UOBAM Malaysia launches United Great Dragon Fund
KUALA LUMPUR: UOB Asset Management (Malaysia) (UOBAM (Malaysia)) has launched the United Great Dragon Fund to provide retail investors with access to China-listed companies set to become the future growth drivers of China’s economy.
The fund invests primarily in UOB Asset Management Ltd (UOBAM)’s United China A-Shares Innovation Fund (Target Fund), which focuses on companies in China’s A-shares market.
These companies are likely to be major beneficiaries of technology, innovation and long-term growth trends such as rising consumer affluence and growing urbanisation.
“China offers long-term potential for Malaysian investors who seek to capitalise on its growth opportunities,” UOBAM (Malaysia) chief executive officer Lim Suet Ling said.
“The country is forecast to replace the United States as the world’s largest economy by 2028 as it shifts from an export-driven economy to one that focuses on high-growth industries driven by technological advancements.
“This shift is characterised by increasing domestic consumption and the development of higher value-add sectors such as healthcare equipment, industrial automation, new energy vehicles, biotechnology, software and advanced materials, tourism and entertainment.”
The United Great Dragon Fund is suitable for retail investors seeking returns over the medium and long term. The fund seeks to achieve long-term capital appreciation by investing a minimum of 90 per cent of its net asset value in the Target Fund and the balance in liquid assets such as money market instruments and deposits.
Previously, China A-shares were open only to China-based investors but the government recently relaxed its restrictions on foreign ownership to global institutional investors. With the United Great Dragon Fund, retail investors can gain greater access to China’s growth opportunities via its A-share market.
“As China is poised for a new growth phase, the China A-shares weightage in emerging and global indices such as the Morgan Stanley Capital Index (MSCI) will likely increase significantly over the next five to seven years.
“We estimate another US$300 billion to US$400 billion of inflows into China A-shares if MSCI’s inclusion ratio for these shares is increased to 100 per cent from the current 20 per cent.
“The increase in the inclusion ratio will see the free float of China A-shares owned by foreign institutional investors grow to 17 per cent from the current 3.5 per cent. This will give Malaysia’s retail investors access to new growth opportunities otherwise only available for institutional investors.”
The United Great Dragon Fund is available in ringgit, Chinese renminbi and US dollar with an initial minimum investment of RM1,000, RMB1,000 and US$1,000 respectively.
UOBAM (Malaysia) is the Fund’s manager, while UOB Asset Management Ltd and Ping An Fund Management Company Limited are the management company and sub-manager of the Target Fund respectively.
The fund is available for subscription at selected distributors nationwide.