TA Investment Management Bhd staged a comeback at The Edge-Thomson Reuters Lipper Fund Awards 2018 after a seven-year hiatus, bagging two individual awards. TA Income Fund won the award for Best Mixed-Asset MYR Balance in the three-year category while TA Asia Pacific Islamic Balanced Fund won the award for Best Mixed-Asset MYR Global in the three-year category.
CEO Wong Mien says the TA Income Fund outperformed its peers due to the fund manager’s ability to spot opportunities in the small-cap space. “It is a low-risk, conservative fund and the money is mostly invested in blue chips and stocks that offer high-dividend yields in Asia-Pacific. Nonetheless, the fund allocated a small portion to undervalued small-cap stocks that could potentially generate alpha returns.”
TA Asia Pacific Islamic Fund outperformed its peers due to its investments in commodity stocks listed in Australia. The fund also benefited from the strong returns generated by world-renowned technology companies listed in Japan, Hong Kong and South Korea in which it invested.
Wong attributes TA Investment Management’s achievements to the fund house’s investment team, which adopted a top-down approach. “We identify countries we believe will outperform in Asia-Pacific and take concentrated bets on stocks in which we have a strong conviction. We review both the country and stock selection regularly,” he says.
Wong expects the market to be more volatile going forward as the US Federal Reserve and other major central banks tighten monetary policy. Also, regional stock markets may not rise as much as last year due to a higher base effect.
However, there are investment opportunities in the markets, he says. For instance, commodity stocks are expected to continue to do well on the back of sustained global economic growth. The stronger demand for commodities is keeping prices relatively high, which benefits commodity producers.
The local market, which is relatively stable compared with other markets in the region, could be more attractive to investors as volatility rises. “But we would likely avoid the telecoms sector as it has reached a mature stage and is unlikely to see much growth,” says Wong.
On the risk side, he says unexpected market shocks such as a trade war will likely affect the fund house’s investment strategy. It is also monitoring the global interest rate cycle closely as a sharp rise could disrupt the financial markets.
“We still believe stock prices will go up in the longer term and we will ride out the volatility. We will be more active in adjusting our equity exposure, given the higher volatility. We will ‘underweight’ bonds in the current rising interest rate scenario,” says Wong. — By Kuek Ser Kwang Zhe