Annual Review 2017 For the Financial Year Ended 31 December 2017

Transcription

1 Annual Review 2017 For the Financial Year Ended 31 December 2017 MANULIFE INVESTMENT-LINKED FUND MANULIFE EAP MANAGED FUND

2 ABOUT MANULIFE MALAYSIA Manulife Insurance Berhad, a wholly owned subsidiary of Manulife Holdings Berhad and a member of Canada-based Manulife Financial Corporation. We have been established over 54 years in Malaysia and was listed on the KLSE in As at 31 December 2017, assets under management were over RM10 billion. Through its subsidiary companies, the Manulife Group offers an innovative range of financial protection and wealth management products and services to meet different customer needs.

3 CONTENT 1. Market Commentary 4 2. Fund Performance 8 - Comparative Performance Tables 11 - Investment information Summary of Financial Statement Notes to the Financial Information Statement by Manager Independent Auditors Report 28

4 MARKET COMMENTARY

5 MARKET COMMENTARY MANULIFE EAP MANAGED FUND FUND OBJECTIVE The Manulife EAP Managed Fund (the Fund ) is designed to help build the annuity principal for potentially higher annuity income stream. It seeks to achieve long term total return via income and capital growth over its investment horizon. The NAV of the Fund is dependent on the performance of its underlying investments. Past performance of the Fund is not an indication of its future performance. The account value under the annuity policy may go down as well as up. Accordingly, policy owner may receive back less than the annuity premium paid. There can be no assurance that the investment objective of the Fund will be achieved or losses will be avoided. The investment risks, which include currency risk, under the Fund are borne solely by the policy owner. INVESTMENT REVIEW The financial period under review covers since inception date of the fund, i.e. from 28 November 2017 to the year ending 31 December The key development in the period under review was the signing of the Republican tax reform bill into law in the US. This is Trump s first major victory in his first year in office. In addition, the US continued to exhibit a robust labour market, reinforcing the Federal Reserve s third interest rate hike in 2017 to 1.50%. The Malaysia equity market closed higher in December 2017 as the FBMKLCI gained 4.6% m-o-m, supported by foreign net inflows, a reversal from previous months. The strong performance was mainly driven by banking stocks and year end window dressing activities. Relative to the region, the FBMKLCI out-performed the MSCI Asia ex-japan Index, which recorded an increase of 2.51% in USD terms. Asia ex-japan equities extended gains in December and finished 2017 near its all-time high. Strong trade data from China and higher commodity prices provided a boost for the markets. ASEAN countries performed strongly given the strength in commodities. Indonesia also benefitted from the sovereign ratings upgrade from Fitch. Meanwhile, the relative underperformance in Taiwan could be attributable to weakness in the technology sector as concerns over lukewarm demand for the iphone X negatively impacted Apple supply chain names. Asian REITs closed mixed for the month of December. Singapore s REIT market continued to make further gains while Australia and Hong Kong s REIT markets consolidated. Investors shrugged off the third US rate hike in 2017 as they focused on the potential cyclical rental growth recovery for the real estate market in the region. The Malaysian Government Securities (MGS) yield curve shifted down slightly, with the three and five year MGS yields down by 8bps and 7bps respectively, while the 10-year MGS yield increased by 2 bps. The short to medium duration MGS gained, together with the MYR, supported by foreign demand. The secondary MYR corporate bond market activity was relatively slower. The flows were driven by portfolio rebalancing activities, coupled with bargain hunting. ANNUAL REVIEW 2017 MANULIFE EAP MANAGED FUND 5

6 MARKET COMMENTARY MANULIFE EAP MANAGED FUND (CONTINUED) INVESTMENT REVIEW (CONTINUED) Treasury yields were range bound over the month as the Fed raised its key interest rate by 25 bps as expected by most market participants. The 10-year US treasury yield closed at 2.41% at the end of the month. Offshore Renminbi bond yields rose amid tighter offshore liquidity conditions. Indonesian government bond yields fell in December on the back of Fitch s decision to upgrade Indonesia s credit rating, citing the country s resilience to external shocks. Indian government bond yields rose over the period due to resurgent inflation data and investor concerns over government plans to increase the fiscal deficit. India s consumer price index in November rose by 4.88% y-o-y, the fastest pace since mid-2016 due to higher food and fuel prices. OUTLOOK Equities remain an attractive asset class in 2018 as earnings growth is expected to sustain throughout the year, thanks to a more broad-based and synchronized recovery in the global economy. Significant reforms have taken place over the past two years and most Asian economies are now more resilient to an interest rate tightening cycle, compared to the period of the first taper tantrum. We expect economic growth in the region to be supported by a relatively benign interest rate environment as inflation stays at reasonable levels. More importantly, valuations remain undemanding. In the REIT space, the pick-up in business and consumer confidence across Asia has positive implications for the rental market outlook for real estate in the region. In spite of the three interest rate hikes in the US last year, Asia REITs have climbed the wall of worry on expectations of a recovery in the various sub-sectors. Eventually, we believe that opportunities may emerge in Asian fixed income due to continued growth and supportive economic and reform policies. The Chinese government may continue with deleveraging policies in 2018, while growth is expected to maintain at a reasonable level. The deleveraging process and announced reforms may benefit the Chinese state-owned enterprise sector, while also reducing overall financial risks for investors. The higher-yielding bond markets of Indonesia and India still offer attractive coupon yields and are supported by strong economic fundamentals. On the domestic front, Bank Negara Malaysia ( BNM ) commented that the current level of the Overnight Policy Rate ( OPR ) provides a degree of monetary accommodativeness. However, BNM hinted that it may consider reviewing the current degree of monetary policy accommodation. As such, there is a possibility that BNM may raise OPR in 2018 given the recent favourable economic growth and stable core inflation. STRATEGY In terms of investment strategy, we continue to prefer equities amidst the uptick in global growth and expected boost to risky assets, provided by a US fiscal reform. The new US tax structure is a significant positive catalyst for equities and it should continue to out-perform Bonds. Within ANNUAL REVIEW 2017 MANULIFE EAP MANAGED FUND 6

