Fund Information. Fund Name. Fund Category. Fund Investment Objective. Fund Performance Benchmark. Fund Distribution Policy

Transcription

1 Fund Information Fund Name Public Asia Ittikal Fund () Fund Category Equity (Shariah-compliant) Fund Investment Objective To achieve capital growth over the medium to long term period by investing in a portfolio of investments in domestic and regional markets that complies with Shariah requirements. Fund Performance Benchmark The benchmarks of the Fund and their respective percentages are 70% S&P Shariah BMI Asia Ex-Japan Index, 15% customised index by S&P Dow Jones Indices, LLC based on top 20 constituents by market capitalisation of the S&P BMI Shariah Japan Index and 15% FTSE Bursa Malaysia Hijrah Shariah Index. The S&P Shariah BMI Asia Ex-Japan Index and the customised index of the S&P BMI Shariah Japan Index are products of S&P Dow Jones Indices LLC ( SPDJI ), and have been licensed for use by Public Mutual Berhad. Standard & Poor s and S&P are registered trademarks of Standard & Poor s Financial Services LLC ( S&P ); Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC ( Dow Jones ); Standard & Poor s, S&P and Dow Jones are trademarks of the SPDJI; and these trademarks have been licensed for use by SPDJI and sublicensed for certain purposes by Public Mutual Berhad. Public Mutual Berhad s is not sponsored, endorsed, sold or promoted by SPDJI, Dow Jones, S&P, their respective affiliates and none of such parties make any representation regarding the advisability of investing in such product(s) nor do they have any liability for any errors, omissions, or interruptions of the S&P Shariah BMI Asia Ex-Japan Index and the customised index of the S&P BMI Shariah Japan Index. The is not in any way sponsored, endorsed, sold or promoted by FTSE International Limited ( FTSE ) or by Bursa Malaysia Berhad ( BURSA MALAYSIA ) or by the London Stock Exchange Group companies (the LSEG ) and neither FTSE nor BURSA MALAYSIA nor LSEG makes any warranty or representation whatsoever, expressly or impliedly, either as to the results to be obtained from the use of the FTSE BURSA MALAYSIA HIJRAH SHARIAH INDEX ( the Index ), and/or the fi gure at which the said Index stands at any particular time on any particular day or otherwise. The Index is compiled and calculated by FTSE. However, neither FTSE nor BURSA MALAYSIA nor LSEG shall be liable (whether in negligence or otherwise) to any person for any error in the Index and neither FTSE nor BURSA MALAYSIA nor LSEG shall be under any obligation to advise any person of any error therein. FTSE, FT-SE and Footsie are trade marks of LSEG and are used by FTSE under licence. BURSA MALAYSIA is a trade mark of BURSA MALAYSIA. Fund Distribution Policy Incidental Breakdown of Unitholdings of as at 30 April 2018 Size of holdings No. of % of No. of units unitholders unitholders held (million) 5,000 and below 10, ,001 to 10,000 20, ,001 to 50,000 74, ,812 50,001 to 500,000 36, , ,001 and above Total 142, ,233 Note: Excluding Manager s Stock.

