Mixed asset types pull in the money

PUBLISHED : Monday, 24 June, 2013, 12:00am
UPDATED : Monday, 24 June, 2013, 4:49am

Mixed asset funds, also known as balanced funds, are all the rage. Hongkongers are putting more money into these than any other fund type.

To get an idea of what is out there, we look at two big funds launched this year by Fidelity and BlackRock. Both, coincidently, go by the name "Global Multi Asset Income Fund".

Both funds aim to provide regular income alongside capital growth by investing in bonds, equities and alternative assets, such as real estate, infrastructure and loans.

Dominic Wong, the head of intermediary business in Hong Kong at Fidelity Worldwide Investment, said: "As markets have become more complex, it is not easy for investors to manage their investments themselves."

The funds cover a wide spectrum of assets that would be difficult and expensive for a retail investor to manage.

Last month, BlackRock started offering its fund to Hong Kong investors. It launched the fund in London in June last year. It has delivered a return of 13.9 per cent since inception and 5.4 per cent from January to April.

Chang Lin-yun, the head of BlackRock's retail business for Asia ex-Japan, says investors want yield.

Volatile share markets spook investors and people are nervous about bonds in the context of rising interest rates. Balanced funds may interest investors.

Wong said last week's sell-off, which came after hints from the US Federal Reserve that it would reduce its quantitative easing programme, underlined the appeal of a diversified fund that takes volatility in its stride.