Fubon Fund Management in Hong Kong has received approval from the Securities and Futures Commission (SFC) to launch the Fubon Asian Bond Target Maturity Fund 2024, according to the regulator’s website.
Fubon Fund Management in Hong Kong is a subsidiary of Taipei-based Fubon Asset Management, which is wholly owned by Fubon Financial. In Taiwan, Fubon’s fund management arm is the fifth largest manager in the market’s onshore (Taiwan-domiciled) market, with assets of around NT$305bn ($10.39bn), according to data from Morningstar Direct.
While the new fund is the only SFC-authorised product that the asset manager has in Hong Kong, Fubon Fund Management has held an asset management licence (Type 9) since 2014 and licences for dealing in securities (Type 1) and advising on securities (Type 4) since 2004, SFC records show.
FSA sought more information from the firm, but it was not able to provide more details in time for publication.
Fubon’s target maturity fund invests in corporate and government bonds in Asia over an investment period of around four years and aims to make quarterly distributions, according to its product key facts statement. Its initial offer period is expected to be from 7 September-25 September and the maturity date is expected to be on 30 September 2024, it added.
Fixed maturity products (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.
Other asset management firms operating in Hong Kong that are preparing FMPs recently include EFG Asset Management, Invesco and Amundi.
