The Asset October 2010 by Chito Santiago
 | |
| Campbell Tupling: We see a lot of upside for ETFs |
For John Campbell Tupling, CEO of CIMB-Principal Asset Management Berhad, 2010 is still a bit of a recovery year for the asset management industry in Malaysia. While the market had rebounded somewhat in 2009 and had some major pick-up early this year, it went through a correction in May and June. Retail investors are still wary, although the institutional investors are starting to invest, which is a good sign, he says.
“There had been a number of funds launched at the retail level, but their average size was only 41 million ringgit (US$13.23 million), which was an indication that there still isn’t enough positive market sentiment out there to warrant the launching of more new funds,” he notes.
As Campbell Tupling points out, CIMB-Principal is achieving some solid sales – its retail equity sales are up more than 100% this year over the same period last year. However, these are not the kind of numbers that they are hoping for, especially in view of how much the market has recovered and of the available opportunities.
CIMB-Principal has assets under management of 23 billion ringgit as of the end of August 2010. It has 68 unit trust funds, including six wholesale funds and two exchange-traded funds (ETFs). These include 22 Shariah-compliant unit trust funds in Malaysia, while the rest are conventional funds. In Malaysia, the company has launched three funds so far in 2010 and it is looking at a number of ideas. “Our domestic portfolio is fairly full, so we will be looking for opportunities across the region, which we have been doing for the past three years,” Campbell Tupling explains.
CIMB-Principal has bought BT Asset Management in Thailand from BankThai and brought it under the CIMB-Principal umbrella. “We are looking at product sharing across Indonesia, Singapore, Malaysia and Thailand,” he adds. “With this acquisition, we will be able to meet the Thai demand for regional funds fairly quickly and efficiently.”
Broad appeal
Broad appeal
In January this year, CIMB-Principal launched the CIMB Islamic Global Commodities Equity Fund, a Shariah-compliant fund that provides investors broad investment opportunities in global commodities. The fund provides exposure to stocks that will benefit from the strong and rising demand from natural resources and basic materials, namely energy, metals, agriculture and renewable energy.
The fund offers potential capital growth over the medium to long term, by investing at least 70% of its net asset value (NAV) in Shariah-compliant equities and
Shariah-compliant equity-related securities of companies that are primarily engaged in activities related to commodities. In addition, it may invest in Shariah-compliant derivatives such as commodity ETFs and commodity indices if they offer a more compelling alternative to equities, but subject to a maximum of 28% of the fund’s NAV.
“Our Islamic funds are our way of reaching out to the broader investor base,” Campbell Tupling explains. “You would be surprised by how broad the appeal is for those funds due to their characteristics – lack of leverage and the risk management.”
Malaysia’s first offshore ETFs
Malaysia’s first offshore ETFs
Campbell Tupling says Malaysia has sufficient Islamic products in which CIMB-Principal can invest. “Both the equity market and the sukuk market in Malaysia are deep enough,” he believes. “In Indonesia, though, the secondary sukuk market is quite thin and there is not enough liquidity in the Shariah-compliant stocks either.”
In March, CIMB-Principal launched the CIMB-Principal Australian Equity Fund, which aims to achieve medium to long-term capital appreciation through investment in a portfolio of predominantly Australian securities. The fund, which feeds into the Schroder Australian Equity Fund, an Australian-domiciled fund, strives to outperform the S&P/ASX 200 Accumulation Index over the medium to long term. It will invest at least 95% of its NAV in the Schroder Australian Equity Fund, with an emphasis on investments in companies with a sustainable competitive advantage in the long-term, while maintaining up to a maximum of 5% of its NAV in liquid assets.
CIMB-Principal is likewise managing Malaysia’s first offshore invested ETFs – the CIMB FTSE Asean 40 Malaysia and the CIMB FTSE Xinhua China 25 – which were listed on Bursa Malaysia on July 9 2010. The two ETFs offer the Malaysian investors easy access to top stocks in Asean and China for instant diversification. They are the first Malaysian ETFs that are based on a cash creation and redemption structure.
The CIMB FTSE Asean 40 Malaysia feeds into the CIMB FTSE Asean 40, which has been listed on the Singapore Exchange since September 2006. The fund aims to provide investment results that track its benchmark, the FTSE/Asean 40 Index, which comprises the top 40 stocks in five Asean countries – Singapore, Malaysia, Thailand, Indonesia and the Philippines.
The CIMB FTSE Xinhua China 25, which represents Malaysia’s first China ETF, aims to provide investment results that closely correspond to its benchmark, the FTSE/Xinhua China 25 Index. The index comprises 25 of the largest and most liquid Chinese stocks listed and trading on the Stock Exchange of Hong Kong with top stocks from the financial, telecom, oil and gas, and industrial sectors currently dominating the index.
 | |
| Campbell Tupling: We see a lot of upside for ETFs |
“The CIMB FTSE Xinhua China 25 ETF is a solid way to get into the China market,” says Campbell Tupling. “The breadth of those companies in China is enormous. While investors are worried about the China slowdown, the Chinese government has impressed everybody with its ability to shift from an export-oriented, low-cost labour market into a domestic consumption-driven economy.”
Volume is key
Volume is key
At present, there are three other ETFs in Malaysia, but none of them could be considered overly successful in the niches that they serve. They boast of reasonable amounts of assets under management, but not the trading volume that would indicate their usage as investment tools. For ETFs, as Campbell Tupling points out, the trading volume is important.
“ETFs are not yet popular among the Malaysian investors as they are still new in this market,” he notes. “When you launch a product that is different, you will tend to get that kind of sluggish reception if insufficient investor education is carried out to attract demand. While the demand for ETFs in other Asian markets is growing, it is nowhere near the US or European level. As such, we see a lot of upside for ETFs.”
Campbell Tupling stresses that much of the success depends on having the right ETFs and that is a question in this market. “Certainly, we see ETFs as something that are going to grow and they are needed to be offered in Malaysia as an alternative way of investing for different types of investors, particularly institutional investors,” he remarks. “ETFs should likewise be attractive to retail investors who are looking for alternative types of investments.”
Source : http://www.theasset.com/article/18619.html - Oct 2010
No comments:
Post a Comment