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The Smart Investor: Navigating Volatility and Grasping Opportunities
Navigating Volatility and Grasping Opportunities:
ASSET MANAGEMENT IN THE AGE OF DISRUPTION
The Malaysian economy is poised for a 5% growth in 2025 and the asset management industry is adapting to evolving investor expectations amidst shifting global market dynamics. As we progress further into the second half of the year, several key trends and challenges are shaping the landscape, influencing fund allocations, investment strategies, and technological advancements.
Q1 2025'S GLOBAL MARKET SNAPSHOT
The global markets, particularly the US equity, have experienced corrections between the range of 3%-5% after hitting record-highs. This comes amidst recent releases of economic data, pointing towards some cracks in the US economy, as evidenced by a weaker-than-expected Services PMI numbers and weakening consumer sentiment.
Concerns have arisen regarding the sustainability of US market exceptionalism especially after the US markets clocked 31.6% and 21.8% returns in 2023 and 2024 respectively, according to the S&P 500 Index (total returns in MYR terms). Looking beyond the US, we are seeing broadening signs of the current market rally, where companies beyond the Magnificent 7 have contributed not only to market performance, but also in terms of earnings results and guidance.
The broadening theme is not constrained to just companies domiciled within the US, we also see European and Chinese equities outperforming, surprising market participants, at 14.4% and 25.0% YTD gains respectively (Euro STOXX 600 Index, Hang Seng Mainland 100 Index, total returns in MYR terms), leading the pack vis-à-vis regional peers.
KEY MACROECONOMIC INFLUENCES AND RISKS FOR 2025
Several macroeconomic factors have impacted the global markets with President Trump’s administration policy announcement, specifically trade tariffs, taking the centre stage. While some view this as negotiation tactics, it has nonetheless stoked investor worries about economic growth, placing noticeable downward pressure on equities and bond yields.
Meanwhile, geopolitical tensions stemming from the unresolved wars are weighing on investor sentiment. On the tech front, the rise of DeepSeek AI and other Chinese chatbots has prompted scrutiny on the premium valuations of US tech giants. Meanwhile, central banks have stayed focused with the Federal Reserves (Fed) maintaining its data-dependent script on monitoring inflation (which remained at 2.8% in February).
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Maybank Asset Management launched its first in-house global fund, the Maybank Global Strategic Growth-I Fund (MSGF), in July 2024. Despite market volatility, the resilience of MSGF withstood external shocks and presented a globally diversified investment solution for long-term capital appreciation. We recently introduced the Maybank Global Technology-I Fund (MGTI), which targets high-growth tech companies. Together, MSGF provides a stable Shariah-compliant core, while MGTI captures growth opportunities in tech.
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and jobs growth (unemployment hovers near history lows). The uncertainty surrounding these macroeconomic factors has led to market volatility but we believe the situation also presents opportunities for investors to gradually build positions in quality companies poised for long-term growth.
GLOBAL ASSET CLASS TRENDS
Investment flows peaked in November 2024 and tapered off in 2025, caused by a slew of economic uncertainty stemming from the new US administration. Within asset classes, those that exhibit resilient characteristics, such as fixed income and diversifiers, witnessed better flows as compared to equities which suffered outflows after two roaring months in November and December 2024.
Within fixed income, investors are gravitating towards short-term bonds, indicating desire for safety while generating income and preserving some upside in the event the Fed were to pursue rate cut if the new Trump Administration policies were to curtail growth.
SHIFTING INVESTOR SENTIMENT AND EMERGING TRENDS IN MALAYSIA
In Malaysia, investor sentiment has strengthened since 2024 driven by greater political clarity and the roll out of fiscal initiatives that is aligned with global technological advancements especially AI. This optimism has led to the increased appetite for global equity funds with investors being exposed to resilient companies worldwide.
Tech investments have gained traction particularly with generative AI and rapid tech adoption across industries.
Simultaneously, we’re seeing pockets of investors favouring solutions that deliver steady income, plus a rising demand for tools to tame portfolio volatility through unconventional assets like private debt, which offer returns that don’t march in lockstep with traditional markets. The 2022 market downturn, where nearly all asset classes declined except cash, has left a lasting impact, driving demand for downside-protection strategies. Additionally, financial democratisation is expanding access to investment products, once exclusive to ultra-high-net-worth individuals, to a broader investor base in Malaysia.
