Allianz Global Investors has launched a Singapore dollar based income fund.
The Allianz SGD Income fund aims to provide long-term income and/or capital appreciation in Singapore Dollar terms by investing primarily in debt securities, and will be available to both retail and institutional investors.
The launch period of the Fund will be from 7 – 18 August, with the inception on 21 August, subject to regulatory approval.
The Allianz SGD Income Fund will capture opportunities in Singapore’s growing fixed income market by investing predominantly in SGD bonds, with additional sources of returns and diversification through USD-denominated bonds, the company said in a statement announcing the launch.
The fund’s diversified portfolio will invest primarily in investment grade credits, with selective allocation to high-yield credit for yield enhancement. Non-SGD bond exposures will be hedged to minimise currency volatility. The fund intends to provide a payout of 3-5% p.a. distributable on a monthly basis, AllianzGI said.
Based out of Singapore, Hong Kong and Taipei, the fund management team is led by David Tan, chief investment officer, Fixed Income, Asia Pacific region, AllianzGI, who has over 24 years of experience managing Asian fixed income portfolios.
“Today’s low-yield and uncertain economic backdrop has given rise to a global hunt for income, and we are seeing growing investor demand for solutions that provide attractive and steady yield with some risk protection, said Tan. “Singapore’s strong credit rating and resilient fundamentals paint a strong outlook amidst recent economic growth data which suggests positive signs of recovery.”
The past few years have shown that emerging markets, especially those from Asia, have become fundamentally more solid. Asia now makes up 78% of new issue allocation for credit, and the region’s corporate high-yield default rates are amongst the lowest as compared to other emerging markets, AllianzGI said.
Locally, Singapore’s bond market has also seen exponential growth over the past decade, from less than S$50bn in 1996 to S$333bn as of December 2016.