This SGD Bond Fund has an Annualised Returns of Over 3%¹ – And an ETF Version is Coming Soon

In today’s low-rate environment, making money work harder has become increasingly challenging.

Take the latest Singapore Government Treasury Bill issued on 5 August 2025 that offered a cut-off yield of just 1.77%. The August 2025 tranche of Singapore Savings Bonds isn’t much better with a first-year rate of 1.71% and a 10-year average return of 2.11%.

Looking further out on the yield curve, even long-term options like the 30-year Singapore Government bond is yielding around 2.11%, not much different from the 10-year.

Everywhere we look, Singapore-dollar denominated and relatively safe investments are delivering low yields. The brief period of 4% T-bills is long gone, and we’re firmly back in a low-yield environment.

¹Return periods longer than 1 year are annualised. Class A SGD (Dist) achieved annualized returns of 3.5% and total returns of 227.3% since inception on 22 March 1991. Past performance is not necessarily indicative of future performance. Returns are based on a single pricing basis. Dividends are reinvested net of all charges payable upon reinvestment and in respective share class currency terms.

Bonds Are Great, but Hard to Buy

Bonds can offer better yields but aren’t accessible for many individual investors. Buying high-quality bonds typically requires large capital outlays (the minimum investment amount for most Singapore corporate bonds is S$250,000). With S$1 million, that only allows for the purchase of four bonds, which isn’t enough to build a truly diversified portfolio.

That’s where the LionGlobal Short Duration Bond Fund (Active ETF SGD Class) comes in — offering a smarter, easier way to invest in bonds.

Singapore’s first Active Bond ETF

The LionGlobal Short Duration Bond Fund (Active ETF SGD Class) is a listed share class of the LionGlobal Short Duration Bond Fund which was incepted since 22 March 1991. It is now listing as an ETF on SGX, making it accessible for as low as S$1.00 per unit.

This marks Singapore’s first actively managed bond ETF, offering a differentiated approach compared to traditional passive ETFs. Unlike index-tracking ETFs, this ETF is managed by experienced investment professionals with a proven active management process, providing investors access to professional credit selection and portfolio management.

In fact, the LionGlobal Short Duration Bond Fund SGD Class A (Dist) is also Included under CPF Investment Scheme (CPFIS) having met CPF Board’s stringent criteria for inclusion, it has been part of CPFIS since January 2014 and is 1 out of 19 CPFIS List A Fund share classes included for both CPF Ordinary Account (OA) and Special Account (SA). Source: CPF as of 29 Aug 2025.

Some key details as of 31 Jul 2025:

• Weighted Yield to Maturity²: 3.18%
• Weighted Duration³: 2.25 years
• Weighted Credit Rating⁴: A-
• Diversification: more than 200 bonds

That’s meaningfully higher than what we’re seeing from Singapore government bonds or fixed deposits. In addition, this level of diversification and credit quality is difficult to replicate as an individual investor, and it’s made possible by Lion Global Investors’ scale and expertise in bond selection.

²In local currency yield terms and on unhedged Foreign exchange basis.
³Inclusive of cash & equivalents which are assumed to be zero duration.
⁴Includes cash & equivalents @ AA, takes the worst of S&P, Moody’s, Fitch’s or Internal ratings and based on a straight-line model.

Top Holdings⁵

SGD-Based Yield with Minimal Currency Risk

Some investors might think of turning to USD-denominated bonds for higher yields as US interest rates remain elevated. But this introduces currency risk— as seen earlier in 2025 when the USD weakened against the SGD.

The LionGlobal Short Duration Bond Fund does hold about 18.2% in USD bonds⁶, but the manager hedges non-SGD exposure back into SGD. As a result, the fund is 99.7% SGD-exposed, with just 0.2% in USD. Investors can therefore be confident that the 3%+ annualised returns¹ is effectively SGD-based, with minimal forex risk.

Attract Regular Income⁷ with a Resilient Portfolio

Another advantage is price stability. Longer-duration bonds tend to be more sensitive to interest-rate changes, leading to larger price fluctuations. As its name suggests, the LionGlobal Short Duration Bond Fund focuses on shorter maturities, with an average duration of 2.25 years⁶. This helps to reduce volatility, which may appeal to investors seeking lower-risk exposure.

All in all, it’s an attractive low-risk option for those looking to make their money to work harder. The LionGlobal Short Duration Bond Fund (Active ETF SGD Class) intends to declare dividends⁷ quarterly and charges a competitive management fee of just 0.25%⁸.

⁵Securities referenced are not intended as recommendations to buy or sell securities.
⁶Source: Lion Global Investors, 31 Jul 2025. Inclusive of cash & equivalents which are assumed to be zero duration.
⁷Distributions are not guaranteed. Distributions may be made up of income, capital gains, and/or capital.
⁸Up to a maximum of 1% per annum of the Net Asset Value of the Fund.

The Initial Offering Period (IOP) runs from 8 to 23 September 2025, with trading to start on 29 September 2025.

