450395 10719 horizon investment bn8 - fundsupermart.com · performance summary returns (%) 3 mth 6...

Nikko AM Shenton Horizon Investment Funds

SEMI-ANNUAL REPORTFor the fi nancial period ending 30 June 2020

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MANAGERSNikko Asset Management Asia Limited

12 Marina View, #18-02, Asia Square Tower 2, Singapore 018961

Company Registration No. 198202562H

DIRECTORSHou Wey Fook

Lim Soon ChongKiyotaka Ryu

Seet Oon Hui EleanorHiroki Tsujimura (appointed with effect from 30 July 2020)

TRUSTEE & REGISTRARBNP Paribas Trust Services Singapore Limited

20 Collyer Quay, #01-01Singapore 049319

AUDITORSPricewaterhouseCoopers LLP7 Straits View, Marina One,

East Tower, Level 12,Singapore 018936

CUSTODIANBNP Paribas Securities Services, operating through its Singapore Branch

20 Collyer Quay, #01-01Singapore 049319

This report is also available on our website (www.nikkoam.com.sg)

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PERFORMANCE SUMMARY

Returns (%) 3 Mth 6 Mth 1 Yr 3 Yr 5 Yr 10 Yr Since

Inception

Horizon Global Bond Fund (S$ Hedged)- SGD Class

4.68 4.55 5.96 3.37 3.18 3.41 2.64

Bloomberg Barclays Global Aggregate Total Return Index SGD Hedged

2.32 3.77 5.75 4.61 4.27 4.12 4.21

Nikko AM Global Dividend Equity Fund- SGD Hedged (Acc) Class

13.32 -9.87 -4.39 -0.32 2.16 5.55 1.04

Horizon Singapore Fixed Income Enhanced Fund

2.38 3.16 6.73 3.36 3.35 2.96 2.37

Markit iBoxx ALBI Singapore Government Bond Index

2.99 6.75 10.41 4.78 4.53 3.15 2.96

Singapore Dividend Equity Fund- SGD Class

9.70 -14.67 -13.19 -1.29 0.33 4.84 3.29

Source: Nikko Asset Management Asia Limited & Russell Investment Group Pte Ltd, & Markit Indices Limited. Returns as at 30 June 2020. Returns are calculated on a NAV-NAV basis, SGD, and based on the assumption that all dividends and distributions are reinvested, if any. Returns for period in excess of 1 year are annualised. Past performance is not indicative of future performance.


Inception

Horizon Global Bond Fund (S$ Hedged)- SGD Class

-0.56 -0.68 0.66 1.61 2.13 2.88 2.39

Bloomberg Barclays Global Aggregate Total Return Index SGD Hedged

2.32 3.77 5.75 4.61 4.27 4.12 4.21

Nikko AM Global Dividend Equity Fund- SGD Hedged (Acc) Class

7.66 -14.38 -9.17 -2.01 1.12 5.01 0.79


-2.74 -2.00 1.40 1.60 2.29 2.43 2.12

Markit iBoxx ALBI Singapore Government Bond Index

2.99 6.75 10.41 4.78 4.53 3.15 2.96

Singapore Dividend Equity Fund- SGD Class

4.22 -18.94 -17.53 -2.97 -0.69 4.30 3.04

Source: Nikko Asset Management Asia Limited & Russell Investment Group Pte Ltd, & Markit Indices Limited. Returns as at 30 June 2020. Returns are calculated on a NAV-NAV basis, SGD, and based on the assumption that all dividends and distributions are reinvested, if any, and take into account of maximum initial sales charge and a realisation charge, currently nil, as and where applicable. Returns for period in excess of 1 year are annualised. Past performance is not indicative of future performance.


Inception

Nikko AM Global Dividend Equity Fund- USD (Acc) Class

13.64 -9.19 -3.33 0.14 2.06 6.32 2.48

Singapore Dividend Equity Fund- USD Class

11.90 -17.82 -15.81 -1.74 -0.38 4.84 4.45

Source: Nikko Asset Management Asia Limited, returns as at 30 June 2020. Returns are calculated on a NAV-NAV basis, USD, and based on the assumption that all dividends and distributions are reinvested, if any. Returns for period in excess of 1 year are annualised. Past performance is not indicative of future performance.

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Inception

Nikko AM Global Dividend Equity Fund- USD (Acc) Class

7.96 -13.73 -8.16 -1.56 1.02 5.78 2.23

Singapore Dividend Equity Fund- USD Class

6.31 -21.93 -20.02 -3.40 -1.40 4.31 4.19

Source: Nikko Asset Management Asia Limited, returns as at 30 June 2020. Returns are calculated on a NAV-NAV basis, USD, and based on the assumption that all dividends and distributions are reinvested, if any, and take into account of maximum initial sales charge and a realisation charge, currently nil, as and where applicable. Returns for period in excess of 1 year are annualised. Past performance is not indicative of future performance.

Inception date: 2 August 1999


Inception

Singapore Dividend Equity Fund- JPY Class

12.09 -18.01 -14.89 -2.12 -1.92 N/A 2.53

Source: Nikko Asset Management Asia Limited, returns as at 30 June 2020. Returns are calculated on a NAV-NAV basis, JPY, and based on the assumption that all dividends and distributions are reinvested, if any. Returns for period in excess of 1 year are annualised. Past performance is not indicative of future performance.


Inception

Singapore Dividend Equity Fund- JPY Class

6.49 -22.11 -19.14 -3.78 -2.92 N/A 1.78

Source: Nikko Asset Management Asia Limited, returns as at 30 June 2020. Returns are calculated on a NAV-NAV basis, JPY, and based on the assumption that all dividends and distributions are reinvested, if any, and take into account of maximum initial sales charge and a realisation charge, currently nil, as and where applicable. Returns for period in excess of 1 year are annualised. Past performance is not indicative of future performance.

Inception date: 1 July 2013


Inception

Singapore Dividend Equity Fund- MYR Class

10.88 -13.97 -12.82 -1.83 N/A N/A 4.56

Source: Nikko Asset Management Asia Limited, returns as at 30 June 2020. Returns are calculated on a NAV-NAV basis, MYR, and based on the assumption that all dividends and distributions are reinvested, if any. Returns for period in excess of 1 year are annualised. Past performance is not indicative of future performance.


Inception

Singapore Dividend Equity Fund- MYR Class

5.34 -18.27 -17.18 -3.49 N/A N/A 3.31

Source: Nikko Asset Management Asia Limited, returns as at 30 June 2020. Returns are calculated on a NAV-NAV basis, MYR, and based on the assumption that all dividends and distributions are reinvested, if any, and take into account of maximum initial sales charge and a realisation charge, currently nil, as and where applicable. Returns for period in excess of 1 year are annualised. Past performance is not indicative of future performance.

Inception date: 29 March 2016

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Inception

Nikko AM Global Dividend Equity Fund- SGD Hedged (Dist) Class

13.29 -10.03 -4.36 -0.32 2.15 N/A 2.21

Source: Nikko Asset Management Asia Limited, returns as at 30 June 2020. Returns are calculated on a NAV-NAV basis, SGD, and based on the assumption that all dividends and distributions are reinvested, if any. Returns for period in excess of 1 year are annualised. Past performance is not indicative of future performance.


Inception

Nikko AM Global Dividend Equity Fund- SGD Hedged (Dist) Class

7.62 -14.53 -9.14 -2.00 1.11 N/A 1.38

Source: Nikko Asset Management Asia Limited, returns as at 30 June 2020. Returns are calculated on a NAV-NAV basis, SGD, and based on the assumption that all dividends and distributions are reinvested, if any, and take into account of maximum initial sales charge and a realisation charge, currently nil, as and where applicable. Returns for period in excess of 1 year are annualised. Past performance is not indicative of future performance.

Inception date: 17 March 2014


Inception

Nikko AM Global Dividend Equity Fund- CNH Hedged (Dist) Class

13.90 -8.81 -2.73 -0.47 2.68 N/A 2.16

Source: Nikko Asset Management Asia Limited, returns as at 30 June 2020. Returns are calculated on a NAV-NAV basis, CNH, and based on the assumption that all dividends and distributions are reinvested, if any. Returns for period in excess of 1 year are annualised. Past performance is not indicative of future performance.


Inception

Nikko AM Global Dividend Equity Fund- CNH Hedged (Dist) Class

8.20 -13.37 -7.59 -2.15 1.63 N/A 1.32

Source: Nikko Asset Management Asia Limited, returns as at 30 June 2020. Returns are calculated on a NAV-NAV basis, CNH, and based on the assumption that all dividends and distributions are reinvested, if any, and take into account of maximum initial sales charge and a realisation charge, currently nil, as and where applicable. Returns for period in excess of 1 year are annualised. Past performance is not indicative of future performance.

Inception date: 1 April 2014

Note:(1) With effect from 17 October 2011, the umbrella unit trust (formerly known as “Horizon Investment Funds”)

has been renamed Nikko AM Shenton Horizon Investment Funds.(2) With effect from 20 February 2012, Horizon Singapore Equity Fund has been renamed Singapore Dividend

Equity Fund.(3) With effect from 16 December 2013, Horizon Global Equity Fund was reshaped to Nikko AM Global Dividend

Equity Fund.(4) With effect from 6 February 2015, Horizon U.S. Equity Fund was terminated.(5) With effect from 30 September 2015, Horizon Asia ex-Japan Equity Fund was terminated.(6) With effect from 28 October 2015, the appointment of Russell Investment Group Private Limited as the

investment adviser for the Horizon Global Bond Fund (S$ Hedged); Horizon European Equity Fund; Singapore Dividend Equity Fund and Horizon Singapore Fixed Income Enhanced Fund was terminated.

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(7) With effect from 27 October 2016, Horizon European Equity Fund was terminated.(8) With effect from 1 December 2016, the appointment of Kleinwort Benson Investors Dublin Ltd (“Kleinwort

Benson”) as the sub-managers for the Nikko AM Global Dividend Equity Fund was terminated and Nikko Asset Management Europe Ltd (“NAM Europe”) has been appointed as the sub-managers for the Nikko AM Global Dividend Equity Fund.

With effect from August 2016, the benchmark for the Horizon Global Bond Fund (S$ Hedged) was renamed as Bloomberg Barclays Global Aggregate Total Return Index SGD Hedged. With effect from November 2008, it was renamed as Barclays Capital (“Barcap”) Global Aggregate Index, S$ Hedged. Prior to November 2008, it was known as Lehman Brothers’ Global Aggregate (SGD Hedged) Index.

With effect from 1 December 2016, the benchmark for the Nikko AM Global Dividend Equity Fund (i.e. MSCI All Country World Index, USD base) has been removed and there will be no benchmark for this Fund. This is because pursuant to the investment objective of the Fund, the Fund is managed on a total return basis and as such, it does not seek to outperform any benchmark. Prior to 16 December 2013, the reference benchmark was a composite of Russell 1000® Net 30% Index; FTSE All Share Index; TOPIX Dividend Included Index; Russell Developed Europe ex-UK Large Cap Index (net); and Russell Asia Pacific ex Japan (All cap) Index, according to their regional weights from time to time.

With effect from 1 June 2017, the benchmark for the Horizon Singapore Fixed Income Enhanced Fund was changed to Markit iBoxx ALBI Singapore Government Bond Index. Prior to 1 June 2017, the benchmark was UOB Singapore Government Bond All Index. Prior to August 2006, the benchmark was 3-month Singapore Interbank Bid Rate (SIBID).

