ING Funds said it expects its latest Malaysian product, ING Annual Alpha Access Capital Protected fund, to provide annual returns of between 7% and 10%.
The strategy’s annual payout is linked to the potential outperformance of two global emerging markets baskets versus the S&P500. The fund will invest up to 10% of its net asset value in the ING Outperformance Alpha Option, a three-year ringgit call linked to global emerging markets ex-Asia and the Asia emerging markets indices versus the US S&P500 index, said CEO Steve Ong at the product's launch.
“The two global emerging markets’ basket of indices offers investors diversification as they are not correlated with one another,” he said.
Global emerging markets ex-Asia includes the Russian Depository Index, Central and European Europe Index, iShares MSCI Brazil Index Fund and iShares MSCI Mexico Index Fund. The Asia emerging markets consist of Hang Seng China Enterprises, Kospi200, MSCI Taiwan Index and ASX200.
Singapore director for exotic equity derivatives trading Camiel Houwen added that the US recession is likely to last up to 18 months, affecting the country’s growth, while the China economy is well geared to weather a global slowdown, as it has demonstrated a lower degree of sensitivity to a downshift in the US demand.
The fund has an approved fund size of 500 million units, with a minimum initial investment amount of MYR5,000 ($1,573). ING Funds said it will launch three more products this year.
