DWS gives HK investors food for thought
Firm launches the first global agribusiness fund to retail investors.
DWS, the retail investment arm of Deutsche Asset Management, has notched a first for Hong Kong, launching the first global agriculture fund to retail investors. Its DWS Global Agriculture Fund will invest in all areas of the food-to-consumption value chain through listed companies globally and give Hong Kong investors a chance to invest in a previously unavailable fund.
According to the firm, the decision to offer the DWS Global Agriculture Fund to Hong KongÆs retail investors is the result of several inevitable global changes. Firstly, soaring global population will likely result in more expensive food prices, as will rising incomes in both the developed and emerging world. Massive urban sprawl continuing means a limited amount of agriculture land available.
ôWe believe that demand for food is about to dramatically increase and factors such as soaring global population, rising incomes and limited agricultural land, suggest that agriculture business will inevitably see many benefits,ö says Bill Barbour, director and investment specialist at DWS in Singapore. ôThere are clearly investment opportunities stemming from the business of feeding the world.ö
In addition, DWS made the decision to launch this fund to Hong KongÆs retail investor class because of its assumptions that the present rise in food, ranging from corn to chickens to soy beans, will catch peopleÆs attention. It also pointed to similar cost increases in both the US product price indiex and consumer price index to drum home the point that agricultural prices will continue to rise.
ôThere are a confluence of forces that are driving up the price of food and we believe that recent prices rises are secular, or long term, rather than just cyclical,ö says Barbour.
Managed from New York, the fund will not invest in any stock with a market cap below $150 million. Geographically, the lionÆs share of companies in the portfolio will come from the US, which comprises of 24% of the total fund size. Regionally, Hong Kong, Singapore and Australian names will each account for 7% of the total portfolio.
In terms of the sub-sector waiting, agricultural products will account for 22% of the total portfolio, while listed firms specialising in packaged food and meats and fertilizers and agricultural chemicals will both account for 16% of the total weighting. The fund will also invest in more indirect agribusiness companies coming from the equipment manufacturer and biotechnology sub-sectors.
Stock-wise, Hong Kong retail investors will recognise local names like Noble Group, but will also be given exposure to international agriculture players such as Monsanto, John Deere and Australia Agriculture.
Currently, the total fund size is hovering around the $600 million mark. DWS believes that the fund can accommodate up to $2 billion in investments into its DWS Global Agriculture Fund.
ôAside from only looking at companies that have a market capitalisation of over $150 million, we have also taken into account issues such as corporate governance and limited family ownership when selecting the portfolio,ö says Barbour.
Since its launch to investors, mainly from Singapore and Malaysia, in September 2006, the DWS Global Agriculture Fund has seen its total fund size almost double from $321 million and has outperformed the MSCI World index.
Hong Kong distributors are ABN Amro Bank, Dah Sing Bank, Mevas Bank and Bank of East Asia. The minimum investment amount is $2,500 and management fees have been capped at 1.50% per annum.
According to the firm, the decision to offer the DWS Global Agriculture Fund to Hong KongÆs retail investors is the result of several inevitable global changes. Firstly, soaring global population will likely result in more expensive food prices, as will rising incomes in both the developed and emerging world. Massive urban sprawl continuing means a limited amount of agriculture land available.
ôWe believe that demand for food is about to dramatically increase and factors such as soaring global population, rising incomes and limited agricultural land, suggest that agriculture business will inevitably see many benefits,ö says Bill Barbour, director and investment specialist at DWS in Singapore. ôThere are clearly investment opportunities stemming from the business of feeding the world.ö
In addition, DWS made the decision to launch this fund to Hong KongÆs retail investor class because of its assumptions that the present rise in food, ranging from corn to chickens to soy beans, will catch peopleÆs attention. It also pointed to similar cost increases in both the US product price indiex and consumer price index to drum home the point that agricultural prices will continue to rise.
ôThere are a confluence of forces that are driving up the price of food and we believe that recent prices rises are secular, or long term, rather than just cyclical,ö says Barbour.
Managed from New York, the fund will not invest in any stock with a market cap below $150 million. Geographically, the lionÆs share of companies in the portfolio will come from the US, which comprises of 24% of the total fund size. Regionally, Hong Kong, Singapore and Australian names will each account for 7% of the total portfolio.
In terms of the sub-sector waiting, agricultural products will account for 22% of the total portfolio, while listed firms specialising in packaged food and meats and fertilizers and agricultural chemicals will both account for 16% of the total weighting. The fund will also invest in more indirect agribusiness companies coming from the equipment manufacturer and biotechnology sub-sectors.
Stock-wise, Hong Kong retail investors will recognise local names like Noble Group, but will also be given exposure to international agriculture players such as Monsanto, John Deere and Australia Agriculture.
Currently, the total fund size is hovering around the $600 million mark. DWS believes that the fund can accommodate up to $2 billion in investments into its DWS Global Agriculture Fund.
ôAside from only looking at companies that have a market capitalisation of over $150 million, we have also taken into account issues such as corporate governance and limited family ownership when selecting the portfolio,ö says Barbour.
Since its launch to investors, mainly from Singapore and Malaysia, in September 2006, the DWS Global Agriculture Fund has seen its total fund size almost double from $321 million and has outperformed the MSCI World index.
Hong Kong distributors are ABN Amro Bank, Dah Sing Bank, Mevas Bank and Bank of East Asia. The minimum investment amount is $2,500 and management fees have been capped at 1.50% per annum.
¬ Haymarket Media Limited. All rights reserved.