SINGAPORE, 27 February 2017 – Manulife Asset Management (Singapore) Pte. Ltd. has launched the Manulife SGD Income Fund (the "Fund"), which aims to deliver income and returns in Singapore Dollar (SGD) from Asian fixed income investment opportunities. The Fund aims to deliver higher stability and lower risk, with an emphasis on income. Returns potential is expected to be realised from the allocation between interest rate strategies and credit positioning. The Fund is structured to invest in companies that consistently distribute coupon interest.
The Fund invests mainly in Asian investment-grade bonds, with the flexibility to invest up to 30 per cent of its Net Asset Value in non-investment-grade bonds for potential higher returns.
Murray Collis, Head of Fixed Income, Singapore at Manulife Asset Management, advised that investors should also consider whether they are adequately compensated for the risk when evaluating potential investments. He explained, "Investors have experienced rising volatility and uncertainty from global events in recent years which has created a challenging market landscape to navigate. Many investors in Singapore have been chasing yields and some have recently encountered defaults from corporate bond issuers, particularly in the high-yield, oil, gas and shipping segments. Credit risk is a key uncertainty for bond investors, which is why this Fund is focusing on high quality credit, with at least 70 per cent of the portfolio allocated to investment-grade bonds."
Asian economic fundamentals are expected to remain stronger than other emerging markets in the year ahead. Over the past 10 years, a rating upgrade trend was seen for most Asian countries to achieve investment grade status. Countries in the region have also seen stable economic growth, stronger balance sheets and are in a better macroeconomic position than in the previous years.
Asia’s GDP is expected to grow at a steady pace of over 5 per cent per annum from 2016 to 20181. Asian bonds also offer attractive yields relative to developed markets while delivering better risk-adjusted returns versus other asset classes over the past decade2.
Wendy Lim, Chief Executive Officer, Singapore at Manulife Asset Management said, "Many investors are facing a more challenging investment environment with modest growth prospects, greater uncertainty and volatility while they are increasingly looking for regular income. Despite considerable global uncertainty and looming US rate hikes, the long-term fundamentals for Asian fixed income remain in place. We are pleased to offer this Fund which captures regional investment opportunities in SGD terms that minimises foreign currency exposure, offering regular SGD income and returns."
1. Bloomberg Economic Survey, August 2016
2. Bloomberg, 30 September 2016
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Investments in any Fund are not deposits in, guaranteed or insured by Manulife and involve risks. The value of units in any Fund and any income accruing to it may fall or rise. Past performance of the Fund is not necessarily indicative of future performance. The Fund may use or invest in financial derivative instruments. Investors should read the prospectus and seek advice from a financial adviser, before deciding whether to subscribe for or purchase units in any Fund. In the event an investor chooses not to seek advice from a financial adviser, he should consider whether the Fund(s) is/are suitable for him. Copies of the prospectus and the product highlights sheets can be obtained from Manulife or its distributors, for further details (including the risk factors) and charges.
The Manager shall have the absolute discretion to determine whether a distribution is to be made in respect of any Fund as well as the rate and frequency of distributions to be made. The intention of the Manager to make the distribution and the distribution yield for the Fund is not guaranteed, and the Manager may review the distribution policy depending on prevailing market conditions. Distributions may be made out of income, net capital gains and/or capital. Past distribution yields and payments are not necessarily indicative of future distribution yields and payments. Any payment of distributions by the Fund may result in an immediate decrease in the net asset value per unit.
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Manulife Investment Management (Singapore) Pte. Ltd. (Company Registration No. 200709952G)