Following the success of the 1st and 2nd tranches of AmIncome Flexi, which were launched on Sept 18 and Dec 12 last year, with Rm100mil and Rm250mil in asset under management respectively, AmInvest once again would like to satisfy investors appetite.
"Given ample liquidity from the various central bank easing measures, the bond market is expected to be well supported in 2013". The 3 year closed-ended fund, targeted at investors seeking regular income and potentially higher returns than fixed deposits but with lower risk than equities.
How to do that?
To achieve the investment objective, the fund intends to invest its NAV in a portfolio of domestic and/or foreign sovereign issued bonds and corporate bonds, with minimum 'A' credit rating. The manager will purchase bonds which will generally have shorter or same maturity to the fund's maturity. The fund employs a flexible investment strategy as follows:-
- Will not actively adopt a trading strategy unless there are decrease or expected decrease in interest rates resulting in an increase of bond price, for the purpose of maximizing returns of the fund over 3 years;
- May at its discretion dispose off a bond to mitigate currency risk for the benefit of the fund;
- May also opt to dispose off a bond when it has achieved at least 15% cumulative return before its maturity, and return the proceeds of the bond to investors;
- May liquidate the particular bond affected in the event of a credit downgrade if the manager at its discretion feels that there is a likelihood of credit default. The bond's sale proceeds may be reinvested in fixed deposits, money market instruments and/or other bonds;
- May use derivatives for currency hedging purpose, for investment in foreign currencies denominated bonds.
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