Manulife Investment Management (M) Berhad has launched the Manulife Global Low Volatility Equity Fund (the ‘Fund’).
The fund aims to provide Malaysian investors with stable capital growth over the long run through investments in global companies with sustainable business models, while seeking to limit volatility and emphasise downside protection.
The Fund is a retail feeder fund that invests at least 95 percent of its net asset value into Alliance Bernstein’s SICAV I – Low Volatility Equity Portfolio (the “Target Fund”), which follows the disciplined approach and investment philosophy of QSP – investing in high-Quality, Stable companies at the right Price to beat the market and cushion downside.
“As investors, we can only mitigate the associated risks by searching further and wider for opportunities. Taking a global perspective and focusing on the potential long-term success of companies allows investors to cut through short-term market noises and stay on course to achieving their financial objectives,” said Jason Chong, chief executive officer, Manulife Investment Management (M) Berhad.
This sets the basis for the Target Fund that aims to protect against downside risk and beat the market at the same time, It does so by positioning the portfolio so that it is prepared for downturns and poised for recovery – it seeks to capture 90 percent of the market’s gains in rising markets, and seek to capture only 70 percent of the market’s declines during down markets.
Performance would smooth out over a long-term cycle, and this has allowed the Target Fund to consistently outperform the MSCI World Index benchmark and with less volatility in both up and down markets since its inception in December 2012.
“Volatility creates anxiety, which can cause investors to lose sight of their investment objectives. Short-term market drops may tempt investors to cut losses, but doing also means potentially missing out on the market’s eventual recovery. It is imperative that investors always maintain a cool head, stay invested and ride out short-term volatility. As such, adapting an investment strategy that focuses on the sustainable growth of companies allows investors the opportunity to capture the long-term upside and mitigate downside,” said Chze How Ng, head of Retail Wealth Distribution, Manulife Investment Management (M) Berhad.
“The coronavirus pandemic and subsequent movement restrictions has brought to light what is truly essential businesses, as evidenced by 2020 Q1 earnings of companies on the S&P 500. Healthcare, technology, staples, communications services and utilities – which are growth and non-cyclicals sectors and make up 65% of the index – on average recorded 5% growth in sales and earnings per share (EPS), whereas cyclical sectors on average experienced 3% drop in sales and 39% drop in EPS. This comes to show that the combination of growth and defensive stocks are essential in any long-term investment portfolio,” Jason added.
The Fund is suitable for investors who seek capital appreciation, wish to participate in global equity markets and have a long-term investment horizon.
The classes that are offered for subscription by the Fund are A (RM Hedged) Class and A (USD) Class at RM0.5000 and USD0.5000 respectively during the initial offer period from July 29 until Aug 18.
The minimum initial investment amount for the Fund is RM1,000 (for A (RM Hedged) Class) or USD1,000 (for A (USD) Class), and the minimum additional investment amount is RM100 or USD100. The Fund is distributed through unit trust advisers of Manulife Investment Management (M) Berhad.