THE Malaysian Association of Asset Managers (MAAM) said total assets under management increased by an impressive 35.8% to RM25.3bil last year, compared with 35.4% in 2001.
This was the finding of a survey conducted on 12 of MAAM's 21 members, who represent 80% of the funds under management in the private sector.
MAAM chairman Tunku Afwida Tunku Abdul Malek said given the current global economic conditions, the results were commendable. The performance was the best since the regional financial crisis, she told reporters after MAAM's AGM in Kuala Lumpur yesterday.
Afwida said the overall unit trust investments in 2002 made up about 46% of the total funds, with gains to the tune of 26.4% to RM11.5bil, compared with 40.6% in 2001.
She added that gains last year were attributed to new monies and also the performance of the funds.
The average growth of both equities and bonds combined was around 3% to 4%, she said, adding that bond funds were the big sellers.
Afwida estimated that fixed income funds could grow at 6% to 7% next year, depending on whether Bank Negara cuts interest rate.
We may see a rally on bonds if that (interest rate cut) occurs, she said, adding that more investment would be on private debt securities (PDS) rather than Malaysian Government Securities (MGS) because they were less expensive.
Asked if the 30% increase in assets under management could be maintained for this year, she said it was difficult to predict.
Our market still has good liquidity and investors generally favour bonds to fixed deposits because they generallyprovide better returns but a lot would also depend on how long the war in Iraq lasts, said Afwida.
For the next three to six months, we believe investors would continue to adopt a conservative stance, preferring to opt for bonds rather than equity, she said, adding that investors viewed the global market conditions as too unstable for them to invest heavily in equity.
She also said that if the war lasted more than three months, it would have a significant impact on the global economy as investors would be more risk averse.
A lot would depend on how long the war lasts and itsthe impact on the US economy, she said.