Investments that stand the test of time

Transcription

1 UNAUDITED QUARTERLY REPORT FOR THE QUARTER AND FINANCIAL PERIOD ENDED 31 AUGUST 2018 Investments that stand the test of time FORWARD Your Investments

2 UNAUDITED QUARTERLY REPORT FOR THE QUARTER AND FINANCIAL PERIOD ENDED 31 AUGUST 2018

3 CONTENTS PAGE(S) INVESTORS' LETTER 1 MANAGER'S REPORT 2-11 Fund Objective and Policy Performance Data Market Review Fund Performance Portfolio Structure Market Outlook Investment Strategy Unit Holdings Statistics Soft Commissions and Rebates UNAUDITED STATEMENT OF COMPREHENSIVE INCOME UNAUDITED STATEMENT OF FINANCIAL POSITION UNAUDITED STATEMENT OF CHANGES IN NET ASSETS ATTRIBUTABLE TO UNIT HOLDERS UNAUDITED STATEMENT OF CASH FLOWS NOTES TO THE FINANCIAL STATEMENTS DIRECTORY 38

4 INVESTORS LETTER Dear Valued Investor, Thank you for your continued support and for the confidence that you have placed in us. We are pleased to share that CIMB-Principal Asset Management Berhad ( CIMB-Principal ) Malaysia has achieved RM52.60 billion in Asset under Management ( AUM ) as at June The Edge Thomson Reuters Lipper Malaysia Fund Awards 2018 Best Fund Over 5 Years, Equity Global - Malaysia : CIMB-Principal Global Titans Fund Best Fund Over 5 Years, Equity Asia Pacific ex Japan - Malaysia : CIMB-Principal Asian Equity Fund Best Fund Over 5 Years, Equity Asia Pacific ex Japan - Malaysia : CIMB Islamic Asia Pacific Equity Fund Best Fund Over 5 Years, Equity Malaysia Diversified - Malaysia : CIMB-Principal Equity Growth & Income Fund Best Fund Over 5 Years, Mixed Asset MYR Bal - Malaysia : CIMB-Principal Income Plus Balanced Fund Best Fund Over 3 Years, Equity Global - Malaysia : CIMB-Principal Global Titans Fund In addition, we received recognition from Fundsupermart.com for Fund House of the Year award and Recommended Unit Trust 2018/2019 awards for the following funds: CIMB-Principal Global Titans Fund CIMB-Principal Asia Pacific Dynamic Income Fund CIMB Islamic Asia Pacific Equity Fund CIMB-Principal Greater China Equity Fund CIMB-Principal PRS Plus Conservative CIMB-Principal PRS Plus Growth Our latest accomplishment is The Asset Triple A Private Banking, Wealth Management, Investment and Exchange-Traded Fund ( ETF ) Awards 2018 where we have been recognized for the Best Wealth Manager in Malaysia. These prestigious awards are a celebration of the trust that you have placed in us and testament to our capability in bringing potential value to your financial goals and needs. We look forward to serving you for many years to come and to the best of our ability. Thank you. Yours faithfully, for CIMB-Principal Asset Management Berhad Munirah Khairuddin Chief Executive Officer 1

5 MANAGER S REPORT FUND OBJECTIVE AND POLICY What is the investment objective of the Fund? The Fund aims to provide income* and potential capital growth to investors through investments in one collective investment scheme, which invests in equities or equity related securities worldwide. Note: * All distributions (if any) will be automatically reinvested into additional units in the Class at the Net Asset Value ( NAV ) per unit of the Class on the distribution date (the number of units is rounded using the normal rounding policy to two decimal places), unless written instructions to the contrary are communicated by you to the Manager. Has the Fund achieved its objective? For the financial period under review, the Fund has achieved its objective. What are the Fund investment policy and principal investment strategy? In order to achieve its objective, the Fund will invest at least 95% of its NAV in the Schroder International Selection Fund Global Dividend Maximiser (the Target Fund ); a Société d'investissement à Capital Variable ( SICAV ) domiciled in Luxembourg and established on the 13 July The Fund will invest in Class A of the Target Fund, which is a share class denominated in US Dollar ( ) with income distribution. The Fund will also maintain up to a maximum of 5% of its NAV in liquid assets. Information on the Target Fund Investment manager: Schroder Investment Management Limited Management company: Schroder Investment Management (Luxembourg) S.A. Regulatory authority: Commission de Surveillance du Secteur Financier (Luxembourg Financial Sector Supervisory Authority) Base Currency Fund category/type Wholesale Fund (Feeder Fund)/Income and capital growth How long should you invest for? Recommended medium term to long term Indication of short-term risk (low, moderate, high) High When was the Fund launched? Class MYR 11 May 2015 Class 11 May 2015 Class AUD 30 November 2015 Class SGD 30 November