2 Fund Performance Fund Performance Average Total Return for the Following Years Ended 30 April 2018 Average Total Return of (%) 1 Year Years Years Annual Total Return for the Financial Years Ended 31 October Year (%) The calculation of the above returns is based on computation methods of Lipper. Notes: End of Period FYCurrent Year NAV per ( End of Period FYPrevious Year NAV per unit) 1. Total return of the Fund is derived by this formulae: (Adjusted for unit split and distribution paid out for the period) The above total return of the Fund was sourced from Lipper. 2. Average total return is derived by this formulae: Total Return Number of Years Under Review Past performance is not necessarily indicative of future performance and unit prices and investment returns may go down, as well as up. Other Performance Data for the Past Three Financial Periods Ended 30 April Unit Prices (MYR) Highest NAV per unit for the period Lowest NAV per unit for the period Net Asset Value (NAV) and Units in Circulation (UIC) as at the End of the Period Total NAV (MYR 000) 2,591, , ,990 UIC (in 000) 7,255,606 2,442, ,089 NAV per unit (MYR) Total Return for the Period (%) Capital growth (%) Income (%) Management Expense Ratio (%) Portfolio Turnover Ratio (time) Notes: Management Expense Ratio is calculated by taking the total management expenses expressed as an annual percentage of the Fund s average net asset value. The Management Expense Ratio for the financial period 2018 dropped to 1.71% from 1.76% in the previous financial period mainly due to Fund s higher average net asset value. Portfolio Turnover Ratio is calculated by taking the average of the total acquisitions and disposals of the investments in the Fund for the period over the average net asset value of the Fund calculated on a daily basis. The Portfolio Turnover Ratio for the financial period 2018 dropped to 0.22 time from 0.38 time in the previous fi nancial period on account of lower level of rebalancing activities performed by the Fund during the period. - 1 Asset Allocation for the Past Three Financial Periods As at 30 April (Percent of NAV) % % % EQUITY SECURITIES Quoted Malaysia Basic Materials Communications Consumer, Non-cyclical Diversifi ed Energy Industrial Utilities Outside Malaysia Hong Kong Communications Consumer, Cyclical Consumer, Non-cyclical Diversifi ed Energy Financial Industrial Technology Utilities Indonesia Communications Consumer, Non-cyclical Financial Industrial Japan Basic Materials Communications Consumer, Cyclical Consumer, Non-cyclical Industrial Technology

3 Fund Performance Manager s Report Asset Allocation for the Past Three Financial Periods (cont d) As at 30 April (Percent of NAV) % % % Korea Basic Materials Communications Consumer, Cyclical Consumer, Non-cyclical Industrial Technology Singapore Communications Taiwan Basic Materials Communications Consumer, Cyclical Energy Industrial Technology Overview This Interim Report covers the fi nancial period from 1 November 2017 to 30 April Public Asia Ittikal Fund ( or the Fund) seeks to achieve capital growth over the medium to long term period by investing in a portfolio of investments in the domestic and regional markets that complies with Shariah requirements. For the fi nancial period under review, the Fund registered a return of -6.82% as compared to its Benchmark s return of -2.16%. The Fund s Shariahcompliant equity portfolio registered a return of -6.55% while its Islamic money market portfolio registered a return of +1.55% during the fi nancial period under review. A detailed performance attribution analysis is provided in the sections below. For the fi ve fi nancial years ended 30 April 2018, the Fund registered a return of % as compared to the Benchmark s return of % over the same period. 90% 75% Performance of from 30 April 2013 to 30 April 2018 BENCHMARK Thailand Consumer, Non-cyclical Industrial Returns from Start of Period 60% 45% 30% 15% United States Communications % TOTAL QUOTED EQUITY SECURITIES % COLLECTIVE INVESTMENT FUNDS Quoted Outside Malaysia Hong Kong Financial TOTAL QUOTED COLLECTIVE INVESTMENT FUNDS SHARIAH-BASED PLACEMENTS WITH FINANCIAL INSTITUTIONS OTHER ASSETS & LIABILITIES The Benchmark of the Fund is a composite index of 70% S&P Shariah BMI Asia Ex-Japan Index, 15% FTSE Bursa Malaysia Hijrah Shariah Index and 15% customised index by S&P Dow Jones Indices, LLC based on the top 20 constituents by market capitalisation of the S&P BMI Shariah Japan Index. Effect of Distribution Reinvestment on Portfolio Exposures There were no distributions declared for the period ended 30 April Change in Portfolio Exposures from 31-Oct-17 to 30-Apr-18 Average 31-Oct Apr-18 Change Exposure Shariah-compliant Equities & Related Securities 87.4% 90.7% +3.3% 90.34% Islamic Money Market 12.6% 9.3% -3.3% 9.66%

