Units will only be offered for sale from 17 October 2014 until 30 November 2014

Transcription

1 Prospectus IN RESPECT OF THE MANULIFE INVESTMENT ASIA TARGET MATURITY BOND FUND SERIES 2 MANAGER : Manulife Asset Management Services Berhad ( U) TRUSTEE : HSBC (Malaysia) Trustee Berhad (1281-T) This Prospectus is dated 17 October 2014 Units will only be offered for sale from 17 October 2014 until 30 November 2014 The date of constitution of the Manulife Investment Asia Target Maturity Bond Fund Series 2 is 6 March 2014 INVESTORS ARE ADVISED TO READ AND UNDERSTAND THE CONTENTS OF THIS PROSPECTUS. IF IN DOUBT, PLEASE CONSULT A PROFESSIONAL ADVISER. FOR INFORMATION CONCERNING CERTAIN RISK FACTORS WHICH SHOULD BE CONSIDERED BY PROSPECTIVE INVESTORS, SEE RISK FACTORS COMMENCING ON PAGE 20.

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3 Message from the Ceo 3I Dear Valued Investor, At Manulife Asset Management Services Berhad, we offer a comprehensive range of funds for investor s diversified investment appetites in achieving their financial goals. We pride ourselves at Manulife on developing forward-thinking financial solutions to meet our customer s needs. Thank you for considering making an investment in our MANULIFE INVESTMENT ASIA TARGET MATURITY BOND FUND SERIES 2 ( the Fund ) which is a 3 year close-ended bond fund that focuses its investment in local and/or foreign bonds. The Fund seeks to provide regular income during the tenure of the Fund. Please refer to 12 to 19 of Chapter 1, Key Data and 25 to 31 of Chapter 3, Detailed Information on the Fund for a better understanding of the investment strategy employed by the Manager to achieve the objective of the Fund. The Fund is suitable for investors who seek regular income distribution, have a 3 year investment horizon and have a moderate risk tolerance. All investments carry some form of risk. The risk profile of the Fund will very much depend on the underlying investments of the Fund. Some of the specific risks related to the Fund are loss of opportunity risk, interest rate risk, credit/default risk, country risk, currency risk, mismatch risk, commitment risk, derivatives risk, concentration risk and counterparty risk. You may refer to 20 to 24 of Chapter 2, Risk Factors for a better understanding of the above risks. The following are some of the fees and charges which you may incur when investing in the Fund: a Sales Charge of up to 3.00% of the Offer Price for all distribution channels; a Redemption Charge of: (i) up to 3.00% of the NAV per Unit if the request for redemption is done within the 1 st year of the Commencement Date; (ii) up to 2.00% of the NAV per Unit if the request for redemption is done within the 2 nd year of the Commencement Date; and (iii) up to 1.00% of the NAV per Unit if the request for redemption is done within the 3 rd year of the Commencement Date. (Please note that the Redemption Charge will be retained by the Fund.) An annual trustee fee of 0.06% of the NAV of the Fund per annum, calculated and accrued on a daily basis (excluding foreign custodian fees and charges, if any). Please refer to 32 to 33 of Chapter 4, Fees, Charges and Expenses for the full details on the fees, charges and expenses which you may incur when investing in the Fund. If you have any queries about the information in this Prospectus or would like to know more about the Fund, please feel free to contact our customer service at or my_utservice@ manulife.com. Alternatively, you may contact our unit trust consultants at our regional support centers listed in the Corporate Directory section. We look forward to being of service to you. Best wishes, Nykola Michael Czolak Acting Chief Executive Officer/Executive Director

