Singapore-based Fullerton Fund Management has unveiled a new Luxembourg-domiciled, Asia-focused short duration bond fund to further strengthen its presence in the European market.
The Asia-focused short duration fixed income fund will invest in dollar-denominated investment grade fixed income securities with average portfolio duration of about three years.
Additionally, the fund will invest up to 30% of the portfolio in non investment grade bonds to increase the fund’s yield. The fund can invest in either Singapore dollars or US dollars.
The fund will be managed by the firm’s fixed income head, Patrick Yeo on a total return basis while minimising interest rate risk.
Bank Julius Baer will serve as an exclusive distributor for the Fullerton Asian Short Duration Bond fund during the launch period.
Yeo said: "Given the improving economic conditions in the US, we believe that investors are beginning to look ahead to a time when the US Federal Reserve will begin to normalise monetary policy.
"US Treasury bonds have already started to factor in the prospect of higher interest rates. Short-duration bonds are less vulnerable to rising interest rates, allowing investors to benefit from income payouts with measured risk," he added.