This article first appeared in Personal Wealth, The Edge Malaysia Weekly on April 2, 2018 - April 8, 2018
Inter-Pacific Asset Management Sdn Bhd (InterPac) took home two individual awards at The Edge-Thomson Reuters Lipper Fund Awards 2018. InterPac Dynamic Equity won the award for Best Mixed Asset MYR Flexible (Malaysia) in the three-year category while InterPac Dana Safi clinched the award for Best Mixed Asset MYR Flexible (Islamic) in the three-year category.
InterPac Dynamic Equity — a RM13.65 million fund — delivered returns of 56% over three years, 46.23% over five years and 104.97% over 10 years as at Dec 31, 2017. InterPac Dana Safi — a RM15.01 million fund — provided returns of 50.63% over three years, 47.27% over five years and 104.91% over 10 years.
CEO Lim Tze Cheng says sticking to the fund house’s investment philosophy was key to generating the winning funds’ outsized returns. “We view investing in equities as investing in a business — we call it a business-centric approach. When we analyse a company, we don’t try to derive the target price of the stock but rather, how much we are willing to pay for the business.”
Lim acknowledges that consistently posting strong numbers can be difficult due to the fund house’s approach of going to the ground and assessing companies and industries that meet its investment criteria. “We don’t invest based on themes, rumours and news reports, or try to bet on the next trend in the market. Thus, there will be periods when we will not be performing. So, the challenge is sticking to our convictions and approach and being willing to accept short-term underperformance for longer-term gain,” he says.
Lim says InterPac’s overall fund size saw healthy growth last year. “Of course, I must stress that the growth is relative to our size. Growth of about RM50 million may be insignificant to most fund houses, but it is significant to us. My guess is that investors have started to notice our company.”
InterPac launched the first-of-its-kind Social Enterprise and Social Responsibility Fund (iSERF), which invests in Asean, last year. The fund will disburse 20% of its returns each year so that investors can contribute money to charitable causes. The other 80% is reinvested.
“iSERF has just been qualified by the Securities Commission Malaysia as a sustainable and responsible investment (SRI) fund. We believe this is one of the first funds, if not the first, to qualify for this status,” says Lim.
His advice to investors is to focus on cumulative returns over at least three years. “Our outlook is still positive as we have yet to see any significant warning signs on the global economy,” he says.
Lim remains positive on the semiconductor value chain, given the positive demand momentum that he has seen in the space. “Unfortunately, we are not in the banking and finance sector as it has been one of the top sectors so far this year. Our reason is that the loan segment, especially housing and hire purchase, will still be weak due to the high rejection rate,” he says.
Lim isn’t in oil and gas either, despite his view that oil prices should hold between US$60 and US$70 per barrel. “We think the era of high margins for oil and gas service providers will be a thing of the past,” he notes. — By Oliver Christopher Gomez
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