New Fund: OSK-UOB Capital Protected Essentials Fund

As the world population continues its growth led by the emerging countries coupled with the higher purchasing power, the demand for the essentials or basic commodities (i.e. those that we use daily such as cotton for clothing, corn and sugar for food, crude oil for energy) have significantly increased. Further, with the imbalance of increase in demand and slower growth in supply, this has also resulted in a situation where consumers now and going forward have to pay more for fuel, clothing and food.

With the expectation of further increase in the prices of these essentials or basic commodities, OSK-UOB has established a fund that will capitalize on the price movements of these essentials or basic commodities, which is OSK-UOB Capital Protected* Essentials Fund.

Fund Asset Allocation:

Indicative Asset Allocation

Over The Counter (OTC) Option:

A 4-year option whose underlying reference is a basket of 4 commodities, i.e. Brent Crude Oil, Cotton, Sugar and Corn, and each commodity is represented by a listed futures contract.

Why it also called "Memory Option" ?

This is because the option is structured to provide 4 annual coupon payments during the tenure of the fund, if at the relevant observation date, all of the 4 underlying reference commodities prices are greater than or equal to their initial reference prices determined at the commencement date of the fund. It has a "memory" component i.e. the annual coupon payable can be carried forward if it failed to met the conditions for a particular year.

103% Capital Protection?

Yes. The capital protection covers the investors' capital investment and includes the 3% sales charge payable by investors.

Hence, the fund is suitable for investors who:

1. have a low risk tolerance;
2. seeks capital protection*;
3. seek potential returns from commodities essential to our daily lives;
4. have a medium term horizon; and
5. seek income

Download the fund prospectus here

Source: OSK-UOB Investment Management

* Investors are advised that the fund is not a guaranteed fund. Capital protection is provided through investments in ZNIDs and not by a guarantee. Consequently, the return of capital is SUBJECT TO the credit/default risk of the issuers of the ZNIDs and may result in losses.

New Fund: OSK-UOB Absolute Return Fund

With market continuously rotating between "risk-off" and "risk-on", an absolute return mandate with the adoption of a dynamic asset allocation approach would be a good vehicle to ride out the volatility. With the fixed income market having outperformed over the last 5 years, there is a high possibility that good quality equities - those with earnings growth and clarity supporting healthy dividend payouts would find favour.

This is a wholesale fund which aims to achieve medium to long term (3 - 7 years) capital appreciation through investments in equity and equity related securities of companies, and exchange traded funds with the potential to deliver total return in excess of the fund's benchmark return (8% growth per annum).

Investment Strategy

Asia Pacific region (excluding Japan) will the focus of this fund, either through equity or equity related or exchange traded funds. The manager views the region as a vibrant economic growth region supported by factors such as favorable demographics, improving per capita incomes, positive foreign direct investment flows, and vast natural resources.

The strategy is to identify such investment opportunities in its early phase and select companies with strong fundamentals and attractive valuations to capitalize on its growth. Undervalued securities are uncovered through intensive and independent fundamental research.

A Barbell approach - buying dividend yielders coupled with growth (and cyclical) & value stocks would provide a combination of steady cash flows and capital appreciation. This new fund to some extent would allow the portfolio managers to focus more on stock picking without ignoring developments at the macro level.

Meanwhile, the fund's asset allocation is totally flexible between equity and fixed income / money market, depending on economic conditions.

Click here to download the fund's "Information Memorandum"

OSK-UOB Dana KidSave

One of the most desired by an investor, is to achieve diversification in his or her portfolio and what better way to do so then by investing in a balanced fund. A balance in an investment portfolio is also fundamental to appease an investor in times of uncertainties and volatility. Such a balance can appeal to the investor of any age regardless of his or her objectives. Thus, with market uncertainties continuing to prevail over the Eurozone debt crisis and its contagion effect on the global economy, investors remain cautious with their investment choice, seeking to invest in low to moderate risk investments such as a balanced fund.

Hence, OSK-UOB offer you a Shariah-based fund with its balanced asset allocation strategy in equities and investments comprising sukuk, islamic money market instruments, deposits and collective investment schemes. The investment in equities will enjoy potential capital appreciation upswings while any downswings will be cushioned by its investments in the latter which are defensive in nature.

