It will be the firm’s third FMP. The target launch date will be on 22 November 2019, according to a statement from the firm.
The expected maturity date will be on 18 November 2022. The fund will be managed by Gordon Ip, Value Partners’ chief investment officer for fixed income, and his team.
The FMP aims to provide monthly dividend payouts of a 3.6% annual yield (US dollar class) during the fixed investment period, the statement said, adding that “Asia and China bond markets are generally offering higher yields than other developed markets.”
A spokeswoman for the firm told FSA that “at the initial stage, we are promoting the fund through our existing intermediary distribution channels in Hong Kong, as well as the private banking channels.
The product is already available to accredited investors in Singapore, she added.
In terms of total products, Value Partners has 13 SFC-authorised funds in Hong Kong and 16 for accredited investors in Singapore, according to FE data.
Other FMPs with a similar focus are already in the market. Last month, BEA Union Investment offered its Asian Corporate Target Maturity Fund 2023 to retail investors in Hong Kong. The FMP invests in US dollar-denominated Asian corporate bonds.
In the same month, three FMPs from HSBC Global Asset Management also received approval from the SFC while Invesco launched its third FMP, the Asian Bond Fixed Maturity Fund (2022).
This move comes after that Invesco raised around $600m in July and August for FMPs, FSA previously reported.
In September, Hang Seng Investment Management launched its second FMP, following the launch of the Hang Seng Asia Bond Fixed Term Fund 2022, which invests in US dollar-denominated Asian debt securities.
In Singapore, Aberdeen Standard Investment just launched its first FMP, the Emerging Markets Bond Fixed Maturity 2023 Fund in early October.
FMPs are in demand because they are in-and-out products, offering regular income for a specific time period. Compared to direct investment in a few bonds by individual investors, a fixed-maturity bond fund promises 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, as specified.
The products are expected to appeal to investors who want more certainty in terms of future income streams and interest rate risk.