CIMB-Principal Asset Management Bhd expects to raise RM300 million in sales from its newly-launched CIMB-Principal Preferred Securities Fund (PSF) this year.

Chief Executive Officer Munirah Khairuddin said the preferred securities potentially offered attractive yields, especially in an environment with low interest rates and heightened volatility.

"As a unique asset class, preferred securities share the characteristics of both equities and bonds, but exhibit a relatively low correlation to both traditional fixed income and equity categories.

"Therefore, by investing in the fund, investors could improve their overall portfolio risk-return profile," she said in a statement today.

The CIMB-Principal PSF invests in a portfolio of diversified preferred securities for potential income returns and long-term capital preservation.

Elaborating, Munirah said the fund aimed to achieve potential income and capital appreciation by investing in Principal Global Investors-PSF (PGIPF) over the medium to long term.

She said PGIPF is a Dublin-based fund that invests primarily in a portfolio of US dollar-denominated preferred securities and debt securities.

"The PGIPF is expected to perform above its benchmark which is 50 per cent Merrill Lynch Fixed Rate Preferred Securities Index and 50 per cent Bank of America Merrill Lynch US Capital Securities Index," she said.

The PGIPF provides a conservative, risk-managed approach to preferred securities, with at least 75 per cent of assets in investment grade preferred securities with a required minimum average portfolio credit rating of BBB- or better.

Meanwhile, the CIMB-Principal PSF is available in a multi-currency structure with a minimum initial investment of RM5,000 for investments in ringgit, with minimum additional investment of RM2,000 and US$5,000 for investments in US dollar (with minimum additional investment of US$2,000).

Munirah said investors could invest via consultants of CIMB-Principal, CIMB Private Banking and other participating banks.

To-date, CIMB-Principal has a total of 63 unit trust funds (out of which 19 are Shariah-compliant), 19 wholesale funds, 10 Private Retirement Scheme funds and two exchange-traded funds.

The asset management arm of CIMB Group has also recently launched two other funds - the CIMB-Principal Emerging Market Multi Asset Fund and CIMB-Principal Asia Pacific Dynamic Mixed Asset Fund for investors with a moderate risk profile. -- Bernama