Thank you for considering an investment in AMB Dana Nabeel ( AMBDN or Fund ).

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2 Dear Prospective Investors of AMB Dana Nabeel PREFACE Thank you for considering an investment in AMB Dana Nabeel ( AMBDN or Fund ). On behalf of the Board of Directors of Amanah Mutual Berhad ( The Manager ), we wish to inform you that the Fund is an open-ended fund with the objective of providing investors with high level liquidity and regular income stream, whilst maintaining capital preservation* by investing in a diversified portfolio of Islamic money market instruments. In order to achieve Fund s investment objective, the Fund will invest at least 90% of it s Net Asset Value (NAV) in quality Shariah-compliant deposit and Islamic money market instruments and up to 10% of its NAV may be invested in Shariah compliant debentures. The instruments and debentures invested in would have a minimum short term local credit rating of at least BBB/P2 by RAM, MARC or equivalent rating agencies. In view of the above, suitable investors include retail and corporate investors who seek Shariahcompliant investment, conservative and prefer an investment with high liquidity. As with any investment, investors should also be aware of the inherent specific risks of investing in AMBDN which include interest rate risk, counterparty risk, credit/default risk. Further information on the risk factors can be reviewed in Section 2.1 on page 18 of this Prospectus. There is no sales charge and repurchase charge imposed for this Fund. However, there are other direct and indirect fees and charges that will be incurred by investors when Units of the Fund are purchased or repurchased such as management fee, trustee fee and switching fee. Details of all fees and charges are disclosed in Chapter 4 Fees, Charges and Expenses on page 30 of this Prospectus. Investments in our Funds can be made directly at our office at 34 th floor, Menara PNB, Jalan Tun Razak, Kuala Lumpur or any Maybank, Bank Rakyat Distribution Branches nearest to you. In addition, you could also purchase and/or repurchase Units at ASNB branches or any other IUTA branches appointed by the Manager from time to time nationwide. Corporate details of our office are on page 9, while information on our distributors is available on page 84 of this Prospectus. We recommend that you read this Prospectus in its entirety before making an investment decision and if in doubt, investors should consult their own professional adviser. Should you require further clarification, feel free to call our Client Services at or us at ambcare@pnb.com.my. You are also welcome to browse our company website, for more information. As always, we thank you for allowing us to be of service to you. Yours faithfully, For and On Behalf of Amanah Mutual Berhad Aldilla@Zilfalila binti Abdul Halim (Sheila Halim) Chief Executive Officer *Capital preservation does not signify that the capital/principal invested is guaranteed/protected by any party.

3 RESPONSIBILITY STATEMENT This Prospectus has been reviewed and approved by the Directors of Amanah Mutual Berhad, and they collectively and individually accept full responsibility for the accuracy of the information. Having made all reasonable inquiries, they confirm to the best of their knowledge and belief, there are no false or misleading statements, or omission of other facts which would make any statement in the Prospectus false or misleading. STATEMENTS OF DISCLAIMER The Securities Commission has approved the issue of, offer for subscription or purchase, or issue an invitation to subscribe for or purchase units of the unit trust fund and a copy of this Prospectus has been registered with the Securities Commission. The approval, and registration of this Prospectus, should not be taken to indicate that the Securities Commission recommends the Fund or assumes responsibility for the correctness of any statement made or opinion or report expressed in this Prospectus. The Securities Commission is not liable for any non-disclosure on the part of the management company responsible for the Fund and takes no responsibility for the contents in this Prospectus. The Securities Commission makes no representation on the accuracy or completeness of this Prospectus, and expressly disclaims any liability whatsoever arising from, or in reliance upon, the whole or any part of its contents. INVESTORS SHOULD RELY ON THEIR OWN EVALUATION TO ASSESS THE MERITS AND RISKS OF THE INVESTMENT. IN CONSIDERING THE INVESTMENT, INVESTORS WHO ARE IN DOUBT ON THE ACTION TO BE TAKEN SHOULD CONSULT PROFESSIONAL ADVISERS IMMEDIATELY. No units will be issued or sold based on this Prospectus later than one year after the date of this Prospectus. Investors are advised to note that recourse for false or misleading statements or acts made in connection with the Prospectus is directly available through sections 248, 249 and 357 of the Capital Markets and Services Act AMB Dana Nabeel has been certified as being Shariah compliant by the Shariah Advisors appointed for the Fund.

4 Contents Glossary of Terms/Abbreviations... 4 Corporate Information Summary of Key Features of the Fund General Information on AMBDN Fees and Charges Information on Transactions Other Information 17 2 Risk Factors Risks of Investing in Unit Trusts Detailed Information on the Fund Fund s Profile Investment Objective of the Fund 21 Maximum Approved Fund Size.. 21 Investors Profile.. 21 Asset Allocation Benchmark Specific Benefits of Investing in AMBDN Investment Policy / Approach. 22 Investment Strategy / Investment Mechanism Investment Process of the Fund Committee Responsibilities.. 24 Investment Process. 25 Cleansing/ Purification Process.. 26 Steps to be Taken in the event of a Rating Downgrade Permitted Investments for AMBDN. Investment Restrictions.. Exceptions and Exclusions Applicable to the Fund Policy on Gearing and Liquid Assets Bases of valuation of investments Fees, Charges and Expenses Charges Sales Charge Repurchase / Redemption Charge Switching Charge Transfer Charge Other Administrative Charge Fees Management Fee Trustee Fee Fund s Expenses Others Policy on Brokerage Rebates and Soft Commissions Portfolio Turnover Ratio (PTR)... Management Expense Ratio (MER) AMB Client Services (603)