When making investments, the manager may invest up to 30% of NAV in foreign markets. The fund will invest in Shariah-compliant securities/instruments listed on or traded in Asia Pacific ex Japan markets, including Shariah-compliant securities / instruments of companies that are listed on or traded in non-Asia Pacific ex Japan markets (such as NYSE and LSE).

How about Sukuk ?

At lease BBB rating sukuk issued by Malaysian incorporated companies at the point of purchase by RAM Rating Services Bhd or equivalent rating agencies. Foreign sukuk issued by corporations and financial institutions must carry a rating of BB or higher by S&P or equivalent, whereas sukuk issued by supra-nationals, governments and their agencies need not be rated.

Click here to download prospectus

Source: OSK-UOB IM

New Fund: OSK-UOB Multi Asset Regular Income Fund

As investor continue to seek safe investment havens, i.e. investments that are more stable and/or of lower risk and with regular income, OSK-UOB Investment Management see opportunities in the Asia and Asia Pacific (ex Japan) region. Hence, they are now offering investors a fund that utilizes a multi-asset strategy to generate potential regular income and capital growth in a fund that invests in three yielding assets i.e. bonds, equities and REITs (real estate investment trusts) from the Asia and Asia Pacific (ex Japan) region.

The Fund is suitable for investors who:

1. seek regular income and capital growth over medium to long term;
2. are willing to accept moderate risk in their investments; and
3. wish to benefit from investment exposure in the Asian and Asia Pacific (ex Japan) region.

Tactical Asset Allocation?

Of the fund's investments, the External Investment Manager will initially invest in accordance to the allocation stated in the table below. However, for the purpose of tactical asset allocation, the manager may deviate from the stated allocation by a 10% variance for each asset class depending on the market conditions to achieve medium to long term returns.

Thus, this Fund's portfolio will be structured as follows:

• 65% - 98% of NAV
• Investments in Asian (ex Japan) debt instruments / bonds, Asia Pacific (ex Japan) dividend equities and Asia Pacific (ex Japan) REITs.
• 2% - 35% of NAV
• Investments in liquid assets including money market instruments and deposits with financial institutions.

What's the composite benchmark for this fund?

• 50% JP Morgan Asia Credit Index Total Return Composite (RM);
• 30% MSCI AC Asia Pacific ex Japan Index (RM);
• 20% MSCI AC Asia Pacific ex Japan REITs Index (RM).

Distribution Policy:

Depending on the level of income generated at each relevant period, the fund will declare distributions, if any, to unit holders QUARTERLY.

Click here to read fund's prospectus

Source: OSK-UOB Investment Management

New Fund: OSK-UOB Focus Bond Fund - Enhanced

In view of the current volatile markets culminating from the Eurozone debt crisis, investors are concern about the contagion effect on the domestic and global economies. Amid the recent volatility, some believe there are opportunities arising from bond investments that will offer consistent and regular income to investors. Hence, OSK-UOB now offer investors an enhanced bond fund that has the potential to provide higher regular income^{^} during the tenure of the Fund and capital appreciation at its maturity date from a concentrated portfolio of global debt instruments / bonds and from an option structure to provide the potentially higher income.

The OSK-UOB Focus Bond Fund – Enhanced (“the Fund”) is a 3-year close-ended, income fund which aims to provide regular income during the tenure of the Fund and capital appreciation at its maturity date primarily from a concentrated portfolio of global debt instruments / bonds. Generally, the Fund aims to achieve its objective through a two-fold strategy.

1. Fixed Income portionThe first is to invest in a concentrated portfolio of fixed income securities to provide a stable income stream. In managing the fixed income portfolio of the Fund, the External Investment Manager will generally seek out global debt instruments / bonds that are able to offer attractive yields (i.e. yields that are greater than the Fund’s benchmark net of expenses) and/or capital appreciation during the tenure of the Fund. Given the Fund’s 3-year tenure, the External Investment Manager will invest in a concentrated portfolio of not more than 20 global debt instruments / bonds to lock-in the yield.
   