7 MARKET COMMENTARY MANULIFE EAP MANAGED FUND (CONTINUED) STRATEGY (CONTINUED) Equities, the rotation should be towards equity growth funds from equity income funds given expectations of relative out-performance on the back of global growth. Meanwhile, within the fixed income segment, we favour domestic bond and money market funds over offshore bond funds to generate income streams that contribute to portfolio performance. PORTFOLIO BREAKDOWN FOR UNDERLYING FUND As at 31 st December 2017 Equities & Reits : 32.9% Bond & Others : 67.1% Total : 100% Manulife Investment Al-Fauzan - 4.6% Manulife Investment Asia-Pacific REIT Fund - 3.0% Manulife Investment Dividend Fund - 4.7% Manulife Investment Growth Fund - 7.4% Manulife Investment Pacific Fund - 6.0% Manulife Investment Progress Fund - 7.2% Manulife Global Fund - Asia Total Return Fund- 6.0% Manulife Investment Al-Ma mun - 9.0% Manulife Investment Money Market Fund % Liquidity and Others % ANNUAL REVIEW 2017 MANULIFE EAP MANAGED FUND 7

8 FUND PERFORMANCE

9 FUND PERFORMANCE MANULIFE EAP MANAGED FUND FUND PERFORMANCE The Fund out-performed the benchmark by 36bps during the month of December The out-performance was mainly driven by its allocation in equity. Our strategy to allocate into the local equity fund contributed positively due to the year-end rally in the domestic equity market and strengthening of the MYR. Among the key performing funds were the Manulife Investment Dividend Fund and Manulife Investment Growth Fund. Since its launch, the Fund registered a return of 0.84%, out-performing its benchmark return of 0.54%. Its month-end position on 31 December 2017 was however, diluted by a huge injection of new money in the last trading day of the month. MANULIFE EAP MANAGED FUND TRANCHE 1 Performance calculated as at 31 th December 2017 Performance 1 mth Since Inception* % % Manulife EAP Managed Fund Tranche Benchmark ** Relative +/(-) The Fund s performance is calculated on NAV to NAV basis. The value of units may go down as well as up. Past performance is not indicative of future results. The fund performance is strictly the performance of the investment-linked (IL) fund and not to the gross premium/contribution of the IL insurance product. * Inception Date: 28 th November 2017 ** Benchmark of total 6% return p.a. Note: The fund performance is based on the last trading day of the month/year and returns are adjusted for quarterly payouts. ANNUAL REVIEW 2017 MANULIFE EAP MANAGED FUND 9

10 FUND PERFORMANCE MANULIFE EAP MANAGED FUND (CONTINUED) MANULIFE EAP MANAGED FUND TRANCHE 2 Performance calculated as at 31 th December 2017 Performance 1 mth Since Inception* % % Manulife EAP Managed Fund Tranche Benchmark ** - - Relative +/(-) - - The Fund s performance is calculated on NAV to NAV basis. The value of units may go down as well as up. Past performance is not indicative of future results. The fund performance is strictly the performance of the investment-linked (IL) fund and not to the gross premium/contribution of the IL insurance product. * Inception Date: 27 th December 2017 ** Benchmark of total 6% return p.a. Note: The fund performance is based on the last trading day of the month/year and returns are adjusted for quarterly payouts. ANNUAL REVIEW 2017 MANULIFE EAP MANAGED FUND 10

11 COMPARATIVE PERFORMANCE TABLES

12 COMPARATIVE PERFORMANCE TABLES MANULIFE EAP MANAGED FUND The table below shows the performance table of the Fund by the individual tranches: Tranche Launched on 28 November 2017 RM Net asset value (NAV) 23,160,069 Number of units in circulation 24,178,165 NAV per unit Highest NAV per unit during the financial period Lowest NAV per unit during the financial period Capital growth (%) 0.83 Policy Benefits (%) - Income Distribution (%) - Tranche Launched on 27 December 2017 RM Net asset value (NAV) 15,580,491 Number of units in circulation 16,368,700 NAV per unit Highest NAV per unit during the financial period Lowest NAV per unit during the financial period Capital growth (%) 0.19 Policy Benefits (%) - Income Distribution (%) - Total 2017 RM Net asset value (NAV) 38,740,560 Number of units in circulation 40,546,865 NAV per unit Note: The fund performance is based on the last calendar day of the year. The table below shows the percentage of investment holding to the Fund s net asset value: Categories of investments 2017 Percentage of NAV % Quoted securities within Malaysia Foreign investments 5.97 Fixed deposits with licensed banks in Malaysia ANNUAL REVIEW 2017 MANULIFE EAP MANAGED FUND 12

13 INVESTMENT INFORMATION

14 INVESTMENT INFORMATION MANULIFE EAP MANAGED FUND The details of investments of the Fund as at 31 December 2017 are set out as follows: Manulife EAP Managed Fund PERCENTAGE MARKET OF NET QUANTITY COST VALUE ASSET VALUE RM RM % Quoted securities (within Malaysia) Manulife Investment Dividend Fund 5,104,399 1,740,600 1,805, Manulife Investment Al-Fauzan 5,099,912 1,740,600 1,782, Manulife Investment Growth Fund 6,840,973 2,784,960 2,867, Manulife Investment Al-Mamun 3,473,558 3,481,200 3,489, Manulife Investment Money Market Fund 4,602,935 4,641,600 4,652, Manulife Investment Pacific Fund 6,882,562 2,320,800 2,323, Manulife Investment Progress Fund 6,546,685 2,784,960 2,807, Manulife Investment Asia-Pacific REIT Fund 2,413,980 1,160,400 1,180, Total 40,965,004 20,655,120 20,908, Foreign Investment Manulife Global Fund Asia Total Return Fund 521,364 2,315,700 2,311, Total 521,364 2,315,700 2,311, ,486,368 22,970,820 23,220, ANNUAL REVIEW 2017 MANULIFE EAP MANAGED FUND 14

