A German fund manager is pushing further into Singapore's market with a fixed income offering. The move aims to squeeze income out of investment grade bonds without piling on risk.
Munich-based Allianz said its fund management arm is launching a Singapore dollar fixed income fund which aims to return up to 5 percent annually.
The fund, managed by fund manager David Tan, will be run out of Singapore, Hong Kong and Taipei. Tan and his team, who manage roughly $3.8 billion, will invest in investment-grade Singapore bonds, as well as tap U.S. dollar and high-yield in order to diversify and for better yield.
Sturdy Singapore
Bond investors are grappling with low yields as well as economic uncertainty, and Asia's bond market has proven a welcome reprieve. The region now makes for more than three-quarters of of new bond issue allocation, according to Allianz.
«Singapore’s strong credit rating and resilient fundamentals paint a strong outlook amidst recent economic growth data which suggests positive signs of recovery,» Tan said in a statement. The fund is open to both retail and institutional investors.
Singapore's market has grown to S$333 billion at the end of last year, from just S$50 billion 20 years ago.
