Malaysia’s First Japan Investment Solution: Hwang Select Japan Quantum Fund

KUALA LUMPUR, 4 MARCH 2014 – Hwang Investment Management Berhad (“HwangIM” or the “Company”) today unveiled Malaysia’s maiden Japan investment solution that is tailored to investors who have a medium-to-long term investment horizon. Known as the Hwang Select Japan Quantum Fund (“SJQF” or “the Fund”), its objective is to provide investors with capital appreciation over the medium-to-long term. The Fund is suitable for investors who seek exposure in Japanese equities and have a relatively higher risk tolerance level.

The Fund employs an active value strategy which essentially focuses on investments in undervalued companies that offer growth opportunities. It utilises fundamental research to identify stocks that have been mispriced by the market. Over the long run, the Fund also aims to take opportunities in companies which have undergone changes in business strategy. Therefore, the stock prices of these undervalued companies are expected to rise and converge to their intrinsic valuations.

During the launch of the Fund, Teng Chee Wai, Chief Executive Officer and Executive Director of HwangIM, said, “I am positive of the impact from Shinzo Abe’s policies on the Japanese economy. The present administration is firm on reflating the economy with its three-arrow policy goals; bold monetary policies, fiscal stimulus and structural reforms, all aimed at reviving the economy and achieving sustainable growth.” He also added that the 2020 Olympics Games which is to be held in Tokyo will provide further boost to the Japanese economy, particularly to sectors such as construction, tourism, transportation and retail, over the years leading up to the event.

Recent economic data from the US augurs well for the global economy with positive spillover effects. Many developed and emerging markets, including Japan, will be beneficiaries to an underlying general improvement in the US economy with the onset of tapering of the US Federal Reserve’s quantitative easing (QE) stimulus.

During his speech, Teng highlighted the appointment of Nikko Asset Management Co., Ltd (Nikko AM) as the Fund’s external investment manager – citing their 50-year track record in managing Japanese equities. Head of Japan Equities and Alternative Investment Fund Management at Nikko AM, Takashi Maruyama said, “The Fund’s investment mandate will enable us to tap the growth potential of undervalued companies and take advantage of the growth prospects of Japan’s economy. This can be achieved by leveraging our active value strategy that invests in a portfolio of high-conviction stocks, considered to be mispriced and undervalued.”

Hwang Select Japan Quantum Fund adopts the strategy of active value investing, which identifies and selects fundamentally sound stocks that provide a superior return and margin of safety. The process involves analysing a company’s financial and business information to estimate its intrinsic value and then comparing its current stock price to this value to see whether it is traded at a discount or premium. Essentially, value investing revolves around buying profitable companies that are trading below their intrinsic values.

Maruyama highlighted that the Fund would provide investors with opportunities arising from the growth strategies being implemented under Abenomics, resulting in increased consumer confidence and positive business environment. He stressed investors would be able to gain exposure to the potential upside of Japan’s equity markets as a result of the structural reforms undertaken by the Abe Administration.

Teng added, “With the apparent signs of recovery in the developed market economies led by the US, and QE tapering underway, the immediate focus of financial markets will be on corporate earnings. If the US economic recovery continues to be sustained and with a favourable level of Yen, then there could be further upward revisions of earnings forecasts and a future rise in Japanese equities can be expected.”

In conjunction with the launch of the Fund, HwangIM will be organising a public seminar on 8 March 2014 (Saturday) at 9.00am at the Auditorium, Connexion@Nexus Bangsar South, 8 Jalan Kerinchi, 59200 Kuala Lumpur. This seminar will provide investors and members of the public with valuable insights on the market outlook for Japan and Asian region.

The Fund will invest a minimum of 70% of its Net Asset Value (NAV) in equities and equity-linked instruments and a maximum of 30% of its NAV in liquid assets such as money market instruments and deposits. It has an offer period of not more than 21 days, starting 3 March 2014 until 23 March 2014 at the price of RM0.50 per unit with an initial investment of RM1,000 and additional investment of RM100. The trustee of the Fund is Deutsche Trustees Malaysia Berhad.

– End of Press Release –

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