The All Equity Index lost 2.3 per cent month-to-date as at May 31, 2012. The top five funds were mostly invested in Malaysian large caps; bottom five funds were heavily exposed to energy and agriculture commodities.
During the month of May, the MSCI AC World Index lost a hefty 4.9 per cent (in ringgit terms) as Greece’s exit from the eurozone was the topic of the month, ahead of the Greek elections on June 17, 2012. This was against the backdrop of soft global economic data, including data coming from the US.
Meanwhile, the possibility of the Federal Reserve embarking on Quantitative Easing 3 (QE3) sooner rather than later had been revived. Consensus estimates on Bloomberg for US and Europe’s 2012 real economic growth remained unchanged at 2.3 per cent and -0.4 per cent respectively (as of June 4, 2012).
Among the top performers in May were Malaysia, Taiwan and gold equities as the FTSE Bursa Malaysia KLCI, Taiwan TAIEX and FTSE Gold Minesindices returned 0.6 per cent, -0.2 per cent and -0.6 per cent respectively (all in ringgit terms). The FSMI – All Equity Index shed 2.3 per cent month-on-month in the worst month of 2012 thus far.
Domestic safe haven for Malaysian investors
Malaysian large caps (as represented by the FTSE Bursa Malaysia KLCI) were very well shielded from external headwinds mainly originating in the eurozone. However, small caps were not spared as the benchmark FTSE Bursa Malaysia Small Cap Index lost 4.4 per cent in May.
The top five funds held mostly large cap stocks in the oil and gas and financial sector, save for the Alliance Optimal Income Fund which was diversified into Real Estate Investment Trusts (REITs) and fixed income securities as well.
On the currency exchange front in the month of May 2012, the ringgit strengthened against the Aussie dollar and euro by 2.1 per cent and 1.6 per cent respectively while at the same time weakened against the US dollar, renminbi and Indonesia rupiah by 4.6 per cent, 3.7 per cent and 1.8 per cent.
On a year-to-date basis, the ringgit strengthened against the Indian rupee, Aussie dollar, Indonesian rupiah by 5.6 per cent, 4.4 per cent, and 4.4 per cent respectively as of end-May 2012.
This article is not to be construed as an offer or solicitation for the subscription, purchase or sale of any fund. Opinions expressed herein are subject to change without notice.