Pheim Asset Management Sdn Bhd’s philosophy to “never be fully invested at all times” has served it well. The firm took home seven fund awards at this year’s Refinitiv Lipper Fund Awards.
For the fifth consecutive year, Dana Makmur Pheim swept the awards for Best Mixed Asset MYR Balanced (Islamic) in the three, five and 10-year categories, as well as the awards for Best Mixed Asset MYR Balanced (Provident) in the three, five and 10-year categories. Pheim Asia Ex-Japan Islamic fund grabbed the award for Best Equity Asia-Pacific ex-Japan (Islamic) in the three-year category.
Founder and chief strategist Dr Tan Chong Koay says the firm’s philosophy and strategy is particularly relevant to Asian markets in the light of the region’s volatility. The fund house believes in reducing equity exposure when markets are near their peaks and
increasing equity exposure when the markets are near their troughs.
“It is not the perfect formula, but it will work in the long run as it has done for Pheim. The extent to which the formula is successful depends on the timing of your decision to sell before a strong market correction — so that you have the cash to buy when the market crashes.”
The fund house believes in reducing equity exposure when markets are near their peak and increasing equity exposure when the markets are near their troughs.
Despite the volatility that rocked financial markets last year, Dana Makmur Pheim had a good year, he says. “[The fund] registered a return of 18.09% in ringgit terms versus its benchmark’s 3.79%. Considering the ringgit’s slight appreciation against the US dollar, the fund registered a higher return of 19.31% in US dollar terms for 2019.”
Last year, financial markets were again in limbo following the US-China trade tiff, social unrest in Hong Kong, political imbroglio in the European Union due Brexit and crude oil price volatility. In Malaysia, the big-cap stocks were laggards as a result of political and economic uncertainties, which were compounded by a lack of “good growth visibility”, says Tan.
“As a result, the FBM KLCI declined 6% last year. Thankfully, in contrast, small to mid-cap stocks performed better. The FBM Small Cap Index was up 25.4%.
“Taking advantage of the market volatility and based on our investment criteria, Pheim managed to pick a few winners such as Datasonic Group Bhd, Wah Seong Corp Bhd, Johore Tin Bhd and Mega First Corp Bhd, as well as a few new technology listings such as Greatech Technology Bhd and AME Elite Consortium Bhd. In addition to these, rising palm oil prices also boosted the fund’s performance.”
Now that the unprecedented pandemonium in the form of the Covid-19 pandemic has sent the world’s markets into freefall, the crisis creates not only problems but also opportunities, says Tan. “Pheim’s studies show that equities can give returns of 8% to 12% in the long run. Your chances improve when the market is depressed.
“With the crash created by Covid-19, the US market plunge and political uncertainties, investors of long-term funds should seriously consider putting part
of their money into equities. You may temporarily lose money initially, but there will be an opportunity to make good money over the long term. Dana Makmur Pheim’s long-term track record is an example of this.”
He adds that the volatility will persist as the real economic impact from the Covid-19 pandemic, capital market adjustments arising from the US market crash and oil price recovery have yet to be fully realised. “If the pandemic can be brought under control in the next few months, we are hopeful that the global economy will start to improve. Then, the markets should be better.”