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

AHAM Asset Management Bhd has won the best Mixed Asset MYR Flexible Fund Over 5 Years accolade in the Malaysia (Provident) universe at the LSEG Lipper Fund Awards 2024 through the firm’s AHAM Tactical Fund.

Chief of equities Gan Eng Peng attributes the win to the firm’s investment philosophy, which is underpinned by an absolute return mindset by focusing on quality growth at reasonable prices.

By not being bound to a benchmark, it could raise cash during periods of volatility and focus on capital preservation when the macroenvironment was challenging, Gan adds.

He says the outperformance of the fund was driven mainly by some of its best investment calls, including property developer Eco World Development Group Bhd and telecommunications company Time dotCom Bhd, KPJ Healthcare Bhd and some glove counters.

Gan and his team have been holding Eco World’s shares for several years when the company was highly geared. The company was favoured by Gan and his team, as its balance sheet improved because of an astute management team, resulting in the closing of its valuation gap.

On the other hand, Time dotCom was Gan’s digitalisation and digital play. “We rode through the value-enhancing sell-down of its data centre business and continued to hold it, given its excess cash on the balance sheet,” he says.

According to news reports, Time dotCom sold its stake in AIMS Data Centre Holdings Sdn Bhd to DigitalBridge Group last year for RM2 billion. The deal was completed last April and was packaged as a strategic partnership between the two parties.

A contrarian bet that Gan and his team made last year and that turned out well was their positioning in the glove sector, which they expected to turn around in the longer term. In addition, the glove companies’ huge cash pile gave Gan and his team the confidence that the lack of profits from these companies would not cause their share prices to fall much further.

In the bigger picture, Gan and his team also made the right call on the local political landscape and decided to deploy more cash into the markets.

He says: “Our key call was political stability. Recall that Malaysia has suffered from political instability since the 1MDB issue cropped up in 2014. The frequent changes in government since then have resulted in policy delays, fear of commitment by investors and lack of proper administration. As a result, we have seen more than RM50 billion foreign portfolio outflow since 2014 and 20% negative performance on the KLCI up to 2022.

“What changed in 2022 and going into 2023 was the formation of a unity government. And what made this coalition government more stable than the previous iterations were the implementation of the anti-hopping law, the super-majority [of support] achieved and the strong backing of royalty for stability.

“Political stability brings forth policy implementation and, ultimately, investors have a road map for growth. Throughout 2023, we have seen value emerging due to low positioning by foreign and local funds, coupled with a greater semblance of growth. This confluence of factors naturally flowed into our decision to max out our positions into the market.”

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