Manulife to Launch New Singapore All Cap Strategy After EQDP Appointment

Manulife Investment Management is preparing to introduce a new fund strategy that places a strong focus on Singapore small and mid cap companies.

The announcement comes soon after the firm was selected as one of the six newest asset managers under the Equity Market Development Programme (EQDP).

In a statement, the firm said that about 40 percent of its portfolio will be invested in Singapore small and mid cap firms. At the same time, it intends to keep significant exposure to large cap companies to support liquidity and scalability within the portfolio.

Manulife will launch a Singapore All Cap Equity strategy that will be guided by research and will not be tied to any specific benchmark. The firm added that individual stock selection will serve as the main approach to building long term value for investors.

Manulife was appointed by the Monetary Authority of Singapore on Nov 19 as part of the second group of asset managers chosen for the EQDP. The other managers in this round are Amova Asset Management, AR Capital, BlackRock, Eastspring Investments Singapore and Lion Global Investors. According to earlier reports by The Business Times, the six managers in this batch will receive a combined allocation of about USD 2.85 billion.

While Manulife plans to introduce a new strategy, Lion Global Investors will channel its EQDP allocation into its existing LionGlobal Singapore Trust Fund and does not plan to roll out any new products. The trust fund will follow a similar approach to its current strategy, which involves investing between 60 percent and 70 percent in large cap stocks and between 30 percent and 40 percent in mid cap names.

The EQDP is a USD 5 billion initiative designed to increase investor participation and improve liquidity in the Singapore equities market. The first batch of managers under the programme was announced on Jul 21. They are Fullerton Fund Management, JP Morgan Asset Management and Avanda Investment Management. A total of USD 1.1 billion was allocated to these three firms.

Fullerton's Singapore Value Up Fund focuses entirely on securities listed in Singapore. Its investment universe includes large, mid and small cap companies, as well as initial public offerings and secondary listings. The fund is available to retail, accredited and institutional investors in Singapore and selected markets abroad.

Avanda's Singapore equity strategy is built on three themes. They are Value Up, Local Champions and Turnaround. The portfolio will include between 25 and 35 main holdings, with half of them expected to be mid cap companies with market values between USD 500 million and USD 5 billion. The rest will mostly be large cap stocks with a smaller portion allocated to small cap firms. The fund aims to deliver an absolute return of up to 15 percent over the next three to five years and is available only to accredited and institutional investors.

JP Morgan Asset Management is also planning a strategy under the EQDP. Its fund will focus on Singapore small and mid cap stocks and on high yielding markets in the Asia Pacific region. The firm has not yet officially launched the fund.