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

AmanahRaya Investment Management Sdn Bhd (ARIM) won four awards at the LSEG Lipper Fund Awards 2025 in the Bond MYR category, continuing its winning streak in this category for five years running.

CEO Mohamad Shafik Badaruddin says one of the firm’s best investment calls last year was investing heavily in higher-yielding investment-grade corporate bonds and sukuk early in the year, which offered stable and attractive returns due to a favourable interest rate environment and improved economic conditions.

“Our thorough analysis of the individual issuers’ financial health and market position convinced us of their potential, and our significant allocation to these companies paid off handsomely,” he says.

Shafik also attributes the win to ARIM’s investment strategy, which is a blend of sector rotation, active management and asset allocation. These led to the firm placing special emphasis on growing its allocation to riskier assets.

For instance, the firm was fully invested in its equity funds. It also kept its fixed income portfolio diversified across several industries, with particular emphasis on corporate bonds due a pickup in yields.
pursuing active management in segments in which the firm held strong alpha conviction, ARIM not only increased its allocation in high-yielding investment-grade corporate papers with attractive potential but also captured some capital gains on top of stable yield during the market uptrend.

“Our emphasis on asset allocation also allowed us to successfully seize opportunities during market upcycles and prevent extended periods of underperformance,” says Shafik.

“To safeguard our portfolio during volatile times, we employed strong credit research and risk management techniques. We were able to successfully ride the upsurge and provide our clients with substantial returns, thanks to our methodical and flexible approach.”

Did the firm perform a significant rebalancing exercise last year? Shafik says the firm did withdraw profits from overpriced assets periodically and reinvest them in fixed income opportunities that were deemed undervalued.

He says the firm maintained a moderate cash reserve to ensure liquidity and flexibility, allowing it to capitalise on market opportunities and manage risk during periods of volatility.

Looking ahead, Shafik says rigorous credit analysis will continue to be a key component of the firm’s strategy. It will conduct a thorough assessment of issuers’ creditworthiness and an unbiased evaluation of all investment opportunities.

“Our credit team carefully evaluates every opportunity against stringent criteria rather than disregarding any particular industry because of prior failures. By efficiently controlling risk and identifying potential alpha, this strategy enables us to make well-informed decisions for higher returns.”

The firm’s approach to managing its winning funds will be both proactive and adaptive, given current economic conditions, says Shafik.

“To mitigate risks, we maintain a diversified portfolio across various sectors and credit ratings, closely monitoring macroeconomic indicators and dynamically adjusting our asset allocation to capture emerging opportunities and avoid prolonged underperformance,” he says.

While the impressive performance of ARIM’s funds and the Malaysian markets set a high bar for fund managers this year, the firm still sees good investment potential and opportunities locally.

“It makes complete sense [for us] to continue to invest in Malaysia’s growth story. Initiatives like the New Industrial Master Plan 2030, political stability, fiscal responsibility, sustainability and competitiveness in key sectors make our country attractive. The RM378.5 billion in approved [private] investments in 2024 demonstrates this,” he says.

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