KUALA LUMPUR: OSK-UOB Unit Trust Management Bhd is confident that its latest product, the OSK-UOB Capital Protected Gold-Linked Fund, will yield potential annual returns of 15% to 23%.
Executive director cum chief executive officer Ho Seng Yee said the three-year closed-end capital protected fund aimed to provide regular income over the medium term from rising gold prices whilst protecting investors’ capital at the end of the fund’s maturity period.
“In these uncertain times, when economies around the world are still reeling from the impact of the US subprime mortgage crisis and rising oil prices, a commodity like gold would act as a safe haven for investors’ hard-earned money,” he told reporters at the launch yesterday.
The fund’s principal strategy is to invest 87% to 100% of the capital raised in a three-year zero coupon negotiable instrument of deposit to protect the fund's capital and the remainder of up to 10% of the capital raised in over-the-counter options issued on a gold index, JP Morgan Gold Excess Return Index, to generate the returns.
“The options are purchased from JP Morgan Chase Bank (London branch) and has a participation rate of 100%,” Ho said.
He said fund managers expected gold prices to appreciate in the short to medium term due to the increasing demand for gold, particularly from China and India while the weakness in the US dollar might lead to central banks, especially the ones in Asia, diversifying from the dollar and increasing their gold reserves.
“The weak dollar also favours investments in gold as it is negatively correlated to the greenback, hence it could be the prime beneficiary as a result of the structural weakness in the US economy.
“And with the recent turmoil in oil and food prices, which inevitably induce inflationary pressures, gold comes into play again as it is traditionally a hedge against inflation,” Ho added.
The fund has an approved size of 200 million units at an initial price of RM1 per unit.
The minimum initial investment amount is RM5,000 and the subsequent minimum top-up is RM1,000.
The company is targeting to increase the funds under management to RM5bil from over RM3.7bil currently with the launch of five new products this year.
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