KUALA LUMPUR: OSK-UOB Unit Trust Management Bhd expects its latest product, OSK-UOB Golden Dragon Fund, to deliver an annualised return of 15% over the next three to five years.
Chief executive officer Ho Seng Yee attributed this to the fund's dynamic investment strategy and the potential markets it would invest in.
“The fund will invest on a 30:30:40 ratio in fixed-income securities, equities in Greater China markets, and either in fixed-income securities in Malaysia or equities in these markets.
“This allows for a dynamic allocation between the two asset classes, subject to market conditions, and ensure potentially higher returns,'' he said at the fund launch.
According to Ho, Greater China markets include China, Hong Kong and Taiwan which have proven to have strong fundamentals.
The 2008 Olympics in Beijing would act as a catalyst in spurring China's gross domestic product by at least one percentage point, he said.
He added that growth in China would substantially benefit Hong Kong's tourism, property, retail and hospitality sectors as well as Taiwan's trading and manufacturing industries.
UOB Asset Management Ltd (UOBAM) senior director and head of Asia ex-Japan equities, Colin Ng, said the urbanisation rate in China was about 40% in 2005 compared with an average 75% in developed countries in the same period.
He added that China was flushed with liquidity and currently had US$4.3 trillion in cash and bank deposits that could make their way into the equity market.
UOBAM is the external investment manager for the fund.
Ho expects the new fund to be fully subscribed within the next few weeks, based on strong feedback from the company's business partners.
He also expects total funds under management to hit at least RM3.5bil by year-end from RM2.65bil now with more funds to be launched.
With an approved size of 400 million units, the Golden Dragon Fund is being offered at 50 sen per unit during its initial offer period ending May 28. The initial minimum investment amount is RM1,000.