KUALA LUMPUR (April 5): CIMB-Principal Asset Management Bhd (CIMB-Principal) has launched its CIMB-Principal Strategic Income Bond Fund 2, a close-ended fund that will invest in both local and foreign bonds to take advantage of the high demand for bonds, predominately Asian bonds, due to continuing low interest rates in the US and Europe.
In a statement on Thursday, CIMB-Principal Asset Management chief executive Campbell Tupling said 2011 has proven to be a bumpy year for equity markets, causing investors to resort to safe haven assets as worries about the European sovereign debt crisis continue.
"However, bonds have weathered the recent market gyrations more successfully and have been more resilient than the equity market.
"In comparison to developed markets, the Asian region looks set to continue growing with sustained domestic demand and improving sovereign credit," said Tupling.
He said this sustained demand meant there would be strong support for Asian bond prices in the future.
"In Asia, the fixed income market will remain positive with moderating inflation and improving sovereign credit. Compared with the developed markets in Europe, the US and Japan, gross government debt in Asia as a percentage of GDP [gross domestic product] is significantly lower.
"Combined with positive outlook for Asian corporates which includes strong balance sheets, large cash holdings and modest leverage, Asia's governments look set to better develop their bond markets and thus fund its economic growth. This positive outlook will provide an opportunity for investors to leverage on the good credit ratings and healthy growth drivers," he said.
Tupling said that with balance sheets of most Asian economies expected to remain strong, there was an insurgence of investors tilting towards Asia as compared to developed economies.
China, for example, remains the major driver of the growth in Asia as the number one export destination for regional countries with a GDP growth estimation of 8.7% in 2012, he said.
Meanwhile, he said Indonesia would remain as one of the most favoured economies in the region.
Having its sovereign ratings upgraded by Moody's and Fitch, confidence remains high for Indonesia and foreign investors are pouring in.
Malaysia on the other hand, will be lifted by Chinese commodity demand linked to their huge public infrastructure and investment projects, he said.
"Investors with a three-year investment goal will be able to benefit from the positive growth drivers mentioned earlier. This means investors can expect potential returns higher than that of cash deposits and regular income distribution, if any," Tupling said.
Tupling said the CIMB-Principal Strategic Income Bond Fund 2 would invest between 70% to 98% (both inclusive) of the Fund's net asset value (NAV) in a diversified portfolio of bonds and other fixed and floating rate securities issued by governments, government agencies, supranational organisations and corporate issuers.
The Fund may also invest in high-yield securities subject to a maximum of 40% of its NAV, he said.
With a minimum subscription of RM5,000, the Fund has an approved fund size of 150 million units priced at RM1.00 per unit.
The Fund is available for subscription from April 9 to May 23, and will be distributed by CIMB Bank, CIMB Private Banking, CIMB Investment-Retail Equities, CWA, Citibank and OCBC.
In a statement on Thursday, CIMB-Principal Asset Management chief executive Campbell Tupling said 2011 has proven to be a bumpy year for equity markets, causing investors to resort to safe haven assets as worries about the European sovereign debt crisis continue.
"However, bonds have weathered the recent market gyrations more successfully and have been more resilient than the equity market.
"In comparison to developed markets, the Asian region looks set to continue growing with sustained domestic demand and improving sovereign credit," said Tupling.
He said this sustained demand meant there would be strong support for Asian bond prices in the future.
"In Asia, the fixed income market will remain positive with moderating inflation and improving sovereign credit. Compared with the developed markets in Europe, the US and Japan, gross government debt in Asia as a percentage of GDP [gross domestic product] is significantly lower.
"Combined with positive outlook for Asian corporates which includes strong balance sheets, large cash holdings and modest leverage, Asia's governments look set to better develop their bond markets and thus fund its economic growth. This positive outlook will provide an opportunity for investors to leverage on the good credit ratings and healthy growth drivers," he said.
Tupling said that with balance sheets of most Asian economies expected to remain strong, there was an insurgence of investors tilting towards Asia as compared to developed economies.
China, for example, remains the major driver of the growth in Asia as the number one export destination for regional countries with a GDP growth estimation of 8.7% in 2012, he said.
Meanwhile, he said Indonesia would remain as one of the most favoured economies in the region.
Having its sovereign ratings upgraded by Moody's and Fitch, confidence remains high for Indonesia and foreign investors are pouring in.
Malaysia on the other hand, will be lifted by Chinese commodity demand linked to their huge public infrastructure and investment projects, he said.
"Investors with a three-year investment goal will be able to benefit from the positive growth drivers mentioned earlier. This means investors can expect potential returns higher than that of cash deposits and regular income distribution, if any," Tupling said.
Tupling said the CIMB-Principal Strategic Income Bond Fund 2 would invest between 70% to 98% (both inclusive) of the Fund's net asset value (NAV) in a diversified portfolio of bonds and other fixed and floating rate securities issued by governments, government agencies, supranational organisations and corporate issuers.
The Fund may also invest in high-yield securities subject to a maximum of 40% of its NAV, he said.
With a minimum subscription of RM5,000, the Fund has an approved fund size of 150 million units priced at RM1.00 per unit.
The Fund is available for subscription from April 9 to May 23, and will be distributed by CIMB Bank, CIMB Private Banking, CIMB Investment-Retail Equities, CWA, Citibank and OCBC.
