MIDF Amanah Dynamic Fund Report - January 2021

Transcription

1. Monthly Fund Fact Sheet as at 31 December 2020 MIDF AMANAH DYNAMIC FUND JANUARY 2021 FUND OBJECTIVE The objective of the fund is to achieve long-term capital growth through investments in a portfolio of Shariah-compliant equities with superior growth prospects . THE FUND IS SUITABLE FOR INVESTORS WHO: • • Are seeking long term capital growth, who wish their investments to be in line with Shariah principles; Can tolerate a high level of risks associated with stock market investments. FUND DETAILS (as at 31 December 2020) Fund Size RM 1.910 million Unit NAV Fund Inception Financial Year End Management Fee RM 0.7440 5 May 1976 15th day of March 1.5% p.a. of NAV Trustee Fee Initial Service Charge Redemption Payment Period 0.08% p.a. of NAV Up to 5.00% of NAV Within 10 calendar days Investment Manager MIDF Amanah Asset Management Bhd MANAGER’S COMMENTS Review The global equity market rallied during the fourth quarter of 2020, extending the positive momentum for the third consecutive quarter as the United States ("U.S.") election results, and positive news on the Covid-19 vaccine helped ease the market's uncertainties and improved investors' appetite towards risky assets on expectations of a broader economic recovery. Further accommodative policies continued to provide liquidity to the market as major governments announced fresh monetary stimulus to support their economies. Despite the challenging pandemic environment, the U.S. equity markets continued to register positive gains as investors focused on long-term earnings recovery. The S&P 500 and Dow gained +3.71% and +3.27% respectively over the month (quarter-on-quarter ("QoQ"): +11.69% and +10.17% respectively), while NASDAQ recorded a higher gain of +5.65% (QoQ: +15.41%). Year-on-Year, all three indices posted positive growth with NASDAQ registered the highest gains of +43.64%, followed by the S&P 500 and Dow at +16.26% and +7.25%, respectively. On the local front, investors were spooked by news that Fitch downgraded on Malaysia's long-term foreign-currency issuer default rating ("IDR") from 'A-' to 'BBB+' while Covid-19 was unabated with daily new record highs. However, despite those setbacks, our market maintained its resilience as investors pricing in an economic recovery in 2021, in-line with government’s guidance of a Gross Domestic Product ("GDP") growth of between 6.5% to 7.5% compared to -4.5% estimated for 2020. This will be underpinned by the effective roll-out of a Covid-19 vaccine. Economic data such as Exports and Manufacturing PMI stayed on the bright side with the former rose for the third straight month in November, expanding 4.3% from a year earlier, attributed to higher shipments of Manufactured Goods and Palm Oil products while the latter increased to 49.1 in December from 48.4 in November. Wrapping up the challenging year of 2020, the FBMKLCI ended on a positive note to close in December at 1,588.76 points, with a gain of +4.13% month-on-month ("MoM") (QoQ: +8.13%). On the other hand, the FBM Hijrah Shariah posted a negative MoM returns of -2.24% (QoQ: -2.69%) underperforming the FBMKLCI due to weaker performance of glove stocks during the month, which attributed to 19.30% of the index weightage. However, on a YTD basis, the FBM Hijrah Shariah registered a gain of 8.54%, outperforming the FBMKLCI, which only posted a YTD gain of +2.42%. Meanwhile, the Mid Cap Shariah and Small Cap Shariah rose 6.54% and 5.57% respectively m-o-m (YTD: +30.59% and +15.35% respectively). For the month of January, investors will be closely monitoring key events including the Monetary Policy Committee Meeting, the U.S. FOMC Meeting, updates on the progress of Covid-19 vaccine and also the domestic political developments. We viewed the year of 2021 as a recovery year with value and cyclical plays expected to dominate the investment theme throughout the year but not without a challenging and volatile period. Our growing optimism is anchored by the accommodative monetary and fiscal policy, and the assumption of vaccine mass availability after mid-2021 which may accelerate the return to normality. We opine that investors might increase their exposure to value and cyclical sectors due to depressed valuations and higher earnings growth potentials. Another investment theme that could manifest in 2021 is the Environmental, Social, and Governance ("ESG") as it has become a mainstream within the industry. Integration of ESG as an overlay is deemed pivotal during the investment decision process, resulting in higher equity