Both the Manulife Global Asset Allocation-Managed Growth fund and the Manulife Global Asset Allocation-Growth fund will adopt a dynamic asset allocation strategy, but with a different level of exposure to equities.
As such, the managed growth fund will seek to invest a maximum of 29.9% of the assets in equities, deploying the rest in fixed income securities. The growth fund has the flexibility to invest up to 60% of the assets in equities and balance in fixed income securities.
Both the schemes will primarily invest in the Luxembourg-based range of Manulife global funds. These funds also have the flexibility to allocate investments into exchange traded funds as well as real estate investment trusts.
Speaking on the fund launch, Peter Warnes, head of portfolio solution group, international for Manulife Asset Management said: “Multi-asset funds are capable of providing payouts comparable to many single asset classes, but with better ability to control volatility, which is made possible by a mix of diverse assets.”
With the anticiapted rise in volatility across asset classes and in an environment of low nominal growth and relatively low return, income will remain a critical component of total return, Warnes said.
An ageing population and the need for extra income to meet the retirement needs has also resulted in an increase in demand for income-oriented solutions.
Asset class outlook
Warnes, who joined the fund house in August, said the firm is positive on US equities compared with the European market. With the expected global economic recovery, the fund house also holds a positive view on Asian equities, but has a neutral outlook on Japan equities.
The fund house, however, believes the valuations of Japan-listed companies look attractive as they are supported by robust earnings growth. Furthermore, the additional quantitative easing and the likely government pension reforms could act as a catalyst for stronger Japanese equities and a weaker yen ahead.
On the fixed income side, the fund house is cautious on government bonds as it sees bond yields rising further in the next year and instead prefers credit and high yield bonds.
Jill Smith, senior managing director, said the targeted monthly distribution for the managed growth fund will be 3.5% while the same for the growth fund will be 7%. The first such distribution will start from 15 January, she said.
Investors can invest in the schemes with a minimum sum of $1000 and a minimum top-up of $100. The schemes will levy sales charge of up to 5%. The management fees charged by the managed growth fund is 1.1% while the same for the growth fund is 1.35%.
The funds are distributed by DBS Bank and run by Manulife Asset Management’s portfolio solutions group, which comprises 25 asset allocation professionals worldwide managing more than $119bn in multi-asset investment solutions.