KUALA LUMPUR, April 26 (Bernama) --  Eastspring Investments Berhad today announced the gross income distribution for Eastspring Investments Target Income Fund 5 (“Fund”):
 

Fund Name	Financial Year End	Gross Distribution (RM/Unit)	Dividend Yield as at 31 March 2018	Type of Distribution
Eastspring Investments Target Income Fund 5	31 December 2017	0.0592	5.75%	Annual

All unit holders who have maintained their unit holdings in the Fund as at 25 April 2018 will be entitled to the income distribution.
 
This 5 year closed-ended bond fund is the fifth in a series of target income funds.This distribution is consistent with the Fund’s objective which endeavours to provide regular income[1] during the tenure of the Fund.
 
Market Outlook from the External Investment Manager, Eastspring Investments (Singapore) Limited
 
As represented by the JP Morgan Asia Credit Index, the Asian USD bond market was largely unchanged over the month of March. Returns were driven primarily by the declines in longer-dated US Treasury (UST) yields, which helped to offset the negative effects of broad-based credit spread widening over the month. Investment grade Asian bonds outperformed their non-investment grade counterparts due to their longer duration nature – the investment grade Asian sovereign segment was a key outperformer in the month of March on its higher sensitivity to declining UST yields. While economic data points released over the month remained supportive of continued rowth for the global economy, markets were roiled by rising trade war fears, which led to a pullback in investor risk appetite. The month of March started on a volatile note as US President Trump announced that he would be imposing steep tariffs on imported steel (25%) and aluminum (10%). While the US has since exempted numerous key allies, China remains subject to these newly-minted tariffs, while additional tariffs and investment restrictions have been imposed in relation to the US Trade Representative’s “Section 301” investigation, pertaining to alleged misappropriation of US intellectual property by China. China has since retaliated with a plan to impose tariffs on 128 US products, highlighting the strained trade relations
between the two countries.
 
Jerome Powell’s first Federal Open Market Committee (FOMC) meeting as Chairman saw the US Federal Reserve (Fed) stay the course with a much-anticipated 25 bps rate hike in March, which brought the federal funds rate to a range of 1.5% to 1.75%. The latest Fed “Dot Plot” indicated an upward-revision to the median end-2019 and end-2020 Fed Funds Target Rate forecast (to 2.875% and 3.375% respectively), suggesting that after an expected three hikes in 2018, the Fed expects to hike rates another three times in 2019, and twice in 2020. While short-term bond yields rose marginally on the back of the latest rate hike, bond market performance was dictated by the weaker investor sentiment in the month, which bolstered the performance of longer-dated US Treasuries – 5-year and 10-year US Treasury yields declined by 8 bps and 12 bps respectively (to 2.56% and 2.74% respectively) over the month of March.
 
As a reflection of increased investor risk aversion, Asian credit spreads widened in March, particularly for the non-investment grade sovereign segment, where Pakistan was a notable underperformer. On the whole, Asian high yield bonds were broadly weaker as negative effects from credit spread widening outweighed the positive  effects of a decline in base rates. Investment-grade Asian USD credits outperformed thanks to their longer-duration nature; the segment benefited from the general decline in mid to longer-dated US Treasury yields over the month.