Amundi has launched its Amundi Global Dynamic Allocation Protect 90 Fund, the first authorised guaranteed fund of its kind on the Hong Kong retail market since 2008, which guarantees investors a capital return of at least 90% of the highest net asset value (NAV) per unit reached since the inception. Standard Chartered is the sole distributor of the fund up until June 30, 2017.

"The product is designed for risk averse investors, retired/retiring people, first-time fund investors or experienced investors, who seek for long-term stable capital growth through investing in multi-assets with guaranteed downside protection and daily liquidity," said an Amundi spokeswoman, noting that there has been a steady inflow to the fund since launch on January 11, and that Amundi had received a significant number of enquiries from investors.

The fund aims to grow investors' capital and intends to pay no dividends, with investors receiving the higher of either the NAV per unit or the guaranteed value upon redemption. There is no lock-up period and investors can subscribe or redeem their holdings in the fund on any dealing day. The minimum investment amount is HK$8,000 (US$1,031). Notably, the 90% guarantee is valid for an initial period of five years, and may be renewed for successive further periods of one year. The fund is terminated upon expiry of the guarantee.

'Having witnessed the market volatility in 2016, customers are now more cautious about risk management while investing,' said Vicky Kong (pictured), regional head, Wealth Management, Greater China & North Asia at Standard Chartered Hong Kong, in a statement. '[In the second half of 2016,] customers were trending risk off and searching for low volatility products.'

The Global Allocation Protect 90 Fund invests in two separate portfolios, or components - a growth component and a conservative component. The growth portfolio acts as the return engine of the fund; it consists primarily of equities, and its allocation grows in favourable market conditions. In contrast, the conservative portfolio invests primarily in bonds and the money market, and acts as the value preservation tool of the fund in adverse conditions.

At no time will the fund have more than 70% allocation to equities, or more than 30% allocation to non-investment grade debt securities or emerging markets bonds.

According to Amundi, maintaining an overweight stance in emerging market assets through equities, government debt, currencies, and credit in the current ultra-low interest rate environment, still makes sense. The asset manager sees alternative and real assets 'attractive' from a diversification and yield standpoint.

'However, there is no denying that the negotiations over Brexit, China's economic restructuring, the limitations of monetary policy or upcoming elections in Europe are likely to bring about meaningful change in current trends,' it said. '2017 is expected to be a more complex, volatile year for financial markets.'

Meanwhile, Hong Kong Exchanges and Clearing (HKEx) unveiled its 2017 work plan, outlining the key initiatives and goals ahead, including improvements to the listing regime, an expansion of the Stock Connect scheme, new products and enhanced platforms.

The exchange will further expand the pool of eligible underlyings for HKEx-listed Leveraged & Inverse (L&I) products, and will work with its Mainland counterparts on including ETFs in the Connect Programme.

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