2018 The Edge Thomson Reuters Lipper Fund Awards: Pheim Asset Management Sdn Bhd - Won Six Individual Awards

This article first appeared in Personal Wealth, The Edge Malaysia Weekly, on April 2, 2018 - April 08, 2018.
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Pheim Asset Management Sdn Bhd grabbed six individual awards at The Edge-Thomson Reuters Lipper Fund Awards 2018.  For the third consecutive year, it won the awards for Best Mixed Asset MYR Balanced (Islamic) in the 3, 5 and 10-year categories. It also won the awards for Best Mixed Asset MYR Balanced (Provident) in the 3, 5 and 10-year categories.

Chief strategist Dr Tan Chong Koay says Pheim’s value investing approach through careful stock selection and good asset allocation was key to the funds’ performance. The fund house also adhered to its philosophy of never being fully invested at all times.

He adds that 2017 was a good year for the local stock market and Dana Makmur Pheim benefited from being highly invested when the bulls ran. As at end-February, the fund had reduced its equity exposure to 43.33% from 52.22% at end-December. It registered a return of 20.7% in ringgit terms compared with its benchmark’s return of 7.81%.

Tan says the fund has picked and “overweight” many winners since its launch 16 years ago. Some of the more recent ones have been Pentamaster Corp Bhd, Hibiscus Petroleum Bhd, Inari Amertron Bhd and Econpile Holdings Bhd. As at Dec 31, 2017, the fund’s top holdings were Hibiscus Petroleum Bhd, Ta Ann Holdings Bhd, Frontken Corp Bhd and Jaya Tiasa Holdings Bhd.

“Hibiscus has done exceptionally well and we were fortunate to be overweight on the stock. We managed to buy the shares for as low as 18 sen for the other accounts, but only managed to buy at 48 sen for this account as soon as it was listed as a shariah-compliant stock,” says Tan. As at March 16, Hibiscus was trading at 86 sen per share.

“Although Pentamaster represented less than 1% of the total portfolio as at December, it was one of our top 10 holdings in January last year and it yielded exceptionally good returns in 2017. The shares could give the highest return as we managed to buy them at one of the lowest points at 58 sen apiece,” says Tan.

“As at Dec 31, Pentamaster closed at RM3.03, excluding the bonus and stock split, or RM6.54 with bonus and stock split,” he adds. As at March 16, the stock closed at RM2.38.

Ta Ann and Jaya Tiasa, which have businesses in the plantation sector, did not perform as well due to the unfavourable industry outlook, which worsened when the European Union decided to remove palm oil from its biofuels mix.

“However, Frontken outperformed the benchmark as the technology sector performed relatively well last year. We were fortunate to be overweight on technology stocks and Hibiscus as they contributed significantly to the performance of Dana Makmur Pheim,” says Tan. The ability to pick good stocks becomes more important going forward, he adds.

Tan favours the technology and oil and gas sectors. He says consumers’ tendency to upgrade and new developments are expected to spur the growth of the tech sector. This includes innovations in the fifth generation wireless broadband technology, artificial intelligence, and the Internet of Things, particularly in smart homes and autonomous cars.

“Financial technology (fintech) is expected to be disruptive and we will be selective in picking fintech stocks. Pheim will certainly look into companies that can leverage a scalable ecosystem that is able to improve our living. In the oil and gas sector, capital expenditure is expected to increase among the major companies with oil prices beginning to stabilise,” says Tan. — By Tan Zhai Yun