Does your investment portfolio need a shakeup?
Individual investors can benefit by keeping a tab on the launch of new financial products. Several funds targeted at the retail market have been introduced in 2017. These have relatively low investment thresholds and provide Singaporeans with the opportunity to diversify their investment portfolios.
We check out three recently launched funds to understand the advantages that they offer and examine whether individual investors should allocate a part of their savings to them.
1. LionGlobal Disruptive Innovation Fund – Launched in early January 2017, the LionGlobal Disruptive Innovation Fund invests in companies worldwide that have successfully disrupted the incumbents within their industry, which including e-commerce, social media and electric vehicles and artificial intelligence, among others.
Some of the companies in which this fund may invest include:
|Software Innovation||Alibaba Group||E-Commerce|
|iFly Tek||Artificial intelligence|
|Hardware Innovation||Tesla Motors||Electric vehicles|
Companies in the e-commerce and social media sectors have shown tremendous growth in the last few years and they are likely to continue to grow their business volumes.
Similarly, the electric vehicle, artificial intelligence, and robotics companies are also poised for strong growth in the coming years.
The LionGlobal Disruptive Innovation Fund allows almost anyone to participate in the long term growth of disruptors at the minimum investment sum of just $100. Subsequent investments can also be made in $100 amounts.
Investors may also choose between a US dollar denominated fund and one that is denominated in Singapore dollars.
2. Allianz Income and Growth – This fund was launched on 15 February 2017. The minimum investment amount is $1,000 and regular savings plan investors can make additional investments in amounts of S$100 each month.
The fund’s objective is to achieve long term capital appreciation by investing in stocks, debt securities, and convertible securities. Fundsupermart, an online unit trust distributor, has given the Allianz Income and Growth fund a risk rating of 7, signifying that the fund carries a moderately high risk.
An investment in the Allianz Income and Growth fund is eligible under the Supplementary Retirement Scheme (SRS), the Singapore government’s initiative to help citizens save for their sunset years.
The fund is not listed in Singapore and investors would need to redeem their investments directly from Allianz. The minimum redemption amount is S$100. The fund also stipulates a minimum holding amount of S$1,000.
Allianz Global Investors manages EUR 412 billion worldwide and is registered with the Monetary Authority of Singapore.
3. BNY Mellon Asia Rising Stars Fund – the minimum investment amount stipulated by the fund is US$5,000. Launched on the 10th of January, 2017, the BNY Mellon Asia Rising Stars Fund aims to seek long-term growth by investing in small cap equities.
The fund is jointly managed by the BNY Mellon Asset Management team and by Malaysia’s Maybank.
The management of the fund will be handled from two centres. BNY Mellon Asset Management Japan will look after the Japanese small cap equity investments. The ex-Japan investments will be managed by Maybank Asset Management Singapore. The focus will be on those companies that have a market cap of less than US$5 billion.
About 50% of the investible amount will be deployed in Japanese companies while the remaining sum will be spread between companies in Hong Kong, China, India, Korea, Singapore, Indonesia, and other Asian countries.
The fund management is of the view that only those investors who have a time horizon greater than five years should invest, as many of the investments may take an extended period to yield returns. Based on EU rules, the risk profile of the fund is rated at 5 on a scale of 1 to 7, with a higher rating signifying potentially greater risks and rewards.
Retail investors will have to bear an annual maintenance charge of 1.6% of the amount invested as well as an initial maximum charge of 5%.
Should individuals invest in these funds?
Unit trusts are inherently risky. The shares that a fund invests in can decrease in value if the stock market falls. Global economic conditions, as well as the type of industry in which a company operates, can also impact values.
However, investing in one of the three funds described above will allow investors to diversify their risks. Instead of putting a large sum of money into one company, you are spreading it out over dozens of firms. There is also the possibility of making returns that are significantly higher than what you can make in a bank term deposit or in an investment in fixed income securities.