Martin Lee @ Sg
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Lion Global AUD Short Duration Fund

Lion Global has recently launched a new fund, the Lion Global AUD Short Duration Fund. This fund invests in high quality short-term AUD money market instruments and debt securities and aims to provide a return which is comparable to that or better than AUD deposit rates.

As we all know, the interest rates in Australia are at 12-year high and a large sum fixed deposit can easily get a yield in excess of 7% or sometimes even 8%.

The Lion Global AUD Short Duration Fund aims to generate excess returns by active management of the yield curve/duration, credit and currencies.

Risk Factors

  • Since the duration of the holdings are 5 years and below (mainly 3 years), the risk from rising interest rates will be slightly reduced.
  • There will be currency risk from a weakening Australian dollar and pullback in commodity prices.
  • Credit risk of corporate bonds.

The Lion Global AUD Short Duration Fund seems to be one of the first few money market/bond funds with a focus on Australia available to retail investors here.

This fund is a good proxy to a direct fixed deposit investment. With the pooling of funds, you are likely to get a better interest rate than if you were to invest in a fixed deposit directly. Investing via this fund also comes with the advantage of no locked-in period and daily liquidity.

A minimum of just A$5000 is needed to invest in this fund. The fund has a maximum sales charge of 0.2%. There is a redemption charge of 0.1%. The annual management fee of this fund is 0.5%.

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