This article first appeared in The Edge Malaysia Weekly on November 27, 2023 - December 3, 2023

Maybank Asset Management Sdn Bhd (Maybank AM) bagged three awards at The Edge Malaysia ESG Awards 2023. The MAMG Global Environment Fund (MGEF) won gold in the best overall fund and the best equity fund categories, while the Maybank Global Sustainable Technology Fund (MGSTF) won silver in the best low carbon award category.

MGEF aims for capital growth by investing in the BNP Paribas Funds Global Environment, which looks for companies that focus on renewable energy, pollution control and sustainable food production. The fund seeks to tap the growth potential of companies benefiting from the shift towards more sustainable consumer behaviour.

“Because of the unprecedented environmental challenges facing us, we believe industries in the environmental sector will benefit from high growth over the long term due to the massive investment needed to meet these challenges. As environmental markets transform, the set of related investment opportunities is widening and deepening. This is supported by strong consumer interest and government policies as we transition to a more sustainable global economy,” says Syhiful Zamri, chief investment officer of Maybank AM.

Meanwhile, MGSTF focuses on global technology-related equities, and aims for potential long-term capital growth. Advised by Wellington Management, it employs a high-conviction portfolio approach using scientific tools as well as a multi-manager investment style with four sub-portfolios to manage risk and deliver returns.

The main challenges that MGEF’s fund managers faced was the higher interest rate environment and Russia’s invasion of Ukraine, which saw an increase in energy prices.

Inflationary pressure on the 2022 financial market was also cause for concern for the tech-focused MGSTF. However, “As the concerns on the [US] Federal Reserve being hawkish have tapered off moving into 2023, the fund has seen performance improvement, delivering a return of 25.62% year to date as at end-September.”

Challenges aside, “Twenty-two per cent of our total assets under management have a low ESG risk scoring based on Sustainalytics. This is tantamount to more than RM7 billion,” Syhiful says.

“As interest rates will likely reach a peak, we believe this will benefit growth companies such as technology stocks and we continue to find compelling opportunities across the technology space.”

Continued levels of uncertainty for interest rates on end-market demand for sustainability is to be expected in 2024, he adds, but the investment team is actively monitoring for earnings quality.

And while Syhiful expects a mixed outlook for tech markets in 2024, company fundamentals and key economic indicators remain largely resilient. “Despite concerns around excess enthusiasm for companies perceived as beneficiaries of generative artificial intelligence, we are seeing evidence of tangible demand, which could be a new growth driver across the tech landscape.”

The future looks promising, says Syhiful, as institutional investors are increasingly favouring ESG or sustainable and responsible investment (SRI) funds despite recent economic challenges such as lockdowns, supply chain disruptions, high inflation and global recession concerns.

This highlights a sustained commitment to socially responsible investing. “We do hope that all stakeholders will take the ESG or SRI funds and activities more seriously now as they can see real examples and benefits from integrating ESG or SRI practices in society and via investing.”

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