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

Manulife Investment Management (M) Bhd won one group and six fund awards at the LSEG Lipper Fund Awards 2025, thanks to its ability to respond to market cycles and economic conditions, says Manulife CEO Jason Chong.

The company won the award for Best Mixed Assets Group (Islamic), while five of its funds clinched six accolades in different categories.

Two of the best stock calls that the investment team made last year were in the property and utilities sectors, says Chong.

“In early 2024, we were optimistic about the property sector, as several stocks were supported by their asset holdings and trading at a significant discount to their book value. Meanwhile, we viewed the utilities sector as a defensive option that offered consistent, recurring income. As a result, we kept our ‘overweight’ rating on both sectors.”

This strategic position paid off as both sectors performed well, he says, driven by the surge in demand for artificial intelligence (AI) and data centres, which significantly contributed to the portfolio’s strong performance in 2024.

Looking at the bigger picture, Chong believes that the fund house’s best investment strategy last year was to capitalise on the uptrend in the FBM KLCI and major global indices by maintaining a well-diversified portfolio that balanced both growth and defensive positions.

“We prioritised selecting high-quality stocks with strong fundamentals and robust earnings potential, while also taking advantage of sector rotations to optimise returns,” says Chong.

“Additionally, we closely monitored macroeconomic indicators and market trends, allowing us to make informed adjustments to our asset allocation. This approach ensured that we remained well-positioned to benefit from the positive market momentum.”

It is this well-diversified investment strategy that enabled the firm to win the mixed assets group award, and for several of its funds — Manulife Investment Al-Umran and Manulife Investment-HW Shariah Flexi Fund — to win in their respective mixed asset fund categories.

Chong also attributes the firm’s success to its ability to adjust allocations based on market cycles and economic conditions, guided by a proprietary model that incorporates insights from equities and fixed income. This offers them a more holistic approach to managing mixed asset funds.

“In terms of equity allocation, our strong returns are the result of strategic stock selection, supported by rigorous research and comprehensive analysis. For our bond allocation, our proactive approach to duration management has enhanced yield and helped us achieve attractive returns,” says Chong.

The Manulife Investment Al-Umran fund won two awards in the Best Mixed Asset MYR Balanced — Malaysia Islamic and Provident categories.

According to its latest fund fact sheet in February, the fund had 35.9% allocated to fixed income, in which the biggest holding (8.8%) was in Malaysia Government Investment Issue 4.07 (9/30/26). In equities, it was invested in the industrial products and services (7.9%), utilities (6.5%) and technology (5.4%) sectors. Its biggest holdings being Tenaga Nasional Bhd (6.2%), followed by IHH Healthcare Bhd.

The Manulife Investment-HW Shariah Flexi Fund, meanwhile, scored the Best Mixed Asset MYR Flexible (Islamic) (10 years) award.

The fund was most exposed to the industrial products and services (15.8%), healthcare (15.4%), and telecommunications and media (10.6%) sectors, according to its latest fund fact sheet in February. Its main holdings were in Sunway Bhd (6.9%), KPJ Healthcare Bhd (6.2%) and IHH Healthcare Bhd (5.2%).

“By maintaining a balanced portfolio of equities and bonds, we have optimised returns while effectively managing risk. We believe that effective risk management is fundamental to our investment approach,” he says.

The markets in 2024 were good for global equity investors, thanks to the AI boom, falling inflation and other factors. Malaysia’s equity market was also held up by strong investment inflows, earnings growth and excitement from data centre investments.

Amid these conditions, the fund house remained nearly fully invested throughout the year in 2024, while strategically rebalancing its funds by rotating between growth and defensive stocks.

“We continuously assess market conditions to determine the optimal split between these segments. Throughout the year, we regularly reviewed our portfolio to dynamically adjust asset allocation and stock selection in response to prevailing market themes and sentiment,” he says.

However, uncertainties over growth, inflation, the US presidential elections and escalating tensions in the Middle East cast a dark cloud over the global economy in the last quarter, according to Manulife’s first-quarter 2025 Malaysia outlook.

Global equities experienced significant volatility, which continued to this year as US President Donald Trump imposes tariffs on its trade partners. In the beginning of 2025, tighter US restrictions on AI chips and the launch of the Chinese AI chatbot DeepSeek triggered a sell-off in AI and data centre-related proxies in Malaysia, marking the deepest January decline since 1995, according to Manulife’s market review.

“The market swung from one end to the other on shifting economic outlook and interest rate expectations, all while geopolitics kept most investors on edge. While challenging, such a backdrop provided plenty of good investment opportunities for discerning fund managers,” says Chong.

Chong says given this economic outlook, the fund house will continue to implement its disciplined investment strategy centred on diversification and risk management.

“We will closely monitor key market events, including policy changes, interest rates, inflation trends and geopolitical developments to evaluate their potential impact on our portfolio. Our strategy involves maintaining a well-balanced portfolio while focusing on high-quality stocks to enhance returns,” he says.

“We believe that 2025 will be a pivotal year for strategic stock picking, with companies that consistently deliver earnings growth expected to provide favourable returns.”

The stocks that the team will be focusing on will be those with compelling valuations, strong cash flow, preferably those in net cash position, strong management and those with consistent dividend payouts, says Chong.

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