Income products top choice in Singapore

Asset Class in Focus

In Hong Kong and Singapore, income funds of various types had some of the highest net flows during the first half.

Income funds dominated the top selling list of Singapore-domiciled funds in the first half, according to Broadridge Financial’s Asia-Pacific quarterly report.

Top 10 Singapore-domiciled funds by net flows (1H 2019, in $)

Fund NameFund Sector

Net flows

Schroder Asian Income FundMixed Assets Income

126.5

First State BridgeFund of Funds Balanced

120.2

Fullerton SGD Heritage IncomeFund of Funds Bonds Asia Pacific

117.3

First State Dividend AdvantageEquities Pacific Income

114.9

LionGlobal Short Duration BondBonds Global Short-Term

62.8

Eastspring IUT-Singapore Select BondBonds SGD

45.2

Fullerton Short Term Interest RateBonds SGD

43.3

Schroder Asian Investment Grade CreditBonds Asia Mixed Currencies

40.3

Schroder Global Quality BondBonds Global Currencies

40.1

Phillip SING Income ETFEquities Singapore

37.2

Source: Broadridge Financial

Two of those income products are relatively new to the market: the Fullerton SGD Heritage Income Fund was launched in May, while the Phillip Sing Income ETF was rolled out in October last year.

“Investors have been piling into income-oriented funds for the past few years,” said Yoon Ng, director of Apac insights for global market intelligence at Broadridge.

“There is strong demand for funds which can provide downside protection, access to upside potential and a regular income stream,” she said.

Other fund management firms have taken advantage of the trend toward income products. Aviva Investors, for example, applied last month with the Monetary Authority of Singapore to launch the Sustainable Income and Growth Fund, which aims to earn income, targeted 5% annually, while BNP Paribas Asset Management launched earlier this year the Parvest Multi-Asset Income Europe Fund.

Income continues to be important for investors in Asia and not just in Singapore. According to findings from a previous Cerulli Associates report, regular steady income payments are the most important feature for investors in the region.

Most important features for retail investors in Asia

Source: Cerulli Associates

Bond funds dominate in Hong Kong

In Hong Kong, six of the top 10 best-selling products domiciled in the SAR are fixed income funds, five of which are focused on Asia.

Top 10 Hong Kong-domiciled funds by net flows (1H 2019, in $)

Fund NameFund SectorNet flows
JPMorgan Asian Total Return BondBonds Asia Hard Currencies848.5
HSBC Asian Bond FundBonds Asia Mixed Currencies502.6
BEA Asia Bond and Currency FundBonds Asia Hard Currencies440.6
JPMorgan Provident Capital FundFund of Funds Conservative218.7
JPMorgan SAR Greater ChinaEquities Greater China216.5
Fidelity Global Invt-Mkt Invt-Global Bond FundBonds Global Currencies205.7
HSBC Asia High Income Bond FundBonds Asian High Yield201.6
HSBC Asian High Yield BondBonds Asian High Yield178.9
CSOP Hang Seng Index Daily (-2x) Inverse Product ETFEquities Alternative Inverse/Leverage177
UBS (HK) Fund Series-Systematic Allocation Portfolio Medium ClassicAsset Allocation167.7
Source: Broadridge

“Investors in Hong Kong are pivoting towards Asian-focused fixed income funds, as they tend to offer higher yields due to exposure to Chinese bonds,” Ng said.

In general, fixed income products have become popular among Hong Kong investors this year and have accounted for 66.1% of total gross fund sales in the SAR as of the end of April, which compares to just 22.5% during the second quarter last year, according to data from the Hong Kong Investment Funds Association.

CSOP’s Hang Seng Index Daily (-2x) Inverse Product ETF has also made it on the top 10 list, after a May debut. The product is Hong Kong’s first (-2x) inverse product, following the relaxation of the rules on inverse products in March.

 

Source: HKIFA

 

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