Aboi's Updates For Malaysian Equities Mutual Funds for 2H'2014

This is the last update on Mutual Funds in Malaysia. Links to my first two:
Aboi's Updates For Malaysian Bond Mutual Funds for 2H'2014
Aboi's Updates For Malaysian Mixed Assets Mutual Funds for 2H'2014

Equities

TER is the total expense ratio, a measure of total cost (purchase, redemption, auditing, management fees) of a fund to the investor. The lower the better.

Commentary

[1] 4/5 of picks since 2012/2013 in four broad categories have since performed admirably: Kenanga Growth, Select Opportunity, Eastspring Small-cap and HL Consumer.
[2] I have added Affin Hwang Select Asia Quantum in which I will explain later over Eastspring's Small-cap fund as a better choice.
[3] The sole under performer is Public's Far East Property & Resorts (Property - indirect Asia fund) which has been performing flattish for almost two full years and thus under flagged. The fund is invested primarily in Asia emerging and developed markets e.g. Malaysia, South Korea, Indonesia. The performance is similar to PB Asia Real Estate Income fund (from Mixed Assets). Under flagged.
[4] As of this writing, I own Kenanga Growth Fund which has been performing above my expectation. Though it has recently changed fund manager in 2013, the fund is still up to par and I will be closely watching. 

[5] Even though Philip Master Equity Growth is top I shun it for the sole reason that the TER (total expense ratio) is a whopping 4%!.
[6] I also own Aberdeen Islamic World Equity Fund. This fund is only 1.5 years old and there is really no useful data to show. In due time I will share of course.
You may read why. 
Aberdeen Funds in Malaysia..Are They "Iron" Clad Investments?
Aboi To Finally Invest In Aberdeen Islamic World Equity Fund

Here's risk-adjusted returns measure using the five principles of risk measures; alpha, beta, r-squared, std deviation and Sharpe ratio. I will just explain what they represent rather than showing hefty equations.

Alpha: A +ve of 1.0 means the fund has outperform its benchmark index by 1.0%. The opposite goes for -ve.
Beta: A +ve of 1.2 means the fund is 20% more volatile than the index. The higher the beta suggest it offers the possibility of higher returns but also posing more risk. The opposite goes for -ve. 
R-squared: A higher R-squared will indicate a more useful beta value (85 to 100) aka good correlation. A low R-squared value means you should ignore the beta. It's a measure on well the fund is measured against an appropriate benchmark.
Standard deviation: A large dispersion tells us how much the return on the fund is deviating from the expected normal returns.
Sharpe Ratio: The greater a portfolio's Sharpe ratio, the better its risk-adjusted performance has been. It describes how much excess return you get for extra volatility you endure in holding riskier asset.

Source: MorningStar - Rating & Risks section for respective fund

Immediately you will notice why I prefer Affin Hwang's Quantum over Eastspring Investments Small-cap. Sharpe ratios are similar but with Quantum's std dev at almost half of Small-cap's - less volatility. This explains why the Preservation rating of Small-cap is at an appalling 2. Nevertheless both are in different categories and they do excel at what they do. However I cannot stomach such volatility and would certainly lean towards Quantum. Perhaps you can :)

Second. There are three outstanding performers - those with Sharpe ratios of 2.26 & 2.27. With R-squared values around 80, I can take into consideration the Alpha and Beta values. MY Focus has the highest Beta, an indication of 30% more volatile than the market so I wouldn't stomach that either. That leaves Kenanga Growth and Equity Income. Equity income is the clear winner - lower Beta and less Std Dev. Would I consider it? Yes. But I already have Kenanga Growth which comes really close to it and I do not wish to increase my exposure purely into Malaysia equities.

So what's next? Definitely times are getting hard as equities start to peak especially in America and bonds floating as interest rates are as low as it can be. Europe looks like it's entering a recession as Germany recorded minus GDP growth for a second consecutive quarter and France still stagnating. I would say Asia (exc Japan). Funds that have such focus (SIF and Quantum) might still do okay but don't expect sky high returns. Unfortunately the world is in a more tangled position than it was in 2008. The best would be to hold more cash and wait to accumulate.
   
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My five rules of choosing funds:

#1 Avoid choosing big sized popular funds!
#2 Compare fund expenses!
#3 Information on the fund manager!
#4 Good funds don't advertise.
#5 Avoid the usual past performance > riskiness of fund > manager's rep (some don't) > fund expenses > popularity of fund.  Look from the opposite direction and do your filtering from there.