6 FUND OBJECTIVE AND POLICY (CONTINUED) What was the size of the Fund as at 31 August 2018? 5.66 million (15.16 million units) CIMB-PRINCIPAL GLOBAL DIVIDEND MAXIMISER FUND What is the Fund s benchmark? The Fund is benchmark unconstrained as the Target Fund is benchmark unconstrained, i.e. it will be actively managed without reference to any specific benchmark. What is the Fund distribution policy? Quarterly, depending on the level of income that the Class and/or Fund generates and at the discretion of the Manager. Class MYR Any distribution payments for Class MYR will be made in MYR to the Unit holder s MYR currency bank account in CIMB-Principal s records (at the cost and expense of the Unit holders). All distributions (if any) will be automatically reinvested into additional units in the Class at the NAV per unit of the Class on the distribution date (the number of units is rounded using the normal rounding policy to two decimal places), unless written instructions to the contrary are communicated by you to the Manager. Class Any distribution payments for Class will be made in to the Unit holder s foreign currency bank account in CIMB-Principal s records (at the cost and expense of the Unit holders). All distributions (if any) will be automatically reinvested into additional units in the Class at the NAV per unit of the Class on the distribution date (the number of units is rounded using the normal rounding policy to two decimal places), unless written instructions to the contrary are communicated by you to the Manager. Class AUD Any distribution payments for Class AUD will be made in AUD to the Unit holder s AUD currency bank account in CIMB-Principal s records (at the cost and expense of the Unit holders). All distributions (if any) will be automatically reinvested into additional units in the Class at the NAV per unit of the Class on the distribution date (the number of units is rounded using the normal rounding policy to two decimal places), unless written instructions to the contrary are communicated by you to the Manager. Class SGD Any distribution payments for Class SGD will be made in SGD to the Unit holder s SGD currency bank account in CIMB-Principal s records (at the cost and expense of the Unit holders). All distributions (if any) will be automatically reinvested into additional units in the Class at the NAV per unit of the Class on the distribution date (the number of units is rounded using the normal rounding policy to two decimal places), unless written instructions to the contrary are communicated by you to the Manager. What was the net income distribution for the financial period from 1 June 2018 to 31 August 2018? There was no income distribution made for the financial period from 1 June 2018 to 31 August

7 PERFORMANCE DATA Details of portfolio composition of the Fund for the last three unaudited financial periods are as follows: % % % Collective investment scheme Cash Other net assets (0.15) (1.06) (1.26) Performance details of the Fund for the last three unaudited financial periods are as follows: NAV ( Million) - Class AUD Class MYR Class SGD Class Units in circulation (Million) - Class AUD Class MYR Class SGD Class NAV per unit () - Class AUD Class MYR Class SGD Class to to to Highest NAV per unit () - Class AUD Class MYR Class SGD Class Lowest NAV per unit () - Class AUD Class MYR Class SGD Class Total return (%) - Class AUD (2.74) Class MYR (2.18) Class SGD (2.43) Class (2.16) Capital growth (%) - Class AUD (2.74) Class MYR (2.18) Class SGD (2.43) Class (2.16) Income distribution (%) - Class AUD Class MYR Class SGD Class

8 PERFORMANCE DATA (CONTINUED) to to to Management Expense Ratio ( MER ) (%) Portfolio Turnover Ratio ( PTR ) (times) # # the Fund s PTR decreased from 0.13 times to 0.07 times as there were less trading activities within the financial period under review. Date of distribution Gross/Net distribution per unit (cent) - Class AUD Class MYR Class SGD Class Since inception to % % % % Annual total return - Class MYR (10.09) - Class (9.15) (Launch date: 11 May 2015) Since inception to % % % - Class AUD Class SGD (Launch date: 30 November 2015) Past performance is not necessarily indicative of future performance and that unit prices and investment returns may go down, as well as up. All performance figures for the financial period have been extracted from Lipper. MARKET REVIEW (1 JUNE 2018 TO 31 AUGUST 2018) In June 2018, global equities had a divergent month with the US assets outperforming both Europe and the Emerging Markets ( EM ). In fact, several of the EM markets recorded negative returns during the month. In addition, markets like H-shares 1, Shanghai, and Brazil were also ~20% lower from their 52-week highs. Tighter financial conditions, continuing US Dollar ( ) strength, as well as trade tension worries ultimately caused investors to pull money out of equities. To note, during the month, President Trump released a list of tariffs on 50 billion worth of Chinese imports. Consequently, this led China to retaliate by imposing a 25% tariff on 659 US goods worth the same amount. Meanwhile, on fixed income, global assets underperformed the US assets due to the strength. To note, the Federal Open Market Committee ( FOMC ) had raised its benchmark funds rate by 25 basis points ( bps ) to a range between 1.75% to 2.00%. The guidance by the FOMC also turned more hawkish as the Central Bank now pencils in two more rate hikes for the second half of H shares refer to the shares of companies incorporated in the Chinese mainland that are listed on the Hong Kong Stock Exchange or other foreign exchange. H shares are still regulated by Chinese law, but they are denominated in Hong Kong dollars and trade the same as other equities on the Hong Kong Stock exchange 5