15 SUMMARY OF FINANCIAL STATEMENT

16 SUMMARY OF FINANCIAL STATEMENT STATEMENT OF INCOME AND EXPENDITURE FOR THE FINANCIAL PERIOD FROM 28 NOVEMBER 2017 (LAUNCH DATE) TO 31 DECEMBER 2017 INCOME 28 November 2017 to 31 December 2017 RM Net investment income Interest income 13,597 Rebate income 20,302 Unrealised capital gains 264,658 Total income 298,557 OUTGO Management expenses 31,520 Unrealised exchange losses 3,400 Realised exchange losses 17,000 Current tax 4,077 Deferred tax 19,949 Total outgo 75,946 Excess of income over outgo 222,611 Undistributed gains carried forward 222,611 ANNUAL REVIEW 2017 MANULIFE EAP MANAGED FUND 16

17 SUMMARY OF FINANCIAL STATEMENT STATEMENT OF ASSETS AND LIABILITIES AS AT 31 DECEMBER RM ASSETS Investments Quoted securities 20,908,984 Foreign investment 2,311,194 Fixed deposits with licensed banks in Malaysia 15,770,359 Other receivables 23,722 Cash and cash equivalents 20,581 Total assets 39,034,840 LIABILITIES Payables 270,254 Current tax liabilities 4,077 Deferred tax liabilities 19,949 Total liabilities 294,280 NET ASSETS ATTRIBUTABLE TO POLICYHOLDERS 38,740,560 REPRESENTED BY: Policyholders capital 38,517,949 Undistributed gains carried forward 222,611 NET ASSETS ATTRIBUTABLE TO POLICYHOLDERS 1 38,740,560 NUMBER OF UNITS IN CIRCULATION 1 40,546,865 NET ASSET VALUE ATTRIBUTABLE TO POLICYHOLDERS PER UNIT Refer to the Comparative Performance table for the Net Asset Value of respective tranches ANNUAL REVIEW 2017 MANULIFE EAP MANAGED FUND 17

18 SUMMARY OF FINANCIAL STATEMENT STATEMENT OF CHANGES IN NET ASSET VALUE FOR THE FINANCIAL PERIOD FROM 28 NOVEMBER 2017 (LAUNCH DATE) TO 31 DECEMBER November 2017 to 31 December 2017 RM Net asset value at the beginning of the financial period - Net realised losses after taxation (38,647) Net unrealised gains on investments 261,258 Amounts received from net creation of units 38,758,272 Amounts paid for net cancellation of units (240,323) Net asset value at the end of the financial period 38,740,560 ANNUAL REVIEW 2017 MANULIFE EAP MANAGED FUND 18

19 NOTES TO THE FINANCIAL INFORMATION

20 NOTES TO THE FINANCIAL INFORMATION 31 DECEMBER PRINCIPAL ACTIVITIES The principal activity of the Investment-Linked Fund of Manulife Insurance Berhad, Manulife EAP Managed Fund ( the Fund ) is to invest in authorised investments. The Fund invests in collective investment schemes ( CIS ) across major asset classes, such as equities, real estate investment trusts ( REITS ) and fixed income securities with investment focus in domestic and Asia Pacific markets. The investment allocations are made based on the fund manager s assessment of the fundamentals of asset classes, macroeconomic conditions and market sentiments. The Fund is designed to help build the annuity principal for potentially higher annuity income streams. It seeks to achieve long term total return via income and capital growth over its investment horizon. The Manager of the Fund is Manulife Insurance Berhad, a company incorporated in Malaysia, engaged principally in the underwriting of life insurance business including investment-linked business. 2. BASIS OF PREPARATION The financial information of the Fund has been prepared in accordance with the accounting policies as described in Note 3 to the financial information and Guidelines on Investment- Linked Insurance/Takaful Business issued by Bank Negara Malaysia ( BNM ). The financial information of the Fund has been prepared under the historical cost convention except as disclosed in the significant accounting policies in Note 3 to the financial information. ANNUAL REVIEW 2017 MANULIFE EAP MANAGED FUND 20

21 NOTES TO THE FINANCIAL INFORMATION 31 DECEMBER 2017 (CONTINUED) 3. SIGNIFICANT ACCOUNTING POLICIES (a) Financial assets and liabilities (i) Classification A financial instrument is any contract that gives rise to both a financial asset of one enterprise and a financial liability or equity instrument of another enterprise. A financial asset is any asset that is cash, a contractual right to receive cash or another financial asset from another enterprise, a contractual right to exchange financial instruments with another enterprise under conditions that are potentially favourable, or an equity instrument of another enterprise. A financial liability is any liability that is a contractual obligation to deliver cash or another financial asset to another enterprise, or to exchange financial instruments with another enterprise under conditions that are potentially unfavourable. Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. The Fund s loans and receivables comprise deposits with licensed financial institutions and other receivables. The Fund classifies payables as other financial liabilities. (ii) Recognition and measurement All purchases of investments are recognised on their trade dates, i.e. the date the commitment exists to purchase the investments. The investments are initially recorded at cost, being fair value of the consideration given. The attributable transaction costs are recognised in the profit or loss when incurred. 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. Financial assets at fair value through profit or loss Investments of the Fund are designated at initial recognition at fair value through profit or loss. After initial recognition, the investments are recorded at fair value and the unrealised gains or losses on re-measurement to fair value are taken to the statement of income and expenditure. Investment in foreign assets comprises investments under the Underlying Fund which is valued at the net asset values of the underlying funds as at the date of the statement of assets and liabilities. ANNUAL REVIEW 2017 MANULIFE EAP MANAGED FUND 21

