Weak performance of funds in Malaysia persists

Funds in Malaysia generally fail to impress for the fifth straight month.
Mutual funds registered for sale in Malaysia posted an average loss of -3.84% in March, making that five straight months of negative performance on-average, according to data from Lipper.

Equity funds again led the decline, falling -5.91%. Equity Malaysia (-6.88%) and Equity Malaysia small- and mid-cap (-6.04%) funds were among the worst performers.

Global bond funds advanced 1.47% on easing short-term interest rates, but domestic fixed-income products fell 0.19% on weaker demand for Malaysian paper. Money market products returned 0.22% to provide the best aggregate return.

Islamic subsectors fell 4.26%, underperforming the broader market, but outperforming Equity Asia Pacific ex-Japan-Islamic (-4.82%) products on-average.

The Malaysian bourse started the month of March on a weak note, weighed down by global concerns, only to take a turn for the worse following the unexpected failure by the ruling coalition to secure a two-thirds parliamentary majority in the countryÆs general elections.

The ôworst ever election resultsö on March 8 of Barisan National (National Front), which has ruled Malaysia since independence in 1957, saw the benchmark KL Composite Index plunge more than 10% to a low of 1,157.47 points the next market day, leading to an hourÆs trading suspension for the first time in the exchangeÆs history, says Singapore-based Kenneth Koh, head of research for Asia ex-Japan at Lipper.

While some semblance of calm subsequently returned, key benchmarks see-sawed as investors sold off government-associated companies, although sectors such as palm oil as well as oil and gas rose on selective buying support, Koh notes. The benchmark index subsequently ended the month with an 8.09% loss at 1,247.52 points, underperforming most of the other markets under review and down 13.67% for the year.

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

Money Market Funds +0.22%
Bond Funds -0.19%
Protected Funds -0.40%
Guaranteed Funds -0.98%
Commodities -2.98%
Mixed-Asset Funds -4.10%
Equity Funds -5.91
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