KUALA LUMPUR: Affin Hwang Asset Management Bhd had on Thursday launched the Affin Hwang World Series – Global High Income Fund, which in turn is a feeder fund into the JPMorgan Fund.
It said on Friday the fund is a wholesale feeder income fund that provides access to vast income opportunities in the global fixed income universe by investing in a collective investment scheme, namely JPMorgan Funds - Income Fund (target fund).
The target fund is a Luxembourg-domiciled fund managed by JP Morgan Asset Management.
Affin Hwang AM said the fund will invest a minimum of 80% of the net asset value (NAV) into the target fund and a maximum of 20% of the fund’s NAV into money market instruments, deposits and/ or liquid assets.
Affin Hwang AM chief marketing and distribution officer Chan Ai Mei said the fund would use an unconstrained approach to look for the best investment ideas across the globe to deliver attractive yield at lower volatility.
“With a focus on generating income, the fund has a dynamic allocation to shift across sectors and countries with no constraints.
“The fund also has the flexibility to adjust duration depending on market conditions to minimise fluctuation. In return, investors gain a predictable income stream through a consistent monthly payout from the fund at a targeted distribution yield between 5% and 6%, ” she said.
Chan said as global central banks maintain their accommodative bias towards monetary policy, the fund provides a solution to investors in their search for yield in a lower-for-longer interest rate environment.
“As markets continue to be tested by higher volatility, the importance of fixed income as an asset class should not be underestimated by acting as a ballast in one’s portfolio to provide a steady source of income and liquidity, ” she added.
On the macro outlook for markets and recessionary risk, managing director, global fixed income, JP Morgan Asset Management, Ramon Maronilla said that after a thaw in trade tensions and a year of three Federal Reserve rate cuts along with easing by dozens of other central banks, “sub-trend growth is our likeliest scenario”.
“Global growth is bottoming including in emerging economies, but we can’t see the next impulses that would ratchet growth much higher. Tariffs, quotas, embargoes and all forms of protectionism reduce efficiency as well as trade volumes and increase costs. Ultimately that would affect the profitability of global companies.
“The probability of recession over the next three to six months had come down from 40% to 25% in acknowledgment of the quantity of global central banks easing and the bias for the US and China to try and maintain some middle ground, ” he added.
Maronilla said if either US President Donald Trump has given up on his desire to decouple the US economy from China’s; or if China's President Xi Jingping has given up on or at least toned down his desire to expand Chinese influence globally, a recession would no longer occur.
“But because we still see a trajectory towards trade tension instead of one of resolution, we think a recession is rather likely, ” he said.
With global central banks signalling a pause in its easing cycle for now, he sees opportunities within higher-rated short-duration securitised credit, intermediate high yield and select investment grade credit, as well as US Treasuries with yields expected to trade around current levels.
The base currency of the fund is in US dollar. The fund is offered in five currency classes which are US$ Class, ringgit-hedged class, S$-hedged Ccass, A$ hedged-class and pound sterling hedged-class.
The minimum investment amount is US$5,000 for all listed currency classes.
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