Entries by Affin Hwang Asset Management

Profiting from Volatility using Leveraged and Inverse ETFs

Global financial markets have been erratic throughout 2019. Market cycles are seen to be sharper and shorter as of late moving on news flow and expectations. With volatility back and investors bracing for a bumpier ride ahead, instruments like leveraged and inverse exchange-traded funds (L&I ETFs) can be used to capitalise on such market conditions. With the fresh listing of the country’s first L&I ETF on Bursa, local investors now have access to a popular strategy that was until recently only available in more developed markets like the US, Hong Kong or South Korea. Last November saw the simultaneous listing of 4 L&I ETFs by Affin Hwang AM that would provide investors the opportunity to profit from both bearish and bullish market trends. The 4 ETFs are the TradePlus NYSE® FANG+™ Daily (2x) Leveraged Tracker, TradePlus NYSE® FANG+™ Daily (-1x) Inverse Tracker, TradePlus HSCEI Daily (2x) Leveraged Tracker, and TradePlus HSCEI Daily (-1x) Inverse Tracker. Benchmarked against the Hang Seng China Enterprises Index and NYSE® FANG+™ Index respectively, the ETFs will provide investors the option to either gain a (2x) leverage or hold an inverse (-1x) position on the 2 indices. It would provide investors with the opportunity to either […]

Estate Planning Don’t Postpone the Inevitable

In 2018, Finance Minister YB Lim Guan Eng disclosed in Parliament that unclaimed monies amounting close to RM10billion from various entities had been submitted to the Accountant-General’s Department. Yes, you read that correctly – almost RM10billion in cash sitting idly left unclaimed by Malaysians. The figure underscores a pertinent issue surrounding the lack of awareness amongst Malaysians on proper estate planning practices as well as apathy and just plain ignorance on the basic steps in wealth & asset distribution. Tan Ping Ying, CEO of Affin Hwang Trustee Berhad (AHTB) highlights that the actual value of unclaimed assets could be even higher than what was reported. “Unclaimed monies comprising of inactive bank accounts, unclaimed fixed deposits or insurance payouts is just one aspect of unclaimed assets. The value of unclaimed estates such as land, landed or non-landed properties, farms and estates are even more significant,” she states. That is why investors should pay as much attention to the wealth distribution phase of the financial lifecycle to avoid having their assets trapped in bureaucratic limbo and regulatory red tape which puts their dependants at risk, says Tan. In the financial lifecycle, investors tend to pay more attention to the wealth accumulation stage […]

Global Easing Cycle Close to an End

In the following Maggie Wong, Senior Portfolio Manager of Affin Hwang Asset Management shares her views on where we are in the current interest rate cycle and outlook for Asian credits. 1) On monetary policy outlook, where are we in the interest rate cycle looking ahead? In the past six months, we saw coordinated efforts by central banks globally to reduce interest rates in response to slowing economic growth. Total interest rate cuts delivered amounted to more than 1000bps by 26 central banks, including US Federal Reserve (Fed), European Central Bank (ECB), Reserve Bank of Australia (RBA) and Bank Indonesia (BI). Going forward, we believe there is limited room for further monetary policy easing given already low interest rates. Central banks are more inclined to “save some bullets” for future, i.e. in the event whereby a recession materialises, as well as adopting a “wait-and-see” approach to assess impact post recent rate cuts. In the US, the Fed will likely put rates on hold after a final cut in October (if not December), delivering a total cut of 75bps this easing round. The RBA and Bank of Korea (BoK) have also recently signalled that they have likely approached the end of […]

Affin Hwang AM Triggers Early Maturity of Flexible Maturity Income Fund 7

KUALA LUMPUR – Affin Hwang Asset Management Berhad (“Affin Hwang AM” or “the Company”) triggered an early maturity notice of its retail income fund Affin Hwang Flexible Maturity Income Fund 7 (“FlexMIF 7” or “the Fund”) to deliver an annualised return of 5.50% per annum after returning capital back to investors. FlexMIF 7 was a close-ended income fund which pays annual income distribution over a maximum investment horizon of five (5) years with a targeted return of 5.00% p.a. The Fund’s underlying credit exposure was in regional names which held a long-standing track record of honouring their outstanding financial obligations over multiple market cycles. In accordance with the prospectus of the Fund, the Early Maturity requirement can be triggered where the Fund’s NAV per Unit has exceeded the Target NAV per Unit for more than ten (10) consecutive business days. The Fund matured on 10 October 2019 at a Net Asset Value (“NAV”) of RM1.00 per unit. At the maturity of the Fund, it registered a return of 5.50% per annum which exceeded the target return of 5.00% p.a. The total return is derived from the Fund’s income distribution as below: Year Income Distribution (sen per unit) 2017 5.1590 2018 […]

Budget 2020 – Job Creation Prime Focus

At the tabling of the budget, Finance Minister YB Lim Guan Eng struck a balanced tone by sticking to the need for fiscal discipline whilst also remaining expansionary. The budget placed a lot more emphasis on job creation and shifted away from the outright disbursement of large cash handouts and subsidies as seen in prior budgets before. Among the measures include a Malaysians@Work initiative aimed at creating better employment opportunities for youth and women, as well as reduce dependence on foreign labour. Malaysians who replace foreign workers will get a monthly wage incentive of RM350/RM500 for two years, depending on the sector. Similarly, employers will get a monthly incentive of up to RM250 a month throughout the same period. With expectations that 2020 will be another year of a sustained global economic slowdown, the government also focused on the attraction of FDIs and incentives to attract large multi-national corporations (MNCs) to set-up shop in Malaysia. These include a RM1 billion allocation in investment incentive to attract Fortune 500 companies and global unicorns. The move is intended to create supporting industries that will boost job creation and aid development of the SME segment as an important pillar of the economy. Technology […]

How to De-Risk Your Portfolio

As volatility in markets jolt and intraday price swings become more pronounced, many investors are looking at ways to reduce risk in their portfolios. Most investors make the mistake of interpreting ‘de-risking’ as just locking-in gains and cashing out from the market. But de-risking entails more than just cutting one’s exposure and shifting all their asset allocation to cash. Here are 4 ways investors can lower risk in their portfolios without derailing their long-term plan whilst also staying invested. 1. Hold Some Cash Cash may be king, but not always and certainly not in excessive amounts in a portfolio. Most investors would automatically flock to cash when faced with higher market volatility or when signs of headwinds appear. As a safe haven asset class, cash is arguably the safest in its category. But it also offers no real returns or yield and its intrinsic value can be diluted by inflation. Keeping some cash can ensure some form of capital preservation, but the investor also sacrifices yield and could potentially miss out on higher returns when markets rebound. Holding large amounts of cash also introduces another dilemma when investors plan their eventual entry back into the market. This involves a significant […]