Maybank Asset Management launches global bond fund
25 November 2013
Category: News, Global, Malaysia
By Toby Garrod
Maybank Asset Management announced on November 20 the introduction of its first global unit trust, the Maybank Global Bond Fund. The fund is aimed at local investors who are seeking an opportunity to invest into sovereign debt. As an income type feeder fund, it aims to maximise returns by investing in the Templeton Global Bond Fund (target fund) through interest income, capital appreciation and currency gains.
Maybank Asset Management Executive Director Badrul Hisyam Abu Bakar said the vibrant Malaysian capital market, valued at 2.59 trillion ringgit (US$816 billion) or twice the country's current gross domestic product, was an important one for the company to establish its presence in.
"The net asset value of the unit trust industry has nearly quadrupled from 87.4 billion ringgit in 2004 to 329 billion ringgit in 2013, and has been projected to increase to almost 830 billion Malaysian ringgit in 2020," he said in a statement.
Mr. Badrul, who is also the regional head of investment, said investors should have access to global sovereign bonds to provide a consistent income and defensive position against market volatility.
"Another upside to the fund is that the share class we are feeding into is the Singaporean dollar, which has remained resilient in periods of market uncertainty,” he added.
Looking at the general response from local investors, the demand for global bond has been positive over the past four years, said Mr. Badrul. This is because it is relatively low risk compared to equities, and offers more attractive capital return gains while being able to deliver a fairly consistent income stream.
“Statistics have also shown that in the past five years (July 2008 to July 2013), those who have diversified into global bonds rather than global equities alone have garnered better returns, which is one of the reasons why we launched the Maybank Global Bond Fund (Maybank GBF) early this month,” says Mr. Badrul. “We opine that investors should consider having access to global sovereign bonds as part of their portfolio diversification as it provides consistent income and a more defensive position against market volatility.”
As at September 30, the geographical allocation for the Templeton Global Bond Fund, which is the target Fund for Maybank Global Bond Fund, is as follows: South Korea – 17.31%, Poland – 11.54%, Malaysia – 10.53%, Mexico – 8.94%, Ireland – 8.84%.
The firm is currently neutral on the equity markets for the short term and has no plans to launch any similar global equity funds in the medium term.