Fee review
The Fullerton fund charges a management fee of 0.80%. Lim noted that the fund house’s charges are in line with its peer average.
ChinaAMC charges management fee of 1.25%, which is line with peer average within the onshore space, she said.
Conclusion
Lim said that investors who are bullish on the RMB bond market should consider the Fullerton fund and ChinaAMC fund for different exposures.
“The Fullerton fund offers diversified opportunities across onshore government and policy bank bonds, offshore bonds and USD bonds.
“The ChinaAMC fund gives investors exposure to onshore corporate bonds.”
“Of the two funds, the ChinaAMC fund could potentially offer more opportunities and hence higher returns as the onshore RMB market develops and deepens. But with higher returns, investors should be aware of the higher risk relating to defaults, mis-pricing and structural issues,” Lim said.
