This article first appeared in Wealth, The Edge Malaysia Weekly on March 28, 2022 - April 3, 2022
Principal Asset Management Bhd clinched four awards in the Asia Pacific ex-Japan category in the Refinitiv Lipper Fund Awards 2022.
Principal Asia Titan Fund won the Best Equity Asia ex-Japan (Provident) award in the 10-year category while Principal Asia Pacific Dynamic Equity won the same award in the Islamic universe in the three-, five- and 10-year categories.
CEO and chief investment officer of Principal Asset Management Singapore Christopher Leow says it is the demonstration of thought leadership in the firm that contributed to its success. “We believe consistent alpha is generated when we achieve thought leadership through the early identification of the long-term growth prospects of companies.”
The firm’s investment philosophy that focuses on identifying fundamental changes in economies, markets and companies has also been working well when investing in the regional markets.
“This focus drives us to do primary research, think independently and position our investments ahead of the market. Over time, this philosophy allows the funds to deliver consistent, low-risk and high-return performance.”
For Leow, last year’s biggest challenge was still very much about the development of the Covid-19 pandemic, which continued to cause widespread concern and economic hardship for consumers, businesses and communities across the globe. Internally, the firm has spent the bulk of its time since last March responding to the effects of the pandemic on its workforce and business operations.
“One of the challenges we faced was to operate both safely and economically, which we were able to do through technology and the digital platform. At the same time, we continued to ensure that our clients were hand-held through educational materials, online webinars, relationship calls and social media.”
As the firm responded successfully to the challenges posed by the pandemic, its business operation is recovering from the disruption last year and focusing on ways to emerge stronger in the future of an increasingly digitalised world.
Leow says Principal’s award-winning funds that invest in Asia-Pacific were fully invested at all times throughout last year’s volatile market. This was because the team was able to find stock ideas amid market swings. They are also long-term investors who do not trade the market frequently.
“We avoid making high-frequency changes unless there are better opportunities on a structural basis to reduce the risk of the portfolio,” he says.
Leow plans to diversify the holdings of the two funds across various businesses to improve portfolio’s resilience. “We will maintain our focus on quality companies that are long-term winners. They are expected to benefit from structural changes in their respective industries through gaining market share.
“We prefer companies with pricing power to overcome cost pressure and those with good earnings visibility. Growth companies are also under our radar. These companies tend to be less vulnerable to sudden changes in macroeconomic conditions,” he says.
Leow also expects the Malaysian economy to improve this year, following the normalisation of economic activities. “We deem the market to be attractive and we remain steadfast in our strategy to overweight cyclical themes, including companies in the consumer discretionary and commodity sectors.”
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