Tech stocks have rallied during the last 2 quarters, big names like the FAANG stocks have all seen huge rise in the prices, the prospect of technology playing a pivotal role in humanity is never more evident than how they allowed us to stay connected during the pandemic. But we are surprisingly at a nascent stage, with great innovation set to chart our future the likes of Artificial Intelligent, Cloud computing, machine learning are just beginning to develop. To enable these technology to flourish will be connectivity, a robust network that could load 100’s of millions of hardware with ease is required, which is why 5G is a such an important aspect for the next industrial revolution.
5G is here and there are nations already deploying early stage of the technology to its citizens, the prospect on the capability of the network is creating euphoric buzz among businesses, industries and even fund managers. Investors keen to capitalise on the specific growth in the sector can now look to Principal Asset Management which has just launched a new Fund closely connected to 5G, the Next-G Connectivity Fund.
The Fund is designed to help investors gain capital appreciation through exposure in portfolio of global equity holdings, focusing on companies that are involved or derive benefit from Next Generation Connectivity. Principal Asset will initially have the fund distributed exclusively through Standard Chartered Bank branches nationwide.
“I believe technology will continue to be a dominant and central theme in the market. Globally, connectivity in technology has allowed approximately 6 billion people to connect with one another. With the rise of 5G networks and the ‘Internet of Things’, we are looking at exponential growth potential,” said Munirah Khairuddin, CEO of Principal Asset Management.
Through the new fund, investors who seek medium to long-term capital appreciation would be able to benefit in line with the progress in the technology sector. The Fund will invest at least 95% of its net asset value in a portfolio of best-in-class companies with sustainable advantages around the world, and which have at least 50% of their future earnings growth driven by 5G. Key enablers and beneficiaries in 5G network infrastructure, Internet of Things (IoT) devices, and applications & services will be in focus. Leveraging on the strong industry expertise of Neuberger Berman Europe Ltd, the Fund seeks to identify hidden gems of 5G using a research-intensive, bottom-up approach.
Sammeer Sharma, Head of Wealth Management, Standard Chartered Malaysia, believes that 5G is the next big thing for investors. “If the past decade was about investing in technology, then the focus now is on investing in companies at the forefront of 5G innovation. The fund offers potentially good returns as economies are now looking ahead to a post COVID-19 world, where the adoption and advancement of technology will intensify and investors can reap the diversification benefits from investing in a portfolio centered on 5G. As trusted wealth advisors, we play a crucial role in helping investors understand and gain access to opportunities in building and enhancing their financial portfolio.”
“2020 was just the beginning of 5G network deployment and 5G smartphone launches. We believe 5G trends will enter an accelerated growth phase in 2021, driven by stronger demand for better connectivity. While the impact from COVID-19 will subside as vaccination becomes available, we believe the trends of 5G and digitalisation of the economy are structural and irreversible,” said Yan Taw (YT) Boon, Director of Research (Asia) and a Portfolio Manager for Neuberger Berman’s research thematic portfolios. He also opined that this year the ramp up in 5G network deployments, 5G smartphone adoption as well as emerging next-generation will be augur well for the fund.
The Fund has a multi-class structure of five share classes; Class AUD-Hedged, Class GBP-Hedged, Class MYR-Hedged, Class SGD-Hedged, and Class USD, the fund will be priced with an initial offer of AUD 1.0000, GBP 1.0000, MYR 1.0000, SGD 1.0000, USD 1.0000 per unit, respectively.