KUALA LUMPUR: Public Bank Bhd is launching a new fund, PB China Australia Equity Fund (PBCAUEF), tomorrow to tap on China's and Australia's thriving economies with stocks that offer growth potential.

In a statement today, Public Bank said PBCAUEF was an equity fund that sought to achieve capital growth over the medium- to long-term period by investing in a diversified portfolio of China and Australian stocks. The equity exposure will generally range from 75% to 98% of its net asset value (NAV).

PBCAUEF is managed by Public Bank's wholly-owned subsidiary Public Mutual Bhd.

The initial issue price is 25 sen per unit during the 21-day initial offer period to March 22, 2010. The minimum initial investment for the fund is RM1,000 and the minimum additional investment is RM100.

Public Mutual's CEO Yeoh Kim Hong said despite the slowdown in global economic activities, the Chinese and Australian economies continued to register positive growth in 2009 supported by the governments' fiscal stimulus measures and sound monetary policies.

"Over the medium- to long-term, the Chinese and Australian equity markets are expected to perform well due to their reasonable valuations, healthy national savings rates and sustained economic growth prospects," she said.

Yeoh said PBCAUEF's allocation to China stocks would be raised accordingly, when valuations and growth prospects for China stocks were attractive.

"When valuations for China stocks are not compelling, the fund's allocation to China stocks will be reduced and its exposure to Australian markets will be raised accordingly," she said.

Public Mutual is Malaysia's largest private unit trust company with 73 funds under management. It has over two million account holders and as at Dec 31, 2009, the total net asset value of the funds managed by the company was RM35.6 billion.