PUBLISHED : 19 Aug 2024 at 04:30
One Asset Management (ONEAM) is focusing on launching mutual funds comprised of alternative assets, with the One Life Insurance Settlement (ONE-LIFESET-UI) fund expected to entice investors and generate a good return during market fluctuations.
ONEAM said stock exchanges globally have the potential to recover based on world economic growth, as the International Monetary Fund recently upgraded its global GDP forecast for 2024 to 3.2%.
Yet bourses worldwide remain volatile, pressured by the monetary policies of central banks in major economies as well as their specific economic conditions, geopolitics, and stock market valuations.
Some stock exchanges have reached new highs this year, including the US and India, along with some bourses in Europe.
Risk diversification is vital for investors to cope with ongoing volatility and generate good returns over the long term, which includes investments in alternative assets, said ONEAM.
“As market volatility lingers, ONEAM sees an increasing role for alternative assets in raising risk-adjusted returns of investment portfolios, which investors have shown growing interest in adopting,” said the brokerage.
Pote Harinasuta, chief executive of ONEAM, which is offering a life insurance settlement mutual fund.
Volatile market conditions have prompted investors to increasingly seek alternatives. All six series of ONEAM’s Life Settlement fund have received a positive response from investors.
Launched as a private fund, the Life Settlement fund was changed to a mutual fund in 2021 and was due for redemption earlier this year.
The asset manager focused on designing investment features to meet Thai demand.
The Life Settlement fund was launched with a maturity of 37-38 months and offered via an initial public offering.
A new open-ended ONE-LIFESET-UI, which is being offered for sale during Aug 15-22, is not for retail investors. This product is Thailand’s first and only mutual fund that invests in life settlement.
“We adjusted the fund’s features to allow investors to buy every month and sell their investment units every quarter. That marks a significant difference from other life settlement funds that can be bought only once,” noted the brokerage.
ONE-LIFESET-UI does not have a requirement concerning an exit fee. This allows investors attracted to alternative assets to access liquidity in times of need, according to ONEAM.
The fund offers two types of investment units. ONE-LIFESET-UIG is for large institutional investors or wealthy individuals, with a minimum initial investment of 500,000 baht.
ONE-LIFESET-UIS is for wealthy individuals or institutional investors and has a required initial investment of 35 million baht.
Investing in ONE-LIFESET-UI, in comparison with direct investment in the Life Settlement Fund abroad, offers tax exemption from capital gains when selling investment units in Thailand, according to the Securities and Exchange Act.
Regarding the investment policy, the fund invests in the secondary market for life insurance policies in the US, which is called life settlement. These carry a legal guarantee.
Insurance policyholders pay for future insurance premiums and receive a return according to the conditions of their policy. The fund invests only in policies of insurance companies that have credit ratings higher than A.M. Best’s B+ (equivalent to S&P’s BBB-).
The fund can buy and sell insurance policies for higher returns or access the liquidity.
Since their establishment, ONEAM’s Life Settlement mutual funds have generated an average return of 6-9% per year, except for ONE-LS6-UI, which was launched in February this year.
For the return of ONE-LS-UI, which was redeemed earlier this year, the fund generated combined returns of 22.8% over three years, or an average of 7.61% per year.
