Eastspring declares distribution of 5.92 sen for Target Income Fund 5
KUALA LUMPUR: Eastspring Investments Bhd has announced a gross distribution of 5.92 sen a unit for Eastspring Investments Target Income Fund 5 (TIF5) for the year ended Dec 31, 2018.
In a statement yesterday, the company said this represented a dividend yield of 5.75 per cent.
The distribution was consistent with the fund's objective which endeavours to provide regular income during the tenure of the fund, it said.
“All unit holders who have maintained their unit holdings in the fund as at April 23, 2019 will be entitled to the income distribution.”
As for the market outlook, Eastspring said that following the bout of market volatility in 2018, investor sentiment in the Asian credit market experienced a strong turnaround in recent months.
“The dovish shift in the US Federal Reserve (Fed) and supportive policy measures in China spurred investor demand for yield that resulted in significant spread tightening, particularly in the high yield space,” it said.
Eastspring is inclined to be more cautious in adding risk after the strong market run-up, as it expects market performance to be underpinned by bond carry from here.
“Investor demand for yield is likely to be sustained as interest rate expectation remains anchored amid the slowing growth environment and benign Fed's monetary policy path.
“Thelooserfinancingconditions, and generally adequate liquidity positions, should also mitigate refinancing risks for high yield issuers. However, ongoing macro and political uncertainties could still result in bouts of volatility, which we would see as opportunities to buy on dips,” it said.
In terms of sectors, Eastspring said the TIF5 is maintaining an ‘Overweight' on China property positioning, and is also ‘Overweight' on Indonesia real estate and metals and mining credits.
“Underweights include China financials, China technology, media and telecoms, Malaysia and Korea quasi-sovereign bonds, as well as sovereign bonds in Indonesia and the Philippines,” it said.