Phillip Capital Management has announced the launch of its new equity fund, the Phillip Global Rising Yield Innovators Fund.

The fund, which will be launched on August 28, “seeks to identify enabling or disruptive innovative enterprises, working to bring new and unique solutions to solve today’s and tomorrow’s high-value problems”.

According to Phillip Capital Management, companies relevant to this innovation theme are those that rely on or benefit from the development of new products or services, technological improvements and advancements.

Phillip Capital also said that the Covid-19 pandemic has exposed a drawback of the traditional “pure dividend strategy”, where investors invest into traditional businesses for high dividend yields.

This phenomenon is further reflected by the contrasting performance between tech indices and other market indices. 

It cited that the lack of technology stocks in the local stock market has resulted in the poor performance of the Straits Times Index (STI) during this downturn. 

On a year-to-date basis, the STI is down 19.6% as of 25 June 2020, while the US major tech index Nasdaq Composite is up by about 11% and still trading at record territory.

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