Smart Investor Malaysia

Morningstar Awards – AmanahRaya Investment Management Sdn Bhd

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It is a double-win for AmanahRaya Investment Management Sdn Bhd, nabbing both the Best Malaysia Bond Fund and Best Malaysia Bond Shariah Fund award for AmanahRaya Unit Trust Fund (ARUTF) and AmanahRaya Syariah Trust Fund (ARSTF) respectively. Smart Investor speaks to Roszali Ramlee, managing director of AmanahRaya Investment Management Sdn Bhd (ARIM) for their thoughts on their wins, what is up and coming for investing in 2021 and their philosophy when it comes to managing a successful fund.

Smart Investor: Congratulations on your double win! In your opinion, what is the main reason behind the funds’ successful performance?

Roszali Ramlee: A discretionary investing style and teamwork are key attributes for our achievements. Our main goal is to give consistent returns to our investors. We believe in active fund management and rely on our strength in credit analysis. In addition, we also employ a combination of top-down and bottom-up approaches in our fund management process, depending on market conditions.

SI: Given such a tumultuous year with the pandemic and volatile global economy, what measures have been taken on to safeguard the performance of these fund(s)? How were the funds positioned to mitigate risks and/or optimise opportunities in 2020?

Roszali Ramlee Amanah Raya morningstar awardsRR: Firstly, we actively sourced undervalued sukuks in the secondary markets. As a fund manager, we strive to stay ahead of the curve and act ahead of market anticipation. For example, in 2020, we extended our portfolio’s duration prior to the multiple OPR (overnight policy rate) cuts throughout the year. By doing this, we have increased our fund sensitivity and the prices of the longer tenure bonds in our portfolio rises to a greater degree compared to shorter tenure bonds. This enabled both ARUTF and ARSTF funds to each declare 8 sen dividend for the year 2020.

It is important to identify opportunities in times of crisis; Bank Negara Malaysia’s pre-emptive move to cut interest rates helped drive our funds’ performance in 2020. In terms of addressing risks, we promote a strong credit culture that forms the foundation of our risk management. We view our credit team as our ‘first line of defence’ against weak credits and rely on good credit analysis to identify good issuances.

SI: As we slowly recover into a post-pandemic world, what can you tell us about the upcoming trends investors should be looking out for?

RR: For 2021, fixed-income investors should brace for lower returns than last year. We expect local interest rates to remain low in the next 12 months with volatility coming from foreign factors such as the performance of US Treasury bonds. We believe with increasing support for sustainable investments amidst the pandemic, as investors will begin to shift towards investing in companies that are focused on corporate responsibilities and long-term goals.

SI: Will there be new investment products that investors can look forward to, to support the recovery of the global market? If so, can you tell us more about it?

RR: ESG-themed investments are currently on the rise with higher returns in general. Indeed, we are moving into that direction upon completion of our ESG framework. In the meantime, fixed income funds should perform well in the current environment compared to fixed deposit returns in the current low interest rate environment. These funds remain attractive as they also provide investors with consistent returns with low fluctuations.

SI: What are your future plans and strategies to build upon the successes of these funds?

RR: Investment success is something that is subjective and often unquantifiable. At ARIM, we will continue to adopt actively managed portfolios and follow well-crafted policies to deliver superior, yet stable fixed income
returns for our investors. 

Click here to read the full article in the special pullout for the Morningstar Malaysia Fund Awards 2021.

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