What's Hot and What's Not

What's Hot, and What's Not

If you’re looking at the performance chart on the left and wondering if it was somehow accidentally inverted during the transmission of this article, wonder no more. It’s wasn’t. Global financial markets have been in distress since the start of the year as uncertainties surrounding the recovery progress of global economies stacked up. Gold, the go to asset in times of uncertainty, has not been spared. The Index has dipped 1.6% in USD terms since the start of the year. (Though the GoldETF has benefitted from the appreciation in USD against MYR to bring the ETF to gain 5.9% in MYR terms over the same period. More on that later). Death rates caused by the Coronavirus is no longer hogging the headlines - knocked off centre stage by the death of some cryptocurrencies, and tumbling prices of the others. Once the darling of investors, many have stopped to re-evaluate whether their destination will really be the moon with their crypto investments. The term “HODL” has never been more true after the recent fall of Celsius Network, a giant in the crypto lending world. More than 1.7 million customers globally have been impacted, leaving them to “Hold On for Dear Life” as they plead to have their investments returned to them.

Let’s not forget about the political drama that is surrounding us. Did you know that the conflict in Russia and Ukraine has not yet been resolved? That news has also been nudged to the side as tensions between US, and China intensifies after U.S House Speaker, Nancy Pelosi, made a visit to Taiwan against the wishes of the China government. China’s dissatisfaction is apparent through the ongoing “military drills” where multiple missiles have been fired into waters surrounding Taiwan. 

Throw that in with inflationary concerns, rising interest rates, and a patchy recovery in the global supply chain, and we’re left with a huge cloud of uncertainty hovering over global financial markets.

Stay Calm, and Go for Gold

Common-Wealth

If you’re feeling FOMO that Malaysia’s women’s badminton doubles pair Pearly Tan, and M. Thinaah managed to snag the Gold medal at the Commonwealth Games (amazing match btw), fear no more! We’ve got a solution for you! Maybe not in the form of a medal, but the transaction advice / contract note can be quite attractive too. With the yo-yoing prices of global financial markets, demand for Gold has been heating up, whilst risk assets….not so much.

But Why Gold? Gold has long been known as a storage of wealth as supply scarcity, and the high cost of mining leaves it with a perception of prestige and drives demand. Central governments have long used the precious metal as an integral part of foreign currency reserves to provide economic stability. And if central governments are using it to stabilise their economy, why wouldn’t investors do the same to stabilise their own investment portfolio?   Based on a study by the World Gold Council that spans more than 50 years (1 Jan 1970 to 31 December 2021), Gold has provided a return of 15% on average when inflation was higher than 3%.  And what if the inflation rate was lower than 3%? Then returns averaged over 6% per annum. Nevertheless, returns were in positive territory.

Because we’re Asians, let’s also take a look at this from an Asian currencies perspective.  The chart shows that over a timeframe of 20-years, Gold has actually provided steady annual returns in both a low inflation environment, as well as in a high inflation environment. Quoted in multiple different regional currencies, Gold price per ounce have proven to be able to provide refuge to investors who are looking for an avenue to store their wealth, and provide steady returns over the longer-term investment timeframe.

The TradePlus Shariah Gold Tracker

While there are numerous options for investors to gain exposure to Gold price, Gold-backed ETFs have been the preferred option given that it is physically backed by the asset that it tracks, and its ability to closely mirror the performance of Gold price. The convenience that it provides to investors looking to move in and out of the asset during any trading day without suffering from a wide difference between the buy and sell price also seen as an added bonus.

The Exchange-traded Fund: TradePlus Shariah Gold Tracker

The TradePlus Shariah Gold Tracker, Malaysia’s 1st and only physically-backed Gold ETF that is listed on Bursa, is able to provide investors with this option on the local front.  The ETF buys into physical Gold bars that are thereafter safeguarded in a vault in Singapore.  The ETF closely tracks the performane of the Gold price index by maintaining approximately 99% of its value in physical Gold.

Using USD as its base currency, the Gold ETF derives its performance from the movement of Gold Price, as well as the US Dollar. Which explains why the GoldETF remains in positive territory despite the marginal dip in the Gold index.  Since the start of the year, the Gold ETF’s NAV has appreciated by 5.9% in MYR terms (up till 9 August 2022), with 214kg of Gold (or 214 gold bars) maintained in its vault as at 31 July 2022.