5 5 Transaction Information Valuation of Units Pricing of Units Single Pricing Policy Forward Pricing Transactions How to Purchase Units of the Fund Making an Initial Investment Making an Additional Investment How to Repurchase Units of the Fund Transfer of Units Switching Facility Where to Purchase, Repurchase, Transfer and Switch Cooling-Off Right Minimum Holdings to Maintain Account Conditions for the Fund Understanding Income Distribution Distribution Policy What Comprises Income Distribution? Mode of Payment for the Income Distribution Policy on Unclaimed Monies Error in Pricing The Management and Administration of the Fund Corporate Profile of the Manager Past Performance of the Manager Profile of the Board of Directors of the Manager Company Secretary Senior Compliance Officer Profile of the Key Management Staff of the Manager The Investment Committee of the Fund The Shariah Committee Roles and Responsibilities of the Shariah Committee Members Shariah Committee Members Profile of the EIM Permodalan Nasional Berhad Designated Investment Manager of the Fund Duties of the External Investment Manager Declaration of Absence of Conflict of Interest involving EIM Manager s Disclosure of Material Litigation and Arbitration 57 7 The Trustee of the Fund Profile of AmanahRaya Trustees Berhad Trustee s Responsibility Statement Trustee s Disclosure of Material Litigation and Arbitration Duties and Obligations of the Trustee Retirement, Removal or Replacement of the Trustee Powers of the Trustee to Remove or Replace the Manager.. 62 AMB Client Services (603)

6 8 Salient Terms of The Deed Exemptions Granted by the SC Related Party Transactions/Conflict of Interest Existing and Potential Related Party Transactions Conflict of Interest Policies on Dealing with Conflict of Interest Situations Policies on Dealing with Conflict of Interest Situations by the Manager Policies on Dealing with Conflict of Interest Situations by the EIM Details of AMB s Directors Direct and Indirect Interest in Other Corporations Carrying on a Similar Business Details of AMB s Substantial Shareholders Direct and Indirect Interest in Other Corporations Carrying on a Similar Business Declaration of Conflict of Interest Tax Advisor s Letter Consents Documents Available for Inspection Rights and Liabilities of a Unit Holder Rights of a Unit Holder Liabilities of a Unit Holder Communications with Unit Holders Customer Information Service Regular Reports and Statements on your Investment Register of Unit Holders Policies Adopted by AMB to Avoid Money Laundering Activities Material Contracts List of Distributors Offices AMB Client Services (603)

7 Glossary of Terms / Abbreviations The following words or abbreviations shall have the following meanings in the current Prospectus unless otherwise stated: Act or CMSA AMB or Manager AMB Family of Funds ASNB AMBDN ART Bursa Malaysia Business Day(s) BAFIA Cooling-off Period Cooling-off Right Deed Distribution Branch Eligible Market EPF The Capital Markets and Services Act, 2007 including all amendments thereto and all regulations rules and guidelines issued in connection therewith. Amanah Mutual Berhad (AMB) ( U). All Funds under the management of the Manager. Amanah Saham Nasional Berhad (47457-V), the holding company of the Manager. AMB Dana Nabeel. AmanahRaya Trustees Berhad ( T). Bursa Malaysia Securities Berhad ( W). A day on which the Bursa Malaysia is open for trading in securities. Banking and Financial Institution Act 1989, including all amendments thereto and all regulations, rules and guidelines issued in connection therewith. The cooling-off period for the Fund is 6 Business Days commencing from the date of purchase i.e. the date on which the Manager receives the application form and the investment amount. The right of a qualified Unit Holder to change his mind and cancel an investment in the Fund. The Deed including any supplementary deed between the Manager and the Trustee for AMBDN. Any branch, outlet or any other premises of the IUTA used as distribution channel for the purpose of marketing and distribution of Units. Any market, such as the stock market, futures market, money market, any over-the-counter private debt securities market, as agreed in writing from time to time by the Manager and Trustee, which falls within the definition of an eligible market as defined in the Guidelines. Employee Provident Fund. AMB Client Services (603)

8 EPF-MIS External Investment Manager or EIM FiMM Forward Pricing FBM EMAS Shariah Index Fund GIA GII Guidelines IOP Investment Committee Investment Management Agreement IUTA or Distributor LPD EPF-Members Investment Scheme. Permodalan Nasional Berhad (38218-X). Federation of Investment Managers Malaysia. The price of a unit that is the NAV per Unit calculated at the next valuation point after an instruction or a request is received. FTSE Bursa Malaysia EMAS Shariah Index. AMBDN. General Investment Account. Government Investment Issues. The Guidelines on Unit Trust Funds and any other relevant guidelines on unit trust funds issued by the SC as amended, modified or varied by any notes, circular and guidelines issued from time to time by the SC. The Initial Offer Period of 21 days commencing from the date of this Prospectus. The Investment Committee of the Fund primarily responsible for formulating, implementing and monitoring the investment management strategies of the Fund in accordance with the respective investment objectives of the Fund. The agreement between AMB and the EIM setting out the terms and conditions upon which the EIM has been appointed and has agreed to act as the EIM of the Fund. Any Institutional Unit Trust Agent appointed by the Manager, which is an institution, a corporation or an organisation that is registered with FiMM in accordance with their guidelines to distribute the Units. The latest practicable date for the purpose of ascertaining the information contained in this Prospectus, 31 January AMB Client Services (603)

