Manulife Dana Saham Kelas A

Key detractor to fund performance in Q4 was allocation in the materials, communication, and financials sectors. In the materials sector, the fund’s underweight position in a petrochemical company result in underperformance of 185bps, as the stock rose >100% in Q4 that mainly occurred in early December. We don’t think the rally is fundamentally justified and we have not added position. In the communication sector, key detractor was the fund’s overweight position in telco operator as the stock was hampered by acquisition uncertainty. In the financials sector, key detractor was the fund’s natural underweight in big cap banks as the benchmark weighting on some big cap banks >10%.

We are somewhat cautious in the short-term as the market rallied at the end of 2023. On the global front, we think the market is overoptimistic on The Fed’s rate cut potential while the central bank’s stance remains cautious. We are also wary of the geopolitical risk that may arise from Taiwan election and uncertain condition in the Middle East. On the domestic side, we think despite risk-on sentiment in global equity market, investors’ sentiment in the domestic market remains lukewarm. Market rally was dominated by a small number of stocks, while the majority of the companies continued to de-rate. In this environment we favor companies with strong earnings visibility and look to add in interest rate sensitive stocks that likely to benefit from potential rate in 2024.

Manulife Saham Andalan

Key detractor to fund performance in Q4 was allocation in the materials, IT, and financials sector. In the materials sector, the fund’s underweight position in a petrochemical company result in negative attribution as the stock rose >100% in Q4 that mainly occurred in early December. We don’t think the rally is fundamentally justified and we have not added position. Our overweight position in the green commodity stocks also result in negative attribution as the sector performance was hampered by China’s disappointing growth.  Meanwhile, sentiment on Indonesia IT sector remain unfavorable in Q4 that result in negative attribution from this sector. In the financials sector, the funds underweight position in big cap banks result in negative attribution as the small-mid cap banks underperformed the big cap banks in the period.

We are somewhat cautious in the short-term as the market rallied at the end of 2023. On the global front, we think the market is overoptimistic on The Fed’s rate cut potential while the central bank’s stance remains cautious. We are also wary of the geopolitical risk that may arise from Taiwan election and uncertain condition in the Middle East. On the domestic side, we think despite risk-on sentiment in global equity market, investors’ sentiment in the domestic market remains lukewarm. Market rally was dominated by a small number of stocks, while the majority of the companies continued to de-rate. In this environment we favor companies with strong earnings visibility and look to add in interest rate sensitive sector that likely to benefit from potential rate in 2024.

Manulife Greater Indonesia Fund

Key detractor to fund performance in Q4 was allocation in the materials, IT, and financials sector. In the materials sector, the fund’s underweight position in a petrochemical company result in negative attribution as the stock rose >100% in Q4 that mainly occurred in early December. We don’t think the rally is fundamentally justified and we have not added position. Our overweight position in the green commodity stocks also result in negative attribution as the sector performance was hampered by China’s disappointing growth.  Meanwhile, sentiment on Indonesia IT sector remain unfavorable in Q4 that result in negative attribution from this sector. In the financials sector, the funds underweight position in big cap banks result in negative attribution as the small-mid cap banks underperformed the big cap banks in the period.

We are somewhat cautious in the short-term as the market rallied at the end of 2023. On the global front, we think the market is overoptimistic on The Fed’s rate cut potential while the central bank’s stance remains cautious. We are also wary of the geopolitical risk that may arise from Taiwan election and uncertain condition in the Middle East. On the domestic side, we think despite risk-on sentiment in global equity market, investors’ sentiment in the domestic market remains lukewarm. Market rally was dominated by a small number of stocks, while the majority of the companies continued to de-rate. In this environment we favor companies with strong earnings visibility and look to add in interest rate sensitive sector that likely to benefit from potential rate in 2024.

