One Asset Management (ONEAM) yesterday launched the fourth unit of its One Life Settlement Fund (ONE-LS), an alternative investment option, following the success of the first three funds.
The launch period continues through March 15.
ONE-LS invests in life insurance policies in the US, where policyholders who need money for retirement can surrender the policies to life settlement funds.
The first three ONE-LS funds which were launched several years ago received strong interest from the market as they offered suitable returns during a period of high market volatility, said Pote Harinasuta, director and chief executive of ONEAM.
ONEAM expects market sentiment to remain volatile this year as inflation is still high, prompting the US Federal Reserve to further raise interest rates by as much as 0.50% at its meeting next month. The rate hike would pressure the US stock market outlook.
Average returns since the inception of the first three funds, ONE-LS, ONE-LS2, and ONE-LS3, were 18.9%, 10.7% and 0.74%, respectively, as of Feb 23.
"The returns of the first three funds were satisfactory, reflecting the fact that the assets which ONE-LS alternative funds invested in had suffered little impact from the economic downturn during lockdown," said Mr Pote.
As US inflation remains high, the Fed might lift the policy rate by 0.50% at its next meeting on March 21-22, instead of the 0.25% hike predicted earlier. The US labour market remains strong, with non-farm payrolls growing by 517,000 jobs last month, beating market expectations.
The unemployment rate in February was 3.4%, another catalyst for a higher rate hike, Mr Pote said.
"Uncertainties persist in the market and the Fed is continuing to raise interest rates. The aforementioned uncertainty will inevitably affect the volatility of risky assets such as the stock market and bond yields. The financial results of listed companies are likely to slow down this year and recover in 2024," said Mr Pote.
The value of the US life settlement market exceeds US$20 billion and is likely to grow because the population is ageing. The main life settlement market is in the US, with 43 states having transaction protection laws, representing 90% of the states, which gives investors confidence, Mr Pote said.
