UOB Asset Management has launched its first Asia Pacific-focused daily liquidity alternative investment fund in Singapore.
The United Asia Pacific Diversified Strategies fund (United Asia Pacific DSF) is UOB’s first fund to offer investors access to alternative investments.
The company's spokesperson told Citywire Asia that the new fund is available to all class of investors, including retail, accredited as well as institutional investors in Singapore.
In addition, the company has been in discussion to include alternative investments as part of regional clients' portfolios, the spokesperson said.
Without giving out much details, the spokesperson added that the company has plans to launch more new funds this year.
Alternative investment – including funds that invest in private equity (PE) and hedge funds – is an emerging asset class in Singapore that is typically held by institutional or accredited investors.
The fund invests in long-short equity strategy funds, which buy stocks that are expected to increase in value and short-sell those expected to drop before buying them back at a lower price to make a profit.
The daily liquidity feature also provides investors the flexibility to purchase the fund daily and sell it back to the fund at any time.
The majority of the United Asia Pacific DSF’s underlying funds are alternative funds regulated under the Undertakings for Collective Investments in Transferable Securities (Ucits) 6 framework.
As Ucits funds are deemed to be better regulated than conventional alternative funds, they tend to be more transparent to investors.
The new fund will give investors access to an asset class that provides capital appreciation through periods of market volatility, as well as better long-term risk-adjusted returns compared with Asian equities and Asian bonds.
‘Alternative investment funds offer investors better long-term risk-adjusted returns when compared with traditional asset classes such as equities and bonds, due to their ability to capture opportunities in different market conditions,’ said Low Han Seng, chief executive officer of UOB Alternative Investment Management (UOBAIM).
Early this year, Temasek Holdings’ wholly-owned subsidiary Azalea Group listed PE bonds on the Singapore Exchange (SGX), opening up the asset class to retail investors in Singapore.
PE has traditionally been the preserve of institutional and high-net-worth individuals because they are illiquid investments that can lock up large amounts of capital for as long as 10 years.
However, Singapore’s retail investors are now getting a chance to access bonds that were distributed to institutional and accredited investors earlier this year.
The fund is sub-managed by UOB’s subsidiary, UOBAIM and is measured against an absolute return benchmark of 6% per annum.
The minimum investment sum to invest in the new fund is S$1,000 (US$736.97) or $1,000.