Libra Invest Berhad’s head of Fixed Income tells us its winning fund and fund investment strategy.
Libra Invest Berhad (LIB) has been managing funds for institutions, public listed companies, high net worth individuals as well as retail investors since 1995. As at 31 May 2019, LIB manages 13 unit trust funds, four wholesale funds and privately managed funds with asset under management (AUM) of RM6.23 billion.
Smart Investor speaks to LIB’s head of Fixed Income Joy-Marina Choong Wai Kwin about its winning fund and fund investment strategy.
Smart Investor: Tell us about your winning fund in the FSMOne Recommended Unit Trust Awards 2019/2020.
Joy-Marina Choong Wai Kwin: Libra ASnitaBOND Fund is an actively managed fund that invests in Malaysian ringgit Islamic bonds and sukuk, with a focus on corporate bond issuers with strong financial metrics. This is the fifth year that the fund has received the Recommended Unit Trust Award from FSMOne Malaysia.
What are Libra Invest’s strategies to ensure each fund achieves its targeted returns?
As part of our investment strategy for the fund, we continuously monitor global economic data, capital flows and movements in equity, fixed income and currency markets to anticipate future market direction.
Meanwhile for individual bond selection, we place strong emphasis on the credit strength of the bond issuers e.g. consistent and visible cash flows, stringent bond structure and good corporate governance, to name a few. We also seek to diversify our investments across sectors and individual securities, to mitigate the risk profile of the fund.
What is the outlook for the second half of 2019 specific to the markets you cover?
Looking ahead, the global growth momentum appears to be moderating, as unresolved trade tensions and political uncertainties continue to cloud the overall growth outlook. Locally, the economy is expected to remain on a steady growth path in 2019, after having expanded at a moderate pace of 4.7% in 2018.
Nonetheless, downside risks from heightened uncertainties in the global and domestic environment could weigh on Malaysia’s growth prospects.
As a whole, the Malaysian bond market has remained resilient, supported by strong demand from domestic fixed income investors. For corporate bonds, market appetite may continue to be skewed towards liquid, high-grade papers for their enhanced yield relative to lower yielding MGS.
The limited supply of primary corporate bond issuances against a backdrop of growing demand from major fixed income investors may further enhance the positive supply-demand dynamics in the local bond market.
Nonetheless, we will stay vigilant while monitoring market developments on both the local and global front. We will continue to manage the fund actively, maintaining a focus on liquid, high-grade bonds with strong credit profiles and stable long-term cashflows.
What advice can you give investors seeking value amidst the uncertainty in the equity markets?
We recommend investors allocate some of their investments into Malaysian bond funds. Given that domestic growth and inflation are expected to remain moderate, Bank Negara Malaysia is expected to maintain its accommodative monetary policy stance.
Therefore, the overall interest rate outlook remains conducive for bond investments. While financial markets may experience fluctuations from time to time, we always advocate that our investors take a long-term approach towards their investments.