The Fund endeavours to provide investors an affordable access into a diversified investment portfolio containing a balanced mixture of equities and fixed income instruments to achieve a balance of growth and income* over the medium to long-term period.
*Income distribution will either be made in the form of Units or in cash.
08 December 2014
The Fund may be suitable for investors who seek:
medium to long-term capital growth; and
regular income distributions.
To achieve its objective, the Fund will be investing in a balanced portfolio consisting equities, and fixed income instruments such as debentures, money market instruments, and deposits with Financial Institutions.
We will combine a top-down and bottom-up investment approach to identify investment opportunities. When selecting its fixed income instruments, macroeconomic trends and market analysis are the important considerations in deriving the top-down perspective on interest rate outlook, credit market and currency movement. For its bottom-up approach, we would conduct analysis on the respective issuer’s ability to meet their financial obligations, cash-flow management, collateral type, value, claims priority, as well as ability to offer timely payment of interest and principal.
While we typically actively manage the portfolio, 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.
To achieve its objective, the Fund will also have the flexibility to hold exposure in warrants, as well as collective investment schemes that have similar investment objectives to the Fund. The value of the Fund’s investments in these instruments will not exceed 30% of the Fund’s NAV.
The Fund will invest in Asia Pacific (ex Japan) countries where the regulatory authorities are the ordinary or associate members of the IOSCO. 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.
The Fund may employ derivative investments for hedging purposes 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 may also employ derivatives for investment purposes to enhance the returns of the Fund by taking a view on the underlying asset or currency and establish a long position to gain a specific underlying exposure. The Fund’s exposure into derivatives for these purposes could potentially result in higher volatility for the Fund’s NAV as the price of the derivatives will move dependent on the underlying assets, similar to that of purchasing the underlying assets.
The types of derivatives envisaged for hedging, as well as for investment purposes includes OTC and those traded on a centralised exchange which could typically include forwards and swaps.
Notwithstanding, the Fund may invest a maximum of 30% of the Fund’s NAV in structured products such as but not limited to equity linked notes, and credit linked notes. Investment into these structured products will provide the Fund with the exposure to the reference asset. Each of these products have its own targeted maturity and will expose investors to the price fluctuations of, in the case of an equity linked note, the stock that the equity linked note is linked to. As such, the Fund’s exposure into these instruments could expose the Fund to higher volatility in its NAV movement as prices of the note will be dependent on its underlying asset, thus the exposure to market risk. As the note is structured by an external party, investments into a structured product will also expose the Fund to counterparty risk, which the Manager will attempt to mitigate by carrying out a stringent selection process on its counterparty prior to an investment being made.
The Fund’s asset allocation range are as follows:-
% of NAV of the Fund
40% to 60%
Fixed income instruments such as fixed income securities, money market instruments and deposits with Financial Institutions.
40% to 60%
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).