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VAM Funds launches Asia Fixed Income fund

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VAM Funds has launched the VAM Asia Fixed Income fund to enable investors to take advantage of attractive investment opportunities in the Asian fixed income market.

VAM Funds has launched the VAM Asia Fixed Income fund to enable investors to take advantage of attractive investment opportunities in the Asian fixed income market.

Yields on investment grade corporate bonds in the Asian fixed income market are averaging six per cent per year.

VAM Funds has appointed Hong Kong-based Enhanced Investment Products to run the fund on its behalf. EIP has over seven years of consecutive positive returns in Asia and a team with over 50 years’ combined experience of trading in the region.

The fund will invest across Asia including Japan, holding a portfolio 20 to 50 names from an investable universe of around 650 bonds. The current portfolio yields in excess of six per cent net of costs. Dividends generated can be either paid out or accumulated in the investment. The new fund is Ucits III compliant and a sub fund of VAM Funds (Lux) Sicav.

Michael Hunt, managing director of VAM Funds, says: ‘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. This is what VAM, in partnership with EIP, is offering here.’

Toby Bland, chief executive of EIP, says: ‘Enhanced Investment Products is looking forward to advising the VAM Asia Fixed Income fund. Asian Fixed Income is a growing market and, given the present need for yielding assets, this fund offers a solution to investors who are looking for low volatility with a medium 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.

‘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.’

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