The UOB Global UN Women Singapore fund is an open-ended unit trust whose objective is long term capital appreciation. The fund invests in global securities that show a commitment to the empowerment of women. A portion of the management fee of the fund is donated by UOBAM to UN Women Singapore. In Fiscal Year 2007, this amounted to $ 22,796.24.
As at 31/12/07, the fund had SGD$2.75 million under management. Redemptions and management fees have brought the total to its current level, a drop from $4.7 million as of 31/12/06. Redemptions and overall volatility in the equity markets resulted in the decrease in assets. For the first time since its inception, the fund underperformed its benchmark, the MSCI World Index in 2007- 2008, returning 1.71% on a bid-bid basis. UOBAM continues its investment strategy, with the fund primarily invested in equities, however increasing its hold in cash (currently 5.8% of holdings). The fund's country allocation is primarily in US (28%), Switzerland (9%), the UK (8%), and France (8%). Japan and Spain constitute 7% each of investments. Other markets constitute 25% of the investments, up from 17% in 2006. The fund currently reduced its holdings in the financial service sector from 25% in 2006 to 15% in 2007.
Consumer products likewise increased from 15% of total holdings to 22% of total holdings. Other major industries include Industrials, IT, Telcoms, and Energy. Its top stock holdings are Koninklikje, Nokia, Total, Reckett Benckiser, ABB, HK Exchanges, McDonalds, Rio Tinto, IBM and Nestle.
In assessing whether the securities in the fund show a commitment to the empowerment of women, the National Committee for UN Women Singapore’s oversight committee provides UOB asset management with specific criteria for stock selection. The UN Women Singapore Chapter's oversight committee implemented it revised selection criteria process in mid-year 2004.
The process includes two steps:
1. Companies which derive more than 50% of their revenues from the five sectors deemed unacceptable by UN Women New York's policy for engagement with the private sector are eliminated. These sectors are armaments, pornography, tobacco, alcohol, and gambling.
2. The Singapore Chapter entered into a contract with EIRIS Ltd, a social responsibility screening firm based in the UK, to obtain a subset of the ‘most women friendly’ companies within the investment universe. This is achieved by giving the companies negative scores if they are engaged in women-unfriendly practices like discrimination and sexual harassment and positive scores if they are engaged in women-friendly practices, for example, being engaged in equal opportunity or having women on their boards. The companies with scores in the top 50% in each country are then chosen for inclusion into the UOBAM UN Women fund's investable universe. It is believed that this ‘best of class’ approach is in line with industry practice, while providing a wide range of investment options for the fund.
UOB Asset Management has informed unit holders that the United Global Singapore UN Women Fund will be terminated on 30 September 2008. The Fund was launched in 1999 and was a pioneer in the region in socially responsible investing by focusing on companies which show a commitment to the empowerment of women in any part of the world. As well as highlighting women-friendly companies to investors, it also served to raise awareness of UN Women and contributed to its programmes, through a donation of one-third of management fees to UN Women Singapore.
We would like to acknowledge UOB Asset Management for pioneering this women-friendly fund and for the support it has given to UN Women Singapore all these years."
Click here to read UOB Letter to Unit Holders.
Frequently Asked Questions
1) Why is the fund being terminated?
A: The net asset value of the fund is small and at this size, it is not viable to continue given the cost of operating the fund.
2) Does the termination of the fund/decline in the fund's size indicate that socially responsible funds do not generate the necessary returns to be sustainable and attract investors?
A: In terms of returns, the performance of the fund since inception has been in line with the performance of the MSCI AC World Index in Singapore dollar terms. This is the most relevant benchmark since the fund invests globally and is diversified across sectors. It should be noted that a high proportion of the fund's investments are concentrated in North America and Europe, as many of the listed companies that fit the "women-friendly" criteria are MNCs coming out of OECD. These markets have underperformed Asia and other Emerging Markets in recent years.
3) Why did the fund's net asset value decline to this extent?
A: A number of factors contributed to this - over the last 6-9 months since the subprime crisis erupted, equity markets have been extremely volatile and some investors have preferred to hold cash and stay on the sidelines. Also over the course of the years, there has been a rapid growth in the number of unit trusts or funds, including socially responsible investment funds or so-called ethical funds. Investors thus have plenty of options to choose from in the general market place, besides the United Global UN Women Singapore fund.
4) What kind of companies did the fund invest in?
A: Examples of some of the top holdings (as at 30 Apr 08) include IBM, MacDonalds, Nestle and AT&T.
5) How will UN Women SIngapore be affected with the loss on one source of income in the form of its share of management fees?
A: We have multiple sources of funding: membership subscription, fundraising events and donations from corporates and individuals.
6) What should I do with my investment? and who can I contact about my investment?
A: Please refer to the termination letter by UOB here to find out what you can do with your investment. Should you need further clarification with respect to the Fund, you can call the 24-hour hotline number at 1800-222-8882 or email email@example.com.
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