Funds in Malaysia recover from early lows

May 28, 2009

Recovering from market lows early in the year, equity funds outperform all other asset classes in April with a double-digit average gain.

Mutual funds registered for sale in Malaysia posted an average return of 6.1% in April, with equity funds outperforming all asset classes with an average return of 10.53%, according to data from Lipper. All fund types delivered positive returns in the January to April period, which is promising given the continued declines in the market during February and early March.

The three best performing funds in April were AmGlobal Property Equities (up 28.09%), PRUsmall cap (up 20.39%), and AmPan European Property Equities (up 19.83%). The bottom-performing funds were HLG Global Healthcare (down 0.23%) and AmPrecious Metals (down 5.09%). The year-on-year equity table showed the top-performing fund for the month, AmGlobal Property Equities, was still down 46.67% since April 2008.

Bond fund returns were a mixed bag for April. The best performing bond fund, AmEmerging Markets Bond (up 6.92%), outperformed the next best performing fund HLG Global Bond (up 4.14%) by over 250 basis points. While there has been much talk about the rally back into risky assets, ING Global Emerging Markets Debt (down 3.62%) was the worst performing bond fund in the month of April.

On a year-on-year basis, the best performing bond fund was AmGlobal Bond (up 8.79%), while the worst performing bond fund was AUTB Dana Bon Amanah (down 12.28%).

The top-performing mixed-asset fund for April was TA Dana Optimix (up 15.84%), and the second best performing fund in this category was Pacific Dynamic Trader (up 14.29%). The worst performing mixed-asset fund for April was PRUdynamic (down 1.10%).

"There has been much contention over whether we have truly witnessed the turning point in this crisis, which has dogged the markets since the start of January 2008. The term green shoots has been in recent times a key phrase uttered to the delight of the bulls, since even the staunchest of bears were forced to admit this bear rally has been nothing short of spectacular," says Ivan Ng, a Singapore-based research analyst at Lipper.

"All this has made managing money and portfolios extremely difficult, since even the most bearish of portfolio managers has had to jump back into the markets or risk underperforming their benchmarks by a wide margin, assuming this rally is sustainable in the days going forward," he adds.

Ng believes signs point to the economy reaching a trough, which will bode well for funds in Malaysia.