With effect from 1 November 2017, the benchmark for the Singapore Dividend Equity Fund (i.e. Straits Times Index) was removed and there will no longer be any benchmark for the Fund. This is because pursuant to the investment objective of this Fund, this Fund is managed on a total return basis and as such, it does not seek to outperform any benchmark. Prior to 1 July 2001, the benchmark was DBS 50 Index.

The Markit iBoxx ALBI Singapore Government Bond All Index referenced herein is the property of Markit Indices Limited and is used under license. The Horizon Singapore Fixed Income Enhanced Fund - SGD Class is not sponsored, endorsed, or promoted by Markit Indices Limited.

Nikko AM Global Dividend Equity Fund

Portfolio Review

Fund returned -9.87% in SGD hedged terms in 1H20For the six months ended 30 June 2020, the Nikko AM Global Dividend Equity Fund (the “Fund”) posted a return of -9.87% (SGD hedged terms, on a NAV-NAV basis).

We added Neste, PepsiCo, Siemens Healthineers, AON and Dolby Laboratories to the portfolio over the period. Neste is a global leader in the biodiesel market, enjoying a 40% market share. Many countries are increasing their targets for use of these alternative fuels as part of their strategies for reducing the carbon footprint of their economies and Neste are well placed to serve this growth in demand. PepsiCo has a strong portfolio, spanning food, snacks and convenience beverages. More than 50% of the profit for the business comes from the North American foods business (which comprises Frito-Lay and Quaker). These lines are growing steadily and will likely prove resilient in the face of the current economic uncertainty. With solid and stable revenue growth and strong cash generation, we expect PepsiCo to be a reliable dividend payer in the coming years. Siemens Healthineers (which was partly spun out by Siemens in 2018) is one of the world’s leading providers of diagnostic imaging equipment for hospitals, including CT and MRI scanners and this business continues to grow very strongly, driven by innovation. AON was a recognized leader in the P&C insurance brokerage market and related

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segments, even before it announced its planned merger with Willis. This transaction will add to its competitive advantage and allow it to continue growing market share and expanding profit margins, as it has done for many years. IT Hardware company Dolby Laboratories’ technologies are helping accelerate the growth in streaming entertainment onto mobile devices and the acceptance of Dolby Vision/Dolby Atmos into the iPhone X and Apple TV highlights the quality of its latest technologies. With an exceptionally strong balance sheet and good free cash flow generation, we expect the business to deliver gradually increasing dividends.

Against this, we sold Chevron on concerns over the long-term sustainability of its dividend as the business may have to invest heavily in reducing its carbon intensity. We also exited our position in Fortum. With global energy prices plunging and an uncertain recovery in sight, its dividend payment level was beginning to look less sustainable. We exited Six Flags as we had become more concerned about its ability to cover its dividend after its Chinese development partner defaulted on its payment obligations and amid soft attendance figures at its theme parks. Subsequent to our sale, the company cut their dividend by 75%, whilst giving disappointing guidance for this year. We sold Bankinter following a sharp rally from March’s lows. Although this remains a well-managed bank, we are concerned that high levels of competition will handicap the company’s long-term returns. Finally, we exited Weir Group. Although the Minerals business is continuing to trade well, we have become increasingly concerned about how long the Oil & Gas business will take to recover and the potential for further capital raising by the business.

Market Review

High dividend equities fell in 1H20Global equity markets fell over the six months to end June, with Q2’s recovery unable to fully offset the nasty falls seen in late February and March. The first half of 2020 has produced the fastest 30% drawdown in history, followed by the best month for 30 years. The forces that shaped both the panicky sell-off and the subsequent recovery remain firmly on investors’ radars as we move into the second half.

We have certainly seen unprecedented government intervention in some economies, as businesses across vast swathes of economies were forced to shut in an attempt to contain the spread of the coronavirus Economic lockdowns were starting to ease by the end of June but the path back to ‘normal’ remains a long one for most.

The path will be bumpy too, as shown by the surge in new infections in some US states, as economic lockdown measures were eased and the balance between economic and public health remains a very challenging one, even for countries with relatively sophisticated testing infrastructure. Developing economies across the Americas and parts of South Asia are dealing with the pandemic without this assistance – making the task even more unenviable for their politicians and public health leaders.

Gold has continued to remain in favour across the period as central banks have injected liquidity into the global financial system in an attempt to make sure that the current recession doesn’t morph into anything more enduring. Debt deflation remains public enemy number one, given generally high levels of indebtedness, but a burst of reasonably pronounced price inflation could also result from recent monetary easing if the pandemic’s impact on consumers is less marked than expected. Gold is viewed as a hedge against both eventualities.

Geopolitics have become somewhat more troubling as the period has worn on too, with the forced bonhomie between Presidents Trump and Xi that we saw at the end of last year giving way to more traditional rivalry. Technology theft, the blame game surrounding the coronavirus and the South China Seas will all feature as we move closer to US presidential elections in November.

Against this backdrop of uncertainty, visible revenue growth and strong cash generation have remained valuable commodities. The Information Technology sector is blessed with both and has been the best relative performer this year. Rising stock valuations have been no impediment to this continued strong performance, so far. Other sectors to outperform included Healthcare (helped by the sector’s role in helping deal with the virus).

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The weakest sectors in the first half have been Energy and Financials. March saw the outbreak of a brief but intense price war in oil markets, between OPEC and non-OPEC countries, as countries clashed over planned output cuts. Ongoing yield curve suppression by central banks continues to limit net interest margins at banks.

The US was one of the strongest performing regions across the period, helped by its heavy exposure to technology giants like Microsoft, Amazon and Apple. Emerging Asia also outperformed, with China leading the way. The worst performing regions included Latin America and also the UK.

Market Outlook and Strategy

Focus primarily on companies with Future Quality attributes Equity investors have continued to gradually re-emerge from the caves that they were sheltering in at the end of March. A measure of confidence has been created by a sound that has become very familiar in recent years – that is the sound of printing presses, as central banks around the world create abundant liquidity. It seems that these measures have succeeded to some extent (credit spreads continue to normalise and consumer and business confidence levels have ticked higher). As a result, we have probably seen the worst of the short-term impacts of the coronavirus and the associated economic shutdowns. What is less clear, however, is how quickly economic growth will return to normal.

The quarterly reporting season is almost upon us again. With macroeconomics and geopolitics looking as confusing as ever and the coronavirus continuing to add another layer of uncertainty, investors will be particularly keen to hear from company management teams. We suspect, however, that the upcoming management reports will not shed much light. Not long ago it seemed likely that a lot of companies would be able to present dreadful calendar Q2 numbers, accompanied by confident statements that we have seen the worst. Whilst Chinese economic data has continued to improve steadily, the jump in new cases as some US states started to ease their lockdowns has probably given some pause for thought.

To some extent 2020 is already being treated as a lost year for corporate earnings. If the resurgence in cases means that some of the social distancing measures introduced to slow the spread drag into next year, then we are likely to see another round of earnings downgrades – particularly for services companies. With valuations having moved higher in recent months, helped by monetary policy, this could provide a challenge for further market gains in the second half of this year.

We do remain constructive on a medium-term view – particularly for companies that have managed to keep investing in innovation throughout recent, challenging times. Even amongst these companies, however, the need for careful selectivity remains. Whatever historical precedent you prefer – whether it be the ‘nifty-fifty’ of the early 1970’s or the Tech Boom of the late 1990’s – valuations are nearing levels that have warranted caution in the past. This is particularly true of the Information Technology sector but the price paid for innovation is high across the market. We remain particularly watchful where these valuations are not supported by cash flow generation.

It is likely that there will be a re-evaluation of some of today’s apparent truths at some stage. It remains unclear what this will be, however, and the nature of the (likely macroeconomic) shock that causes this reassessment but also how it will dictate market leadership at that point. The coronavirus looks as likely a source of this resolution as any in the near-term. If one of the hundred plus vaccines currently in clinical development are demonstrated to be effective as well as safe and the new normal looks a lot like the old normal (just with a lot more liquidity in the system), then returning consumer spending and inflation could necessitate rising interest rates. This would likely nudge higher the historically low discount rates that support the frothiest parts of the market, favouring more cyclical companies. If, on the other hand, these vaccines fail to confer a lasting immunity to the virus and social distancing continues to severely handicap employment and growth, recent gains in equity markets could be reversed and defensive sectors could reassert their leadership.

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Whichever of these two paths that we might eventually be forced to follow, we are confident that the core characteristics of ‘Future Quality’ will be a useful guide.

Singapore Dividend Equity Fund

Portfolio Review

Fund fell 14.67% in SGD terms in 1H20For the six months ended 30 June 2020, the Singapore Dividend Equity Fund (the “Fund”) posted a return of -14.67% (SGD terms, on a NAV-NAV basis). The Fund’s holdings in UOB, DBS and OCBC were the main detractors from absolute returns over the period. Conversely, Mapletree Logistics Trust, Keppel DC REIT and Sheng Siong contributed to performance.

Market Review

The Straits Times Index fell 17.77% in 1H20Singapore stocks, as measured by the STI, sank 17.77% on a total return basis in SGD terms in 1H20, which saw two contrasting quarters due to the ebb and flow in the developments of the Covid-19 pandemic.

In the first quarter of 2020 (1Q20), the fallout from Covid-19, widespread fears of a severe global recession and plummeting oil prices sent stocks around the world, including those of Singapore, into a tailspin. The virus-induced equity rout during the quarter saw some of the biggest daily sell-offs since the 2008 Global Financial Crisis, prompting global governments and major central banks to roll out massive fiscal support measures and monetary stimulus to stabilise markets and reduce the economic impact from the Covid-19 outbreak.

After the harrowing selloff in 1Q20, global stocks staged a strong rebound in 2Q20, buoyed by optimism that the pandemic has passed its peak, as the daily number of Covid-19 cases in many countries started to fall. Continuous fiscal support and monetary stimulus by governments and central banks around the world, and the reopening of economies in many countries in 2Q20, with the gradual easing of lockdown measures, also lifted equities.

Singapore stocks—buoyed by the upswing in global equities—surged in 2Q20, despite a slew of gloomy economic data and the curtail of economic activities in the nation due to the government’s partial lockdown directives known as the “circuit breaker” measures (implemented from 7 April to 1 June) to stem the spread of Covid-19 in the community. On a six-month basis, however, the gains of Singapore equities in 2Q20 weren’t enough to offset the steep losses incurred in 1Q20. As a result, local stocks ended 1H20 in negative territory. At the sector level, communication services and industrials were the worst performers, while information technology and consumer staples were best performers over the six-month period.

Of the 30 component stocks in the STI; SATS, Singapore Press Holdings (which was dropped from the STI on 22 June) and Singapore Airlines were the worst performers in 1H 2020. At the other end of the performance spectrum; Mapletree Logistics Trust, Ascendas REIT and Venture Corporation were the top gainers over the period.

Unprecedented fiscal stimulus to support the economy; MAS eased monetary policyIn 1H20, the Singapore government unprecedentedly rolled out four stimulus packages worth nearly SGD 100 billion to deal with the economic fallout of Covid-19. Additionally, in a widely expected move to make Singapore exports more competitive, the Monetary Authority of Singapore (MAS) in March re-centred the SGD Nominal Effective Exchange Rate’s midpoint slightly lower and reduced the slope to zero, with no change to the policy bandwidth.

