October 12, 2009

New Launch: Hwang-DBS Global Allocation Fund Series

Hwang-DBS Investment Management has just introduced a new unit trust series, Global Allocation Fund (GAF), which consists of Global Growth Allocation fund and Global Balanced Allocation Fund. This asset allocation fund series intend to gain exposure to money markets, bonds, equities, real estate and commodity markets via exchange traded funds (ETF) and other financial instruments, such as exchange traded notes (ETN) and listed securities.

Below is some of the summary information for Global Growth and Global Balanced Allocation series:

Global Growth Allocation Fund

Fund category: Equity
Fund type: Growth

Investment objective: To provide medium to long term capital appreciation for aggressive investors.
Investment limits: Equities 70-100%, Fixed Income 0-10%, Others (Real Estate & Commodity) 0-25%
Benchmark: Dow Jones Aggressive Portfolio Index

Global Balanced Allocation Fund

Fund category: Balanced
Fund type: Growth & Income

Investment objective: To provide income stream which aiming for medium to long term capital appreciation for moderate investors.
Investment limits: Equities 40-60%, Fixed Income 40-60%, Others (Real Estate & Commodity) 0-10%
Benchmark: Dow Jones Moderate Portfolio Index

Common Fund Information for GAF series:

Sales charge: 3%
Redemption charge: 1% if redeemed within first 6 months from date of purchase
Switching fee: No fees
Transfer fee: RM5 per transfer
Management fee: 1.2% of fund NAV
Trustee fee: 0.8% of fund NAV
Minimum initial investment: RM1000
Minimum holding: 2000 units
Minimum additional investment: RM100
Minimum redemption amount: 2000 units
Minimum switching amount: 2000 units
Fund manager: David Ng Kong Cheong & Esther Teo Keet Ying

Some of the ETFs and ETNs that the fund series might invest in are listed below:
  • iShares MSCI Pacific ex-Japan Index fund
  • iShares MSCI Emerging Market Index fund
  • iShares S&P 500 Index fund
  • iShares FTSE ERPA/NAREIT North America Index fund
  • iShares MSCI Malaysia Index fund
  • iShares Barclays Government / Credit Bond Fund
  • iShares iBoxx Investment Corporate Grade Bond fund
  • iShares S&P GSCI Commodity Indexed Trust
  • iShares Barclays 1-3 year Treasury Bond fund
  • iShares MSCI Taiwan Index fund
  • iShares MSCI World Index fund
  • iShares MSCI Japan Index fund
  • iShares Asia Trust - MSCI China Tracker
  • Powershares Emerging Markets Sovereign Debt Portfolio
  • Powershares DB Commodity Index Tracking fund
  • Powershares DB Base Metals fund
  • Powershares DB Energy fund
  • BLDRS Emerging Markets 50 ADR Index fund
  • S&P 500 SPDR
  • SPDR Gold Shares
  • ABF Pan Asia Bond Index fund
  • SPDR S&P Emerging Markets ETF
  • SPDR DJ International Real Estate ETF
  • SPDR Barclays Capital 1-3 month T-Bill ETF
  • Lyxor ETF MSCI Europe
  • Lyxor ETF Commodities CRB
  • Vanguard European ETF
  • Vanguard Pacific ETF
  • Vanguard Total Bond Market ETF
  • iPath Dow Jones-AIG Commodity Index Total Return ETN
  • iPath GSCI Total Return Index ETN
  • iPath Dow Jones AIG Agriculture Total Return Sub IndexETN
  • First Trust FTSE ERPA/NAREIT Global Real Estate Index fund
  • ABF Singapore Bond Index fund
For more product information, please click here.

My Opinion:
Based on the response of the markets to previously launched global asset allocation funds, such as OSK-UOB Global Allocation Fund and Prudential Global Market Navigator Fund, I suspect the response for this fund will be good as well.

If your portfolio consists of mainly Malaysian and Asia Pacific equities, I think this fund especially the Global Growth Allocation fund will provide you a good exposure to other regional/sector markets, and hence provide you with a balanced portfolio and diversification.

If you already have a diversified portfolio, this fund series might not be a good fit. Alternatively, you might want to consider restructure your portfolio to include this group of funds instead of accumulating individual funds since it will be cheaper (sales charge 3%), and you get the expertise from the fund management company for allocation decisions.

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