UOB AM launches Malaysia’s first fixed income FoF
KUALA LUMPUR: UOB Asset Management (Malaysia) Bhd (UOBAM (Malaysia)) has launched the United Global Income Allocator Fund (UGIAF), the first fixed income fund-of-funds (FoF) available to retail investors in Malaysia.
An FoF is a collective investment scheme that invests in other funds instead of investing directly in securities, such as stocks and bonds. Through the UGIAF, retail investors in Malaysia can access different fixed income funds easily through just one portfolio.
The UGIAF aims to provide retail investors with regular income and capital appreciation by allocating at least 80 per cent of its portfolio to fixed income funds. Investors will be able to capitalise on investment opportunities across global credit markets, including global high yield and Asian bonds.
The remaining 20 per cent of the fund will be allocated to liquid assets such as money market instruments and deposits. The UGIAF is suitable for retail investors who have a moderate risk tolerance over a medium- to long-term investment horizon.
UOB AM chief executive officer Lim Suet Ling said, “The United Global Income Allocator Fund is the first FoF solution in Malaysia that enables retail investors to invest in a diverse range of fixed income funds through one portfolio.
“Fixed Income FoFs are typically available only to institutional investors such as pension funds and sovereign wealth funds, but retail investors can now also gain exposure to high-quality institutional fixed income funds previously not accessible to them.
“As global interest rates remain low, we believe the launch of the United Global Income Allocator Fund is timely as it can potentially offer investors be er yield. By investing in different fixed income funds, ranging from investment grade to high yield, the UGIAF aims to provide investors with diversification across the entire fixed income asset class.
“To drive stronger returns, the fund will allocate to growth-focused fixed income funds. The fund is also invested across both Asian and global bond funds, with the objective of providing investors with long-term, regular income streams,” Lim said.
Global investment consultant, Mercer, is the adviser to UOBAM (Malaysia) for the UGIAF’s selection of underlying funds for investment. Mercer researches more than 34,000 funds and evaluates each fund and the respective fund managers before making a recommendation to UOBAM (Malaysia) for selection.
Only funds that are rated by Mercer as “A” or “B+” will be considered for the UGIAF’s investment. UOBAM (Malaysia) will then evaluate the recommended fund’s performance, income distribution, investment policies as well as consider wider global macroeconomic trends before making a selection.
UOB Asset Management Ltd, the parent company of UOBAM (Malaysia), will perform overall due diligence on Mercer and its fund review process as well as ensure the Fund keeps within its investment guidelines and limits.
The UGIAF is available in Malaysian ringgit, Singapore dollar, Australian dollar and US dollar with an initial minimum investment of RM1,000, S$1,000, A$1,000 and US$1,000 respectively.
UOBAM (Malaysia) is the UGIAF’s investment manager, while UOB Asset Management Ltd and Mercer are the investment adviser and sub-investment adviser, respectively.
The United Global Income Allocator Fund is the first FoF solution in Malaysia that enables retail investors to invest in a diverse range of fixed income funds through one portfolio.
Lim Suet Ling