KUALA LUMPUR – Affin Hwang Asset Management Berhad (“Affin Hwang AM” or “the Company”) triggered an early maturity notice of its retail income fund Affin Hwang Flexible Maturity Income Fund 7 (“FlexMIF 7” or “the Fund”) to deliver an annualised return of 5.50% per annum after returning capital back to investors.
FlexMIF 7 was a close-ended income fund which pays annual income distribution over a maximum investment horizon of five (5) years with a targeted return of 5.00% p.a. The Fund’s underlying credit exposure was in regional names which held a long-standing track record of honouring their outstanding financial obligations over multiple market cycles.
In accordance with the prospectus of the Fund, the Early Maturity requirement can be triggered where the Fund’s NAV per Unit has exceeded the Target NAV per Unit for more than ten (10) consecutive business days.
The Fund matured on 10 October 2019 at a Net Asset Value (“NAV”) of RM1.00 per unit. At the maturity of the Fund, it registered a return of 5.50% per annum which exceeded the target return of 5.00% p.a. The total return is derived from the Fund’s income distribution as below:
(sen per unit)
Chan Ai Mei, Chief Marketing & Distribution Officer of Affin Hwang AM said, “After achieving the targeted return, the company decided to trigger an early maturity of the Fund to lock-in gains for unitholders and allow them to redeem back their principal before the expiry of the 5-year tenure in 2021.”
“The Fund’s unique product feature which enables flexibility of maturity is meant to safeguard the interest of investors as well as prevent our fund managers from taking undue risks as necessary especially once the targeted returns has already been achieved. The Fund continued to beat the benchmark despite yield compression and maintained its track record of no defaults in credit selection throughout the series.
“In the past, we had been managing a total of 28 similar funds before in the series and successfully raised over RM4billion in total assets since 2009. We will continue to replicate the success of the series through capturing returns in a low interest rate environment.” Ai Mei said.
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