Ulster Bank Wealth Launches Global Rebalancing Strategy
15th February 2010
Emerging Economies Provide Strong Investment Opportunities
Monday, 15th February, 2010: Ulster Bank Wealth today launched a new structured investment strategy around the theme of ‘Global Economic Rebalancing.' The ‘Global Rebalancing Strategy' offers investors the potential to generate attractive returns by combining a term deposit with an exposure to shares of leading European companies which will benefit from strong economic growth in Asia.
Commenting on the launch of the Global Rebalancing Strategy, Alan Dunne, Investment Director, Ulster Bank Wealth said, "2009 provided the clearest evidence yet of economic "decoupling”, the phenomenon whereby emerging economies achieved growth in the face of economic contraction in the developed world. Consumers in the West are now saving more while the middle classes are growing in Asia and driving consumer demand. We see this trend towards rebalancing of global economic growth from the West to the East persisting over the next number of years."
Recent economic data releases appear to be consistent with the idea of Global Economic Rebalancing with the latest GDP data from China for Q4 2009 coming at 10.7% year on year. While the major Western economies of the US, Eurozone, Japan and the UK are emerging from recession their economic growth in 2010 is still expected to be substantially lower than the major emerging economies.
"A key part of our investment process is drawing on the diverse economic expertise within the RBS Group. RBS Equity Research has developed an index of large European companies that derive a high proportion of their total revenues from Asia to reflect the theme of growing consumer and business spending in the region. We have selected 16 of the top 20 shares in this index to formulate the strategy," said Alan Dunne.
The equities for the strategy are based on the following criteria:
- All stocks are drawn from the 20 largest companies in the ABN Amro Asian basket
- All are European companies with a market capitalisation in excess of €8 billion
- On average, stocks in the basket have sales exposure to Asia ex-Japan of 30%
- The companies are expected to benefit from strong growth in Asia and rising levels of consumption
- 16 of the top 20 equities have been selected to provide the optimal participation level and return potential for the strategy.
The structural trend towards global rebalancing of growth and higher levels of consumer demand depicts a compelling case for investing in equities with a high sales revenue exposure to the Asian consumer. The Global Rebalancing Strategy offers investors an attractive way to benefit from this evolving economic theme.
The minimum investment stands at €200,000 with 100% capital protection at maturity.
Ulster Bank Wealth. An unlimited company having a share capital. Registered in Republic of Ireland. Registered No 149869. Registered Office: Ulster Bank Group Centre, George’s Quay, Dublin 2. Member of The Royal Bank of Scotland Group. Ulster Bank Wealth is regulated by the Financial Regulator. Calls may be recorded.