PETALING JAYA: Pacific Mutual Fund Bhd will launch today the Pacific Asia Brands Fund, its second global fund that invests in companies with strong global brands in the Asian market.
Chief executive officer and chief investment officer Michael Auyeung said the fund would mainly invest in stocks of companies that owned, developed, marketed or manufactured consumer products or services offered in the region.
“These products and services will carry strong or up-and-coming brand identities and will be directly used by Asian end-consumers. The new fund effectively emulates what CEOs of most global consumer companies are focused on – how to access Asian consumers.
“We expect the fund to be well received as it will be invested in top consumer brand companies which have operations not only in the Asian region, but also worldwide. Pacific Mutual is targeting double-digit annual returns for the fund,'' he said.
In terms of asset allocation, the Pacific Asia Brands Fund will invest up to 99% in global equities.
Auyeung said he was positive about the prospects of the fund and attributed this to the company's investment strategy and capability in managing overseas assets, and its dedicated and experienced investment team.
“Pacific Mutual's expertise in managing foreign investments is supported by the vast experience of our team that collectively has 27 years of experience in foreign stock markets.
“This experience is reflected in the company's first global fund, the Pacific Focus18 Fund, which is allowed a 30% exposure in foreign stocks. Within six months of its inception in mid-June last year, the small foreign component of this fund has contributed a hefty 78% to its total returns,” he said.
Auyeung said one reason for the company's decision to launch the fund was because established consumer brand companies tended to exhibit “safer” operational performance than other types of businesses.
“Safer” referred to the relative stability of such companies, which meant greater consistency in revenue and profit growth, he added.
He said most of these companies sold products and services targeted at the end consumer and, hence, had the strongest bargaining power compared with other businesses. Brand companies were, therefore, less susceptible to downward pricing pressures faced by other businesses, he noted.
Auyeung said many top consumer brand companies owned products or services for which demand was less elastic. This meant consumer demand was less affected by any price hikes in their products or services, and more resilient than demand for non-branded offerings during economic downturns.
This ability to create repetitive buying patterns, especially over the long term allowed these companies to charge premiums in product pricing which translated into superior profit margins, he added.
“With the Pacific Asia Brands Fund, the investing public will enjoy exposure to growth prospects of top brand global companies, the rapid growing consumer power of Asia and global diversification in one investment,'' he said.