22 NOTES TO THE FINANCIAL INFORMATION 31 DECEMBER 2017 (CONTINUED) 3. SIGNIFICANT ACCOUNTING POLICIES (continued) (a) Financial assets and liabilities (continued) (ii) Recognition and measurement (continued) Other receivables Other receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest rate method, less any impairment losses. Collectability of other receivables is reviewed on an on going basis. An allowance account is used when there is objective evidence that the Fund will not be able to collect all amounts due according to the original terms of the receivables. 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 ). The amount of the impairment allowance is the difference between the asset s carrying amount and the present value of estimated future cash flows, discounted at the original effective interest rate. Cash flows relating to short term receivables are not discounted if the effect of discounting is immaterial. The amount of the impairment loss is recognised in the statement of income and expenditure. When loans and receivables for which an impairment allowance had been recognised become uncollectible in a subsequent period, it is written off against the allowance account. Subsequent recoveries of amounts previously written off are credited to the statement of income and expenditure. (b) Net creation of units Net creation of units represents premiums paid by policyholders as payment for a new contract or subsequent payments to increase the amount of that contract. Net creation of units is recognised on a receipt basis. (c) Net cancellation of units Net cancellation of units represents cancellation of units arising from surrenders and withdrawals by policyholders. Net cancellation of units is recognised upon surrendering of the related insurance contracts. ANNUAL REVIEW 2017 MANULIFE EAP MANAGED FUND 22

23 NOTES TO THE FINANCIAL INFORMATION 31 DECEMBER 2017 (CONTINUED) 3. SIGNIFICANT ACCOUNTING POLICIES (continued) (d) Income recognition Dividend income is recognised when the right to receive payment is established. Interest income earned is recognised on a time proportion basis, calculated as a percentage of the investment values of the underlying funds. Gain or loss on disposal of financial assets is calculated by comparing the net proceeds with the original cost of the financial assets and is credited or charged to the statement of income and expenditure. Rebate income is received from Manulife Asset Management Services Berhad, a fellow subsidiary of the Manager and is accrued on a daily basis. (e) Management expenses Management expenses charged to the Fund which include management fee, audit fee and tax fee and are recognised on an accrual basis. (f) Policy Benefits Policy benefits represent the quarterly payout to the policyholders in accordance with the terms under the insurance contracts. (g) Foreign currencies (i) Functional and presentation currency Foreign currency items included in the financial information of the Fund are measured using the currency of the primary economic environment in which the Investment-Linked Fund operates ( the functional currency ). The functional currency and presentation currency of the Fund are Ringgit Malaysia. (ii) Transactions and balances Transactions in a currency other than the functional currency ( foreign currency ) are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Currency translation gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the statement of income and expenditure. ANNUAL REVIEW 2017 MANULIFE EAP MANAGED FUND 23

24 NOTES TO THE FINANCIAL INFORMATION 31 DECEMBER 2017 (CONTINUED) 3. SIGNIFICANT ACCOUNTING POLICIES (continued) (h) Taxation The income tax charge is calculated at current tax rate based on the method prescribed under the Income Tax Act, 1967 for life insurance business. Deferred tax is recognised in full, using the liability method, on temporary differences arising between the amounts attributed to assets and liabilities for tax purposes and their carrying amounts in the financial information. Deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which the deductible temporary differences or unutilised tax losses can be utilised. The tax rate enacted or substantively enacted by the date of the statement of assets and liabilities is used to determine deferred tax. (i) Cash and cash equivalents Cash and cash equivalents consist of cash and bank balances which have an insignificant risk of changes in value. Deposits with financial institutions are not part of cash and cash equivalents as these are held for investment purposes. 4. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS Estimates and judgements are continuously 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. The Manager 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 Fund s results and financial position are tested for sensitivity to changes in the underlying parameters. 5. AVERAGE ANNUAL RETURNS AND BENCHMARK The performance against relevant benchmark indices of the Fund are set out on page 8 of the Fund Performance Report. There is no information on average annual returns as the Fund was launched for a period of less than a year. ANNUAL REVIEW 2017 MANULIFE EAP MANAGED FUND 24

25 NOTES TO THE FINANCIAL INFORMATION 31 DECEMBER 2017 (CONTINUED) 6. INVESTMENT INFORMATION The details of investments of the Fund and market value of investment holdings as a percentage of net asset value are set out on pages 13 to 14 of the Fund Performance Report. 7. COMPARATIVE PERFORMANCE TABLES The details of the Fund s net asset value, units in circulation, percentage of investment holding to the Fund s net asset value and the breakdown of the total annual returns of the Fund into capital growth, policy benefits and income distribution are set out on pages 11 to 12 of the Fund Performance Report. 8. COMPARATIVES There are no comparative figures as this is the first set of financial information prepared for the Fund since the launch date on 28 November ANNUAL REVIEW 2017 MANULIFE EAP MANAGED FUND 25

26 STATEMENT BY MANAGER

27 STATEMENT BY MANAGER We, Dato Md Agil Bin Mohd Natt and Mark Steven O Dell, being two of the Directors of Manulife Insurance Berhad ( the Manager ), do hereby state that, in the opinion of the Manager, the accompanying financial information of Manulife Investment-Linked Fund, Manulife EAP Managed Fund set out on pages 15 to 25 have been prepared in accordance with the accounting policies described in Note 3 to the financial information and the Guidelines on Investment-Linked Insurance/Takaful Business issued by Bank Negara Malaysia. On behalf of the Manager, DATO MD AGIL BIN MOHD NATT DIRECTOR MARK STEVEN O DELL DIRECTOR Kuala Lumpur 26 March 2018 ANNUAL REVIEW 2017 MANULIFE EAP MANAGED FUND 27

