Invesco launches Global Bond Fixed Maturity Fund 2022 targeting Hong Kong retail space
Important Information:
· The Fund invest primarily in a buy-and-hold portfolio of USD denominated global fixed income instruments with active risk monitoring and primarily investing in investment grade fixed income instruments over a fixed investment period of 2.5 years from the close of the initial offer period on 26 July 2019 up to the Fund’s maturity date, which is expected to be on or around 28 January 2022 (“Maturity Date”).
· The duration of the Fund is limited (i.e. up to the Maturity Date) and will be terminated automatically at maturity. Neither income, return nor capital of the Fund is guaranteed or protected. There are risks that investors may not recoup the original amount invested in the Fund during the investment period as well as at the Maturity Date.
· The issuers of fixed income instruments may repay principal before the maturity of the instruments. Prepayments may cause losses on instruments purchased at a premium. Unscheduled prepayments for fixed income instruments issued at par may result in a loss equal to any unamortised premium. Repayment of principal before the Fund’s maturity as well as the re-investment of cash proceeds from the sale of fixed income instruments where a potential deterioration of credit profiles is anticipated by the Fund Manager create out of market risk and the uncertainty of gaining access to fixed income instruments delivering similar yield to maturity resulting in lower interest income and returns to the Fund.
· The Fund is subject to early termination risk. Upon the termination of the Fund, all the assets of the Fund will be realised and the net proceeds thereof which are available for distribution will be distributed to relevant unitholders. Investors should note that the amount distributed to them may be less than the amount of their initial investment. Any termination costs which have been amortised up to the early termination date will be utilised to pay the Fund’s expenses associated with the termination and any expenses in excess will be borne by the Fund Manager.
· The Fund Manager may at its discretion extend the Initial Offer Period (“IOP”) (i.e. 15 July 2019 to 26 July 2019) or not to issue any units. If the Fund Manager decides not to proceed with the launch, any subscription monies shall be promptly returned to investors in full (without any interest) less any applicable bank charges, after the close of the IOP. The Fund will also be closed to subsequent subscriptions after the IOP and no subsequent subscription to the Fund will be accepted.
· Investors should note the general investment risk, emerging markets risk, currency and foreign exchange risk, country concentration risk for China, concentration risk, and contingent convertibles risk.
· Risks relating to fixed income instruments: (a) credit / counterparty risk; (b) interest rates risk; (c) volatility and liquidity risk; (d) credit rating downgrading risk; (e) credit ratings risk; (f) sovereign debt risk; (g) valuation risk.
· Financial derivative instruments may be used for hedging. The use of derivatives may become ineffective and the Fund may suffer significant losses
· For Monthly Distribution-1 unit class (MD1), (a) the Fund Manager may at discretion pay distributions out of the capital and/or effectively out of capital amounts to a return or withdrawal of part of an investor’s original investment or from any capital gains attributable to that original investment.
· Any such distributions may result in an immediate reduction of the net asset value per unit in respect of such unit class after the distribution date; (b) Investments in MD1 are not an alternative to a savings account or fixed-interest paying investment, investors may not be able to get back the original investment amount; and (c) The fixed amount of distributions per month is subject to risk of exchange rate fluctuations. (Note 1)
· The value of the Fund can be volatile and could go down substantially.
· Investors should not base their investment decision on this material alone.
Hong Kong, July 15, 2019 : Invesco today launched the Invesco Global Bond Fixed Maturity Fund 2022 (“the Fund”), bringing a fixed maturity investment solution to retail investors in Hong Kong.
Fixed maturity bond funds combine the benefits of a traditional bond fund with a fixed maturity date. Compared to a straight bond facing the concentration credit risk with only a single issuer, a global fixed maturity bond fund invests in a globally diversified portfolio of bonds with a maximum maturity close to the fund's own expiration date. Investors are expected to receive the targeted periodic income from bond coupons regardless of the fluctuated bond prices. When the fund matures, investors are repaid their share of its net asset value.
“Now is the right time to launch a fixed maturity bond product for Hong Kong retail investors, a desirable investment strategy to navigate today’s fast-moving market conditions” said Terry Pan, Chief Executive Officer Greater China, Southeast Asia and Korea at Invesco. “We see increasing demand from investors for solutions which may provide a steady income stream. Fixed maturity products are well-suited to fit this purpose and have proven successful in other Asia Pacific markets.”
The Fund aims to provide investors with exposure to a “buy-and-monitor” portfolio of USD-denominated global fixed income securities with active risk monitoring, primarily investing in investment grade fixed income securities over a fixed investment period of 2.5 years from the close of the subscription up to the fund’s stated maturity date.
“A global bond fund with a stated maturity gives more certainty than traditional bond funds in terms of future cash flows and interest rate risk,” Ken Hu, Chief Investment Officer, Fixed Income, Asia Pacific at Invesco commented. “Compared to direct investment in a few bonds by individual investors, a fixed-maturity bond fund brings in benefits of diversification with a large pool of bond positions across different markets. The structure also benefits from economies of scale which help reduce transaction costs. Furthermore, our active credit selection and continuous monitoring of credit developments by a global team of fixed income professionals deliver values to investors.”
The Fund is open for subscription from 15 July 2019 to 26 July 2019 (the “Initial Offer Period”) and will be closed to subsequent subscriptions after the Initial Offer Period. It is expected to begin investing on 29 July 2019.
Managing over US$335 billion, Invesco’s fixed income team is one of the world's leading fixed income managers with over 160 fixed income investment professionals and offices in North America, Europe and Asia, all singularly focused on uncovering and delivering value for clients.
About Invesco Ltd.
Invesco is an independent investment management firm dedicated to delivering an investment experience that helps people get more out of life. NYSE: IVZ; www.invesco.com.
Important information
All data are sourced from Invesco dated March 31, 2019, unless otherwise stated.
Investment involves risks. Investors should read the relevant prospectus for details, including the risk factors and product features. This document has not been reviewed by the Securities and Futures Commission of Hong Kong and is issued by Invesco Hong Kong Limited（景順投資管理有限公司）.
Where Terry Pan and Ken Hu has expressed opinions, they are based on current market conditions and are subject to change without notice. These opinions may differ from those of other Invesco investment professionals.