4 Manager s Report Manager s Report Returns Breakdown by Asset Class Market / Returns On Benchmark Benchmark Average Attributed Investments Returns Index Used Exposure Returns Shariahcompliant Equities & Related Securities -6.55% -2.16% Benchmark 90.34% -5.92% Islamic Money Overnight Market 1.55% 1.52% Islamic Rate 9.66% 0.15% less: Expenses -1.05% Total Net Return for the Period -6.82% Overnight Islamic Rate = Overnight Islamic Interbank Money Market Rate Shariah-compliant Equity Portfolio Review For the fi nancial period under review, the Fund s Shariah-compliant equity portfolio registered a return of -6.55% as compared to the Benchmark s return of -2.16%. The Fund s Shariah-compliant equity portfolio registered a return which was lower than the Benchmark as its selected holdings were impacted by the retracement in Technology stocks during the fi nancial period under review. The Fund commenced the financial period under review with a Shariahcompliant equity exposure of 87.4% and its Shariah-compliant equity weight was increased to 90.7% at the end of the period under review to capitalise on Shariah-compliant investment opportunities in the domestic and regional markets. Based on an average Shariah-compliant equity exposure of 90.34%, the Shariah-compliant equity portfolio is deemed to have registered a return of -5.92% to the Fund as a whole for the financial period under review. A full review of the performance of the equity markets is tabled in the following sections. Country Allocation In terms of country allocation within the Shariah-compliant equity portfolio, the Fund s investments in Malaysia accounted for 7.3% of the Net Asset Value (NAV) of the Fund. Other than Malaysia, the top 5 countries accounted for 81.4% of the NAV of the Fund and 89.7% of the Fund s Shariah-compliant equity portfolio. The weightings of the top 5 countries excluding Malaysia are in the following order: Hong Kong (23.6%), Korea (20.9%), Taiwan (16.4%), Japan (13.1%) and the United States (7.4%). During the fi nancial period under review, the Fund s exposure to Islamic money market investments decreased from 12.6% to 9.3% as funds were mobilised into Shariah-compliant equity investments. Based on an average exposure of 9.66%, the Islamic money market portfolio is estimated to have contributed +0.15% to the Fund s overall return for the fi nancial period under review. Stock Market Review Commencing the fi nancial period under review at 13, points, the FTSE Bursa Malaysia EMAS Shariah Index (FBMS) retraced in November 2017 as market sentiment was dampened by a lack of fresh catalysts and a selldown in selected blue chips. The Index rebounded in December 2017 and continued to rally in January 2018 on the back of fi rmer oil prices and buying interest from foreign investors. In early February 2018, the Index fell in tandem with global markets due to concerns over the prospect of higherthan-expected interest rates in the U.S. The Index eased further in March and April 2018 amid a retracement in selected small- and mid-cap stocks. The FBMS closed at 13, points to register a gain of 0.66% for the fi nancial period under review. The regional equity markets, as proxied by the S&P Shariah BMI Asia Ex- Japan (S&P SAEJ) Index, commenced the fi nancial period under review at points. The Index moved higher in November and December 2017, driven by improving liquidity conditions in China, an improving global economic outlook, robust corporate earnings as well as the strengthening of regional currencies against the U.S. Dollar. The S&P SAEJ Index started 2018 on a strong note but retreated from February to April 2018, weighed by concerns over the prospect of faster-thanexpected interest rate hikes in the U.S. as well as trade tensions between the U.S. and China. The S&P SAEJ Index closed at points to register a gain of 4.97% (-2.72% in Ringgit terms) for the financial period under review. Regional markets, namely the Korea, Japan, Thailand, Singapore, Hong Kong, Taiwan and Indonesia markets registered returns of +1.17%, -2.32%, -4.57%, -5.69%, -7.70%, -9.53% and % (in Ringgit terms) respectively for the fi nancial period under review. Index S&P Shariah BMI Asia Ex-Japan Index (31 October April 2018) Islamic Money Market Portfolio Review During the financial period under review, the Fund s Islamic money market portfolio, which was invested primarily in Islamic deposits, yielded a return of +1.55%. In comparison, the Overnight Islamic Interbank Money Market Rate (Overnight Islamic Rate) registered a return of +1.52% over the same period Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18

