Asset managers start the year on a high note

“Also, with the low interest rates, loan moratorium and financial insecurity, they will be looking to build a financial buffer, ” country manager of StashAway in Malaysia Wong Wai Ken (file pic) told StarBiz.

PETALING JAYA: Asset management firms appear to be witnessing encouraging growth as people look for various avenues to park their money amid the uncertain economic outlook brought on by the Covid-19 pandemic.

The prevailing environment seems to bode well for such companies due to the low interest rates environment, among other factors.

“People are spending less and they would have more deposits. There are less expenditures on restaurants and travel, so naturally they would have more savings.

“Also, with the low interest rates, loan moratorium and financial insecurity, they will be looking to build a financial buffer, ” country manager of StashAway in Malaysia Wong Wai Ken tells StarBiz.

“We think that the unique set of circumstances has helped us to grow. With many people being confined to their homes, some very big events have happened in the Malaysian investing space. This has forced Malaysians to learn about investing, ” Wong adds.

He says when the movement control order (MCO) was implemented in March 2020 at the onset of the Covid-19 pandemic, there was a bear market, which helped drive greater public interest in the financial markets.

“There were also a few sectors that were exciting in Malaysia such as rubber gloves in May and June where the stocks rallied. Whether they had made money or got their fingers burned, they still learnt something about investing, ” Wong says.

“In October 2020, bitcoin soared again after being very quiet since the last boom in 2019. Recently, there was the GameStop frenzy in the United States. So there is a lot of knowledge being built up and a lot of new investors coming in, ” he adds.

StashAway is a digital wealth management platform that offers investment and cash management portfolios for both retail and sophisticated investors.

The company, which has a total paid-up capital of US$36.6mil (RM153.8mil), is backed several prominent venture capitals such as Eight Roads Ventures, the global investment firm backed by Fidelity and an early investor in Alibaba and Square Peg: the largest venture capital fund in Australia.

At the end of January, StashAway which operates in Malaysia, Singapore and UAE announced that it had hit assets under management (AUM) of more than US$1bil in a relatively short period of time since it first launched its services in 2017.

“Reaching the US$1bil milestone in less than four years is one of the many signs that Asia truly wants a better way to create wealth: We see high conversion rates and large consistent deposits, ” says Wong.

Another asset manager, Principal Asset Management Bhd group, recently reported it recorded a 5.1% increase in AUM of RM92.6bil as at Dec 31 last year from RM88.10bil in 2019.

The group’s AUM is comprised of Principal Asset Management Bhd and Principal Islamic Asset Management Sdn Bhd in Malaysia, PT Principal Asset Management (Indonesia), Principal Asset Management Company Ltd (Thailand) and Principal Asset Management Pte Ltd (Singapore).

Chief executive officer of Principal Asset Management in Malaysia Munirah Khairuddin said, in a statement, that its total dividend distribution for conventional and syariah-compliant unit trust funds was RM844.27mil.

“As we look at 2021 from the investors’ perspective, we recommend equities over fixed income. We remain positive on Asian equities favouring China and more developed Asian economies on a 12-month basis.

“We added more Asean funds in anticipation of a broader economic recovery which would be strengthen by the greater availability of Covid-19 vaccines by mid-2021, ” she said.

Manulife Investment Management (M) Bhd head of retail wealth distribution Ng Chze How was reported as saying recently that there had been a higher demand for unit trust investment under the new normal.Meanwhile, Affin Hwang Asset Management Bhd (AHAM) said it had recorded the strongest growth in total assets under administration in 2020.

AHAM said its AUM rose 26% from RM58bil at the start of 2020 to close the year at RM73bil as at Dec 31.

The total AUM represents the combined growth of both AHAM and its wholly-owned Islamic fund management arm AIIMAN Asset Management.