FSMOne Malaysia (FSMOne) held its annual Recommended Unit Trusts Awards at the Pavilion KL Hotel.

(From left) Demi Chan Lai Teng, General Manager, Platform Services of iFAST Capital Sdn Bhd; Wong Yew Joe, Chief Investment Officer of AmInvest; Raymond Tang, Chief Executive Officer of Eastspring Investments Berhad; Najmi Haji Mohamed, Chief Executive Officer of PMB Investment Berhad; Jason Chong, Chief Executive Officer of Manulife Asset Management Services Berhad; Chue Kwok Yan, Chief Investment Officer of KAF Investment Funds Berhad; Kaleon Leong bin Rahan, Chief Executive Officer of Federation of Investment Managers Malaysia; Dennis Tan Yik Kuan, Managing Director of iFAST Capital Sdn Bhd; Munirah binti Khairuddin, Chief Executive Officer of Principal Asset Management Berhad; Woo Mun Thye, Head of Investment Services of Principal Asset Management Berhad; Wong Weiyi, General Manager of FSMOne Malaysia; Lee Sook Yee, Chief Investment Officer of Kenanga Investors Berhad; Esther Seo, Intermediary Business Development Director of Nikko Asset Management Asia Limited; Ahmad Najib Nazlan, Chief Executive Officer of Maybank Asset Management Sdn Bhd; Michael Chang, Chief Investment Officer, Fixed Income of RHB Asset Management Sdn Bhd; Teh Song Lai, Chief Executive Officer of Pheim Unit Trusts Berhad; Joy-Marina Choong Wai Kwin, Head of Fixed Income of Libra Invest Berhad; Jonathan Ng, Senior Associate Director, Partnership Business of Affin Hwang Asset Management Berhad; and Choo Swee Kee, Chief Investment Officer of TA Investment Management Berhad.

FSMOne Malaysia (FSMOne) held its annual Recommended Unit Trusts Awards to honour the unit trusts that have made it to the FSMOne Recommended Unit Trusts list for the 2019/20 period. The awards include 35 unit trusts from 15 fund houses including RHB Asset Management Sdn Bhd, Kenanga Investors Berhad, Eastspring Investments Berhad, AmInvest, Maybank Asset Management Sdn Bhd, Affin Hwang Asset Management Berhad, and Principal Asset Management Berhad have made it into the list.

There are three main aspects that we look at when it comes to assessing unit trust performance: Returns, Risk and Expense Ratio. “These areas are what we believe a good unit trust should excel in. Only unit trusts with exemplary track records in these areas make it to our Recommended Unit Trusts list,” said Wong Weiyi, General Manager of FSMOne Malaysia.

“The FSMOne Recommended Unit Trusts list serves as a good point of departure for new investors. There are only 35 Recommended Unit Trusts for them to screen and understand, which is more digestible than trying to grasp over 450 unit trusts on FSMOne platform,” Weiyi added.

In regards to the current market landscape, Weiyi mentioned that the market regime is highly influenced by the development and progress of policies concerning global trades. The MSCI World Index recorded about 15% gain in USD term up to April 2019 before falling more than 6% over May 2019 amid the escalation of the US-China tensions.

“Subsequently, the prospects of an easier monetary condition and possible progress on trade between the US and China after the G20 Summit fueled global equities performance,” said Weiyi.

On the local front, Weiyi highlighted that Malaysia’s equity market as represented by the FBM KLCI index was the bottom performing market. While the new government executes new fiscal and economic policies, there are also institutional reform initiatives that are being run by the Council of Eminent Persons. Disruptions on business operations are imminent and are likely to cloud the earnings prospect of these listed companies over the first half of 2019, but things may turn for the better for the rest of 2019.

“As the central banks across the developed markets are shifting towards a more dovish stance, this could also help ease the liquidity condition and reverse the foreign fund flowing back into emerging markets, which may benefit Malaysian equities”, he added.

When asked about the FSMOne’s current asset allocation, Weiyi shared, “Although global growth may decelerate amid rising trade and geopolitical tensions, we believe investors will still be compensated with a slight overweight in equities. Therefore, we remained a +5% overweight in equities vis-à-vis fixed income.”

“Among all the markets under our coverage, we maintained our preference for Asia ex-Japan relative to their developed market peers by giving 4.5 stars ‘Very Attractive’ rating due to its still strong earnings outlook and attractive valuation.

“Within the region, we are in favour of the offshore Chinese H-shares as the Chinese policymakers have eased both fiscal policies and monetary policies in an attempt to moderate the slowdown of economic growth in China. Chinese companies listed in the offshore exchange are poised to benefit from the recovery on China’s domestic front as positive effect trickles down across the Chinese economy,” said Weiyi.

As for the foreign bond market, Weiyi highlighted the change in the current Fed rate stance is likely to be beneficial for fixed income. At the beginning of the year, the Fed shifted from a hawkish tone towards a ‘patient’ approach, but in the latest Fed meeting that happened in June 2019, the Fed’s statement was more dovish than expected, and market participants are now pricing in a 100% probability of at least one rate cut by end-2019.

A lower interest rate environment tends to steer investors to seek income-yielding assets. Investors could look into Asian and emerging market bonds while opting for longer duration bond funds.

Looking back towards Malaysia, the British index provider FTSE Russell has announced to place Malaysian Government Securities (MGS) under review for its World Government Bond Index amid liquidity concerns. The event has impacted the MGS segment and sparked a minor selloff in the Ringgit.

With regards to this matter, Weiyi shared, “While we foresee an increase in volatility within the local bond space in months ahead, this asset class will remain relevant to investors for diversification benefits. If there is any further sell-off, we believe that offers an attractive opportunity for investors to buy on the dip. Also, the continuing state of ample liquidity from domestic institutional investors is likely to lend support to bond prices.”

The current trade situation is fluid and any potential outcomes are difficult to anticipate. As such, the volatile regime is likely to stay for the rest of 2019. Weiyi reminded investors to be more cautious on the market fluctuations.

“While we are expecting the volatility of the global equity market to stay for an extended period of time, we would like to advocate investors not to time the market but to be more discipline, to stay invested in the market and focus on value gems that are washed ashore by these violent market tides,” he said.

Luminaries in the event included Chief Executive Officer of the Federation of Investment Managers Malaysia (FIMM), Kaleon Leong who gave a keynote address, representatives from the Private Pension Administrator (PPA) and Employees Provident Fund (EPF), as well as the representatives from the award-winning fund houses.

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