UOB Fund Beats Peers With Perpetual Debt: Southeast Asia

SMU Professor of Finance Benedict Koh was of the opinion that fund managers may be saddling investors with too much risk by loading money-market and bond funds with securities that may be hard to sell in times of market volatility. He added: “Given the low interest-rate environment and poor prospects of financial markets, many money-market and bond funds are pressured to earn a decent return…This pressure to perform may explain partially their interest in perpetual bonds. They need to ask whether the risk-return trade-off is justifiable.”