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Singapore’s MTI downgraded 2020 growth forecast In 2Q20, Singapore’s Ministry of Trade and Industry (MTI) cut its growth projection for 2020 yet again. GDP is now expected to shrink between 4% and 7%, down from the previous forecast range of between -1% and -4%. The ministry further cautioned that “a significant degree of uncertainty” remains, with regard to the length and severity of the Covid-19 outbreak, and the trajectory of the economic recovery in Singapore and other countries around the world.


Maintaining positions in beneficiaries of a resumption in economic activityWe continue to monitor the Covid-19 crisis globally and in Singapore, particularly around the easing of social distancing measures, resumption of economic activity and the potential second waves of infections. In Singapore, Phase Two of the reopening of the economy started on 19 June, with almost the entire economy resuming operations. Selected tourist attractions, including the two casinos, will also reopen from 1 July. As such, we are seeing a gradual resumption of economic activity, albeit still below pre-pandemic levels at the current time.

The Singapore stock market remains at around the same valuation as during the trough of the Global Financial Crisis, based on the Price-to-Book measure. We continue to believe that valuations have begun to price in a recovery from the second half of 2020 and as such, there is risk of further market volatility should the pace of recovery be uneven, especially as further waves of infections remain a threat.

Amidst the uncertain backdrop, we maintain our positions in beneficiaries of a resumption in economic activity. These include selected retail REITs, particularly those with quality suburban assets. We also hold selected names in the domestic transportation sector and companies that operate in countries which are more advanced in reopening their economies. We remain light in sectors which are more badly affected by the Covid-19 crisis.

We continue to like “New Singapore” stocks, which represent the future economy of Singapore, and corporate restructuring candidates, where companies are looking to reorganise their businesses in order to be more relevant in the future economy. We also advocate investing in dividend stocks, especially where dividend growth is structural and less impacted by the Covid-19 pandemic.


Portfolio Review

Fund underperformed the benchmark in 1H2020The Horizon Singapore Fixed Income Enhanced Fund (the “Fund”) posted a return of 3.16% (in SGD terms, on a NAV-NAV basis) in the six months to end June 2020, underperforming its benchmark, the iBoxx ALBI Singapore Government Total Return Index, which returned 6.75% (SGD terms) during the period. The underperformance was mainly from the overweight in credits which were badly hit by the COVID-19 sell-off. Credit spreads widened and risk-free assets rallied as the rolling lockdowns hit the global economy hard. Swift policy action by major central banks like the European Central Bank and the Federal Reserve (Fed) contained the immediate liquidity risks, providing a backstop for financial assets including SGD bonds. This was, however, a lagged trickledown effect as the Monetary Authority of Singapore (MAS) chose not to independently support Singapore capital markets. The Fund underperformed as SGD credit spreads ended the period wider than pre-COVID levels. The Fund also suffered from its moderate underweight in duration after the Singapore Government Securities (SGS) rallied strongly in line with global yield curves. Higher carry and income helped to buffer some of the underperformance as running yields were quite elevated. We expect to see some recovery in performance relative to the benchmark, from a combination of spread tightening in specific credit sectors and higher yields in the coming months.

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Market Review

Singapore government debt rallied in 1H20, but underperformed US Treasuries (USTs) The first half of 2020 saw extreme volatility across global fixed income markets, driven primarily by the COVID-19 shock that brought global economic activity to a virtual standstill. The year started with the US and China officially signing the “Phase One” trade deal, which spurred positive risk sentiment. However, as the outbreak of COVID-19 which started in Wuhan, China spread to the rest of China and other parts of the world, markets grew increasingly concerned about the negative impact of the pandemic on the global economic outlook. From end-February to the third week of March, financial markets across all asset classes, including safe haven assets, exhibited extreme volatility. Notably, the UST market experienced severe dysfunction, with yields rising amidst risk aversion as funds sought to sell the most liquid assets to meet redemptions. With significant disruptions to global markets, policymakers across the world raced to introduce policies and measures to calm the market. While initially feeble and disjointed, monetary and fiscal authorities globally became more coordinated and forceful by the end of March, which finally succeeded in stabilising key segments of the global fixed income markets. The second half of the period saw global risk assets staging a strong recovery, on the back of aggressive and broad-based policy support from central banks, hopes for a pick-up in economic activity, and optimism around progress towards developing a COVID-19 vaccine. Market functioning in USTs vastly improved, as liquidity substantially recovered, and overall volatility declined. That said, UST yields continued to be anchored at low levels over the period largely due to prevailing uncertainty around the economic impact of the COVID-19 outbreak, and the Fed’s declaration that the Fed Funds rate would remain at current levels through the end of 2022. Meanwhile, significantly stronger-than-expected US domestic data, expectation of greater UST supply particularly at the long-end, and the Fed tapering its weekly purchase amount, provided some offset. Overall, the UST yield curve shifted meaningfully lower in the period, with yields dropping 98 basis points (bps) to 142 bps across the curve. SGS underperformed their UST counterparts in the first six months of 2020. Market sentiment in the first half of the period was down on COVID-19 fears and disappointing domestic economic data released. Subsequently, flush domestic liquidity and relatively light SGS duration supply in April and May enabled SGS performance to catch up to USTs. Expectations that the central bank would keep the SGD Nominal Effective Exchange Rate (NEER) policy parameters unchanged in October further supported demand, enabling SGS spreads to USTs to compress to flat levels in mid-May. Towards the end of the period, SGS experienced profit-taking, and 2-year and 10-year SGS yields ended at 0.27% and 0.89% respectively at end-June, about 125 bps and 84 bps lower compared to end-December. Government bonds outperformed non-government securities in the period, with the Markit iBoxx ALBI Singapore Govt TRI Index returning +6.75%, compared to the +3.93% returns for the Markit iBoxx ALBI Singapore Non-Govt TRI Index.

Economic data revealed a meaningful slowdown in economic activity Retail sales plunged by 40.5% Year-on-Year (YoY) in April, worsening from the 13.3% drop in the prior month, as circuit breaker measures meant only essential shops were allowed to operate. Non-oil domestic exports turned negative in May, dropping 4.5% YoY. The decline was led by a sharp drop in petrochemical exports. In contrast, electronic exports saw a robust expansion, owing to a low base effect. Similarly, industrial production growth fell 7.4% YoY in May, following an upwardly revised 13.6% rise in April. The contraction in the transport engineering sector accelerated, and growth in electronics output turned slightly negative. Separately, Singapore’s main price gauges remained in deflationary territory, with headline consumer price index inflation falling further to -0.8% YoY in May. Excluding private transportation and accommodation, core inflation rose slightly to -0.2% YoY from -0.3%, driven by an increase in food inflation.

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Government announced several stimulus packages to cushion the blow of COVID-19; central bank eased monetary policy The government introduced a set of “circuit breaker” measures in April, to stem the spread of COVID-19 in the community. Partial lockdown measures were subsequently tightened and extended, after the city-state saw a surge in local transmissions. In June, COVID-19 restrictions were gradually lifted, with most businesses and social activities now being allowed. Over the period, the government announced several stimulus packages in response to the virus outbreak, bringing its total cost of COVID-19 support to nearly SGD 100 billion. Separately, in a widely expected move, the MAS re-centred the SGD NEER midpoint slightly lower and reduced the slope to zero, with no change to the policy bandwidth.


‘Neutral’ on both SGS and the SGDThe growth outlook for Singapore continues to look highly uncertain, even after the initial burst of optimism from Phase Two of the post-circuit breaker re-opening. After the SGS curve flattened to price in line with UST, the SGS curve has been largely trading in a range. Hence, we maintain our view at ‘neutral’ but look for small tactical curve positioning opportunities in the long-end. Separately, domestic economic activity has increased slightly from the re-opening but leading indicators still point to poor spending and investment outlooks. Liquidity remains flush from risk averse investors and fiscal stimulus working its way through the banking system. As a result, growth and inflation are currently basing at current low levels. Our SGD view therefore remains at ‘neutral’.

Horizon Global Bond Fund (S$ Hedged)

Portfolio Review

Fund outperformed the benchmark in 1H2020The Horizon Global Bond Fund (S$ Hedged) (the “Fund”) posted a return of 4.55% (in SGD terms, on a NAV-NAV basis) in the six months to end June 2020, outperforming the benchmark which returned 3.77%.

The Fund finished behind the benchmark in the first quarter. Rates positioning had a positive effect, notably through the overweight in the US. An underweight in the UK was a slight detractor. In active currency positioning, the overweights to the Mexican peso, British pound and Norwegian krone, offset the gains generated through the underweights to the Antipodean (Australian dollar and New Zealand dollar) currencies. Credit positioning was the core driver of underperformance, notably through our allocation to securitised credit, long credit derivatives positioning, an overweight to investment grade financials and an overweight to corporate high yield.

The Fund outperformed the benchmark in the second quarter. Credit positioning drove performance, notably through the long credit derivatives exposure and overweights to corporate high yield and investment grade financials. Active currency positioning was also positive, owing to overweights to the Norwegian krone, Swedish krona and Mexican peso. The underweights to the Thai baht and Swiss franc were minor detractors. In rates positioning, overweights in Mexico and Italy generated gains. The underweights in France, UK and Canada moderated this slightly.

Market Review

The Bloomberg Barclays Global Aggregate Bond Index (USDH) increased 1.4% in the first quarter. In January, the G4 central banks remained cautious whilst watching a dangerous conflict between the US and Iran fortunately fizzle out. However, as the quarter progressed, the World Health Organisation characterised the global spread of the COVID-19 as a pandemic. Governments across the globe decided to enforce lockdowns, which immediately

11


impacted livelihoods and national economies. In a concerted effort, G4 central banks alongside respective governments, unleashed major stimulus measures as a direct response. Over the first quarter, oil prices slumped owing to a price war between Russia and Saudi Arabia and the US dollar strengthened on the back of its perceived safe haven status.

In the US, the core inflation rate rose to 2.4% Year-on-Year (YoY) in February whilst the fourth quarter GDP growth rate was confirmed at 2.1% Quarter-on-Quarter (QoQ). However, the first major indicator of the effect of the coronavirus was the latest release of initial jobless claims. The US jobless claims jumped to 3.28 million in the week ending 21 March, the highest figure since the series began in 1967. In response to the obvious deterioration of the economy, the Federal Reserve (Fed) dropped interest rates to a range of 0-0.25%, down from a range of 1-1.25%. In Europe, the Bank of England (BoE) slashed its interest rate to a record low of 0.1%, as well as expanded its quantitative easing programme by £200 billion. The European Central Bank (ECB) meanwhile, did not have much room to manoeuvre with its zero percent interest rate position. However, it unleashed an emergency €750 billion package called the Pandemic Emergency Purchase Programme.

Global investment-grade (IG) credit spreads widened by 149 basis points (bps) to 241 over a tumultuous quarter. As expected, many governments unleashed large fiscal stimulus programmes to match central bank actions and address the adverse effects of the coronavirus. The US for example, managed to agree to a $2.2 trillion fiscal stimulus deal. This unprecedented package includes $350 billion in support for small businesses, along with $1,200 direct payments to lower- and middle-income adults and $500 per child. The UK revealed several packages including a job retention scheme that pays up to 80% of employees’ salaries. Eurozone governments, including Germany, have promised similar deals. In Emerging Market debt (EMD), local EMD fell 15.2%. Meanwhile, hard currency EMD declined 11.8% and corporate EMD decreased 10.2% in USD terms. However, the Chinese $13 trillion bond market became an unlikely escape valve from the volatility that the coronavirus has caused in developed markets over the first quarter.

