TheStar
KUALA LUMPUR: HwangDBS Investment Management Bhd (HwangDBS IM) sees recovery in US equities in the coming months and aims to capitalise on it now by launching a fund that tracks the Standard and Poor’s 500.
The S&P 500 Index was expected to recover by as early as the second half of this year on the back of economic stimulus measures, said HwangDBS IM chief executive officer and executive director Teng Chee Wai.
The S&P 500 had tumbled 52% from its peak of 1,565 points on Oct 9, 2007 to 754 points on Monday.
It is the most tracked index of American equities after the Dow Jones Industrial Average.
“The current market downturn should be seen as part and parcel of market cycles and, essentially, investing is certainly a long-term approach and should not be taken as a means to make a quick buck,” Teng told reporters at the launch of HwangDBS US Access 80, its first fund this year.
“The US Access 80 was mooted on the premise of capitalising on the bearish global sentiment to gain substantial headway into the S&P 500 at a highly attractive valuation,” he added.
“(S&P 500) comprises American stocks with the largest market capitalisation such as Coca-Cola, Wal-Mart and McDonald’s, that would, in boom time, cost investors an arm and a leg to own due to the premium they command,” he noted.
The US Access 80 is a mixed-asset, open-ended fund that aims to provide capital appreciation through exposure to the S&P 500 while endeavouring to preserve a minimum of 80% of the fund’s highest net asset value achieved, observed on a daily basis.
“The 20% growth aspect of the fund employs a dynamic and tactical allocation strategy to achieve derivative-type active asset exposure on the S&P 500 to ultimately deliver better-than-average results. This strategy allows progressive lock-in gains while raising the preservation limit,” Teng said.
“Investors today are looking for investments that guard them against the ravages of the financial crisis and by nature, we recognise the importance of avoiding investments in highly leveraged companies and complex derivatives,” he said.
HwangDBS IM aims to secure up to RM100mil in sales for the US Access 80 in the next six months.
Aimed at retail clients, the minimum initial investment for the fund is RM1,000.
It has an approved fund size of 300 million units retailing at RM1 each during the initial offer period.
According to Teng, HwangDBS IM will continue to launch more funds this year to boost its assets under management which stood at RM5.6bil at end-December.
A year earlier, its assets under management stood at RM6.1bil.
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