Saturday, 23 February 2013

OSK-UOB Asian Growth Opportunities Fund, Discovering A Needle in The Haystack

The talk among the investment community for the year 2013 is the growth potential in the Asia market. Economic recovery in China since the start of 2012 has indirectly spilled over to neighboring Asia countries such as South Korea, Hong Kong, Indonesia and Thailand. Hence the limelight of the best performing unit trust funds for the 1st Quarter of 2013 has been hogged by China and Asia Pacific exc Japan funds. 

Investors who have missed the early 2012 investment opportunity boat for these funds are concerned that the present price of these funds have gone too high up to invest in. While it's true that most of the top performing fund's current NAV price have gone way above the initial offering price, investing opportunities are still available  for investors. One of it I believe is OSK-UOB Asian Growth Opportunities Fund.

In today's post, I will be reviewing this fund in particular and highlighting my personal views on why this fund is worth investing in.

OSK-UOB Asian Growth Opportunities Fund

  • Fund Category : Feeder Fund (The Fund will invest principally in one of the funds managed by UOB Asset Management Limited, Singapore (“UOBAM”) that is the United Asian Growth Opportunities Fund (“UAGOF”)
  • Fund Type : Growth Fund
  • Fund Inception : 8 January 2008
  • Launch Price : RM 0.50 /unit
  • Fund Size as of 31 Dec 2012 : RM84.32 million
  • Financial Year End : 31 December
  • Minimum Initial / Subsequent Investment : RM1,000 / RM100
  • Management Fee : 1.80% p.a of NAV
  • Trustee Fee : 0.08% p.a of NAV subject to minimumRM18,000 p.a
  • Redemption Charge : None
  • Switching Fee : RM25.00

Fund Portfolio Allocation
The following data for OSK-UOB Asian Growth Opportunities Fund portfolio allocation is updated as of 31 Dec 2012. 

Important note: It is vital for investors to find out where, what and how much is the portfolio allocation of a fund before investing.

Fund portfolio by Sector Allocation

What is Consumer Discretionary?
What is Consumer Staples?
My view : 58.38% of the fund's NAV is allocated into consumer products catering to essential and non-essential consumer products. This is a strong indicator for me as economic growth in any country increases the purchasing power of consumers and encourages spending.

Fund portfolio by Country Allocation

My views : Key countries that are expected to show strong growth for 2013 are China (duh!), South Korea, Hong Kong, Indonesia, Thailand, Philippines. With the fund's NAV allocated into all these countries, it is expected that the fund will continue to perform throughout the rest of 2013, barring any unseen foreseen circumstances such as natural disaster. political unrest, etc.

Fund Top 5 Holdings

My views : 

  • Super Group Ltd is listed in the Singapore Stock Exchange. The company manufactures, packages, and distributes instant cereal flakes, instant beverages, instant coffee powder, and other convenience food products. The Company also provides vending machine services.
  • OSIM International Ltd is listed in the Singapore Stock Exchange. The company creates, designs, develops & markets well-being and healthy lifestyle products through its specialty retail outlets worldwide. The Company's products include massage chairs, foot massagers, neck & shoulder massagers, head massagers, fitness equipment, diagnostic equipment, vitamin & supplements and luxury tea.
  • Tianneng Power International Limited is listed in the Frankfurt Stock Exchange. The company manufactures motive battery products. The Company's batteries are used predominantly in electric bikes.
  • Kingboard Chemicals Holdings Limited is listed in the Hong Kong Stock Exchange. The company through its subsidiaries, manufactures laminates, copper foil, glass fabric, glass yarn, bleached kraft paper, printed circuit boards, and chemicals.
  • Chu Kong Petroleum & Natural Gas Steel is listed in the Hong Kong Stock Exchange. The company manufactures steel pipes for the oil and gas industry. The Company sells these products to enterprises in the oil, petrochemical, and natural gas industry for the use of pipeline transmission.

Fund Performance
Cumulative Performance
My views : The fund has posted a cumulative 19.54% returns over the past one year (as of 31 Dec 2012), making it one of the top performing fund in the Asia Pacific excluding Japan category ranked over a period of one year. 

As of 22 February 2013, this fund is ranked 4th in the list according to returns over a period of 1 year as shown below:
This fund as yielded 21.71% from 22 Feb 2012 - 22 February 2013
Although there are higher rank funds, I shall clarify the reason this fund is chosen later. Over a 3 year cumulative return, this fund has posted made a 13.01% loss which is way above the benchmark value of -2.09%. Although not a favorable figure, this is expected from this fund as the nature of investment of this fund is to invest in small capitalization stocks that has potential growth.

Yearly Performance
My views : To to the risky nature of investment, the fund has seen both tremendous growth such as in 2009 where it posted 104.40% returns as well as losses of -23.49% in 2011. The year 2012 has seen the fund grow by 19.54% and YTD for 2013 is already at +9.21%!

Why this Fund?

  1. I believe that this is an opportunity (as well as a risk) for investors to ride on the economic growth of Asian countries. While many prefer to invest in funds that have their portfolio invested in established companies such as Samsung or China Telecom (these are dividend companies), investing into small cap companies is akin to investing in potential growth companies. The returns are high but so is the risk of these companies going bankrupt.
  2. The current NAV price of this fund is at RM0.4902/unit, which is lower then the initial offer price of RM0.50/unit. There is potential here to accumulate units which is currently being sold at below offering price of this fund. 
  3. I believe that investing in this fund is not recommended for long term investors.Due to the volatility as seen in the yearly performance of this fund, the buy low and exit at high strategy is recommended for investors. Take profit when you feel that you have achieved your targetted percentage of returns.
Suitable For Investors Who:
  1. Have additional cash to invest in!
  2. Are willing to take high risk in order to obtain higher returns.
  3. View this fund as part of a diversified portfolio
  4. Has nothing better to do
While it may sound attractive to invest into this fund, investors should be wary of the potential risks involved. As author of this blog, I am reviewing this fund because I feel there is a potential to make some profit. Lastly, the decision to invest or not to invest in this fund depends entirely on yourself. Therefore do decide wisely and if unsure, do read more about the fund from it's annual report and prospectus. 

Download Annual Report HERE
Download Prospectus HERE

Like to buy this Fund? Find out how to get it from eUnittrust at only 2% Sales Charge Fee! 

Cheers and Happy Investing!

If you're reading this, that means that this post has been helpful. In return, please reward me by:
1. Sharing it on your Facebook!
3. Subscribing to me. See the "FOLLOW MY ARTICLES VIA EMAIL" section located at the top left? Just key in your email and click Submit.
4. Visit my blog for other articles at

No comments:

Post a Comment