Asia’s Red-Hot Bond Funds Are Raising Risks For Investors
- Fixed-maturity funds have grown popular with individual buyers
- Taiwan’s regulator has tightened rules on the products
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An increasingly popular financial product in Asia that invests in bonds is coming under greater scrutiny as concerns about risks to individual investors mount.
The so-called fixed-maturity funds typically offer regular payouts, but don’t guarantee returns even if some cite targets. While the funds can provide stable income, in times of market strains that can crumble. A limited menu of options given the requirements on maturities mean fund managers may at times need to load up on riskier notes.