For investors looking to broaden their fixed income allocation, the Fullerton Lux Funds – Asian Currency Bonds offers access to a differentiated part of the market through a diversified portfolio of Asian local currency bonds.
The fund invests mainly in Asian local currency-denominated fixed income or debt securities (which may be unrated or rated non-investment grade), including convertibles, denominated primarily in Asian currencies and primarily issued by companies, governments, quasi governments, government agencies or supranationals in the Asian region. It also has a small allocation to credits.
This fund gives investors exposure to a segment of the fixed income market that can add diversification beyond traditional developed market bond allocations.
What the fund offers:
- Access to Asian local currency bond markets through high quality, investment grade sovereign issuers across the region.
- Multiple potential return drivers, including coupon income, changes in underlying bond valuations and movements in local currencies over time.
- A way to diversify fixed income exposure across Asian markets rather than relying on a single market or a single return driver.
- Exposure to a strategy that may appeal to investors with a medium to long-term investment horizon.
Why this fund may be relevant?
Asian bond markets are not one monolith block. Country fundamentals, local interest rate cycles and currency moves can differ meaningfully across the region. That creates both risks and opportunities, while reinforcing the value of being selective.
Against this backdrop, a fund that invests across Asian local currency bond markets can help investors access investment opportunities while also participating in market segments that may behave differently from more traditional bond market exposures.
How to think about returns?
Because the fund invests mainly in bonds denominated in Asian currencies, returns are driven by a combination of coupon income, changes in bond valuations and currency movements. Investors should therefore assess the fund as part of a broader portfolio, with an understanding that performance can be influenced by both fixed income and foreign exchange dynamics over time.
A balanced view of the risks
The fund is not without risks. Currency movements can affect returns in either direction. Rising interest rates may lead to lower bond prices, while some credit risk remains present even when the portfolio focuses on higher-quality sovereign issuers. The fund is also not capital guaranteed, and its value may fluctuate with market conditions.
For investors who are comfortable with these risks and have an appropriate investment horizon, Fullerton Lux Funds – Asian Currency Bonds can be considered as part of a diversified fixed income allocation.
Explore Fullerton’s wider range of fixed income solutions at: https://www.fullertonfund.com/investment-capabilities/fixed-income/
Featured funds: https://www.fullertonfund.com/investment-funds/featured-funds/
Please refer to the Fund’s prospectus for the full list of risk disclosures.
Important Information:
This publication is for information only and your specific investment objectives, financial situation and needs are not considered here. The value of units in the Fund and any accruing income from the units may fall or rise. Any past performance, prediction or forecast is not indicative of future or likely performance. Any past payout yields and payments are not indicative of future payout yields and payments. Distributions (if any) may be declared at the absolute discretion of Fullerton Fund Management Company Ltd (UEN: 200312672W) (“Fullerton”) and are not guaranteed. Distribution may be declared out of income and/or capital of the Fund, in accordance with the prospectus. Where distributions (if any) are declared in accordance with the prospectus, this may result in an immediate reduction of the net asset value per unit in the Fund. Applications must be made on the application form accompanying the prospectus, which can be obtained from Fullerton or its approved distributors. You should read the prospectus and seek advice from a financial adviser before investing. If you choose not to seek advice, you should consider whether the Fund is suitable for you. The Fund may use or invest in financial derivative instruments. Please refer to the prospectus of the Fund for more information.
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