Wednesday, September 12, 2007

Pacific Mutual launches global fund - Investments based on GDP expectations of countries

TheStar

PETALING JAYA: Bullish on the global economic outlook, Pacific Mutual Fund Bhd yesterday launched a global fund, Pacific ADVANTAGE GDP Momentum Fund, that invests based on the gross domestic product (GDP) of a country.

Chief executive officer and chief investment officer Michael Auyeung told StarBiz the fund’s uniqueness was that it searched beyond traditional stock market valuations and index-weighted methods to build its portfolio.

“The fund will analyse and take into consideration the GDP size and growth momentum of countries and regions it invests in, rather than merely looking at market value or capitalisation,” he said.

The fund does not target pre-set sectors, industries or regions but has a continuous flexible investment allocation seeking better potential returns by investing in diversified securities based on present and future GDP expectations.

GDP momentum-based research, however, the same portfolio would be heavily weighted into stocks from US, Japan, China, Germany, France, Russia and even Eastern Europe.

The benefits of such an investment philosophy is that it is more diversified across different global regions, thus risk is less concentrated.

The fund also had an additional feature, whereby to maintain capital stability and minimise the potential adverse effects of foreign exchange risks, it would also invest a significant portion in local fixed income instruments, Auyeung added.

This combination, he said, was an important feature for investors today in light of increased volatility in global equities, especially during the sharp market corrections at end-February and early August.

The fund would be distributed by HSBC Bank Malaysia Bhd and is available at all of the bank’s branches nationwide.

The external investment manager for the offshore equity portion of the fund is HSBC Investments (S) Ltd, which is part of the HSBC Group Investment Businesses.

As at end-May, the HSBC Group Investment had total assets of US$339bil, of which the Singapore office contributes S$4.5bil.

The fund, which has an approved fund size of 600 million units (RM300mil), is currently being offered at the net asset value (NAV) per unit of 50 sen plus a service charge of up to 5% of NAV per unit during the offer period ending Sept 23.

Pacific Mutual currently manages a total of 17 funds, including Pacific ADVANTAGE GDP Momentum Fund.As at end-August, the company has over 54,000 accounts under management worth more than RM1.6bil.

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