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iBoxx SGD Monthly Update: August 2020
July 2020 End-of-Month Commentary
The overall index gained 1.20% as its yield fell 15 bps to 1.24% by the end of the month. Notably the index duration surpassed 7 years for the first time since index inception.
Monthly return dispersion across ratings and maturity was quite small with all segments, apart from the AA/5-7 year segment, making positive returns.
The AA sector as a whole bounced back strongly from the previous month with the 7-10 maturity segment posting strong gains. Across the whole index, the top 5 performers were also AA rated issues (Ultra long-end Land Transport Authority bonds).
The government index (+1.31%) outperformed the non-sovereigns index (+0.99%) this month. Year to date, Singapore government bonds have returned 8.15%.
The HY segment underperformed relative to the previous month, making a return of +0.90%.
August 2020 Rebalance
The index took four new corporate bonds at the August rebalance, inserting just over S$ 1.5 billion of fresh notional. The three new financials added are fixed-to-float type bonds with initial coupon rates in the 3.1 to 4.1% range.
Five bonds with a combined notional of just over S$ 1.6 billion were removed from the index as their expected remaining life fell to below one year.
Please see the table in the full commentary for rating changes observed in the August 2020 rebalance.
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