The annual Morningstar Malaysia Fund Awards are designed to help investors identify the retail funds that added the most value for investors within the context of their relevant peer group in 2016 and over longer time periods.
To help our readers better observe what makes a winner fund, we asked the winning teams to shed lights on some major changes they made to the portfolio over the course of 2016, how various risks affect their investment decisions and their investment team structure, etc.
Best Asia Pacific Equity Fund -- Public Ittikal Fund
Key Stats
Inception Date: 10 April, 2010
Morningstar Rating (as of 2017-02-28): 
Total Net Assets (Mil, as of 2017-02-28): 1,218.15 USD
Manager:Yan Heong Tan & Mat Radzuan bin Abd Razak
Manager Start Date: 30 April, 2011 (both managers)
M: Morningstar PMB: Public Mutual Berhad
M: Could you highlight any major changes you made to the portfolio over the course of 2016? Were there any particular holding(s) that drove the fund’s performance for the year?
PMB: In view of a moderate growth in the domestic economy last year, Public Ittikal Fund (P ITTIKAL) focused its investments on selected large-cap stocks with resilient earnings growth in the utilities, telecommunications, plantation, services, healthcare, construction and infrastructure sectors. These stocks enabled the fund to ride through volatilities in the domestic market last year.
In terms of asset allocation, P ITTIKAL maintained a relatively high equity exposure in 1H2016 before trimming its equity weighting in 3Q2016 amid the consolidation in the domestic market. The fund subsequently increased its equity exposure in 4Q2016 as the domestic market stabilised.
M: What is your outlook for 2017 specific to the markets you cover and how are you positioned to take advantage of opportunities and/or mitigate potential risks?
PMB: On the domestic front, the Malaysian economy is anticipated to be underpinned by sustained consumer spending and investment spending backed by the ongoing implementation of infrastructure projects for the coming year.
On the external front, reflationary measures undertaken by the U.S. and Chinese governments to spur growth in their respective economies may continue to underpin energy, commodity and basic material prices which have rebounded from their lows.
In light of the above outlook, P ITTIKAL will continue to focus its investments on stocks with resilient earnings in the utilities, telecommunications, healthcare, services, construction and infrastructure sectors. The fund will also look for investment opportunities in the energy, plantation and basic materials sectors to capitalise on the current price uptrend of the underlying commodities.
M: Can you comment on the macro risks facing the global economy, including the US rate hikes, weaknesses in commodity prices and the significant headwinds facing the emerging world? How do these risks affect your investment decisions?
PMB: Looking ahead, growth in the global economy is expected to remain uneven with the Europe and China economies seeing a moderating growth outlook, while growth in the U.S. is forecast to remain resilient amid the new administration’s reflationary measures. The divergence in monetary policies between the U.S. Federal Reserve Bank and other major central banks may potentially lead to increased volatilities in global financial markets.
In terms of equity investments, we will continue to favour sectors that have resilient earnings outlook and/or positive secular growth trends such as healthcare and technology. In addition, we will also look for entry points in sectors which will benefit from a reflationary environment such as construction and basic materials.
M: How is your investment team organized? Have there been or do you anticipate any changes to the investment team or structure over the course of the year? Do you anticipate adding to the team in the near future?
PMB: We currently have a team of 23 fund managers who are supported by a team of 30 analysts specialised in specific countries or sectors. There have been no major changes to our investment team over the past year. We evaluate our headcount on an ongoing basis to ensure that we have adequate resources to undertake the management of our funds.
M: Can you highlight any areas where you feel that the investment team or the investment process can improve upon?
PMB: Members of our investment team seek to constantly improve themselves through continuous learning and development of their skill sets.
We also look to continuously upgrade and improve our workflow and processes as well as identify and employ best practices that will help to improve our efficiency as a team. To expand the scope of markets under our coverage and also to deepen our insights within the respective markets, we will continually look to strengthen the team with individuals who possess the appropriate skill sets.
Click here for other winners' Q&A.
