Australian Unity Investments (AUI) has launched the Seres Asian Equity Opportunities Fund for Australian investors. The fund, which was seeded by AUI when established six months ago, will invest in equity markets throughout the Asian region, including Japan.
The minimum investment in the fund is $25,000 and it accepts minimum additional investments of $5,000.
The investment manager of the fund is Hong Kong-based Seres Asset Management, a joint venture partner of AUI.
The fund’s investment process covers three stages:
· Determining the investment universe through active and ongoing research
· Fundamental analysis and qualitative research
· Portfolio construction
The portfolio uses a long/short investment strategy and is managed to produce an absolute return outcome rather than follow a benchmark.
The fund aims to exploit market inefficiencies arising from inadequate research coverage. Unlike other Asian funds, it will assess mid- and small-cap company opportunities if they meet the criteria established by the investment process.
Mr David Bryant, chief executive officer of AUI, said the fund has a number of investment criteria, including seeking exchange-listed companies that Seres’ portfolio managers assess as having strong revenue and earnings growth.
“The bias towards growth could recognise any number of characteristics and a common factor Seres’ fund managers look for is the potential for growth through innovation.
“There are many reasons why commentators and analysts have identified Asia, and in particular China, as having a positive investment outlook, but we believe that only half the story is being discussed generally.
“For example, it is widely agreed that China’s future is very strong, but we believe this is not just about its healthy manufacturing or ongoing construction activities.
“We believe the real future of China will be in innovation – statistics suggest that the 25 percent of the population in China with the highest IQs is greater in number than the entire population of North America*. Access to this level of intelligence must almost certainly result in China becoming a major global driving force in innovation in technology, biochemistry and all kinds of other areas in coming years.
“Certainly this will be underpinned by product demand as a large, wealthy and consumer product driven middle class continues to emerge in China, but in the future the manufacturing stimulus of this will benefit other countries in the region.
“As pay, working conditions and training improve for China’s own workers, Chinese companies will seek to lower costs by outsourcing production to other developing Asian countries that can provide a cheaper, unskilled work force.
“In turn, this will drive the economies in other Asian countries, creating broader-based investment opportunities in growth and innovative companies,” Mr Bryant said.
Mr Evan Erlanson, chief investment officer of Seres, added that this continues the natural evolution of the Asian region. Many countries, including Japan, Taiwan, Korea and now China itself, started their economic development as a cheap source of manufacturing before becoming innovators, in turn outsourcing manufacturing to other countries.
“It is this cycle which fuels growth across the region.
“Within the discipline of our investment approach we seek investment opportunities created by innovation in the region as a whole.
“In doing so we are biased towards growth companies,” he said.
Australian Unity Investments is the funds management arm of financial services, health and retirement living services provider Australian Unity. It has over $12.2 billion in funds under management (as at 31 October 2010). Its investment approach is to use its established in-house expertise in property and mortgages while also forming joint ventures and strategic alliances with other organisations with specialist expertise.
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For more information please contact:
Mr David Bryant
Phone: 0412 008 184
Email: dbryant@australianunity.com.au
Mr Evan Erlanson
Phone: + 852 9323 6102
Email: evan.erlanson@seresam.com
* Jim Pinto, “Understanding the global numbers”, http://www.isa.org/
Important information: This information has been prepared by the product issuer Australian Unity Funds Management Limited ABN 60 071 497 115 AFSL 234454. It contains general information only and does not take into account personal objectives, circumstances, financial situation or needs. While every care has been taken in the preparation of this information, we reserve the right to make corrections. Potential investors should seek financial advice from a financial services licensee or an authorised representative and you should read the Product Disclosure Statement (PDS) before making any investment decisions. You can obtain a copy of the PDS by visiting australianunityinvestments.com.au or by calling 13 29 39.
