SINGAPORE (19 July 2022) – Notwithstanding the recent bloodbath in global equity markets, Phillip quant equity portfolios displayed nimbleness and resilience returning positive returns and outperforming their conventional counterparts and Islamic benchmark indices.
Quant Global Equity rose 9.7% year-to-date (30 June 2022), compared with Dow Jones Islamic Market (DJIM) index, which fell in tandem with the broader market giving a return of minus-23% year-to-date. Since its inception in September 2019, QGE returned a whopping 59.3% even though the global economy was wrecked by the Covid 19 pandemic and geopolitical challenges. DJIM Index made a positive return of 25.1% since September 2019.
Quant Asia Pacific Equity increased 18.07% year-to-date compared with Dow Jones Islamic Asia Pacific (DJIAP) Index’s negative-21.99%. QAPE rose 32.73% since inception in September 2019, making DJIAP’s growth of 7.56% pale in comparison.
Portfolio Returns
| YTD | Since Sep 2019 | Annualised | |
| Quant Global Equity [S] | 9.7% | 59.3% | 17.9% |
| Dow Jones Islamic Market | -23.0% | 25.1% | 8.2% |
| Quant Asia Pacific [S] | 18.07% | 32.73% | 10.85% |
| Dow Jones Islamic Asia Pacific [S] | -21.99% | 7.56% | 2.68% |
| Quant Global Equity [C] | 0.51% | -2.25% | -3.83% |
| MSCI AC World | -18.59% | -16.47% | -26.54% |
| Quant Asia Pacific [C] | 3.83% | -2.49% | -3.31% |
| MSCI AC Asia Pacific | -17.86% | -20.12% | -25.89% |
Source: Phillip Capital Management
Notes:
- As of 30 June 2022, in Singapore dollars.
- [S] – Shariah-compliant
- [C] – Conventional
Mr Rizalsham Endut, portfolio manager of Phillip Quant Portfolios attributed the performance in the face of challenges to its quantitative investment model – the computer algorithms applied in the selection of the stocks.
“The model is smart; it knows which industries to invest in and its devoid of human emotions,” Mr Rizalsham said. “Over the past six months, the model selected companies in the oil and gas, commodities and logistics. So far, it has made the right move.”
Its proprietary model screens over 9,000 active companies that are in its investable universe – filtered from the 150,000 publicly listed stocks worldwide – based on fundamental factors such as relative valuation, relative strength of their earnings momentum versus their peers, earnings forecast dispersion and many more. A monthly rebalancing on the first business day of every month using a ranking mechanism ensures a selection of a large number of the top percentile stocks. It also applies a “trend-following adaptation methodology” that systematically adapts stock selection to changing market conditions.
No Co-Mingling of Investors’ Funds
The funds’ disclaimer states the model has a success rate of 70%.
“There’ll be a time when we underperform; it can happen. But if you look at it in the long term, its success ratio is 100%,” he said, adding that these returns are net of fees.
The objective of the portfolios is to provide capital growth in the medium to long term by investing in a portfolio of global and Asia Pacific shariah-compliant securities that have good growth potential.
Since inception, the size of the portfolios – combined net asset value and clients’ investments – has grown to MYR 20 million.
According to Mr Rizalsham, the funds management is based on a client’s private mandate – which means clients invest in his/her individual account. Investors’ funds are not co-mingled with others, which gives them other benefits. “There’s no impact on a client if a major unitholder decides to withdraw his investments.” Furthermore, an investor does not incur additional costs such as trustee and audit fees which other fund management houses would impose. There is also no lock-in period – a client could redeem his investments at any time.
Mr Rizalsham, a Malaysian, was formerly the COO of Quant Asset Management in Singapore. Prior to his stint at QAM, he was the Principal Officer and CEO of Singapore Unit Trust Limited. He was also with Malaysia’s Permodalan Nasional Berhad, the country’s largest fund house managing PNB’s international fund.
Mr Rizalsham is contactable at +6012 5900 190.-/- www.halaluniverse.net
Editor’s Note: The name of the asset in this article was amended on 12 August 2022 to Quant Equity Portfolios. The portfolios comprise shariah-compliant equities listed on global and Asia Pacific exchanges.
