NTUC Income AR 2018

Notes to the Financial Statements For the Financial Year Ended 31 December 2018 12. Investment in funds The funds invested in by the Group may utilise a variety of financial instruments in their trading strategies, including equity and debt securities as well as an array of derivative instruments. Several of these financial instruments contain the risk whereby changes in market values of the securities underlying the financial instruments may be in excess of the amounts recorded on each portfolio fund’s statement of financial position. However, as the Group has limited interests in these funds, the Group’s risk with respect to such transactions is limited to its capital balance in, and where applicable, capital commitments to, each fund. The Group’s holding in a unitised fund, as a percentage of the fund’s total net asset value, will vary from time to time dependent on the volume of subscriptions and redemptions at the fund level. It is possible but unlikely that the Group may, at any point in time, hold a majority of a fund’s total units in issue. The Group’s maximum exposure to loss from its interests in funds is equal to the total fair value of its investments in and capital commitments contracted to the funds. Once the Group has disposed of its shares/units in a portfolio fund or withdrawn from its partnership contracts, the Group ceases to be exposed to any risk from that fund. The Group’s outstanding investment capital commitments are disclosed in Note 30. The tables below summarises the fair value of the Group’s holdings in funds by risk of concentration with respect to geographic region and industry focus of the funds. 2018 % of the Investment in Funds Fair value $’000 Industry focus Diversified financials 59% 2,573,594 Energy 2% 70,162 Real estate 39% 1,720,260 Telecommunication services * 10,586 Industrials * 556 Utilities * 681 Materials * 4,886 Information technology * 11,559 100% 4,392,284 Geographic region Asia Pacific 41% 1,787,564 Australia 3% 131,034 Europe 13% 600,626 North America 33% 1,446,860 Others 10% 426,200 100% 4,392,284 * less than 1% 107 2018 ANNUAL REPORT