KUALA LUMPUR, April 24 (Bernama) -- Eastspring Investments Berhad today announced the gross income distribution for Eastspring Investments Target Income Fund 5 (“Fund”):



All unit holders who have maintained their unit holdings in the Fund as at 23 April 2019 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 income¹ during the tenure of the Fund.
 
Market Outlook from the External Investment Manager, Eastspring Investments (Singapore) Limited
 
Following the bout of market volatility in 2018, investor sentiment in the Asian credit market experienced a strong turnaround in recent months. The dovish shift in the Fed and supportive policy measures in China spurred investor demand for yield that resulted in significant spread tightening, particularly in the high yield space.
 
While we are inclined to be more cautious in adding risk after the strong market runup, we expect performance to be underpinned by bond carry from here. Investor demand for yield is likely to be sustained as interest rate expectation remains anchored amid the slowing growth environment and benign Fed’s monetary policy path. The looser financing conditions, and generally adequate liquidity positions, should also mitigate refinancing risks for high yield issuers. However, ongoing macro and political uncertainties could still result in bouts of volatility, which we would see as opportunities to buy on dips.
 
The Fund thus continues to hold an overweight in high yield corporates for the more attractive bond carry. However, we remain mindful that the slower growth environment could still lead to idiosyncratic stress, which warrants more selective approach in credit selection.
 
In terms of sectors, the Fund maintains an overweight China property positioning, and is also overweight Indonesia real estate and metals & mining credits.  Underweights include China financials, China Technology, Media and Telecoms (TMT), Malaysia and Korea quasi-sovereign bonds, as well as sovereign bonds in Indonesia and the Philippines.

Over the past month, the Fund continued to pare its holdings in local currency bonds in Singapore and Indonesia. We have also taken opportunity of the strong credit rally in March to take profit in selective hard currency Indonesian and China credits. At the same time, we added to China real estate and selective TMT positions partly via new issuances, which contributed to an overall increase in China exposure. Additionally, we reduced our position in Korean industrials, thereby increasing our underweight there slightly.

¹ Income declared will be paid out either by way of E-payment according to unit holders’ instructions in the account opening form or by cheque.
                                                          
ABOUT EASTSPRING INVESTMENTS
 
Eastspring Investments is a leading asset manager in Asia that manages over US$193 billion assets on behalf of institutional and retail clients as at 31 December 2018. Operating in Asia since 1994 in 11 major markets plus offices in North America and Europe. Eastspring Investments is the Asian asset management business of Prudential plc, one of the world’s largest financial services companies.
 
ABOUT EASTSPRING INVESTMENTS BERHAD
 
Established in 2000 and based in Kuala Lumpur, Eastspring Investments Berhad is one of the leading asset management companies in Malaysia in both institutional and retail, with over RM39.3 billion in assets under management in the country as at 31 December 2018. It manages unit trust funds, wholesale funds as well as private mandates.