Bangkok--29 Apr--CPAM
Riding on the strength of the current global economic recovery, CIMB Principal Asset Management (CPAM) is launching a 4,000 million baht Foreign Investment Fund (FIF) that will invest in high-growth small-cap stocks in the United States, Europe and Asia. The new fund, CPAM Global Small-Cap Equity Fund (CPAM GSCEQ), is expected to generate a respectable estimated return 18% annually.
CPAM Chief Executive Officer Jumpon Saimala stated that the new fund, which is being offered for public subscription during April 28 to May 9, will invest in the Principal Global Investors Funds – Global Small Cap Equity Fund, the “master fund” domiciled in Ireland.
The “master fund”, in which proceeds from the new “feeder” fund from Thailand will be invested, has enjoyed an impressive track record since its launch in October 2012, generating 36.27% returns last year which compares favorably with the 28.66% returns of the MSCI All Country Small Cap Index (as of end-February this year). “The success of the Principal Global Investors group has been drawn from the extensive experience and expertise of our analysts and fund managers in picking the right stocks in the right markets,” Mr. Jumpon stated.
He added that the new Thai fund “CPAM GSCEQ”, which is expected to generate an estimated return 18% annually, offers an excellent opportunity for Thai investors who seek good returns from investments in small-cap stocks that carry strong growth potentials in all the major markets in various parts of the world – especially in the US, Europe and Northeast Asia.
According to Mr. Jumpon, Thai investors subscribing to the new fund will benefit from the active management and effective stock-picking strategy of the Principal Global Investors group which focuses on newly-listed small-cap stocks that are undervalued are still reasonably priced and have substantial upside price-gain potentials.
The benefits from focused investments in small-cap stocks are clearly seen from the fact that over the last five years, small-cap stocks in the US markets generated 55.11% higher returns than large-cap stocks or averaging over 10% annually while the gains by small-cap stocks over big-cap stocks in the European markets over the same period were even higher at 79.13%, or averaging 16% annually. For the current year, earnings for small-cap stocks in the MSCI World Small Cap Index are projected to grow by 14.7%, or higher than the 11.1% earnings growth projected for large-cap stocks in the MSCI World Index.
Mr. Jumpon said Thai investors should diversify their investments overseas this year in light of the global economic recovery that is gathering stronger momentum. According to the International Momentary Fund (IMF), the global economy is projected to grow at 3.7% this year, led by the recovery in the developed countries such as the US, Japan and European Union. The US economy in particular is projected to grow at 2.8% while the EU has emerged from a long recession and is now geared for sustained growth amid a continuation of economic-stimulus policies adopted by the European Central Bank (ECB).
He added that the investment strategies of the “master fund” in which the Thai fund will be invested will follow the theme of the global economic recovery by focusing on the developed markets particularly in the US, Europe and Northeast Asia. The investment portfolios will be diversified among about 140 stocks to minimize risks and maximize returns.
The 4,000 million baht CPAM GSCEQ, which will be fully hedged, is being offered to the Thai public during April 28 to May 9 for minimum subscription lots of 5,000 baht each (at 10 baht par per unit).