This article first appeared in The Edge Malaysia Weekly on December 12, 2022 - December 18, 2022

Maybank Asset Management walked away with two awards at The Edge Malaysia ESG Awards 2022. The Maybank Global Sustainable Tech fund was the gold winner in the best low carbon award category while the Maybank Global Sustainable Equity-I fund was the silver winner in the best impact in basic needs category.

“We take a multifaceted approach to integrating ESG elements into the winning funds. Each portfolio manager has an investment approach that incorporates an ESG criterion. ESG considerations are part of their research and decision-making process and are weighed appropriately to assess the long-term success of a company and its investment return. Analysis and integration of ESG elements can enhance a portfolio’s return and mitigate its risks,” says Syhiful Zamri Abdul Azid, chief investment officer at Maybank Asset Management.

“Our approach includes producing ESG research and ratings, conducting ESG portfolio reviews and, in coordination with other investors, engaging with companies on ESG issues for the benefit of our funds.”

Additionally, Maybank Asset Management’s investment advisers Schroders and Wellington Asset Management, have a dedicated ESG team with sector specialisation.

Managing funds this year has been challenging given the elevated uncertainty and volatility across markets. “A myopic focus on inflation and its downstream impact on longer-duration growth assets posed challenging headwinds for equity markets, particularly for assets in the technology sector. Our rigorous research and analysis compelled us to be more cautious of the near-term market outlook,” says Syhiful.

“We took a defensive position and rotated into higher-quality and larger-cap companies. We also balanced our portfolio exposure between growth and value stocks. However, we found several specific idiosyncratic opportunities to invest in high-quality businesses. These are expected to become long-term secular winners that were acquired at once-in-a-decade valuations,” he adds.

In recent years, the global health pandemic, coupled with natural disasters and bad weather conditions, have triggered investors’ curiosity and interest in ESG and Sustainable and Responsible Investment (SRI) funds. Syhiful expects demand for these funds to grow despite concerns about investment returns due to recessionary fears in the US and Covid-related economic lockdowns.

“We hope that stakeholders take ESG or SRI funds and activities more seriously now. They can see the tangible benefits of integrating ESG or SRI practices into society and investment portfolios,” he says.

“It is difficult to forecast what will happen in the short term, but we firmly believe that valuations for some stocks and sectors, especially the technology and healthcare sectors, are increasingly attractive relative to the broader market. Peaking inflation, a bottoming of earnings revisions and a more accommodative monetary policy from central banks can provide significant upside over the next several quarters and in the future. We believe that both funds can outperform their respective benchmarks in the coming years,” he adds.

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