TheStar
KUALA LUMPUR: Despite the gloomy economic conditions, CIMB-Principal Asset Management Bhd hopes to increase its market share in the unit trust industry by 0.5%.
Chief executive officer J. Campbell Tupling said the company had increased its share by 0.5% in 2008 and hoped to maintain its performance, going forward.
“We expect the economy to be sluggish in the first half of the year and pick up after June,” he said after the launch of the CIMB-Principal Opportunistic Bond Fund yesterday.
Acccording to Tupling, CIMB’s latest fund offered investors access to non-ringgit convertible bonds issued by blue chip companies from the Asia-Pacific region.
“The sell-off in equities during the second half of 2008 has resulted in attractive prices for high-grade corporate bonds,” he said.
“With the fund, fixed-income investors may obtain better returns from high-quality and relatively low-risk corporate bonds. At such times when the Malaysian fixed deposits are giving only about 3.5% and maybe less moving forward, investors are well-compensated with this fund,” Tupling said.
According to CIMB-Principal chief investment officer Raymond Tang, the three-year close-ended fund would pursue a buy-and-hold strategy, meaning that the portfolio would be buffered from future interest rate fluctuations.
“I believe this fund offers retail investors the best opportunity to potentially make money in the credit bond market, provided they maintain their investment until the fund matures,” added Tang.
Investors can also exit the fund early if total performance reaches 40% before the fund matures and the fund manager exercises its discretion to terminate the fund and return the investment proceeds before maturity.
“This is possible if equity prices rally sharply and the convertible bonds can be sold at a premium,” Tang said.
Tupling said that retail investors could expect a better outlook for bond funds this year with Bank Negara emphasising a pro-growth policy to encourage spending by lowering interest rates further.
The Opportunistic Bond Fund has an approved size of 200 million units and an initial selling price of RM1 per unit.
It will invest up to 98% of the fund’s net asset value in non-ringgit-denominated bonds as well as other fixed and floating rate instruments issued or backed by governments, government agencies, supernational organisations, corporates and other issuers in the Asia-Pacific region.
The remainder of the fund will be placed in liquid assets, such as bank deposits, for liquidity and ancillary purposes.
Tang said the company would launch similar funds in the near future, depending on the response from retail investors and the global market situation. As at Dec 31, CIMB-Principal had total assets of RM16.4bil under management.
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