Aberdeen Standard Investments has filed an application with the Monetary Authority of Singapore (MAS) to launch the Aberdeen Standard SICAV IV – Asian Bond Fixed Maturity 2023 Fund, according to the regulator’s website.
Once approved, it will be available to retail investors in Singapore.
The product aims to provide income by investing at least 51% of its net asset value in US dollar-denominated Asian investment grade, sub-investment grade debt and debt-related securities, according to the prospectus.
The firm also plans to launch the fund in Hong Kong, according to a Hong Kong-based ASI spokeswoman.
“Investors are looking for income amid falling bond yields and an uncertain outlook. Dollar-denominated Asian credits offer a yield premium over US and European credits while exhibit relative resilience compared to rest of emerging markets. Asian US dollar credits outperformed broader emerging markets and even developed market US dollar bonds during the sell-off in March,” the spokeswoman said.
She added that Asian credit is expected to have lower default rates compared with US high yield and global emerging market corporate bonds.
The move comes after the firm launched its first fixed maturity product (FMP) in Singapore, the Emerging Markets Bond Fixed Maturity 2023 Fund, in October last year.
Other firms that are expected to launch FMPs in Asia this year include Invesco, EFG Asset Management and HSBC Global Asset Management.
FMPs are marketed to investors who want more certainty in terms of future income streams and interest rate risk, especially when global markets are experiencing huge volatility.
They promise regular income for a specific time period. Compared to direct investment in a few bonds by individual investors, a fixed-maturity bond fund is meant to provide the benefits of diversification with a large pool of bond positions across different markets and industries.
They still carry risk, but unlike a regular bond fund, all principal is typically returned at maturity (if no defaults), plus investors receive income monthly or quarterly.
Phillip Capital Management
Separately, Phillip Capital Management has also filed an application to launch its Phillip Global Rising Yield Innovators Fund in the Lion City, according to MAS records.
The fund aims to achieve “sustainable income streams” and capital growth by investing in global stocks with quality businesses that are resilient in economic downturns, according to its prospectus.
However, the fund does not have an income target. “The managers have the sole discretion to determine whether any distribution of income and/or capital of the sub-fund or a class should be made,” the prospectus reads.
FSA sought more information from the firm but it was not able to give more details in time for publication.
