This article first appeared in The Edge Financial Daily on July 7, 2017 - July 13, 2017

KUALA LUMPUR: CIMB-Principal Asset Management Bhd is confident that its newly launched CIMB-Principal China Multi Asset Income Fund will clock in assets under management (AUM) of RM300 million by end-2017.

“This fund, the first of its kind in Malaysia, will enable our customers to invest in China, which is not only the second-largest economy in the world, but also one that is increasingly looked upon to take on the economic leadership in the upcoming rise of Asia.

“Given China’s economic potential, we are fairly confident of achieving RM300 million in assets under management by end 2017,” its chief executive officer Munirah Khairuddin said in a statement yesterday.

The new fund, said CIMB-Principal, will allow its investors to invest in China’s capital markets, like bonds and A-shares, for income and moderate capital growth.

Structured as a collective investment scheme or unit trust, CIMB-Principal said the fund is suitable for investors with an investment horizon of at least five years.

A-shares are securities denominated in yuan and listed on stock exchanges in Shanghai and Shenzhen.

The fund, it added, will invests at least 95% of its net asset value (NAV) in the HSBC China Multi Asset Income Fund, and maintains up to 5% of its NAV in liquid assets for liquidity purposes.

HSBC Bank Malaysia Bhd will be the fund’s exclusive distributor for six months from now, said CIMB-Principal.

“Through an actively managed multi-asset fund, investors can capture the opportunities in Chinese assets throughout the different phases of the economic cycles. The low correlation between Chinese assets also allows for greater diversification which strengthens the cushioning effect for a portfolio,” said chief executive officer and head of Southeast Asia of HSBC Global Asset, Puneet Chaddha, in the same statement.

“The fund is currently available to investors in ringgit-hedged and US dollars, with a minimum initial investment of RM10,000 or US$5,000 respectively. Investments in Singapore dollars and ringgit (unhedged) will be available later this year,” said CIMB-Principal.