9 Licensed Financial institution Management Expense Ratio or MER Any bank or financial institution licensed under BAFIA or the Islamic Banking Act The ratio of the sum of the fees and the recovered expenses of the Fund to the average value of the Fund calculated on a daily basis, as follows: Fees of the Fund Average value of the Fund recovered expenses of the Fund calculated on a daily basis x 100 Where: Fees Recovered Expenses = All ongoing fees deducted/deductible directly from the Fund in respect of the period covered by the management expense ratio, expressed as a fixed amount, calculated on a daily basis. This would include the annual management fee, the annual trustee fee and any other fees deducted/deductible directly from the Fund; = All expenses recovered from /charged to the Fund as a result of the expenses incurred by the operation of the Fund, expressed as a fixed amount. This should not include expenses that would otherwise be incurred by an individual investor (e.g. brokerage, taxes and levies);and Average Value of The Fund = The NAV of the Fund, including the net income value of the Fund, less expenses on an accrued basis, in respect of the period covered by the management expense ratio, calculated on a daily basis. Maybank Islamic NAV NAV of the Fund NAV per Unit Maybank Islamic Berhad ( M). Net Asset Value of the Fund The NAV of the Fund is determined by deducting the value of all the Fund s liabilities from the value of all the Fund s assets, at the Valuation Point. For the purpose of computing the annual management fee and annual trustee fee, the NAV of the Fund should be inclusive of the management fee and trustee fee for the relevant day. The NAV of the Fund divided by the number of Units in Circulation, at the valuation point. AMB Client Services (603)

10 PNB Portfolio Turnover Ratio or PTR Permodalan Nasional Berhad (38218-X), the ultimate holding company of the Manager. The ratio of the average sum of the acquisitions and disposals of the Fund for the year to the average value of the Fund for the year calculated on a daily basis, as follows: [Total acquisitions of the Fund Total disposals Average value of the Fund of the Fund for the year for the year] / 2 for the year calculated on a daily basis Purchase Price of Units RAM RM Repurchase Price of Units SC Shariah Committee Members Shariah Principles Sukuk Trustee Unit Holder(s) The buying of Units by Unit Holders in the Fund is calculated at the NAV per Unit. Rating Agency of Malaysia Holdings Berhad ( U). Ringgit Malaysia. The repurchase of Units by Unit Holders in the Fund is calculated at NAV per Unit. Securities Commission Malaysia. The committee members appointed by the Manager for AMBDN. Shariah principles are based on Islamic law, originating from the Quran as well as practices and explanations rendered by the Prophet Muhammad (PBUH), Ijma, Qiyas and Ijtihad of ulama (personal reasoning of Islamic jurists). Means a document or certificate, documenting the undivided pro-rated ownership of underlying assets. The sak (singular of sukuk) is freely traded at par, premium or discount. In Malaysia, the term sukuk is used for fixed income securities which comply with Shariah requirements. However, it is normally used together with Shariah principles applied in the structure, such as Bai Bithaman Ajil, Murabahah, and Istisna for underlying transactions based on indebtedness, or Musyarakah and Mudharabah for underlying transactions based on partnerships. ART as trustee for AMBDN. A person or persons registered as holder(s) of a Unit or Units of the Fund and whose name appears in the Register of Unit Holders. AMB Client Services (603)

11 Units Units in Circulation or UIC Valuation Point Units of the Fund. Units of the Fund created and fully paid. Such time(s) on a Business Day as may be decided by the Manager wherein the NAV of the Fund is calculated. Under normal circumstances, only one valuation is conducted on each Business Day. Definitions or meanings of words not otherwise expressed above shall follow the meaning or interpretation as ascribed in the Guidelines issued by the SC and any other relevant laws governing unit trust fund. AMB Client Services (603)

12 Corporate Information MANAGER Amanah Mutual Berhad ( U) Registered Office 4th Floor, Balai PNB 201-A, Jalan Tun Razak Kuala Lumpur Telephone : (603) Facsimile : (603) Principal Office 34th Floor, Menara PNB 201-A, Jalan Tun Razak Kuala Lumpur Telephone : (603) Facsimile : (603) / (603) AMB Client Services : (603) ambcare@pnb.com.my Website : BOARD OF DIRECTORS Tun Ahmad Sarji bin Abdul Hamid Chairman (Non-Executive/Non-Independent Director) Tan Sri Dato Sri Hamad Kama Piah bin Che Othman (Non-Executive/Non-Independent Director) Tan Sri Dato' Dr. Wan Mohd. Zahid bin Mohd. Noordin (Non-Executive/Independent Director) Tan Sri Dato' Md. Desa bin Pachi (Non-Executive/Independent Director) Dato Idris bin Kechot (Non-Executive/Non-Independent Director) INVESTMENT COMMITTEE MEMBERS Tun Ahmad Sarji bin Abdul Hamid Chairman (Non-Independent member) Tan Sri Dato' Dr. Wan Mohd. Zahid bin Mohd. Noordin (Independent member) Tan Sri Dato' Md. Desa bin Pachi (Independent member) Dato Idris bin Kechot (Non-Independent member) SHARIAH COMMITTEE MEMBERS Dato Dr. Abdul Halim bin Ismail Chairman (Independent member) Datuk Dr. Syed Othman bin Syed Hussin Alhabshi (Independent member) Prof. Dato Dr. Abdul Monir bin Yaacob (Independent member) Prof. Dato Dr. Mahmood Zuhdi bin Hj Ab Majid (Independent member) AUDIT COMMITTEE OF PNB Tan Sri Dato' Dr. Wan Mohd. Zahid bin Mohd. Noordin Chairman (Independent member) Tan Sri Dato' Md Desa bin Pachi (Independent member) Tan Sri Datuk Amar Bujang bin Mohammed Bujang Mohammed Nor (Independent member) AMB Client Services (603)

