CIMB-Principal Asset Management Bhd has unveiled two life cycle funds based on conventional and Syariah-compliant principles.
The two funds are the CIMB-Principal Lifecycle Funds and CIMB Islamic Kausar Lifecycle Funds, comprising six sub-funds each, designed to cushion the impact of rising costs of living in view of meeting investors retirement objectives.
Both the funds are divided into three target maturity dates namely, 10, 15 and 20-year time frames, ending in 2017, 2022 and 2027.
CIMB-Principal chief executive Noripah Kamso said the different periods and maturity dates would enable investors to select the fund that most closely match their investment time frame.
“With these funds, investors will not need to rebalance their portfolio asset allocation along the years as the funds proactively evolve in tandem with the investors changing appetite.
“As the funds mature, it will automatically focus on lower risk investments,” she said at the launch of the two funds here yesterday.
She said the two funds were diversified soundly across both domestic and international equity, fixed-income and property asset classes.
Noripah added that these baskets would be reviewed periodically and rebalanced accordingly.
She added that initially, the fund would be more heavily weighted in equities and would gradually shift towards fixed income and priority to accommodate investors evolving risk appetite as the fund progressed towards maturity.
The conventional and Islamic lifecycle funds series will be launched on July 12 with an initial net asset value of 50 sen per unit, and the approved collective fund size is RM600 million for each series at a combined total of RM1.2 billion.
The long-term annualised targeted potential return rate of the two funds was at 9%, Noripah added.
She said CIMB-Principal expected to sell about 100 million units in the initial offering period and there is no maximum limit of purchase.
CIMB Principal’s head of retail equities, Arnold B L Lim, said the open-ended funds aimed at providing investors with capital growth through well-diversified and evolving asset allocation.
The evolving asset allocation would see funds placed in liquid assets, domestic and foreign bonds and Sukuk, as well as equities in domestic, emerging and developed markets and in addition to local and foreign REITs, he said.
Meanwhile, Lim said the stock market’s upward momentum was likely to be sustained given its attractiveness given its continued liberalisation.
He said: “If you look at what the government is doing, they starterd with the GLC (government-linked companies) restructuring and they removed the subsidies on petrol for example. Now they are talking of automatic pricing mechanisms for cement and steel.
“This sort of moves are basically positive for the market, he said, adding that these showed that the market was earnings orientated.