Grepalife starts dollar bond fund

The Grepalife Asset Management Corp. (GAMC) will be launching its first dollar bond mutual fund to be allowed leveraging in the mutual fund industry through the Grepalife Dollar Bond Fund (GDBF) Corp.

The GDBF follows the successful launch of the Grepalife Fixed Income Peso Fund, the first mutual fund to do cross currency investing by accepting pesos from investors and investing them in US dollar-denominated assets.

"Leveraging is an investment strategy whereby a fund uses its existing investment assets as collateral to borrow funds to buy more investment assets. The strategy aims to potentially earn more than the cost of borrowing funds," said Efren Ll. Cruz, GAMC senior vice resident and general manager. GAMC is the mutual fund investment company of the Yuchengco Group of Companies and fund manager of the GDBF.

The GDBF aims to invest its investors’ funds globally.

It will also engage in leveraging to potentially increase the return to its shareholders. However, the Fund may only undertake leveraging provided it maintains an asset coverage of 300 percent at all times, as required by law.

"Leveraging has long been practiced by fund managers. However, it is only now that this strategy has been approved for a local mutual fund," said Cruz.

More importantly, GDBF only requires a minimum initial investment of $100 (roughly P5,000). For certain qualified GDBF investors, the GAMC is also packaging free personal accident insurance and hospital income benefit.