Vam Funds has launched a Ucits III Asia fixed income fund in its Luxembourg Sicav.
The Vam Asia Fixed Income fund will be managed by Hong Kong-based Enhanced Investment Products (EIP) and can invest across the Asian continent, including Japan.
Vam said the fund would take advantage of yields on investment grade corporate bonds that are averaging more than 6% a year in Asia. The fund will hold a portfolio of between 20 and 50 names from a universe of some 650 bonds.
Michael Hunt, managing director of Vam Funds, said: “The fund has a very simple mandate: to take advantage of what we see as very exciting opportunities in Asian fixed income markets.
“In current conditions we are finding that investors appreciate fund or product offers with a straightforward structure, an absence of complex financial engineering and the reliance on a good investment proposition and the skill of an experienced manager.”
Toby Bland, chief executive of EIP, said the fund should appeal to investors looking for low volatility with a “medium” level of return.
“There are a number of compelling reasons for launching this fund. Asian investment grade corporate bonds offer value for investors because of their relatively wide spreads over US Treasuries and low risk of default, and are likely to deliver more stable future returns,” he said.
“Furthermore Asian banks are highly liquid and are able to support local corporates as they didn’t invest in complex financial products that contributed to the global financial crisis. Unlike countries in the West which have built up large debts to the rest of the world Asian countries have substantial savings. This leaves them better placed to repay any maturing debt.”
Vam operates a multi-boutique style business model where it outsources investment management to small, specialist firms, among them US manager Driehaus Capital Management, Fleming Fund Advisers and Liechtenstein’s VP Bank.
EIP, which has a track record of more than seven years of positive returns, according to Vam, was formed in 2002 by fund managers from Jardine Fleming. It has an Asia and Japan focus and a quantitative driven approach.
IA Fund Facts:
• Min investment: $10,000 / £5000 / €8,000
• Weekly redemptions and subscriptions
• Annual management charge: 1.2%
• Share classes: USD / GBP / EUR
• Domicile: Luxembourg