The Singapore arm of Malaysia's Maybank Asset Management has launched an Asian equity fund and an Asian fixed income fund through the new Asean passporting scheme.
The firm plans to sell the products in Malaysia, Singapore and Thailand, the initial signatories of the Asean Collective Investment Scheme (CIS) framework, which was launched last month.
The Monetary Authority of Singapore (MAS) approved the funds for cross-border distribution on October 28. Around the same time it had also approved the Singapore dividend equity fund of Nikko Asset Management, in partnership with Malaysia's Affin Hwang Asset Management, under the CIS.
But none of these funds has been approved for distribution by regulators in Malaysia or Thailand. “It seems that while Singapore is very keen on moving the Asean funds passport forward, the other regulators are more cautious,” said Sze Yoon Ng, Asia research director at research house Cerulli Associates.
Industry observers have voiced doubts over the the potential demand for certain products -- such as those focused on individual Southeast Asian markets -- under the CIS scheme.
This is Maybank AM's first foray into the retail market. The Malaysian manager has previously focused on institutional and high-net-worth clients and now plans a series of regional products. It plans to launch a further two to three funds next year depending on the success of the CIS framework.
The firm had planned to launch the products in Singapore late last year, but pushed them forward until after the start of the Asean CIS framework, said chief executive Goh Seng Kee.
The new equity fund invests in Asia ex-Japan equities and is benchmarked against an absolute return of 6% per annum. The fixed income fund invests in Asian US dollar and local-currency fixed income securities and is benchmarked against the JP Morgan Asia Credit Index.
The firm aims to raise at least S$40 million ($30.8 million) for each fund by the end of next year.
Goh said he is confident of investor demand, citing the Maybank Constant Income Fund, a closed-ended Malaysian rinngit fund investing in US dollar Asian fixed income. Launched in February, it has attracted $60 million so far.
“We hope to benefit from the ability to distribute in other countries in addition to Singapore,” he said, adding that he saw potential to passport the firm’s existing Malaysian-based funds to Singapore and Thailand.
As well as distribution through its sister companies, the firm is finalising a regional distribution agreement with online funds platform iFast. It intends to distribute in Malaysia and Thailand through its sister companies.