4 TABLE OF CONTENT 4II CORPORATE DIRECTORY 5 CHAPTER 1: KEY DATA 12 CHAPTER 2: RISK FACTORS General risks of investing in the Fund Specific Risks Related to the Fund Risk Management Strategies 24 CHAPTER 3: DETAILED INFORMATION ON THE FUND Investment Objective Investment Policy and Strategy Asset Allocation Performance Benchmark Permitted Investments Investment Restrictions and Limits Valuation of the Fund and Bases of Valuation of the Assets of the Fund 29 CHAPTER 4: FEES, CHARGES AND EXPENSES Sales Charge Redemption Charge Transfer Fee Switching Fee Management Fee Trustee Fee Other Expenses Policy on Rebates and Soft Commissions 33 CHAPTER 5: TRANSACTION INFORMATION Computation of NAV and NAV per Unit of the Fund Pricing of Units Sale of Units Redemption of Units Cooling-Off Rights Minimum Holdings Policy on Gearing Transfer of Units Switching Facility Distribution Policy Mode of Distribution Maturity Date of the Fund 40 CHAPTER 6: MANAGEMENT COMPANY Background Information Financial Position The Board of Directors Roles, Duties and Responsibilities of the Manager 45

5 TABLE OF CONTENT 5III 6.5 Investment Committee Key Personnel of the Manager Material Litigation Manager s Delegate 49 CHAPTER 7: TRUSTEE Financial Position Experience in Trustee Business Board of Directors Profile of Key Personnel Duties and Responsibilities of the Trustee Trustee s Statement of Responsibility Trustee s Disclosure on Material Litigation Trustee s Delegate Anti-Money Laundering and Anti-Terrorism Financing Provisions Statement of Disclaimer Consent to Disclosure 56 CHAPTER 8: SALIENT TERMS OF THE DEED Rights and Liabilities of the Unit Holders Maximum Fees and Charges permitted by the Deed Procedures to increase the maximum rate of the direct and indirect fees and charges as provided in this Prospectus Procedures to increase the maximum rate of the direct and indirect fees and charges as set out in the Deed Permitted Expenses payable out of the Fund s property The Manager s Right to Retire Removal and Replacement of the Manager Retirement of the Trustee Removal and Replacement of the Trustee Termination of the Fund Unit Holders Meeting 65 CHAPTER 9: RELATED-PARTY TRANSACTIONS/CONFLICT OF INTEREST 67 CHAPTER 10: TAX ADVISER S LETTER 69 CHAPTER 11: ADDITIONAL INFORMATION Reports relating to the Fund Unclaimed Moneys Policy Anti-Money Laundering Policies and Procedures Customer Service 77 CHAPTER 12: CONSENTS 78 CHAPTER 13: DOCUMENTS AVAILABLE FOR INSPECTION 79

6 responsibility STATEMENTS AND STATEMENTS OF DISCLAIMER 6IV RESPONSIBILITY STATEMENTS This has been reviewed and approved by the directors of Manulife Asset Management Services Berhad and they collectively and individually accept full responsibility for the accuracy of the information. Having made all reasonable enquiries, 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 this Prospectus false or misleading. STATEMENTS OF DISCLAIMER The Securities Commission Malaysia has authorized the Manulife Investment Asia Target Maturity Bond Fund Series 2 and a copy of this Prospectus has been registered with the Securities Commission Malaysia. The authorization, and the registration of this Prospectus, should not be taken to indicate that the Securities Commission Malaysia recommends the Manulife Investment Asia Target Maturity Bond Fund Series 2 or assumes responsibility for the correctness of any statement made or opinion or report expressed in this Prospectus. The Securities Commission Malaysia is not liable for any non-disclosure on the part of Manulife Asset Management Services Berhad, the management company responsible for the Manulife Investment Asia Target Maturity Bond Fund Series 2 and takes no responsibility for the contents in this Prospectus. The Securities Commission Malaysia 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 of the Manulife Investment Asia Target Maturity Bond Fund Series 2 will be issued or sold based on this Prospectus after the Offer Period. Investors are advised to note that recourse for false or misleading statements or acts made in connection with this Prospectus is directly available through sections 248, 249 and 357 of the Capital Markets and Services Act 2007.