9 MARKET REVIEW (1 JUNE 2018 TO 31 AUGUST 2018) (CONTINUED) During July 2018, global equities showed recovery especially for those regions that were impacted by deeply negative sentiment in the second quarter of However, Chinese equity sentiment remained skittish as markets were not convinced of a quick resolution to China s trade dispute with the US. While incremental easing by Public Bank of China ( PBOC ) on the fiscal side helped, it was not sufficient to turn sentiment around enough for markets to be bull. H-shares and Shanghai are the only two markets that remain in a technical bear market, staying 20% below their recent peaks. On the other hand, global fixed income markets made a solid recovery as credit spreads tightened, led by high yield. Asian spreads followed the global cue despite continuing concerns about Chinese onshore defaults. Lastly, in August 2018, global equities recorded mixed performances. US equities continued their amazing run of outperformance, aided by strong macro and earnings season. Meanwhile, ongoing trade disputes had severely impacted sentiments in China and Europe, causing some currencies such as Turkey, Argentina, and Brazil to crash. This consequently drew more money into US markets, both in equities and fixed income. Separately, the global fixed income markets delivered positive but low returns except for EMs where high yield spreads widened and currencies weakened, making it a tough month for EM bond investors. FUND PERFORMANCE 3 months to months to Class AUD Class MYR Class SGD Class Class AUD Class MYR Class SGD Class % % % % % % % % Income Capital (2.74) (2.18) (2.43) (2.16) (3.99) (3.47) (3.77) (3.49) Total Return (2.74) (2.18) (2.43) (2.16) (3.99) (3.47) (3.77) (3.49) Average Total Return N/A N/A N/A N/A N/A N/A N/A N/A 1 year to years to Class AUD Class MYR Class SGD Class Class AUD Class MYR Class SGD Class % % % % % % % % Income N/A 5.93 N/A 7.26 Capital N/A N/A Total Return N/A N/A Average Total Return N/A 7.23 N/A 7.58 Since Inception to Class AUD Class MYR Class SGD Class % % % % Income Capital Total Return Average Total Return For the financial period under review, the Fund declined in all classes. Class MYR dropped by 2.18%, Class fell by 2.16%, Class AUD declined by 2.74% and Class SGD inched down by 2.43%. The Fund does not have a benchmark for comparison. 6

10 Nov-15 Feb-16 May-16 Aug-16 Nov-16 Feb-17 May-17 Aug-17 Nov-17 Feb-18 May-18 Aug-18 May-15 Aug-15 Nov-15 Feb-16 May-16 Aug-16 Nov-16 Feb-17 May-17 Aug-17 Nov-17 Feb-18 May-18 Aug-18 Nov-15 Feb-16 May-16 Aug-16 Nov-16 Feb-17 May-17 Aug-17 Nov-17 Feb-18 May-18 Aug-18 CIMB-PRINCIPAL GLOBAL DIVIDEND MAXIMISER FUND FUND PERFORMANCE (CONTINUED) Class AUD 35.00% 30.00% 25.00% 20.00% 15.00% 10.00% 5.00% 0.00% -5.00% % Class MYR 30.00% 20.00% 10.00% 0.00% % % Class SGD 40.00% 35.00% 30.00% 25.00% 20.00% 15.00% 10.00% 5.00% 0.00% -5.00% % 7

11 May-15 Aug-15 Nov-15 Feb-16 May-16 Aug-16 Nov-16 Feb-17 May-17 Aug-17 Nov-17 Feb-18 May-18 Aug-18 CIMB-PRINCIPAL GLOBAL DIVIDEND MAXIMISER FUND FUND PERFORMANCE (CONTINUED) Class 25.00% 20.00% 15.00% 10.00% 5.00% 0.00% -5.00% % % % Changes in NAV CLASS AUD Changes % NAV ( Million) (35.42) NAV/Unit () CLASS MYR Changes % NAV ( Million) (41.64) NAV/Unit () CLASS SGD Changes % NAV ( Million) > NAV/Unit () CLASS Changes % NAV ( Million) (45.67) NAV/Unit ()

12 FUND PERFORMANCE (CONTINUED) Changes in NAV (Continued) The Fund recorded outflows from redemptions over the one-year period for three out of the four classes - Class AUD, Class MYR, and Class. Class lost the most by 45.67% in its total NAV, followed by Class MYR by 41.64%, and Class AUD by 35.42%. Meanwhile, the Class SGD saw inflows from net creations and recoded a positive increase of more than 100% in its total NAV. The changes in NAV per unit for all the four classes were within the range of 3.72% to 3.75%. Class AUD and MYR posted similar gains of 3.75%, while Class and SGD increased by 3.73% and 3.72% respectively. Performance data represents the combined income and capital return as a result of holding units in the Fund for the specified length of time, based on NAV to NAV price. The performance data assumes that all earnings from the Fund are reinvested and are net of management and trustee fees. Past performance is not reflective of future performance and income distributions are not guaranteed. Unit prices and income distributions, if any, may fall and rise. All performance figures for the financial period have been extracted from Lipper. PORTFOLIO STRUCTURE Asset allocation (% of NAV) Collective investment scheme Cash Other net assets (0.15) (1.06) TOTAL The Fund was fully invested during the financial period under review. A minimal level of liquid assets was maintained primarily for liquidity purposes. MARKET OUTLOOK* We believe that the US economy will expand about 3% in While Chinese growth is expected to slow down, we are projecting that growth should remain above 6% (second quarter of 2018 China s real Gross Domestic Product ( GDP ) growth stood at 6.7% year-on-year ( y-o-y )). In addition, we expect the Chinese monetary policy to be less restrictive and fiscal policy to be more accommodative till end 2018 as the Government re-focuses on growth, given the lack of progress on trade tariffs. Separately, we view that despite Eurozone s slower growth in the second quarter of 2018 of 1.7% y-o-y are showing signs that the decline is stabilising. Meanwhile, we are expecting for Japan to grow by ~1%. While global Manufacturing Purchasing Managers' Index ( PMI ) has lost momentum lately, dropping to a 12-month low, the level continues to signify solid expansion. * This market outlook does not constitute an offer, invitation, commitment, advice or recommendation to make a purchase of any investment. The information given in this article represents the views of CIMB-Principal or based on data obtained from sources believed to be reliable by CIMB-Principal. Whilst every care has been taken in preparing this, CIMB-Principal makes no guarantee, representation or warranty and is under no circumstances liable for any loss or damage caused by reliance on, any opinion, advice or statement made in this market outlook. INVESTMENT STRATEGY The Fund will continue to remain fully invested in the Target Fund with minimal cash kept for liquidity purposes. Our asset allocation decision will continue to be subject to market conditions. 9

