Published by Asia Asset Management – 23rd Jan 2019
US fund management company Principal Global Investors (PGI) sees growing demand this year for its “millennials strategy” from Asian institutional investors seeking exposure to stocks that are expected to benefit from the spending and lifestyle habits of the generation born between the 1980s and mid-2000s.
PGI, a unit of Principal Financial Group (PFG), currently offers the strategy via an exchange-traded fund (ETF) – the Nasdaq-listed Principal Millennials Index ETF – and the CIMB-Principal Millennials Equity Fund. The latter was developed by CIMB-Principal Asset Management, a 60:40 joint venture between PFG and Malaysian lender CIMB Group.
“We recently learned that one of our clients in Southeast Asia will be investing in the millennials strategy via our US-domiciled exchange-traded fund,” Steve Jones, senior director and portfolio specialist at PGI, tells Asia Asset Management in an email interview.
The ETF has posted an average annual gain of 11% since its launch in August 2016 and the equity fund has gained 6.24% since its May 2018 launch.
According to Mr. Jones, the millennials strategy “will resonate with clients across generations and wealth profiles”, partly due to growing demand for thematic-oriented strategies in Asia.
“It is my personal experience that the millennials theme has proven to be of interest to not only millennials, but also with the relatively more wealthy generation X and baby boomer generations,” he adds.
But he says the company has no immediate plans to launch another millennials-based strategy in Asia beyond the equity fund.
“That said, we have a number of compelling solutions for potential distribution in Asia where we continue to explore the opportunity with our partners in the region,” he says, without providing details.
According to Mr. Jones, Asia will be a “focus for us in 2019” and his team will be travelling often to the region “to profile our capabilities with clients and our business partners”.
PFG had US$667.8 billion of assets under management as at end-September 2018.