2. Option portionThe Fund will also invest in a 3-year OTC call option that is referenced to a yield enhancement strategy(YES). The YES Option is denominated in Singapore Dollar (SGD) and the Fund will have 150% Participation Rate in the YES Option’s annual returns. As the tenure of the Fund is 3 years, the YES Option is designed to provide 3 annual coupon payments during the 3 years tenure of the YES Option. As such, there will be 3 observation periods for the determination of the performance of the YES Option (i.e. the 3 annual coupon payments).

Its indicative asset allocation is as follows:

• 92% - 100% of Net Asset Value- Investments in global debt instruments/bonds.

• Up to 3% of Net Asset Value- Investments in the YES Option.

• Up to 5% of Net Asset Value- Investments in liquid assets including money market instruments and deposits with financial institutions.

^{^}Note: The income (if any) is in the form of cheque payments.

Source: OSK-UOB Investment Management

Click here to download the prospectus 

New Fund: OSK-UOB Asian Income Fund

If you have a medium risk appetite and are seeking for an investment opportunity in the Asian region, you may want to take a close look at OSK-UOB Asian Income Fund, a balanced fund which was newly launched by OSK-UOB Investment Management Berhad on 5 June 2012.

The fund is a feeder fund that aims to provide income and capital growth over the medium to long term by investing in one target fund, i.e, the Schroder Asian Income (fund's inception date: 24 October 2011 and is denominated in Singapore Dollar), which primarily invests in Asian equities and Asian fixed income securities.

More about Schroder Asian Income

The Schroder Asian Income can invests in Asian high yield bonds (30% - 70%), Asian high dividend yielding equities (30% - 70%), cash (0% - 30%) or other asset classes (0% - 10%). Cash will be used if necessary to limit downside risk during adverse market conditions. Financial derivatives are also used to stabilize the portfolio of the fund by hedging the fund's exposure to foreign currency.

This strategy allows the Schroder Asian Income to adjust its allocation according to the phases of the economic cycle to deliver more consistent returns.

Click here to know more about Schroder Asian Income fund

Click here to download the OSK-UOB Asian Income fund prospectus

Source: OSK-UOB Investment Management

New Fund: OSK-UOB Agriculture Fund

With the world population slated to increase, particularly from the emerging markets like India and China, coupled with the increase in per capita income in the developing nations and an improvement in lifestyle, the demand for food, and in turn agricultural commodities, will see an upward rise. Moreover, with rising income, meat consumption is also expected to increase and therefore more grains, wheat and other soft commodities are needed to feed the poultry demand, thus also creating demand for agricultural commodities. 

However, despite the expected increase in demand, supply factors remain constrained due to land and water scarcity caused by urbanisation. Climate has also proven to be very unpredictable in the recent past, with increasing frequency of extreme weather events. This makes the planning and production of crops harder, especially when the supply of agricultural commodities is concentrated in a few countries.

This mismatch in demand and supply factors is expected to move prices of agricultural commodities upwards. OSK-UOB has therefore established this Fund so as to capitalise on this potential price increase in the agricultural commodities sector.

The Cultivating Fund

The OSK-UOB Agriculture Fund (AGRI) is an open-ended, growth fund which aims to achieve long term (5-7 years) capital appreciation through an over-the-counter derivative instrument in the form of a swap agreement that is linked to the agricultural commodities sector. 

The Fund seeks to achieve its investment objective by investing up to 100% of its Net Asset Value into fixed income instruments and up to 10% of its Net Asset Value as capital payment for exposure to an over-the-counter (OTC) derivative instrument in the form of a swap agreement with a counterparty that offers exposure to the performance of one of 3 indices, the Contag Beta Agriculture Excess Return Index-Beta Index, the Contag Beta Agriculture Excess Return Index-Alpha Index and the Contag Beta Agriculture Excess Return Index-Alpha Beta Index ("Contag Indices") that are linked to the agricultural commodities sector.

