BEA Union Investment Management, the Hong Kong-based asset manager, has announced the launch of a global quality bond fund.
The BEA Union Investment Global Quality Bond Fund has an IPO subscription period between 26 August and 10 September, after which it will commence trading.
The fund aims to offer investors a high-quality bond strategy with reduced volatility and risk, the company said in a statement.
Authorised by the Securities and Futures Commission in Hong Kong, the fund will primarily invest in US Treasuries and US dollar-denominated investment-grade bonds spanning across developed markets, including the US, Europe, Japan and Australia.
The model portfolio will have an average credit rating of A, and a duration of less than a year to capitalise on higher income from short-term bonds.
BEA Union Investment chief executive officer Janet Li said: “The global rate-cutting cycle will soon kick off as inflationary pressures steadily decline, dimming the allure of banks’ savings rates.”
“In response to investors seeking an alternative to interest income from banks, we are launching ‘BEA Union Investment Global Quality Bond Fund’.”
Pheona Tsang, chief investment officer of fixed income at BEA Union Investment, said: “Until inflation declines to its target, interest rates are expected to remain at a relatively high level for an extended period of time. Consequently, we believe that short-term bond yields will stay at attractive levels.”
“Despite an impending shift in monetary policy, short-term bonds experience relatively lower price volatility because the asset class is less sensitive to rate movements and, as a result, less impacted by interest rate fluctuations.”
The fund will be managed by Pheona Tsang and her team, integrating macroeconomic research and views of Union Asset Management’s fixed income team into the investment process.
Its base currency is US dollars, with other currency classes available in Hong Kong dollars and renminbi. It will distribute dividends monthly, and have an investment manager fee of 0.85% per annum.
