SECURITY BANK CORPORATIONSB Peso Equity Fund Key Information and Investment Disclosure Statement Month Ended 29 January 2016 FUND FACTS Classification: Launch Date: Minimum Investment: Minimum Additional Investment: Bloomberg Ticker: Peso Equity Fund 1 February 2010 Php 10,000 Php 5,000 Net Asset Value Per Unit: Total Fund NAV: Dealing Period Redemption Settlement: 1.819362 Php 3,998.35 million 9:00 am – 1:30 pm any banking day Four (4) banking days after the redemption date SBPSEQF PM Equity FEES* Trustee Fee Custodianship External Auditor Fee 0.1273% 0.0023% 0.0001% Security Bank Corporation HSBC SGV & Co. *As a percentage of average daily NAV for the quarter valued at Php 3,973.26 million INVESTMENT OBJECTIVE AND STRATEGY SB Peso Equity Fund aims to achieve long term growth by diversifying mainly into select equity investments listed in the Philippine stock exchange, and other marketable instruments. The Fund aims to surpass its benchmark (gross of fees) which is 90% Philippine Stock Exchange Index (price only return) + 10% O/N Special Savings Account (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 Equity Fund is suitable only for investors who: • Have an aggressive risk tolerance. • Seek potentially higher returns through investments on Philippine Stock Market and who can tolerate high price volatilities. • Have the possibility to be exposed to capital losses given the volatility nature of the local equities markets • Have an investment horizon of one to three (1-3) years. 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 equities or bonds. 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. 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) 888 7378 email us at [email protected] SB FUNDS | SB PESO EQUITY FUND -16. RELATED TRANSACTIONS The Fund has investments with Security Bank Corporation. Subject to BSP guidelines and the Trustee's Trust Committee approval.4% MTD) and EMP (-18. Investments in the said outlets were approved by the Trust Committee.701. the better. as well as invest in other tradable investment outlets/categories as may be deemed suitable for the Fund. while the later has a number of positive catalysts including the possible listing of its hospital unit and a favorable decision on Maynilad’s arbitration case. However. ***Information Ratio measures reward-to-risk efficiency of the portfolio relative to the benchmark. Hence.3% 3. The higher the number. We also like stocks such as CEB and DNL as both will benefit from the 2016 elections and higher discretionary spending due to lower oil prices.1% MTD) was sold down as investors took profits after it outperformed in 2015. we remain underweight gaming and financials given the competitive environment. visit our website at www.com SB FUNDS | SB PESO EQUITY FUND .39% -5. SM Prime Holdings Inc. 6.8% MTD) outperformed and Globe (GLO. +0.9000 1. foreign investors bought SECB (-0.12% 4.7000 *Volatility. we believe that the index can close above 7.744735 1. Meanwhile. Telcos sector (+4.28 to 6.8% MTD) while JFC (-6.6% Services 24. Market was volatile during the first week fuelled by developments in China causing a general risk-off sentiment.97% 3.49% -4.05% 3.084.1000 2.13) % *Volatility measures the degree to which the fund fluctuates vis-à-vis its average return over a period of time.5% MTD).300 and a strong support at 6.1000 1. we believe that the index could retest the January lows.2% MTD) stayed positive for the month as investors flocked to defensive names. Ayala Land. Likewise. among the top foreign names sold included Megaworld (MEG. However.96% 10.6m for the month.24% 5.49% 4. Past Year **Sharpe Ratio *** Information Ratio 2.80% 4. all related party transactions are conducted on an arm’s length and best execution basis and within established limits.71) (2.28% 5. -8.36 (1.5% 0.6% MTD) stayed flat. NAVPU Graph NAVPU over the past 12 months Highest Lowest 3. we remain defensive and will be looking to accumulate as the market drops.000. given the weak global outlook and a lot of global indices in bear territory.1% MTD) after the M&A deal with MUFG was disclosed and BPI (+4. For more information. INVESTMENT POLICY / PROSPECTIVE INVESTMENTS The Fund may invest in exchange-listed equities and fixed income securities.4% OUTLOOK AND STRATEGY.8% MTD) was sold off. **Sharpe Ratio is used to characterize how well the return of a Fund compensates the investor for the level of risk taken. The higher the number. If we get a clear winner for the 2016 elections and corporates deliver sound earnings. recovering oil prices and passive buying helped cushion the outflow.9% MTD).734070 Statistics 2. Inc.5000 2.59% -10.5m in December).securitybank. PLDT Co. Inc.42% 6.com or call (02) 888 7378 email us at [email protected]% MTD) saw a turnaround with names like URC recovering (+3.3000 SB Peso Equity Fund Benchmark 2. The PSEi registered slightly higher average daily turnover of $121m (vs $108.687. The PSEi has an initial support at 6.36 in just a span of 7 trading days.0% MTD) all sank for the month.23% -11.98% -3.6% Holdings Firms Cash & Cash Equivalents 18. Equity markets started the year on a sour note with the PSEi dropping 3.0% MTD) and Ayala Land (ALI. securities issued or guaranteed by the Philippine Government or the BSP and tradable securities issued by any supranational entity. while MBT (-11. and foreign funds continued to remain net sellers by $42.7% Property Equities 81. PLDT (TEL.9000 2.8% to end the month at 6.0% Cebu Air Inc. Consumer sector (-8. The property sector (-13. For Banks.06% Portfolio Composition Industrial 28. in the amount of: Php 469 million in deposits.39% -24. Robinson's Retail Energy Development Corporation Manila Electric Co. Puregold Price Club DNL Industries LT Group.62.4% Mining and Oil Financials 14. deposits in the Trustee’s bank or in other banks.000 by yearend.3% MTD). +7.FUND PERFORMANCE AND STATISTICS AS OF 29 JANUARY 2016 For reference purposes only and not a guarantee of future returns. Top 10 Holdings Cumulative Performance Period Fund Benchmark 1Mo 3Mo 6Mo 1Y 3Y -8. Large cap names we continue to overweight include LTG and MPI because the former has been benefiting from the introduction of the tax stamp program. the higher the reward per unit of risk. The market bounced convincingly from its January 21 low of 6.52% -16.20% 5.15% -33.65% 7. GLO and URC started the 4th Quarter earnings season registering decent topline growth but recognizing larger than expected expenses.7000 29-Jan-15 29-Apr-15 29-Jul-15 29-Oct-15 29-Jan-16 20. MAXS (-31. the Fund may also avail of financial derivative instruments solely for the purpose of hedging risk exposures. betterthan-expected GDP numbers.