More on Contag Indices

The Contag Indices provide exposure to agricultural commodities by referencing exposure to certain commodity futures over time. They use the Contag contract selection methodology to select a maturity for each commodity futures on a monthly basis. Each of the Contag Indices invests in the same underlying commodities as included in the S&P GSCI™ Agriculture Official Close Index Excess Return (the “GSCI”) which currently as at 11 June 2011, by way of example, comprise exposure to the following underlying commodities but which may change in accordance with the GSCI’s own rules: sugar, cocoa, coffee, corn, cotton, Kansas wheat, soybeans and wheat. The workings of the Contag Indices are elaborated further in the Prospectus (page 18-20).

 

AGRI is suitable for investors who: 

(i)	seek investment opportunities in the agricultural commodities sector;
(ii)	seek capital growth;
(iii)	have a long term investment horizon; and
(iv)	have an appetite for risk to gain higher returns.

Source: OSK-UOB Investment Management

Click here to download prospectus

New Fund: OSK-UOB Taiwan Opportunity Fund

Taiwan has recovered strongly from the global economic downturn with a growth of 10.8% in 2010. According to Global Economic Prospects, January 2011 by World Bank, Taiwan’s gross domestic product is tipped to grow 5% in 2011. Taiwan is a beneficiary of Asia’s growth, in particular that of China’s. Following the liberalization policies of Taiwan’s new administration towards China, Taiwan’s economy has become increasingly linked with China’s.

Foreseeing a significant growth prospects for Taiwan in the next few years, OSK-UOB has therefore established a Fund that is structured to benefit from these potential opportunities through a swap agreement which will provide exposure to Taiwan’s capital markets as represented by the Taiwan Taiex Index (“TWSE”). This Fund will provide investors with an opportunity to participate in the potential benefits from this outlook on the Taiwan economy in the next three years.

About the Fund

This is a 3 year close-ended growth fund which aims to achieve medium term capital appreciation. It seeks to achieve its investment objective by investing 90% of its NAV into fixed income instruments and the remaining 10% as capital payment for exposure to an over the over-the-counter (OTC) derivative instrument in the form of a swap agreement.

Swap Agreement?

The Fund's potential returns will principally be derived from the swap agreement through its exposure to the performance of TWSE over a 3 year period and also from an enhanced payout if certain criteria are met at the maturity of the Fund. As such, the Swap Counter-party will charge a swap fee of 1% per annum of the notional amount.

How to calculate the return, which consists of Enhanced return?

Investors are entitled to the enhanced return at maturity, if the following conditions are fulfilled:

1. the final average level of TWSE is greater than the initial reference level, and


2. the lowest level is below the initial reference level of TWSE

What is the downside risk?

First, this is NOT a capital protected or guaranteed fund, although 90% of its NAV is in fixed income instruments. The Fund may lose all its assets under the swap agreement (limited to investor's investment amount only) if:

1. the TWSE declines 100% from its initial reference level determined, or


2. the TWSE declines close to 100% from its initial reference level determined and USD appreciates against RM.

Source: OSK-UOB Investment Management Berhad

Click here to download the fund's prospectus

New Fund: OSK-UOB Capital Protected Dual Opportunities Fund

While inflation fears in China is a dominant factor, signs that China's growth is holding up well despite this concern will certainly fuel further growth. Traditionally in China, a higher inflation tends to exhibit a positive correlation with Chinese companies price-earnings ratios and nominal earnings growth. Having said that, the consensus view is that the government will raise borrowing costs to contain inflation and prevent the economy from overheating.

With such growth euphoria and inflationary concern, a new fund is structured to take advantage of the current inflationary economy in China. This is a 4-year close-ended capital protected* fund which aims to provide income and capital appreciation over the medium term whilst protecting investors’ capital* on the Maturity Date.

Where is the Fund's return comes from?

The Hong Kong (HK) Option is designed to provide investors with potential annual coupon payments that are based on the performance of Chinese companies’ stocks and potential returns from its exposure to a gold investment at Maturity Date. Hence, the Fund’s name “Dual Opportunities” reflects the two opportunities available under the HK Option.

The HK Option is denominated in US Dollars and thus, the Fund’s return from the HK Option is subject to US Dollars / Ringgit Malaysia exchange rate risk. The Fund has 100% participation in the HK Option payout. The HK Option will provide the Fund with exposure to the performance of a fixed basket of 5 Chinese companies’ stocks listed on the Hong Kong Stock Exchange (“Underlying”).

