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  • 07/05/2016

No risk no gain. Value Partners’ ambitious targets to generate yields


More Power to the People, Gold and Dollars

By Carmen Reid

Value Partners’ strong presence in the fixed income market is ultimately helping the company to deliver real value for its investors. In fact, this commitment has resulted in the company winning a Retail Top 100 award in the Other Bond category for the Value Partners Greater China High Yield Income Fund. It also picks up a Top ETF award in the Commodities – Precious Metals category for the Value Gold ETF.

Gordon Ip, Head of Fixed Income at Value Partners, who has over 20 years’ experience managing fixed income assets, explained that: “Our significant position in the market gives us the power to negotiate the best prices for our investors. This is helped by the strong synergy between our equity and fixed income teams.” Adding that: “The fixed income team can leverage on Value Partners’ knowledge and relationships in the region, so it gets first calls for many primary issues.”

The overall business analysis is executed by both teams, while the fixed income managers undertake balance sheet scrutiny, the equity desk supplies findings from its research.

Yield and Capital Appreciation

Ip turned to the Greater China High Yield Income Fund: “We aim to capture investment opportunities in Greater China’s high-yield bond market. This means we invest at least 70% in Greater China fixed-income securities, with our primary focus on US dollar-denominated offshore bonds.”

Ip also clarified: “There is the flexibility to invest up to a maximum of 30% of the fund in non-Greater China fixed-income assets. Furthermore, investment-grade bonds, convertible bonds, stressed and dislocated bonds can be added to provide further alpha.”

The Fund has a target to deliver a regular income of around 7-9% per annum, and the intention is to pay the majority of the income as dividend, and not to pay it out from capital. “We aim for both a healthy yield and capital appreciation for the portfolio,” elaborated Ip.

Special Situations

The investment strategy is best summarized as being overweight in lower-rated credit while focusing on under-researched credits, as well as aiming to find special situations and event-driven opportunities. Ip continued: “We also invest where we believe such debt securities are being traded at a significant discount to their underlying intrinsic values. Naturally, a very close and careful analysis of the creditworthiness of the issuer is always undertaken.”

Attractive Market

Looking ahead, Ip believes there are strong reasons why investors should now consider the Asian market more favorable than the US one. “The general perception of the public towards Trump’s fiscal stimulus and the Federal Reserve’s hawkish stance are likely to send yields higher in the US, at least for the short term,” he explained. “To a certain extent, this may induce fund flows out of emerging markets into the US and lighten liquidity in Asia. However, Asia is still relatively more attractive as stability is good for the bond market.”

He went on to say: “Mainland Chinese investors are seeking dollar assets with a higher return than bank deposits. The abundant liquidity from mainland China to the Asian bond market serves as a positive technical factor. Amid the general hunt for yield, this will provide support to Asian credit markets, although they are likely not considered cheap.”

Demand Will Remain

Addressing concerns over the Asian credit cycle, Ip says: “We do not foresee a heightened default rate in Chinese offshore debt, as these issuers have the ability to roll over their debt. Even if there is a pullback in the market, there will still be money chasing those bonds.”

Turning to Chinese high yield bonds, and Ip mentioned that: “The restrictive measures on China’s property market are positive,” but warns, “it would be unwise for the government to let the sector decline too far given the contribution it makes to economic growth.”

More Groundwork

No changes to strategy are planned: “To hedge against a potential inflationary pressure in 2017, we will maintain positions in energy, materials and industrial sectors.” However, Ip admitted that: “It will be much more challenging to deliver double-digit return again in 2017 due to the high base from 2016. We expect to generate returns more from alpha than beta, meaning that we will need to do a lot more groundwork and uncover opportunities in special situations, stressed and distressed credits which tend to be under-researched.”

A Physical Presence

Looking at Value Partners’ other success this year, the Company’s Value Gold ETF was set up to meet the needs of investors looking to invest in a ‘safe haven’ during uncertain economic times. Gold ETFs are gaining traction as investors become more aware of their benefits, such as enhanced trading liquidity, reduced security risk and lower costs.

The Value Gold ETF, established in 2010, was the first commodity ETF set up by Value Partners. What’s more, it is the first ETF listed in Hong Kong which is backed by physical gold stored in Hong Kong. The attraction for Asian investors is the protection afforded by Hong Kong’s relatively stable status, compared with other overseas locations. The ETF tracks the LBMA Gold Price, a widely used international benchmark for the daily gold price.

Multi Counters Arrangement

Standard Chartered Bank, the metal provider for the Fund, ensures that all gold bullion has a minimum fineness of 99.5% and is manufactured by certified refiners. The gold bullion currently held have a fineness of 99.9%, surpassing the aforementioned minimum requirement.

