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Manulife Asset Management has announced the launch of its Dynamic Asset Allocation Fund, offering investors exposure to a range of assets from bonds to equities.
"The fund aims at a long-term growth above the rate of inflation in order to help investors achieve their financial goals. Our research shows that there's appetite in Hong Kong for such a product, in part because investors here recognize the need for diversification," says Shirley Lam, head of affiliate wealth at Manulife Asset Management. According to Manulife research, 42% of Hong Kong citizens hold their cash in their savings accounts earning little or no return with low interest rates in the marketplace.
Peter Warnes, head of portfolio solutions group at Manulife Asset Management says the fund offers flexibility when choosing an asset class to invest in. "There is no single asset class which can provide that combination of risk and return," explains Warnes. At the moment the fund looks at three types of investments: direct investments, exchange traded funds (ETFs) and Manulife Funds. The product also provides investors 30% liquidity and can be at any point be 100% invested in either bond or equity assets.
According to Lam, the fund's strategy was well-received in various markets in Asia such as Singapore and Malaysia. "We launched a number of these funds around the region, so concept is not new," states Warnes. "We are trying to liberate some of that Hong Kong cash to present decent income with some capital growth and certainly less downside than equities."
The fund is currently domiciled in Hong Kong and could take advantage of the mutual recognition of funds (MRF) scheme between Hong Kong and China once the fund passes regulatory requirements such as being in operation for more than a year and reaching a fund size of 200 million yuan. Many funds in Hong Kong have been slowly positioning themselves to capture the capital flows from yield-hungry Chinese investors following volatility on mainland China's markets. Baring Asset Management for example launched three Hong Kong domiciled funds in May in preparation for the MRF scheme launch.