We profile the most interesting fund launches in recent weeks and examine the performance of one product a year after it hit the market.
The Association of Southeast Asian Nations (Asean) contains some of the most exciting emerging and frontier markets in Asia, including Brunei, Cambodia, Indonesia, Laos, Malaysia, Philippines, Singapore, Thailand and Vietnam.
According to some estimates, the GDP of the group will more than quadruple to $10 trillion (€8 trillion) by 2030. No wonder, then, that fund managers are eager to channel investor capital to equities in the region.
The new Asean fund from Franklin Templeton hopes to do exactly that, by investing in equities and equity-related securities that are listed in the region or which do a significant amount of business there.
“In general, high economic growth rates in many Southeast Asian countries – driven by favourable demographics, ongoing urbanisation, rapid productivity gains and improving technology – are underpinned by solid finances,” says Mark Mobius, executive chairman of the Templeton Emerging Markets Group, who is the lead portfolio manager on the fund.
REAL ESTATE DEBT
Investors are often reassured if their money is linked, however indirectly, to bricks and mortar. That may help to explain a growing interest in real estate debt funds, which seek to offer both attractive returns and limited capital risk.
Standard Life Investments began its UK property lending programme last year, which it says has been well received by the market. It has now launched a fund that will invest in senior commercial real estate loans secured against UK-based commercial real estate assets.
“We believe that real estate debt is a compelling investment opportunity, offering investors access to a funding market which is undergoing structural change,” says David Paine, head of global real estate, Standard Life Investments.
Standard Life, the insurance firm behind the asset manager, seems to have faith in the project. The fund has already obtained £100 million (€127 million) from the Standard Life Group Pension Scheme.
APPLIANCE OF SCIENCE
Some of the most rewarding stocks to own in recent decades have been science and technology companies, so it makes sense to launch a fund specifically targeting these firms.
US-based Ivy Global Investors says its fund will invest at least 70% of its assets in science and technology companies or companies employing scientific or technological developments or discoveries to build their business or increase their competitive advantage.
The firm is hoping this and its other recent Luxembourg-domiciled fund launches will help it build an investor base in Europe and increase its assets under management, which were $136 billion (€111 billion) as of the end of June.
“As we broaden our distribution network internationally, we will continue to pursue opportunities to effectively meet the needs of global investors through a variety of product offerings,” says Thomas W Butch, president and chief executive of Ivy Funds Distributor.
As fixed income investors prepare for what may be an inevitable rate rise, positioning on the government bond yield curve is more important than ever.
State Street Global Advisors aims to help investors in this task with a new product that focuses on bonds with a time to maturity of three to five years.
“In the current low yield environment investors have told us they want greater flexibility to adjust their position on the yield curve,” says Alexis Marinof, head of SPDR ETFs for Europe, the Middle East and Africa.
“This three to five-year exposure gives investors access to a steeper segment of the yield curve, while still maintaining a relatively short maturity exposure.”
SPDR, the exchange-traded fund division of State Street, currently offers two existing European government bond ETFs – the short maturity SPDR Barclays 1-3 Year Euro Government Bond Ucits ETF and the all-maturities SPDR Barclays Euro Government Bond Ucits ETF.
ONE YEAR ON
The MSCI China Index contains too much of what Swiss & Global Asset Management refers to as China’s “old economy” – 70% of its constituents are telecommunications, energy and financial companies.
By buying the index, investors were not getting enough exposure to the “new” economy, such as the healthcare, consumer and technology sectors, says Jian Shi Cortesi, the manager of the JB China Evolution Fund.
The fund was designed to correct the imbalance by investing in between 30 and 50 core stocks, up to 70% of them representing the new economy.
After making losses in its first few months, the fund has performed well, returning more than 10% in its first 12 months. The fund had $27 million under management at the end of September this year.
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