If approved, the fund will be the firm’s first FMP offering to retail investors in Singapore. The firm has also not yet launched an FMP to accredited investors in the Lion City, MAS records show.
The firm plans to launch the product in October, subject to regulatory approval, according to a Hong Kong-based spokeswoman of the firm. The fund will also be available to professional investors in Hong Kong and Singapore, she added, noting that the firm has previously launched similar strategies to professional investors in Asia.
The Emerging Markets Bond Fixed Maturity 2023 Fund, which is a Sicav product denominated in US dollars with various share classes, needs to raise a minimum of $100m during its initial offer period to launch the product, according to the fund’s prospectus. If it can’t raise $100m, then it will be liquidated and contributions will be returned to investors.
The fund will invest at least two-thirds of its assets in US dollar-denominated emerging market bonds, and may invest up to a maximum of 50% of its assets in sub-investment grade debt, according to the prospectus.
A number of fund managers have introduced FMPs in Asia this year. In Singapore, Aviva was the most recent, launching the Investment Solutions Fixed Maturity Plan – Series 1, which is targeted to accredited investors.
Other fund managers that have launched FMPs to Singapore’s accredited investors include Credit Suisse Fund Management, Legg Mason Investment Management and Schroders, according to FE data.
Credit Suisse’s CS (Lux) Fixed Maturity FR Bond Fund 2023 S-IV was launched in January and is also offered to investors in Saudi Arabia and Europe. The product is among the biggest FMPs, with around $1.7bn in assets, according to FE data.
Legg Mason’s Diversified Global Credit Fixed Maturity Bond 2023, which was launched in Singapore in June and also offered in the UK, Greece and Ireland, has around $702m in assets.
Schroders launched its Special Situations Fixed Maturity Bond 2023 Fund in March. Elsewhere, the firm is also one of the biggest FMP players in Taiwan.
In Hong Kong, Invesco launched its second FMP last week after raising around $300m for its first FMP that was launched in July. Like Schroders, it is also a huge player in Taiwan’s FMP market.
FMPs have become in demand in Asia because they are in-and-out products, offering regular income for a specific time period. They still carry risk, but unlike a regular bond fund, all principal is typically returned at maturity (if no defaults), plus investors receive monthly income monthly or quarterly, as specified.