Malaysia’s fund management industry assets rose 2.54% in January through July, as foreign investors fled emerging-market stocks and sought safe haven assets, including bonds, in the wake of the coronavirus pandemic.
The industry’s total assets under management as of end-July was 844.07 billion ringgit (US$202.55 billion), up from 823.19 billion ringgit at the end of 2019, according to latest figures published on the website of Securities Commission Malaysia. Assets were up 4.5% from 807.69 billion ringgit in June.
The regulator typically posts the data without providing analysis.
Bond fund assets jumped 12.12% to 203.65 billion ringgit between January and July. Assets of stock funds fell 2.20% to 391.34 billion ringgit in spite of a 5.45% month-on-month gain in July.
The decline in stocks over the seven-month period was mainly driven by foreign investors cutting their exposure to emerging markets to move into safe haven assets amid the pandemic, according to a fund manager at a Malaysian fund management company.
“Even though Malaysia’s stock market was up by about 1% during the first seven months, the overall [equities] industry AUM fell as we have many funds that have exposure to other emerging markets, including Indonesia and Thailand stocks, which suffered badly during the pandemic,” the Kuala Lumpur-based manager tells Asia Asset Management, speaking on condition of anonymity.
Bond fund assets were up 3.16% month-on-month in July.
Assets of fund of funds jumped 14.89% to 41.12 billion ringgit over the seven months, and rose 7.03% in July.