28 INDEPENDENT AUDITORS REPORT

29 INDEPENDENT AUDITORS REPORT Independent auditors report to the policyholders of Manulife EAP Managed Fund of Manulife Insurance Berhad (Incorporated in Malaysia) Report on the Audit of the Financial Information Opinion We have audited the financial information of Manulife EAP Managed Fund ( the Fund ), which comprise the statement of assets and liabilities as at 31 December 2017, and the statement of income and expenditure, statement of changes in net asset value of the Fund for the period from 28 November 2017 to 31 December 2017, and a summary of significant accounting policies, as set out on pages 15 to 25. In our opinion, the accompanying financial information of the fund for the period ended 31 December 2017 are prepared, in all material respects in accordance with the accounting policies as described in Note 3 to the financial information and the Guidelines on Investment-linked Insurance/Takaful Business issued by Bank Negara Malaysia. Basis for Opinion We conducted our audit in accordance with approved standards on auditing in Malaysia and International Standards on Auditing. Our responsibilities under those standards are further described in the Auditors Responsibilities for the Audit of the Financial Information section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Emphasis of Matter We draw attention to Note 2 to the financial information of the Fund, which describes the basis of accounting. The financial information of the Fund is prepared to assist the Fund in complying with the Guidelines on Investment-linked Insurance/Takaful Business issued by Bank Negara Malaysia. As a result, the financial information of the Fund may not be suitable for another purpose. Our report is intended solely for the policyholders of the Fund, as a body and should not be distributed to or used by parties other than the policyholders of the Fund. Our opinion is not modified in respect of this matter. Independence and Other Ethical Responsibilities We are independent of the Fund in accordance with the By-Laws (on Professional Ethics, Conduct and Practice) of the Malaysian Institute of Accountants ( By-Laws ) and the International Ethics Standards Board for Accountants Code of Ethics for Professional Accountants ( IESBA Code ), and we have fulfilled our other ethical responsibilities in accordance with the By-Laws and the IESBA Code. ANNUAL REVIEW 2017 MANULIFE EAP MANAGED FUND 29

30 INDEPENDENT AUDITORS REPORT (CONTINUED) Independent auditors report to the policyholders of Manulife Global Select Fund of Manulife Insurance Berhad (continued) (Incorporated in Malaysia) Information Other than the Financial Information and Auditors Report Thereon The directors of the Manager ( the directors ) are responsible for the other information. The other information comprises the information contained in the Annual Report of the Fund but does not include the financial information of the Fund and our auditors report thereon. Our opinion on the financial information of the Fund does not cover the other information and we do not express any form of assurance conclusion thereon. In connection with our audit of the financial information of the Fund, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial information of the Fund or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. Responsibilities of the Directors of the Manager for the Financial Information The directors are responsible for the preparation of financial information of the Fund that give a true and fair view in accordance with the accounting policies as described in Note 3 to the financial information and the Guidelines on Investment-linked Insurance/Takaful Business issued by Bank Negara Malaysia. The directors are also responsible for such internal control as the directors determine is necessary to enable the preparation of financial information of the Fund that are free from material misstatement, whether due to fraud or error. In preparing the financial information of the Fund, the directors are responsible for assessing the Fund s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Fund or to cease operations, or have no realistic alternative but to do so. ANNUAL REVIEW 2017 MANULIFE EAP MANAGED FUND 30

31 INDEPENDENT AUDITORS REPORT (CONTINUED) Independent auditors report to the policyholders of Manulife EAP Managed Fund of Manulife Insurance Berhad (continued) (Incorporated in Malaysia) Auditors Responsibilities for the Audit of the Financial Information Our objectives are to obtain reasonable assurance about whether the financial information of the Fund as a whole is free from material misstatement, whether due to fraud or error, and to issue an auditors report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with approved standards on auditing in Malaysia and International Standards on Auditing will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial information. As part of an audit in accordance with approved standards on auditing in Malaysia and International Standards on Auditing, we exercise professional judgement and maintain professional scepticism throughout the audit. We also: Identify and assess the risks of material misstatement of the financial information of the Fund, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Fund s internal control. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors. Conclude on the appropriateness of the directors use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Fund s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors report to the related disclosures in the financial information of the Fund or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors report. However, future events or conditions may cause the Fund to cease to continue as a going concern. ANNUAL REVIEW 2017 MANULIFE EAP MANAGED FUND 31

32 INDEPENDENT AUDITORS REPORT (CONTINUED) Independent auditors report to the policyholders of Manulife EAP Managed Fund of Manulife Insurance Berhad (continued) (Incorporated in Malaysia) Auditors Responsibilities for the Audit of the Financial Information (continued) We communicate with the directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. Ernst & Young AF: 0039 Chartered Accountants Brandon Bruce Sta Maria No /09/2019 J Chartered Accountant Kuala Lumpur, Malaysia 26 March 2018 ANNUAL REVIEW 2017 MANULIFE EAP MANAGED FUND 32

33 MENGENAI MANULIFE MALAYSIA Manulife Insurance Berhad merupakan anak syarikat milik penuh Manulife Holdings Berhad dan ahli Manulife Financial Corporation yang berpangkalan di Kanada. Kami telah bertapak di Malaysia selama lebih 54 tahun dan disenaraikan di KLSE pada Setakat 31 Disember 2017, aset di bawah pengurusan kami berjumlah lebih RM10 bilion. Menerusi anak-anak syarikatnya, Kumpulan Manulife menawarkan rangkaian produk dan perkhidmatan perlindungan kewangan dan pengurusan kekayaan yang terpelbagai untuk memenuhi keperluan pelanggan yang berbeza.