13 UNIT HOLDINGS STATISTICS Breakdown of unit holdings by size as at 31 August 2018 are as follows: CLASS AUD Size of unit holdings (units) No. of unit holders No. of units held (million) % of units held 5,000 and below ,001 to 10, ,001 to 50, ,001 to 500, ,001 and above Total CLASS MYR Size of unit holdings (units) No. of unit holders No. of units held (million) % of units held 5,000 and below ,001 to 10, ,001 to 50, ,001 to 500, ,001 and above Total CLASS SGD Size of unit holdings (units) No. of unit holders No. of units held (million) % of units held 5,000 and below ,001 to 10, ,001 to 50, ,001 to 500, ,001 and above Total CLASS Size of unit holdings (units) No. of unit holders No. of units held (million) % of units held 5,000 and below ,001 to 10, ,001 to 50, ,001 to 500, ,001 and above Total

14 SOFT COMMISSIONS AND REBATES CIMB-Principal Asset Management Berhad (the Manager ) and the Trustee (including their officers) will not retain any form of rebate or soft commission from, or otherwise share in any commission with any broker in consideration for directing dealings in the investments of the Funds unless the soft commission received is retained in the form of goods and services such as financial wire services and stock quotations system incidental to investment management of the Funds. All dealings with brokers are executed on best available terms. During the financial period under review, the Manager and the Trustee did not receive any rebates from the brokers or dealers but have retained soft commission in the form of goods and services such as financial wire services and stock quotations system incidental to investment management of the Funds. 11

15 UNAUDITED STATEMENT OF COMPREHENSIVE INCOME FOR THE FINANCIAL PERIOD FROM 1 JUNE 2018 TO 31 AUGUST to to Note INVESTMENT (LOSS)/INCOME Dividend income 99, ,663 Interest income 2 - Net (loss)/gain on financial assets at fair value through profit or loss 8 (270,615) 143,681 Net foreign exchange loss (116) (3,208) Other income 4 21,799 39,905 (149,021) 375,041 EXPENSES Management fee 5 26,568 48,786 Trustee's fee ,084 Audit fee Tax agent's fee Other expenses 1,213 3,034 29,143 53,876 (LOSS)/PROFIT BEFORE TAXATION (178,164) 321,165 Taxation (LOSS)/PROFIT AFTER TAXATION AND COMPREHENSIVE (LOSS)/INCOME FOR THE FINANCIAL PERIOD (178,164) 321,165 (Loss)/Profit after taxation is made up as follows: Realised amount 87, ,835 Unrealised amount (266,071) 189,330 (178,164) 321,165 The accompanying notes to the financial statements form an integral part of the unaudited financial statements. 12

16 UNAUDITED STATEMENT OF COMPREHENSIVE INCOME FOR THE FINANCIAL PERIOD FROM 1 DECEMBER 2017 TO 31 AUGUST 2018 Year-to-date Year-to-date Note INVESTMENT INCOME Dividend income 365, ,780 Interest income 35 - Net (loss)/gain on financial assets at fair value through profit or loss 8 (387,582) 919,787 Net foreign exchange loss (17,261) (16,668) Other income 4 77, ,149 38,141 1,968,048 EXPENSES Management fee 5 93, ,655 Trustee's fee 6 2,070 4,592 Audit fee (393) 2,494 Tax agent's fee Other expenses 8,085 11, , ,292 (LOSS)/PROFIT BEFORE TAXATION (65,590) 1,741,756 Taxation (LOSS)/PROFIT AFTER TAXATION AND COMPREHENSIVE (LOSS)/INCOME FOR THE FINANCIAL PERIOD (65,590) 1,741,756 (Loss)/Profit after taxation is made up as follows: Realised amount 474,788 (13,681) Unrealised amount (540,378) 1,755,437 (65,590) 1,741,756 The accompanying notes to the financial statements form an integral part of the unaudited financial statements. 13

17 UNAUDITED STATEMENT OF FINANCIAL POSITION AS AT 31 AUGUST 2018 CIMB-PRINCIPAL GLOBAL DIVIDEND MAXIMISER FUND Audited Note ASSETS Cash and cash equivalents 9 9,149 89,050 Financial assets at fair value through profit or loss 8 5,656,019 8,983,600 Amount due from Manager of collective investment scheme - Management fee rebate 7,912 10,431 - Disposal of collective investment scheme 102, ,000 TOTAL ASSETS 5,775,080 9,183,081 LIABILITIES Amount due to Manager 107,888 86,662 Accrued management fee 5,989 9,063 Amount due to Trustee Other payables and accruals 4,510 5,307 TOTAL LIABILITIES (EXCLUDING NET ASSETS ATTRIBUTABLE TO UNIT HOLDERS) 118, ,333 NET ASSET VALUE OF THE FUND 5,656,497 9,081,748 NET ASSETS ATTRIBUTABLE TO UNIT HOLDERS 5,656,497 9,081,748 The accompanying notes to the financial statements form an integral part of the unaudited financial statements. 14

