HK regulator authorizes three UBS Asset Management fixed income funds for retail sale

Maria Nikolova

The three funds are: UBS Asian High Yield Fund, UBS Multi Income Bond Fund, and UBS USD High Yield Fund.

UBS announces that three UBS Asset Management fixed income funds have become available to retail investors in Hong Kong, The Securities and Futures Commission (SFC) on September 8, 2020, authorized UBS Asset Management’s three UBS (Lux) Bond SICAV series of funds for distribution to retail investors in Hong Kong.

The three funds are: the UBS (Lux) Bond SICAV – Asian High Yield (USD) (“UBS Asian High Yield Fund”); the UBS (Lux) Bond SICAV – Multi Income (USD) (“UBS Multi Income Bond Fund”); and the UBS (Lux) Bond SICAV – USD High Yield (USD) (“UBS USD High Yield Fund”).

“With the new funds now authorized for retail sale, we have strengthened our fixed income offering for Hong Kong investors. Collectively, the funds offer regional and global exposure and can satisfy multiple income demands. The addition of the UBS Asian High Yield Fund and the UBS USD High Yield Fund to our UBS China High Yield and UBS Euro High Yield funds strengthens our existing high yield offerings, which is particularly important in a zero-interest-rate environment,” said Chris YIU, Head of Wholesale Client Coverage Hong Kong at UBS-AM.

Ross DILKES, Portfolio Manager of the UBS Asian High Yield Bond Fund, explains: “Asia remains the key driver for global economic growth. With significant monetary and fiscal measures by central banks in Asia, particularly China, Asian high yield fundamentals are solid. Our current default forecast for the Asian credit universe is between five and six per cent and we expect default rates in Asian high yield over the next 18 months to be lower than those in the US and Europe. At this level, investors in Asian high yield bonds are well compensated for risk given that yields remain close to historical highs”

Mr Dilkes sees an uptick in sustainable investing opportunities in the Asian High Yield universe.

“The overarching commitment of policy-makers to encourage sustainable investment can be expected to help investors achieve an attractive risk-adjusted return. The push for renewable energy is gaining momentum. For example, there are several solar and wind energy companies with strong fundamentals in India that are attractive in terms of outlook and management strength,” he added.

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