Morningstar recently announced the winners for the 2023 Morningstar Fund Awards – Malaysia and PMB Investment Berhad emerged as one of the winners.
|Morningstar Category Awards||Winner|
|Best Malaysia Large-Cap Equity (Shariah) Fund||PMB Shariah Tactical Fund|
Congratulations to PMB Investment for winning the Best Malaysia Large-Cap Equity (Shariah) Fund award with their PMB Shariah Tactical Fund.
Smart Investor had the opportunity to interview Mahani Ibrahim, CEO of PMB Investment Berhad, to learn more about their winning funds.
Smart Investor: Congratulations on winning the Morningstar Award! Can you share with us what the recipe for your success is?
Mahani Ibrahim: The equity market’s performance last year was put under pressure by a combination of factors, such as rising inflation, interest rate hikes, the prospects of slower global growth, fears of a US recession, the Russia & Ukraine war, geopolitical events, supply chain disruptions and China’s zero-Covid policy.
In line with the market condition, the fund manager maintained the equities position around 70% to 82%. The fund manager was cautious about the equity market. The fund manager also adopted a trading strategy stance.
Last year, we focussed on non-traditional and essential businesses, export-oriented companies and ESG themes. Due to this approach, some of the stock selections contributed handsomely to the portfolios under our management.
SI: What are the strategies that you used in 2022? How was the fund positioned to mitigate risks and optimise opportunities?
MI: Last year’s asset allocation had a fair combination of core, dividend, growth and trading play. There was no significant re-balancing exercise as we practically held to our core and dividend stocks as we believed the companies had a potential upside.
However, the FM cut losses on some non-profitable stocks and replaced them with other companies we evaluated to have good potential. The fund manager maintained the cash level around 18% to 30%.
SI: 2022 was a bad year for most investments; how has this affected your investment strategies for both the short- and long-term?
MI: Throughout these challenging years, we emphasised stock picking to achieve outperformance. Besides, we used the “Buy on Weakness” approach if the market went down to a certain level and applied temporary defensive measures during adverse periods. We are more comfortable to raise cash and we are comfortable to be underperforming our peers and benchmark on short-term basis.
As our focus is our long-term performance, it is only natural that our performance to sway in the short-term basis due to the volatility.
SI: The recession is expected to hit us this year. What are your plans and strategies for 2023? Is there anything you plan to do differently?
MI: At the moment, we plan to stick to our approach as stated in Q3. However, we will be flexible on our strategy depending on the market and economic situation. Currently, we are focusing on defensive such as the consumer staples and quality yield play, energy (due to underinvestment in the recent years following the collapse of oil price), ESG themes and small and medium size companies with potential growth.
SI: With high inflation and interest rates, what’s your advice for retail investors?
MI: They should focus on the long-term value of their portfolio and avoid making poorly timed asset sales. Besides, they must be ready to withstand the short-term volatility of the equity market.