This article first appeared in Wealth, The Edge Malaysia Weekly on March 25, 2024 - March 31, 2024

TA Investment Management Bhd (TAIM) has won two awards at the LSEG Lipper Fund Awards 2024.

The TA Asia Pacific REITs Income Fund (TAREITs) clinched the Equity Sector Real Estate Asia Pacific (Malaysia) in the three-year category, while TA Dana Fokus bagged the Equity Malaysia (Islamic) award in the five-year category on March 6.

Choo Swee Kee, executive director and chief investment officer of TAIM, says buying underappreciated stocks with minimum downside potential was the investment strategy used by TA Dana Fokus.

The best stock call was on renewable energy company Cypark Resources Bhd, which was heavily oversold even though its business remained intact. This is while the firm increased its position on Econpile Bhd as the construction business was getting more active in the market, says Choo.

“Sometimes stocks [are] sold out of panic and if it’s in oversold territory, then that is when we scoop. Nevertheless, homework must be done to ensure that we know exactly what is going on with the said stocks,” says Choo.

Additionally, TA Dana Fokus was actively traded on certain range-bound stocks while the firm gradually bought positions for the medium to long term. Choo says the firm remained cautious as the market was quite volatile, thus cash level was maintained at around 10% to 15%.

On the other hand, the TAREITs income fund’s best-performing stock was Matrix Concepts, which not only provided a base of 5% yield but also gained share price appreciation during the year.

“For TAREITs, we maintain full investment in real estate investment trusts (REITs) due to cheap valuation after the crash in 2023. We buy REITs that will benefit from recovery post the Covid-19 [pandemic] and we always maintain a minimum 6% yield for the REITs fund,” notes Choo.

Meanwhile, the TAREITs income fund deployed most of its cash throughout 2023 as share prices fell significantly due to the high interest rate environment. “We bought REITs on weakness, and the cash level was less than 5%,” says Choo.

Underpinning all these are TAIM’s continuous efforts in refining its investment process with pro-active modelling, technical analysis and on-the-ground checks. It is a key factor that contributed to the firm’s win, as it allows the company to find good and undervalued stocks.

“We are in constant search of hidden gems — untouched, unloved or forgotten stocks that actually have real upside potential for us to be ahead of the curve,” he says.

Moving forward, Choo says the firm will remain cautious. Although markets like the US and Japan are at an all-time high, the economic data is not convincing. If there is a big pullback in those markets, there will be subsequent negative impacts on the financial markets.

Hence, the firm will perform short-term trading and take profits from performing stocks. TAIM will also maintain investments in resilient REITs and well-managed property companies that provide steady cash flow for dividend payments, says Choo.

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