UOB Offers IPO Fund

October 22, 2004 (PLANSPONSOR.com) - UOB Asset Management (UOBAM) has launched a mutual fund to take positions in global initial public offerings (IPO).

According to  information  on the firm’s Web site, the fund will put 60% of its assets in global post-IPOs, (securities issued within 36 months of initial offering), 30% in global IPO placements and up to 10% in pre-IPOs.

The Web site statement warned that the fund may not be suitable for all investors. “Investing in IPOs typically entails extensive research and is associated with high risk due to, amongst other reasons, the lack of diversification,” the company said. “Together with the large subscription amount required for participation, direct investment in IPOs can be a tricky affair.”

UOBAM said the fund also has the flexibility to hold cash and global interest-bearing securities if there are no suitable investment opportunities. This gives the fund two distinct benefits: lower risk and the ability to take advantage of opportunities as they arise, the company said.

The performance of the fund is benchmarked to an absolute return of 6% p.a. The launch period is October 18 to November 30 and the sales load will be 5%.