The Fund endeavours to provide a combination of regular income# and capital growth over the medium to long term period.
Please note that the Fund’s priority is to provide regular income over the medium to long term.
# Please note that income can be distributed earlier in the form of cash or Units. Kindly refer to the “Distribution Policy” section for a better understanding on the mode of distribution.
28 March 2011
The Fund is suitable for Investors who:
prefer stable and regular investment returns;
have moderate risk tolerance;
prefer receiving regular income distributions; and
seek medium to long term capital growth for their investments.
The Fund will focus on achieving its objective by investing in a portfolio consisting a minimum of 70% of its NAV in equities, which the remaining balance may be invested into debentures, money market instruments and deposits with Financial Institutions.
As the Fund holds a domestic focus, we will maintain a minimum of 70% of the Fund’s investments into the domestic market and hold a flexibility to invest up to 30% of its NAV in investments listed/issued in the Asia-Pacific region.
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 terms 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 (as a priority) 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 highest safety for timeline 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 may invest up to 30% of its NAV in investments listed/issued in foreign markets. The decision to invest in foreign equities will be opportunistically driven where the Manager would seek out attractive dividend equities that could provide potential to enhance the returns of the Fund. The Fund will invest only into countries where regulatory authorities are ordinary or associate members of the International Organization of Securities Commissions (IOSCO).
The Fund may employ derivative investments for hedging purposes by participating in instruments such as forward contracts and cross currency swaps.
Forward 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 gains from the hedging strategy will be capped as well.
Temporary Defensive Position
We hold the option to take temporary defensive measures that may be inconsistent with the Fund’s principal strategy, and asset allocation to protect the Fund against adverse market conditions. To manage the risk of the Fund, we may shift the Fund’s focus into lower risk investments such as deposits with Financial Institutions or money market instruments.
The Fund’s asset allocation range is as follows:-
70% – 100%
Debentures, money markets instruments and deposits
0% – 30%
Minimum Initial Investment
Minimum Additional Investment
FEES & CHARGES
Sales Charge per Unit
Maximum Sales Charge as a percentage of the NAV per Unit of the Fund*
Internal distribution channel of the Manager
Unit trust consultants
*Investors may negotiate for a lower Sales Charge.
Annual Management Fee
1.50% per annum of the NAV of the Fund.
Trustee Fee / Custodian fee
0.08% per annum of the NAV of the Fund, (excluding foreign custodian fees and charges).
A MYR 5.00 transfer fee will be levied for each transfer of Units.