Mutual funds registered for sale in Malaysia posted an average loss of 0.16% in January, extending their average decline of 22.28% in 2008, according to Thomson Reuters Lipper data.

In terms of average performance by asset type, commodities funds posted an average gain of 4.61% last month, a turnaround from their 33.30% average decline in 2008.

Equity fund posted an average loss of 0.79% in January. The average total return of equity funds was dragged down mainly by portfolios that invest in emerging markets (-12.88%), real estate (-9.04%), and banks and financials (-7.54%). Last month's top performing equity fund was AmPrecious Metals, which was up 5.16%.

Bond funds reported an average gain of 0.80% in January. Last month's top performing bond fund was AmAsian Income, which was up 7.72%.

The global investment climate in 2009 will continue to be determined by the US economy and the US housing market, says Eric Wong, Hong Kong-based head of research at Thomson Reuters Lipper.

The $787-billion stimulus package approved by the US Congress earlier this month, which includes a mixture of tax cuts and government spending, is a positive step in the right direction to revive the US economy, he says.

But tax cuts, including $400 for individuals and $800 for couples in 2009 and 2010, may not exert a positive impact on the economy in the short term, he says, since the expectation of more job losses in the US labour market may discourage Americans from spending the extra money generated from tax cuts.

"With economic and corporate earnings growth projected to remain gloomy despite a low interest-rate environment in the global financial market, the outlook for equities in 2009 remains challenging," Wong says.

Thomson Reuters reports that the average growth of earnings per share of the S&P500 Index's member companies will decrease 28.5% in the first quarter 2009, 24.8% in the second quarter, and 10.5% in the third quarter.

Average performance of fund groups registered for sale in Malaysia in January: 

  • Commodities +4.61
  • Hedge/Fixed Income Arbitrage +1.79
  • Bonds +0.80
  • Guaranteed +0.75
  • Protected +0.32
  • Money Market +0.22
  • Mixed Asset +0.16
  • Equity -0.79