18 UNAUDITED STATEMENT OF FINANCIAL POSITION (CONTINUED) AS AT 31 AUGUST 2018 (CONTINUED) CIMB-PRINCIPAL GLOBAL DIVIDEND MAXIMISER FUND REPRESENTED BY: Audited Note FAIR VALUE OF OUTSTANDING UNITS () - Class AUD 311, ,828 - Class MYR 3,834,856 5,981,914 - Class SGD 131, ,675 - Class 1,379,208 2,467,331 5,656,497 9,081,748 NUMBER OF UNITS IN CIRCULATION (UNITS) - Class AUD 358, ,451 - Class MYR 13,331,911 19,995,891 - Class SGD 152, ,599 - Class 1,315,802 2,300, ,158,287 23,110,517 NET ASSET VALUE PER UNIT () - Class AUD Class MYR Class SGD Class NET ASSET VALUE PER UNIT IN RESPECTIVE CURRENCIES - Class AUD AUD AUD Class MYR MYR MYR Class SGD SGD SGD Class The accompanying notes to the financial statements form an integral part of the unaudited financial statements. 15

19 UNAUDITED STATEMENT OF CHANGES IN NET ASSETS ATTRIBUTABLE TO UNIT HOLDERS FOR THE FINANCIAL PERIOD FROM 1 JUNE 2018 TO 31 AUGUST to to NET ASSETS ATTRIBUTABLE TO UNIT HOLDERS AT THE BEGINNING OF THE FINANCIAL PERIOD 6,014,175 12,223,983 Movement due to units created and cancelled during the financial period: Creation of units from applications - Class AUD 186, Class MYR 30,437 22,682 - Class SGD - 21,004 - Class 48,780 26,849 Cancellation of units - Class AUD - (74,272) - Class MYR (317,824) (1,736,855) - Class SGD - (46,957) - Class (127,001) (1,101,030) 5,834,661 9,335,404 (Decrease)/Increase in net assets attributable to unit holders during the financial period (178,164) 321,165 NET ASSETS ATTTRIBUTABLE TO UNIT HOLDERS DURING THE FINANCIAL PERIOD 5,656,497 9,656,569 The accompanying notes to the financial statements form an integral part of the unaudited financial statements. 16

20 UNAUDITED STATEMENT OF CHANGES IN NET ASSETS ATTRIBUTABLE TO UNIT HOLDERS (CONTINUED) FOR THE FINANCIAL PERIOD FROM 1 DECEMBER 2017 TO 31 AUGUST 2018 Year-to-date Year-to-date NET ASSETS ATTRIBUTABLE TO UNIT HOLDERS AT THE BEGINNING OF THE FINANCIAL PERIOD 9,081,748 29,282,705 Movement due to units created and cancelled during the financial period: Creation of units from applications - Class AUD 518, ,775 - Class MYR 148, ,795 - Class SGD - 21,004 - Class 75,206 78,684 Cancellation of units - Class AUD (739,154) (1,225,297) - Class MYR (2,105,509) (17,613,584) - Class SGD (96,425) (115,935) - Class (1,160,506) (3,572,335) 5,722,087 7,914,812 Increase in net assets attributable to unit holders during the financial period (65,590) 1,741,757 NET ASSETS ATTTRIBUTABLE TO UNIT HOLDERS DURING THE FINANCIAL PERIOD 5,656,497 9,656,569 The accompanying notes to the financial statements form an integral part of the unaudited financial statements. 17

21 UNAUDITED STATEMENT OF CASH FLOWS FOR THE FINANCIAL PERIOD FROM 1 JUNE 2018 TO 31 AUGUST to to CASH FLOWS FROM OPERATING ACTIVITIES Proceeds from disposal of collective investment scheme 431,000 2,865,000 Purchase of collective investment scheme (340,000) (100,000) Dividend income received 99, ,663 Interest income received 2 - Management fee paid (27,533) (53,207) Management fee rebate received 22,216 19,149 Trustee's fee paid (611) (1,182) Other income (1,840) 26,493 Payment of other fees and expenses 573 (4,107) Net realised foreign exchange loss (24) (3,366) Net cash generated from operating activities 183,692 2,943,443 CASH FLOWS FROM FINANCING ACTIVITIES Cash proceeds from units created 265,311 70,834 Payments for cancellation of units (457,906) (3,063,348) Net cash used in financing activities (192,595) (2,992,514) Net decrease in cash and cash equivalents (8,903) (49,071) Effect of foreign exchange differences (95) (193) Cash and cash equivalents at the beginning of financial period 18, ,808 Cash and cash equivalents at the end of financial period 9,149 75,544 Cash and cash equivalents comprised of: Bank balances 9,149 75,544 Cash and cash equivalents at the end of the financial period 9,149 75,544 The accompanying notes to the financial statements form an integral part of the unaudited financial statements. 18

22 UNAUDITED STATEMENT OF CASH FLOWS (CONTINUED) FOR THE FINANCIAL PERIOD FROM 1 DECEMBER 2017 TO 31 AUGUST 2018 Year-to-date Year-to-date CASH FLOWS FROM OPERATING ACTIVITIES Proceeds from disposal of collective investment scheme 4,038,000 24,085,000 Purchase of collective investment scheme (1,100,000) (490,000) Dividend income received 365, ,780 Interest income received 35 - Management fee paid (79,643) (255,842) Management fee rebate received 62,808 99,170 Trustee's fee paid (2,174) (5,365) Other income (1,794) 58,304 Payment of other fees and expenses (6,908) (34,784) Net realised foreign exchange (loss)/gain (13,899) 52,764 Net cash generated from operating activities 3,261,899 24,402,027 CASH FLOWS FROM FINANCING ACTIVITIES Cash proceeds from units created 741,932 1,215,883 Payments for cancellation of units (4,080,366) (25,618,923) Net cash used in financing activities (3,338,434) (24,403,040) Net decrease in cash and cash equivalents (76,535) (1,013) Effect of foreign exchange differences (3,366) 10,638 Cash and cash equivalents at the beginning of financial period 89,050 65,919 Cash and cash equivalents at the end of financial period 9,149 75,544 Cash and cash equivalents comprised of: Bank balances 9,149 75,544 Cash and cash equivalents at the end of the financial period 9,149 75,544 The accompanying notes to the financial statements form an integral part of the unaudited financial statements. 19

