Growing ILP market sees Wellington make direct entry in Singapore
Scott Geary, vice chair, head of client group - Asia Pacific, Wellington
Global asset manager Wellington Management has launched three of its UCITS funds — US Quality Growth, Credit Income, and Global Property Income — on Manulife Singapore’s investment-linked plan (ILP) insurance platform InvestReady (III). This partnership marks the first time that Wellington has entered the ILP market directly in the region, debuting in Singapore.
These funds are purpose-built to addressing a more pronounced investor need for income and growth, during the transition from a low yield market to a rising interest rate environment. Against this backdrop, these strategies offer investors the potential for capital growth, income distribution*, and diversification in both global and emerging markets.
Beginning with an association between Wellington and John Hancock (Manulife’s operation in the US market) that dates back over three decades, Wellington’s partnership with Manulife Singapore marks a continuation of the two’s longstanding relationship globally, with an increasing focus on Asia.
Scott Geary, vice chair, head of client group, Asia Pacific at Wellington said, “This partnership is significant as we look to build out our insurance distribution network in the region. Our long history of working with global insurance clients, and position as the largest sub-advisor in the US, makes us well-placed in complementing Manulife’s efforts to widen their ILP offering to customers in Asia. The depth and breadth of our investment platform and our strong research capabilities enable us to work with insurers on ILP mandates effectively — and is in line with our commitment to support our partners’ needs in the insurance sector.”
Speaking about the association, a Manulife spokesperson said, "From our perspective, Wellington has been a key element in the success of our businesses up until now and will be a critical partner going forward, particularly as we continue to grow in Asia. As our customer base gets more sophisticated, there is greater demand for strategies with proven track records that were previously only available to institutional customers, a need that InvestReady (III) is well-positioned to meet with the curation of over 100 funds. Wellington’s recognized schemes which are retail-registered help to make such strategies accessible to retail customers.”
Wellington’s increased presence in the Asian market is poised to address two ongoing developments driving its clients’ need for greater ILP offerings. The first is that new risk-based capital regimes across the region require insurers to hold additional capital to compensate for the risk that they take across their business (through both investments and insurance products). Geary explained, “As we have seen in Europe following the introduction of similar regulations in recent years, we expect Asian insurers to deepen their ILP (or unit-linked) product offerings, which provide greater capital-efficiency compared to traditional guaranteed insurance products. These offerings also allow insurers more flexibility in terms of how they structure products as part of their platform for policyholders.”
Secondly, the new regulatory regimes are amplified by the evolving needs of Wellington’s insurance partners and their underlying policyholders in Asia. At the retail client level, wealth creation and accumulation are becoming a growing priority in today’s challenging economic environment (heightened market volatility, rising inflation and recessionary concerns), supporting the demand for the firm’s funds in the wealth and insurer segments.
Increasingly, this environment requires a more sophisticated approach to asset management and product development from insurers, including the development of new capabilities to address current and future market challenges.
“We believe that the residual effects from the pandemic, rising geopolitical tensions, and a shifting market backdrop combine to highlight the need for a diversified portfolio and the critical role of high-quality assets. In this environment, the ability to select companies that can survive a downturn and weather today’s heightened volatility is the key value proposition of active managers like Wellington, who have the potential to find opportunity amidst challenging conditions and an uncertain outlook,” concluded Geary.
For more information on Wellington's offerings targeted at individual investors, please visit Wellington SG Individual Investor.
*Distribution payouts and its frequency are determined by the manager, and can be made of income, capital, or both. Investors should note that the payment of dividends directly out of capital may result in an immediate reduction of the net asset value per share of the fund. Distributions are not guaranteed and may fluctuate.