Simultaneously, we’re seeing pockets of investors favouring solutions that deliver steady income, plus a rising demand for tools to tame portfolio volatility through unconventional assets like private debt, which offer returns that don’t march in lockstep with traditional markets. The 2022 market downturn, where nearly all asset classes declined except cash, has left a lasting impact, driving demand for downside-protection strategies. Additionally, financial democratisation is expanding access to investment products, once exclusive to ultra-high-net-worth individuals, to a broader investor base in Malaysia.
THE AGE OF AI AND DIGITAL TRANSFORMATION
Digital transformation has profoundly reshaped asset management in Malaysia, enhancing investors’ accessibility and fund advisor’s overall operational efficiency. For example, the introduction like the EPF i-Invest feature, the rise of robo-advisors and fintech wealth platforms have enabled investors to dive into diverse asset classes.
Client management and reach has also advanced as asset management firms leverage on digital tools to deliver better services through real-time engagement, seamless data sharing and other platforms such as mobile apps, revamped websites, communication materials and digital transactions.
The AI adoption is still early for the industry as local players are exploring ways for affordable integration. However, trends are emerging, for example, AI-powered
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bots are empowering staff when it comes to client interactions. Additionally, AI is also a win for advisory as it is equipping advisors with real-time data for tailored investment strategies. Moving forward, we see three game changers – a well-integrated client data system, advanced behavioural analytics and apps to enhance marketing and advisory solutions for top-notch client experience.
IMPACTS BY REGULATORY DEVELOPMENT
In 2024, the Securities Commission (SC) rolled out several key initiatives that continue to shape the industry in 2025. Aimed at spurring innovation in the capital market, regulatory initiatives include the Practical Guide on Venture Capital and Private Equity in Malaysia, the Family Office Incentive Scheme, the introduction of a regulatory sandbox, and enhancements to the regulatory framework to promote securities tokenisation. While not entirely new, these changes mirrors Hong Kong and Singapore and adoption is still in progress.
The Family Office Incentive Scheme has gained traction, particularly since the Johor-Singapore Special Economic Zone (JSSEZ) initiative took off. Market players, including ourselves, are collaborating closely with stakeholders to ensure the structures, offerings and operational models align economically and deliver compelling propositions for high-net-worth families looking to anchor their wealth in Malaysia’s growing ecosystem.
While tokenisation remains in its early stages of building a solid digital foundation, the sandbox and updated guidelines are encouraging steps such as faster settlements and lower costs via blockchain-based securities.
To this end, we see tokenisation as a future roadmap tied closely to our broader digital transformation plan.
THE REMAINING OF 2025 – WHAT TO WATCH OUT FOR
As we progress beyond Q1 2025, policy risks remain a dominant concern for investors especially due to President Trump’s aggressive trade stance—proposing steep tariffs of 25% on Mexico and Canada and 20% on China. These trade tensions come at a time when the US economy is showing signs of slowing, and interest rates have not eased as much as anticipated, adding to investor anxiety.
Market volatility has been evident, with the Nasdaq shedding over 2.5% in a single day and bond yields tumbling amidst US recession fears. However, we believe that concerns of severe economic downturn may be overstated as consumer spending remains resilient and labour market data continues to support growth. That said, after two years of strong equity market performance—including a 25% gain in the S&P 500 in 2024—even modest shifts in sentiment are amplifying risk premiums and fuelling market swings.
In Malaysia, external risks persist but the economy is bolstered by political stability, structural reforms, and fiscal initiatives that drive investment activity and domestic consumption. These factors provide a degree of resilience against global headwinds.
For investors, now is the time to reassess portfolios and build strong, diversified foundations. Whether the goal is seeking capital growth or steady income, aligning investments with risk budgets is crucial. As fund managers, our role is to navigate these challenges, identify resilient opportunities so investors can stay focused on long-term financial goals with confidence.
ABOUT THE EXPERT
Muhammad Hishamudin Hamzah is the CEO of Maybank Asset Management Group Berhad and Maybank Asset Management Sdn Bhd. Hisham brings over 13 years of experience in global equity markets. Previously, he was a Senior Portfolio Manager at Nomura Asset Management Malaysia, managing global equities and Nomura’s Global Multi-Asset Strategic Growth Fund.
His decade-long financial services career in the UK includes roles at Lansdowne Partners, a leading hedge fund, and Redburn Partners as an Equities Analyst. He began his career at EY UK, building a strong foundation in investment and financial management.
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