23 NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL PERIOD FROM 1 JUNE 2018 TO 31 AUGUST THE FUND, THE MANAGER AND ITS PRINCIPAL ACTIVITY CIMB-Principal Global Dividend Maximiser Fund (the Fund ) was constituted pursuant to the execution of a Deed dated 30 April 2015 and a First Supplemental Deed dated 24 November 2015 (collectively referred to as the Deeds ) between CIMB-Principal Asset Management Berhad (the Manager ) and HSBC (Malaysia) Trustee Berhad (the Trustee ). In order to achieve its objective, the Fund will invest at least 95% of its NAV in the Target Fund; a SICAV domiciled in Luxembourg and established on the 13 July The Fund will invest in Class A of the Target Fund, which is a share class denominated in with income distribution. The Fund will also maintain up to a maximum of 5% of its NAV in liquid assets. All investments are subjected to the Securities Commission Malaysia ( SC ) Guidelines on Unlisted Capital Market Products under the Lodge and Launch Framework, SC requirements, the Deeds, except where exemptions or variations have been approved by the SC, internal policies and procedures and the Fund s objective. The Manager, a company incorporated in Malaysia, is jointly owned by CIMB Group and The Principal International (Asia) Limited. The principal activities of the Manager are the establishment and management of unit trust funds and fund management activities. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The following accounting policies have been used consistently in dealing with items which are considered material in relation to the financial statements: (a) Basis of preparation The financial statements have been prepared in accordance with the provisions of the Malaysian Financial Reporting Standards ( MFRS ) and International Financial Reporting Standards ( IFRS ). The financial statements have been prepared under the historical cost convention, as modified by financial assets at fair value through profit or loss. The preparation of financial statements in conformity with MFRS and IFRS requires the use of certain critical accounting estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reported period. It also requires the Manager to exercise their judgment in the process of applying the Fund s accounting policies. Although these estimates and judgment are based on the Manager s best knowledge of current events and actions, actual results may differ. The areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the financial statements are disclosed in Note 2(m). 20

24 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (a) Basis of preparation (continued) Standards, amendments to published standards and interpretations to existing standards that are effective: The Fund has applied the following amendments for the first time for the financial period beginning 1 December 2017: Amendments to MFRS 107 Statement of Cash Flows - Disclosure Initiative introduce an additional disclosure on changes in liabilities arising from financing activities. The adoption of these amendments did not have any impact on the current financial period or any prior period and is not likely to affect future periods. The standards, amendments to published standards and interpretations to existing standards that are applicable to the Fund but not yet effective and have not been early adopted are as follows: (i) Financial period beginning on/after 1 December 2018 MFRS 9 Financial Instruments (effective from 1 January 2018) will replace MFRS 139 Financial Instruments: Recognition and Measurement. MFRS 9 retains but simplifies the mixed measurement model in MFRS 139 and establishes three primary measurement categories for financial assets: amortised cost, fair value through profit or loss and fair value through other comprehensive income ( OCI ). The basis of classification depends on the entity's business model and the contractual cash flow characteristics of the financial asset. Investments in equity instruments are always measured at fair value through profit or loss with an irrevocable option at inception to present changes in fair value in OCI (provided the instrument is not held for trading). A debt instrument is measured at amortised cost only if the entity is holding it to collect contractual cash flows and the cash flows represent principal and interest. For liabilities, the standard retains most of the MFRS 139 requirements. These include amortised cost accounting for most financial liabilities, with bifurcation of embedded derivatives. The main change is that, in cases where the fair value option is taken for financial liabilities, the part of a fair value change due to an entity s own credit risk is recorded in OCI rather than the income statement, unless this creates an accounting mismatch. MFRS 9 introduces an expected credit loss ( ECL ) model on impairment that replaces the incurred loss impairment model used in MFRS 139. The expected credit loss model is forward-looking and eliminates the need for a trigger event to have occurred before credit losses are recognised. 21

