CIMB-Principal to passport funds this week

Malaysia’s CIMB-Principal Asset Management will launch two funds in Singapore on September 9 under the Asean Collective Investment Scheme (CIS) passporting framework.

While other fund houses have managed to secure qualifying status for their funds under the scheme, the CIMB-Principal funds will be the first to be passported.

Paul McConomy, chief administration officer for Asia and the Middle East at Principal Global Investors, confirmed that CIMB Principal’s Asia Pacific Dynamic income fund and the Asean Total Return fund had been approved by the Securities Commission Malaysia and the Monetary Authority of Singapore for cross-border distribution.

McConomy has oversight of the joint venture company of CIMB and Principal Group from the shareholders’ perspective. He also supports the joint venture on mutual fund distribution given his legal and compliance background.

The CIMB-Principal Asia Pacific Dynamic Income fund is an existing fund launched in 2011 that provides regular income by investing in Asia ex-Japan equities. While the Asean Total Return Fund was newly created for passporting purposes, it invests between 70-98% in equities and up to 15% in debt securities in Asean markets.

The two funds will target retail investors in Singapore. When asked about expected demand for the funds, McConomy acknowledged that Singapore was a competitive market and investors had access to a wide range of investment products. But he argued that having people on the ground in the Asean market provided an advantage even over the global brands.

CIMB Principal is headquartered in Malaysia and has fund management operations in Singapore, Thailand and Indonesia.

In a previous interview with AsianInvestor, CIMB-Principal Asset Management's chief executive, Munirah Khairuddin, has said she was looking to launch four funds in Singapore to tap the retail market using the Asean passporting initiative. McConomy said the other two were Malaysian products that would be launched when the Malaysian market became more stable.

Aside from CIMB-Principal, Malaysian players Maybank Asset Management and Affin Hwang Asset Management (in partnership with Nikko Asset Management) have funds that are qualified for passporting within Singapore, Malaysia and Thailand under the scheme. But these funds are still waiting to be distributed across the border.