Opportunities can still be found despite macro uncertainties
Structured Investments
Theme: Increased Defence Spending
The 2025 NATO Summit, held in The Hague, concentrated on boosting defence expenditures and enhancing the alliance's capabilities. Member countries pledged to allocate 5% of their GDP to defence by 2035. The summit also covered support for Ukraine, cooperation in transatlantic defence industries, and strategies to combat hybrid threats.
- Thales is a French aerospace and defence company and one of the largest defence contractors in Europe. The company’s business is well diversified, with 48% of its revenue generated from civil sectors and 52% from defence. Rising global security concerns, heightened by the conflict in Ukraine, are fueling sustained growth in the defence market.
- Lockheed Martin is the world’s largest defence contractor and has led the Western market for advanced fighter aircrafts since securing the F-35 Joint Strike Fighter program in 2001. The company’s involvement in the F-35 program, hypersonic missile development, and space militarisation positions it strongly within the key spending priorities of the US defence budget.
Bonds
Temasek Holdings Pte Ltd was founded by the Singapore government in 1974 with the purpose of managing and overseeing its commercial investments. While the government does not engage in the day-to-day operations of Temasek, it maintains oversight by holding the company's management and board accountable for their performance and the protection of Singapore's past reserves.
Temasek Financial I Ltd (SGD)
This bond pays a coupon of 4.0475% with a maturity date on 5 March 2035.
Temasek Holdings has a diverse portfolio of listed and unlisted investments, with 48% and 52% of its net assets in each category, respectively. Managed both directly and through third-party fund managers, Temasek follows a long-term investment strategy that prioritises resilience against short-term market fluctuations, aiming for sustainable returns.
Over the past decade, it has achieved an annualised return of 6.0%, with 7.0% over 20 years and 14.0% since inception, alongside cumulative net investments of S$57 billion in the last ten years.
Temasek's financial strength is highlighted by its high credit ratings: Aaa (Stable Outlook) from Moody’s and AAA (Stable Outlook) from S&P Global, both aligned with Singapore's sovereign rating. These ratings reflect its status as a government-related entity, with both agencies acknowledging a strong likelihood of extraordinary government support in the unlikely event of financial need, further enhancing the stability of its investment framework.
Funds
Multi-asset Funds
Lion-Bank of Singapore CIO Supertrends Multi Asset Fund
The Lion-BOS CIO Supertrends Multi-Asset Fund is a multi-asset strategy that aims to provide income and long-term capital growth by investing in a diversified portfolio of asset classes including global equities, ETFs, global bonds, the writing of equity covered call options and other collective investment schemes. Guided by research from Bank of Singapore’s award-winning Chief Investment Office, the fund takes a rigorous research-based approach to identify quality companies within equities and fixed income with resilient business models and robust fundamentals. The fund also has distribution share classes for investors looking for dividend income.
PIMCO Balanced Income & Growth Fund
The PIMCO Balanced Income & Growth Fund is a global multi-sector strategy that seeks to combine PIMCO’s total return investment process and philosophy with income maximisation. The portfolio construction is founded on the principle of diversification across a broad range of equity and global fixed income securities. The fund has a historical annualised dividend yield of 7.01% p.a.
Note: Past performance figures do not reflect future performance. Dividend figures are from Bloomberg, as of 30 June 2025.
Bond Funds
PIMCO GIS Income Fund
The PIMCO GIS Income Fund is designed for investors who seek steady income with a secondary goal of capital appreciation. It takes a broad-based approach to investing in income-generating bonds. The fund aims to achieve this by employing PIMCO’s best income-generating ideas across global fixed income sectors. The fund has a historical annualised dividend yield of 6.55% p.a.
Note: Past performance figures do not reflect future performance. Dividend figures are from Bloomberg, as of 30 June 2025.
M&G (Lux) Optimal Income
The M&G (Lux) Optimal Income Fund is a global bond fund that aims to provide a combination of capital growth and income to deliver a return based on exposure to optimal income streams in investment markets, while applying environmental, social and governance (ESG) criteria. The fund has a historical annualised dividend yield of 6.01% p.a.
Note: Past performance figures do not reflect future performance. Dividend figures are from Bloomberg, as of 30 June 2025.
Equity Funds
AB Low Volatility Equity Portfolio Fund
The AB Low Volatility Equity Portfolio fund is a global equity fund seeking capital growth through securities of companies that the fund manager believes have lower volatility. Its investment approach focuses on quality, stability and price, where the fund seeks high quality stocks of companies with stable performance and predictable earnings, trading at attractive prices. The fund also has distribution share classes for investors looking for dividend income.
