (5.37%)
• Singapore Government Bond 3.375% 01/09/2033 – S\$60.3m (5.26%)
• Singapore Government Bond 3% 01/08/2072 – S\$53.2m (4.63%)
• Singapore Government Bond 2.625% 01/05/2028 – S\$46.9m (4.08%)
• Singapore Government Bond 2.75% 01/04/2042 – S\$44.2m (3.85%)
• Singapore Government Bond 2.875% 01/09/2027 – S\$43.7m (3.81%)

Fund Flows and Related-Party Transactions

• Units Created (H2 2025): S\$115.6m
• Units Cancelled (H2 2025): S\$62.1m
• Related Party Transactions: Bank balances are held with a related party of the Trustee (HSBC group). No soft dollar commissions or arrangements entered into by the manager.

Expense and Turnover Ratios

• Expense Ratio: Remained stable at 0.24% (YoY and HoH).
• Portfolio Turnover Ratio: Increased to 16.06% in H2 2025 from 12.15% in H1 2025, indicating increased trading activity.

Exceptional/Unusual Items and Other Events

• No exposure to financial derivatives, securities lending, repo transactions, unit trusts, or borrowings.
• No mention of asset revaluation, natural disasters, legal disputes, or significant macroeconomic shocks.
• No performance fees charged.

Conclusion and Investment Recommendations

Overall Financial Performance: The fund delivered a strong 1-year total return of 7.56% and maintained high credit quality and sectoral stability. However, the total return for H2 2025 was significantly lower than H1 2025, reflecting challenging market conditions or lower realised gains. Distributions paid were also notably lower compared to the previous period.

Outlook: The fund’s high allocation to AAA-rated Singapore sovereign bonds offers safety and stability. The consistent expense ratio and absence of leverage or derivatives point to a conservative, risk-averse approach. The uptick in turnover may reflect active rebalancing to capture yield opportunities or manage risk.

Recommendations

• If you are currently holding the stock (units): The fund remains a robust, low-cost vehicle for exposure to Singapore government and quasi-government debt. Investors seeking capital preservation and modest income should consider holding, especially in uncertain or volatile equity markets.
• If you are not currently holding the stock (units): The fund is suitable for investors seeking defensive exposure and diversification. Entry may be attractive given the fund’s solid 1-year performance and high credit quality, but be mindful that future returns may moderate given the recent slowdown in total return and distributions.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Investors should consider their own financial situation and risk tolerance and read the official prospectus and product highlights sheet before making investment decisions.

View ABF SG BOND ETF Historical chart here