“Whilst the general interest is still for income generating funds, small-cap funds have their place in providing good growth potential to one’s investment portfolio,” says Raymond Tang, CEO, Eastspring Investments. “This can be seen from the inflows we’ve been getting for our existing equity funds."
"Usually the small-cap universe is under researched and undeservingly traded below their intrinsic value. Fund managers like us use this opportunity to unearth these small-cap gems and exploit these pricing inefficiencies.”
The fund was launched to meet the demands of investors with the appetite for long-term equity growth funds following the soft closure of the Eastspring Investments Small-cap Fund in order for the latter fund to continue to deliver good performance to existing unit holders. Although the fund will be a shari'ah-compliant version of the company’s existing small-cap fund, the fund will be managed by the same award-winning equity investment team who are experienced in managing Islamic and small-cap funds, and fund managers will adopt the same investment philosophy of stock picking, the company said.
“We will generally pick companies with good business model that has superior earnings growth. We like companies with solid management who is able to weather through the ups and downs of the business cycle. And these stocks should be accompanied by a strong balance sheet and fundamentally undervalued,” says Tung Yin Wai, Head of Investment, Retail & Institutional Business (Domestic).
“We have experienced fund managers and analysts who are very passionate about small-cap investing. As fund managers, we derive a sense of satisfaction from being able to unearth these small-cap gems and help them to discover their true value. And to the companies that we are invested in, we are happy to be a shareholder and proud to be part of their success stories,” added Tang.
According to Eastspring Investments, Malaysia equities are back in the limelight with improved fundamentals and attractive valuations compared to their regional peers. In addition, the Malaysian government will introduce the Small and Midcap PLC Research Scheme to conduct research on 300 companies. Government-linked investment companies will be setting aside RM3 billion to be invested in small and medium capitalised stocks.
“We believe that corporate earnings should recover this year and most importantly these corporate captains are again confident enough to expand their capacities. A weakness in the ringgit is actually a blessing in disguise and have boosted the competitiveness of many of our Malaysian corporates. They are using this window of opportunity to move up the value chain and grab market share,” says Tung.
Interested?
The fund is available at Eastspring Investments and its authorised distributors. The initial offer period for the fund runs for 21 days commencing from 25 May 2017 to 14 June 2017. Units are priced at RM0.50 during its initial offer period after which its net asset value per unit will fluctuate based on market movements. The minimum initial investment (lump sum) is RM1,000
Editor's comment: All investments are open to risk and investments may grow but also shrink, even if the original forecast is for a growth market. It is best to do some due diligence on expected trends in the market and the track record of the fund managers before parting with any money.
Editor's comment: All investments are open to risk and investments may grow but also shrink, even if the original forecast is for a growth market. It is best to do some due diligence on expected trends in the market and the track record of the fund managers before parting with any money.