Manulife Pendapatan Bulanan  II

The fund outperformed the benchmark in Q4 as market sentiment turned positive in November-December period. Major driver of market rally came from the global space with less hawkish Fed’s policy supported by weaker US economic data. There is stronger expectation that the rates may have peaked in the US and The Fed potentially cutting rates next year. Stronger rate cut potential was favorable for the short-tenor bonds. The 5y bond yield dropped from 7% in October to 6.4% at the end of December. We maintain portfolio duration at around 2.7 years and continue to seek out higher yielding money market corporates for yield enhancement.

Manulife Obligasi Negara Indonesia II Kelas A

The fund outperformed the benchmark in Q4. The 10-year bond yield was volatile in Q4 with yield rising in October from 6.89% to 7.09% as the market was concerned with Fed rate outlook and conflict in Middle East. However, market sentiment turned positive in November-December period. Major driver of market rally came from the global with less hawkish Fed’s policy supported by weaker US economic data. There is stronger expectation that the rates may have peaked in the US and The Fed potentially cutting rates in 2024. The 10y bond yield dropped from 7.09% to 6.45% in the November-December period. Meanwhile domestic macroeconomic condition remains supportive with inflation continued to moderate to 2.61% YoY, and Bank Indonesia maintained its policy focus on rupiah stability. We maintain portfolio duration at around 7.2 years as market sentiment remain favorable with the expectation of potential rate cut in 2024. However, we are also wary of short-term volatility as domestic bond issuance expected to be sizeable as the government front-load its issuance, and also global volatility can persist as the market remains sentiment driven on rate cut expectation.

Manulife USD Fixed Income Kelas A

The fund outperformed the benchmark in Q4 supported by stronger performance in November-December period. The market was volatile in October as concern on The Fed’s higher for longer outlook lingers and conflict in Middle East. However, market sentiment turned positive in November-December period. Major driver of market rally came from the global space with less hawkish Fed’s policy supported by weaker US economic data. There is stronger expectation that the rates may have peaked in the US and The Fed potentially cutting rates in 2024. The 10y UST dropped from 4.98% to 3.86% as the market turned more optimistic on rate cut potential. Meanwhile domestic macroeconomic condition remains supportive with inflation continued to moderate to 2.61% YoY, and Bank Indonesia maintained its policy focus on rupiah stability. Portfolio duration is at around 3 years.

Manulife Dana Campuran II

The fund underperformed the benchmark in Q4. Key detractor to overall fund performance was allocation in equity, where the biggest detractor was that the fund had no position in a newly listed stock in the utilities sector that rose >500% in the period. This position alone result in underperformance of 340bps against the benchmark. However, we don’t see the rally in the stock is justified fundamentally and maintain no position in the stock. Another detractor to the fund was from the energy sector, due to underperformance in oil and gas stock as global oil price fell in the period. Meanwhile, strong security selection in the materials and industrials sectors managed to offset some of the underperformance.

We are somewhat cautious in the short-term as the market rallied at the end of 2023. On the global front, we think the market is overoptimistic on The Fed’s rate cut potential while the central bank’s stance remains cautious. We are also wary of the geopolitical risk that may arise from Taiwan election and uncertain condition in the Middle East. On the domestic side, we think despite risk on sentiment in global equity market, investors’ sentiment in the domestic equity market remains lukewarm. Market rally was dominated by a small number of stocks, while the majority of the companies continued to de-rate. With this backdrop, we look to maintain overweight position in bonds, and continue to monitor market dynamics to add position in equity.

Manulife Dana Tumbuh Berimbang

The fund underperformed the benchmark in Q4. Key detractor to overall fund performance was underperformance in equity. The fund’s allocation in the materials sector was the key detractor as green commodity stock were under pressure due to weak China growth outlook. Other detractor was from IT stocks, as sentiment on Indonesia IT sector remain unfavorable in Q4. Meanwhile, allocation in consumer staples offset some of the underperformance.

