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FX bonds: A new product to make returns from forex

Samantha Chiew

Whenever people think of foreign exchange – or forex – trading, one of the first things that usually comes to their minds is the possibility of quick and high returns.

We have all heard about how, with the right training and skill set, traders are able to exploit the volatility typical in the forex market to make potentially huge gains.

While this may be true to a certain degree, it is also this same fluctuation of the currencies that brings about a significant degree of risk for investors, especially those who perhaps do not yet possess the necessary experience or knowledge on how to be successful in this market.


A different approach

Source: Furong Investments

However, there is now an investment product that enables you to enjoy returns from the forex market, without being exposed to its volatile aspect.

Furong Investments, a Singapore-based investment firm, has created a safer way to invest in the currency market by tying investment returns to commission rebates from FX brokers rather than on taking up speculative positions.


How does this work?

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Since 2012, Furong Investments have devoted time and extensive research into foreign exchange trading, with the main aim of deriving an alternative financial product that will be safe, stable and suitable for investors who have a conservative risk appetite.

Instead of the conventional forex trading method of profiting from buying or selling a particular currency against another (aka a currency pair) in the hope that either:

(a) the currency you buy will gain in strength (i.e. the exchange rate will increase),


(b) the currency that you sell will weaken against its counterpart (i.e. the exchange rate will decrease).

The new product offered by Furong Investments is made possible via close working relationships with primary market-makers in the wholesale currency market.

These market-makers use FX brokers to conduct their trades and in return, receive commission rebates from these brokers. Commission amounts are paid to them regardless of gain or loss in a particular trade.

This pooled commission essentially makes up the returns for the new bond series, which is explained below.

The funds from investors are actually used to make up a margin deposit (or security deposit), which is the balance or equity that a trader must have to open or maintain a position in a forex trade.

With this deposit, more squaring-off of positions in the wholesale currency market can occur, which then results in the brokers being able to achieve more commission rebates, based on those transactions. And again, as mentioned earlier, investors are able to benefit from this steady stream of returns without worrying too much about what happens to the market itself and how volatile it might be.

These commissions will be paid to investors on a quarterly or semi-annually basis, as a coupon payment arrangement typical to bonds, which is why this special investment instrument is called an FX bond.


Who can invest in this bond?

Investing in FX bonds are a form of alternative investments, thus to adhere to regulators’ requirements, you must be an accredited or institutional investor, as the minimum subscription is US$200,000.


How safe is the investment?

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There’s always a certain element of risk involved with all types of investments. And hence, the management team at Furong Investments have put in place as many features as possible to reduce the risk levels to give investors peace of mind.

Another plus point when investing with Furong Investments is that there are no management fees and sales charges incurred by the investor; which might not necessarily be the case for most investment products offered by other providers.



How many types of bonds are offered?

Firstly, with the Flex Bond, investors can earn step-up coupon returns every quarter and earn up to 7.6% for the first year and 8.8% for the second and subsequent years. Investors can even withdraw anytime without any penalty or capital loss and without a minimum holding period.

For anyone looking for even higher returns and have a fixed investment timeframe, you may be interested in Furong Investments’ second product, the Furong 2 Years 9.6% FX Bond. This FX bond will earn you 9.6% returns over a short period of 2 years.



What is the profile of Furong Investments?

Source: Furong Investments

Furong Investments originally entered the wealth management scene back in 2010 as an investment holding company, primarily into real estate acquisitions.

This investment focus, however, changed as the company expands its repertoire. According to its CEO, Mr Niu Liming, the company’s goal is to eventually become an asset management company. Until recently, the company has used its own capital to scour the market for the best investments. These eventually formed the company’s commercial and industrial property holdings.

Now, Furong Investments is proud to offer global investors unparalleled access to global markets; encompassing niche investments in the Asia Pacific region, primarily in Singapore, Malaysia, Greater China, Japan and Australia.

Its core focus businesses include mergers and acquisitions, bonds and real estate investments.

Furong Investments takes a very client-centric approach to investment, as evident in their company motto: ‘For A Wealthier World and Universal Prosperity’.

During the grand opening of Furong Investments’ new office, Mr Niu emphasised on abolishing products distribution via traditional third-party agents and thus is able to waive off unnecessary fees and distribution costs. Instead, a specialised team of consultants and advisors were nurtured to manage the company’s growing portfolio internally, which brought about a better investor-company relationship with a personal touch, while reducing the layers of red-tape to solve investors’ concerns, should there be any.

“We pride ourselves in being transparent with our clients. This way, clients can not only be more involved in their own investments but also are more aware of what is happening to their money. Transparency is the key to gaining our clients’ trust.” says Mr Niu.


Keeping customers close to the heart

Source: Furong Investments

Furong Investments offers its investors greater transparency and constant updates of latest developments in the company and products by holding customer appreciation events.

With the aim to foster a stronger relationship with their customers, these events are held regularly. These events also serve to better understand their customers’ needs through the regular and closer less formal interactions, in-line with the Company’s belief of ‘understanding customers first, business second’.

One such event was held on a private yacht at Sentosa Cove on 4th November. It was exclusive only to customers and specially invited guests.

Learn more about Furong Investments here.

(By Samantha Chiew)

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