On 25th April 2011, CIMB-Principle Asset Management Berhad launched the first Asia-Pacific fund for this year. The fund will invest in dividend-yielding stocks from the Asia Pacific (ex-Japan) region. To brings out the "dynamism" of the fund, a "color-changing dragon" was used. For sure, the company must has placed a lot of hard work to come out with the idea and I think it is a successful example which could attracts the attention of prospective investors.
"Investors are generally back to being bullish. After 2 very good years, valuations have recovered and Asia Pacific ex-Japan markets are up. Looking ahead, slower economic recovery of the developed markets will shift investors' appetite to Asia Pacific and this positive outlook will spur further stable investments. We are confident that markets will perform positively and this Fund will satisfy investors' revived sentiments and lingering concerns", said CEO of CIMB-Principal.
The fund aims to provide regular income by investing primarily in the Asia Pacific ex Japan region and at the same time aims to achieve capital appreciation over the medium to long term.
How to achieve that?
Under general market conditions, the Fund's investment will focus on high dividend yielding equities of companies. In addition, the Fund may also invest in companies with good growth potential, which may adopt a strong dividend payout policy.
How about in not-so-good time?
The manager may take temporary defensive positions that may detract from the Fund's prescribed asset allocation when the manager believes that the equity markets that the Fund invests in are experiencing excessive circumstances, the Fund may invest all or a substantial portion of its assets in money market instruments and/or other fixed income investments. The manager may also utilize derivative instruments such as futures contracts to hedge the portfolio.
What is an active investment strategy that the Manager will adopt?
- combines top-down country and sector allocation with a bottom-up stock selection process
- reviewing the macroeconomic trends in Asia Pacific ex Japan economies
- analyzes the direction of GDP growth, interest rates, inflation, currencies and government policies to form the view and outlook for each country
- then, assessing their impact on corporate earnings and dividends and determine if there are any predictable trends
- have a medium to long term investment horizon
- want a well diversified portfolio of Asia Pacifc ex Japan region
- willing to take moderate risks for potentially moderate capital returns over the long term
- seek regular income
What is the targeted return?
The fund is an equity income and growth fund with a target return of 8% per annum over the medium to long term. "We believe this is an achievable target even after the crisis in 2008. The demand for Asia Pacific ex-Japan equities is on the rise, with continued rapid urbanization and accompanying domestic consumption that have fueled high GDP growth in most Asia Pacific countries, which are higher than that of the US and Europe," added CEO.
Click here to download the prospectus
Source: CIMB-Principle website