Capturing Malaysia's Highest Momentum Stocks
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06 August 2020
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Momentum investing has gained traction amongst investors as a strategy to capitalise on prevailing market trends to ride the market’s natural upward momentum. It typically involves going long on equities and investing based on technical indicators that measure momentum such as moving averages and price signals.

These steps would involve comprehensive and detailed research which some investors may not have the resources and time to do. 

However with the listing of the country’s first momentum-based smart beta exchange traded fund (ETF), local investors will finally have access to a local momentum strategy by investing in the TradePlus DWA Malaysia Momentum Tracker (“Malaysia Momentum Tracker” or “the Fund”).

In just a single trade, investors can now gain exposure into 20 of Malaysia’s highest momentum stocks which have consistently notched higher gains and demonstrate powerful relative strength.  

What does Momentum Mean?


Captures companies with the highest upswing momentum. Basically, it refers to the tendency of winning stocks to continue to do well in the near term and reach higher highs. 

How does it Work?


As the first ETF in Asia Pacific to track the Nasdaq Dorsey Wright (NDW) Indexes, the TradePlus DWA Malaysia Momentum Tracker offers investors turnkey access to relative strength strategy empowered by NDW's global technical research by tracking the Dorsey Wright Technical Leaders Malaysia Index.


By scouring the universe of stocks listed in Bursa Malaysia, the smart beta factor applies a screening filter to select companies which exhibit the highest price momentum. This involves measuring the relative strength reading of the stock by calculating the ratio of the closing price of each stock to the closing price of the benchmark on a daily basis.

Each of this company is then assigned a momentum score, where they are then ranked and weighted equally in a customised index. Only 20 stocks with the highest momentum scores are then included as component companies of the index.

To derive momentum, the smart beta factor focuses on prevailing price movements and ignores insignificant movements such as small price fluctuations, timing factors as well as trading volumes. This ensures that the Fund only select companies that truly demonstrate relative strength characteristics.

Trend is your Friend

Some investors may be cautious about entering the market when it is trending upwards, but sometimes it is better not to go against the market's direction and just ride its momentum. As aptly put by astute investor, George Soros, "It does not follow that one should always go against the prevailing trend. Most of the time we are punished if we go against the trend."

The Malaysia Momentum Tracker provides investors a momentum strategy focused on the performance of the domestic market through local companies that many are already familiar with.

Through extensive back-testing, this strategy has shown a strong historical trend by vaulting higher than the broader market and amplifying returns in a portfolio.

This can be seen in 2017 when markets were buoyed by synchronised global growth underpinned by a Goldilocks environment, where the Dorsey Wright Technical Leaders Malaysia Index leaped 51.9% compared to the benchmark FBM KLCI that rose 9.5%.

In 2014 and 2015, the Malaysia Momentum ETF even bucked the broader market direction and posted positive returns even though the benchmark KLCI closed in the red. This can be attributed to the smart beta factor which sidesteps the market-cap value of the stocks and instead invest in stocks based on its momentum attribute

A New Way to Invest in Malaysia

With the Tradeplus DWA Malaysia Momentum Tracker, investors can position themselves to ride along with the recovery of the domestic market. By investing in stocks with the highest price momentum, investors would be able to gain exposure to companies that would truly reflect the recovery of the domestic economy. While the broader market direction has been somewhat lacklustre with mounting pressures from both internal and external forces, the strategy aims to sniff out opportunities using the momentum factor tilt to find trends and capitalise on them.

It may even be an opportune time for investors to gradually build their exposure into equities through a momentum strategy, as valuations have turned attractive following the indiscriminate sell-down of local stocks in Bursa Malaysia post COVID-19. The strategy has historically done well and performed even better during improving / recovery periods. Coupled with its low-cost attractiveness as an ETF, the Malaysia Momentum Tracker also provides investors the opportunity to capitalise on the movement of 20 stocks at a fraction of owning the full 20 names if they were to trade them on their own.

Warning Statement:
A copy of the Prospectus can be obtained at Affin Hwang Asset M ana gement's (" Affin Hwang AM") dedicated website at www.tradep lus.com.my. Investors are advised to read and understand the contents of the Prospectus dat ed 9 July 2020 for the TradePlus DWA Malay sia M omentum Tracker before investing. There are fees and charges inv olved when investing in the fund stated herein. Invest ors are advised to consider and compare th e fees and charges as well of the risks carefully before investing. Investors should make their own assessment of the risks involved in investing and should seek professional advice, where necessary. The price of units and distribution payable, if any, may go down as well as up and past performance of the fu nd should not be taken as indicativ e of its future performance. The Securities Commission Malaysia ha s not revie wed this mate rial and takes no responsibility for the contents of this mate rial and expressly disclaims all liability, however arising from this mate rial.