We are somewhat cautious in the short-term as the market rallied at the end of 2023. On the global front, we think the market is overoptimistic on The Fed’s rate cut potential while the central bank’s stance remains cautious. We are also wary of the geopolitical risk that may arise from Taiwan election and uncertain condition in the Middle East. On the domestic side, we think despite risk on sentiment in global equity market, investors’ sentiment in the domestic equity market remains lukewarm. Market rally was dominated by a small number of stocks, while the majority of the companies continued to de-rate. With this backdrop, we look to maintain overweight position in bonds, and continue to monitor market dynamics to add position in equity.

Manulife Saham Syariah Asia Pasifik Dollar AS

The fund posted positive performance in Q4-23 but underperformed the benchmark in the period. Key detractor to performance was security selection in industrials and consumer discretionary sectors, as Chinese stocks within these sectors underperformed the benchmark. Chinese equities remained under pressure in the quarter despite of global equity rally, as China’s mixed economic data continued to weigh on the market. Meanwhile, strong security selection in the materials sector was the key contributor for the fund supported by strong performance in an Indian cement company and an Australian building materials company.

We have constructive view on Asia Pacific equity for 2024 as the headwinds from 2023 are expected to turn more favorable. We expect the beginning of rate cut in 2024, lower yield environment, and weaker USD that are favorable for Asia. However, we are somewhat cautious in the short-term as the market rallied strongly at the end of 2023. We see the market is being too optimistic on The Fed’s rate cut potential, while the central bank’s stance remains cautious. We are also wary of the geopolitical risk that may arise from Taiwan election and uncertain condition in the Middle East. In this condition we focus on companies that benefit from Asia’s structural growth story with its competitive advantage in the global technology supply chain, renewable and EV supply chains, and consumption upgrade potential.

Manulife Saham Syariah Golden Asia Dolar AS Kelas A1

The fund posted negative performance in Q4 and underperformed the benchmark.  Allocation in the materials sector, which consist of Chinese industrial material companies, was the key detractor to performance hampered by weak China growth outlook. Other detractor was the fund’s underweight position in the energy sector, while an Indian conglomerate company within the sector posted strong performance in the quarter as the Indian market turned bullish by year end. Offsetting some of the detractor, the funds strong security selection in the IT sector in both India and China was the key contributor to the fund. In terms of country allocation, the fund maintains overweight position in India and underweight position in China due to top-down perspective.

Looking ahead, Chinese equities may remain under pressure until macro and micro economy further improve. With the persistent volatility ahead, we continue to position the portfolio defensively to navigate the market cycle while remaining focused on the long-term structural growth story. Chinese government continues to promote high quality development with diverse opportunities emerging in different industry. We will stick with our disciplined investment approach and be highly selective. We believe China’s four megatrend  remain intact going into 2024: (1) Acceleration: Consumption may further improve with Mainland China’s pro-growth policy stance; (2) Abroad: Leading mainland Chinese companies are going abroad (i.e., another growth engine); (3) Advancement: The artificial intelligence (AI) supply chain in Mainland China should continue to see robust growth in 2024; and (4) Automation: Mainland China’s aged population should present higher demand for automation.

Meanwhile, we are positive on India as the primary growth drivers of digitization driving formalization, as well as reinvestment policies underpinning manufacturing growth, are well embedded in India’s economic growth agenda. This is starting to show results with visibly improved capital expenditure and industrial order books, as well as a narrowing current-account deficit and a healthier inflationary picture. We also believe that the structural reforms will make India a more efficient, productive, and resilient economy. From a sectoral positioning perspective, we are more optimistic on: 1) India manufacturing plays such as industrial, chemical and automotive companies that are benefitting from improved global market share; 2) domestic demand plays where we continue to identify beneficiaries of rising domestic income, as well as disruptors in a selective manner; 3) healthcare where we see opportunities in domestic health care service names, as well as US generics; 4) utilities which are likely to benefit from higher power demand driven by strong domestic growth and capex.

Manulife Dana Kas II Kelas A