Entries by Affin Hwang Asset Management

What Investors Get Wrong About Risk

One of the first steps to investing successfully is to determine your risk profile at the onset before building a portfolio. Investors often do this by answering a series of questionnaire that touches on their attitudes toward risk and also net assets. The answers would then ultimately serve as a guide to asset allocation and set the risk-return parameters in a portfolio. Hence, it is a crucial step that investors need to get right at the beginning to avoid a risk mismatch in a portfolio. But the concept of risk can be tricky terrain for investors to manoeuvre especially when psychological biases and market volatility comes into play. Among the most common misconception that investors have is the level of risk that they are prepared to accept and actually able to take.   Understanding your Risk Profile According to Investopedia, a risk profile is an evaluation of an individual’s willingness and ability to take risks. There are two parts to the equation here, i.e. willingness and ability to take risks. Investors often get confused between the two. Risk tolerance is the amount of risk/degree of volatility in one’s portfolio that the investor is willing to accept or able to stomach […]

Affin Hwang AM Investment Forum 2019: Geopolitical Flare-Ups Key Market Risk

Geopolitics will continue to be a fixture of markets for time to come as increasing polarisation and fractures appear in bilateral ties leading to more volatility in turbulent times. “We are entering an unprecedented period of geopolitical risk that investors have to price-in when making decisions in their portfolio,” Teng Chee Wai, Managing Director of Affin Hwang AM said at the company’s annual investment forum held at MITEC, Kuala Lumpur on the 20th July, Saturday. Teng contends that there is a possibility of US President Donald Trump winning a second term in the White House due to a lack of strong candidates from the Democrats and also Trump’s own ability to rile up political support by tapping into populist sentiment. “The reality is that investors may have to live with Trump for the next 4 to 5 years if he wins election next year. His penchant for Twitter diplomacy has the ability to influence market behaviour and also introduce policy uncertainty unlike anything we have tread before. Will he be a better president or continue to be reckless if he wins? Nobody knows the answer,” adds Teng. Unresolved US-China trade tensions which has stretched into a year-long trade war is […]

Looking Beyond the Yield Curve

If you’re a keen market observer, you would have read about the yield curve inverting which sent chills down the spine of investors globally. Financial and business news outlets were in a frenzy to point out that a key financial indicator was flashing warning signals that a recession is looming ahead. Benchmark gauges surrendered gains back in March due to recessionary fears when the spread between the 3-month and 10-year Treasury note went negative for the first time this year since a decade ago. A pallid economic picture painted by the US Federal Reserve which downgraded its economic outlook and tilted its policy stance towards a more dovish approach also added to concerns. But how accurate is the yield curve as a dark omen for markets that an imminent economic slump is coming for us all? Here is what you need to know about the yield curve and what bond markets are trying to tell investors. Yield Curve Inversion, Explained… Logically, people would demand higher interest rates for longer-term loans because the risk is higher over longer time horizons. Think about your fixed deposits (FD), where the longer your FD placement is with a bank, the higher your rate of […]

Overcoming the Herd Instinct in Markets

Ever walked into a mall and saw heaps of people gathered into lines that stretch as far as the eye could see? You have no idea what’s going on, but for some inextricable reason you feel compelled to join the back of the line too and patiently await for this mysterious artefact to reveal itself. Hopefully something or someone turns up? If you did, you just succumbed to the lure of the herd and fallen into perhaps one of the most common investor behavioural biases. Most daily examples of herding behaviour can be completely innocuous whether you’re strolling through your neighbourhood mall or adopting the latest trends. But as seen throughout history, extreme instances of herding in markets can significantly distort prices, lead to asset bubbles and even cause recessions. From Tulipmania that gripped 17th century Netherlands, the dotcom bubble in the early 2000s as well as the subprime mortgage crisis during the 2008-GFC, history has shown that investors are willing to suspend disbelief when market euphoria swells to reach delirious highs. This is prevalent especially during bullish market conditions and when there is abundant liquidity in the system. Go with the Flow? Not Really… As social creatures, people have […]

Affin Hwang AM Launches Zero Entry Fee Smart Invest Fund

KUALA LUMPUR – Affin Hwang Asset Management Berhad (“Affin Hwang AM” or “the Company”) announced today the launch of the Smart Invest Portfolio – Growth (“the Fund”) which is the first in a series of zero front-end load funds lined up by the company that waives the initial sales charge. The Fund is a retail mixed asset fund that aims to provide investors with income and capital growth over the medium to long-term period through a portfolio of collective investment schemes.  Structured as a fund-of-funds (FoF), the Fund combines an all-in-one approach to source the best-in-class strategies covering multiple asset classes, regions and managers. To achieve its investment objective, the Fund will invest a minimum of 95% of the Fund’s net asset value (NAV) into collective investment schemes and a maximum of 5% of the Fund’s NAV into money market instruments and/or fixed deposits for liquidity. Chan Ai Mei, Chief Marketing & Distribution Officer of Affin Hwang AM said, “With a minimum investment amount of just RM100, the Fund is the ideal starter-kit for both novice and seasoned investors looking to dip their toes into markets at zero entry cost. Through a carefully constructed model portfolio and fund selection process, […]