34 KANDUNGAN 1. Ulasan Pasaran Prestasi Dana 39 - Jadual Perbandingan Prestasi 42 - Informasi Pelaburan Ringkasan Penyata Kewangan Nota kepada Maklumat Kewangan Kenyataan oleh Pengurus Laporan Juruaudit Bebas 59

35 ULASAN PASARAN

36 ULASAN PASARAN MANULIFE EAP MANAGED FUND OBJEKTIF DANA Manulife EAP Managed Fund ( Dana ) dirangka untuk membantu membina nilai pokok anuiti dalam usaha menjana potensi aliran pendapatan anuiti yang lebih tinggi. Matlamat Dana ialah untuk mencapai pulangan keseluruhan jangka panjang menerusi pendapatan dan pertumbuhan modal dalam tempoh pelaburannya. NAB Dana bergantung kepada prestasi pelaburan asas. Prestasi masa lepas Dana bukan petunjuk prestasi masa depan. Nilai akaun di bawah polisi anuiti mungkin turun dan juga naik. Justeru, pemilik polisi mungkin menerima jumlah yang lebih rendah daripada premium yang telah dibayar. Tiada jaminan bahawa objektif pelaburan Dana akan dicapai atau kerugian boleh dielakkan. Risiko pelaburan Dana, yang termasuk risiko mata wang, ditanggung sepenuhnya oleh pemilik polisi. PENILAIAN PELABURAN Tempoh kewangan yang dilaporkan meliputi jangka masa dari tarikh penubuhan dana, iaitu dari 28hb November 2017 hingga tahun berakhir 31hb Disember Antara perkembangan penting dalam tempoh yang dilaporkan ialah langkah mewartakan rang undang-undang reformasi cukai Republican di Amerika Syarikat (AS). Ini merupakan kejayaan pertama Trump pada tahun pertama memegang tampuk kepimpinan. Di samping itu, pasaran buruh AS terus teguh, memberikan alasan kukuh bagi Rizab Persekutuan untuk meningkatkan kadar faedah pada 2017 kepada 1.50%. Pasaran ekuiti Malaysia ditutup lebih tinggi pada Disember 2017 dengan FBMKLCI meningkat 4.6% secara perbandingan bulanan, disokong oleh aliran masuk bersih asing, berbeza daripada bulan-bulan sebelumnya. Prestasi kukuh dipacu terutamanya oleh saham perbankan dan aktiviti sokongan harga saham pada akhir tahun. Apabila dibandingkan dengan prestasi serantau FBMKLCI mengatasi Indeks MSCI Asia tidak termasuk Jepun, yang mencatatkan peningkatan 2.51% dalam USD. Ekuiti Asia tidak termasuk Jepun meningkatkan lagi keuntungan pada bulan Disember dan mengakhiri tahun 2017pada paras hampir yang tertinggi. Data perdagangan kukuh dari China dan harga komoditi lebih tinggi memberikan sokongan kepada pasaran. Negara-negara ASEAN mencatatkan prestasi kukuh berbekalkan kekuatan harga komoditi. Indonesia juga mendapat manfaat daripada peningkatan penarafan negara oleh Fitch. Sementara itu, prestasi Taiwan yang kurang memberangsangkan mungkin disebabkan oleh kelemahan dalam sektor teknologi yang dibelenggu kebimbangan tentang permintaan kurang baik bagi iphone yang berpotensi mencetus kesan negatif terhadap rantaian bekalan Apple. REIT Asia ditutup bercampur-campur pada bulan Disember. Pasaran REIT Singapura terus meraih keuntungan manakala pasaran REIT Australia dan Hong Kong menyusut. Pelabur tidak mengendahkan kenaikan kadar AS pada 2017 sambil mereka memberi tumpuan terhadap kitaran pemulihan pertumbuhan sewa bagi pasaran hartanah di rantau ini. Keluk pulangan Sekuriti Kerajaan Malaysia (MGS) turun sedikit dengan hasil pulangan tiga dan lima tahun MGS masing-masing menyusut 8 mata asas dan 7 mata asas, manakala pulangan MGS 10 tahun meningkat sebanyak 2 mata asas. Harga MGS bertempoh singkat hingga pertengahan KAJIAN TAHUNAN 2017 MANULIFE EAP MANAGED FUND 36

37 ULASAN PASARAN MANULIFE EAP MANAGED FUND (SAMBUNGAN) meningkat, seiring dengan kenaikan MYR, disokong oleh permintaan asing. Pasaran bon korporat MYR di pasaran sekunder agak kurang rancak. Aliran dana dipacu oleh aktiviti pengimbangan semula portfolio, disokong oleh usaha mencari tawaran menarik. Hasil pulangan bon perbendaharaan berada dalam julat terhad sepanjang bulan kerana Fed meningkatkan kadar faedah utamanya sebanyak 25 mata atas seperti yang dijangkakan oleh kebanyakan peserta pasaran. Hasil pulangan perbendaharaan 10 tahun ditutup pada 2.41% pada akhir bulan. Hasil pulangan bon Renminbi luar pesisir meningkat seiring dengan syarat-syarat kecairan luar pesisir yang lebih ketat. Hasil pulangan bon kerajaan Indonesia pula merosot pada bulan Disember berasaskan keputusan Fitch untuk menaik taraf penarafan kredit Indonesia, berasaskan tanggapan bahawa negara tersebut mampu menghadapi kejutan luar. Hasil pulangan bon kerajaan India meningkat dalam tempoh tersebut disebabkan data inflasi yang kukuh dan kebimbangan pelabur terhadap rancangan kerajaan untuk meningkatkan defisit fiskal. Indeks harga pengguna India pada bulan November naik 4.88% secara tahunan, kadar paling pantas sejak pertengahan 2016 kerana harga makanan dan bahan api yang lebih tinggi. TINJAUAN Ekuiti kekal sebagai kelas aset menarik pada 2018 kerana pertumbuhan pendapatan dijangka berkekalan sepanjang tahun, lebih-lebih lagi dengan pemulihan ekonomi global yang lebih luas dan terselaras. Reformasi penting telah berlaku dalam tempoh dua tahun lepas dan kebanyakan ekonomi Asia kini lebih sedia untuk menampung kitaran kenaikan kadar, berbanding tempoh semasa dilanda kemerosotan apabila kadar dinaikkan buat pertama kali. Kami meramalkan pertumbuhan ekonomi di rantau ini disokong oleh persekitaran kadar faedah yang agak rendah memandangkan inflasi kekal pada tahap yang munasabah. Lebih penting lagi, penilaian adalah kurang mendesak. Dalam sektor REIT, peningkatan aktiviti perniagaan dan keyakinan pengguna di seluruh Asia memberikan implikasi positif bagi tinjauan pasaran sewa hartanah di rantau ini. Walaupun terdapat tiga kenaikan kadar faedah di AS tahun lepas, REIT Asia telah menangkis segala kebimbangan berasaskan jangkaan pemulihan dalam pelbagai subsektor. Pada dasarnya, kami yakin bahawa peluang mungkin muncul dalam sektor pendapatan tetap Asia disebabkan pertumbuhan berterusan dan dasar-dasar ekonomi dan reformasi yang menyokongnya. Kerajaan China mungkin meneruskan dasar mengurangkan tahap hutang pada 2018, manakala pertumbuhan dijangka kekal pada paras yang munasabah. Proses mengurangkan hutang dan reformasi yang diumumkan boleh membawa manfaat kepada sektor perusahaan milik kerajaan China, sambil mengurangkan risiko kewangan keseluruhan bagi pelabur. Pasaran bon dengan kadar pulangan lebih tinggi di Indonesia dan India masih menawarkan kupon yang menguntungkan disokong oleh kedudukan ekonomi asas yang kukuh. Di dalam negara, Bank Negara Malaysia ( BNM ) mengulas bahawa Kadar Dasar Semalaman ( OPR ) semasa masih bersifat mengembang. Bagaimanapun, BNM ada membayangkan pertimbangannya untuk mengkaji semula kedudukan dasar wang mengembang semasa. Dengan KAJIAN TAHUNAN 2017 MANULIFE EAP MANAGED FUND 37