Currencies
For the month of June, the US Dollar (USD) initially saw mild demand on geopolitical escalation in Middle East, but demand quickly faded after a ceasefire in the Israel-Iran conflict. Subsequently, the USD took a turn lower, with the USD Index (DXY) testing more than a three-year low into month-end. Some of the factors that contributed to renewed USD selling pressure include tentative optimism about trade talks, prospects of rate cuts by the US Federal Reserve (Fed) and softer US data (reinforcing the view that US exceptionalism is eroding), while geopolitical concerns took a back seat. Recent comments from Fed officials have indicated that a rate cut in July is a possibility. In the near term, reciprocal tariffs remain a key focus, as markets watch for potential new deals or extensions. We continue to expect the USD to trade weaker as the USD diversification/re-allocation trend takes centre-stage while potential for a Fed rate-cut cycle comes into focus in 2H2025.
This advertisement has not been reviewed by the Monetary Authority of Singapore.
This document may be translated into the Chinese language. If there is any difference between the English and Chinese versions, the English version will apply.
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Global Equities Disclaimer
- Dividend growth is not guaranteed, nor are companies in which you invest obliged to pay dividends;
- Companies may go bankrupt rendering the original investment valueless;
- Equity markets may decline in value;
- Corporate earnings and financial markets may be volatile;
- If there is no recognised market for equities, then these may be difficult to sell and accurate information about their value may be hard to obtain;
- Smaller company investments may be difficult to sell if there is little liquidity in the market for such equities and there may be substantial differences between the buying price and the selling price;
- Equities on overseas markets may involve different risks to equities issued in Singapore;
- With regards to investments in overseas companies, foreign exchange rates may move in an unfavourable direction affecting adversely the valuation of investments in base currency terms.
Foreign Currency
- Foreign currency investments or deposits are subject to inherent exchange rate fluctuation that may provide opportunities and risks. Consequently, exchange rate fluctuations may affect the value of your foreign currency investments or deposits.
- Earning on foreign currency investments or deposits may change depending on the exchange rates prevalent at the time of their maturity if you choose to convert.
- Exchange controls may apply to certain foreign currencies from time to time.
- Any pre-termination costs will be taken and deducted from your deposit directly and without notice.
Dual Currency Returns
- By buying Dual Currency Returns, you are giving us the right to repay you at a future date in a different currency from the currency in which you made your original investment, even if you would prefer not to be paid in this currency at that time. Dual Currency Returns are affected by foreign exchange rates, which may affect how much you get back from your investment. You may receive less than you originally invested.
- Foreign exchange control restrictions may apply to the foreign currencies linked to your Dual Currency Returns. As a result, we may repay your investment and interest in a different currency. You may receive less than you originally invested when the amount of this different currency is converted back to the base currency (the currency you originally invested). You may be able to get information on foreign exchange control restrictions, if any, for each foreign currency offered in relation to Dual Currency Returns, from the relevant monetary, regulatory or other governmental authorities for that currency.
- We will not end Dual Currency Returns before the maturity date (the date they are due to end). You may, however, withdraw the amount you originally invested before the maturity date. If you do this, please remember that you will have to pay any charges that apply which are calculated based on the amount of the time remaining before maturity date, as well as current market conditions relating to strike prices, foreign exchange rates and changes in the underlying foreign exchange pair. These charges may mean that you get back much less than you originally invested. Please feel free to approach your relationship manager for details of the procedures and charges that apply if you withdraw your Dual Currency Returns investment before the maturity date.
- Dual Currency Returns are not insured deposits for the purposes of the Deposit Insurance and Policy Owners’ Protection Schemes Act 2011.
Collective Investment Schemes
- A copy of the prospectus of each fund is available and may be obtained from the fund manager or any of its approved distributors. Potential investors should read the prospectus for details on the relevant fund before deciding whether to subscribe for, or purchase units in the fund.
- The value of the units in the funds and the income accruing to the units, if any, may fall or rise. Please refer to the prospectus of the relevant fund for the name of the fund manager and the investment objectives of the fund.
- Investment involves risks. Past performance figures do not reflect future performance.
- Any reference to a company, financial product or asset class is used for illustrative purposes and does not represent our recommendation in any way.
- For funds that are listed on an approved exchange, investors cannot redeem their units of those funds with the manager, or may only redeem units with the manager under certain specified conditions. The listing of the units of those funds on any approved exchange does not guarantee a liquid market for the units.
- Any indicative distribution rate may not be achieved and is not an indication, forecast, or projection of the future performance of the Fund.
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Any opinions or views of third parties expressed in this document are those of the third parties identified, and do not represent views of Oversea-Chinese Banking Corporation Limited (“OCBC Bank”, “us”, “we” or “our”).