UOB AM’s gold fund to provide investors with long-term capital appreciation
KUCHI NG: UOB As s et Management ( Malaysia) Bhd ( UOB AM) has launched the United Golden Opportunity Fund to cater to investors’ demand for diversification and long- term capital appreciation.
Targeted at sophisticated investors with a high tolerance for risk, the fund will invest at least 95 per cent of its net asset value mainly in global goldrelated collective investment schemes and/or exchangetraded funds ( ETFs). This is the first fund in Malaysia to offer investors exposure to gold-related ETFs.
Lim Suet Ling, chief executive officer (CEO) of UOB AM said that gold-related investments are seen traditionally as a diversification tool given that they have a negative or weak correlation to other asset classes.
This means that the commodity acts as a natural hedge against market volatility, making it a common safe haven asset. Gold is also seen as a good hedge against inflation, which is expected to rise following the likely changes to fiscal stimulus measures in the US.
“Against a backdrop of low interest rates in many developed economies and mounting global macroeconomic uncertainty, more investors are likely to turn to gold to diversify their portfolio and to reduce their risks,” said Lim.
In addition to gold’s hedging and diversification properties, Lim said that investors may benefit from its potential price appreciation as the demand for physical gold gains momentum over the longer term.
“The demand for gold is expected to be buoyed by China and India, the two leading centres for physical gold demand. Between 2000 and 2015, both countries were the largest buyers of gold, accounting for 41 per cent of global demand collectively.”
Lim added that gold, while volatile in the short term, remains a good store of value relative to cash.
“While gold prices will fluctuate from time to time, the broader market environment of ongoing low interest rates, coupled with continued political, economic and monetary policy uncertainties, is generally supportive of goldrelated investments,” said Lim.
The United Golden Opportunity Fund is available at selected distributors nationwide.