13 COMPLIANCE COMMITTEE OF PNB Tan Sri Dato' Dr. Wan Mohd. Zahid bin Mohd. Noordin Chairman (Independent member) Tan Sri Dato' Sri Hamad Kama Piah bin Che Othman (Non-Independent member) Tan Sri Dato' Md. Desa bin Pachi (Independent member) Encik Paisol bin Ahmad (Non-Independent member) RISK MANAGEMENT COMMITTEE OF PNB Tan Sri Datuk Amar Bujang bin Mohammed Bujang Mohammed Nor Chairman (Independent member) Tan Sri Asmat bin Kamaluddin (Independent member) Tan Sri Dato' Md. Desa bin Pachi (Independent member) Dato Seri Ainum binti Mohamed Saaid (Independent member) COMPANY SECRETARY Puan Adibah Khairiah binti Daud (MIA 13755) 4th Floor Balai PNB 201-A Jalan Tun Razak Kuala Lumpur EXTERNAL INVESTMENT MANAGER Permodalan Nasional Berhad (38218-X) 4th Floor, Balai PNB 201-A, Jalan Tun Razak Kuala Lumpur Telephone : (603) Website : TRUSTEE AmanahRaya Trustees Berhad ( T) Registered Office Address: Tingkat 11 Wisma AmanahRaya No. 2 Jalan Ampang, Kuala Lumpur Telephone : (603) Business Office Address Tingkat 2 Wisma TAS No. 21 Jalan Melaka, Kuala Lumpur Telephone : (603) Facsimile : (603) Website : AUDITORS Messrs. Ernst & Young Chartered Accountants Level 23A Menara Milenium, Jalan Damanlela Pusat Bandar Damansara, Kuala Lumpur SOLICITORS Messrs. Zainal Abidin & Co. Suite , 18th Floor Plaza Permata Jalan Kampar Off Jalan Tun Razak Kuala Lumpur TAX ADVISOR Ernst & Young Tax Consultants Sdn Bhd Level 23A Menara Milenium Jalan Damanlela, Pusat Bandar Damansara Kuala Lumpur PRINCIPAL BANKER Maybank Islamic Berhad ( M) Level 10, Tower A, Dataran Maybank 1, Jalan Ma arof Kuala Lumpur Telephone : (603) Website : FEDERATION OF INVESTMENT MANAGERS MALAYSIA (FiMM) th Floor PNB Damansara, 19 Lorong Dungun Damansara Heights Kuala Lumpur Telephone: (603) Facsimile : (603) Website : AMB Client Services (603)

14 1 Summary of Key Features of the Fund This section is only a summary of the salient information about the Fund. Investors should read and understand the whole Prospectus before making investment decisions. 1.1 General Information on AMBDN Fund Category / Type Money Market (Shariah)/ Income Further details on page : Investment Objective of the Fund Policies and Principal Investment Strategy Asset Allocation The Fund aims to provide investors with high-level liquidity and regular income stream to meet cash flow requirements based on Shariah principles while maintaining capital preservation*. Note : Distribution of income, if any, will be automatically reinvested into the Unit Holder s account. Refer to Section on page 44 for further details. The Fund will invest at least 90% of the Fund s NAV in Shariah-compliant deposits, Islamic money market instruments and Shariah-compliant debentures with maturity of not more than 365 days and up to 10% of the Fund s NAV may be invested in Shariah-compliant debentures which have a remaining maturity period of more than 365 days but less than 732 days. The securities invested in would have a minimum local credit rating of at least BBB (long-term rating) or P2 (short-term rating) by RAM or equivalent rating agencies. Minimum 90% in short term Shariah-compliant deposits, Islamic money market instruments and Shariahcompliant debentures with maturity of not more than 365 days. Up to 10% in short term Shariah-compliant debentures exceeding 365 days but no longer than 732 days. 21, * Capital preservation does not signify that the capital/principal invested is guaranteed/protected by any party. AMB Client Services (603)

15 Benchmark Principal Risks of Investing in the Fund Bank Islam Mudharabah Overnight Rate. Note: Investors are advised that the actual portfolio of the Fund at any given time may consist of a mix of Shariahcompliants deposits, Islamic money market instruments and Shariah-compliant debentures of varying tenure and credit rating, as allowed by the Prospectus. Investors are to note that the risk profile of the Fund s portfolio may be higher than the risk profile of the benchmark. Therefore, the Fund s return can be potentially higher than the benchmark commensurate with the risk profile of the underlying assets of the Fund. The principal risks of investing in the Fund includes interest rate risk, counterparty risk, and credit issuer/default risk External Investment Manager PNB 55 Trustee ART 58 Investor s Profile Distribution Policy The Fund is suitable for investors with the following profile: - Seeking low risk investments that are in accordance with Shariah Principles. Seeking a Fund with regular income with potential yield to return better than Bank Islam Mudharabah Overnight Rate. Preferring short term investment horizon and wish to reduce exposure in higher risk investments. Ease of entry and exit. Monthly, depending on the level of income (if any) the Fund generates Launch Date 6 July Financial Year End 30 June 12 Maximum Approved Fund Size 400 million Units. 12 IOP 21 days commencing from the date of this Prospectus. 12 Initial Offer Price RM0.50 per Unit 12 AMB Client Services (603)