5 Manager s Report Manager s Report Islamic Money Market Review The Overnight Islamic Rate commenced the financial period under review at 2.99% and ended the financial period under review higher at 3.20%. Economic Review Malaysia s GDP growth gained pace from 4.2% in 2016 to 5.9% in 2017 on the back of higher domestic demand and export growth. Growth in the services sector rose from 5.6% in 2016 to 6.2% in Meanwhile, growth in manufacturing activities increased from 4.4% to 6.0% over the same period. Malaysia s export growth moderated to 7.8% in the first two months of 2018 from 18.9% in 2017 due mainly to slower exports of electrical and electronic products. Import growth eased to 4.6% from 19.9% over the same period on the back of lower imports of intermediate goods. Malaysia s cumulative trade surplus widened to RM18.7 billion in the first two months of 2018 compared to RM13.5 billion in the corresponding period of the prior year. Due to capital inflows, Malaysia s foreign reserves increased to US$107.8 billion as at end- March 2018 compared to US$95.4 billion a year ago. Malaysia s inflation rate slowed to 1.8% in 1Q 2018 from 3.7% in 2017 amid moderating food prices and transportation costs. On 25 January 2018, Bank Negara Malaysia (BNM) raised the Overnight Policy Rate (OPR) by 25 basis points (bps) from 3.00% to 3.25% on the back of resilient economic growth. Loans growth edged up to 4.4% in 1Q 2018 from 4.1% in 2017 due to higher demand from the household sector. On the regional front, Singapore s GDP growth expanded from 3.6% in 2017 to 4.3% in 1Q 2018, helped by robust growth in the manufacturing and services sectors. Singapore s inflation rate edged down to 0.2% in 1Q 2018 from 0.6% in 2017 amid moderating transportation costs. Indonesia s economic growth inched higher from 5.0% in 2016 to 5.1% in 2017 on the back of resilient domestic demand. The infl ation rate eased to 3.3% in 1Q 2018 from 3.8% in 2017 due to moderating housing and transportation costs. To support domestic economic activities, Bank Indonesia (BI) reduced its benchmark interest rate by 50 bps to 4.25% during the August-September 2017 period. Led by resilient consumer spending and higher export growth, Thailand s GDP growth increased from 3.3% in 2016 to 3.9% in The inflation rate edged down to 0.6% in 1Q 2018 from 0.7% in 2017 due to moderating transportation costs. The Bank of Thailand maintained its policy interest rate at 1.50% to support economic growth. In North Asia, China s GDP growth inched down from 6.9% in 2017 to 6.8% in 1Q 2018 following a moderation in the services sector. The services sector s growth eased from 8.0% in 2017 to 7.5% in 1Q 2018 amid softer growth in fi nancial activities and trade. Driven by higher food prices, China s infl ation rate climbed to 2.1% in 1Q 2018 from 1.6% in To support China s economic activities, the People s Bank of China (PBoC) maintained its lending rate at 4.35%. Hong Kong s GDP growth gained pace from 2.1% in 2016 to 3.8% in 2017 due to higher consumer spending and export growth. The infl ation rate fi rmed to 2.4% in 1Q 2018 from 1.5% in 2017 on the back of higher food prices and housing costs. To curb elevated residential property prices, Hong Kong s government introduced additional tightening measures in May Japan s GDP growth increased from 0.9% in 2016 to 1.7% in 2017 amid fi rmer domestic demand and higher export growth. Driven by higher food prices and transportation costs, the inflation rate climbed to 1.3% in 1Q 2018 from 0.5% in To support economic growth, the Bank of Japan left its interest rate unchanged at -0.1%. Weighed by slower investment spending and export growth, South Korea s GDP growth eased from 3.1% in 2017 to 2.8% in 1Q The infl ation rate softened to 1.3% in 1Q 2018 from 1.9% in 2017 due to moderating food prices and transportation costs. To maintain economic growth, the Bank of Korea held its benchmark interest rate at 1.50%. Taiwan s GDP growth inched up from 2.9% in 2017 to 3.0% in 1Q 2018 amid higher consumer and government spending. Taiwan s infl ation rate climbed to 1.5% in 1Q 2018 from 0.6% in 2017 on the back of higher food prices and housing costs. The Bank of Taiwan left its discount rate unchanged at 1.375% to support domestic demand. Led by higher investment spending and export growth, U.S. GDP growth rose from 2.3% in 2017 to 2.9% in 1Q Investment spending increased from 3.3% in 2017 to 5.8% in 1Q 2018 due to higher investment in equipment. Likewise, export growth expanded from 3.4% to 4.3% over the same period. At the Federal Open Market Committee (FOMC) meeting on March 2018, the Federal