The Fund endeavours to provide investors with regular income* and capital growth over the medium to long-term period.
Note: Any material change to the Fund’s investment objective would require Unit Holders’ approval.
* Income distribution will either be made in the form of Units or in cash. Please refer to “Distribution Policy” for more details.
08 December 2014
The Fund may be suitable for investors who:
seek medium to long-term capital growth;
seek regular income distributions; and
have moderate risk tolerance.
To achieve its objective, the Fund will be investing in a portfolio consisting a minimum of 70% of its NAV in equities, while the remaining balance may be invested into fixed income instruments.
The investment selection process will include dividend paying companies that are able to provide a steady income stream to the Fund. As such, we would adopt a bottom-up strategy where individual stock analysis forms the primary building blocks for portfolio construction and stock selection. The Fund focuses on higher dividend paying sectors where cash flows are more resilient towards the broader market environment, examples of which include utility companies. Similarly, the Fund will also look at selected lower dividend yielding stocks with prospects of growing its dividends to achieve an element of capital growth in addition to dividend yield on a total return basis. Key factors which are useful to the identification of such companies would include sales and profit growth, financial strength and gearing levels, capital expenditure levels as well as management commitment to rewarding shareholders via dividends or capital repayments. The dividends provided by these companies would be the primary source of income from which the Fund would then declare income distributions to you.
While we typically take an active trading policy, we look to maintain some core holdings that are held over the medium to long term which is similar to a buy and hold strategy. We will also maintain a trading portion for the portfolio, which we use to take advantage of beneficiaries during prevailing market conditions with the aim of boosting the Fund’s performance.
The Fund intends to adopt a two-part approach whereby a portion of the Fund’s investments will be focused towards stable and high-dividend yielding equities, and the other portion will be invested in “the next dividend leaders”. These are equities which we believe could, in the Medium term, potentially start paying high dividends or substantially increase the existing dividend payouts. The determination of proportion between the two parts will be driven by prevailing opportunities in the markets and premised on achieving the overall Fund’s objective of providing regular income and capital growth over the medium to long term. However, as the Fund’s primary objective is to provide regular income, there is a natural bias towards holding more of the stable and high dividend yielding equities.
While the Fund’s core investments will remain in equities, the Fund holds the option to invest into fixed income instruments such as debentures, money market instruments and deposits. The selection of fixed income instruments will depend largely on its credit quality where the respective issuers will have strong ability to meet their financial obligations, healthy cash-flow, the collateral type, value, claims priority as well as offer higher safety for timely payment of interest and principal.
To achieve its objective, the Fund will also have the flexibility to invest in warrants as well as collective investment schemes that have similar investment objectives to the Fund.
The Fund will invest in Asia Pacific (ex Japan) countries where the regulatory authorities are the ordinary or associate members of the IOSCO. The Fund may also opt to invest into companies domiciled and/or listed outside of the Asia Pacific (ex Japan) markets. As the Fund remains primarily focused on investment opportunities within Asia Pacific (ex Japan), investments into global markets outside of Asia Pacific (ex Japan) will be capped to no more than 20% of the Fund’s NAV.
Temporary Defensive Position
We hold the option to take temporary defensive positions that may be inconsistent with the Fund’s principal strategy and asset allocation to protect the Fund against adverse market conditions that may impact financial markets. To manage the risk of the Fund, we may shift the Fund’s focus and exposure into lower risk investments such as deposits or money market instruments.
Derivative Investments For Hedging Purposes Only
The Fund may employ derivative investments for hedging purposes only by participating in instruments such as forward contracts and cross currency swaps. Foreign exchange contracts enable the Fund to trade currency at a specific exchange rate, specific time and specific amount as indicated in the contract. Cross currency swaps allows the Fund to convert foreign exchange rates and/or interest rate exposures between two currencies. These derivatives may be used to hedge the principal and/or the returns of the foreign currency denominated investments back to MYR. The employment of derivatives under these circumstances, is expected to reduce the impact of foreign currency movements on the Fund’s NAV. While the hedging strategy will assist with mitigating the potential foreign exchange losses by the Fund, any potential foreign exchange gain from the hedging strategy will be capped as well.
The Fund’s asset allocation range are as follows:-
% of NAV of the Fund
70% to 100%
Fixed income instruments
0% to 30%
Minimum Initial Investment
Minimum Additional Investment
FEES & CHARGES
Sales Charge per Unit
Up to 5.50% of the NAV per Unit of the Fund.
Annual Management Fee
Up to 1.85% per annum of the NAV of the Fund.
Trustee Fee / Custodian fee
Up to 0.06% per annum of the NAV of the Fund (excluding foreign custodian fees and charges).