KBank Private Banking (KPB) has reinforced its strategy of leading the Thai investment sector towards sustainability in terms of processes and goals.
In line with the prevailing trend, as seen from the launch of new funds focusing on sustainable investing, KPB has continually introduced sustainability-themed funds to take advantage of the current fund inflows. As of today, KPB has unveiled K-SUSTAIN-UI (K Sustainable Long-Short Fund Not for Retail Investors) which focuses on generating profits from stocks that are positively or negatively affected by the transition towards sustainable business operations. The Fund’s initial public offering (IPO) will take place from May 24 to 28, 2021.
- Captioning service gives deaf people access to information
- DEPA acts as tech go-between in fight against Covid-19
Siriporn Suwannagarn, Managing Director, Financial Advisory Head, Private Banking Group, KASIKORNBANK (KBank) said that KPB believes that the sustainability investing trend will offer stable long-term returns. K-SUSTAIN-UI is launched in line with the principles of a Bank of Sustainability established by KBank, and thus focused on balance in three dimensions, i.e., economy, society and environment.
Sustainability-themed investment has been arranged to ensure that investors will receive sustainable returns on investment while also supporting businesses that have brought positive changes to the world.
Over the past several years, KBank has recommended investment in sustainability-themed funds, including K-HIT, K-CHANGE and K-CLIMATE. Sustainability Investing not only involve climate change issues but also equitable access to health services, financial services and educational opportunity in order to elevate the society and well-being of people.
Recently, KPB collaborated with KASIKORN ASSET MANAGEMENT (KAsset) in introducing the new K-SUSTAIN-UI, which uses the long-short strategy to focus on generating profit from shares that either benefit or do not profit from the transition of business operating guidelines towards sustainability.
K-SUSTAIN-UI will invest in JPMorgan Funds – Multi-Manager Sustainable Long-Short Fund, Class JPM S2 (perf) (acc) – USD (Master Fund) at not less than 80 percent of NAV on average in any accounting period.
This master fund has a policy of investing sustainability megatrends in five business categories: 1) energy transition; 2) health and wellness; 3) empowerment; 4) resource efficiency; and 5) technology for sustainability. The businesses that can make adjustments in response to market demand will benefit from higher profit and growth, and will emerge as the winners.
Meanwhile, companies that fail to make such adjustments will be at risk of deterioration in performance and profit.Therefore, they could eventually become losers.
JP Morgan Asset Management, which manages the master fund, has more than 25 years of experience in simultaneously buying shares(long positions) that have growth potential and selling shares (short positions) that may decline in terms of value, or the so-called long-short strategy, in order to make K-SUSTAIN-UI stand out from other sustainability funds in the Thai market.
This strategy is not about buying regular shares, but taking long positions with shares that are expected to perform well from their future adjustment towards sustainability, although their present value may have yet to reflect growth.
This strategy will also focus on short positions, or selling shares that are presently overpriced or that have the potential to lose as they fail to adjust – or may simply not have the ability to adjust – towards sustainability in order to reduce risks during market downturns.
In short, this strategy can create both opportunities and returns from shares whether they become winners or losers. Additionally it can mitigate volatility in investment portfolios, as well.
JP Morgan Asset Management is experienced in finding fund managers with special expertise in each industry to become sub-advisors in all seven funds: 1. Emerging markets, 2. Chinese market, 3. European market, 4. Healthcare, 5. Public utility, 6. Consumer technology, media and telecommunications, and 7. Equity participation. These sub-advisors would help facilitate investment management under the five aforementioned sustainability megatrends with the use of long-short strategy in order to generate positive returns under any circumstances, navigating periods of stock market volatility with ease while also being able to take profits from short positions.
Siriporn added that since its inception in February 2020, the master fund, JPMorgan Funds – Multi-Manager Sustainable Long-Short Fund, Class JPM S2 (perf) (acc) – USD, offered returns of 15.53 percent [data as of May 20, 2021].
In 2020, while the COVID-19 outbreak contributed to a 21 percent decrease in the MSCI World index, the master fund fell by a mere 9.44 percent due to long-short strategy and sub-advisors’ ability. KBank Private Banking recommends a long-term and mixed investment portfolio as it will help mitigate the portfolio volatility while also providing opportunities for higher returns and driving global sustainability.
K-SUSTAIN-UI is reserved for institutional and ultra-high net worth individual investors only. IPO period is May 24-28, 2021. For more information, please contact your private banker, or call the KBank Private Banking Contact Center at 02-888-8811.
