United Japan Growth Fund

United Japan Growth Fund Semi Annual Report for the half year ended 30 June 2021 United Japan Growth Fund (Constituted under a Trust Deed in the Republic of Singapore) MANAGER UOB Asset Management Ltd Registered Address: 80 Raffles Place UOB Plaza Singapore 048624 Company Registration No. : 198600120Z Tel: 1800 22 22 228 DIRECTORS OF UOB ASSET MANAGEMENT LTD Lee Wai Fai Eric Tham Kah Jin PehKianHeng Thio Boon Kiat TRUSTEE State Street Trust (SG) Limited 168 Robinson Road #33-01, Capital Tower Singapore 068912 CUSTODIAN / ADMINISTRATOR / REGISTRAR State Street Bank and Trust Company, acting through its Singapore Branch 168 Robinson Road #33-01, Capital Tower Singapore 068912 AUDITOR PricewaterhouseCoopers LLP 7 Straits View, Marina One East Tower, Level 12 Singapore 018936 SUB-MANAGER Fukoku Capital Management, Inc. 1-3-1 Uchisaiwaicho Chiyoda-Ku Saiwai Building 3rd Floor Tokyo 100-0011, Japan -1- United Japan Growth Fund (Constituted under a Trust Deed in the Republic of Singapore) A) Fund Performance Since Inception 18 August 3yr 5yr 10 yr 1995 3mth 6mth 1yr Ann Ann Ann Ann Fund Performance/ % % % Comp Comp Comp Comp Benchmark Returns Growth Growth Growth Ret Ret Ret Ret United Japan Growth Fund -2.42 -2.27 16.23 3.68 5.17 4.75 2.57 Benchmark -0.24 3.01 20.29 6.73 10.16 8.13 0.60 Source: Morningstar. Note: The performance returns of the Fund are in Singapore Dollar based on a NAV-to-NAV basis with dividends and distributions reinvested, if any. The benchmark of the Fund: Aug 95 – Dec 04: Nikkei 225 Stock Average; Jan 05 – Dec 10: Topix; Jan 11 to Present: MSCI Japan Index. For the six months ended 30 June 2021, the net asset value (NAV) of the Fund declined by 2.27% compared to the 3.01% gain in the benchmark MSCI Japan Index in Singapore Dollar (SGD) terms. The performance was attributed largely to negative security selection, while sector allocation had a marginal negative impact on relative performance. The underweight to Financials was the largest detractor which was offset by the underweight exposure to Health Care. As to security selection, the Fund’s performance suffered due to weak selection in the Financials, Health Care and Consumer Discretionary sectors. Key contributors to performance included Hitachi Ltd (Information Technology), JTEKT Corporation (Consumer Discretionary)andFujifilm Holdings Corp (Information Technology). Key detractors include Daiichi Sankyo Co Ltd (Health Care), Tokyo Century Corp (Financials) and Softbank Group Corp (Communication Services). Sector allocation for the Fund as at end June 2021: Industrials (29.40%), Consumer Discretionary (17.14%), Information Technology (12.77%), Financials (8.88%), Communication Services (8.60%), Materials (8.31%), Health Care (7.15%), Real Estate (3.33%) and Consumer Staples (3.32%), with the remainder in cash (1.10%). Economic and Market Review The Japanese economy had deteriorated during the first quarter due to the negative impact from the imposition of a state of emergency following a rise in COVID-19 cases. Exports had continued to rise, mainly to the United States and China. Although capital investment was low, production was picking up, in particularly within the manufacturing sector. In contrast, personal consumption had declined due to restrictions such as shortened restaurant business hours due to the resurgence of infections and growing self-restraint among consumers. During the first quarter, the TOPIX Index rose by 9.3%. Japanese equities rose as the US stock market hit a new high. Towards the end of the quarter, the stock market however started to stagnate due to changes in the Bank of Japan’s ETF purchasing policy and continued caution around rising US long-term interest rates. -2- United Japan Growth Fund (Constituted under a Trust Deed in the Republic of Singapore) A) Fund Performance (continued) In 2nd Quarter, Japanese economic activities began to rise despite the challenging situation due to COVID-19 stemming from the re-imposition of the state of emergency which led to sluggish consumption in particular in the services sector, such as the restaurant business. While the global shortage of semiconductors weighed on automobile production, exports continued to rise against a backdrop of strong overseas demand. Capital investment also rose in the manufacturing industry. During the quarter, the TOPIX declined by 0.3% in the wake of “priority measures such as prevention of spread” against new COVID-19 infections and the rise in long-term US interest rates amid concerns over rising inflation. Outlook and Fund Strategy We expect further improvement in foreign demand in the wake of the US and global recovery while domestically focused companies in consumer services to benefit from the normalisation of the domestic economy once vaccination rates improve in the latter half of this year. The US Fed shift to a slightly hawkish stance with suggestions of tapering and possible rate hikes despite its continued accommodative monetary stance and talk of US tax hikes may however on equity performance prices. Stock selection wise, our focus will be on investing in companies that are able to: 1. Improve their business performances in the medium to long term. 2. Raise their profitability and capital efficiencies. 