38 ULASAN PASARAN MANULIFE EAP MANAGED FUND (SAMBUNGAN) demikian BNM mungkin meningkatkan OPR pada 2018 berlatarkan pertumbuhan ekonomi yang menggalakkan baru-baru ini dan inflasi asas yang stabil. STRATEGI Dari segi strategi pelaburan, kami terus memilih ekuiti berlandaskan pertumbuhan global yang berlaku dan peningkatan yang dijangkakan dalam aset berisiko, yang diunjurkan daripada reformasi fiskal AS. Struktur cukai baharu AS ialah pencetus positif yang ketara bagi ekuiti dan seharusnya terus mengatasi Bon. Bagi Ekuiti, pelaburan dijangka bertukar kepada dana pertumbuhan ekuiti daripada dana pendapatan ekuiti berasaskan jangkaan prestasi lebih baik daripada pertumbuhan global yang kukuh. Sementara itu, dalam segmen pendapatan tetap, kami memilih bon domestik dan dana pasaran wang berbanding dana bon luar pesisir untuk menjana aliran pendapatan yang dapat menyumbang kepada prestasi portfolio. PECAHAN PORTFOLIO UNTUK DANA DASAR Pada 31 hb Disember 2017 Ekuiti & REIT : 32.9% Bon & Lain-lain : 67.1% Jumlah : 100% Manulife Investment Al-Fauzan - 4.6% Manulife Investment Asia-Pacific REIT Fund - 3.0% Manulife Investment Dividend Fund - 4.7% Manulife Investment Growth Fund - 7.4% Manulife Investment Pacific Fund - 6.0% Manulife Investment Progress Fund - 7.2% Manulife Global Fund - Asia Total Return Fund- 6.0% Manulife Investment Al-Ma mun - 9.0% Manulife Investment Money Market Fund % Liquidity and Others % KAJIAN TAHUNAN 2017 MANULIFE EAP MANAGED FUND 38

39 PRESTASI DANA

40 PRESTASI DANA MANULIFE EAP MANAGED FUND PRESTASI DANA Dana telah mengatasi penanda aras sebanyak 36 mata asas pada bulan Disember Prestasi lebih kukuh ini dipacu terutamanya oleh peruntukan dalam ekuiti. Strategi kami untuk melebihkan peruntukan dalam dana ekuiti tempatan membuahkan hasil positif seiring kenaikan pasaran ekuiti tempatan pada akhir tahun dan pengukuhan MYR. Antara dana utama yang mencatatkan prestasi kukuh ialah Manulife Investment Dividend Fund dan Manulife Investment Growth Fund. Sejak dilancarkan, Dana mencatatkan pulangan 0.84%, mengatasi pulangan penanda aras sebanyak 0.54%. Bagaimanapun, kedudukan pada akhir bulan pada 29 Disember 2017 dicairkan dengan ketara ekoran suntikan besar dana baharu pada hari terakhir dagangan dalam bulan tersebut. MANULIFE EAP MANAGED FUND TRANCHE 1 Prestasi yang dinilai pada 31 Disember 2017 Prestasi 1 bulan Sejak Penubuhan* % % Manulife EAP Managed Fund Tranche Penanda Aras ** Relatif +/(-) Prestasi Dana dinilai atas dasar NAB ke NAB. Nilai unit mungkin turun dan juga naik. Prestasi masa lalu bukan petunjuk keputusan masa depan. Prestasi dana adalah semata-mata prestasi dana berkaitan pelaburan (IL) dan tidak boleh dianggap sebagai pulangan premium/sumbangan kasar produk insurans IL. * Tarikh Penubuhan: 28 hb November 2017 ** Penanda aras jumlah pulangan 6% setahun Nota: Prestasi dana adalah berasaskan hari perdagangan terakhir bulan/tahun dan pulangan dilaraskan untuk bayaran suku tahunan. KAJIAN TAHUNAN 2017 MANULIFE EAP MANAGED FUND 40

