Barclays has launched the Premier Fixed Income Fund in Singapore, providing retail investors with potential returns of 7% per annum of the net asset value of the fund.
The fund invests in global bond funds, emerging market bond funds and high yield bond funds. Bond funds are mutual funds investing in fixed income instruments. Bond funds offer diversification of portfolio risk given their relatively low correlation to asset classes such as equities and commodities. Comparatively, bond funds are also less volatile.
The fund also provides potential exposure to inflation indices or inflation-linked bond indices via swaps. Inflation-linked bonds and indices can provide investors with protection against inflation risk, and these swaps may therefore enhance the funds performance.
Initially, the fund is expected to have inflation exposure to the Barclays Euro, Japan, UK, US Government Inflation Linked Index, and the Barclays Capital Emerging Markets Global Inflation-Linked Bond Ex Columbia Tradable Index.
“This fund offers investors relatively attractive returns and the ability to potentially protect against inflation. With Singapores consumer price index for the first two months of 2008 having increased by 6.6% compared with the same period last year, inflation is a real concern for investors,” says Yong Sheng Tan, director of Investor Solutions at Barclays Capital in Singapore.
The initial offer period of the fund is from 10 April 2008 to 2 May 2008, with an initial issue price of SGD1.00. The minimum initial investment is SGD1,000, with subsequent increments of SGD100. The fund will be distributed in Singapore by UOB.
Regionally, Barclays Capital was named FX and Commodities House of the Year 2007 in FinanceAsias Structured Products Awards, Structured Products House of the Year, Asia 2007 by Structured Products magazine, Currency Derivatives House of the Year 2006 by AsiaRisk magazine, and in The Asset Asian Awards won Best Currency Derivatives House & Best Commodity-Linked Structured Product in 2006.