25 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (a) Basis of preparation (continued) (i) Financial period beginning on/after 1 December 2018 (continued) The Fund has reviewed its financial assets and liabilities and has assessed the following impact from the adoption of the new standard on 1 January 2018: There will be no impact on the Fund's accounting for financial assets as the Fund's equity investments currently measured at fair value through profit or loss will continue to be measured on the same basis under MFRS 9. There will be no impact on the Fund's accounting for financial liabilities as the new requirements only affect the accounting for financial liabilities that are designated at fair value through profit or loss and the Fund does not have any such liabilities. The new impairment model requires the recognition of impairment provisions based on ECL rather than only incurred credit losses as is the case under MFRS 139. It applies to financial assets classified at amortised cost. Based on the assessments undertaken to date, the Fund does not expect any loss allowance to be recognised upon adoption of MFRS 9. (b) Financial assets and financial liabilities Classification The Fund designates its investments in collective investment scheme as financial assets at fair value through profit or loss at inception. Financial assets are designated at fair value through profit or loss when they are managed and their performance evaluated on a fair value basis. Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market and have been included in current assets. The Fund s loans and receivables comprise cash and cash equivalents, and amount due from Manager of collective investment scheme. Financial liabilities are classified according to the substance of the contractual arrangements entered into and the definitions of a financial liability. The Fund classifies amount due to Manager, accrued management fee, amount due to Trustee, and other payables and accruals as other financial liabilities. Recognition and measurement Regular purchases and sales of financial assets are recognised on the trade-date, the date on which the Fund commits to purchase or sell the asset. Investments are initially recognised at fair value. Financial liabilities, within the scope of MFRS 139, are recognised in the statement of financial position when, and only when, the Fund becomes a party to the contractual provisions of the financial instrument. 22

26 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (b) Financial assets and financial liabilities (continued) Recognition and measurement (continued) Financial assets are derecognised when the rights to receive cash flows from the investments have expired or have been transferred and the Fund has transferred substantially all risks and rewards of ownership. Financial liabilities are derecognised when it is extinguished, i.e. when the obligation specified in the contract is discharged or cancelled or expired. Unrealised gains or losses arising from changes in the fair value of the financial assets at fair value through profit or loss are presented in the statement of comprehensive income within net gain or loss on financial assets at fair value through profit or loss in the financial period which they arise. Collective investment scheme is valued based on the most recent published NAV per unit or share of such collective investment scheme or, if unavailable, the last published price of such unit or share (excluding any sales charge included in such selling price). Dividend income from financial assets at fair value through profit or loss is recognised in the statement of comprehensive income as part of gross dividend income when the Fund s right to receive payments is established. Loans and receivables and other financial liabilities are subsequently carried at amortised cost using the effective interest method. Impairment for assets carried at amortised costs For assets carried at amortised cost, the Fund assesses at the end of the reporting period whether there is objective evidence that a financial asset or group of financial assets is impaired. A financial asset or a group of financial assets is impaired and impairment losses are incurred only if there is objective evidence of impairment as a result of one or more events that occurred after the initial recognition of the asset (a loss event ) and that loss event (or events) has an impact on the estimated future cash flows of the financial asset or group of financial assets that can be reliably estimated. The amount of the loss is measured as the difference between the asset s carrying amount and the present value of estimated future cash flows (excluding future credit losses that have not been incurred) discounted at the financial asset s original effective interest rate. The asset s carrying amount is reduced and the amount of the loss is recognised in statement of comprehensive income. If loans and receivables has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate determined under the contract. As a practical expedient, the Fund may measure impairment on the basis of an instrument s fair value using an observable market price. If, in a subsequent financial period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised (such as an improvement in the debtor s credit rating), the reversal of the previously recognised impairment loss is recognised in statement of comprehensive income. When an asset is uncollectible, it is written off against the related allowance account. Such assets are written off after all the necessary procedures have been completed and the amount of the loss has been determined. 23

27 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (c) Income recognition Dividend income is recognised on the ex-dividend date when the right to receive payment is established. Interest income from deposits with licensed financial institutions is recognised on a time proportionate basis using effective interest rate method on an accrual basis. Realised gain or loss on disposal of collective investment scheme is accounted for as the difference between the net disposal proceeds and the carrying amount of collective investment scheme, determined on a weighted average cost basis. (d) Foreign currency Functional and presentation currency Items included in the financial statements of the Fund are measured using the currency of the primary economic environment in which the Fund operates (the functional currency ). The financial statements are presented in, which is the Fund s functional and presentation currency. Due to mixed factors in determining the functional currency of the Fund, the Manager has used its judgement to determine the functional currency that most faithfully represents the economic effects of the underlying transactions, events and conditions and have determined the functional currency to be in primarily due to the following factors: i) Significant portion of the NAV is invested in the form of collective investment scheme denominated in ; ii) Significant portion of the Fund s expenses are denominated in. Transactions and balances Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions or valuation where items are remeasured. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at financial period/period end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in statement of comprehensive income. (e) Cash and cash equivalents For the purpose of statement of cash flows, cash and cash equivalents comprise bank balances that are readily convertible to known amounts of cash and which is subjected to an insignificant risk of changes in value. (f) Taxation Current tax expense is determined according to Malaysian tax laws at the current rate based on taxable profit earned during the financial period. Tax on income from foreign collective investment scheme is based on the tax regime of the respective countries that the Fund invests in. 24

