Demand for stable income persists in Asia leading Invesco to launch its third fixed maturity product for the year in Hong Kong.
The fund aims to generate stable income through a «buy-and-monitor» strategy that involves mostly holding bonds till maturity unless credit risk increases substantially. Invesco’s fund will invest in USD-denominated fixed income assets – primarily investment grade – from the Asia Pacific region, excluding Japan. The fund will begin investing on October 28 with the aim holding assets that mature in 2.5 years.
«The successful launches of our last two fixed maturity products (FMPs) in Hong Kong earlier this year reflect a clear demand from retail investors for investment solutions that hedge against market volatility and interest rate risk while offering stable income,» said Clarence Lee, Hong Kong head of intermediary sales at Invesco.
Better Yields
The launch of an Asian version not only expands Invesco’s FMP offering but caters to the regional demand for relatively higher income.
«Asian US dollar bonds offer attractive yields and credit spreads compared with other major credit markets, while high yield bonds from Asian issuers have lower historical default rates than those of other high yield bonds,» explained Ken Hu, Invesco’s APAC fixed income CIO, underlining that the market has grown beyond $1 trillion.
«We also expect monetary and fiscal policies to remain accommodative across key Asian markets including China, Korea, India and Southeast Asia, which may continue to support yields in both onshore and offshore markets.»