7 DEFINITION 1 the Act or CMSA BNM Bursa Malaysia Business Day Commencement Date the Deed Eligible Market means the Capital Markets and Services Act means Bank Negara Malaysia. means Bursa Malaysia Securities Berhad, the stock exchange managed or operated by Bursa Malaysia Berhad. means a day on which the Bursa Malaysia is open for trading. means the date on which investments of the Fund may first be made and is the date which falls on the 7 th Business Day after the end of the Offer Period. means the Deed entered into between the Manager and the Trustee dated 6 th March 2014 in relation to the Fund and registered with the Securities Commission Malaysia. means a market that: (a) is regulated by a regulatory authority; (b) operates regularly; (c) is open to the public; and (d) has adequate liquidity for the purposes of the Fund. For investments in a foreign market*, a foreign market is an eligible market where it has satisfactory provisions relating to: (a) (b) (c) (d) (e) (f) the regulation of the foreign market; the general carrying on of business in the market with due regard to the interests of the public; adequacy of market information; corporate governance; disciplining of participants for conduct inconsistent with just and equitable principles in the transaction of business, or for a contravention of, or a failure to comply with the rules of the market; and arrangements for the unimpeded transmission of income and capital from the foreign market. *Note: Investments in a foreign market are limited to markets where the regulatory authority is a member of the International Organization of Securities Commissions (IOSCO).

8 DEFINITION 2 financial institution (a) if the institution is in Malaysia: (i) licensed bank; (ii) licensed investment bank; or (iii) Islamic bank; (b) if the institution is outside Malaysia, any institution that is licensed / registered / approved / authorized to provide financial services by the relevant banking regulator. the Fund Fitch the Guidelines Islamic bank IUTA Jointholder Launch Date licensed bank licensed investment bank LPD management company or the Manager or we or us MARC Maturity Date or Maturity means the Manulife Investment Asia Target Maturity Bond Fund Series 2. refers to Fitch Ratings. means the Guidelines on Unit Trust Funds, issued by the Securities Commission Malaysia, as may be amended from time to time. means a bank licensed under the Islamic Financial Services Act means an institutional unit trust adviser registered with the Federation of Investment Managers Malaysia. means a person who holds Units together with another person or persons and Jointholders means the persons who are holding the same Units. means the date of this Prospectus and is the date on which sale of Units of the Fund may first be made; the Launch Date is also the date of constitution of the Fund. has the same meaning as prescribed under the Financial Services Act has the same meaning as prescribed under the Financial Services Act means 31 January 2014, and is the latest practicable date for the purposes of ascertaining certain information deemed relevant in this Prospectus. means Manulife Asset Management Services Berhad. means Malaysian Rating Corporation Berhad. means the date which falls on the third (3rd) anniversary of the Commencement Date; if that date does not fall on a Business Day, it shall be the following Business Day. If the Fund is earlier terminated in accordance with the provisions of the Deed, the Maturity Date or Maturity shall mean the date of such early termination.

9 DEFINITION 3 medium-term Moody s Net Asset Value or NAV NAV per Unit Offer Period Offer Price Prospectus RAM Redemption Charge RM S&P Sales Charge the SC means a period of 3 years. means Moody s Investors Service. 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 (if any) and annual trustee fee, the NAV of the Fund should be inclusive of the management fee (if any) and trustee fee for the relevant day. means the NAV of the Fund divided by the number of Units in Circulation at the valuation point. means the period during which Units of the Fund are offered for sale. means the fixed price payable by an applicant for the purchase of Units during the Offer Period. means this prospectus in respect of the Manulife Investment Asia Target Maturity Bond Fund Series 2. means RAM Rating Services Berhad. means a fee to be paid by a Unit Holder when redeeming Units of the Fund. means Ringgit Malaysia, the official currency of Malaysia. means Standard & Poor s Financial Services LLC. means a fee to be paid by an investor when purchasing Units of the Fund. means the Securities Commission Malaysia established under the Securities Commission Act 1993.