The GoldETF saw its NAV close at RM 2.5235 per unit on 9 August 2022, and is tradeable on Bursa’s Main Market through your preferred broker.

The Unit Trust Fund: Affin Hwang Shariah Gold Tracker

To provide convenience to our investors, AHAM Capital has also launched a Unit Trust Fund that feeds into the ETF. This way, investors can conveniently gain access to Gold through their relationship manager, as opposed to performing the trade themselves via a broker.

The Unit Trust Fund is a feeder fund, and is able to track the price performance of Gold through its sole investment in the TradePlus Shariah Gold Tracker.

For more information

	www.tradeplus.com.my
	www.facebook.com/AHAMCapital/
	#ahamcapital
	+(60) 12 606 8685
	TradePlus ETF

Disclaimer: This article has been prepared by AHAM Asset Management Berhad (“AHAM Capital”) specific for its use, a specific target audience, and for discussion purposes only. All information contained within this presentation belongs to AHAM Capital and may not be copied, distributed or otherwise disseminated in whole or in part without written consent of AHAM Capital. The information contained in this presentation may include, but is not limited to opinions, analysis, forecasts, projections and expectations (collectively referred to as “Opinions”). Such information has been obtained from various sources including those in the public domain, are merely expressions of belief. Although this presentation has been prepared on the basis of information and/or Opinions that are believed to be correct at the time the presentation was prepared, AHAM Capital makes no expressed or implied warranty as to the accuracy and completeness of any such information and/or Opinions. As with any forms of financial products, the financial product mentioned herein (if any) carries with it various risks. Although attempts have been made to disclose all possible risks involved, the financial product may still be subject to inherent risk that may arise beyond our reasonable contemplation. The financial product may be wholly unsuited for you, if you are adverse to the risk arising out of and/or in connection with the financial product. AHAM Capital is not acting as an advisor or agent to any person to whom this presentation is directed. Such persons must make their own independent assessments of the contents of this presentation, should not treat such content as advice relating to legal, accounting, taxation or investment matters and should consult their own advisers. AHAM Capital and its affiliates may act as a principal and agent in any transaction contemplated by this presentation, or any other transaction connected with any such transaction, and may as a result earn brokerage, commission or other income. Nothing in this presentation is intended to be, or should be construed as an offer to buy or sell, or invitation to subscribe for, any securities. Neither AHAM Capital nor any of its directors, employees or representatives are to have any liability (including liability to any person by reason of negligence or negligent misstatement) from any statement, opinion, information or matter (expressed or implied) arising out of, contained in or derived from or any omission from this presentation, except liability under statute that cannot be excluded.

Warning Statement: A copy of the Prospectus / Supplemental Prospectus for the TradePlus Shariah Gold Tracker and TradePlus S&P New China Tracker, the Prospectus for the TradePlus DWA Malaysia Momentum Tracker and TradePlus MSCI Asia Ex Japan REITs Tracker can be obtained at Affin Hwang Asset Management's (“AHAM Capital”) website at www.tradeplus.com.my. Investors are advised to read and understand the contents of the Prospectus dated 28 November 2017 and Supplemental Prospectus dated 2 July 2019 (for TradePlus Shariah Gold Tracker), Prospectus dated 15 January 2019 and Supplemental Prospectus dated 2 July 2019 (for TradePlus S&P New China Tracker), Prospectus dated 9 July 2020 (for TradePlus DWA Malaysia Momentum Tracker), Prospectus dated 9 July 2020 (for TradePlus MSCI Asia Ex Japan REITs Tracker) before investing. There are fees and charges involved when investing in the funds stated herein. Investors are advised to consider and compare the fees and charges as well of the risks carefully before investing. Investors should make their own assessment of the risks involved in investing and should seek professional advice, where necessary. The price of units and distribution payable, if any, may go down as well as up and past performance of the funds should not be taken as indicative of their future performance. The Securities Commission Malaysia has not reviewed this material and takes no responsibility for the contents of this material and expressly disclaims all liability, however arising from this material.