The Bloomberg Barclays Global Aggregate Bond Index (USDH) rose 2.4% in the second quarter. Despite the painful economic fallout from the lockdowns, the severe “risk-off” market environment in the first quarter largely reversed over the second quarter. A divergence in economic fundamentals and financial market performance became pronounced. The concerted support of monetary policy and a further opening of fiscal taps drove a rapid recovery in risk appetite. The market also latched onto positive news regarding potential vaccines and treatments against COVID-19. Additionally, after a record collapse in oil demand, oil prices crawled upwards over the second quarter, largely helped by agreed production cuts. Fears of a second wave of coronavirus infections, as well as escalating tensions between the US and China on trade, the origins of COVID-19 and China’s new security law on Hong Kong, remained on investors’ thoughts.

In the US, the latest unemployment rate remained high at 13.3%. Meanwhile core inflation trended downwards to 1.2% YoY in May which was the lowest rate since March 2011, whilst the final print for the first quarter GDP indicated a contraction of -5.0% QoQ ending the longest period of expansion in the country’s history. Whilst the Fed kept rates unchanged over the quarter, it continued to expand its support programmes. Over the month, the benchmark 10-year Treasury yield decreased by a single basis point to 0.66%. Across the pond, there were several “firsts” too. The BoE became the first major central bank to undertake the direct financing of a government, which allowed the government to bypass the traditional bond markets for funding.

Global IG credit spreads tightened by 113 bps to 145 in the second quarter. Alongside monetary policy support, the further opening of fiscal taps such as the European Union’s record-breaking €750 billion stimulus package (which included risk-sharing across the eurozone through Eurobonds) and the US’ $484 billion coronavirus relief bill, has driven a rapid recovery in US (-113 bps to 142) and EU (-72 bps to 126) IG credit spreads, even with corroding credit fundamentals. With only six months into 2020, markets have seen over $1 trillion worth of new corporate issuance deals – the fastest rate on record. This comes as companies continue to fortify their abilities

12


to weather the storm from the effects of the coronavirus. Some notable deals came from Booking Holdings ($3.25 billion), BP Plc (€2.25 billion), Airbus (€2.5 billion), Boeing ($25.0 billion) and Delta Air Lines ($5.0 billion).

In EMD, local EMD rose 9.8% and hard currency EMD increased 11.2% in USD terms. Demand for Chinese sovereign bonds surged on the back of an improving economic backdrop. In contrast, having already missed an interest payment in May, Argentina is still negotiating the restructuring of some $83 billion of its foreign debt with creditors.


Markets have rallied on hopes of an economic recovery and easing lockdown measures globally, while the cycle outlook has improved amid vast fiscal and monetary stimulus. However, the market rebound means value is no longer compelling for global equities or credit. Though markets may be vulnerable to negative headlines in the near-term, in our view, the supportive cycle outlook should allow equities to continue to outperform bonds over the medium-term. We believe the recovery from the recession will lead to a long period of low-inflationary growth, with central banks likely to keep interest rates low once inflation rises.

We maintain our preference for non-US equities over US equities; a view driven largely by expensive relative valuations. However, we also believe the post coronavirus recovery will see corporate profits improve. This scenario could favour cyclical and value stocks over defensive and growth names, which would be more supportive for stocks outside of the US. We believe emerging markets equities should benefit from China’s early exit from lockdown and additional stimulus measures.

For fixed income assets, we continue to see government bonds as universally expensive. Low inflation and dovish central banks should limit rises in bond yields during the recovery phase. In terms of credit, we have a neutral view on high yield and investment grade debt. Since their levels in mid-March, credit spreads have compressed and, in our view, only now adequately compensate for the likely rise in default rates following the recession.

In the currency space, we expect the USD to weaken into the global economic recovery due to its countercyclical behaviour, which has historically seen it decline in the recovery phase. Economically sensitive “commodity currencies” like the Australian, New Zealand and Canadian dollars should be the main beneficiaries of this.

Moving forward, the major risks to our outlook include a second wave of virus infections and the US elections in November. In the next few months, we are likely to know if a second wave is underway. Most countries appear to be better placed to manage a second wave in terms of treatment and healthcare capacity. The US elections will become a bigger focus for markets if the Democratic presidential nominee, Joe Biden, sustains a commanding lead in the polls. Biden plans to reverse some of the Trump Administration’s corporate tax cuts from 2017, which could deliver a negative hit to earnings in 2021. One of the key watchpoints of the election outcome will be if the Democrats seize control of the White House, Senate and House of Representatives, which would make corporate tax hikes more likely and increase the risk of further corporate regulation. The other risk is a re-escalation of the US-China trade war, though with US President Donald Trump’s re-election chances tied to a recovery in the stock market and the US economy, we expect he will not endanger this by rebooting trade hostilities. We remain alert to risks and volatility as we enter the recovery phase of the global economic cycle. Importantly, we believe this is an environment that will favour our active management approach.

13


This document is purely for informational purposes only with no consideration given to the specifi c investment objective, fi nancial situation and particular needs of any specifi c person. It should not be relied upon as fi nancial advice. Any securities mentioned herein are for illustration purposes only and should not be construed as a recommendation for investment. You should seek advice from a fi nancial adviser before making any investment. In the event that you choose not to do so, you should consider whether the investment selected is suitable for you. Investments in funds are not deposits in, obligations of, or guaranteed or insured by Nikko Asset Management Asia Limited (“Nikko AM Asia”).

Past performance or any prediction, projection or forecast is not indicative of future performance. The Fund or any underlying fund may use or invest in fi nancial derivative instruments. The value of units and income from them may fall or rise. Investments in the Fund are subject to investment risks, including the possible loss of principal amount invested. You should read the relevant prospectus (including the risk warnings) and product highlights sheet of the Fund, which are available and may be obtained from appointed distributors of Nikko AM Asia or our website (www.nikkoam.com.sg) before deciding whether to invest in the Fund.

The information contained herein may not be copied, reproduced or redistributed without the express consent of Nikko AM Asia. While reasonable care has been taken to ensure the accuracy of the information as at the date of publication, Nikko AM Asia does not give any warranty or representation, either express or implied, and expressly disclaims liability for any errors or omissions. Information may be subject to change without notice. Nikko AM Asia accepts no liability for any loss, indirect or consequential damages, arising from any use of or reliance on this document.

The Central Provident Fund (“CPF”) interest rate for the Ordinary Account (“OA”) is based on the 12-month fi xed deposit and month-end savings rates of major local banks, subject to a minimum 2.5% interest per annum. The interest rate for Special, Medisave and Retirement Accounts (“SMRA”) is pegged to the 12-month average yield of 10-year Singapore Government Securities plus 1% per annum. A 4% per annum fl oor rate will be maintained for interest earned on SMRA until 31 December 2020, after which a 2.5% per annum minimum rate will apply. An extra 1% per annum interest is paid on the fi rst S$60,000 of a member’s combined balances, including up to S$20,000 in the OA. The fi rst S$20,000 in the OA and the fi rst S$40,000 in the Special Account (“SA”) cannot be invested under the CPF Investment Scheme (“CPFIS”). Investors should note that the applicable interest rates for each of the CPF accounts may be varied by the CPF Board from time to time.

For Hong Kong Investors

The Fund may be offered to professional investors in Hong Kong or to Hong Kong investors via the private placement exemption. Hong Kong investors should note that the contents of this document have not been reviewed by any regulatory authority in Hong Kong and are advised to exercise caution in relation to the offer. If you are in any doubt about any of the contents of this document, you should obtain independent professional advice.

Nikko Asset Management Asia Limited. Registration Number 198202562H

14


SOFT DOLLAR COMMISSIONS/ARRANGEMENTS

In their management of the Nikko AM Shenton Horizon Investment Funds, the Managers currently do not receive or enter into any soft dollar commissions or arrangements.

Russell Investments’ underlying investment advisers’ participation in soft dollars/soft commissionsEach of the money managers (appointed by Russell Investments) and/or Russell Investments may enter into transactions on a soft commission basis, i.e., utilise the services and expertise of brokers in return for the execution of trades through such brokers, provided that the transactions are entered into on the principle of best execution, the benefits provided in the transaction will assist in the provision of investment arrangements and will comply with the requirements of Article 11 of the MiFID II Delegated Directive. Any transaction must be in the best interests of Shareholders and must provide benefits that will assist in the provision of investment services to the RIC.

Russell Investments’ soft commission and commission recapture programmeRussell Investments retains the right to request that the investment advisers participate in Russell Investments’ soft commission and commission recapture programme (the “Programme”) through the use (and execution) of a portion of the fund’s trading activity through various brokers. Certain funds will effect transactions through Cowen Execution Services (“Cowen”) and its global network of unaffiliated correspondent brokers, as well as State Street Global Markets, LLC (“SSGM”) and its global network of unaffiliated correspondent brokers. Participation in Russell Investments’ Programme is not mandatory and the appropriate participation percentage target is determined on an investment adviser by investment adviser basis, based upon asset class, investment mandate, trading habits, and tolerance for participation. Participation is always subject to an investment adviser’s ability to obtain best execution.

As a result of this trading activity, Cowen and SSGM will set aside a portion of these commissions as “credits”. Credits generated for soft commissions will be used by Russell Investments to purchase research that will aid Russell Investments in its investment decisionmaking process. Research used by Russell Investments will meet local regulations in terms of services that are eligible based on local regulatory guidance. All soft commission use is overseen by Russell Investments’ soft commission committee which is made up of senior level investment personnel. The committee, with the guidance of Russell Investments’ investment strategy committee will establish an annual soft commission budget. Once this budget has been met, future commissions credits generated through Cowen or SSGM will be recaptured directly back to the funds from which the commissions were generated. Russell Investments does not receive any revenue (directly or indirectly from Cowen and SSGM or any broker) from the commission recapture component of the Programme.

The Sub-Managers do not receive or intend to receive any soft dollars in their management of the Nikko AM Global Dividend Equity Fund. NAM Americas also does not receive or intend to receive soft dollars in respect of the global equities trading that it carries out for the Nikko AM Global Dividend Equity Fund.

