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New funds that pulled in the most assets

One type of product has been dominant in attracting big capital in a short time frame, according to FE Fundinfo data.

New funds that aim for a relatively high yield, particularly if it is derived from a lower risk fixed maturity product, are what investors have poured into the last 13 months, FE Fundinfo data shows.

For funds incepted on or after 01 January 2019 to the end of January 2020, about 15 products in the Hong Kong and Singapore universe collected assets of $500m or more, FE Fundinfo data shows.

The top ten list is dominated by fixed maturity products (FMPs).

FMPs are in demand because they are in-and-out products, offering regular income for a specific time period. 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, as specified.

Quickest and largest asset gatherers

Product Launch date Assets
CS Investment 3 CS (Lux) Fixed Maturity FR Bond 2023 S-IV 28 January 2019 $2.015bn
UBS (Lux) Bond SICAV 2023 (USD) 01 February 2019 $1.5bn
Lazard Emerging Markets Equity 26 February 2019 $1.098bn
Wellington Blended Opportunistic Emerging Markets Debt 01 April 2019 $808.5m
Invesco US Senior Loan ESG 12 July 2019 $767.7m
Source: FE Fundinfo. Funds in the Hong Kong and/or Singapore universes with launch date on or after 01 January 2019. Assets at 31 January 2020, in US dollars.

The top asset gatherer was the fixed maturity product from Credit Suisse, which has attracted slightly more than $2bn in assets 13 months after launch. It has a yield to maturity of 5.11% with fees (total expense ratio) of around 1%, the factsheet shows.

The portfolio holds 303 positions and the top ten holdings appear well-diversified while accounting for only 14% of the fund.

Reasonably protected yield, not return, has been a key ingredient for successful asset gathering. The UBS fund, which appears to be an FMP maturing in 2023,  has a yield to maturity of 5.35% and the Wellington debt fund 5.1%.

The Wellington fund’s performance is distinct — a 9.7% gain since inception, while the others eked out marginal gains or slight losses in the relatively short time since launch, FE Fundinfo data shows.

The other two funds seem to be institutionally-focused products, requiring a high minimum investment which would help account for their fast accumulation of capital.

For example, the Lazard EM equity product requires a minimum investment of €25m ($27.1m) and the Invesco fund, which was launched only about six months ago and has quickly collected capital, puts a $10m minimum on investment.

Extending the list to the top ten asset gatherers, three more FMPs appear.

Two are from Legg Mason: the Diversified Global Credit Fixed Maturity Bond 2023 (AUM $685m) and the Western Asset Diversified Global Credit Fixed Maturity Bond Fund Series 3 ($530.4m).

The third is the UBS – (CAY) Investment Series – Asian Bonds Series 3 (USD) ($549.4m).

To be continued?

A plethora of FMPs were launched last year from a long list of managers, including Eastspring, HSBC, Hang Seng, Invesco and others.

Hang Seng, Amundi and Hermes are among the fund houses who told FSA in earlier interviews that, based on talks with clients, the FMP is likely to remain popular in 2020.

Hermes, which doesn’t offer an FMP, is exploring the product with corporate partners, according to the firm.

Part of the Mark Allen Group.