Author Topic: Eastspring: Investment focus moves to income funds for next 6 months  (Read 95950 times)

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KUALA LUMPUR (Nov 15, 2014): Malaysian unit trust investors plan to shift their investments from Asia high dividend equities and bonds to Asia and global income funds over the next six months, a study by Eastspring Investments revealed.

The survey findings suggest that fund investors in Malaysia, particularly those planning to invest in unit trusts, are keen on increasing their allocation in Asia multi-asset income funds as well as global high yield bonds, multi-asset funds and high dividend equities.
 
The survey also revealed that Asia high dividend equities and bonds are the most popular income asset class over other income fund categories. But despite the potential change in asset allocation among income funds, Asian-themed income funds will still be the most popular.

Eastspring Investments head of marketing Alvin Chiu (pix) said in May and June, talk about the US Federal Reserve tapering has raised fears among investors that interest rates may rise in the US.

"Hence, we see a big exit in terms of assets from Asian bonds to emerging markets and we see the potential shift in the next six months," he told a media briefing to announce the Growth and Income Index and the findings of its Unit Trust Fund Investor Behaviour Study here yesterday.

Hong Kong-based Chiu said this could also be due to increased confidence levels in the stock market where investors have the tendency of increasing their portfolio in stocks.

"Our study showed that Malaysian unit trust investors are continuously searching for yield and increasingly looking at alternative options, such as Asia multi-asset income funds and global high yield bond funds to capture income and returns."
 
He said performance of non-Asian markets like the developed markets of the US, Japan, Europe have also been doing well, resulting in investors looking for opportunities outside Asia.
 
"Within the income fund category, we're seeing investors show interest on global-themed products," said Chiu.

The Eastspring Investments' Growth and Income Index offers insights into the asset allocation plans of Malaysian unit trust investors for the next six months. The inaugural index of Malaysia stands at 46, indicating that investors have a slight orientation toward income funds.

The survey findings on Malaysia were based on 300 interviews with Malaysian unit trust investors in July 2013.

In terms of asset allocation, Malaysian unit trust investors on average have 43% of their capital invested in unit trust funds, the highest among all the five countries covered in this survey. However, they have the lowest allocation of capital in stocks.
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