This article first appeared in Personal Wealth, The Edge Malaysia Weekly, on March 14 - 20, 2016.

RHB Asset Management Sdn Bhd stepped up its game by taking home 15 individual awards at this year’s edition of The Edge-Thomson Reuters Lipper Fund Awards, making it the biggest winner in the individual fund category once again. Last year, it won 12 individual awards.

Managing director Eliza Ong attributes the wins to the fund house’s holistic “top-down plus bottom-up” investment approach in constructing portfolios of well-managed companies with solid fundamentals.

“For equities, our approach has always been to look at the investment target as a business when most people look at listed companies as merely shares,” she says, adding that this allows them to use a value investing approach. 

For fixed-income investments, Ong says that to deliver consistent returns that exceed expectations within the parameters set out for each portfolio, the fund house actively manages its portfolios without taking excessive risks and makes “high-conviction duration positioning” by taking into account the in-depth global macro outlook and trend assessment. 

Going forward, the team’s strategy is to remain focused on its longer-term and strategic investment views, and not to be distracted by short-term market volatility, which is expected to remain high this year. It will continue investing in companies with capacity expansion plans and the right cost structure that can still reap the benefits of low raw material costs amid lower commodity prices. 

“There is always a strong emphasis on selecting the best companies that can weather the changing economic climate for the portfolio. Thus, we will continue to focus on our bottom-up fundamental research in identifying companies with strong fundamentals for investment,” says Ong.

As there are no risks that can be fully hedged, the RHB team believes investing in stocks with strong fundamentals, sustainable business models, solid execution and track records will protect its portfolios from downside risks.

Last year was a year of heightened financial market volatility, says Ong. “Globally, we had fears over the impact of the Federal Reserve’s rate lift-off and accompanying US dollar strength, sudden currency devaluation and interest rate cuts by China, as well as the headlines-grabbing low crude oil prices.

“On the local front, we had close to a perfect storm. Adding to the macro challenges stemming from low crude oil prices, we were perturbed by the 1Malaysia Development Bhd implications, political issues and street rallies. All these punctured global investors’ risk appetite and caused huge capital outflows from across the emerging markets, Malaysia included.”

However, there wasn’t a significant portfolio rebalancing in 2015. Being less pessimistic than the rest of the market, the fund house remained almost fully invested throughout the year. 

“There were some changes and improvements in the assets under management (AUM) last year. We were more into mixed-asset type of funds as these provided consistent income distributions, and also equity-based funds, rather than fixed-income investments. We offered exposure to developed markets, such as the European developed markets, via new funds we introduced to our investors,” says Ong. 

Concurrently, the fund house focused on its existing pool of funds and ensured there were increases in AUM. These factors contributed to the 5% increase in the overall AUM last year.

Ong says the global economy’s overall growth will remain positive. However, she sees an increasing risk for further growth slowdown, with the biggest threat being a sharper-than-expected slowdown in China and the associated rising corporate default risks. “To overcome this, we have reduced our exposure to vulnerable sectors [such as commodities and property sector].”

She says that barring any unforeseen circumstances, the resolution of a few non-macro issues and stabilising of oil prices in the next few months will increase the attractiveness of the ringgit, though she does not foresee oil prices exceeding the yearly average of 2015.

The fund house aims to grow its AUM this year on the back of sound investments and innovative products. Amid global economic uncertainties and volatility, Ong believes there will be opportunities. 

“We are confident we can do this due to the imminent launches of new funds in the pipeline. There will be a good mix of conventional and shariah-compliant funds,” she says.