MANILA -- Filipinos are now considered mature enough in their investment choices and their appetite for products, much toned down from their risky tastes in investment in the past.
Pru Life UK Chief Investment Officer Anthony Garces told the Philippines News Agency (PNA) on Friday that Filipino investors are actively placing funds on US dollar-denominated assets, among others.
Recently, Pru Life UK launched its peso-hedged PRUlink cash flow fund (Peso CFF), which is invested in diversified portfolio of US dollar-denominated high-yield bonds, particularly in Eastspring Investments’ Asian Bond Fund and US High Yield Bond Fund. This product provides a quarterly payout of up to 1 percent of fund value.
Garces declined to give any figure on how the Peso CFF might perform in its initial year of offering but said their portfolio manager has an overall positive view on US high yield bonds. “Eastspring also believes that Asian USD bonds have stronger credit quality with an average of BBB, which helps provide stability for the fund,” he said, citing that “its allocations in Asian equities are invested in stable and quality companies mainly situated in Singapore.”
Garces said this investment, along with other Pru Life UK products, provides policyholders with enhanced financial security by expanding their wealth and mitigating their investment risks against market volatility. “Industry players have also launched more funds with offshore strategies, which reflect the growing demand for this kind of product and that the customers are becoming more mature and sophisticated in investments,” he said.
Amid the current volatility in the domestic and global financial markets as a result of interest rate normalization in major economies, fiscal issues in some European countries and trade concerns, Garces is optimistic that the Peso CFF will be attractive to Filipinos with moderate risk appetite.
He explained that these volatilities “can be mitigated because the Peso CFF invests in a diversified portfolio of US dollar-denominated high-yield bonds and high-dividend yielding equities.” “And while the Peso CFF’s assets are USD-denominated, the foreign exchange fluctuations will be minimized through the fund’s hedging strategy, allowing policyholders to maximize their peso investment,” he said.
The Pru Life UK executive also said that “while the payout is non-guaranteed, investors can have confidence in the fact that the Peso CFF invests in the same assets as PRUlink USD cash flow fund, which has consistently provided policyholders with the target quarterly payout since its launch in November 2014.” (PNA)
