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Germaine Share, Morningstar
Income-generating products have continued to be popular among Asia investors, especially during periods when investors are more cautious due to market uncertainty.
“As investors navigate the corona-virus uncertainty, capital protection, reducing downside risks and ensuring steady income will likely be on top of minds,” Leena Dagade, associate director at Cerulli Associates, said previously.
As the search for income continues, fund managers have responded to client demand and have recently launched different income-generating funds, which would usually include equity dividend, high yield and mixed-asset strategies.
In Malaysia, for example, Manulife Investment Management recently launched a preferred securities income fund, a product that invests in instruments with the capital growth features of equities and the income streams of bonds.
Franklin Templeton, meanwhile, is expected to offer a multi-asset fund with income features in Hong Kong.
Amundi also launched three fixed income funds in the SAR that provide a monthly dividend distribution.
“Investment solutions with steady sources of income are becoming more relevant to investors amid the uncertain market environment,” Vincent Mortier, deputy chief investment officer at Amundi, said.
Against this backdrop, FSA asked Germaine Share, associate director at Morningstar, to compare two income-generating funds: The JP Morgan Asia Equity Dividend Fund and the Schroder ISF Asian Equity Yield Fund.
|Manager/s||Jeffrey Roskell, Julie Ho, Ruben Lienhard||King Fuei Lee|
|Three-year cumulative return||7.41%||5.55%|
|Three-year annualised return||1.59%||2.06%|
|Three-year annualised alpha||-2.53||-2.00%|
|Three-year annualised volatility||18.83||18.28|
|Morningstar analyst rating||Neutral||Gold|
|Morningstar star rating||**||****|
|FE Crown fund rating||*||**|