15


NIKKO AM SHENTON HORIZON INVESTMENT FUNDS (Constituted under a Trust Deed registered in the Republic of Singapore) STATEMENTS OF TOTAL RETURN For the financial period from 01 January 2020 to 30 June 2020 (unaudited)



30 June 30 June 30 June 30 June 2020 2019 2020 2019 US$ US$ S$ S$ Income Dividends 1,134,908 1,709,048 - - Interest 998 11,281 633 3,592 Other Income - - 913 - 1,135,906 1,720,329 1,546 3,592 Less: Expenses Management fee 454,356 521,547 145,060 143,151 Management fee rebate - - (72,356) (72,230) Registrar fee 13,623 15,285 9,575 9,276 Trustee fee 9,683 11,433 3,811 3,766 Custody fee 2,268 8,286 - - Audit fee 2,431 3,159 2,165 1,033 Valuation fee 14,735 17,393 5,804 5,728 Transaction costs 28,822 42,646 10,843 5,450 Other expenses 5,682 (14,531) 3,179 (2,714) 531,600 605,218 108,081 93,460 Net income/(losses) 604,306 1,115,111 (106,535) (89,868) Net gains or losses on value of

investments and financial derivatives Net (losses)/gains on investments (6,575,903) 6,835,052 1,579,212 963,273 Net foreign exchange (losses)/gains (25,084) (23,655) (33,100) (11,024) Net (losses)/gains on financial derivatives (2,423,577) 222,486 (697,231) 181,597 (9,024,564) 7,033,883 848,881 1,133,846 Total (deficit)/return for the financial period

before income tax (8,420,258) 8,148,994 742,346 1,043,978 Less: Income tax (202,492) (283,120) - - Total (deficit)/return for the financial period

after income tax

(8,622,750)

7,865,874

742,346

1,043,978

16


NIKKO AM SHENTON HORIZON INVESTMENT FUNDS (Constituted under a Trust Deed registered in the Republic of Singapore) STATEMENTS OF TOTAL RETURN For the financial period from 01 January 2020 to 30 June 2020 (unaudited)



30 June 30 June 30 June 30 June 2020 2019 2020 2019 S$ S$ S$ S$ Income Dividends 4,772,553 4,536,852 - - Interest 2,733 41,487 40 1,677 Other Income 13 - 3,750 - 4,775,299 4,578,339 3,790 1,677 Less: Expenses Management fee 1,424,936 1,283,245 108,730 112,038 Management fee rebate (203) (183) - - Registrar fee 61,221 52,641 9,040 8,645 Trustee fee 37,396 33,762 3,568 3,687 Custody fee 14,540 29,403 988 2,508 Audit fee 15,616 15,662 2,088 828 Valuation fee 60,742 54,849 5,440 5,603 Transaction costs 296,197 205,142 9,857 5,076 Other expenses 53,619 33,809 2,385 (1,818) 1,964,064 1,708,330 142,096 136,567 Net income/(losses) 2,811,235 2,870,009 (138,306) (134,890) Net losses or gains on value of

investments Net (losses)/gains on investments (40,130,122) 17,257,837 783,662 449,840 Net foreign exchange gains/(losses) 78,710 (11,297) 12 - (40,051,412) 17,246,540 783,674 449,840 Total (deficit)/return for the financial period

before income tax (37,240,177) 20,116,549 645,368 314,950 Less: Income tax (68,622) (75,434) - - Total (deficit)/return for the financial period

after income tax

(37,308,799)

20,041,115

645,368

314,950

17


NIKKO AM SHENTON HORIZON INVESTMENT FUNDS (Constituted under a Trust Deed registered in the Republic of Singapore) STATEMENTS OF FINANCIAL POSITION As at 30 June 2020 (unaudited)

Nikko AM Global Dividend

Equity Fund Horizon Global Bond Fund

(S$ Hedged) 30 June 2020 31 December 2019 30 June 2020 31 December 2019 US$ US$ S$ S$ ASSETS Portfolio of investments 59,935,109 68,852,855 22,882,668 23,125,906 Sales awaiting settlement - - 8,081 1,727 Receivables 180,016 146,984 - 5,330 Cash and bank balances 783,368 487,166 674,538 1,048,065 Financial derivatives at fair value 324,692 956,012 223,807 207,897 Total assets 61,223,185 70,443,017 23,789,094 24,388,925 LIABILITIES Payables 340,579 408,843 63,454 58,671 Purchases awaiting settlement - - - 204,595 Distribution payable 26,189 31,841 - - Financial derivatives at fair value 14 122,347 112,411 12,544 Total liabilities 366,782 563,031 175,865 275,810 EQUITY Net assets attributable to unitholders 60,856,403 69,879,986 23,613,229 24,113,115

Singapore Dividend

Equity Fund Horizon Singapore Fixed Income Enhanced Fund

30 June 2020 31 December 2019 30 June 2020 31 December 2019 S$ S$ S$ S$ ASSETS Portfolio of investments 231,745,298 232,395,190 21,572,600 21,975,341 Sales awaiting settlement - - 876,461 - Receivables 1,714,288 837,104 46,160 13,834 Cash and bank balances 9,637,960 7,656,253 848,267 930,693 Total assets 243,097,546 240,888,547 23,343,488 22,919,868 LIABILITIES Payables 1,295,954 1,733,249 78,998 76,355 Purchases awaiting settlement 415,210 - 1,422,401 111,972 Distribution payable 1,197,598 1,183,977 - - Total liabilities 2,908,762 2,917,226 1,501,399 188,327 EQUITY Net assets attributable to unitholders 240,188,784 237,971,321 21,842,089 22,731,541

18


NIKKO AM SHENTON HORIZON INVESTMENT FUNDS (Constituted under a Trust Deed registered in the Republic of Singapore) STATEMENTS OF MOVEMENTS OF UNITHOLDERS' FUNDS For the financial period from 01 January 2020 to 30 June 2020 (unaudited)

Nikko AM Global Dividend

Equity Fund Horizon Global Bond

Fund (S$ Hedged) 30 June 31 December 30 June 31 December 2020 2019 2020 2019 US$ US$ S$ S$ Net assets attributable to unitholders at the

beginning of the financial period/year 69,879,986 66,312,041 24,113,115 22,816,771 Operations Change in net assets attributable to unitholders resulting from operations (8,622,750)

12,328,475

742,346

1,369,083

Unitholders' contributions/ (withdrawals) Creation of units 5,345,715 3,582,079 7,156,090 3,333,547 Cancellation of units (5,588,048) (12,022,951) (8,398,322) (3,406,286) Change in net assets attributable to unitholders resulting from net creation and cancellation of units (242,333)

(8,440,872)

(1,242,232)

(72,739) Distributions (158,500) (319,658) - - Total (decreases)/increases in net assets attributable to

unitholders (9,023,583)

3,567,945

(499,886)

1,296,344 Net assets attributable to unitholders at the end of the financial period/year 60,856,403

69,879,986

23,613,229

24,113,115

19


NIKKO AM SHENTON HORIZON INVESTMENT FUNDS (Constituted under a Trust Deed registered in the Republic of Singapore) STATEMENTS OF MOVEMENTS OF UNITHOLDERS' FUNDS For the financial period from 01 January 2020 to 30 June 2020 (unaudited)



30 June 31 December 30 June 31 December 2020 2019 2020 2019 S$ S$ S$ S$ Net assets attributable to unitholders at the

beginning of the financial period/year 237,971,321 182,305,244 22,731,541 23,757,678 Operations Change in net assets attributable to unitholders resulting from operations (37,308,799)

24,649,232

645,368

1,074,142

Unitholders' contributions/ (withdrawals) Creation of units 75,072,005 104,076,680 4,497,075 4,109,066 Cancellation of units (28,547,977) (61,886,053) (6,031,895) (6,209,345) Change in net assets attributable to unitholders resulting from net creation and cancellation of units 46,524,028

42,190,627

(1,534,820)

(2,100,279) Distributions (6,997,766) (11,173,782) - - Total increases/(decreases) in net assets attributable to

unitholders 2,217,463

55,666,077

(889,452)

(1,026,137) Net assets attributable to unitholders at the end of the financial period/year 240,188,784

237,971,321

21,842,089

22,731,541

20


NIKKO AM SHENTON HORIZON INVESTMENT FUNDS (Constituted under a Trust Deed registered in the Republic of Singapore) STATEMENTS OF PORTFOLIO As at 30 June 2020 (unaudited)

Nikko AM Global Dividend Equity Fund By Geography (Primary)

Holdings at 30 June 2020

Fair value at 30 June 2020

Percentage of total net assets attributable to unitholders at 30 June 2020

US$ % Quoted Equities AUSTRALIA Macquarie Group Limited 19,218 1,569,267 2.58 Total AUSTRALIA 1,569,267 2.58 BRITAIN Aon Public Listed Company 3,944 759,614 1.24 Astrazeneca Public Listed Company 16,512 1,718,055 2.82 Compass Group Public Listed Company 81,635 1,121,644 1.84 GlaxoSmithKline Public Listed Company 64,954 1,313,476 2.16 Johnson Matthey Public Listed Company 28,312 733,922 1.21 Prudential Public Listed Company 87,939 1,323,978 2.18 Unilever Public Listed Company 45,550 2,451,040 4.03 Total BRITAIN 9,421,729 15.48 CANADA Intact Financial Corporation 12,168 1,154,337 1.90 Total CANADA 1,154,337 1.90 FINLAND Neste OYJ 28,010 1,086,923 1.79 Total FINLAND 1,086,923 1.79 FRANCE Schneider Electric SE 15,894 1,765,141 2.90 Total SA 27,629 1,054,296 1.73 Total FRANCE 2,819,437 4.63 GERMANY Allianz SE 10,210 2,084,537 3.43 Deutsche Telekom AG 57,403 962,570 1.58 Siemens Healthineers AG 25,988 1,246,346 2.05 Total GERMANY 4,293,453 7.06 HONG KONG SAR AIA Group Limited 157,800 1,472,030 2.42 Total HONG KONG SAR 1,472,030 2.42 IRELAND Accenture Public Listed Company 9,483 2,034,483 3.34 Total IRELAND 2,034,483 3.34 JAPAN Nintendo Company Limited 4,900 2,180,553 3.58 Nomura Research Institute Limited 48,900 1,326,693 2.18 TechnoPro Holdings Incorporated 15,900 906,382 1.49 Total JAPAN 4,413,628 7.25

21




By Geography (Primary) (continued)




US$ % Quoted Equities (continued) NETHERLANDS Koninklijke Philips NV 41,229 1,922,640 3.16 Total NETHERLANDS 1,922,640 3.16 SINGAPORE DBS Group Holdings Limited 59,300 884,155 1.45 Total SINGAPORE 884,155 1.45 SWEDEN ASSA ABLOY AB 53,722 1,096,449 1.80 Total SWEDEN 1,096,449 1.80 SWITZERLAND Roche Holding AG 8,930 3,094,444 5.08 Total SWITZERLAND 3,094,444 5.08 TAIWAN Taiwan Semiconductor Manufacturing Company

Limited 316,000 3,352,300 5.51 Total TAIWAN 3,352,300 5.51 UNITED STATES OF AMERICA AbbVie Incorporated 20,938 2,055,693 3.38 Cisco Systems Incorporated 32,409 1,511,556 2.48 Coca-Cola Company 64,052 2,858,641 4.70 Dolby Laboratories Incorporated 19,962 1,314,897 2.16 Microsoft Corporation 10,393 2,115,079 3.48 PepsiCo Incorporated 16,375 2,165,758 3.56 Pfizer Incorporated 56,937 1,861,840 3.06 Philip Morris International Incorporated 24,521 1,716,225 2.82 Starbucks Corporation 18,244 1,342,576 2.20 TJX Companies Incorporation 32,745 1,655,587 2.72 Total UNITED STATES OF AMERICA 18,597,852 30.56 Total Quoted Equities 57,213,127 94.01

22



Nikko AM Global Dividend Equity Fund By Geography (Primary) (continued)




US$ % Quoted Real Estate Investment Trusts

SPAIN Merlin Properties Socimi SA 119,311 988,951 1.63 Total SPAIN 988,951 1.63 UNITED STATES OF AMERICA Digital Realty Trust Incorporated 12,195 1,733,031 2.85 Total UNITED STATES OF AMERICA 1,733,031 2.85 Total Quoted Real Estate Investment Trusts 2,721,982 4.48 Portfolio of investments 59,935,109 98.49 Other net assets 921,294 1.51 Net assets attributable to unitholders 60,856,403 100.00

23



Nikko AM Global Dividend Equity Fund By Geography (Summary)


