To provide investors with a steady income stream over the medium to long term period through investment primarily in bonds and other fixed income securities.
28 July 2003
The Fund may be suitable for investors who:
have a medium to long-term investment horizon; and
are risk averse and conservative.
The Fund will focus on achieving its objective by investing a minimum 70% of the Fund’s NAV in bonds and a maximum 30% of the Fund’s NAV in money market instruments and/or deposits.
The Fund’s investment in bonds would consist of government and corporate bonds. 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 by participating in investment opportunities that are set to benefit from prevailing market conditions, with the aim of boosting the Fund’s performance.
To achieve its objective, the Fund will also have the flexibility to hold exposure in collective investment schemes that have similar investment objectives to the Fund.
The Fund may invest in investments listed or issued in foreign markets. The decision to invest into foreign markets will be opportunistically driven where we would seek out investments that could provide a potential to enhance the returns of the Fund. The Fund will invest only into countries where the regulatory authorities are ordinary or associate members of the International Organization of Securities Commissions (IOSCO).
Derivative trades may be carried out for hedging purposes through financial instruments including, but not limited to, forward contracts, futures contracts and swaps. Future and forward contracts are generally contracts between two parties to trade an asset at an agreed price on a pre-determined future date. Swaps, whereas, is an agreement to swap or exchange two financial instruments between two parties.
The intention of hedging is to protect the value of the asset from any adverse price movements. For example, to hedge against foreign currency exchange risk, the Fund may enter into a currency forward contract to offset any adverse foreign currency movements by determining an agreed rate for an agreed tenure with its counterparty. While these hedging transactions would protect the Fund against potential losses, trades for hedging purposes would also limit the returns that the Fund may have potentially received from foreign exchange gains would the Fund not have hedged its foreign currency exposure.
We may also invest into structured products such as, but not limited to, credit linked notes. Investment into these structured products will provide the Fund with the exposure to the reference asset. Each of these products has its own targeted maturity and will expose investors to the price fluctuations of, in the case of a credit linked note, the credit that the credit linked note is linked to. As a result, any fluctuation in the price of the structured product may also lead to fluctuations in the NAV of the Fund i.e. if the price of the structured product sees a drop in price, the NAV of the Fund will also be negatively impacted. As the note is structured by an external party, investments into a structured product will also expose the Fund to counterparty risk, which we will attempt to mitigate by carrying out a stringent selection process on its counterparty prior to an investment being made. Risk into structured products will also be mitigated by limiting the Fund’s total exposure to not more than 10% 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 the financial markets. To manage the risk of the Fund, we may shift the Fund’s assets to be temporarily invested in money market instruments and/or deposits.
% of NAV of the Fund
Minimum of 70%
Money market instruments and/or deposits
Maximum of 30.0%
Minimum Initial Investment
Minimum Additional Investment
FEES & CHARGES
Sales Charge per Unit
Up to 2.00% on the NAV per Unit of the Fund.
Annual Management Fee
Up to 1.00% per annum of the NAV of the Fund.
Trustee Fee / Custodian fee
Up to 0.07% per annum of the NAV of the Fund, subject to a minimum of MYR18,000 per annum (excluding foreign custodian fees and charges).