10 DEFINITION 4 Special Resolution the Trustee Unit or Units Units in Circulation Unit Holder or Unit Holders means a resolution passed at a meeting of Unit Holders duly convened in accordance with the Deed by a majority of not less than three-fourths of the Unit Holders present and voting at the meeting in person or by proxy; for the avoidance of doubt, three-fourths of the Unit Holders present and voting means three-fourths of the votes cast by the Unit Holders present and voting; for the purposes of winding-up the Fund, Special Resolution means a resolution passed at a meeting of Unit Holders duly convened in accordance with the Deed by a majority in number holding not less than three-fourths of the value of the votes cast by the Unit Holders present and voting at the meeting in person or by proxy. means HSBC (Malaysia) Trustee Berhad. refers to an undivided share in the beneficial interest and/or right in the Fund and a measurement of the interest and/or right of a Unit Holder in the Fund and means a unit of the Fund. means Units created and fully paid for and which has not been cancelled and is the total number of Units issued at a particular valuation point. means the person registered as the holder of a Unit or Units including persons jointly registered.

11 CORPORATE DIRECTORY 5 Manager Name Registered Office : Manulife Asset Management Services Berhad ( U) : 16 th Floor, Menara Manulife No. 6, Jalan Gelenggang Damansara Heights Kuala Lumpur. Telephone number : Facsimile number : Business Address : 13 th Floor, Menara Manulife No. 6, Jalan Gelenggang Damansara Heights Kuala Lumpur. Telephone number : Facsimile number : Address Website : my_utservice@manulife.com : Manager s Delegate Name Registered Office and Business Address (Fund Valuation) : HSBC (Malaysia) Trustee Berhad (1281-T) : 13 th Floor, Bangunan HSBC, South Tower No.2, Leboh Ampang, Kuala Lumpur. Telephone number : Facsimile number :

12 CORPORATE DIRECTORY 6 Manager s Delegate Name Registered Office and Business Address (Internal audit, human resource, finance, corporate secretarial and legal) : Manulife Holdings Berhad (24851-H) : 16 th Floor, Menara Manulife No. 6, Jalan Gelenggang Damansara Heights Kuala Lumpur. Telephone number : Facsimile number : Website : Manager s Delegate Name Registered Office and Business Address (Marketing) : Manulife Insurance Berhad ( M) : 16 th Floor, Menara Manulife No. 6, Jalan Gelenggang Damansara Heights Kuala Lumpur. Telephone number : Facsimile number : Website : Manager s Delegate Name Registered Office and Business Address (Information Technology Services) : Manulife Technology and Services Sdn Bhd ( U) : 16 th Floor, Menara Manulife No. 6, Jalan Gelenggang Damansara Heights Kuala Lumpur. Telephone number : Facsimile number : Website :

13 CORPORATE DIRECTORY 7 Manager s Delegate Name Address (Investment Back-Office Services) : Manulife Data Services Inc. : Manulife Building, U.P. North Science & Technology Park Commonwealth Avenue, Quezon City, Metro Manila 1101, Philippines. Telephone number : (632) Facsimile number : (632) Website : Board of Directors Datuk Seri Panglima Mohd Annuar bin Zaini (Chairman and Independent Director) Dato Md Agil bin Mohd Natt (Independent Director) Chong Soon Min (Jason) (Managing Director/Chief Investment Officer/Non-Independent Executive Director) Michael Floyd Dommermuth (Non-Independent Director) Mark Steven O Dell (Non-Independent Director) Nykola Michael Czolak (Acting Chief Executive Officer/Non-Independent Executive Director) Investment Committee Dato Dr Zaha Rina binti Zahari (Chairman and Independent member) Dato Md Agil bin Mohd Natt (Independent member) Alex Wong Chi Kit (Non-Independent member)