Percentage of total net assets attributable to unitholders at

31 December 2019 % % Quoted Equities Australia 2.58 2.91 Britain 15.48 20.37 Canada 1.90 1.54 Finland 1.79 1.16 France 4.63 4.40 Germany 7.06 5.39 Hong Kong SAR 2.42 2.12 Ireland 3.34 2.03 Japan 7.25 6.86 Netherlands 3.16 3.15 Singapore 1.45 2.37 Spain - 1.15 Sweden 1.80 1.96 Switzerland 5.08 4.53 Taiwan 5.51 5.44 United States of America 30.56 28.19 Total Quoted Equities 94.01 93.57 Quoted Real Estate Investment Trusts Spain 1.63 2.68 United States of America 2.85 2.28 Total Quoted Real Estate Investment Trusts 4.48 4.96 Portfolio of investments 98.49 98.53 Other net assets 1.51 1.47 Net assets attributable to unitholders 100.00 100.00

24



Nikko AM Global Dividend Equity Fund By Industry (Secondary)




31 December 2019 US$ % % Agriculture 1,716,225 2.82 3.73 Banks 2,453,422 4.03 6.44 Beverages 5,024,399 8.26 5.05 Chemicals 733,922 1.21 2.47 Commercial Services 906,382 1.49 1.74 Computers 3,361,176 5.52 4.08 Cosmetics/Personal Care 2,451,040 4.03 4.10 Electric - - 1.16 Electrical Component & Equipment 1,765,141 2.90 2.01 Electronics 1,096,449 1.80 1.96 Entertainment - - 1.87 Food Service 1,121,644 1.84 2.00 Healthcare-Products 3,168,986 5.21 3.15 Home Furnishings 1,314,897 2.16 - Insurance 6,794,496 11.16 10.83 Machinery-Diversified - - 1.39 Oil and Gas 2,141,219 3.52 3.56 Pharmaceuticals 10,043,508 16.50 18.53 Real Estate Investment Trusts (REITS) 2,721,982 4.48 4.96 Retail 2,998,163 4.93 4.05 Semiconductors 3,352,300 5.50 5.44 Software 2,115,079 3.48 2.56 Telecommunications 2,474,126 4.07 4.38 Toys/Games/Hobbies 2,180,553 3.58 3.07 Portfolio of investments 59,935,109 98.49 98.53 Other net assets 921,294 1.51 1.47 Net assets attributable to unitholders 60,856,403 100.00 100.00

25




By Geography (Primary)



S$


% Quoted Investment Fund IRELAND Russell Investment Company PLC – Russell Investment Global Bond Fund (Class A) 50,868 22,882,668 96.91 Total IRELAND 22,882,668 96.91 Total Quoted Investment Fund 22,882,668 96.91 Portfolio of investments 22,882,668 96.91 Other net assets 730,561 3.09 Net assets attributable to unitholders 23,613,229 100.00 By Geography (Summary)



31 December 2019 % % Quoted Investment Fund Ireland 96.91 95.91 Total Quoted Investment Fund 96.91 95.91 Portfolio of investments 96.91 95.91 Other net assets 3.09 4.09 Net assets attributable to unitholders 100.00 100.00 As the sub-fund is invested wholly as a feeder-fund into an underlying investment fund, it is not meaningful to classify the investments into industry, country or asset classes.

26


NIKKO AM SHENTON HORIZON INVESTMENT FUNDS (Constituted under a Trust Deed registered in the Republic of Singapore) STATEMENTS OF PORTFOLIO As at 30 June 2020 (unaudited) Singapore Dividend Equity Fund By Geography (Primary)




S$ % Quoted Equities HONG KONG SAR Hongkong Land Holdings Limited 820,900 4,729,663 1.97 Jardine Matheson Holdings Limited 34,100 1,985,623 0.82 Jardine Strategic Holdings Limited 234,500 7,049,852 2.94 Total HONG KONG SAR 13,765,138 5.73 INDONESIA Bumitama Agri Limited 3,600,000 1,584,000 0.66 Total INDONESIA 1,584,000 0.66 MALAYSIA Top Glove Corporation Berhad 246,500 1,299,055 0.54 Total MALAYSIA 1,299,055 0.54 SINGAPORE Capitaland Limited 2,920,400 8,527,568 3.55 City Developments Limited 283,000 2,382,860 0.99 ComfortDelGro Corporation Limited 4,833,000 7,007,850 2.92 CSE Global Limited 8,596,400 3,438,560 1.43 DBS Group Holdings Limited 1,014,000 21,091,200 8.78 Genting Singapore Limited 2,632,700 2,000,852 0.83 Hi-P International Limited 1,339,400 1,419,764 0.59 Hong Leong Finance Limited 311,200 774,888 0.32 Hyphens Pharma International Limited 4,000,400 1,180,118 0.49 Japfa Limited 5,437,560 3,724,729 1.55 Jardine Cycle & Carriage Limited 68,300 1,376,928 0.58 Keppel Corporation Limited 1,235,200 7,361,792 3.07 Koufu Group Limited 3,630,700 2,505,183 1.04 Oversea-Chinese Banking Corporation Limited 2,398,900 21,590,100 8.99 RE&S Holdings Limited 655,600 61,626 0.03 Sembcorp Industries Limited 1,195,500 2,092,125 0.87 Sheng Siong Group Limited 1,576,600 2,601,390 1.08 Singapore Exchange Limited 1,143,900 9,540,126 3.97 Singapore Technologies Engineering Limited 1,419,400 4,684,020 1.95 Singapore Telecommunications Limited 2,547,300 6,266,358 2.61 Starhub Limited 3,837,600 4,988,880 2.08 United Overseas Bank Limited 816,900 16,525,887 6.88 UOL Group Limited 322,800 2,191,812 0.91 Venture Corporation Limited 651,100 10,534,798 4.39 Wilmar International Limited 2,181,500 8,922,335 3.71 Yanlord Land Group Limited 4,223,100 4,941,027 2.06 Total SINGAPORE 157,732,776 65.67

27


NIKKO AM SHENTON HORIZON INVESTMENT FUNDS (Constituted under a Trust Deed registered in the Republic of Singapore) STATEMENTS OF PORTFOLIO As at 30 June 2020 (unaudited) Singapore Dividend Equity Fund By Geography (Primary) (continued)




S$ % Quoted Equities (continued) THAILAND Thai Beverage Public Company Limited 13,960,700 9,423,472 3.92 Total THAILAND 9,423,472 3.92 Total Quoted Equities 183,804,441 76.52 Quoted Investment Funds SINGAPORE Keppel Infrastructure Trust 11,048,606 5,966,247 2.48 Netlink NBN Trust 4,692,900 4,552,113 1.90 Total SINGAPORE 10,518,360 4.38 Total Quoted Investment Funds 10,518,360 4.38 Quoted Real Estate Investment Trusts HONG KONG SAR Champion REIT 2,674,000 1,939,669 0.81 Link REIT 214,000 2,440,178 1.01 Total HONG KONG SAR 4,379,847 1.82 SINGAPORE Capitaland Mall Trust 2,296,000 4,500,160 1.87 Far East Hospitality Trust 3,442,700 1,704,136 0.71 Frasers Centrepoint Trust 1,461,400 3,375,834 1.41 Frasers Logistics & Commercial Trust 3,731,940 4,441,009 1.85 Keppel DC REIT 1,844,287 4,684,489 1.95 Keppel REIT 1,651,100 1,816,210 0.76 Lendlease Global Commercial REIT 3,444,100 2,341,988 0.97 Mapletree Industrial Trust 977,600 2,805,712 1.17 Mapletree Logistics Trust 3,052,000 5,920,880 2.47 Parkway Life Real Estate Investment Trust 434,800 1,452,232 0.60 Total SINGAPORE 33,042,650 13.76 Total Quoted Real Estate Investment Trusts 37,422,497 15.58 Portfolio of investments 231,745,298 96.48 Other net assets 8,443,486 3.52 Net assets attributable to unitholders 240,188,784 100.00

28


NIKKO AM SHENTON HORIZON INVESTMENT FUNDS (Constituted under a Trust Deed registered in the Republic of Singapore) STATEMENTS OF PORTFOLIO As at 30 June 2020 (unaudited) Singapore Dividend Equity Fund By Geography (Summary)



31 December 2019 % % Quoted Equities Hong Kong SAR 5.73 4.24 Indonesia 0.66 1.21 Malaysia 0.54 - Singapore 65.67 71.27 Thailand 3.92 4.36 Total Quoted Equities 76.52 81.08 Quoted Investment Fund Singapore 4.38 4.30 Total Quoted Investment Fund 4.38 4.30 Quoted Real Estate Investment Trusts Hong Kong SAR 1.82 2.28 Singapore 13.76 10.00 Total Quoted Real Estate Investment Trusts 15.58 12.28 Portfolio of investments 96.48 97.66 Other net assets 3.52 2.34 Net assets attributable to unitholders 100.00 100.00

29



Singapore Dividend Equity Fund By Industry (Secondary)




31 December 2019 S$ % % Agriculture 5,308,729 2.21 1.76 Airlines - - 0.87 Banks 59,207,187 24.65 24.56 Beverages 9,423,472 3.92 4.36 Computers 3,438,560 1.43 2.36 Distribution/Wholesale 1,376,928 0.57 0.86 Diversified Financial Services 10,315,014 4.29 1.32 Electric 8,058,372 3.36 1.88 Electronics 11,954,562 4.98 3.93 Engineering and Construction 12,045,812 5.02 11.63 Entertainment 2,000,852 0.83 1.35 Food 15,972,187 6.65 6.17 Gas - - 1.76 Healthcare-Products 1,299,055 0.54 - Holding Companies-Diversified 1,985,623 0.83 - Lodging 2,382,860 0.99 4.59 Pharmaceuticals 1,180,118 0.49 0.44 Real Estate 20,390,070 8.49 9.24 Real Estate Investment Trusts (REITS) 37,422,497 15.58 12.28 Retail 5,168,199 2.15 2.45 Telecommunications 15,807,351 6.58 5.85 Transportation 7,007,850 2.92 - Portfolio of investments 231,745,298 96.48 97.66 Other net assets 8,443,486 3.52 2.34 Net assets attributable to unitholders 240,188,784 100.00 100.00

30



Horizon Singapore Fixed Income Enhanced Fund By Geography (Primary)




S$ % Quoted Fixed Income Securities AUSTRALIA Australia & New Zealand Banking Group Limited

3.75% due 23/03/2027 250,000 254,164 1.17 Lendlease Finance Limited 3.9% due 27/04/2027 500,000 496,583 2.27 Total AUSTRALIA 750,747 3.44 BRITAIN Barclays Public Listed Company 3.75% due

23/05/2030 250,000 251,950 1.16 HSBC Holdings Public Listed Company 4.7% due

31/12/2049 250,000 246,291 1.13 HSBC Holdings Public Listed Company 5% due

31/12/2049 250,000 247,500 1.13 Swiss Re Finance UK Public Listed Company

3.125% due 03/07/2035 250,000 251,970 1.15 Total BRITAIN 997,711 4.57 BRITISH VIRGIN ISLANDS Huarong Finance 2017 Company Limited 3.2%

due 27/04/2021 250,000 251,875 1.16 Vigorous Champion International Limited 2.25%

due 17/02/2021 500,000 498,587 2.28 Total BRITISH VIRGIN ISLANDS 750,462 3.44 CANADA Manulife Financial Corporation 3.85% due

25/05/2026 250,000 252,394 1.16 Manulife Financial Corporation 3% due

21/11/2029 250,000 253,770 1.16 Total CANADA 506,164 2.32 CHINA Chongqing Banan Economic Park Development &