How to Buy – Important Dates

• Initial Offer Period (IOP): 8–23 Sep 2025
  • Subscribe using cash via participating dealers like OCBC Securities, Phillip Securities, iFAST, DBS Vickers, and Maybank Securities.
  • Also available via OCBC ATMs, Internet Banking, and Mobile Banking.
• From 29 Sep 2025: Available on SGX like any other stock/ETF via cash and SRS.
  • Ticker codes: SBO (SGD), SBV (USD)
  • Bloomberg codes: SBO SP (SGD), SBV SP (USD)

Promotions

• FSMOne: Get S$10 for every S$10k invested (capped at S$200). Valid 8 Sep–31 Oct 2025. Only cash investment is eligible during 8-23 Sep 2025. Cash and SRS investments are both eligible during 29 Sep-31 Oct 2025. Eligible investors will receive the cashback within 6 weeks after the Promotional Period.
• POEMS: S$10 for every S$5k invested (capped at S$500 per client). First 200 clients, valid 8–22 Sep 2025. Cash reward credited after 31 October 2025.

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Footnotes

1. Return periods longer than 1 year are annualised. Class A SGD (Dist) achieved annualized returns of 3.5% and total returns of 227.3% since inception on 22 March 1991. Past performance is not necessarily indicative of future performance. Returns are based on a single pricing basis. Dividends are reinvested net of all charges payable upon reinvestment and in respective share class currency terms. ↩︎
2. In local currency yield terms and on unhedged Foreign exchange basis. ↩︎
3. Inclusive of cash & equivalents which are assumed to be zero duration. ↩︎
4. Includes cash & equivalents @ AA, takes the worst of S&P, Moody’s, Fitch’s or Internal ratings and based on a straight-line model. ↩︎
5. Securities referenced are not intended as recommendations to buy or sell securities.   ↩︎
6. Source: Lion Global Investors, 31 Jul 2025. Inclusive of cash & equivalents which are assumed to be zero duration. ↩︎
7. Distributions are not guaranteed. Distributions may be made up of income, capital gains, and/or capital. ↩︎
8. Up to a maximum of 1% per annum of the Net Asset Value of the Fund. ↩︎

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This article is sponsored by Lion Global Investors but the views expressed belong to the author.

Disclaimer – Lion Global Investors Limited

This advertisement or publication has not been reviewed by the Monetary Authority of Singapore. It is for information only, and is not a recommendation, offer or solicitation to deal in any capital markets products or investments and does not have regard to your specific investment objectives, financial situation, tax position or particular needs.

The LionGlobal Short Duration Bond Fund (the “Fund”) is not like a typical unit trust offered to the public in Singapore. The Fund comprises both classes of units listed and traded on the Singapore Exchange (“SGX-ST”) and classes of units which are neither listed on the SGX-ST nor any other stock exchange.

You should read the prospectus and Product Highlights Sheet for the Fund, which is available and may be obtained from Lion Global Investors Limited (“LGI”) or any of the appointed Participating Dealers (“PDs”), agents or distributors (as the case may be) for further details including the risk factors and consider if the Fund is suitable for you and seek such advice from a financial adviser if necessary, before deciding whether to purchase units in the Fund. Applications for units in the listed or unlisted classes of the Fund must be made in the manner set out in the prospectus. Investments are subject to investment risks including the possible loss of the principal amount invested.

Investments in the Fund are not obligations of, deposits in, guaranteed or insured by LGI or any of its affiliates and are subject to investment risks including the possible loss of the principal amount invested. The performance of the Fund is not guaranteed and the value of units in the Fund and the income accruing to the units, if any, may rise or fall. Past performance, payout yields and payments as well as any predictions, projections, or forecasts are not necessarily indicative of the future or likely performance, payout yields and payments of the Fund. Any extraordinary performance may be due to exceptional circumstances which may not be sustainable. Any dividend distributions, which may be either out of income and/or capital, are not guaranteed and subject to LGI’s discretion. Any such dividend distributions will reduce the available capital for reinvestment and may result in an immediate decrease in the net asset value of the Fund. Any references to specific securities are for illustration purposes and are not to be considered as recommendations to buy or sell the securities. It should not be assumed that investment in such specific securities will be profitable. There can be no assurance that any of the allocations or holdings presented will remain in the Fund at the time this information is presented. Any information (which includes opinions, estimates, graphs, charts, formulae or devices) is subject to change or correction at any time without notice and is not to be relied on as advice. You are advised to conduct your own independent assessment and investigation of the relevance, accuracy, adequacy and reliability of any information or contained herein and seek professional advice on them. No warranty is given and no liability is accepted for any loss arising directly or indirectly as a result of you acting on such information. The Fund may, where permitted by the prospectus, invest in financial derivative instruments for hedging purposes or for the purpose of efficient portfolio management. LGI, its related companies, their directors and/or employees may hold units of the Fund and be engaged in purchasing or selling units of the Fund for themselves or their clients.

The Fund is an actively managed fund. Please refer to the Prospectus for further details, including a discussion of certain factors to be considered in connection with an investment in the listed units of the Fund on the SGX-ST.

The listed units of the Fund are listed and traded on the Singapore Exchange (“SGX”), and may be traded at prices different from their net asset value, suspended from trading, or delisted. Such listing does not guarantee a liquid market for the units. You cannot purchase or redeem listed units in the Fund directly with the manager of the Fund, but you may, subject to specific conditions, do so on the SGX or through the PDs.

© Lion Global Investors Limited (UEN/ Registration No. 198601745D). All rights reserved. LGI is a Singapore incorporated company and is not related to any corporation or trading entity that is domiciled in Europe or the United States (other than entities owned by its holding companies).