3. Benefit from a recovery as economic activities start to return to normal. In terms of sector allocation, we will continue to overweight the Information Technology and Communication Services sectors which are expected to benefit from growth in demand; and the Electric Appliances and Precision Instruments sectors which are expected to see growth from the development and applications of new 5G, artificial intelligence (AI) and Internet of Things (IoT) deployment; business involved in development and supply of medical equipment as well as sectors that would benefit from the re-opening of the economy such as Passengers and Services whose revenues are expected to recover in anticipation of the normalisation of economic activities as vaccinations rates rise. -3- United Japan Growth Fund (Constituted under a Trust Deed in the Republic of Singapore) B) Investments at fair value and as a percentage of net asset value (“NAV”) as at 30 June 2021 under review classified by i) Country Fair Value % of NAV (S$) Japan 12,292,222 98.90 Portfolio of investments 12,292,222 98.90 Other net assets/(liabilities) 137,346 1.10 Total 12,429,568 100.00 ii) Industry Fair Value % of NAV (S$) Communication Services 1,068,700 8.60 Consumer Discretionary 2,130,022 17.14 Consumer Staples 412,264 3.32 Financials 1,104,012 8.88 Health Care 888,574 7.15 Industrials 3,654,783 29.40 Information Technology 1,587,546 12.77 Materials 1,032,471 8.31 Real Estate 413,850 3.33 Portfolio of investments 12,292,222 98.90 Other net assets/(liabilities) 137,346 1.10 Total 12,429,568 100.00 iii) Asset Class Fair Value % of NAV (S$) Quoted equities 12,292,222 98.90 Other net assets/(liabilities) 137,346 1.10 Total 12,429,568 100.00 iv) Credit rating of quoted bonds N/A -4- United Japan Growth Fund (Constituted under a Trust Deed in the Republic of Singapore) C) Top Ten Holdings 10 largest holdings as at 30 June 2021 Percentage of total net assets attributable to Fair Value unitholders (S$) % SONY GROUP CORP 484,628 3.90 SOFTBANK GROUP CORP 414,317 3.33 KEYENCE CORP 407,438 3.28 TOYOTA MOTOR CORP 376,313 3.03 HITACHI LTD 338,968 2.73 Z HOLDINGS CORP 324,358 2.61 CENTRAL JAPAN RAILWAY CO 306,106 2.46 NOMURA RESEARCH INSTITUTE LTD 275,949 2.22 DAIKIN INDUSTRIES LTD 275,634 2.22 TERUMO CORP 256,262 2.06 10 largest holdings as at 30 June 2020 Percentage of total net assets attributable to Fair Value unitholders (S$) % KEYENCE CORP 349,367 3.41 TOYOTA MOTOR CORP 332,267 3.24 SONY CORP 324,638 3.16 SOFTBANK GROUP CORP 324,178 3.16 TOKIO MARINE HOLDINGS INC 273,372 2.67 OBIC CO LTD 268,407 2.62 DAIICHI SANKYO CO LTD 261,900 2.56 SUMITOMO MITSUI FINANCIAL GROUP 258,763 2.52 ITOCHU CORP 252,160 2.46 Z HOLDINGS CORP 251,661 2.45 -5- United Japan Growth Fund (Constituted under a Trust Deed in the Republic of Singapore) D) Exposure to derivatives The global exposure relating to derivative instruments is calculated using the commitment approach: (i) the absolute value of the exposure of each individual financial derivative not involved in netting or hedging arrangements; (ii) the absolute value of the net exposure of each individual financial derivative after netting or hedging arrangements; and (iii) the sum of the values of cash collateral received under certain cases. i) FairvalueofderivativecontractsandasapercentageofNAVasat30June2021 Contract or underlying principal Positive Negative amount fair value % of NAV fair value % of NAV $$ $ Foreign currency contracts 20,000 101 -* - - * denotes amount less than 0.01% ii) There was a net realised gain of SGD 17,275 on derivative contracts during the financial period from 1 January 2021 to 30 June 2021. iii) There was a net unrealised gain of SGD 101 on outstanding derivative contracts marked to market as at 30 June 2021. E) Amount and percentage of NAV invested in other schemes as at 30 June 2021 N/A F) Amount and percentage of borrowings to NAV as at 30 June 2021 N/A G) Amount of redemptions and subscriptions for the financial period from 1 January 2021 to 30 June 2021 Total amount of redemptions SGD 2,072,757 Total amount of subscriptions SGD 59,330 -6- United Japan Growth Fund (Constituted under a Trust Deed in the Republic of Singapore) H) The amount and terms of related-party transactions for the financial period from 1 January 2021 to 30 June 2021 i) As at 30 June 2021, the Fund maintained current accounts with its related party as follows: State Street Bank and Trust Company, Singapore Branch Cash and bank balances SGD 216,584 ii) Investment in Initial Public Offerings managed by UOB Group N/A iii) As at 30 June 2021, there was no brokerage income earned by UOB Kay Hian Pte Ltd.

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