41 PRESTASI DANA MANULIFE EAP MANAGED FUND (SAMBUNGAN) MANULIFE EAP MANAGED FUND TRANCHE 2 Prestasi yang dinilai pada 31 hb Disember 2017 Prestasi 1 bulan Sejak Penubuhan* % % Manulife EAP Managed Fund Tranche Penanda Aras ** - - Relatif +/(-) - - Prestasi Dana dinilai atas dasar NAB ke NAB. Nilai unit mungkin turun dan juga naik. Prestasi masa lalu bukan petunjuk keputusan masa depan. Prestasi dana adalah semata-mata prestasi dana berkaitan pelaburan (IL) dan tidak boleh dianggap sebagai pulangan premium/sumbangan kasar produk insurans IL. * Tarikh Penubuhan: 27 hb Disember 2017 ** Penanda aras jumlah pulangan 6% setahun Nota: Prestasi dana adalah berasaskan hari perdagangan terakhir bulan/tahun dan pulangan dilaraskan untuk bayaran suku tahunan. KAJIAN TAHUNAN 2017 MANULIFE EAP MANAGED FUND 41

42 JADUAL PERBANDINGAN PRESTASI

43 JADUAL PERBANDINGAN PRESTASI MANULIFE EAP MANAGED FUND Jadual di bawah menunjukkan prestasi Dana mengikut tranche individu: Tranche Dilancarkan pada 28 November 2017 RM Nilai aset bersih (NAB) 23,160,069 Bilangan unit dalam edaran 24,178,165 NAB seunit NAB seunit tertinggi dalam tempoh kewangan NAB seunit terendah dalam tempoh kewangan Pertumbuhan modal (%) 0.83 Manfaat polisi (%) - Pengagihan pendapatan (%) - Tranche Dilancarkan pada 27 Disember 2017 RM Nilai aset bersih (NAB) 15,580,491 Bilangan unit dalam edaran 16,368,700 NAB seunit NAB seunit tertinggi dalam tempoh kewangan NAB seunit terendah dalam tempoh kewangan Pertumbuhan modal (%) 0.19 Manfaat polisi (%) - Pengagihan pendapatan (%) - Jumlah 2017 RM Nilai aset bersih (NAB) 38,740,560 Bilangan unit dalam edaran 40,546,865 NAB seunit Nota: Prestasi dana adalah berasaskan hari kalendar terakhir tahun. Jadual di bawah menunjukkan peratus pegangan pelaburan berbanding nilai aset bersih Dana: Kategori pelaburan 2017 Peratus atas NAB % Sekuriti disebut harga di Malaysia Pelaburan asing 5.97 Deposit tetap dengan bank berlesen di Malaysia KAJIAN TAHUNAN 2017 MANULIFE EAP MANAGED FUND 43

44 INFORMASI PELABURAN

45 INFORMASI PELABURAN MANULIFE EAP MANAGED FUND Butiran pelaburan Dana pada 31 Disember 2017 dibentangkan seperti di bawah: Manulife EAP Managed Fund PERATUS NILAI ATAS NILAI KUANTITI KOS PASARAN ASET BERSIH RM RM % Sekuriti disebut harga (di dalam Malaysia) Manulife Investment Dividend Fund 5,104,399 1,740,600 1,805, Manulife Investment Al-Fauzan 5,099,912 1,740,600 1,782, Manulife Investment Growth Fund 6,840,973 2,784,960 2,867, Manulife Investment Al-Mamun 3,473,558 3,481,200 3,489, Manulife Investment Money Market Fund 4,602,935 4,641,600 4,652, Manulife Investment Pacific Fund 6,882,562 2,320,800 2,323, Manulife Investment Progress Fund 6,546,685 2,784,960 2,807, Manulife Investment Asia-Pacific REIT Fund 2,413,980 1,160,400 1,180, Jumlah 40,965,004 20,655,120 20,908, Pelaburan Asing Manulife Global Fund Asia Total Return Fund 521,364 2,315,700 2,311, Jumlah 521,364 2,315,700 2,311, ,486,368 22,970,820 23,220, KAJIAN TAHUNAN 2017 MANULIFE EAP MANAGED FUND 45

46 RINGKASAN PENYATA KEWANGAN

47 RINGKASAN PENYATA KEWANGAN PENYATA PENDAPATAN DAN PERBELANJAAN BAGI TEMPOH KEWANGAN DARI 28 NOVEMBER 2017 (TARIKH PELANCARAN) HINGGA 31 DISEMBER 2017 PENDAPATAN 28 November 2017 hingga 31 Disember 2017 RM Pendapatan pelaburan bersih Pendapatan faedah 13,597 Pendapatan rebat 20,302 Untung modal belum terealisasi 264,658 Jumlah pendapatan 298,557 PERBELANJAAN Perbelanjaan pengurusan 31,520 Rugi pertukaran belum terealisasi 3,400 Rugi pertukaran terealisasi 17,000 Cukai semasa 4,077 Cukai tertunda 19,949 Jumlah perbelanjaan 75,946 Lebihan pendapatan berbanding perbelanjaan 222,611 Untung tidak diagih dihantar ke hadapan 222,611 KAJIAN TAHUNAN 2017 MANULIFE EAP MANAGED FUND 47

48 RINGKASAN PENYATA KEWANGAN PENYATA ASET DAN LIABILITI PADA 31 DISEMBER RM ASET Pelaburan Sekuriti disebut harga 20,908,984 Pelaburan asing 2,311,194 Deposit tetap dengan bank berlesen di Malaysia 15,770,359 Penghutang lain 23,722 Tunai dan kesetaraan tunai 20,581 Jumlah aset 39,034,840 LIABILITI Pemiutang 270,254 Liabiliti cukai semasa 4,077 Liabiliti cukai tertunda 19,949 Jumlah liabiliti 294,280 ASET BERSIH MILIK PEMEGANG POLISI 38,740,560 DIWAKILI OLEH: Modal pemegang polisi 38,517,949 Untung tidak diagihkan dihantar ke hadapan 222,611 ASET BERSIH MILIK PEMEGANG POLISI 1 38,740,560 BILANGAN UNIT DALAM EDARAN1 1 40,546,865 NILAI ASET BERSIH SEUNIT MILIK PEMEGANG POLISI Rujuk kepada jadual Perbandingan Prestasi bagi Nilai Aset Bersih tranche yang berkenaan KAJIAN TAHUNAN 2017 MANULIFE EAP MANAGED FUND 48