Posted inAsset Class in FocusNewsSingapore

Multi-asset Reits funds proliferate in Singapore

Allianz GI is the latest to join the trend of launching income-generating mixed-asset portfolios that have Reits as a key component.
Aerial view of Singapore Downtown. Financial district and business centers in technology smart urban city in Asia. Skyscraper and high-rise buildings at night.

This month, Allianz Global Investors lodged an application with the Monetary Authority of Singapore to roll out the Allianz SGD Income Plus Fund. The fund, which will be domiciled in the Lion City, is still waiting for regulatory approval to be sold in Singapore, according to records from the MAS.

The mixed-asset product will invest in fixed income securities and real estate investment trusts (Reits), according to the fund’s prospectus. The manager has the option to invest directly or indirectly through ETFs.

The fund’s aim is to provide investors with a regular income stream of around 3.5%-4.5% per annum, according to the prospectus.

Given that the product has not yet been approved by the regulator, Allianz GI could not provide additional details.

“We will look to provide more details after the fund is successfully authorised by the regulator and launch plans are confirmed,” a firm spokeswoman said.

The product will be co-managed by Albert Tan, Singapore-based senior portfolio manager for Reits, and Wayne Chew, portfolio manager for fixed income, who is also based in the Lion City, according to the prospectus. Tan joined the firm in 2014 and is responsible for the portfolio management of Reits mandates, while Chew joined in 2017 and is responsible for Asian fixed income portfolio management.

However, several asset managers in Singapore are deferring major events, including fund launches, as the coronavirus continues to spread globally.

Other managers operating in both Singapore and in Hong Kong have continued with their fund launches, including Nomura Asset Management, T Rowe Price and CSOP Asset Management.

Reits popularity

Having Reits in a mixed-asset product has become a common feature of recently launched income-generating funds in Singapore.

For example, Aviva Investors’ Sustainable Income and Growth Fund, which was launched in August, has 17.29% of its assets in Reits, according to its fund factsheet. Fullerton Fund Management also rolled out a mixed-asset product in May, which has 23.3% of its assets in listed real estate, its fund factsheet shows.

Even robo-advisors in the Lion City have joined the trend. Syfe’s “Reit+” product, for example, consists of Singapore government bonds and 15 Singapore Exchange-listed Reits (S-Reits), while Stashaway has an income portfolio that invests around 35% in S-Reits. Both portfolios were launched last year.

Reits promise to boost returns in a multi-asset portfolio, according to Yoon Ng, Broadridge’s senior director of Apac insights.

For instance, in Japan, “Reits are being used more widely in an effort to boost returns, as shown by top-selling funds such as Tokio Marine JPY Asset Balanced Fund with a typical allocation of 70% in bonds, 15% in stocks and 15% in Reits,” she said recently.

Wealth managers, including Indosuez Wealth Management and DBS Private Bank, have also favoured Reits as they provide investors with regular dividends and are generally less volatile than other equities. The yields that global Reits provide are higher compared with global equities and US 10-year government bonds, according to a JP Morgan Asset Management report.

Source: JP Morgan Asset Management’s guide to alternatives for the first quarter 2020 report. As of 29 February 2020.

Most popular products

Separately, Reits as an asset class has become popular among investors in the Lion City.

According to data provided by Broadridge Financial, four of the top 10 best-selling funds in Singapore in terms of net inflows for the full year 2019 are Reits funds. Collectively, the four funds had net inflows of $1.08bn.

The Schroder Asian Income Fund had the highest inflows last year and its portfolio has a 20% allocation to Reits, according to its fund factsheet.

Top 10 best-selling funds in Singapore in 2019

Fund Name Investment type Net inflows 2019 ($m)
Schroder Asian Income Fund Mixed Assets 638
OUE Commercial Real Estate Investment Trust Property 416
Eastspring Fixed Income 1 Bond 406
Schroder Fixed Maturity Bond Portfolio 2023 Bond 343
Amundi Global Emerging Bond Portfolio 2024 Bond 296
Mapletree Greater China Commercial Trust Property 236
Fortune Real Estate Investment Trust Property 225
Cromwell European Real Estate Investment Trust Property 209
Fullerton SGD Income Bond 200
Lion-OCBC Income Fund Mixed Assets 184
Source: Broadridge Financial


Part of the Mark Allen Group.