ABN Amro Asset Management is offering a high-dividend stock fund in Hong Kong in the belief there is demand for such funds, despite concerns rising interest rates will attract investors to other less risky assets.
"Generally we still have a long way to go before we come to positions like we had in the 1980s and 1990s, where bond yields were significantly outstripping dividend yields," said Wouter Weijand, global head of high-income equity group.
"And until that time, we will enjoy the ride," he told Reuters in an interview late recently.
He said markets were seeing bond yields of 3 percent and dividend yields of 4 percent, compared with bond yields of 6 percent and dividend yields of 3 percent in the 1990s.
Amsterdam-based Weijand and his team of Hong Kong-based fund managers launched an Asia-Pacific High Dividend Equity Fund in Hong Kong this month, managing a pool of 50 stocks across the region with dividend yields of more than 3 percent.
"The aim of this fund is to provide sustainable dividend and capital gains for clients," he said, declining to provide any specific examples.
"We want to provide stable and rising dividend and capital gains, primarily by stock selection, and also some country selection in the Asia Pacific region," he said.
The US dollar-denominated fund aims to outperform a customised index known as the S&P/Citigroup Asia Pacific High Income Equity Index, which has recorded an average annual dividend yield of 4.5 percent for the last 16 years, surpassing the traditional MSCI All Country Asia Pacific Index.
A similar award-winning ABN Amro High-Income Equity Fund launched in 2003 in the Netherlands has grown to 1.4 billion euros from 400 million euros in size.
As of October, that fund, which invests in high-yielding stocks globally, has an annualised return of 19.3 percent, outpacing the 18.4 percent return in the benchmark Citigroup High Income Equity Index, ABN Amro Asset Management data showed.
Weijand said he saw the turnaround in the Japanese economy, the world's second biggest, as a major structural change that would underpin Asian economic health.
He shrugged off concerns about the spread of avian flu, saying it was a big unknown.
"Structurally as well as cyclically, we see reason to remain confident about the Asia Pacific, strongly enhanced by Japan," he said.