16 1.2 Fees and Charges This table describes the charges that you may directly incur when you purchase or repurchase Units of the Fund. All these direct charges are negotiable. Direct Charges Amount (i) Sales Charge Nil (ii) Repurchase/Redemption Charge Nil (iii) Transfer Charge RM25 per transfer transaction (iv) Switching Charge Switch into AMBDN Nil. Switch out from AMBDN into the existing AMB Family of Funds - Please refer to the table below : AMBDN to Equity Funds Up to 5% of amount switched AMBDN to Balanced Funds Up to 5% of amount switched AMBDN to Bond Funds Up to 1% of amount switched The switching facility into AMBDN is not presently available for Unit Holders who have invested via the EPF-MIS. Refer to section page 31 for further information on switching transactions. (v) Other Administrative Charges The Manager shall also be entitled to require a Unit Holder to pay a charge not exceeding RM50.00 only in respect of : a) any documents supplied to the Unit Holder at the Unit Holder s request ; b) any act of an administrative nature carried out for the Unit Holder at the Unit Holder s request. which by the Deed or law is not required to be supplied or carried out free of charge by the Manager. You shall also be required to reimburse the Manager and/or the Trustee in respect of any disbursements such as bank charges incurred by the Manager and/or the Trustee on your behalf. AMB Client Services (603)

17 This table describes the fees that you may indirectly incur when you invest in the Fund. Indirect Fees % (i) Annual Management Fee Up to 0.50% per annum of the NAV of the Fund calculated and accrued on a daily basis. The NAV is a gross NAV, before deducting management fee and trustee fee for the day. (ii) Annual Trustee Fee Up to 0.08% per annum of the NAV of the Fund, calculated and accrued on a daily basis, subject to a minimum fee of RM18,000 per annum. The NAV is a gross NAV, before deducting management fee and trustee fee for the day. (iii) Other Annual Operating Expenses The auditor s fees, tax agents fee and other relevant professional fees; the costs of printing & distribution of annual and interim reports, tax vouchers and warrants; cost of modification of the Deed other than those for the benefits of the Manager and/or Trustee; and other notices to Unit Holders as well as expenses that are directly related and necessary for the administration of the Fund as set out in the Deed. These costs have been factored into the quoted NAV per Unit as they are related and necessary to the business of the Fund. Please refer to Section 4 for further information on fees and charges. There are fees and charges involved and investors are advised to consider them before investing in the Fund. Investment in the Fund is not the same as placing funds in a deposit with financial institutions. There are risks involved and investors should rely on their own evaluation to assess the merits and risks when investing in the Fund. AMB Client Services (603)

18 1.3 Information on Transactions Minimum initial investment Application for Units at the point of issue must be for a minimum of : Individual RM5,000 Corporate RM50,000 Minimum additional investment Application for additional Units must be for a minimum of : Individual RM1,000 Corporate RM10,000 Purchase of Units Repurchase of Units The investment amount payable by the Unit Holders for the purchase of a Unit is calculated at NAV per Unit. The NAV per Unit is computed on Forward Pricing basis and published daily in major newspapers. No sales charge will be imposed on the Unit Holders. Refer to section 4.1 on page 30 respectively for more details. The repurchase amount payable to the Unit Holders for the repurchase of a Unit is calculated at NAV per Unit. The NAV per Unit is computed on Forward Pricing basis and published daily in major newspapers. No repurchase charge will be imposed on the Unit Holders. Refer to section on page 39 for more details. No repurchase is allowed during IOP. The Manager has taken necessary procedures to ensure accuracy of information of pricing to be published in the news papers. However, the Manager shall not be held liable for any error or omission in the pricing information published in the newspapers. Refer to section 15.1 on page 81 for more details Cooling-off Period Cooling-off Right Repurchase Period Within six Business Days commencing from the date of purchase, i.e. the date on which the Manager receives the application form and the investment amount. The Cooling-off Right is only given to a qualified Unit Holder who is investing in AMB s Family of Funds for the first time. Refer to section 5.5 on page 42 for more details. For repurchase applications received before a.m., repurchase monies will be paid the following business day (T+1). In respect of any repurchase applications received after a.m., the repurchase monies will be paid after two business days (T+2). In the event of any technical difficulties beyond the Manager s control or should the repurchase request result in the sale of assets AMB Client Services (603)

19 which cannot be liquidated at an appropriate price or on adequate terms and is as such not in the interest of the existing unit holders, repurchase monies may be paid at any time not later than 10 days after receipt by the Manager of the request to repurchase or such other period as may be permitted by the relevant authorities from time to time. Frequency and Minimum Units of Repurchase There is no minimum Units of repurchase imposed on a Unit Holder. However, for partial repurchase, the minimum balance of Units remaining in the account must always be 1,000 Units for Individuals and 5,000 Units for Corporate Institutions. There is no limitation on the frequency of requests for repurchase. Minimum Holdings to Maintain Accounts The minimum balance of Units remaining in the account must always be 1,000 Units for Individuals and 5,000 Units for Corporate Institutions. The Manager is allowed to close the Unit Holder s account, at the Manager s discretion, should the balance in Unit Holder s account fall below the minimum balance requirement. Transfer Of Units Switching of Units A Unit Holder may fully or partially transfer his Units in the Fund to another Unit Holder of the same, subject to an administrative fee of RM25 for each transfer. Refer to section on page 40 for more details. The switching facility into AMBDN is not presently available for Unit Holders who have invested via the EPF-MIS. Distribution Units of conventional funds cannot be switched into AMBDN. However the principal amount of conventional funds is allowed to be switched into AMBDN. Switching from a Shariahbased fund to a conventional fund is discouraged, especially for Muslim Unit Holders. Distribution Mode Any distribution income declared will be automatically re-invested as additional units into the Unit Holder s account. Unit Holders can withdraw this distribution income by submitting a repurchase request. Refer to page 44 for details on distribution payment. Note: The Manager will ensure that the published prices are accurate. However, the Manager shall not be held liable for any error in prices published in the press. Investors may contact AMB or any Distribution Branch to further confirm the Unit prices. AMB Client Services (603)

