Aviva preps multi-asset product in Singapore

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A number of fund managers have launched mixed-asset products in the Lion City in the past year.

London-headquartered Aviva Investors is expected to launch the Sustainable Income and Growth Fund in Singapore, according to records from the Monetary Authority of Singapore (MAS).

The firm is still waiting for approval from the regulator.

The fund aims to earn income, targeted at 5% annually, according to the fund’s prospectus. The fund will invest in global equities, bonds, money market instruments and bank deposits. It also has the option to invest in alternative asset classes, including infrastructure, real estate companies and real estate investment trusts (REITs).

The product has already been launched in the UK this month, according to a statement from the firm.

FSA sought more information from Aviva Investors about Hong Kong launch plans, but the firm was not able to reply in time for publication.

“Companies will be selected on the basis of sustainable business models and underlying revenue streams, with an emphasis on cash flows to deliver compounding interest over time,” said Francois De Bruin, fund manager of the product, in the statement.

“By focusing on assets likely to generate dividends and coupons during draw down, rather than selling shares for income, the fund will help mitigate the risk of permanent loss of capital when markets are depressed,” he added.

The launch of the product comes at a time when investors are withdrawing from mixed-asset funds.

Globally, mixed-asset products saw net outflows of around $2.54bn globally, according to data from Morningstar Direct.

The trend is also seen in Asia, where sales of mixed-asset products in both Hong Kong and Taiwan have declined.

Nonetheless, other firms have launched mixed-asset funds in the past year, including Fullerton Fund Management, Aberdeen Standard Investments, Capital Group, Nikko Asset Management, UTI Mutual Fund and Lion Global Investors. Since 2018, around 29 mixed-asset products have been launched in the Lion City, according to data from FE.

Aviva has 12 mutual fund offerings available to accredited investors in Singapore, which include equity and fixed income strategies, according to data from FE.

Globally, the firm manages  £331bn ($424.7bn) in assets, according to the firm’s website.

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