14 CORPORATE DIRECTORY 8 Company Secretaries Name : Jasbender Kaur a/p Mehar Singh (LS ) Address : No. 11, Jalan 22/ Petaling Jaya, Selangor Darul Ehsan. Name : Ling Chui Shee (MAICSA ) Address : No. 56, Jalan Impian 4 Taman Impian Indah, Bukit Jalil, Kuala Lumpur. Trustee Name Registered Office and Business Address : HSBC (Malaysia) Trustee Berhad (1281-T) : 13 th Floor, Bangunan HSBC, South Tower No.2, Leboh Ampang, Kuala Lumpur. Telephone number : Facsimile number : Trustee s Delegate Name Address (Local custodian functions) : The Hongkong and Shanghai Banking Corporation Limited (as Custodian) and assets held through HSBC Nominees (Tempatan) Sdn Bhd ( D) : No.2, Leboh Ampang, Kuala Lumpur. Telephone number : Facsimile number : Trustee s Delegate Name Address (Foreign custodian functions) : HSBC Institutional Trust Services (Asia) Limited : 6 th Floor, Tower One, HSBC Centre 1, Sham Mong Road, Kowloon, Hong Kong. Telephone number : Facsimile number :

15 CORPORATE DIRECTORY 9 Auditor for the Fund Name Address : Ernst & Young : Level 23A, Menara Milenium, Jalan Damanlela Pusat Bandar Damansara, Kuala Lumpur. Telephone number : Facsimile number : Tax Adviser for the Fund Name Address : Deloitte Tax Services Sdn Bhd (36421-T) : Level 16, Menara LGB, 1, Jalan Wan Kadir Taman Tun Dr. Ismail, Kuala Lumpur. Telephone number : Facsimile number : / Solicitors Name Address : Raja, Darryl & Loh : 18 th Floor, Wisma Sime Darby, Jalan Raja Laut Kuala Lumpur. Telephone number : Facsimile number :

16 CORPORATE DIRECTORY 10 Principal Bankers Name Address : Malayan Banking Berhad (3813-K) : Ground Floor, Block C, Kompleks Pejabat Damansara Jalan Semantan, Damansara Heights, Kuala Lumpur. Telephone number : Name Address : Citibank Berhad ( M) : Menara Citibank, 165 Jalan Ampang Kuala Lumpur. Telephone number : Federation of Investment Managers Malaysia (FIMM) Address : , 6 th Floor, PNB Damansara 19, Lorong Dungun, Damansara Heights, Kuala Lumpur. Telephone number : Facsimile number : Website : info@fimm.com.my :

17 LOCATION OF AUTHORISED UNIT TRUST CONSULTANTS 11 Regional Support Centers Kuala Lumpur 12 th Floor, Menara Manulife No. 6, Jalan Gelenggang Damansara Heights Kuala Lumpur Telephone no : Fax no : Petaling Jaya Lot T101-T106, 3 rd Floor Centre Point No. 3, Leboh Bandar Utama Bandar Utama, Petaling Jaya, Selangor Telephone no : Fax no : Kota Bharu 1 st and 2 nd floor Lot 10900, Wisma Seri Setia Jalan Dusun Muda, Sek Kota Bharu Telephone no : Fax no : Juru No (First Floor) Kompleks Auto World Jalan Perusahaan Juru Interchange Perai Penang Telephone no : Fax no : Johor Bahru 2 nd Floor, Bangunan Ang No. 1, Jalan Jeram, Taman Tasek, Johor Bahru, Johor Telephone no : Fax no : Sungai Petani 1 st, 2 nd and 3 rd floor 185, Jalan Lagenda 1 Lagenda Heights Sungai Petani Telephone no : Fax no : Ipoh 9 th Floor, M&A Building No. 52A, Jalan Sultan Idris Shah, Ipoh, Perak Telephone no : Fax no : Melaka 524A, 524B, Jalan Merdeka Taman Melaka Raya Melaka Telephone no : Fax no : Kuching 1 st Floor, Lot Section 54, Kuching Town Land District, Jalan Petanak Kuching, Sarawak Telephone no : Fax no : Sibu 3 rd Floor, Grand Merdin No. 131, Kampung Nyabor Road, Sibu, Sarawak Telephone no : Fax no : Kota Kinabalu Unit 59, Block J, 5 th Floor, KK Times Square Signature, Office, Coastal Highway, Kota Kinabalu Sabah Telephone no : Fax no :

