UOBAM launches equity fund to capitalise on long-term growth of emerging economies


KUALA LUMPUR: UOB Asset Management (Malaysia) Bhd (UOBAM) has launched the United Global Emerging Markets Opportunity Fund to help Malaysian investors ride on the long-term growth of global emerging markets.

According to its press statement, the fund seeks to provide investors with long-term capital appreciation by investing a minimum of 90 per cent of its net asset value in the UBS (Lux) Equity SICAV – Global Emerging Markets Opportunity (Target Fund).

The Target Fund is a concentrated portfolio of 25 to 30 of the fund manager’s best stock picks from sectors that stand to benefit from emerging markets’ long-term growth trends. For example, the fund will focus on the consumer discretionary, banking, telecommunications and technology sectors, which will gain from rising wealth and growing consumer demand across global emerging markets.

UOBAM chief executive officer Lim Suet Ling, said: “Through the United Global Emerging Markets Opportunity Fund, we want to help investors gain exposure to outstanding companies that will benefit from macroeconomic trends across emerging markets. One such trend is the rising wealth in emerging markets, driven partly by their relatively younger and larger workforce.

“More than 50 per cent of the world’s high-net-worth individuals are from emerging economies and we expect this trend to continue as urbanisation and infrastructure development pick up pace across these countries and give rise to more job opportunities and social mobility.

“Rising wealth is in turn driving greater consumer demand and spending power, translating into solid earnings growth prospects for innovative, well-managed companies operating in these markets.”

UOBAM explained that the United Global Emerging Markets Opportunity Fund’s investments are well-diversified across Asia, Europe, Africa and South America, with the fund manager applying bottom-up research to identify high conviction stocks.

It highlighted that the high conviction investing is an actively-managed, concentrated, low-turnover investment approach, where stock selection is based on the fund manager’s top stock picks.

“In making stock picks, the fund manager will base his selection on a thorough understanding of the portfolio companies, including the factors that influence their long-term growth. The fund manager’s selection will also be determined by the company’s fundamentals, such as asset quality, earnings and revenue growth and its ability to outperform industry peers.

“An actively-managed, high conviction approach to stock selection typically demonstrates strong and consistent outperformance when set against its benchmark. Between 2008 and 2017, the composite strategy of the United Global Emerging Markets Opportunity Fund – the Emerging Markets Equity HALO – outperformed its benchmark, the Morgan Stanley Composite Index (MSCI) Emerging Market Index, by an average of 6.5 percentage points .