This article first appeared in Wealth, The Edge Malaysia Weekly on March 28, 2022 - April 3, 2022

KAF Investment Funds Bhd (KAF) bagged three awards at the Refinitiv Lipper Fund Awards 2022 through two of its award-winning funds, KAF Jade and KAF Vision.

KAF Vision won Best Equity Malaysia Small and Mid-Caps (Provident) for the three-year category while KAF Jade won Equity Asia Pacific (Malaysia) for the three- and five-year categories.

Chief investment officer Chue Kwok Yan says the company is honoured and humbled to have won the awards. “Although we won last year, every year is different and we never take the win for granted. The recognition of our effort in consistently delivering superior returns will definitely inspire us to strive for excellence in the years ahead.”

The key factor that contributes to the firm’s win is its people, says Chue, followed by its investment philosophy that focuses on a company’s fundamentals.

“Our people are our key strength and the biggest determinant contributing to our win. Our fundamentals-driven investment philosophy and investment strategy that adopt a disciplined approach in investment evaluation and sticking to our key areas of competency are two other factors that contributed to our outperformance,” he says.

Last year’s market was less volatile than two years ago, but it was still another challenging year as various events did not turn out according to fund managers’ expectations.

“For instance, advancements in vaccine development towards the end of 2020 raised hopes of an economic reopening in early 2021. However, delays in vaccination alongside rising Covid-19 cases negated the optimism. Then, the pendulum of events started to swing again, with good progress in vaccination programmes, but only to be neutralised by another Movement Control Order. The tug of war of opposing forces is akin to taking two steps forward, then two steps back.

“Amid all these oscillating events, markets continued to drift lower. Empowering our people to act in the best interest of our clients carried the day.”

However, the firm did not make major asset allocation moves last year as clearer market trends came into play, says Chue. “The market was less volatile in 2021 than in 2020, and there were clearer opposing trends in play. We did not carry out a significant rebalancing exercise, but did a more iterative exercise of increasing or trimming our weightage in certain sectors.”

He adds that the cash levels for KAF’s award-winning funds were around 10% throughout the year.

Chue expects 2022 to be another challenging year on the back of geopolitical risk and hawkish central bank policies. “Having said that, Malaysia is a beneficiary of commodity inflation. While there are risks, they also represent an opportunity to generate alpha. We will navigate the risks while capitalising on the opportunities with very active management of our funds.”

Active and nimble are two key words moving forward. “Staying ahead of the curve to minimise risk and being nimble will be our approach, even though it will be very taxing for fund managers as they need to be constantly attuned to the markets,” he says.

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