HLG Unit Trust Bhd (HLG UT) together with Hong Leong Bank (HLB) recently launched the HLG GEM Resources Strategic Fund, designed to leverage on thecurrent inflationary situation. The new Fund has been specially structured to take advantage of current market uncertainties and give investors theopportunity to potentially gain on their investments. The Fund will invest in both global resources and global emerging markets equity securities.
The HLG GEM Resources Strategic Fund is a growth and income fund aimed at providing protection against inflation and long-term growth of capital. The Fundwill invest in global resources related equity securities of companies involved in the extraction, processing, transportation and distribution of naturalresources of any kind, in any part of the world.
"This Fund was designed with a view on the current environment. We would be investing in natural resources, one of the few asset classes that actuallybenefit from inflation," said Richard Lin, Executive Director and CEO of HLG Asset Management Sdn Bhd.
"Natural resources have a positive correlation with inflation – the price of natural resources rise in tandem with inflation. Companies involved in naturalresources have the potential for higher revenues as a result of the higher prices for natural resources. The Fund would leverage on this with a view towardthe potential high returns."
The HLG GEM Resources Strategic Fund would also invest into global emerging markets equity securities for long-term capital growth. Companies in emergingmarkets stand to benefit from these countries' projected economic growth which translate into earnings and increased shareholder wealth. The Fund wouldleverage on this growth by investing in companies represented in the MSCI emerging markets Index and exchange traded funds.
"There are investors who are always on the lookout for opportunities regardless of market conditions. By introducing products like the HLG GEM ResourcesStrategic Fund, we are providing customers with the opportunity to take advantage of current market conditions where inflation is on the rise. We areconfident of the positive take-up for this product, " said Ms Yvonne Chia, Group Managing Director of Hong Leong Bank Berhad.
The asset allocation for the Fund would be a maximum of 98% in equity securities and a maximum of 100% in fixed income securities. The performance of theFund is benchmarked against 50% MSCI ACWI + 50% RAM Quant Shop MGS Bond Short 1-3 Year.
Added Lin, "and during adverse equity market conditions, the Fund has the flexibility to allocate up to 100% in fixed income securities. Investors can,therefore, potentially benefit in various market conditions through the Fund's strategic asset allocation."
The HLG GEM Resources Strategic Fund has a total approved fund size of 2 billion units priced at RM 0.10 per unit during the initial offer period. Minimuminitial investment for HLG GEM Resources Strategic Fund is RM 1,000 while the minimum additional investment is RM 1,000.
Newgate Capital Management LLC has been appointed as the external foreign investment manager to manage the global equity securities of the HLG GEMResources Strategic Fund. Newgate is a privately held global investment advisor specialising in emerging markets and natural resource investing. Theappointment will allow HLG GEM Resources Strategic Fund to leverage on Newgate's niche experience trading in global emerging markets and natural resources.As at 30 April 2008, the firm manages US$1.8 billion worth of assets in natural resources globally, and $4.2 billion in a dedicated emerging marketsproduct.
The new global fund will play an important role in positioning HLG Unit Trust Bhd as among the major unit trust players in the industry. The inclusion ofthe HLG GEM Resources Strategic Fund increases HLG Unit Trust's portfolio of managed funds to 34. Other funds currently managed are from a diverse range ofproducts that include a selection of Islamic Shariah-compliant unit trusts, growth funds, equity funds, balanced funds, sectoral funds as well as bondfunds.
HLG GEM Resources Strategic Fund is exclusively distributed by Hong Leong Bank Berhad and HLG Unit Trust Bhd's agency force. For more information, visitany of HLB's 186 Branches nationwide.
Press Release - 09/09/2008