The First Eagle Amundi Income Builder fund has been onboarded as a core holding at major Asian private banks because of its wealth preservation strategy, says Amundi Asset Management.
In an interview with Citywire Asia, the fund’s investment team confirmed that the steady income stream and margin of safety investment style, appeal to the wealth preservation needs of many Asian investors.
The fund, which saw $4.63 billion net inflows from January 2017 to December 2017, according to data from Citywire Discovery, is managed by Kimball Brooker, and + rated Edward Meigs and Sean Slein.
‘As investors become increasingly risk-aware, particularly as we are in a high valuation or low yield world, the importance of seeking income and growth only by investing in assets with a margin of safety becomes more appealing to more investors,’ Amundi said.
Over the past year, the increasing tightness in credit spreads has caused higher yielding and more risky fixed income securities less attractive relative to safer but lower yielding securities.
‘As a result, the fund’s credit portfolio is now more than two-thirds investment grade. The duration is quite short at around 0.60, positioning the fund to take advantage of rising interest rates, should that occur.’
By the end of 2017, the fund had nearly 20% of its portfolio in cash and cash equivalents, as well as a very short maturity profile in the fixed income portfolio.
All investment decisions, Amundi said, are measured against the attractiveness of holding cash or cash equivalents.
The fund follows a bottom-up investment approach, and there is no top-down asset allocation involved.