Phillip Capital launches South East Asia’s first money market ETF

Oct 9th, 2020 | By | Category: Fixed Income

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Phillip Capital Management has introduced South East Asia’s first money market ETF.

Phillip Capital launches South East Asia’s first money market ETF

Phillip Capital Management has launched South East Asia’s first money market ETF, listed on SGX.

Listed on Singapore Exchange (SGX), the Phillip SGD Money Market ETF (SGDPMMS SP) offers a treasury management tool for institutional investors and a possible income-enhanced alternative to cash deposits for retail investors.

The fund is domiciled in Singapore and comes with S$100 million (US$74m) in initial assets under management following a successful pre-launch fund raise.

The fund is actively managed and invests in a mix of short-term deposits of established institutions and high-quality money market securities to generate returns that are comparable to Singapore-dollar savings deposits.

Eligible investments may include government and corporate bonds, commercial bills, and deposits with financial institutions, subject to them maintaining a minimum short-term credit rating of F-2 by Fitch, P-2 by Moody’s or A-2 by S&P (all of which are broadly equivalent to ‘good’, just below top tier), or, where it only has a long-term rating, a rating of A by Fitch, Moody’s or S&P.

Securities issued by entities that do not officially maintain one of these ratings can be eligible subject to Trustee approval provided it can be demonstrated by the portfolio manager to exhibit an equivalent intrinsic capacity for timely payment.

Portfolio allocations are expected to be 80% to fixed deposits and cash, and 20% to money market instruments. The target weighted average maturity of the portfolio is 90 days.

The fund is benchmarked against the FTSE SGD 3-month Singapore Dollar Swap Offered Rate (SOR) Index and comes with a management fee of 0.10% with annual expenses capped at 0.30%.

Linus Lim, Director and Chief Executive Officer of Phillip Capital Management, said, “With Phillip SGD Money Market ETF, investors will be able to improve the yield pick-up on their funds without compromising on liquidity and manage their core investments through a single brokerage account. The simplicity of a single account takes away the hassle involved in setting up and managing multiple accounts. We believe this will make a straight-forward cash management tool for corporate treasurers and investors.”

Michael Syn, Head of Equities at SGX, added, “We are pleased to work with Phillip Capital to further expand SGX’s suite of fixed income ETFs, at a time when investors are facing a prolonged low-yield environment across international markets. The Money Market ETF listed on SGX offers cost-efficient intra-day access to a diversified pool of short-term high-quality Singapore-dollar money market instruments. Such access is usually available only to large institutional investors.”

The fund becomes Philip Capital Management’s fourth ETF after the Phillip SING Income ETF, the Phillip SGX APAC Dividend Leaders REIT ETF, and the Lion-Phillip S-REIT ETF.

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