18 1 KEY DATA 12 THIS SECTION IS ONLY A SUMMARY OF THE SALIENT INFORMATION ABOUT THE FUND. YOU SHOULD READ AND UNDERSTAND THE WHOLE PROSPECTUS BEFORE MAKING ANY INVESTMENT DECISIONS. FUND INFORMATION Name of the Fund Manulife Investment Asia Target Maturity Bond Fund Series 2. Fund Category Fund Type Bond (close-ended). Income. Offer Period Forty five (45) days commencing from 17 October 2014 to 30 November The Offer Period may be shortened when the Manager determines that it is in the best interest of the Unit Holders to commence the Fund, subject to the Trustee s approval. The Manager will inform all Unit Holders if the Offer Period is shortened. Offer Price Commencement Date RM The date on which investments of the Fund may first be made and is the date which falls on the 7 th Business Day after the end of the Offer Period. The Manager reserves the right not to commence the Fund at any time before the Commencement Date if the amount of capital raised by the Fund is less than RM thirty million (30,000,000).You will be refunded your amount invested in the Fund including the Sales Charge paid with accrued interest (if any) less bank and administrative charges (if any). Maturity Date Investment Objective Investment Policy and Strategy The date which falls on the third (3 rd ) anniversary of the Commencement Date; if that date does not fall on a Business Day, it shall be the following Business Day. If the Fund is earlier terminated in accordance with the provisions of the Deed, the Maturity Date shall mean the date of such early termination. The Fund seeks to provide regular income* during the tenure of the Fund. *Note: Income distribution proceeds will be paid in Ringgit Malaysia by way of cheque, inter-bank GIRO payment or any other modes as agreed by the Trustee. Please refer to Section 5.11, Mode of Distribution for further details. The Fund aims to achieve its objective by investing a minimum of 70% of the Fund s NAV in local and/or foreign bonds which include sovereign bonds (including quasi-sovereign) and corporate bonds (listed and unlisted). The foreign countries include but are not limited to Australia, China, Hong Kong,

19 1 KEY DATA 13 FUND INFORMATION (cont d) India, New Zealand, Singapore, South Korea, Thailand and Indonesia. The Fund s exposure to non-asia countries such as Australia and New Zealand shall not be more than 20% of the Fund s NAV whilst the Manager will maintain a minimum of 70% of the Fund s NAV in Asia. The bonds are expected to provide regular income by way of coupon payments at intervals which are predetermined. The Manager may invest up to 40% of the Fund s NAV in bonds which are rated non-investment grade by RAM, MARC, S&P, Moody s, Fitch or its equivalent rating by other credit rating agencies while the remainder will be invested in bonds which are of investment grade. For the avoidance of doubt, a bond is deemed as an investment grade bond as long as it is rated investment grade by RAM, MARC, S&P, Moody s, Fitch or its equivalent rating by other credit rating agencies. Investments in non-investment grade bonds can potentially provide the Fund with higher yield but such investments will entail higher credit/default risk as compared to investment grade bonds. In general, the bond portfolio of the Fund will be managed with a buy and hold strategy as the Manager aims to lock in medium-term yields. Notwithstanding the above, the Manager may decide to trade or rebalance the portfolio for the following reasons: (a) For risk management purposes, in the event of the risk of a credit downgrade or risk of default on the bonds or adverse news on the bonds and/or issuer which can potentially lead to credit downgrade or default of the bonds; the Manager will review and may replace the particular bond that is affected. When such replacement is required, the Manager will ensure that the risk profile of the Fund s portfolio is not affected. (b) For liquidity purposes, in the event there are large redemptions made by Unit Holders and the Fund does not have sufficient liquid assets to meet those redemption requests, the Manager may have to sell the bonds held to honour the redemption requests. (c) To manage any other risks relating to the Fund to protect the interest of the Unit Holders. The Manager intends to invest in bonds which have maturities close to or at the Maturity Date of the Fund. The Fund is expected to obtain the full par value for bonds that mature prior to the Maturity Date of the Fund provided