Licensing Disclosure Statement and Conditions:
The product( s) is not sp onsored, endorsed, sold or promoted by Nasdaq, Inc. or its af filiates ( Nasdaq, with its affiliates, are referred to as th e "Corporat ions"). The Corporatio ns have not passed on the legalit y or suitability of, or the accu racy or adequacy of descriptio ns and disclosures relating t o, the product( s). The Corporations make no representatio n or warranty, express or implied to the owners of the product( s) or an y member of the public regarding the advisability of inv esting in sec uri ties generally or in the product( s) particularly, or the ability of the Nasdaq Dorsey Wrigh t Technica l Leaders M alay sia Index to track ge neral st ock market performance. The Corporat ions' only relationship to Affin Hwang Asset M anage ment Berhad (" Licensee") is in the licensing of the Nasdaq®, NASDAQ., and certain trade namesof the Corporat ions and the use of t he Nasda q Dorsey Wright Techni cal Leaders Malay sia Ind ex which is determined, composed and calculate d by Nasdaq without regard to Licensee or the product( s). Nasdaq has no obligati on to take the needs of t he Licensee or the owners of t he product( s) into consideration in determining, composing or calculati ng t he Nasdaq Dorsey Wr ight Techni cal Lea ders Malay sia Index. The Corporati ons are not responsi ble for and have not part icipat ed in the determinati on of the timi ng of, prices at, or quantiti es of the product ( s) to be issued or in the determination or calculation of the equation by which the product ( s) is to be converted into cash. The Corporations have no liability in connection with the administrati on, marketi ng or trading of t h e product ( s).

THE CORPORA TIONS DO NOT GUARANTEE THE ACCURACY AND/ OR UNINTERRUPTED CALCULATION OF NASDAQ DORSEY WRIG HT TECHNICAL LEA DERS M ALAYSIA INDEX OR ANY DATA INCLUDED THEREIN. THE CORPOR ATIONS M AKE NO WARRANTY, EXPRESS OR IM PLIED. AS TO RES ULTS TO BE OBTA INED BY LICENSEE, OWN ERS OF THE PRODUCT( S), OR ANY OTHER PERSON OR ENTITY FROM THE USE OF THE NASDAQ DORSEY WRIG HT TECHNICAL LEA DERS M ALAYSIA INDEX OR AN Y DATA INCLUDED THEREI N. THE CORPORA TIONS M AKE NO EXPRESS OR I MPLIED WARR ANTIES, AND EXPRESSLY DISCLAIM ALL WARRA NTIES OF M ERCHANTABILITY OR FITNESS FOR A PARTI CULAR PURPOSE OR USE WITH RESPECT TO THE NASDAQ DORSE Y WRIGHT TECHNICAL LEADERS M ALAYSIA IND EX OR ANY DATA INCLUD ED THEREI N. WITHOUT LIMI TING ANY OF THE FOREGOING, IN NO EVENT SHALL THE CORPORATION S HAVE ANY LIABILIT Y FOR ANY LOST PROFITS OR SPEC I AL, INCIDENTAL, PUNITIVE, INDIRECT, OR CON SEQUENTIAL DAM AGES, EVEN IF NOTIFIED OF THE POSSIB ILITY OF SUCH DAM AGES.
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TENG CHEE WAI

Managing Director
Teng Chee Wai is the founder of Affin Hwang Asset Management Berhad (Affin Hwang AM). Over the past decade, he has built the Company to be the fastest growing and only independent investment management house in Malaysia’s top three, with an excess of RM47 billion in assets under management as at 31 December 2018.​

​In his capacity as Managing Director / Executive Director, Teng manages the overall business and strategic direction as well as the management of the investment team. His hands-on approach sees him actively involved in investments, product development and marketing. Teng’s critical leadership and regular participation in reviewing and assessing strategies and performance has been pivotal in allowing the Company to successfully navigate the economically turbulent decade.

Teng’s investment management experience spans more than 20 years, and his key area of expertise is in managing absolute return mandates for insurance assets and investment-linked funds in both Singapore and Malaysia. Prior to his current appointments, he was the Assistant General Manager (Investment) of Overseas Assurance Corporation (OAC) and was responsible for the investment function of the Group Overseas Assurance Corporation Ltd.​

​Teng began his career in the financial industry as an Investment Manager with NTUC Income, Singapore. He is a Bachelor of Science graduate from the National University of Singapore and has a Post-Graduate Diploma in Actuarial Studies from City University in London.
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