The Fund has a dual counter arrangement, which means that units are available for trading on the secondary market in Hong Kong dollars as well as the renminbi, which gives investors an additional channel of investment. BM

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助投資者提高議價能力

Carmen Reid 撰文

惠理在固定收益市場佔據領導地位,致力為投資者創造實際價值。事實上,憑着這份承諾,公司旗下的惠理大中華高收益債券基金在「其他債券」類別中贏得「零售100強」大獎。此外,惠理的價值黃金ETF亦奪得「商品 – 貴金屬」類別中之「同級最佳基金(ETF)」獎項。

惠理固定收益投資主管葉浩華在管理固定收益投資方面,擁有超過20年經驗。他指出:「我們在市場的領先地位是我們的談判籌碼,讓我們能夠為投資者爭取最佳價格,而股票及固定收益團隊之間的強大協同效應,則進一步鞏固我們的談判能力。此外,惠理在區內的知識和關係亦對固定收益團隊有利。因此當有債券進行首次公開發行時,我們經常是首個獲知會的投資者之一。」

上述兩個團隊合作分析目標企業的整體業務,當中固定收益投資經理負責審查公司的資產負債表,而股票投資團隊則提供業務研究結果。

收益及資本增值

葉浩華為我們介紹惠理大中華高收益債券基金時說道:「我們的目標是捕捉大中華高收益債券市場的投資機會,因此,基金的資產有最少70%投資於大中華固定收益證券,並以美元計價的境外債券為主。」

葉浩華續稱:「基金投資具靈活性,可將最多30%的資金投資於大中華地區以外的固定收益資產。我們亦可投資於投資級別債券、可轉換債券、承壓債券和價格失衡債券,以獲取更高回報。」

該基金目標每年提供穩定的7-9%回報,目的是將大部分收益以紅利回饋投資者,而非從資本中支付。「投資組合可貢獻健康收益並達至資本增值,這是我們的目標。」葉浩華說。

特殊事件

基金的投資策略以低信用評級投資為主,同時亦關注被市場忽略的信貸投資,以及發掘由特殊情況和事件所衍生的機會。葉浩華續道:「當我們認為某些債券的市價遠低於其內在價值,我們就會在該領域投資。當然,我們必定會對發行人的信貸質素進行非常仔細和嚴謹的分析。」

吸引市場

展望未來,葉浩華認為有充分理由相信亞洲市場將比美國市場更有利:「市場對特朗普將推行財政刺激政策及美聯儲鷹派立場的普遍看法,料將推高美國的孳息率,至少當地息率在短期內上升的機會甚大。在一定程度上,這或導致資金流出新興市場、轉投美國,並減少在亞洲區的流動性。然而,由於亞洲相對穩定的局勢有利債券市場,故亞洲區仍然較為吸引。」

他續道:「內地投資者正尋求回報較銀行存款高的美元資產,內地充裕的資金流向亞洲債市,是正面的技術因素。在市場繼續追求回報的背景下,儘管亞洲債券的估值並不便宜,但上述流動性亦可為亞洲信貸市場提供支持。」

持續需求

談及市場對亞洲信貸週期的憂慮,葉浩華表示:「我們預計中國離岸債劵的違約率不會顯著上升,因為發行人仍能夠透過發行新債償還到期債券。即使市場出現回調,料仍會有資金追捧這些債券。」

就中國高收益債券而言,葉浩華認為中國房地產市場的限制性措施作用正面,但他警告:「中國房地產市場對經濟增長的貢獻甚大,若政府容許房地產市場大幅下滑,此舉將相當不智。」

實地投研

基金未有計劃改變投資策略,葉浩華說:「為了對沖2017年潛在的通脹壓力,我們將繼續在能源、材料和工業板塊投資。」然而,葉浩華坦言:「由於基金的2016年回報基數較高,要在2017年再次達到雙位數回報將更具挑戰性。我們預計2017年的回報中,有更大部分將來自主動型投資(alpha)而非被動型投資(beta),意味著我們須要進行更多研究工作,發掘由特殊情況、承壓及不良信貸產生的機會,而這些機會普遍受到市場忽視。」

實金存港

價值黃金ETF年內為惠理創下另一成就。價值黃金ETF旨在滿足投資者在不明經濟環境中對避險資產的需求而設。隨著投資者更深入認識黃金ETF的優點,例如交易流動性高、安全風險低及成本偏低,此資產類別愈來愈受歡迎。

惠理的價值黃金ETF於2010年成立,是公司首隻商品ETF。此外,價值黃金ETF亦是首隻在香港上市、有實金支持並庫存於香港的 ETF。香港的局勢較海外地區相對穩定,這對亞洲投資者而言是一大吸引之處。此 ETF追蹤倫敦金銀市場協會(LBMA)黃金價格,此價格是國際上廣泛採用的每日金價基準。

雙管齊下

該基金的黃金供應商是渣打銀行,該行負責確保所有黃金皆達到最低99.5%純度,並且由獲認證的煉金廠製造。目前基金持有的黃金純度為99.9%,超過上述最低要求。另外,基金採用「雙櫃檯」交易安排,即基金單位可在二級市場以港幣與人民幣進行交易,為投資者提供多元投資渠道。 BM

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