UOB Asset Management opens Taiwan's first S-REIT fund

This aims to help retail investors seek income growth amid low interest rate environment.

UOB Asset Management (Taiwan) (UOBAM) has launched the United S-REIT Income Fund to offer retail investors in Taiwan some investment opportunities in Singapore-listed real estate investment trusts (S-REIT), according to an announcement.

This is the first S-REIT fund in Taiwan and its initial offering period will close on 24 July.

The United S-REIT Income Fund will have more than 60% of its portfolio allocated to S-REITs to maximise the potential for capital appreciation and returns, with the balance to be invested into quality global REITs.

The fund has a risk rating of ‘RR4’5, which indicates moderate to high-risk yield-driven investments in developed markets assets that may be susceptible to significant market movements.

UOBAM (Taiwan) CEO William Wang said he is positive on the long-term outlook for retail S-REITs, as economic activities gradually resume and consumers’ footfall at malls progressively return to pre-pandemic levels.

“S-REITs are attractive investments due to their strong fundamentals, including reputable sponsors, sound balance sheets and low debt levels. While their recent price performance was affected by the impact of the COVID-19 pandemic, their current valuations present buying opportunities and we are also optimistic of their long-term growth prospects,” he added.

As at 31 May, Singapore’s REIT market was amongst the world’s largest with a total market capitalisation of $98b, average dividend yield of 7.2% as well as an average 10-year annualised total return of 8.3%. UOBAM notes that S-REITs also offer relatively stronger returns, especially amidst the current low interest rate environment.
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Through the United S-REIT Income Fund, retail investors will gain access to S-REITs through a single fund. It aims to provide a monthly dividend payout and meet the demand from local retail investors for yield-based fund investments.

The adviser of the United S-REIT Income Fund is UOB Asset Management Ltd (UOBAM), which is headquartered in Singapore.