20 1.4 Other Information Deed Unit Holders may refer to the Deed of the Fund dated 26 April 2011 for more specific information on the Fund, which is available at the principal office of the Manager. Condition for the Fund The Manager has the option to request the Trustee to terminate the Fund and to wind-up the Fund if at the end of the IOP, the capital raised shall be less than RM5 million, being the Fund s viable size, and it is deemed uneconomical to proceed with the Fund. In such circumstances, the Manager shall reserve the right to return the amount invested which is at RM0.50 per Unit to the Unit Holders. There are fees and charges involved and investors are advised to consider the fees and charges before investing in the Fund. Unit prices and distribution payable may go down as well as up. For information concerning certain risk factors which should be considered by prospective investors, see Risk Factors commencing on page 18. You are advised to read and understand the contents of this Prospectus and if necessary, consult your professional advisor before making an investment decision. AMB Client Services (603)

21 2 Risk Factors 2.1 Risks of Investing in Unit Trusts All investments carry some form of risk. Prior to investing one should consider the elements of risks associated to the investments as the values of the investment could fluctuate due to these risks. Prospective investors should consider the following risk factors in addition to the other information stated in the Prospectus: General Risks Returns Not Guaranteed As a result of market risks, the Manager is unable to guarantee the distribution payout to Unit Holders or the investment returns of the Fund. Liquidity Risk Liquidity risk relates to the Fund s ability to quickly and easily trade, at a reasonable price, in and out of positions. Should the Fund comprise a security that has become temporarily or permanently illiquid or difficult to sell, the EIM may need to sell the security at a discount to its fair value, which eventually affects the Fund s value. Compliance Risk This risk arises from the non-compliance with the deed, legislation, internal policies, all applicable rules and regulations governing a fund. Non-adherence may affect the value of the investment. Inflation Risk Inflation rate risk is the risk of potential loss in the purchasing power of your investment due to a general increase in consumer prices. Inflation is thus one of the major risks to investors over a long-term period and results in uncertainty over the future value of investments. Management Risk Performance of the fund depends on, amongst others, the experience, expertise, knowledge and investment techniques of the fund manager. Inadequate management of the fund can cause considerable losses to the fund, which in turn may affect the capital invested. Force Majeure Risk The fund may also be exposed to force majeure risks. These risks relates to events which are not within the control of manager. This includes terrorist attacks, political instability, natural disasters and spread of disease where risks are generally unforeseen and may have direct impact on the business. AMB Client Services (603)

22 Specific Risks Associated with AMBDN While attempts are being made to reduce risks encountered by the portfolio, investors should be advised that the following risks are inherent in such investments of the Fund: Interest Rate Risk Interest rate risk is a general economic indicator that will impact on the management of the Fund regardless of whether it is a Shariah Fund or otherwise. It does not in any way suggest that the Fund will invest in debt securities which are not Shariah approved. All the investments for Shariah Fund accord with the Shariah Principles. Prices of short-term debt instruments move inversely with interest rates and the degree of price sensitivity to interest rates is a function of debt securities and coupon maturity as well as the level of interest rates. Even though the Fund does not invest in interest bearing instruments, the interest rate referred herein is to the general interest rate of the country which may affect the value of the investment of the Fund. However, given the short term nature of the investments, the Fund is exposed to minimal interest rate risk. In order to mitigate interest rate exposure of the Fund, the EIM will manage the duration of the portfolio via shorter or longer tenured assets depending on the view of the future interest rate trend of the EIM, which is based on its continuous fundamental research and analysis. Counterparty Risk When a Fund conducts over-the-counter (OTC) transactions, it may be exposed to risks relating to the credit standing of its counterparties and their ability to fulfill the conditions of the contracts it enters into with them. Hence, it is generally not applicable to transactions performed through exchanges. This risk is mitigated by performing fundamental credit research and analysis to determine the creditworthiness of the counterparty, and imposing a credit limit as a precautionary step to limit any loss that may arise directly or indirectly as a result of a defaulted transaction. Credit/Default Risk Credit risk refers to the possibility that the issuer of a security may not be able to make interest payments or repay the principal in a timely manner. This will translate to losses that will reduce the value of the Fund. Credit risk is mitigated by performing continuous fundamental credit research and analysis to ascertain the creditworthiness of its issuer. In addition, the EIM imposes a minimum rating requirement as rated by either local and/or foreign rating agencies and manages the duration of the investment in accordance with the objective of the Fund. For this Fund, the Shariah-compliant debentures must satisfy a minimum rating requirement of at least BBB (longterm rating) or P2 (short-term rating) by RAM or equivalent rating agencies. Investors are reminded that the above list of risks may not be exhaustive and if necessary, they should consult their adviser(s), e.g. their bankers, lawyers, stockbrokers or independent financial advisers for a better understanding of the risks. AMB Client Services (603)