Reserve raised the Federal funds rate target range by 25 bps from 1.25%-1.50% to 1.50%-1.75%. Eurozone GDP growth gained pace from 1.8% in 2016 to 2.5% in 2017 on the back of higher export growth. At its monetary policy meeting on 26 April 2018, the European Central Bank (ECB) kept its main refinancing and deposit rates at 0.00% and -0.40% respectively. The ECB extended its quantitativeeasing program from January 2018 until at least September However, it reduced the monthly pace of bond-buying from 60 billion to 30 billion with effect from January In a referendum held on 23 June 2016, British voters voted in favour of exiting the European Union (EU). The United Kingdom (UK) formally notified of its exit from the EU under Article 50 on 29 March 2017, which commences a 2-year process of trade negotiations with the EU. Outlook and Investment Strategy Global and regional equity markets traded on a mixed note in the fi rst 4 months of 2018 on concerns over the prospect of higher U.S. interest rates and the U.S. government s proposed protectionist measures. While concerns over infl ationary pressures in the U.S. as well as U.S.-China trade tensions may result in volatile market conditions in the near term, the performance of equity markets over the longer term will depend on the economic outlook and market valuations of the U.S., Europe and the Asia Pacifi c region.

6 Manager s Report Manager s Report U.S. economic growth is projected to edge up from 2.3% in 2017 to 2.8% in 2018, driven by higher investment spending on the back of tax reform measures. In the Eurozone, economic growth is envisaged to ease from 2.5% in 2017 to 2.3% in 2018 on expectations of a moderation in consumer spending and investment. China s GDP growth is estimated to moderate from 6.9% in 2017 to 6.5% in 2018 as China continues to transform from a manufacturing-driven and export-led economy to one underpinned by services and domestic consumption. Meanwhile, China s inflation rate is projected to increase from 1.6% in 2017 to 2.3% in Hong Kong s GDP growth is expected to slow from 3.8% in 2017 to 3.0% in 2018 amid moderating export growth. Going forward, the Hong Kong government is anticipated to maintain its tightening stance on the residential property market. However, ample liquidity, demand for better living standards and resilient economic growth should lend support to Hong Kong s property market over the long term. Japan s economic growth is projected to ease from 1.7% in 2017 to 1.4% in 2018 amid moderating consumer spending and export growth. South Korea s GDP growth is anticipated to edge lower from 3.1% in 2017 to 3.0% in 2018 on the back of softer domestic demand. Meanwhile, Taiwan s GDP growth is envisaged to inch down from 2.9% in 2017 to 2.7% in 2018 due to slower export growth. In South-East Asia, Singapore s GDP growth is estimated to ease from 3.6% in 2017 to 3.0% in 2018 on expectations of moderating export growth. Indonesia s GDP growth is expected to expand from 5.1% in 2017 to 5.3% in 2018 due to robust domestic demand. Meanwhile, Thailand s GDP growth is envisaged to inch up from 3.9% in 2017 to 4.0% in 2018, driven by higher investment spending. On the domestic front, Malaysia s GDP growth is projected to ease from 5.9% in 2017 to 5.4% in 2018 amid moderating export growth. However, domestic demand is projected to be supported by sustained consumer and investment spending. As at end-april 2018, the local stock market was trading at a prospective P/E ratio of 16.7x, which was above its 10-year average of 16.5x. The market s dividend yield was 3.29%. Among the regional markets, South-East Asian markets were trading at premiums while selected North Asian markets were generally trading at discounts to their historical averages following their respective performances over the same period. Given the above factors, the Fund will continue to rebalance its investment portfolio accordingly with the objective of achieving capital growth over the medium to long term period by investing in a portfolio of investments in domestic and regional markets that complies with Shariah requirements. Note: Q = Quarter Policy on Soft Commissions The management company may receive goods or services which include research materials, data and quotation services and investment related publications by way of soft commissions provided they are of demonstrable benefit to the Fund and unitholders. During the fi nancial period under review, has received data and quotation services by way of soft commissions. These services were used to provide fi nancial data on securities and price quotation information to the Fund Manager during the fi nancial period under review.

