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Malaysia firm launches JP Morgan feeder fund

Affin Hwang Asset Management has introduced an income product for Malaysian investors, aiming for 5% annual distribution.

Malaysia-based Affin Hwang Asset Management has launched the Affin Hwang World Series – Global High Income Fund to sophisticated investors in the country, which include high net worth individuals and institutions, according to a statement from the firm.

The product is a locally-wrapped version of JP Morgan Asset Management’s Income Fund, which is domiciled in Luxembourg. It invests in global fixed income securities and aims to provide investors with a consistent monthly payout at a targeted distribution yield between 5-6% per annum.

The JP Morgan fund, which was incepted in 2014, is also available to investors in Singapore and Hong Kong, according to data from FE Fundinfo. The fund now has around $2.6bn in assets.

“With global central banks maintaining their accommodative bias towards monetary policy, the fund provides a solution to investors in search of yield in a lower-for-longer interest rate environment,” Chan Ai Mei, chief marketing and distribution officer at Affin Hwang, said in the statement.

Various investment managers have warned investors about the low yields in the global bond market. However, Ramon Maronilla, managing director for global fixed income at JP Morgan AM, believes that given that global central banks are signalling a pause in raising interest rates, there are opportunities in higher-rated short-duration securitised credit, intermediate high yield and select investment grade credit, according to the statement.

As of the end of November, agency mortgage-backed securities take up the highest sector allocation in the fund at 23%, followed by high yield bonds (20%), according to the fund factsheet.

The JPMorgan Funds – Income Fund

Source: JP Morgan fund factsheet


Separately, Affin Hwang has recently launched several products. In January last year, for example, it rolled out its China A Opportunity Fund to qualified investors in Malaysia. The fund is also a feeder fund, which invests in UBS Asset Management’s UBS (Lux) Investment Sicav – China A Opportunity Fund. In Malaysia, there are only nine China-focused equity funds, according to data from FE Fundinfo.

The firm also introduced the country’s first leveraged and inverse (L&I) ETFs in November when it simultaneously listed four L&I products.

As of the end of November, the firm managed RM55.88bn ($13.74bn) in assets, according to the statement.

The JPMorgan Funds – Income Fund versus its benchmark index

Source: FE Fundinfo. In US dollars.

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