FMUTM 10th Annual General Meeting
26th MAY 2004
UNIT TRUST INDUSTRY: A GLISTENING AND GLOWING YEAR
Renaissance Hotel, Kuala Lumpur
The Malaysian unit trust industry weathered a storm of economic and geopolitical uncertainties in the first half of 2003, and ended the year on a bright note. Total Net Asset Value (NAV) of unit trust funds expanded from RM53.70 billion in end-2002 to RM70.08 billion in end-2003, a strong growth of 30.50% for the year under review. This is far better than the 13.41% increase recorded in 2002. However, the industry’s NAV accounted for a lower percentage of the Kuala Lumpur Stock Exchange’s (Bursa Malaysia’s) market capitalisation at 10.95%, which was 0.2 percentage points below the previous year’s level.
“I am pleased to report that 2003 turned out to be a challenging yet successful year. The Malaysian unit trust industry performed impressively, … To put this in perspective, with a record 44 funds successfully launched during the year, the industry’s assets have expanded at a compounded annual growth rate of 14.6% over the period since 1992 (the year when statistics were made available). Going forward, this definitely augurs well for the enormous growth potential of the industry,” said Dato’ Abdul Azim Mohd Zabidi in his President’s Statement for the Federation of Malaysian Unit Trust Managers (FMUTM) Annual Report 2003, which was released at the FMUTM’s 10th Annual General Meeting held today.
The Malaysian unit trust industry certainly had a glistening and glowing year in 2003, with funds averaging 20.39% in gains and all unit trusts ending 2003 in positive territory. The average annual return was more than 16 percentage points greater than that of 2002.
According to Lipper Asia Limited, 2003 turned out to be a gratifying year for investors who ventured into Malaysian equity investments. Malaysia’s economy picked up steam over the year, backed by higher exports and improving Gross Domestic Product (GDP) growth, which indicated an upward trend in the country’s economy. Investors enjoyed double-digit returns in the equity funds market – on average over 25% gains in 2003 – and the benchmark KLSE Composite Index (KLCI) closed the year at 793.94 points, surging 22.84% for the first broad-based rally in the past three years. Malaysian equity bulls pointed to a strong economy and robust consumer spending substantiated a rosy surge in the market.
Last year, 44 new funds were launched by 15 unit trust management companies, bringing the total number of unit trust funds to 216. In terms of fund types, Islamic funds continued to top the list with the introduction of 13 fresh funds or 29.55% of all new funds launched. Among these were four Islamic mixed-asset funds and three Islamic bond funds which combined total has out-stripped new Islamic equity funds for the first time. These diverse types of Islamic funds bring the industry a step closer towards offering Malaysian investors a more comprehensive range of Islamic products that conform to Syariah principles. Local investors also witnessed four additional guaranteed funds being launched following their debut in October 2002. The new launches were mainly mixed-asset funds, indicating investors’ increased appetite for risk but with some retained exposure to bonds.
In 2003, the FMUTM continued to focus its efforts towards achieving its vision to develop the unit trust industry as the preferred vehicle for savings and retirement. A three-pronged approach was the mainstay of the Federation’s work, with emphasis on educating the public about the benefits and risks of unit trust investing; encouraging the introduction of new, innovative products to make it more attractive for investors; and raising the level of professionalism in the industry, particularly for UTCs (Persons Dealing in Unit Trusts).
On the international front, the FMUTM successfully hosted the 17th Annual Assembly of the International Funds Associations (IIFA) in October 2003. “Malaysia was the first Southeast Asian country to be given the honour and privilege to host this international assembly, a testament to the FMUTM’s growing prestige and reputation at this level,” said Dato’ Azim.
FMUTM is guided by the Development Plan for the unit trust industry, aimed at moving the industry forward in tandem with the recommendations contained in the Capital Market Masterplan (CMP). In this regard, changes are being set in motion to keep the Federation at the forefront of the implementation process of the numerous CMP’s recommendations pertaining to the investment management industry. A special resolution to change the name of the FMUTM to the Federation of Malaysian Investment Managers, or the FMIM, is being tabled at the 10th AGM today. This is to reflect the evolving role of the FMUTM as it develops into a national association representing all companies involved in managed funds.
FMUTM was formally incorporated on 7 August 1993 as a Company Limited By Guarantee but became operational with a full time Secretariat in July 1995. FMUTM provides a common platform for member companies offering unit trust products and services to discuss issues relating to the industry.
ISSUED BY: FEDERATION OF MALAYSIAN UNIT TRUST MANAGERS
26 May 2004
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