20 1 KEY DATA 14 FUND INFORMATION (cont d) that there are no occurrences of default by the issuer of those bonds or a credit event. In the event of a default or credit event, the NAV and the ability of the Fund to pay income will be affected. Please refer to Section 3.2 for further information on the Investment Policy and Strategy of the Fund. Asset Allocation The asset allocation of the Fund is as follows: Minimum 70% of the Fund s NAV to be invested in local and/or foreign bonds; and Up to 30% of the Fund s NAV to be invested in money market instruments or liquid assets. Please note that the Manager may deviate from the above declared asset allocation during the tenure of the Fund as the Manager may invest proceeds from bonds that mature prior to the Maturity Date in money market instruments for capital preservation* purposes. *Please note that the Fund is neither a capital guaranteed nor a capital protected fund. Performance Benchmark 36-month Malayan Banking Berhad fixed deposit rate as at the Commencement Date of the Fund. Note: Please be aware that investing in the Fund is not the same as placements in a 36-month Malayan Banking Berhad fixed deposit. Hence, the risk profile of the Fund does not reflect that of the 36-month Malayan Banking Berhad fixed deposit. The Fund has a higher risk profile than the 36-month Malayan Banking Berhad fixed deposit. Unit Holders can check the 36-month fixed deposit rate at com on the following Business Day after the Commencement Date of the Fund. Alternatively, Unit Holders can, at all times, call our customer service centers during our business hours to obtain the said rate. Principal Risks Loss of opportunity risk; Interest rate risk; Credit/default risk; Country risk; Currency risk; Mismatch risk; Commitment risk;

21 1 KEY DATA 15 FUND INFORMATION (cont d) Derivatives risk; Concentration risk; and Counterparty risk. Investors Profile Financial Year End Distribution Policy The Fund is suitable for investors who: seek regular income distribution; have a 3-year investment horizon; and have a moderate risk tolerance. The period of twelve (12) months ending on the 30 th day of April of every calendar year except that the first financial year of the Fund shall commence on the Launch Date and end on the 30 th day of April 2015 and the last financial year of the Fund shall end on the Maturity Date of the Fund. Subject to the availability of income, the Fund will distribute income on a semi annual basis. Note: The Fund s income distributions are NOT guaranteed and subject to the continuing ability of the issuers of the Fund s bonds investments to meet their respective outstanding financial obligations. Investors are advised to evaluate their risk tolerance and investment time horizon before investing in the Fund. Mode of Distribution All distribution proceeds will be paid directly to Unit Holders in Ringgit Malaysia. Income distribution proceeds will be paid out by way of cheque, inter-bank GIRO payment or any other modes as agreed by the Trustee. Distribution proceeds will be paid within 14 days from the date income distribution is declared. There will be no option for Unit Holders to reinvest the declared income distribution in the form of additional Units for this Fund.

