New fund by HLG Unit Trust to leverage on potential of inflation hedge sectors consumer staples, agriculture, oil and mining
Kuala Lumpur, September 24- HLG Unit Trust Bhd (HLG UT) at an official launch ceremony today, unveiled its latest fund, the HLG Shariah Inflation Select Fund. The new Fund is designed in view of investors taking a defensive approach due to current inflationary concerns. The HLG Shariah Inflation Select Fund is an 18-month closed-end Shariah compliant structured Fund that aims to reimburse investors their initial capital upon Fund maturity as well as seek potential returns from an environment of rising inflation. The Fund, made available to investors since 22 September 2008, is open for investors during its offer period of 22 September 2008 to 5 November 2008.
The HLG Shariah Inflation Select Fund has been structured to seek for potential returns benchmarked against the performance reference to companies that might benefit from an environment of rising inflation. As such, the Fund’s potential returns are benchmarked on 3 baskets of reference stocks in the agriculture, consumer staples and oil & mining sectors. These sectors have been selected due to their potential as inflation hedge sectors.
A Rainbow Strategy will be adopted whereby the best performing sector among the 3 would be allocated the highest weightage of 70%, the second highest at 20% and the third basket at 10%, upon the Fund’s maturity. “As the payout for the Fund would be calculated at the end of the Fund’s 18-month tenure, investors would benefit from hindsight as the percentage of weight allocation would be based on the performance of the baskets,” said Richard Lin, Executive Director and CEO of HLG Asset Management Sdn Bhd.
The new HLG Shariah Inflation Select Fund also has been structured with the aim to reimburse investors’ on their initial capital upon Fund maturity. To deliver this, the Fund intends to invest in an 18-month Ringgit Malaysia denominated Islamic structured product. This will provide investors the aimed reimbursement of initial capital at maturity.
“This Fund is suitable for investors who are seeking to preserve the value of their investment capital, and at the same time, wish to benefit from the potential upside from sectors which stand to benefit from rising inflation,” Lin said.
The new Fund will also leverage on the extensive distribution network of HLG Unit Trust’s Institutional Unit Trust Advisers (IUTAs). The Fund will be distributed by 5 IUTAs, namely Hong Leong Bank Berhad*, HSBC Bank Malaysia Berhad*, United Overseas Bank (Malaysia) Bhd, The Royal Bank of Scotland Berhad and new distributor Maybank. In addition, the Fund will also be distributed by HLG Unit Trust Bhd’s agency force. This Fund also marks the first new fund launch HLG Unit Trust is launching with Maybank which will see the HLG Shariah Inflation Select Fund sold through the leading bank’s vast local network, in addition to HLG’s existing stable of distributors.
"We are delighted to work together with Maybank as this is the first new fund launch we are launching with Maybank as one of our key distributors. We are confident that with Maybank’s vast network and established brand, as well as HLG Unit Trust Bhd’s track record in the fund management industry, we are able to provide value to an extended customer base of investors,” Lin added.
The HLG Shariah Inflation Select Fund is one of the several products launched recently by HLG Unit Trust that leverages on two similar key features – firstly, the Fund aims to benefit investors from rising inflation and secondly, it seeks to provide reimbursement on investors’ capital. Added Lin, ”These funds were launched to cope with the strong market demand for products that are aimed at protecting or reimbursing investors’ capital. The overwhelming demand for the HLG Star Select – Capital Protected, which aimed to provide capital protection upon maturity –proves this. Due to the encouraging market response for the HLG Star Select – Capital Protected, its fund size was increased twice within its initial offer period in June - July this year, charting a sales total of RM 234.46 million within the initial offer period.”
The asset allocation for the HLG Shariah Inflation Select Fund would be a minimum of 95% into an Islamic structured product and a maximum of 5% into Islamic money market instruments. The performance of the Fund is benchmarked against RAM Quant Shop MGS Bond Short 1-3 Year.
The HLG Shariah Inflation Select Fund has a total approved fund size of 600 million units priced at RM 0.50 per unit during the Offer Period from 22 September 2008 till 5 November 2008. Minimum initial investment for HLG Shariah Inflation Select Fund is RM 1,000 while the minimum additional investment is RM 1,000. The maximum investment amount for the Fund is capped at RM 20 million.
The new fund will play an important role in positioning HLG Unit Trust Bhd as among the major unit trust players in the industry. The inclusion of the HLG Shariah Inflation Select Fund increases HLG Unit Trust’s portfolio of managed funds to 35. Other funds currently managed are from a diverse range of products that include a selection of Islamic Shariah-compliant unit trusts, growth funds, equity funds, balanced funds, sectoral funds as well as bond funds.
*Hong Leong Bank Berhad and HSBC Bank Malaysia Berhad will commence distribution of the fund not immediately but on a later date.
About HLG Unit Trust Bhd
Incorporated on October 5 1994, HLG Unit Trust Bhd is an established unit trust management company, and a member of the Hong Leong Group Malaysia. Its core business is the management of unit trust funds.
The company already manages 35 (including the new fund launched today) unit trust funds to date, which are distributed nationwide through multiple channels. Direct and channel distribution activities are supported by the HLG Unit Trust Bhd’s strategic nationwide sales support infrastructure. This includes our headquarters in Kuala Lumpur and six sales support offices nationwide in Kuala Lumpur, Ipoh, Penang, Johor Bahru, Kuching and Kota Kinabalu.
As at 31 August 2008, HLG Unit Trust Bhd has a combined total fund size of RM 2.35 billion.