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

Public Mutual Bhd turned out to be the big winner at the LSEG Lipper Fund Awards 2025, clinching 28 individual awards and two group awards in the Best Bond Group (Malaysia) and Best Mixed Assets (Malaysia) categories.

Its CEO Chiang Kang Pey says the firm focused on selected stocks that benefited from the proliferation of artificial intelligence (AI) last year, particularly in the hardware and software segments.

Public Mutual also focused on sectors such as construction, property and transformers, which are related to the build-up to support the rollout of AI applications, says Chiang.

“AI technology investments have spurred economic growth and opened doors to new business opportunities across various sectors,” he says.

In this context, Chiang notes that Malaysia presented positive investment opportunities in 2024 with the domestic economy recording higher private investment, particularly in data centres for AI technology.

“These investments carry a positive multiplier impact on various industries such as utilities, construction, building materials, property, banking and others. Meanwhile, key infrastructure investments, revised wages for civil servants and a higher minimum wage have resulted in sustained domestic demand,” he says.

“We optimised the exposure to the aforementioned domestic sectors that have benefited from such trends.”

Moreover, regional and global markets generally rose in 2024 amid sustained global economic growth, easing inflation, the US Federal Reserve’s interest rate cuts as well as the continued AI boom.

On its part, the firm’s funds actively rebalanced its portfolios to capitalise on investment opportunities arising from the latest developments and changing trends in the domestic and foreign markets, notes Chiang. Public Mutual’s funds also maintained diversified portfolios comprising companies with strong fundamentals over the past year.

He says the most important lesson the firm learnt last year was to always adhere to its investment framework of managing its funds for the long term and not be blinded by short-term market fluctuations.

“On an overall basis, our funds were generally well invested in the equity markets in 2024. Public Mutual’s rigorous investment framework, which focuses on fundamental research and managing funds to deliver returns over the long term enabled our winning funds to ride through periods of elevated market volatility last year to generate commendable returns to our investors,” says Chiang.

“Overall, we focused on fundamentals and remained steadfast in our investment philosophy despite short-term market volatility. Throughout the year, we dedicated extensive time and resources to rigorous fundamental research which resulted in our funds’ solid performances.”

Chiang expects higher volatility in the equity markets this year. This is in light of upcoming policy changes under the Trump administration and the prospect of slower-than-expected US interest rate cuts.

Although uncertainties related to the pace of interest rate cuts could lead to increased market volatility, he says the US stock market outlook remains cautiously optimistic. Corporate earnings continue to support stock prices, with potential growth in sectors such as technology and healthcare, aided by the proliferation of AI across all industries.

“While optimal asset allocation across all sectors and markets is key to capitalising on investment opportunities, the US is envisaged to remain one of the major markets of focus due to the country’s resilient economy,” says Chiang.

Back in Malaysia, he says the domestic market’s strong performance last year could mark a turning point for the Malaysian market, which has lagged behind the region over the past decade.

“Compared with 9% in 2024, the domestic market is expected to deliver 5% earnings growth in 2025, driven by the realisation of major investments and sustained domestic demand.

“Given its undemanding valuation and decent dividend yield of 4.0%, there remain opportunities in the local market, and we will continue to select stocks on a bottom-up basis based on fundamentals,” says Chiang.

On the other hand, the domestic bond and sukuk market is anticipated to be underpinned by a stable domestic interest rate environment and healthy corporate credit profiles, he adds.

“Therefore, our bond and sukuk funds will look to lock in selected corporate bonds and sukuk at higher yields when opportunities arise. On equities, we continue to see value in selected domestic and foreign companies and will position accordingly when opportunities arise,” says Chiang.

Adding to this, Public Mutual will continue to maintain diversified portfolios and actively rebalance its portfolios to capitalise on investment opportunities in the domestic and foreign markets, says Chiang. The firm’s investment approach will remain focused on bottom-up research to identify companies with strong fundamentals.

Notably, current developments favour the technology and AI sectors, says Chiang. In addition, selected consumer stocks tend to be supported by resilient consumption trends.

“Our equity funds will continue to adhere to our established investment process to identify companies with strong fundamentals to weather the market volatility. Meanwhile, the bond portfolios of our balanced and mixed asset funds will continue to capitalise on selected higher-yielding bonds that are attractively priced to generate potentially better returns,” says Chiang.

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