However, the performance of each of these stocks under the HK Option is capped at 8% per annum. The final Underlying which will always be comprised of 5 stocks will be determined on the Commencement Date of the Fund.

The HK Option will pay the Fund a potential annual coupon payment that is based on the performance of a basket of 5 Chinese companies’ stocks which are expected to perform during this inflationary period.

In addition to the performance of the Underlying, the HK Option is also structured to pay a gold return, if any, at the Maturity Date. The HK Option’s exposure to gold return would depend on the annual performance of the Underlying and also on the performance of gold prices between the Commencement Date and the Maturity Date.

Indicative Asset Allocation of the Fund

The Fund is suitable for investors who:

• have a low risk tolerance;
• seek capital protection;
• have a positive outlook on China's growth potential;
• have a positive outlook for gold prices;
• have a medium term horizon and seek regular income.

Source: OSK-UOB Investment Management

Click here to download Prospectus

New Fund: OSK-UOB US Legendary Fund

Failed to be Warren Buffett? How about exposing to the performance of his investment company, Berkshire Hathaway? Not a bad idea though.

The latest fund, launched by OSK-UOB, aims to provide capital appreciation over the short-term (18 months) whilst aiming to preserve investors' capital on the Maturity date. This is not a capital guaranteed or protected fund.

This is a wholesale fund which was structured to capitalize on the performance of Berkshire Hathaway Inc., such that the positive performance of the company and its out-performance against the Standard and Poor's 500 Index will provide the fund with returns during the recovery and rebuilding of the US economy.

Structure...

The fund will invest 100% of its NAV in a non-capital protected RM denominated structured investment issued by a domestically incorporated financial institution with a rating of at least 'A' by RAM Rating Services Berhad or its equivalent rating by any other reputable rating agency.

The Structured Investment has embedded options (comprising the underlying reference i.e. the Berkshire Hathaway Inc-Class B shares and the S&P500 index) with a payoff determined only at Maturity Date.

About Berkshire Hathaway Inc. - Class B shares

Berkshire Hathaway Inc. is a holding company owning subsidiaries in a variety of business sectors. Berkshire's principal operations are insurance business conducted nationwide on a primary basis and worldwide on a reinsurance basis. Berkshire's other operations include The Buffalo News, aviation training, and retail furniture businesses, as well as shoe, candy and rug manufacturing.

Source: OSK-UOB Unit Trust Management Bhd

Click here to download Information Memorandum

New Fund: OSK-UOB Multi-Asset Recovery Strategy Fund

With the ongoing global economic recovery and the various opportunities created from the vast stimulus packages put forth by governments around the world, we are currently witnessing differing levels of economic expansion across all economies. And different asset classes such as equities, bonds, commodities, currencies and cash perform differently under different stages of economic expansion.

Hence, OSK-UOB now offer investors a fund that will capitalize on the potential opportunities arising from the different market conditions resulting from this economic expansion phase by dynamically investing in multi-asset classes that are expected to do well in specific market conditions.

The OSK-UOB Multi-Asset Recovery Strategy Fund is a fund-of-funds which aims to achieve long term capital appreciation by investing in a portfolio of exchange traded funds (ETFs).

The fund aims to achieve its objective through a portfolio of ETFs chosen from 5 major asset classes, i.e equities, bonds, commodities, foreign exchange (currencies) and money market instruments selected from the global markets. The fund's name reflects the fund's strategy that capitalize on the recovery of the global economy by dynamically investing in multi-asset classes through a portfolio of ETFs.

How much return?

This fund is benchmark against an average annual return of 8.00% over the long term. This is the targets of the fund.

Investor Profile?

This fund is suitable for investors who:

• want to capitalize on the recovery of the global economy with an investment that invests dynamically in multi-asset classes through a portfolio of ETFs
• seek capital appreciation
• have a medium risk tolerance
• have a long term investment horizon

Source: OSK-UOB Unit Trust Management Bhd

Click here to download prospectus

New Fund: OSK Indonesia Equity Growth Fund

To join in the Indonesia Theme bandwagon, OSK launched its own version of Indonesian Equity Growth Fund, which aims to achieve medium to long term capital appreciation through investments in securities of companies with high growth potential that are listed on the Indonesian Stock Exchange and/or companies listed on other exchanges whose business are substantially in Indonesia.

