The Dutch pension asset manager's Asia Pacific head of real estate says his team has just had one of its busiest years ever and that 2021 is looking similarly promising.
Commodities funds were once again the worst performers, posting an average loss of 5.58% last month.
Natural resources prices, which suffered another round of heavy selling in August, continued to weigh heavily on the performance of commodities funds. Crude oil futures fell nearly 7% as an oil pipeline through Georgia restored shipments during the month. Precious metals prices fell as crude oil prices fell and the US dollar continued its recovery against other currencies, eroding their appeal as alternative investments against inflation. Platinum prices slid 15.7%, while silver prices plunged 23.2% in August. Corn and soybean futures declined 3.6% and 5.7%, respectively, on expectation that their global production would increase after Russia and the US raised their growth forecasts during the month
Equity funds posted an average loss of 2.98% in August. Only 4 of the 25 equity fund groups tracked by Lipper reported average gains for the month. These were equity funds that invest in emerging markets Far East (+38.10%), pharmaceuticals & health (+5.83%), global real estate (+1.68%), and global equities (+0.40%).
The strong performance of emerging markets Far East funds was driven mainly by the 38.1% gain of the HLG Vietnam fund managed by HLG Asset Management. That fund was the best performing equity portfolio in Malaysia in August. The fund benefited from several new reports that showed inflation, the trade deficit, and the currency appear to be stabilising in Vietnam.
Bond funds posted an average positive performance of 0.75% in August. AmAsian Income (+5.79%), AmGlobal Bond (+2.76%), and OSK-UOB Income (+2.08%) were the three best performing bond funds.
Islamic funds posted an average loss of 2.21%. Their overall performance was pulled down mainly by Islamic mixed-asset flexible funds and Islamic Greater China funds.
Looking ahead, the election of former finance minister and now opposition leader Anwar Ibrahim as a member of parliament will shift market attention to his earlier pledge to lure enough lawmakers from the ruling coalition to form his own government, according to Eric Wong, Hong Kong-based head of research at Lipper. He notes that AnwarÆs election to parliament gives him eligibility to be elected as MalaysiaÆs next prime minister.
New developments could escalate the political tension in Malaysia, Wong says, forcing investors to continue staying on the sidelines until a clearer picture emerges.
The market environment has also recently been made more challenging by the governmentÆs latest budget. The budget includes measures to cut taxes and boost public spending, which is expected to increase the countryÆs budget deficit, rendering Malaysia susceptible to downgrade risk of its credit rating, says Wong. All that, he adds, could have a negative impact on the valuation of Malaysian bonds and equities.
In its second annual sustainable investment report, the sovereign wealth fund says it invested $1.79bn in ESG bonds. Experts say asset owners next need to consolidate their standards.
Senior executives at the Taiwan financial group and Canadian pension fund believe that companies have to make an ESG transition, and may not have a choice in a few years.
Record low borrowing costs in Australia are feeding demand for the country's real estate, with domestic and global investors raising their allocations into the sector.
Experts have a diversified view on the appeal of private assets across the region, but one thing's for certain - inflows are rising, particularly into China and the US.