28 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (g) Creation and cancellation of units The unit holders contributions to the Fund meet the definition of puttable instruments classified as financial liability under MFRS 132 Financial Instruments: Presentation. The Fund issues cancellable units, in four classes of units, known respectively as the Class MYR, Class, Class AUD and Class SGD which are cancelled at the unit holder s option. The units are classified as financial liabilities. Cancellable units can be put back to the Fund at any time for cash equal to a proportionate share of the Fund s NAV of respective classes. The outstanding units are carried at the redemption amount that is payable at the date of the statement of financial position if the unit holder exercises the right to put back the unit to the Fund. Units are created and cancelled at the unit holders option at prices based on the Fund s NAV per unit of respective classes at the close of business on the relevant dealing day. The Fund s NAV per unit of respective classes is calculated by dividing the net assets attributable to members of respective classes with the total number of outstanding units of respective classes. (h) Increase/Decrease in net assets attributable to unit holders Income not distributed is included in net assets attributable to unit holders. (i) Distribution A distribution to the Fund s unit holders is accounted for as a deduction from realised reserve. A proposed distribution is recognised as a liability in the financial period/period in which it is approved by the Trustee. (j) Other income Management fee rebate is derived from the Manager and Manager of the collective investment scheme on an accrual basis to ensure no double charging of management fee. It is accrued daily based on the fair value of collective investment scheme held. (k) Amount due from Manager of collective investment scheme (sales of investment) Amounts due from Manager of collective investment scheme represent receivables for collective investment scheme sold that have been contracted for but not yet settled or delivered on the statement of financial position date. These amounts are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method, less provision for impairment. A provision for impairment of amount due from Manager of collective investment scheme is established when there is objective evidence that the Fund will not be able to collect all amounts due from the relevant Manager of collective investment scheme. Significant financial difficulties of the Manager of collective investment scheme, probability that the Manager of collective investment scheme will enter bankruptcy or financial reorganisation, and default in payments are considered indicators that the amount due from Manager of collective investment scheme is impaired. Once a financial asset or a group of similar financial assets has been written down as a result of an impairment loss, interest income is recognised using the interest rate used to discount the future cash flows for the purpose of measuring the impairment loss. 25

29 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (l) Segment information Operating segments are reported in a manner consistent with the internal reporting used by the chief operating decision-maker. The chief operating decision-maker is responsible for allocating resources and assessing performance of the operating segments. (m) Critical accounting estimates and judgments in applying accounting policies The Fund makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, rarely equal the related actual results. To enhance the information content of the estimates, certain key variables that are anticipated to have material impact to the Funds results and financial position are tested for sensitivity to changes in the underlying parameters. Estimates and judgment are continually evaluated by the Manager and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. In undertaking any of the Fund s investment, the Manager will ensure that all assets of the Fund under management will be valued appropriately, that is at fair value and in compliance with the SC Guidelines on Unlisted Capital Market Products under the Lodge and Launch Framework. However, the Manager is of the opinion that in applying these accounting policies, no significant judgment was required. 26

30 3. RISK MANAGEMENT OBJECTIVES AND POLICIES CIMB-PRINCIPAL GLOBAL DIVIDEND MAXIMISER FUND The objective of the Fund is to provide income and potential capital growth to investors through investments in one collective investment scheme, which invests in equities or equity related securities worldwide. The Fund is exposed to a variety of risks which include market risk (inclusive of price risk and currency risk), credit risk and liquidity risk. Financial risk management is carried out through internal control process adopted by the Manager and adherence to the investment restrictions as stipulated in the Deeds and SC Guidelines on Unlisted Capital Market Products under the Lodge and Launch Framework. (a) Market risk (i) Price risk Price risk is the risk that the fair value of an investment in collective investment scheme will fluctuate because of changes in market prices (other than those arising from currency risk). The value of collective investment scheme may fluctuate according to the activities of individual companies, sector and overall political and economic conditions. Such fluctuation may cause the Fund s NAV and prices of units to fall as well as rise, and income produced by the Fund may also fluctuate. The price risk is managed through diversification and selection of collective investment scheme and other financial instruments within specified limits according to the Deeds. (ii) Currency risk Currency risk is associated with investments that are quoted and/or priced in foreign currency denomination. Foreign currency risk is the risk that the value of financial instruments will fluctuate due to changes in foreign exchange rates. The Manager will evaluate the likely directions of a foreign currency versus based on considerations of economic fundamentals such as interest rate differentials, balance of payments position, debt levels, and technical chart considerations. (b) Credit risk Credit risk refers to the risk that counterparty will default on its contractual obligation resulting in financial loss to the Fund. For amount due from Manager of collective investment scheme, the Fund will invest with an investment management company of the collective investment scheme which is authorised or approved by the relevant regulatory authority in its home jurisdiction. 27

31 3. RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTINUED) (c) Liquidity risk Liquidity risk is the risk that the Fund will encounter difficulty in meeting its financial obligations. The Manager manages this risk by maintaining sufficient level of liquid assets to meet anticipated payments and cancellations of the units by unit holders. Liquid assets comprise bank balances, which are capable of being converted into cash within 7 business days. The Fund s investments in collective investment scheme are realisable which are capable of being converted into cash within 10 business days. This is expected to reduce the risks for the entire portfolio without limiting the Fund s growth potentials. (d) Capital risk management The capital of the Fund is represented by net assets attributable to unit holders of 5,656,497 ( : 9,081,748). The amount of capital can change significantly on a daily basis as the Fund is subject to daily subscriptions and redemptions at the discretion of unit holders. The Fund s objective when managing capital is to safeguard the Fund s ability to continue as a going concern in order to provide returns to unit holders and benefits for other stakeholders and to maintain a strong capital base to support the development of the investment activities of the Fund. (e) Fair value estimation Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (i.e. an exit price). The fair value of financial assets traded in active markets (such as trading securities) are based on quoted market prices at the close of trading on the financial period/period end date. The Fund utilises the last traded market price for financial assets where the last traded market falls within the bid-ask spread. In circumstances where the last traded market price is not within the bid-ask spread, the Manager will determine the point within the bid-ask spread that is most representative of the fair value. An active market is a market in which transactions for the asset or liability take place with sufficient frequency and volume to provide pricing information on an ongoing basis. The fair value of financial assets that are not traded in an active market is determined by using valuation techniques. 28