Manulife offers low-volatility equity fund for long-term capital growth
PETALING JAYA: Manulife Investment Management (M) Bhd has launched the Manulife Global Low Volatility Equity fund, which aims to provide investors with stable long-term capital growth through investments in global companies with sustainable business models, while seeking to limit volatility and emphasise downside protection.
It explained that the fund is a retail feeder fund that invests at least 95% of its net asset value into its target fund, Alliance Bernstein’s SICAV I – low volatility equity portfolio which invests in high-quality, stable companies at the right price to beat the market and cushion downside.
The fund is suitable for investors who seek capital appreciation, participate in global equity markets and have a long-term investment horizon.
Manulife Investment Management said the classes that are offered for subscription by the fund are A (RM Hedged) class and A (USD) Class at 50 sen and 50 US cent respectively during the initial offer period from July 29 until Aug 18, 2020.
The minimum initial investment amount for the fund is RM1,000 or US$1,000 and the minimum additional investment amount is RM100 or US$100.
The investment company’s CEO, Jason Chong, said taking a global perspective and focusing on the potential long-term success of companies allows investors to cut through short-term market noises and stay on course to achieving their financial objectives.
He pointed out that companies that produce predictable earnings patterns could potentially outperform the market and have better risk profiles in the longer term.
In addition, it is important to buy at a reasonable price and avoid crowded trades as that may quickly reverse.
The investment company highlighted that this sets the basis for the target fund that aims to protect against downside risk and beat the market at the same time, by positioning the portfolio so that it is prepared for downturns and poised for recovery – it seeks to capture 90% of the market’s gains in rising markets, and seek to capture only 70% of the market’s declines during down markets.
It noted that the performance would smooth out over a long-term cycle, and this has allowed the target fund to consistently outperform the MSCI World Index benchmark and with less volatility in both up and down markets since its inception in December 2012.
In this regard, Chong said the coronavirus pandemic and subsequent movement restrictions have brought to light what essential businesses truly are.
He said healthcare, technology, staples, communication services and utilities, which are growth and non-cyclical sectors and make up 65% of the index, on average recorded 5% growth in sales and earnings per share (EPS), whereas cyclical sectors on average experienced a 3% drop in sales and a 39% drop in EPS.