7 Extracts Of Financial Statements Extracts Of Financial Statements (cont d) The following pages are extracts of the audited financial statements of the Fund for the financial period ended 30 April The full set of the audited fi nancial statements together with the Independent Auditors Report is available upon request without charge. Statement of Assets and Liabilities As at 30 April MYR 000 MYR 000 Assets Investments 2,349,535 1,746,878 Due from brokers/financial institutions, net Due from the Manager, net 1,551 43,754 Other receivables 3,692 1,385 Shariah-based placements with financial institutions 198, ,005 Cash at banks 61, ,148 2,615,662 2,130,170 Liabilities Due to brokers/financial institutions, net 23, ,840 Due to the Trustee - 99 Other payables Distribution payable - 75,284 23, ,521 Total net assets 2,591,772 1,923,649 Net asset value ( NAV ) attributable to unitholders (Total equity) 2,591,772 1,923,649 Units in circulation (in 000) 7,255,606 5,018,956 NAV per unit (in sen) Statement of Income and Expenditure to to MYR 000 MYR 000 Income Profi t from Shariah-based placements 2, Distribution income Dividend income 11,269 2,309 Net (loss)/gain from investments (153,836) 41,891 Net realised gain on sale of non-permissible securities - 21 Net realised/unrealised foreign exchange loss (4,362) (424) Non-permissible income - 10 (144,050) 44,854 Less: Expenses Trustee s fee Management fee 20,622 4,899 Audit fee 3 3 Tax agent s fee 1 1 Brokerage fee 3,680 1,351 Administrative fees and expenses Payment to charitable bodies ,048 6,587 Net (loss)/income before taxation (169,098) 38,267 Taxation (1,721) (242) Net (loss)/income after taxation (170,819) 38,025 Net (loss)/income after taxation is made up as follows: Realised (9,989) (5,358) Unrealised (160,830) 43,383 (170,819) 38,025

8 Extracts Of Financial Statements (cont d) Extracts Of Financial Statements (cont d) Statement of Changes in Net Asset Value Unitholders Retained capital earnings Total MYR 000 MYR 000 MYR 000 As at 1 November ,530 65, ,597 Creation of units 404, ,436 Cancellation of units (168) - (168) Net income after taxation - 38,025 38,025 As at 30 April , , ,890 As at 1 November ,661, ,713 1,923,649 Creation of units 848, ,278 Cancellation of units (9,336) - (9,336) Net loss after taxation - (170,819) (170,819) As at 30 April ,500,878 90,894 2,591,772 Statement of Cash Flows to to MYR 000 MYR 000 Cash flows from operating activities Proceeds from sale of investments 154,815 46,242 Purchase of investments (1,021,188) (392,463) Subscription of rights - (406) Maturity of Shariah-based placements 20,542,494 8,029,498 Shariah-based placements (20,519,046) (8,063,690) Profi t from Shariah-based placements received 2, Interest received from foreign currency accounts 1 - Net distribution income received Net dividend income received 7,514 1,633 Non-permissible income received - 10 Trustee s fee paid (718) (157) Management fee paid (19,679) (4,325) Audit fee paid (4) (4) Payment of other fees and expenses (420) (94) Payment to charitable bodies - (12) Net cash outflow from operating activities (853,351) (382,741) Cash flows from financing activities Cash proceeds from units created 889, ,170 Cash paid on units cancelled (9,336) (168) Distribution paid (75,284) (12,318) Net cash inflow from financing activities 804, ,684 Net (decrease)/increase in cash and cash equivalents (48,433) 943 Effect of changes in foreign exchange rates (5,959) (265) Cash and cash equivalents at the beginning of the financial period 116,148 10,549 Cash and cash equivalents at the end of the financial period 61,756 11,227