Construction Company 4.35% due 01/12/2021 250,000 254,375 1.16 Total CHINA 254,375 1.16 FRANCE Credit Agricole SA 3.8% due 30/04/2031 250,000 255,063 1.17 Total FRANCE 255,063 1.17 GERMANY Commerzbank AG 4.875% due 01/03/2027 500,000 481,993 2.21 Commerzbank AG 4.2% due 18/09/2028 250,000 230,641 1.05 Total GERMANY 712,634 3.26 MALAYSIA Danga Capital Berhad 3.725% due 11/08/2020 250,000 251,094 1.15 Total MALAYSIA 251,094 1.15

31



Horizon Singapore Fixed Income Enhanced Fund By Geography (Primary) (continued)




S$ % Quoted Fixed Income Securities (continued) NETHERLANDS ABN Amro Bank NV 4.75% due 01/04/2026 500,000 507,283 2.32 Total NETHERLANDS 507,283 2.32 SINGAPORE Ascendas Real Estate Investment Trust 3.14%

due 02/03/2025 250,000 259,051 1.19 CDJ Properties Limited 2.958% due 09/05/2024 250,000 252,419 1.16 CJ Logistics Asia Private Limited 2.938% due

25/03/2024 250,000 252,205 1.16 CMT MTN Private Limited 2.88% due 10/11/2027 250,000 252,566 1.16 CMT MTN Private Limited 3.2% due 21/08/2025 250,000 258,804 1.18 CMT MTN Private Limited 3.2115% due

09/11/2023 250,000 257,981 1.18 DBS Bank Limited 4.7% due 22/05/2168 250,000 254,650 1.17 DBS Group Holdings Limited 3.98% due

31/12/2049 500,000 528,249 2.42 F&N Treasury Private Limited 3.8% due

21/04/2027 250,000 259,997 1.19 FCOT Treasury Private Limited 1.53371% due

03/05/2022 500,000 489,305 2.24 Housing & Development Board 2.315% due

18/09/2034 500,000 552,622 2.53 Housing & Development Board 3.08% due

31/05/2030 250,000 290,943 1.33 Keppel Corporation Limited 3% due 01/10/2026 250,000 250,995 1.15 Mapletree Commercial Trust Treasury Company

Private Limited 3.05% due 22/11/2029 250,000 253,420 1.16 Mapletree Treasury Services Limited 3.15% due

03/09/2031 500,000 515,888 2.36 Mapletree Treasury Services Limited 3.4% due

03/09/2026 250,000 257,787 1.18 Mercatus Co-Operative Limited 3.1% due

19/01/2028 250,000 254,281 1.16 Oversea-Chinese Banking Corporation Limited

3.8% due 29/08/2049 250,000 249,379 1.14 Oversea-Chinese Banking Corporation Limited

4% due 31/12/2049 250,000 260,238 1.19 Singapore Press Holdings Limited 3.2% due

22/01/2030 750,000 746,408 3.42 Singapore Airlines Limited 3.13% due 17/11/2026 250,000 251,215 1.15 Singapore Airlines Limited 3.22% due 09/07/2020 250,000 250,054 1.14 Singapore Government Bond 2.25% due

01/08/2036 725,000 833,750 3.82 Singapore Government Bond 2.375% due


01/05/2028 150,000 170,550 0.78

32



Horizon Singapore Fixed Income Enhanced Fund By Geography (Primary) (continued)




S$ % Quoted Fixed Income Securities (continued) SINGAPORE (continued) Singapore Government Bond 2.75% due


01/03/2046 1,450,000 1,895,875 8.68 Singapore Government Bond 2.875% due



01/03/2027 100,000 118,100 0.54 Singapore Technologies Telemedia Private

Limited 4.1% due 31/12/2060 250,000 254,094 1.16 SP Powerassets Limited 3.4% due 19/09/2032 250,000 282,366 1.29 Starhill Global REIT MTN Private Limited 3.4%

due 26/05/2023 250,000 256,096 1.17 Starhub Limited 3.95% due 31/12/2049 500,000 504,433 2.31 Starhub Limited 3.55% due 08/06/2026 250,000 258,414 1.18 Temasek Financial I Limited 4.0475% due

05/03/2035 500,000 603,394 2.76 United Overseas Bank Limited 4% due

29/12/2049 500,000 508,556 2.33 United Overseas Bank Limited 3.5% due

27/02/2029 500,000 523,680 2.40 United Overseas Bank Limited 3.58% due

31/12/2059 250,000 260,105 1.19 Total SINGAPORE 15,929,776 72.93 SWITZERLAND Julius Baer Group Limited 5.9% due 29/12/2049 500,000 493,456 2.26 Total SWITZERLAND 493,456 2.26 Accrued interest receivable on Quoted Fixed Income Securities 163,835 0.75 Total Quoted Fixed Income Securities 21,572,600 98.77 Portfolio of investments 21,572,600 98.77 Other net assets 269,489 1.23 Net assets attributable to unitholders 21,842,089 100.00

33



Horizon Singapore Fixed Income Enhanced Fund By Geography (Summary)


Percentage of total net assets

attributable to unitholders at

31 December 2019 % % Quoted Fixed Income Securities Australia 3.44 1.14 Britain 4.57 2.24 British Virgin Islands 3.44 - Canada 2.32 4.47 China 1.16 - France 1.17 1.14 Germany 3.26 3.36 Malaysia 1.15 1.11 Netherlands 2.32 2.26 Singapore 72.93 77.91 Switzerland 2.26 2.26 Accrued Interest receivable on quoted fixed income securities 0.75 0.78 Total Quoted Fixed Income Securities 98.77 96.67 Portfolio of investments 98.77 96.67 Other net assets 1.23 3.33 Net assets attributable to unitholders 100.00 100.00

34



Horizon Singapore Fixed Income Enhanced Fund By Industry (Secondary)




31 December 2019 S$ % % Airlines 501,269 2.30 2.23 Banks 5,059,742 23.17 21.40 Beverages - - 1.13 Commercial Services - - 1.10 Diversified Financial Services 493,456 2.26 2.26 Electric 282,366 1.29 - Engineering and Construction 250,995 1.15 2.27 Food 259,997 1.19 2.21 Insurance 1,256,721 5.75 4.47 Investment Companies 1,883,038 8.62 3.34 Media 746,408 3.42 - Private Equity 254,281 1.16 2.21 Real Estate 1,003,377 4.59 3.38 Real Estate Investment Trusts (REITS) 2,027,223 9.28 13.35 Sovereign 6,374,840 29.19 32.11 Telecommunications 762,847 3.49 3.32 Transportation 252,205 1.16 1.11

Accrued interest receivable on quoted fixed income securities 163,835 0.75 0.78

Portfolio of investments 21,572,600 98.77 96.67 Other net assets 269,489 1.23 3.33 Net assets attributable to unitholders 21,842,089 100.00 100.00

35


NIKKO AM SHENTON HORIZON INVESTMENT FUNDS(Constituted under a Trust Deed registered in the Republic of Singapore)

REPORT TO UNITHOLDERSFor the financial period from 01 January 2020 to 30 June 2020 (unaudited)

The following contains additional information relating to the Sub-Funds.

Distribution of investments

Please refer to the Statements of Portfolio on pages to .

Credit rating of debt securities


Fair value at30 June 2020

S$

Percentage oftotal net assets

attributable tounitholders at30 June 2020

%

AAA* 6,727,140 30.80AA 534,571 2.45A- 506,164 2.32BBB+ 761,197 3.49BBB 761,933 3.49BBB- 769,722 3.52BB+ 712,634 3.26A2 523,680 2.40A2 *- 769,351 3.52A3 259,051 1.19Baa1 1,288,680 5.90Baa2 743,680 3.40Baa3 1,735,780 7.95Not rated 5,315,182 24.33Accrued interest receivable on quoted fixed income

securities 163,835 0.75Total 21,572,600 98.77

*The balance includes securities that are issued by government agencies of government that have aAAA rating as rated by Standard & Poor’s.

36




3. Top 10 holdings


10 Largest holdings at 30 June 2020

Fair valueUS$


attributable tounitholders

%

Taiwan Semiconductor Manufacturing Company Limited 3,352,300 5.51

Roche Holding AG 3,094,444 5.08Coca-Cola Company 2,858,641 4.70Unilever Public Listed Company 2,451,040 4.03Nintendo Company Limited 2,180,553 3.58Pepsico Incorporated 2,165,758 3.56Microsoft Corporation 2,115,079 3.48Allianz SE 2,084,537 3.43AbbVie Incorporated 2,055,693 3.38Accenture Public Listed Company 2,034,483 3.34


Fair valueUS$



%

Coca-Cola Company 3,540,655 4.97Unilever Public Listed Company 3,426,790 4.81Glaxosmithkline Public Listed Company 3,217,854 4.52Pfizer Incorporated 3,157,717 4.43Roche Holding AG 2,828,987 3.97Taiwan Semiconductor Manufacturing Company

Limited 2,723,994 3.82Prudential Public Listed Company 2,664,112 3.74Philip Morris International Incorporated 2,477,619 3.48Cisco Systems Incorporated 2,382,087 3.34Digital Realty Trust Incorporated 2,104,659 2.95

37




3. Top 10 holding (continued)


Largest holdings at 30 June 2020

Fair valueS$



%

Russell Investment Company PLC –Russell Investment Global Bond Fund (Class A) 22,882,668 96.91

Largest holdings at 30 June 2019

Fair valueS$



%

Russell Investment Company PLC -Russell Investment Global Bond Fund (Class A) 22,436,603 96.38

38







Fair valueS$



%

Oversea-Chinese Banking Corporation Limited 21,590,100 8.99DBS Group Holdings Limited 21,091,200 8.78United Overseas Bank Limited 16,525,887 6.88Venture Corporation Limited 10,534,798 4.39Singapore Exchange Limited 9,540,126 3.97Thai Beverage Public Company Limited 9,423,472 3.92Wilmar International Limited 8,922,335 3.71Capitaland Limited 8,527,568 3.55Keppel Corporation Limited 7,361,792 3.07Jardine Strategic Holdings Limited 7,049,852 2.94


Fair valueS$



%

DBS Group Holdings Limited 21,616,892 9.57United Overseas Bank Limited 19,082,739 8.45Oversea-Chinese Banking Corporation Limited 16,900,500 7.48Keppel Corporation Limited 11,038,284 4.89Singapore Technologies Engineering Limited 9,466,110 4.19Venture Corporation Limited 8,625,555 3.82Singapore Telecommunications Limited 8,174,600 3.62Jardine Strategic Holdings Limited 7,970,393 3.53Capitaland Limited 7,916,731 3.51Thai Beverage Public Company Limited 6,718,269 2.98

39







Fair valueS$



%

Singapore Government Bond 2.75% due 01/03/2046 1,895,875 8.68Singapore Government Bond 2.75% due 01/04/2042 988,900 4.53Singapore Government Bond 2.25% due 01/08/2036 833,750 3.82Singapore Press Holdings Limited 3.2% due

22/01/2030 746,408 3.42Temasek Financial I Limited 4.0475% due

05/03/2035 603,394 2.76Singapore Government Bond 2.875% due

01/09/2030 562,756 2.58Housing & Development Board 2.315% due

18/09/2034 552,622 2.53Singapore Government Bond 2.375% due

01/07/2039 534,600 2.45DBS Group Holdings Limited 3.98% due 31/12/2049 528,249 2.42United Overseas Bank Limited 3.5% due 27/02/2029 523,680 2.40


