HSBC is rolling out a fixed income fund to its Singapore clients, which will invest in a minimum of 70 per cent in Asia ex Japan-based stocks, bonds and trusts.

The new fund HSBC Managed Solutions – Asia Focused Income, was launched in May this year in Hong Kong. The fund has grown to US$865 million in size (as of end of September) and has paid out an annualised yield of 4.7 per cent every month since July. This dividend yield is considered an attractive return, especially compared with Hong Kong's rock bottom interest rates.

It will be managed by the Asian fixed income and Asian equity investment teams at HSBC Global Asset Management. The range of asset classes includes dividend-paying stocks, bonds (investment grade, high yield, local currency, emerging markets and US treasuries), real estate investment trusts and cash. 

Paul Arrowsmith, head of retail banking and wealth management, HSBC Singapore said: “In an environment of low interest rates, high inflation and market uncertainty, retail investors continue to look for stable income as seen in the strong inflows into fixed income products. With global recovery underway, we see potential income generating opportunities from other asset classes as well, specifically from fast-growing emerging markets."

The bank added that despite a positive outlook for Asia, it expects volatility to continue due to concerns over the Eurozone debt issues and risks to global growth. The recent market corrections have created an attractive entry point for riskier assets, such as Asian high dividend equities, Asia high yield and local currency bonds, as well as global emerging market bonds.

The fund’s minimum investment amount is US$5,000 or S$5,000.