23 Control of Risk The structure of the Fund is such that it is confined to instruments of short duration to maturity in order to minimise the impact of fluctuations in interest rate on the performance of the Fund over the short term while the credit risks it may face are mitigated by strict limits on concentration of investments i.e. diversification and due diligence in the credit assessments by ensuring high credit ratings as mentioned earlier. The EIM will seek to reduce all these risks associated with the Fund by virtue of its experience, the analytical process and by structuring a broadly diversified investment pool. Please refer to Chapter 3 : Detailed Information on the Fund for information on Fund specific risks and risk management. Investors should note that investment in the Fund is not the same as placing funds in a deposit with a financial institution. There are risks involved and investors should rely on their own evaluation to assess the merits and risks when investing in the Fund. AMB Client Services (603)

24 3 Detailed Information on the Fund 3.1 Fund s Profile AMBDN Fund Category Fund Type Money Market (Shariah) Income 3.2 Investment Objective of the Fund The Fund aims to provide investors with high-level liquidity and regular income stream to meet cash flow requirements based on Shariah principles while maintaining capital preservation*. Any material change to the investment objective of the Fund would require Unit Holders approval. 3.3 Maximum Approved Fund Size The maximum approved Fund size for AMBDN is 400 million Units. In the event the Fund is fully subscribed within 21 days of IOP, we may increase the maximum approved fund size subject to the approval of the relevant authorities. 3.4 Investors Profile The Fund is suitable for investors with the following profile: Seeking low risk investments that are in accordance with Shariah Principles. Seeking a Fund with regular income with potential yield to return better than Bank Islam Mudharabah Overnight Rate. Preferring short term investment horizon and wish to reduce exposure in higher risk investments. Seeking investment with ease of entry and exit. 3.5 Asset Allocation Minimum 90% in short term Shariah-compliant deposits, Islamic money market instruments and Shariah-compliant debentures with maturity of not more than 365 days. Up to 10% in short term Shariah-compliant debentures exceeding 365 days but no longer than 732 days. *Capital preservation does not signify that the capital/principal invested is guaranteed/protected by any party. AMB Client Services (603)

25 3.6 Benchmark The performance of AMBDN will be benchmarked against the Bank Islam Mudharabah Overnight Rate, which can be obtained from the Bank Islam website or from Bloomberg (indicative rate). Note: Investors are advised that the actual portfolio of the Fund at any given time may consist of a mix of Shariah-compliants deposits, Islamic money market instruments and Shariah-compliant debentures of varying tenure and credit rating, as allowed by the Prospectus. Investors are to note that the risk profile of the Fund s portfolio may be higher than the risk profile of the benchmark. Therefore, the Fund s return can be potentially higher than the benchmark commensurate with the risk profile of the underlying assets of the Fund. 3.7 Specific Benefits of Investing in AMBDN Strict Adherence to the Shariah Principles AMBDN will adhere to the Shariah Principles. The Shariah Committee Members of the Fund comprise Islamic scholars who will monitor the investment activities of the Fund. Liquidity AMBDN invests in highly liquid instruments in order to provide investors the facility to easily shift their funds and take advantage of opportunities presented by market movements. Investment Through Diversification AMBDN manages and aims to minimise your risks by investing in a diversified range of Shariah compliant short term money market instruments. Affordability Individual investors can invest just RM5,000 as a minimum initial investment and subsequent investments can be made at a minimum of RM1,000. For corporate investors, a minimum initial investment of RM50,000 is required and subsequent investments can be made at a minimum of RM10,000. Accessibility Investors can easily access at AMB or any Distribution Branch to perform any enquiry or transaction. 3.8 Investment Policy/Approach The Fund will be actively managed and its investment policy is to invest in liquid and low risk short term investments with a high degree of capital preservation*. As such, it intends to provide liquidity to meet the short-term cash flow requirements of its Unit Holders while providing regular income. In structuring the portfolio of the Fund, there will be no minimum limit for Shariah-based liquid assets as the Fund is highly liquid. The investment policy above applies to the Fund and may be varied by the Investment Committee from time to time with the knowledge of the Trustee. Depending on the prevailing circumstances, the Fund will adopt a suitable level of active and frequent trading for the purpose of meeting the Fund s objective. *Capital preservation does not signify that the capital/principal invested is guaranteed/protected by any party. AMB Client Services (603)

26 3.9 Investment Strategy / Investment Mechanism The Fund will invest at least 90% of the Fund s NAV in quality Shariah-compliant deposits, Islamic money market instruments and Shariah-compliant debentures with maturity of not more than 365 days and up to 10% of the Fund s NAV may be invested in Shariah-compliant debentures which have a remaining maturity period of more than 365 days but less than 732 days. The securities invested in would have a minimum local credit rating of at least BBB (long-term rating) or P2 (shortterm rating) by RAM or equivalent rating agencies. The strategy for investment in Islamic money market instruments would be driven by the interest rate outlook for the market over the short and medium term horizon. This will enable the EIM to decide on the maturity structure for the Fund. As well, the EIM will constantly seek potential credit upgrade issues and avoid potential downgrade issues to maximise returns to Unit Holders. The Fund is essentially managed to prioritise the short term liquidity requirements of Unit Holders, while endeavouring to provide regular income. The EIM will adopt a prudent strategy in forming a portfolio of Islamic money market instruments which is in accordance with the Fund s investment objective and the EIM s assessment of investment prospects in line with the underlying interest rate and economic outlook. The EIM will adopt the following forms of risk management strategies to mitigate the risks inherent in the Fund: Diversification across asset classes within the Fund s permitted investments; Determining optimal asset allocation; Adhering to the Fund's investment objectives and investment restrictions and limits; Imposing limits on exposure to single financial institutions / issuers; Duration management of the portfolio of Shariah-compliant debentures; Liquidity management ; Reviewing the performance of the Fund regularly against the performance of the benchmark; and Reporting investment matters to the Investment Committee of the Fund. The investment strategy adheres to the SC Guidelines pertaining to investments for a money market fund. As such, any changes to these Guidelines would be tantamount to a change in this investment strategy Investment Process of the Fund The investment process in the management of a unit trust portfolio involves the setting up of investment objective, establishing an investment policy, selecting an investment strategy, asset allocation, Shariah-compliant deposits, Islamic money market instruments and Shariah-compliant debentures; and measuring and evaluating performance. AMB Client Services (603)

