Maybank Global Bond Fund Navigates Global Sovereign Debt
Government debts with good valuations can still be found
Kuala Lumpur, 19 November 2013 – Maybank Asset Management Sdn. Bhd. ("Maybank AM Malaysia") today launched the Maybank Global Bond Fund ("the Fund"), its first global unit trust offering to Malaysian investors. The Maybank Global Bond Fund offers investors the opportunity to diversify their portfolio by investing into sovereign debts with attractive valuations across the globe, allowing investors to potentially gain from cheaper currencies and higher yields.
The Fund is an income type feeder fund which aims to maximise investment returns by investing in the Templeton Global Bond Fund ("Target Fund"). The Target Fund provides total investment returns through interest income, capital appreciation and currency gains.
Executive Director of Maybank AM Malaysia and Regional Head of Investment of Maybank's asset management businesses ("Maybank Asset Management" or "Maybank AM"), En. Badrul Hisyam Abu Bakar says, "Countries across the world are at different stages of their economic cycle which means that there are always opportunities to be found. Investors should have access to global sovereign bonds which are important to a diversified portfolio as it provides consistent income and a defensive position against market volatility."
He continues to say that with the recent sell off in global bonds, Maybank AM Malaysia believes that the asset class has started to provide value to investors. The Fund may provide investors with an avenue to allocate into this asset class, which may help improve the risk return profile of their existing portfolios given the steady income generation features of bonds as well as the diversification benefits from the diverse currency and country exposures. While uncertainties remain such as QE tapering, which may affect both equity and bond markets in the medium term, Maybank AM Malaysia has identified and teamed up with Templeton, who have demonstrated strong track record in generating first quartile performance during the challenging past five years in its Target Fund.
Stephen Grundlingh, regional head for Southeast Asia, Franklin Templeton Investments, comments, "The Templeton Global Bond Fund is positioned to manage and seek opportunities from a long term rise in interest rates, as we believe the macroeconomic environment with its strong global aggregate demand will remain supportive of the increased rates. The Target fund therefore maintains an extremely short duration, while seeking to take advantage of what we deem as the relative attractiveness of certain currencies and countries with fundamentals likely to support medium-term growth." Managed by multiple award-winning fund manager Dr. Michael Hasenstab, the Target Fund has delivered annualised returns in US Dollars of 4.8 percent over the past three years and 9.8 percent over the past 5 years, and has continued to remain in the 1st quartile in the Morningstar Peer Group Quartile Ranking for the one-year, three-year, five-year and ten-year periods respectively.
Badrul goes on to explain, "We are of the opinion that emerging markets continue to remain resilient due to strong fundamentals such as low debt to GDP ratios and high savings rates. In addition, central banks of emerging markets have shown themselves to be fiscally disciplined in their relatively high levels of reserves vis-a-vis developed markets. All these fundamentals have contributed towards sustained growth over the last five (5) years where we have seen a lot of market turbulence in developed markets. Geographically, the Target Fund has 17.31% of its holdings in South Korea, 11.54% of its holdings in Poland and 10.53% of its holdings in Malaysia as at 30 September 2013. Another upside of the Fund is the share class we are feeding into is the Singaporean Dollar (SGD) which has remained resilient in periods of market uncertainty."
The Maybank Global Bond Fund is the first retail product launch for Maybank AM Malaysia since Maybank AM underwent a regional transformation more than two years ago. Maybank AM has now entered its second phase of growth which will see an expansion of its footprint, both in terms of manufacturing capabilities and presence around the region.
"Although it's been a short two years or so, Maybank AM is now regional with strong on-the-ground presence in Malaysia, Singapore, Thailand and most recently, Indonesia. Our focus will remain on our core Malaysian market and as part of the largest banking group in Malaysia, we have the full support of Maybank in terms of distribution with 402 branches nationwide. On the regional front, we are able to leverage on the regional network and investment expertise that Global Banking and Maybank Kim Eng offer," says Badrul.
He adds that the vibrant Malaysian capital market, valued at US$816 billion which is twice the current Gross Domestic Product ("GDP") of the country, is an important market for Maybank AM to establish its presence in. The net asset value of the unit trust industry has nearly quadrupled in a period of ten years, from RM87.4 billion in 2004 to RM329 billion in 2013. It has been projected that this figure will increase to almost RM830 billion in 2020. The pace of Malaysia's unit trust industry's growth is astounding and is an indication of the rapid approach towards becoming a high income nation by 2020.
"Given the business direction of Maybank AM in our home country of Malaysia and our regional investment capabilities, it is only natural for us to expand our suite of offerings and start looking beyond local investments to fulfil the needs of an ever-growing and savvy group of investors. We are excited to contribute to the growth of the Malaysian capital market and unit trust industry and we believe that the Maybank Global Bond Fund is a promising first step in that direction," Badrul concludes.
The Maybank Global Bond Fund is available at all Maybank branches nationwide. For enquiries, please visit your nearest Maybank branch or visit www.maybank2u.com.my.
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