The new mandates — Singapore All Share Strategy and Singapore Small Mid Cap Strategy — are intended to deepen Amova’s coverage of the local market and channel fresh capital into smaller companies, in line with EQDP’s objective of revitalising Singapore’s equity ecosystem.
At a press briefing on Nov 25, Eleanor Seet, president and head of Asia ex-Japan at Amova Asset Management, says that the decision to launch two funds under EQDP is a signal of long-term commitment rather than a short-term response to new incentives. Amova, previously known as Nikko Asset Management, has managed Singapore equities continuously for more than two decades, through challenging periods which had forced peers to exit or reduce their presence.
“We have done that, and we have grown and thrived,” she says. “So clearly, our perspective is that we’re long-term committed, and what better demonstration of that than to help complete the suite [of Singapore strategies].”
Lai Yeu Huan, head of Asian equity at Amova, says the firm has been “consistent champions of Singapore as a potential and its potential as an investment destination that rewards conviction and forward thinking”.
See also: AR Capital to launch its EQDP-appointed fund in 'early 2026'
“When Singapore turned 50 years old, we introduced the concept of the ‘New Singapore’ and that’s our way of describing the industries that we believe will shape our nation’s future,” he says. “These businesses are in technology, data, food, innovation, logistics, renewable energy and new financial services, and many of our most successful investments since then have come from these sectors.”
Completing the Singapore equity suite
Ten years on after ‘New Singapore’, the first new product, Singapore All Share Strategy, will be an all-cap fund offering diversified, broad-based exposure to Singapore equities, with a pureplay focus on Singapore-listed names. It is aimed at investors seeking a core allocation that captures both large caps and the “under-researched” mid- and small-caps that Amova believes will drive the next leg of market growth.
The second product, Singapore Small Mid Cap Strategy, will be a “pureplay mid- and small-cap fund” targeting alpha from emerging opportunities in smaller companies. The way senior portfolio manager Kenneth Tang sees it, it will focus on businesses that could become “the future big caps or blue chips of Singapore”, particularly in the New Singapore sectors of technology, data, logistics, renewable energy, and new services.
The two EQDP funds are designed to complement Amova’s existing Singapore equity line-up in three ways: expanding market-cap coverage into small- and mid-caps, providing pureplay Singapore exposure and offering additional “satellite” strategies to sit alongside core Singapore allocations.
Amova currently runs three Singapore-focused strategies for retail investors: Amova Singapore Equity Fund (formerly Shenton Thrift Fund), Amova Singapore Dividend Equity Fund and Amova Singapore STI ETF, a passive product benchmarked against the FTSE Straits Times Index (STI). The Amova Singapore Equity Fund is one of Singapore’s oldest unit trusts, launched in 1987 and CPF-approved, while the Amova Singapore Dividend Equity Fund, launched in 2012, has grown into what Amova describes as the largest Singapore equity fund in the market, with an AUM of about $1.8 billion as at end-September.
The legacy strategies have a large-cap bias and some flexibility to invest outside Singapore. In contrast, the two EQDP mandates will be “SGX pureplay” vehicles, giving investors more targeted exposure to the domestic market, particularly at the smaller end of the capitalisation spectrum.
Tang notes that on an all-cap basis, only about 10% to 20% of the Singapore universe by weight sits in mid- and small-caps. For the Singapore All Share Strategy, Amova expects to allocate around 40% to 50% of the portfolio to the small- mid-cap space on a neutral basis, a significantly higher tilt than the broader market.
Both new funds are likely to hold around 30 to 50 stocks, similar to the firm’s existing concentrated portfolios. The firm’s definition of small- mid-cap stocks follows FTSI’s definition, where the largest mid-cap stock has a market cap of $8 billion.
Lai acknowledges that the small- and mid-cap segment is less liquid today. Still, he says the firm is prepared to be patient, expecting liquidity and trading activity to improve as EQDP capital is deployed and more investors re-engage with the space.
