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Affin Hwang AM launches infrastructure fund

The fund is a wholesale feeder product that provides Malaysian investors access to global income opportunities through listed infrastructure assets.
engineer under inspection and checking construction process railway work on rail train station by Blueprint on hand . Engineer wearing safety uniform and safety helmet in work.

The Affin Hwang World Series – Global Infrastructure Income Fund will feed into a collective investment scheme, the Legg Mason ClearBridge Global Infrastructure Income Fund (the target fund), which is managed by ClearBridge Investments, a specialist investment manager owned by Franklin Templeton.

To achieve its investment objective, the vehicle will invest a minimum of 80% of the fund’s net asset value (NAV) into the target fund and a maximum of 20% of the fund’s NAV into money market instruments, deposits and cash.

“As we emerge from the pandemic, more cities and governments are looking at prioritising maintenance, facility upgrades and embracing sustainability in its public goods and utilities. This is expected to drive infrastructure spending globally including investments in electricity supply and efficiency, renewable energy generation as well as wireless towers with the advent of 5G,” Chan Ai Mei, chief marketing and distribution officer of Affin Hwang Asset Management said, in a statement.

The fund is offered in four currency classes, namely US dollars, and hedged ringgit, Singapore dollars and Australian dollars. The minimum investment amount is $5,000 for all listed currency classes. The annual management fee of the fund is up to 1.80% of the NAV of the fund and is calculated using the base currency.

Diversification benefits

There is little overlap with traditional asset classes such as equities and fixed income, so the fund provides an additional source of diversification to investors through exposure in infrastructure assets that are often regulated and have long-term contracts, where asset lives are typically measured in decades, according to Chan.

“This offers greater stability to investors especially in volatile periods through more predictable returns and a consistent income stream thanks to the long-term contractual nature of the assets,” he said Chan.

In addition, “infrastructure is in a multi-decade secular growth cycle where the assets will play a pivotal role in the path to net-zero emissions,” ClearBridge Investments portfolio manager Shane Hurst said in a statement.

“The strategy aims to provide investors with long-term inflation-linked capital growth over an economic cycle with a focus on providing reliable income targeting 5% a year, net of fees. Our infrastructure portfolio spans across numerous infrastructure sectors, regions, and regulatory environments, providing greater cash flow stability and dividends across investment cycles,” he added.

As at 30 November 2021, the total AUM, comprising in-house unit trust funds as well as corporate and discretionary portfolios, stood at approximately MYR82bn ($19.49bn).

Part of the Mark Allen Group.