Fair valueS$



%

Singapore Government Bond 2.75% due 01/03/2046 1,707,750 7.45Singapore Government Bond 3.375% due01/09/2033 1,360,200 5.93Danga Capital Berhad 3.725% due 11/08/2020 1,012,991 4.42Singapore Government Bond 2.75% due 01/04/2042 940,950 4.10Singapore Government Bond 3.5% due 01/03/2027 890,000 3.88Singapore Government Bond 2.25% due 01/08/2036 788,800 3.44Manulife Financial Corporation 3.85% due 25/05/2026 762,277 3.33Breadtalk Group Limited 4% due 17/01/2023 755,058 3.29China Construction Bank Corporation2.08% due

26/10/2020 747,937 3.26United Overseas Bank Limited 3.5% due 27/02/2029 515,942 2.25

40




4. Exposure to financial derivatives



US$



30 June 2020%

Unrealisedgains/(losses)

US$

Realisedgains/(losses)

US$

Forward foreign exchange contracts 324,678 0.53 324,678 (2,748,255)



S$



30 June 2020%

Unrealisedgains/(losses)

S$

Realisedgains/(losses)

S$

Forward foreign exchange contracts 111,396 0.47 111,396 (808,627)

5. Global exposure to financial derivatives

The global exposure to financial derivatives is computed using the commitment approachwhich is calculated as the sum of:

a. the absolute value of the exposure of each individual financial derivative not involved innetting or hedging arrangements;

b. the absolute value of the net exposure of each individual financial derivative after nettingor hedging arrangements; and

c. the sum of the values of cash collateral received pursuant to:

i. the reduction of exposure to counterparties of OTC financial derivatives; and

ii. EPM techniques relating to securities lending and repurchase transactions and thatare reinvested

6. Collateral

Nil.

7. Securities lending or repurchase transactions

Nil.

41


NIKKO AM SHENTON HORIZON INVESTMENT FUNDS (Constituted under a Trust Deed registered in the Republic of Singapore)

REPORT TO UNITHOLDERS For the financial period from 01 January 2020 to 30 June 2020 (unaudited)

Investment in unit trusts, mutual funds and collective investment schemes

AM Global Dividend Equity Fund

Please refer to the Statements of Portfolio on page to .


Please refer to the Statements of Portfolio on page .


Please refer to the Statements of Portfolio on page to .

Borrowings

Nil.

Amount of units created and cancelled for the financial period ended 30 June2020

Nikko AM GlobalDividend Equity Fund

US$

Horizon Global BondFund (S$ Hedged)

S$

Units created 5,345,715 7,156,090 Units cancelled (5,588,048) (8,398,322)

Singapore DividendEquity Fund

S$

Horizon SingaporeFixed Income

Enhanced Fund S$

Units created 75,072,005 4,497,075 Units cancelled (28,547,977) (6,031,895)

42




11. Turnover ratio

Nikko AM Global Dividend Equity Fund30 June 2020 30 June 2019

Lower of total value of purchases or sales US$ 9,676,160 12,834,261Average daily net asset value US$ 60,680,308 70,176,590Total turnover ratioNote % 15.95 18.29

Horizon Global Bond Fund (S$ Hedged)30 June 2020 30 June 2019

Lower of total value of purchases or sales S$ 5,476,932 968,806Average daily net asset value S$ 23,332,141 23,108,596Total turnover ratioNote % 23.47 4.19

Singapore Dividend Equity Fund30 June 2020 30 June 2019

Lower of total value of purchases or sales S$ 34,474,954 25,847,061Average daily net asset value S$ 228,778,956 207,528,576Total turnover ratioNote % 15.07 12.45

Horizon Singapore Fixed Income Enhanced Fund30 June 2020 30 June 2019

Lower of total value of purchases or sales S$ 15,360,242 8,968,149Average daily net asset value S$ 21,844,450 22,600,137Total turnover ratioNote % 70.32 39.68

Note The portfolio turnover ratio is calculated in accordance with the formula stated in the Code on Collective Investment Schemes. The calculation of the portfolio turnover ratio was based on the lower of the total value of purchases or sales of the underlying investments, divided by the average daily net asset value.

43




12. Expense ratio


SGD Hedged (Acc) Class 30 June 2020 30 June 2019

Total operating expenses US$ 972,156 1,033,155Average daily net asset value US$ 56,929,243 62,383,524Total expense ratioNote % 1.71 1.66

SGD Hedged (Dist) Class 30 June 2020 30 June 2019

Total operating expenses US$ 117,715 137,176Average daily net asset value US$ 6,904,133 8,174,455Total expense ratioNote % 1.70 1.68

USD (Acc) Class 30 June 2020 30 June 2019

Total operating expenses US$ 6,939 9,063Average daily net asset value US$ 407,354 425,012Total expense ratioNote % 1.70 2.13

CNH Hedged (Dist) Class 30 June 2020 30 June 2019

Total operating expenses US$ 1,310 3,400Average daily net asset value US$ 76,750 80,408Total expense ratioNote % 1.71 4.23

Horizon Global Bond Fund (S$ Hedged)30 June 2020 30 June 2019

Total operating expenses S$ 202,437 188,760Average daily net asset value S$ 23,469,078 23,361,964Total expense ratioNote (including

Underlying Fund's expense ratio) % 1.56 1.52Weighted average of the Underlying Fund's

unaudited expense ratio % 0.70 0.71

44


NIKKO AM SHENTON HORIZON INVESTMENT FUNDS (Constituted under a Trust Deed registered in the Republic of Singapore) REPORT TO UNITHOLDERS For the financial period from 01 January 2020 to 30 June 2020 (unaudited) 12. Expense ratio (continued)

Singapore Dividend Equity Fund SGD Class

30 June 2020 30 June 2019

Total operating expenses S$ 3,204,415 2,653,457Average daily net asset value S$ 216,023,425 179,229,216Total expense ratioNote % 1.48 1.48 JPY Class

30 June 2020

30 June 2019 Total operating expenses S$ 4,197 3,357 Average daily net asset value S$ 757,358 608,795 Total expense ratioNote % 0.55 0.55 MYR Class 30 June 2020 30 June 2019 Total operating expenses S$ 92,703 93,282 Average daily net asset value S$ 6,277,046 6,316,336 Total expense ratioNote % 1.48 1.48 USD Class 30 June 2020 30 June 2019 Total operating expenses S$ 68,620 59,076 Average daily net asset value S$ 4,651,483 3,997,570 Total expense ratioNote % 1.48 1.48

Horizon Singapore Fixed Income Enhanced Fund 30 June 2020 30 June 2019 Total operating expenses S$ 276,304 285,843Average daily net asset value S$ 22,109,475 23,488,491Total expense ratioNote % 1.25 1.22 Note The expense ratio has been computed based on the guidelines laid down by the Investment Management

Association of Singapore ("IMAS"). The calculation of the expense ratio at financial year end was based on total operating expenses divided by the average net asset value for the year. The total operating expenses do not include (where applicable) brokerage and other transactions costs, performance fee, interest expense, distribution paid out to unitholders, foreign exchange gains/losses, front or back end loads arising from the purchase or sale of other funds and tax deducted at source or arising out of income received. The Sub-Funds do not pay any performance fee. The average net asset value is based on the daily balances.

45


NIKKO AM SHENTON HORIZON INVESTMENT FUNDS (Constituted under a Trust Deed registered in the Republic of Singapore) REPORT TO UNITHOLDERS For the financial period from 01 January 2020 to 30 June 2020 (unaudited)

13. Related party transactions The Manager of the Sub-Funds is Nikko Asset Management Asia Limited, a subsidiary of Nikko Asset Management International Limited. The Trustee of the Sub-Funds is BNP Paribas Trust Services Singapore Limited (the "Trustee"). Management fee is payable to the Manager. Trustee fee and registrar fee are payable to the Trustee. Custody and valuation fee are payable to a related company of the Trustee, BNP Paribas Securities Services operating through its Singapore Branch. In addition to related party information shown elsewhere in the financial statements (including the Statement of Portfolio), the following significant transactions took place during the financial period between the Sub-Funds and a related party at terms agreed between the parties and within the provisions of the Deed.

Nikko AM Global

Dividend Equity Fund Horizon Global Bond

Fund (S$ Hedged)

30 June 2020 US$

31 December 2019 US$

30 June 2020 S$

31 December 2019 S$

Bank balances held with related party of the trustee 783,368 487,166 674,538 1,048,065

Singapore Dividend

Equity Fund Horizon Singapore Fixed

Income Enhanced Fund

30 June 2020 S$

31 December 2019 S$

30 June 2020 S$

31 December 2019 S$

Bank balances held with related party of the trustee 9,637,960 7,656,253 848,267 930,693

14. Any other material information that will adversely impact the valuation of the fund

Nil.

46


NIKKO AM SHENTON HORIZON INVESTMENT FUNDS (Constituted under a Trust Deed registered in the Republic of Singapore) REPORT TO UNITHOLDERS For the financial period from 01 January 2020 to 30 June 2020 (unaudited) The details which follow make reference to the investments within the Russell Investment Company PLC - Russell Investment Global Bond Fund (Class A) unless stated otherwise.

1. Top 10 Holdings


Fair value S$

Percentage of total net assets


% Buoni Poliennali Del Tes 1.3 15-May-2028 29,175,666 1.01Japan (10 Yr Issue) 0.1 20-Jun-2029 28,771,962 0.99Australian Government 3 21-Mar-2047 26,660,104 0.92FNCL 3.5 14-Jul-2020 26,631,866 0.92FNCL 3 15-Jul-2020 26,412,296 0.91US Treasury N/B 1.5 15-Aug-2022 26,301,319 0.91Japan (10 Yr Issue) 1 20-Dec-2021 24,053,963 0.83Buoni Poliennali Del Tes 0.3 15-Aug-2023 23,164,152 0.80US Treasury N/B 2 30-Nov-2020 22,479,969 0.78US Treasury N/B 3.5 22-Jan-2045 21,202,705 0.73


Fair value S$



% FNCL 4 01-Jul-2048 51,310,840 1.52US Treasury N/B 2 30-Nov-2020 40,248,248 1.20US Treasury N/B 1.5 15-Aug-2026 37,419,184 1.11Buoni Poliennali Del Tes 1.3 15-May-2028 37,352,336 1.11US Treasury N/B 5.375 15-Feb-2031 30,524,922 0.91FNCL 3 15-Jul-2019 28,835,999 0.86US Treasury N/B 1.625 31-Aug-2019 27,701,313 0.82Japan (10 Yr Issue) 0.1 20-Mar-2027 27,269,992 0.81FNCL 5.5 15-Jul-2019 27,201,062 0.81Japan (2 Year Issue) 0.1 01-Nov-2020 26,483,054 0.79

2. Financial Ratios 30 June 2020 30 June 2019 % % Expense ratioNote 0.72 0.74 Turnover ratio 289.64 358.73

Note The expense ratio has been computed based on the total operating expenses divided by the average net

asset value for the period. The total operating expenses do not include (where applicable) brokerage and other transactions costs, performance fee, interest expense, distribution paid out to unitholders, foreign exchange gains/losses, front or back end loads arising from the purchase or sale of other funds and tax deducted at source or arising out of income received. The average net asset value is based on the daily balances

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Company registration number 198202562H


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