Two funds aim to stand out with talents and finance

IN THE highly competitive funds management industry, financial institutions go all out to come up with funds with a difference that are likely to catch the eye of investors.

Two funds that fit that bill were being touted recently - one has been around for a couple of years while the other is fresh on the market.

One, the AXA Talents Fund, focuses on companies managed by exceptionally talented leaders who have caught the attention of the fund manager. The other, the DBS Asian Financials Fund, is a two-year, fixed-tenure fund that gives investors exposure to the financial sector.

Fund manager for the AXA Talents Fund, Mr Charles Firmin-Didot, visited Singapore last week and told The Straits Times how he sniffed out outstandingly talented business leaders - typically founders of firms.

'We look only at people with 10 years of track record and analyse what they have done in their lives - their execution capacity and how they handled difficult crises... It's about leadership characteristics rather than technical skills,' he said.

To cut risks, he steers clear of single product technology and biotechnology firms.

Mr Firmin-Didot admitted that he has invested a handsome eight-digit sum in the AXA Talents' mother fund which was launched in August 2001.

In fact, part of his pay is tied to the performance of the fund and he takes a yearly bonus only if the fund is in positive territory and is above the MSCI World Index.

Currently, it covers more than 100 firms worldwide including home-grown Raffles Education - founded by Mr Chew Hua Seng - and Japan's Softbank Corp.

The Singapore-registered AXA Talents Fund was launched in April 2005 and had $12.3 million assets under management as at Jan 31.

Last year, it posted returns of 11.7 per cent. The fund aims to deliver returns that are 10 per cent above the MSCI World Index.

Over at DBS Asset Management (DBSAM), the recently launched DBS Asian Financials Fund invests in a pool of 10 to 20 stocks with a two-year lifespan starting from March 19.

DBSAM's director of marketing & client services, Mr Tan Chin Kong, said the fund is 'targeting savvy investors who believe in the finance story' and desire exposure to a focused theme.

The fund will be fully invested in about 15 stocks such as South Korea-based Kookmin Bank, and some cash holdings. Bonds are excluded. About 68 per cent are invested in banks and finance firms and the balance in insurance firms, property and cash.

It is available for subscription only for a limited period ending next Friday. Although it has a buy-and-hold strategy with a two-year horizon, the fund will be actively monitored.

The fund manager can rebalance the existing stocks in the portfolio and switch to other stocks during the timeframe.

The objective is to get the highest return during the period. To do so, the mandate is that 30 per cent of the portfolio can be replaced.

Other financial funds, such as Fidelity Financial Services Fund, have an unlimited lifespan and are more actively managed.

A bullish Mr Tan expects loans growth at banks to continue to post percentage growth in the mid-teens over the next two years.

Last year, banks in the Asia-Pacific - excluding Japan - achieved loans growth of 15 per cent.

Before the fund matures, investors can sell their units, although specified charges apply.

The fund's sales charge is 2.5 per cent and annual management fee is 0.8 per cent. The latter is lower than conventional unit trusts which typically have an annual management fee of 1.5 per cent to 2 per cent.



Growth-oriented

The AXA Talents Fund focuses on companies managed by exceptionally talented leaders. The fund had $12.3 million assets under management as at Jan 31. Last year, it posted returns of 11.7 per cent.

The DBS Asian Financials Fund is a two-year, fixed-tenure fund that gives investors exposure to the financial sector.

It invests in a pool of 10 to 20 stocks with a two-year lifespan starting from March 19.