In its sixth year, the specialized asset manager Singular Asset Management has had a very eventful 2024. This includes one of the business lines the firm is best known for: ETFs, where they launched two new indexed strategies, completing their fixed income range.
These new vehicles, created in recent months, are the Chile Long Term and Short Duration Dollar strategies, with which the firm aims to consolidate the ETF as an investment vehicle. With this, their lineup of indexed vehicles now totals eight strategies, with five ETFs dedicated to debt assets.
The launch of Chile Long Term—focused mainly on Chilean bank bonds—aims to complete the curve of UF-denominated instruments, giving investors the option to access an intermediate duration, as stated by Singular AM in a conversation with Funds Society.
While the Chile Corporate ETF—one of the first indexed strategies launched by the Chilean manager—has an average duration of 2.3 years, the Chile Long Term vehicle has an average duration of around 5.8 years.
This, according to the firm, allows investors to use this instrument to access longer segments on the curve. Additionally, it complements the Chile Corporate investment for those with intermediate benchmarks, around 4 years. By combining both ETFs, they emphasize, investors can achieve the desired duration.
On the other hand, the launch of the Short Duration Dollar fund echoes the positive results they have seen with their Chile Short Duration strategy. This strategy has found a relevant niche in companies’ cash management due to its liquidity, but they previously lacked a hard currency alternative.
Therefore, following investor demand, they launched an ETF that invests in time deposits of Chilean banks in dollars.
With these two vehicles—anchored to RiskAmerica indexes—Singular AM aims to consolidate its range of durations and currencies. For now, there are no plans to launch new ETFs, but the firm assures that they are open to the possibility of new strategies in the future—such as dollar-denominated vehicles—as the market demands.
In addition to the indexed vehicles launched this year, the firm has three other debt strategies: Chile Short Duration, focused on time deposits issued by Chilean banks; Chile Corporate, which primarily invests in UF-denominated bonds from Chile’s largest companies; and Global Corporates, indexed to a Bloomberg index, with high-credit-quality, intermediate-duration dollar debt.
The firm also has three equity ETFs: Global Equities, anchored to a FTSE Russell index; an ETF indexed to the iconic S&P 500 from S&P Dow Jones Indices; and Nasdaq 100, a strategy focused on the U.S. tech sector.
Alternative Options
In addition to the ETF business, Singular AM has two other business lines focused on investing in private assets.
The firm has four alternative vehicles, giving investors access to the real estate market in Chile through different approaches. Three of these funds are Lease-Back strategies, where the manager purchases a property and leases it to a company with the option to repurchase it at the end of a period.
These vehicles, as explained by the firm, have a one-year investment period with monthly contributions. Once this period ends, the fund is closed, and the manager lets the portfolio “mature.” At that point, they start a new fund with the same investment logic.
Currently, the firm plans to maintain this sequence, projecting the launch of its fourth Lease-Back fund next year.
The other strategy, called Residential MBS I, invests in subsidized mortgage loans. The vehicle was launched in 2021 and has reported good results. Furthermore, the firm is exploring the possibility of launching a second iteration of this strategy.
Alternative assets are also at the core of Singular AM’s distribution business, the third pillar of the company. The Chilean manager has a binding relationship with specialized international managers Oaktree Capital Management and Brookfield Asset Management, distributing their strategies in Chile, Peru, and Colombia.
The relationship with these international managers is quite close, considering that Oaktree—controlled by Brookfield—acquired a 20% stake in Singular AM in 2019.
For Funds Society, Madrid