This article first appeared in Wealth, The Edge Malaysia Weekly on March 24, 2025 - March 30, 2025

UOB Asset Management (Malaysia) Bhd won an award at the LSEG Lipper Fund Awards 2025, as the United Malaysia Fund MYR Class A clinched the mixed asset MYR flexible (Malaysia) award in the five-year category.

Its CEO Lim Suet Ling says, “The artificial intelligence and data centre investment theme was one of the big drivers for fund returns in 2024.” Its best call was YTL Power International Bhd, as the fund manager anticipated the recovery of its utilities segment and data centre opportunities.

“While not in a hot sector in 2024, United Plantations Bhd was the fund’s second-largest contributor. We like the stock for its well-managed plantation and excellent capital management,” says Lim.

She attributes UOB Asset Management’s win to its investment approach, which has a bottom-up emphasis, allowing it to generate outperformance over the medium to long term from security selection.

“We were quite highly invested in equities for most of 2024. In the third quarter of 2024, we were more cautious in terms of equity exposure, as there was a period of high volatility, driven by the unwinding of the [Japanese] yen carry trade,” says Lim.

After a strong market move in 2024, UOB Asset Management sees security selection as an important driver of excess returns in 2025. “We have a preference for domestic-focused businesses and see opportunities from several investment themes,” says Lim.

Looking ahead, she sees opportunities in financials, energy and healthcare. The fund house believes financial firms will benefit from macroeconomic tailwinds and positive flows, while companies in the energy sector look attractive because of their undemanding valuation and earnings visibility.

“Within the healthcare sector, hospitals offer quality growth and benefits from rising needs from an increasingly ageing population,” she adds.

The firm is also overweight equities and holds a neutral view on bonds, as the former is underpinned by corporate earnings growth on the back of resilient global expansion.

Lim says gold can be considered as part of a diversified portfolio. Factors supportive of gold include its use as a hedge against inflation and rising demand from central banks.

She adds that US President Donald Trump’s policies, including on tariff and immigration, are seen to be inflationary, which would support the “higher for longer” narrative surrounding US interest rates and US dollar strength in the short to medium term.

“Against this backdrop, we do see some weakness in Asian currencies, including the ringgit. Malaysian exporters would generally gain from a stronger US dollar versus ringgit. And we would want some exposure to exporters in the portfolio.”

Ultimately, Lim says, it is important to focus on both upside and downside risks when making investment decisions. She adds that the biggest risk to look out for in this year’s market would be the direction of long-term US bond yields, “given the inflationary bias in some of Trump’s policies”.

She says: “This benchmark rate would have an impact on asset prices. Trump’s policies can be unpredictable and this could cause volatility in financial markets.”

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