Invesco has received approval from the Securities and Futures Commission (SFC) to launch six more versions of the Invesco Asian Bond Fixed Maturity Fund 2022, according to records from the regulator.
The six new versions (from IV to IX) is an addition to the three fixed maturity products (FMP) that follow the same strategy. The first version was launched in October 2019, while versions II and III were rolled out in January last year.
Invesco has launched different versions of its FMPs as each version may vary depending on the requirements of the firm’s distribution partners.
The firm launched its first retail FMP in Hong Kong, the Invesco Global Bond Fixed Maturity Fund 2022 (which now has two versions) in 2019. In total, the firm manages 18 FMPs in Hong Kong, SFC records show.
The Asian Bond Fixed Maturity Funds invest at least 70% of their assets in a portfolio of US-dollar denominated short duration Asian bonds, according to Freddy Wong, managing director and head of Asia-Pacific fixed income at Invesco.
Without revealing the firm’s distribution partners, he said that version IV is open for subscription from today to 22 January.
“The low yield environment continues to be a concern for some investors. The Fed’s policy is expected to remain accommodative for some time, given its average inflation targeting regime and commitment to a zero bound for interest rates,” Wong said.
“This suggests that rates will likely remain low even as growth recovers. At the same time, we see the valuations of Asian credit remain attractive, which offer a higher yield than developed market bonds supported by solid fundamentals.”
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.
In the past two years, FMPs became popular among investors, with several asset managers, including EFG Asset Management , HSBC Global Asset Management and Hang Seng Bank rolling out FMP products in the region.
