Mutual funds registered for sale in Malaysia posted an average return of 0.62% in May, extending AprilÆs average 2.24% gain, according to data from Lipper.

All funds by asset type, except protected funds which posted an average loss of 0.04%, recorded gains on average for the month. High-volatility type funds such as commodities funds and equity funds posted the highest average returns of 4.86% and 1.10%, respectively.

Equity funds investing in commodities-related stocks outperformed other equity funds in line with the strong gains in commodities prices in May. Crude oil prices rallied 12.24% for the month on speculation of supply constraints in the second half of 2008.

Equity China (+0.34%) and Equity Greater China (-0.45%) descended sharply among the rankings by monthly return in May because of the Sichuan earthquake and the restructuring of the telecom industry in China.

The three best performing equity funds were PRUglobal basics (+9.90%), AmPrecious Metals (+9.64%), and HWANGDBS Environmental Opportunities (+7.81%). The three worst performing equity funds were AMB Dividend Trust (-5.02%), CIMB-Principal Emerging Asia (-2.51%), and ING China Access (-2.49%).

Bond funds managed to report an average return of 0.08%. Bond Asia-Pacific (+1.31%) and Bond Global (+0.11%) posted gains. Bond MYR (+0.00%) was flat because Malaysia bonds were affected by the downgrade of MalaysiaÆs credit outlook as domestic political tension remained unresolved.

The three best performing bond funds in May were all Bond Asia-Pacific: AmAsian Income (+2.30%), Asian Total Return (+2.02%), and CIMB-Principal Steady Returns Bond (+1.15%). Bond MYR accounted for all 10 of the bottom-performing bond funds, with the three worst performing being PRUbond (-0.65%), Public Islamic Enhanced Bond (-0.46%), and Public Islamic Bond (-0.37%).

Islamic funds delivered a return of 0.60% in May, nearly the same as the average return of the broader fund universe. Most Islamic fund categories recorded gains on average for the month. For those Islamic fund categories incurring losses in May, the magnitude was not significant. The difference in the average returns of most Islamic funds and the broader fund universe were less than one percentage point, except for equity Malaysia small- and mid-cap funds and target maturity funds.

Average performance of fund groups registered for sale in Malaysia in May, by asset type:

Commodities +4.86%
Equity Funds +1.10%
Mixed-Asset Funds +0.26%
Money Market Funds +0.21%
Bond Funds +0.08%
Guaranteed Funds +0.08%
Protected Funds -0.04%