27 Committee Responsibilities (i) Shariah Committee Responsibilities Function Shariah Screening Process Shariah Committee - Advise and interpret issues of Shariah nature. - Set investment guidelines in compliance with Shariah Principles. - Monitor the Fund s activity to ensure adherence to the investment guidelines. - To formally meet at least once every 3 months to review the Fund s compliance towards the Shariah Principles. - Responsible for scrutinising the compliance and transactions report to ensure investments are in line with Shariah Principles. - To prepare a report to be included in the Fund s interim and annual reports. (ii) Investment Committee Responsibilities Investment Committee - Review investment policies and investment portfolio. - Ensure objectives and investment guidelines are met. The External Investment Manager Designated Portfolio Manager - Review guidelines for asset allocation and portfolio strategy; - Review market outlook, set asset allocation strategy and portfolio construction. - Ensure that the investment policy and strategy of the Fund is adhered to. - Execute investments transactions as recommended by the designated Portfolio Manager. The investment portfolio of the Fund comprise securities which have been permitted by the SC and classified as Shariah-compliant by the Shariah Advisory Council (SAC) of the SC or have been determined as being Shariah-compliant by the Shariah Committee of the Fund. AMB Client Services (603)

28 Investment Process The following investment strategy & process will be adopted: - Macro Economic Analysis DETERMINE INTEREST RATE TRENDS Monetary Policy and key economic indicators Short and long term interest rates outlook DEPOSIT & MONEY MARKET IDENTIFY MONEY MARKET INSTRUMENTS Tenors and liquidity of the instruments Yields offered DEBENTURES IDENTIFY DEBENTURES ISSUANCE High quality credit ratings Tenors and yields offered Industries with stable earnings DETERMINE MATURITY STRUCTURES Cashflow requirements Collection/redemption pattern CREDIT ANALYSIS Cash flows to meet profit & principal repayments Financial and yield analysis MONEY MARKET EXECUTION DEBENTURES EXECUTION Within the permissible exposure limits With authorized panel of financial institutions Liquidity and size of issue Suitability for time horizon of Fund versus interest rate cycle Within the Guidelines parameters FUND MANAGEMENT Constant portfolio monitoring The investment portfolio of the Fund comprise securities which have been permitted by the SC and classified as Shariah-compliant by the Shariah Advisory Council (SAC) of the SC or have been determined as being Shariah-compliant by the Shariah Committee of the Fund. AMB Client Services (603)

29 Cleansing/Purification Process Cleansing Process This refers to a Shariah non-compliant investment inadvertently made by the Manager. The said investment will be disposed/withdrawn with immediate effect. In the event the investment resulted in gain, the gain is to be channeled to baitulmal or any other charitable bodies as advised by the Shariah Committee. If the disposal of the investment resulted in loss to AMBDN, the loss is to be borne by the Manager. Purification Process This refers to the purification by way of payment of zakat by Muslims. AMBDN does NOT pay zakat on behalf of Muslim individuals and Islamic legal entities who are investors of these Funds. Thus, Unit Holders are advised to pay zakat on their own Steps to be Taken in the event of a Rating Downgrade The EIM reserves the right to deal with the invested instruments in the best interest of the Unit Holders. Should the instrument be downgraded below the minimum credit rating of BBB (long-term rating) or P2 (short-term rating), the EIM would divest the instrument whenever possible, within the time frame as may be stipulated by the Investment Committee and Shariah Committee. The EIM will also take into consideration all relevant factors that affect fair value of the investment via an internal credit assessment process before deciding on the manner and time frame of the sale Permitted Investments for AMBDN The Fund may, unless expressly prohibited by the Deed, invest in securities which constitute permitted investments within the definition under the Guidelines. These include Shariahcompliant debentures, deposits and Islamic money market instruments. The securities may take any of the following forms: (i) (ii) (iii) (iv) Cash at hand, GIA, Islamic money market instruments and Shariah-compliant deposits with licensed financial institution; Unlisted Sukuk or Sukuk traded on Eligible Markets; GII, Islamic Acceptance Bills, Islamic Negotiable Instruments of Deposits and other Shariahcompliant obligations issued or guaranteed by the Malaysian Government, Bank Negara Malaysia, State Governments and Government-related agencies such as Cagamas and Khazanah; All types of Shariah-compliant collective investment schemes (listed or unlisted); (v) Any other forms of investments that are in line with the Fund s objective and as may be agreed upon by the Manager, the Investment Committee, the Shariah Advisory Council of the SC and/or Shariah Committee members that are permissible with the Shariah Principles. Note: The investments of the Fund must comply with the rulings of the Shariah Advisory Council of the SC and the Shariah Committee of the Fund. AMB Client Services (603)