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Unpacking the Final Chapter: TradePlus DWA Malaysia Momentum Tracker’s Termination Report
May 19, 2025
Greetings, fellow investors! Today, we’re diving into the latest, and indeed, final annual report for the **TradePlus DWA Malaysia Momentum Tracker**, managed by AHAM Asset Management Berhad. This isn’t just another performance review; it marks a significant milestone as the fund officially terminated its operations on March 26, 2025. This report provides a comprehensive look at its performance leading up to its closure and the strategic rationale behind this decision.
While the fund concluded its journey with a -3.42% return for the period, it’s crucial to understand the underlying factors that led to this outcome. We’ll explore the financial highlights, the market environment it navigated, and the implications of its termination for unit holders and the broader ETF landscape in Malaysia.
Core Data Highlights: A Look at the Fund’s Final Performance
The final annual report offers a snapshot of the fund’s performance and financial health right up to its termination. Let’s break down the key figures:
Overall Fund Performance: The Last Stretch
For the financial period from April 1, 2024, to March 26, 2025, the TradePlus DWA Malaysia Momentum Tracker recorded a net loss. This contrasts with the previous year’s positive performance, reflecting the challenging market conditions and the fund’s specific circumstances leading to its termination.
Period Ending March 26, 2025
- Net Loss Before Taxation: RM (93,069)
- Net Loss After Taxation: RM (93,069)
- Fund Return: -3.42%
- Total Net Asset Value (NAV): RM 1.5391 million
- NAV per Unit: RM 1.0993
- Units in Circulation: 1.4000 million
Period Ending March 31, 2024
- Net Profit Before Taxation: RM 189,945
- Net Profit After Taxation: RM 189,945
- Fund Return: 23.10%
- Total Net Asset Value (NAV): RM 1.1380 million
- NAV per Unit: RM 1.1382
- Units in Circulation: 1.0000 million
Despite the negative return for the final period, the fund did manage to outperform its benchmark, the Dorsey Wright Technical Leaders Malaysia Index, by 0.69% during this specific period. However, since its commencement, the fund underperformed the benchmark by 3.46%.
Expense and Turnover Ratios: Efficiency in the Final Phase
The report also sheds light on the fund’s operational efficiency. The Total Expense Ratio (TER) saw a notable decrease, while the Portfolio Turnover Ratio (PTR) increased, indicating heightened trading activity as the fund moved towards liquidation.
Period Ending March 26, 2025
- Total Expense Ratio (TER): 1.36%
- Portfolio Turnover Ratio (PTR): 2.29 times
Period Ending March 31, 2024
- Total Expense Ratio (TER): 1.67%
- Portfolio Turnover Ratio (PTR): 1.40 times
The Manager noted that the lower TER was due to a higher average NAV for the final period, while the increased PTR was attributed to increased trading activities related to the fund’s termination process.
Portfolio Composition: A Full Liquidation
A key aspect of this final report is the fund’s asset allocation. As expected with a terminated fund, the portfolio underwent a complete liquidation, converting all holdings into cash.
| Category | As at 26 Mar 2025 (%) | As at 31 Mar 2024 (%) |
|---|---|---|
| Quoted equities – local | – | 97.63 |
| Cash and cash equivalent | 100.00 | 2.37 |
| Total | 100.00 | 100.00 |
This shift to 100% cash reflects the completion of the liquidation process, ensuring that unit holders received their proceeds in a timely manner post-termination.
Risks, Strategies, and the Road to Termination
The report doesn’t shy away from explaining the challenging market conditions and the strategic decision to terminate the fund.
Navigating Headwinds: The Malaysian Equity Market
The Malaysian equity market faced significant headwinds during the review period. The benchmark FTSE Bursa Malaysia KLCI (FBM KLCI) declined by 8.5% year-to-date as of late March 2025. Factors contributing to this subdued sentiment included persistent foreign selling, domestic political uncertainties, and broader global macroeconomic challenges.
Sector performance was mixed: technology and energy sectors showed resilience due to global demand recovery and higher crude oil prices, respectively. In contrast, financials, telecommunications, and construction sectors remained under pressure due to cautious earnings guidance and slower infrastructure project rollouts.
External pressures, particularly escalating global trade tensions and the renewed U.S.-China trade war, further impacted Malaysia’s export-dependent economy, leading to declining export orders, especially in the electrical and electronics (E&E) sector. Foreign fund outflows persisted, with net selling in Malaysian equities reaching RM8.8 billion by March 2025, alongside corporate governance concerns affecting investor confidence.
The Termination Strategy: A Difficult but Necessary Decision
The most significant revelation in this report is the termination of the fund. The Manager explicitly stated that despite their best efforts to promote the Exchange-Traded Fund (ETF), its asset size remained small. This resulted in a relatively high total expense ratio, which adversely impacted its performance. Consequently, it was deemed no longer practical to continue managing and operating the ETF in the best interests of the Unit holders.
The liquidation process was initiated and successfully completed on March 26, 2025. This decision was primarily driven by the fund’s small size, which hindered its ability to achieve effective portfolio diversification. While momentum-based strategies remain relevant, the subdued investor interest in Malaysia-focused passive strategies and the fund’s limited scalability ultimately led to its discontinuation.
Summary and Outlook: A Cautious Farewell
The TradePlus DWA Malaysia Momentum Tracker’s final annual report paints a clear picture of a fund that, despite its disciplined momentum-based strategy and outperformance against its benchmark in the final period, ultimately succumbed to structural challenges. The decision to terminate was a pragmatic one, driven by the fund’s small asset size and the resultant high expense ratio, which made continued operations impractical for unit holders.
Key highlights from this report include:
- The fund’s negative return of -3.42% for the period, yet it managed to outperform its benchmark.
- A significant reduction in the Total Expense Ratio to 1.36%, even as the Portfolio Turnover Ratio increased due to liquidation activities.
- The complete conversion of the portfolio to 100% cash, signifying the successful completion of the termination process.
- The persistent headwinds in the Malaysian equity market, characterized by foreign selling and global trade tensions, which underscored the difficult operating environment for the fund.
Looking ahead, the Malaysian equity market remains cautious, but the Manager identifies selective opportunities, particularly with the government’s commitment to structural reforms under the 2025 Malaysia Budget. These initiatives, focusing on domestic demand, green energy transition, and digital economy investments, could serve as medium-term catalysts for sectoral rotation. While the TradePlus DWA fund’s journey has ended, the broader market continues to evolve, presenting new avenues for agile investment strategies.
From a professional standpoint, the termination of the TradePlus DWA Malaysia Momentum Tracker serves as a stark reminder of the importance of fund scalability and investor interest, especially for niche or passively managed products like ETFs. While the fund’s strategy of rebalancing into outperforming sectors showed its merits, a lack of sufficient asset under management can render even a sound strategy unsustainable due to the impact of fixed costs on performance.
What are your thoughts on this fund’s termination? Do you believe more niche ETFs in Malaysia might face similar challenges if they don’t achieve critical mass? Share your insights in the comments below!