allocation to stocks that exhibit strong ESG orientations and compliances. At the level of 1,627 points registered at the end of December, the FBMKLCI trades at 23.0x PER or +2.0 standard deviation from mean. We remain cautiously optimistic on the equity strategy and opine that the FBMKLCI is likely to perform modestly with an upward bias as we enter into the first quarter of 2021, should the index track its historical seasonal performances. The portfolio’s tactical equity exposure is expected to be in the range of between 80% to 85%, to continuously take advantage of the renewed improved sentiment and expectations of a broader economic recovery, which is viewed to be a key theme in 2021. We advocate our stock selection strategy to remain anchored towards sectors that are more resilient in growth. We continue to overweight on sectors such as technology and exporters due to decent earnings growth while also favouring high dividend yielding stocks which provide some defensiveness and deemed to continue doing well in a low yield environment. At the same time, we are also looking to increase cyclical growth stocks on weakness to position for a rebound in line with the broad-based economic recovery. We remain with the view that a diversified portfolio with a mixture of defensive and growth stocks may provide opportunities for alpha. In line with our strategy stance, we are positive on Technology, Telecommunication, Utilities and Construction / Infrastructure and Healthcare sectors. LARGEST HOLDINGS (as at 31 December 2020) COMPANY FOUNDPAC GROUP BHD TELEKOM MALAYSIA BHD TENAGA NASIONAL BHD AXIATA GROUP BHD MUHIBBAH ENGINEERING (M) BHD % 10.00% 8.50% 7.64% 5.87% 5.23% ASSET ALLOCATION (as 31 December 2020) *as percentage of NAV. Please note that asset exposures for the funds are subject to frequent change on a daily basis. FUND PERFORMANCE (as at 31 December 2020) Investment Outlook & Strategy The FBMKLCI continued where it left off in November, extending further its positive returns in the month of December to wrap up the year on a positive note. The encouraging sentiment was driven by renewed optimism and expectations of better economic and corporate earnings recovery in the year 2021. The FBMKLCI garnered 65 points in December with a gain of +4.1% MoM, to close the year at 1,627 points. This in turn has resulted in the FBMKLCI registering a positive return of 2.4% in 2020, following two consecutive years of negative returns of -5.9% and 6.0% in 2018 and 2019, respectively. Whilst the overall sentiment was generally muted throughout the pandemic period, the market’s decent performance was well supported by the strong share price rally of glove and technology stocks which was further lifted by the strong retail participation of approximately 40% on the back of ample liquidity driven by various stimulus packages as well as the low interest rate environment. CALENDAR YEAR RETURN (as at 31 December 2020) FUND FBMHS* 3M 11.38 -2.69 6M 12.27 3.65 1YR 1.74 8.54 3YRS -18.30 -1.29 5YRS -18.41 0.06 *FBM Hijrah Shariah Index (FBMHS +gross dividend yield) Note: Upon conversion to Shariah fund, benchmark has been changed to FBMHS from June 01, 2018 onwards Source: Lipper Fund Table (The Edge, 11 January 2021) (1) Based on the fund’s portfolio returns as at 14 December 2020, the volatility Factor (VF) for this fund is 18.51 and is classified as “very high” (source: Lipper). (2) Volatility Factor (VF) is subjected to monthly changes and Volatility Class (VC) will be revised every six months. (3) The portfolio composition may change overtime, therefore there is no guarantee that the VF and VC to remain constant. Investors are advised to read and understand the prospectus before investing. Among others, investors should consider the fees and charges. The price units and distributions payable, if any, may go down as well as up. Past performance of the fund should not be taken as indicative of its future performance. Investment in the funds are subjected to market risk, stock specific risk and liquidity risk. A copy of our Master Prospectus dated 1 March 2017, 1st Supplementary Master Prospectus dated 26 July 2017, 2nd Supplementary Master Prospectus dated 22 May 2019, 3rd Supplementary Master Prospectus dated 9 March 2020 and 4th Supplementary Master Prospectus dated 5 October 2020 have been registered with the Securities Commission who takes no responsibility of its contents. The prospectus and application form can be obtained at our office. Units will only be issued upon receipt of an application form referred to in and accompanying the prospectus.