Business

Friday August 21, 2009

HwangDBS IM remains upbeat


KUALA LUMPUR: HwangDBS Investment Management (HwangDBS IM), which is targeting to raise RM500mil from the sale of five fixed-income funds launched this year, expects demand for low-risk products to grow despite the stock-market rally in the past months.

The company has been beefing up its fixed income offerings since the start of the year to fill what it sees as a “gap” in the market place between traditional fixed deposits and equity investment, and has worked with sister company Asian Islamic Investment Management Bhd (AIIMAN) to come up with improved products.

Earlier this year, AIIMAN appointed Singapore-based fixed income market and foreign currency strategist Chan Cheh Shin chief investment officer.

“We are looking at an average annual return of between 5% and 6% for our fixed income funds,’’ HwangDBS IM chief executive officer and executive director Teng Chee Wai told reporters at a briefing yesterday.

Chan said in his presentation that “the three to five years’ yield curve segment provides the ideal sweet spot for fixed income investors.’’

HwangDBS’ fixed income potential best sellers this year are close-end, bond-income type funds with a three-year maturity period.

Its Fixed Maturity Income Fund I, launched in June, has raked in sales worth about RM150mil, while up to RM200mil worth of Fixed Maturity Income Fund II units have been on offer from Aug 10.

These two funds have up to 80% exposure to both local and foreign fixed income instruments.

HwangDBS IM is targeting to give a 4.5% return on the first anniversary of the two funds.

“Quality corporate debt papers are still paying better returns than government securities,’’ Chan said.

The benchmark five-year Malaysia Government Securities is yielding at around 3.7%.Chan also noted that the yield for a commercial paper issued by a local bank was higher compared with fixed deposit rates offered by the same bank.

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