This fund is suitable for investors who:

• wish to participate in the potential and investment opportunities of the Indonesian economy
• are willing to accept higher risk in their investments in order to achieve potentially higher returns in the medium to long term
• seek capital appreciation rather than income

8 Answers to "WHY invest in Indonesia?"

1. Impressive equity market performance
• Jakarta Composite Index gained 46% in 2010
• The 7th year in which Indonesia has outperformed Asia ex-Japan over the past 9 years (Source: CLSA Research January 2011)
2. Strong economic growth
• Expected growth of 5.7% to 6% in year 2011
• Growth is driven by domestic consumption, currently stands at about 65% of Indonesia GDP
3. Favorable demographics
• 4th largest population in the world
• Middle and upper-middle class households is expected to increase from 29% currently to 41% by 2012
4. Resources rich
• World's biggest CPO producer
• World's biggest Thermal Coal exporter
• World's biggest Tin exporter
5. Government projects and infrastructure development
• 2011 budget is pro spending, especially in infrastructure development
• Development expenditure expected to increase 29% in 2011
6. Equity market remains attractive
• Currently trading on 13x PE with 22% earnings growth and 25% ROE
• Indonesia has the 2nd lowest Equity Market Cap / Nominal GDP ratio in the region
7. Outlook on Rupiah to strengthen
• Lagged regional currencies in the past 10 years
• Improving outlook for Rupiah makes Indonesia attractive to foreign investors

Investment Approach

1. Combination of "top-down" and "bottom-up" approach
• An investment strategy that is not mutually exclusive but closely inter-twined between asset allocation and stock specific selection
2. Value driven approach
• Stocks are then selected for their value
3. Emphasis on growth
• Stocks are further selected for their growth potential

Investment Approach

Portfolio Strategy

OSK sees several investment opportunities including

1. Banks
• Strong loan growth (+25%) driving revenues
• Low penetration of key financial services and credit
2. Infrastructure
• Total investment needed for infrastructure projects 2010 - 2014 will reach USD34.14 billion
3. Commodities
• Medium term outlook for thermal coal positive due to increasing demand from China, India and Indonesia
4. Consumption
• Low consumption in categories such as cars, motorcycles, cellular phones and cement

Source: OSK-UOB unit trust management berhad

Click here to read the prospectus

New Fund: OSK-UOB Capital Protected Sector Strategy Fund

Yet, another capital protected fund for investors by OSK-UOB unit trust management. Following the pump priming efforts by governments around the world during the financial crisis, the global economies have begun to stabilize and signs of recovery are growing strong. The stimulus packages introduced have benefited broad market sectors to a different extent in each sector at each stage of recovery.

"At each stage of the economic recovery, different market sectors will benefit to a different extent. These 4 sectors which are well diversified are expected to capitalize on the different sectors' play", said Ho Seng Yee, CEO of OSK-UOB.

According to Ho, the fund shares a similar strategy with the OSK-UOB Capital Protected Gold Guru Fund that was launched in 2009 and has registered returns of 29%.

Funds' Allocation & Strategy

This is a 4-year close-ended capital protected fund which aims to provide capital appreciation over the medium term whilst protecting investors' capital on the maturity date. To accord for the capital protection feature, the fund will invest primarily in 4-year ZNIDs with the remainder of the capital raised invested in 4-year over-the-counter (OTC) option whose underlying asset is the Multi Sector Strategy ("Sector Option") to generate the returns for the fund.

The Multi Sector Strategy Option

It provides investors an exposure to 4 distinct market sectors represented by exchange traded funds in the Energy, Material, Financial and Consumer Discretionary sectors.

While the Sector Option is denominated in Ringgit Malaysia, the underlying Multi Sector Strategy is based in Singapore Dollars, thus, the Fund's return is subject to exchange rate risk.

Source: OSK-UOB unit trust management bhd

To read the fund's prospectus, please click here .


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