The Hang Seng Global Bond Fixed Maturity Fund 2022 “will use a buy-and-hold strategy to help investors capture current yield levels of the underlying bonds, while also offering the fixed maturity feature of bond investments as well as the benefits provided by investment diversification of funds,” said Rosita Lee, director and chief executive officer of Hang Seng Investment Management (HSIM), in the statement.
It follows the launch of HSIM’s first FMP in July, the Hang Seng Asia Bond Fixed Term Fund 2022, which invests in US dollar-denominated Asian debt securities.
The new fund has been approved by the Securities and Futures Commission (SFC) for sale to retail investors in Hong Kong, according to the the regulator’s website.
The manager intends to provide investors with monthly distributions during the investment period and, upon maturity, redemption proceeds will be distributed based on the net asset value of the fund at that time, said the statement.
The initial offer period started on 16 September and ends on 9 October 2019, and the expected maturity date is 3 August 2022.
The base currency of the Fund is US dollars, with fund units available in Hong Kong dollar and US dollar classes.
FSA contacted the firm for more details but it declined to comment.
FMP boom
In Hong Kong, other fund managers have recently launched FMPs to retail investors, including HSBC Global Asset Management and Bea Union Investment Management.
Most recently, in late July, US-based asset manager Invesco launched its first retail FMP in Hong Kong, the Global Bond Fixed Maturity Fund 2022, which raised $301m. In the following month, it received approval from SFC to launch another FMP – as FSA previously reported.
FMPs are in demand 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 typically receive income monthly or quarterly.