For more stories about where money flows, click here for Capital Section
Value hunt
The two strategies will be managed using the same investment philosophy applied across Amova’s Asian equity platform. Lai says the team “tend to look at things from a very long-term perspective”, typically deploying money with a three-year investment horizon.
Tang describes the process as a search for “undervalued companies capable of generating high, sustainable returns and undergoing significant positive fundamental change”. He says: “We have an investment philosophy that focuses a lot on high and sustainable returns companies,” adding that the team systematically looks at “positive fundamental change”, which is basically looking for underappreciated stocks that “for whatever reason” were unable to unlock value.
Instead of identifying as either growth or value, Amova positions the two funds as style agnostic. Lai says: “We are not a growth house, we are not a value house. We focus on fundamental change … I think that’s a more encompassing way of describing the potential.” Undervalued companies, he argues, can come with both low price-to-earnings ratios and attractive, growing dividend yields if management is willing and able to return capital to shareholders.
To avoid value traps, the team uses internal scorecards to track whether change is progressing as expected. Tang explains that scores reflect the investment team’s conviction and can flag when a company’s improvement is fully priced or at risk of stalling, prompting a reassessment of position size or an exit.
Lai cites Sembcorp Industries as an early investment from one of the existing funds. Amova first invested in the stock when its market capitalisation was about $3 billion and dominated by carbon-intensive thermal assets that the market viewed as “stranded”.
“In conversation with management, we discovered that they were highly motivated to do this, that they see that this is an imperative for their industry, for the country, and for the company and for shareholders,” he says. Amova backed the company’s plan to pivot towards renewable energy and believed a sale of the brown assets was possible despite initial market scepticism. Over roughly four years, Sembcorp divested its coal portfolio and ramped up its green pipeline; its market cap is now above $11 billion. “That is what we mean by underappreciated fundamental change,” Lai adds.
Tang says the search today is for “the future big caps or the blue chips of Singapore”, particularly among smaller firms exposed to structural themes like data centres, industrial automation and healthcare technology.
Singapore’s macro and market backdrop is another pillar of the case for small- and mid-caps. Tang points out that over the past three years, the Singapore equity market has “quietly delivered very impressive world-class results”, matching the S&P 500 in US dollar terms with an approximately 80% total return. He estimates that more than a third of this came from reinvested dividends, underlining the appeal of established dividend payers.
Singapore retains triple-A sovereign ratings from all major agencies and “very deep” fiscal and monetary resources, which helped the economy weather shocks such as the Covid-19 pandemic. At the same time, the sector mix of the market is evolving away from a dominance of banks and REITs towards services, innovation and energy transition.
Lai notes that Singapore’s open economy is exposed to global headwinds such as US-China tensions and new tariffs. Still, he argues that Asean, including Singapore, stands to be a “net beneficiary” of supply chain realignment, with Singapore’s role as a regional trade and capital hub providing a buffer against external shocks.
Valuations, in Amova’s view, remain reasonable. Lai says the STI trades at about 14 times earnings, around its long-term average, while small- and mid-cap indices appear more expensive on headline multiples. However, he emphasises that the team evaluates value from the bottom up, looking at hidden assets, non-core businesses that can be divested and improvements in return on equity rather than relying on index-level metrics.
Amova also expects EQDP to catalyse a “virtuous cycle” beyond blue chips. Tang argues that as the $5 billion programme is deployed, it can “improve liquidity valuations well beyond the large cap names” and “re-energise SGX as a dynamic fundraising venue”. He highlights recent listings such as Centurion Accommodation REIT, focused on worker and student accommodation, and Ultragreen.AI, which develops fluorescent dyes and AI analytics for healthcare, for which Amova acted as a cornerstone investor in both IPOs.
Policy changes at the Singapore Exchange are another tailwind. Lai welcomes the introduction of small trade sizes that allow younger investors to buy single shares in large blue chips, calling it part of a global move towards “microisation” of stock market access. He also points to SGX’s planned link with Nasdaq, which could allow mid-sized Singapore companies to be traded in both markets, rather than being “lost” as smaller caps in the US.
