Entries by Affin Hwang Asset Management

Cutting Through Noise to Make Sound Investment Decisions

Bracing for Market Turbulence Volatile. If there ever was a word to describe markets now, that would be it. Markets were whipsawed last month amidst a torrent of trade retaliatory measures between the US and China, as fears of an escalated trade war kept markets on edge over who will blink first. Geopolitics also took centre stage following a missile attack in Syria by US-allied forces, as part of a joint-coordinated strike to stem the Syrian regime’s use of chemical weapons in its arsenal. Locally, Malaysia will also hold its 14th General Election (GE14), with polling taking place on the 9th May. Trade tariffs, geopolitics, missile strikes, elections – that’s a lot to digest for any experienced fund manager, let alone a casual observer. So, what’s an investor to do? It’s important to first realise that global markets are prone to ‘noise’ and that most short-term fluctuations in asset prices are a direct reaction from traders reacting to such noise occurrence. Broadly, noise refers to any information (true or false) or activity that distorts the price trend or underlying fundamentals of an asset class. In this fast-paced digital age with social media platforms such as Twitter and Facebook, such noise […]

Affin Hwang AM Launches Global Target Return Fund – An Objective Based Solution amidst Volatility

KUALA LUMPUR – Affin Hwang Asset Management Berhad (“Affin Hwang AM” or “the Company”) announced today the launch of the Affin Hwang World Series – Global Target Return Fund (“WS-GTF” or the “Fund”). The Fund is a wholesale feeder fund that seeks to achieve capital appreciation over the medium to long term period by investing in a collective investment scheme, namely Schroder International Selection Fund Global Target Return (“Target Fund”). The Target Fund is a Luxembourg-domiciled fund managed by Schroder Investment Management (“Target Fund Manager”). To meet its investment objective, the Fund will invest a minimum of 80% of the Fund’s NAV into the Target Fund and a maximum of 20% of the Fund’s NAV into money market instruments, deposits and/or liquid assets. Chan Ai Mei, Chief Marketing & Distribution Officer of Affin Hwang AM said, “In an environment of heightened risks and increased volatility in markets, the role of an absolute return focused strategy has never been more relevant than it is now. As markets enter a new transition phase, the demand for a dynamic and flexible approach to asset allocation has become more punctuated.” “The Fund will benefit clients by focusing on absolute returns with the intention of […]

Keeping an Eye on Inflation

Return to Calmer Waters After January’s US inflation scare that sent jitters across markets and caused ripples all the way to Asia – it looks like markets are making its return back to calmer waters. US consumer prices held steady in February, soothing investor’s concerns over any sudden spike in inflation that would trigger an acceleration of the pace of interest rate hikes by the US Federal Reserve. The US consumer price index (CPI) rose 2.2% in the 12 months through February, compared with 2.1% in January, whilst core CPI was up 1.8% from a year earlier for a third month. As inflation gradually firms up to the Fed’s inflation target, markets have now repriced asset prices in terms of inflationary expectations, where after years of loose monetary policy and quantitative easing (QE) programmes have finally resulted in an uplifting of growth. Markets were only priced-in for 2 rate hikes by the Fed at the start of the year, before we saw markets sold-off on the back of strong inflation data. But with the correction behind us, markets are now priced in-line with the Fed. Nonetheless, we don’t expect any rapid runaway inflation data that would spark another market correction […]

Joint Statement – Affin Hwang AM and AIIMAN Reaffirms Commitment to ESG Principles

