MAS names sustainability head; Malaysia’s EPF appoints COO and CFO; GIC PE head for SEA leaves; State Super hires new exec; Hesta appoints chief growth officer, chief Debby Blakey appointed to corporate governance board; ex-BlackRock exec joins IQ-EQ in Singapore; HSBC AM builds direct real estate team; ex-Vanguard head of distribution joins LGIM; Sanne names Singapore head; and more
Equity funds were the best performers once again, posting an average return of 4.05%, led by gains from local and regional portfolios. Bond funds were up a mere 0.15% on average as declines in Asian and global offerings dragged down overall gains, while money market funds remained steady at an average return of 0.20% on average.
ôA rebound with regional bourses at month-end in anticipation of a cut in the US Fed fund rate saw plantations, property, and government-led companies leading gains (in the local stock market), with a stronger ringgit spurring renewed buying interest from foreign funds,ö says Singapore-based Kenneth Koh, head of research for Asia ex-Japan at Lipper.
MalaysiaÆs benchmark stock market index breached the key psychological level of 1,400 last month for the first time, boosted by the strong foreign buying. The Kuala Lumpur Composite Index of 100 blue chips closed at 1413.65 in end-October, up 5.8% from end-September.
The US Federal Open Market Committee cut federal funds target rate by 25 basis points to 4.5% in late-October in a bid to help ease the US credit crisis, following a 50 bps cut in September. Prior to September, the Fed kept its key interest rate steady for nine straight meetings since August 2006.
Average October performance of fund groups registered for sale in Malaysia, by asset types:
Equity Funds +4.05%
Mixed-Asset Funds +2.84%
Target Maturity Funds +1.74%
Protected Funds +1.58%
Guaranteed Funds +0.98%
Money Market Funds +0.20%
Bond Funds +0.15%
Top 5 fund sectors in terms of performance in October, with their average gain:
Equity Sector General Industry +9.27%
Equity Sector Natural Resource +8.54%
Equity Greater China +8.05%
Equity Emerging Markets Global +7.23%
Equity Asia Pacific Ex-Japan +4.76%
Bottom 5 fund sectors in terms of performance in October, with their average loss/gain:
Equity Sector Real Eastern Europe -4.81%
Equity Sector Pharma & Health -2.42%
Bond Asia-Pacific -0.98%
Bond Global -0.67%
Money Market MYR +0.20%
Top 5 funds in October, with gain:
HwangDBS Greater China +18.10%
Public Aggressive Growth +11.25%
PB Growth +10.87%
PB Asean +9.85%
CMS Islamic +9.62%
Bottom 5 funds in October, with loss:
AmPan European Property -4.81%
HwangDBS Indochina -2.48%
Prudential Shariah -2.44%
HLG Global Healthcare -2.42%
MAAKL Asia-Pacific REIT -2.05%
Investors still favour private equity assets for their higher growth, better governance structures, and diversification potential.
The recent focus on greenwashing has put bond issues under greater scrutiny. However, some market participants believe this risks paralysis by analysis.
The AU$85 billion ($61.6 billion) Australian super fund has some exposure to indebted property developer Evergrande. Meanwhile, China’s construction finance is part of its core strategy in real estate.
Investors are seeing the risks, but also the opportunities of the logistics sector. Warehousing their fears for the moment, they can see it's a good conduit to high-growth assets.