Another record-breaking year

This article first appeared in Personal Wealth, The Edge Malaysia Weekly, on April 20, 2020 - April 26, 2020.

Industry players believe there will be selective opportunities to take advantage of, even in this market cycle. We hope investors will remain calm and invest wisely during this turbulent period. > Ho

Among the key regions and markets, the US posted the largest net inflows of US$829 billion. Europe, Asia ex-Japan and Japan saw net inflows of US$160 billion, US$105 billion and US$38 billion respectively last year. > Feng

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Public Mutual Bhd made history at the Refinitiv Lipper Fund Awards 2020 when it clinched two group awards — Best Equity Group and Best Mixed Assets Group — and 32 fund awards. For the second year in a row, it set the record for the largest number of awards won by a single fund management company.

Kenanga Investors Bhd was another big winner, bagging two prestigious group awards — Best Equity Group (Islamic) and Best Mixed Assets Group (Provident). It also won three fund awards. 

The other group award winners were Hong Leong Asset Management Bhd (HLAM) and AmFunds Management Bhd (AmInvest). HLAM took home the Best Equity Group (Provident) award and nine fund awards while AmInvest grabbed the Best Bond Group (Provident) award and three fund awards. 

This was the first time in 21 years that the awards ceremony could not be held, due to the Covid-19 pandemic, says The Edge Media Group publisher and group CEO Datuk Ho Kay Tat. “While we are disappointed that we are not able to catch up with fund managers and industry stakeholders this year, the safety and well-being of everyone is paramount to us. 

“Nevertheless, we still want to celebrate the achievements of the award winners. That is why the Personal Wealth team at The Edge Malaysia decided to continue publishing its annual coverage of the Lipper Fund Awards.” 

The Edge Malaysia is the official presenter of the Refinitiv Lipper Fund Awards in Malaysia.

This year, 84 awards were given out — six group awards, 25 fund awards in the conventional category, 32 fund awards in the provident category and 21 fund awards in the Islamic category. Like last year, there was no overall group award winner. To be eligible for this award, a fund house would need to have at least three equity, three bond and three mixed-asset funds that meet the required criteria.

According to Xav Feng, director of Lipper Asia-Pacific Research at Refinitiv, the winners in the three-year category (from end-2016 to end-2019) posted an average return of 25.04% while the winners in the five-year category (from end-2014 to end-2019) delivered an average return of 40.84%. The winners in the 10-year category (from end-2009 to end-2019) generated an average return of 126.71%.

Feng says the global fund market saw total net inflows of US$1.35 trillion in 2019, compared with US$532 billion in 2018. All assets except equity funds, which saw net outflows of US$186 billion, posted net inflows last year. 

“Among the key regions and markets, the US posted the largest net inflows of US$829 billion. Europe, Asia ex-Japan and Japan saw net inflows of US$160 billion, US$105 billion and US$38 billion respectively last year,” he adds.

The leading sectors in terms of net inflows were Money Market USD, Bond USD Medium Term, Bond Global USD and Bond USD. Equity US, Loan Participation Funds, Equity US Sm&Mid Cap and Equity Europe saw the highest net outflows.

After recording total net inflows of nearly US$5.3 billion in 2018, Malaysia saw total aggregate net inflows of US$7.2 billion last year. Of all the asset classes, bond funds experienced the highest net inflows of US$3.25 billion while equity funds posted net inflows of US$282 million.

In Malaysia, the sectors that enjoyed the highest net inflows were Money Market MYR, Bond MYR, Mixed Asset MYR Flexible and Mixed Asset MYR Bal — Global. Equity Greater China and Equity Malaysia Diversified suffered the largest net outflows.

Feng acknowledges that 2020 is proving to be a year of dramatic change across the global economy, market climate and political scene. “Undeniably, navigating the ongoing impact of the Covid-19 pandemic on financial markets and economies is the biggest challenge faced by the fund management industry. Refinitiv and Lipper will continue to watch how the pandemic plays out across the industry,” he says. 

Echoing Feng, Ho says industry players are hopeful that the global and local economy will see a recovery in the second half of the year once the pandemic has been contained. “More importantly, they believe there will be selective opportunities to take advantage of, even in this market cycle. We hope investors will remain calm and invest wisely during this turbulent period.” 

AmInvest is the decade’s most successful group award winner

AmFunds Management Bhd (AmInvest), whose funds were previously marketed under AmInvestment Services and AmBank, remains the most successful group award winner in the last decade with a total of eight group awards. This year, the fund house won the award for Best Bond Group (Provident). 

Public Mutual Bhd is the second most consistent group award winner, with six wins over the past decade. Its first group award — Best Equity Group — was achieved in 2006. In the last 10 years, it has also won the awards for Best Overall Group, Best Mixed Asset Group and Best Equity Group (Islamic). 

After a hiatus in 2019, Kenanga Investors Bhd came back to win the award for Best Equity Group (Islamic) this year. The fund house has won four group awards since 2017.