Entries by Affin Hwang Asset Management

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, […]

Malaysia Baru, Where Art Thou?

It has been one year since the watershed 14th general elections (GE14), when the Pakatan Harapan (PH) government unexpectedly trumped Barisan Nasional (BN) 6 decade rule to wrest control of Putrajaya.  However, market reaction has not been kind with the benchmark KLCI plunging close to 12% since May 2018 as euphoria dissipates over lack of policy clarity and sluggish growth, making us the only regional market to be in the red this year.   One year on, where is Malaysia Baru headed? Is the local market really that short of zest to be considered ‘boring’?  In the following interview, Gan Eng Peng, Director of Equities Strategy & Advisory, Affin Hwang Asset Management offers some perspective and if the market has bottomed out. Questions As we approach the one-year anniversary of PH government coming into power, what’s your assessment of the market so far and speed of reforms? Malaysia is the only decent size market globally to be down this year.  We did not benefit from the liquidity driven risk-on rally.  Even Thailand, which had an inconclusive election has fared better than Malaysia. It is fair to point that the speed and effectiveness of reforms has been lacking.   There has been a lot […]

Much Ado About Deflation

This week will see the release of Malaysia’s March’19 inflation data due on Wednesday. After dipping into deflation in January this year, will we see price pressures picking up again? Gan Eng Peng, Director of Equities Strategy & Advisory of Affin Hwang Asset Management offers some perspective on the data and strategies for investing in a deflationary environment. 1) Malaysia has experienced its first deflation in January this year since 2009, according to news reports. Can you tell us what is the difference between the deflation in 2009 and today? The 2009 deflation was caused by a meltdown of financial markets which choked off credit and created a global crisis. Malaysia was not spared. The current deflation is a function of retail oil prices declining by 10%, following the reinstatement of the weekly retail fuel price mechanism from January 5. Retail oil prices had been held static after the last general election. This adjustment should have a temporary effect – while the economy is slow we are clearly not in a crisis driven deflationary environment. 2) As deflation is a rare occasion in today’s world and investors are not familiar with such environment, could you tell us what does it […]

KonMari Your Financial Life

Keeping it Simple These days it’s all about minimalism. Tidiness and clean-up guru Marie Kondo has become a global phenomenon with her hit Netflix show, capturing the cultural zeitgeist with her philosophy on organising and decluttering. But can the same set of ethos also be applied to tidying up one’s financial life and money management skills? As financial products become increasingly commoditised, consumers are bound to pick-up all sorts investment schemes or insurance policies that offer very little or almost no differentiation. Kenny Suen a licensed financial planner who is also Chief Marketing Officer of Bill Morrisons Wealth Management thinks one is more susceptible towards cluttering up their finances especially at the wealth accumulation stage of the financial life cycle. “I think clients haven’t really put a thought to this because they’re so busy at this point working hard at their jobs and building their wealth. It’s like going shopping and you end up buying all sorts of products and policies along the way. If you don’t do a proper housekeeping, you won’t have a complete picture of your finances. Worse still you misplace them and end up forgetting all about it,” Kenny observes. “It should all start from a […]

China NPC: Pivot towards Quality Growth

China’s annual National People Congress (NPC) comes to a close soon after a 2-week parliamentary session. In the following interview Huang Juin Hao, Senior Portfolio Manager of Affin Hwang AM gives a rundown what happened in the NPC and market implications 1) What were the key takeaways of China’s NPC this year? At the NPC, the government work report targets for 2019 have been announced and most of the targets have been largely in-line with market expectations. The keys numbers were for GDP growth to come in between 6% – 6.5%, which would represent a slowdown from 2018’s 6.6% growth. The government has placed particular emphasis on creating 11 million new urban jobs and keep registered urban unemployment rate within 4.5%. Tax cuts in VAT (value-added tax), corporate and households would also provide relief amounting to RMB 2 trillion, which was the same as 2018’s prior announced business tax shift to VAT. 2)  Were there any surprises this year that went against market expectations? There were 5 surprises which differed from market expectations i.The fiscal deficit which the government expected to come to 2.8% of GDP. Market expectations were for the deficit to be at 3.0%, given tax cuts of […]

Staying Defensive in Healthcare

Against a challenging backdrop, the healthcare space was one of the best performing sectors in 2018 due to its low sensitivity to global growth.  In the following interview, Erin Xie, Head of Health Sciences, Fundamental Active Equity of BlackRock shares her outlook for the healthcare sector and its late-cycle potential to outperform.   Q1)  How did the healthcare sector perform overall in 2018 as volatility jolts? Also, as the late-cycle approaches, how do you see the sector performing moving forward? 2018 was an eventful year for global equity markets, with significantly more volatility than in the past 10 years. Performance for the MSCI World Index was more than -5% negative and this was a stark reminder to investors that despite the experience of the last 9 years, equity markets don’t always go up and to the right.  One of the bright spots during the year was the healthcare sector, which delivered more than 2% outperformance over the full year and displayed relative stability in a volatile market. Looking at the historical analysis of sector performance through market cycles in the past 25 years, healthcare has consistently outperformed other sectors during late cycle and recessionary periods. For example, the healthcare sector […]