KUALA LUMPUR – Affin Hwang Asset Management Berhad (“Affin Hwang AM” or “the Company”) together with its wholly-owned subsidiary AIIMAN Asset Management Sdn Bhd (“AIIMAN”) today reaffirmed their commitment in embracing environmental, social, governance (ESG) principles in their underlying investment process as signatories to the Malaysian Code for Institutional Investors (“the Code”). Affin Hwang AM and AIIMAN became signatories to the Code a year ago on the 24 March 2017 and 22 March 2017 respectively. They join a list of 17 other local institutional investors & pension funds who have pledged to uphold the 6 principles stated in the Code including:- Disclosing Policies on Stewardship Monitoring Investee Companies Engaging Investee Companies Managing Conflicts of Interest Incorporating Sustainability Considerations Publishing a Voting Policy Teng Chee Wai, Managing Director of Affin Hwang AM said, “We believe that institutional investors such as ourselves can play an important role in helping to champion the ESG (Environmental, Social and Governance) agenda and influence the behaviour of investee companies’ through an active and clear engagement strategy. We are here to serve our clients by investing in a sustainable manner so as to create long term value for our investors and society.” The company recently appointed US-based […]

Positioning in a Market Correction

A Necessary Jolt to Investors Markets officially entered correction territory in early-February, triggering a global sell-off that sent ripples all the way to Asia. After 9 years of expansion following the 2008-GFC, volatility roared back into markets unsettling the calm that pervaded markets for almost a decade. But behind the pullback is a reminder to investors that markets can go down and that volatility is part and parcel of investing. A market correction is simply an attribute of a normal and healthy functioning market that helps re-establish the relationship between interest rates, inflation levels and valuations. A 10% stock market correction like that seen in February is not uncommon if one were to look back at the long history of stock market cycles. Whilst, market volatility isn’t something investors look forward to or anticipate, the recent correction serves as a useful (but often painful) lesson for investors to never take volatility for granted and always be prepared. Here are some tips how:- Expect the Unexpected Volatility is here to stay and the sooner investors’ start accepting this as a market truism, the quicker they can accept and move on. Even though markets have since rebounded and are now gaining back […]

The Case for Holding Gold in a Market Correction & Strengthening Ringgit Environment

Making the Most of the Ringgit Strength The Ringgit’s resurgence has dampened the risk appetite of investors when allocating into offshore assets. As the Ringgit continues its steady climb upwards, rallying by over 3.66% YTD (as at 30 January) to close at 3.899 – many investors are rightfully anxious about unfavourable forex translation, when converting back their investments into the local currency. However, chasing currency movements is often a superfluous exercise and investors are bound to get burnt. Instead, investors should avoid such short-sightedness and take the opportunity to also capitalise on the Ringgit’s strength to diversify their portfolios and allocate a portion of their holdings into offshore assets including gold which is denominated in USD, and hence diversify their currency exposure. Markets Enter Correction Phase With the S&P and Nasdaq repeatedly pivoting to all-time highs, and the momentum in markets looks set to continue unabated, underpinned by positive earnings revision and rising corporate profits following the passage of US tax reforms and strengthening crude oil prices – some investors are also understandably cautious of how long until the rally starts to dissipate. In fact, we already see markets puling back which is likely an overdue correction, as markets begin […]

Malaysia Bond Market Outlook 2018

Malaysia Bonds Stay Resilient In a global environment marked by heightened geopolitical risks, stepped-up talks of trade protectionism and a cautious undertone lying beneath markets that have rallied strongly at the start of the year – the Malaysia bond market stands as an outlier providing positive yield for investors in an era of low or negative yield rates. Despite the prospect of tightening monetary conditions, and policy uncertainty surrounding a tumultuous administration led by US President Donald Trump, the local bond market held up strongly providing decent yields for bond investors. The Quantshop MGS All-Index and BPAM Corp Bond All-Index yielded 1-year returns of 5.60% and 5.28% respectively in 2017. Real Money Investors to Stem Fund Outflows Underpinned by sound economic fundamentals, an increase in external reserves, along with an expansion in the current account surplus – we see these improving fiscal conditions to be supportive of fund flows into the local bond market. The Ringgit has been on a steady climb and has rallied by over 3.66% YTD (as at 30 January), closing at 3.899 and would strengthen the risk-appetite for Ringgit-denominated bonds among investors. Overall net inflows of foreign debt securities increased by RM2.7 billion in December’17, buoyed […]