AFFIN Fund Management Bhd, which manages RM495.3 million, is starting two money market funds to meet new demand for short-term, yet steady investments in the highly volatile market.
Fund managers have been launching money market products in recent months due to the market uncertainties, as there is a flight to cash, and equity funds had quickly fallen out of favour among investors.
The Affin Money Market Fund, and the Affin Islamic Money Market, which comply with Syariah rules, will target corporate investors who have excess cash in the current account, but are not ready to be locked in long-term investments."A lot of risk averse investors want to switch out of equity funds. It is the right time for them to move some money out if they think the economy is heading downhill in the next six months," Affin Fund Management chief executive officer Mohamad Ayob Abu Hassan said after the launch of the funds in Kuala Lumpur yesterday.
The funds are relatively safe as they will only invest in high-quality fixed-income products with short maturity periods. They also provide high liquidity that allows investors to withdraw anytime without a penalty, Mohamad Ayob said.
The conventional fund is aimed at providing a higher return than the three-month fixed-deposit rate of around 2.3 per cent currently, while the Islamic fund has a similar benchmark to provide better returns than bank deposits.
There is no upfront sales charge, but investors will pay a 0.5 per cent annual management fee. Minimum investment starts at RM5,000.
Mohamad Ayob expects response to be good and that it will fill the RM200 million approved size for each fund in six months.
The company, which has yet to invest abroad, also plans to start launching regional funds next year to take advantage of the beaten-down stock prices and will be working with the group's Hong Kong-based shareholder, Bank of East Asia Ltd, Mohamad Ayob said.
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