22 1 KEY DATA 16 FEES, CHARGES AND EXPENSES This table describes the fees and charges that you may directly incur when you purchase or redeem Units of the Fund: Sales Charge Manager Up to 3.00% of the Offer Price IUTA agents Up to 3.00% of the Offer Price Up to 3.00% of the Offer Price The Sales Charge is negotiable. Redemption Charge Manager 3.00% of the NAV per Unit IUTA 3.00% of the NAV per Unit agents 3.00% of the NAV per Unit if the request for redemption is done within the 1 st year of the Commencement Date Manager IUTA agents Manager IUTA agents 2.00% of the NAV per Unit 2.00% of the NAV per Unit 2.00% of the NAV per Unit 1.00% of the NAV per Unit 1.00% of the NAV per Unit 1.00% of the NAV per Unit if the request for redemption is done within the 2 nd year of the Commencement Date if the request for redemption is done within the 3 rd year of the Commencement Date The Redemption Charge is not negotiable. Please note that the Redemption Charge will be retained by the Fund. Transfer Fee Switching Fee Other Charges Not applicable. Not applicable. There are no other charges (except charges levied by banks on remittance of money) payable directly by Unit Holders when purchasing or redeeming Units of the Fund.

23 1 KEY DATA 17 FEES, CHARGES AND EXPENSES (cont d) This table describes the fees and expenses that you may indirectly incur when you invest in the Fund: Annual Management Fee Annual Trustee Fee The Manager does not intend to impose any management fee. 0.06% of the NAV of the Fund per annum, calculated and accrued on a daily basis (excluding foreign custodian fees and charges, if any). Other Expenses audit fees; commission or fees paid to brokers or dealers (if any); foreign custodian fees and charges; tax adviser s fee; taxes and other duties imposed by the government and/or other authorities; valuation fees incurred for the valuation of any investment of the Fund by independent valuers for the benefit of the Fund; independent investment committee members fee; cost for modification of Deed save where such modification is for the benefit of the Manager and/or the Trustee; cost of convening meetings for Unit Holders other than those convened for the benefit of the Manager and/or the Trustee; and any other expenses allowed under the Deed. TRANSACTION INFORMATION Minimum Initial Investment RM1,000 or such other lower amount as the Manager in its sole discretion allows. Please refer to 38 for more details on how Unit Holders may purchase Units of the Fund. Minimum Additional Investment (during the Offer Period) Cooling-off Policy RM1,000 or such other lower amount as the Manager in its sole discretion allows. 6 Business Days from the date of receipt of the application to purchase Units. A cooling-off right is only given to Unit Holders who are investing for the first time in any unit trust funds managed by the Manager. Corporations/institutions, staff of the Manager and persons registered to deal in unit trust funds are not entitled to a cooling-off right.

24 1 KEY DATA 18 TRANSACTION INFORMATION (cont d) Minimum Redemption 1,000 Units or such other lower amount as the Manager in its sole discretion allows. Please refer to 38 for more details on how Unit Holders may redeem Units of the Fund. Conditions for Redemptions Requests for redemption will only be accepted on every Friday before 3.00 p.m.; however, if the Friday is not a Business Day, Unit Holders may make a request for redemption on the following Business Day. Where the redemption request is received after the cut-off time of 3.00 p.m., the redemption request will be deemed to have been received on the following Friday. The Manager reserves the right to vary the terms and conditions of the mode of redemption from time to time, which will be communicated to Unit Holders in writing. Payment of Redemption Proceeds Minimum Holdings Transfer Facility Switching Facility Redemption proceeds will be paid within 10 days from the date the redemption request is deemed received* by the Manager. *Note: A redemption request is deemed received by the Manager on every Friday in accordance with the Conditions for Redemptions set out above. 1,000 Units or such other lower amount as the Manager in its sole discretion allows. Transfer facility is not available for the Fund. Switching facility is not available for the Fund. OTHER INFORMATION Deed Designated Fund Manager Avenue for Advice The Deed dated 6 th March 2014 entered into between the Manager and the Trustee in relation to the Fund. Tham Lai Ching (Elsie) If you have any queries or require further information, please contact our customer service at or us at my_utservice@manulife. com. Alternatively, you may contact our unit trust consultants at our regional support centers or our authorised distributors listed in the Corporate Directory section.

25 1 KEY DATA 19 INVESTORS SHOULD READ AND UNDERSTAND THE ENTIRE CONTENT OF THIS PROSPECTUS AND IF NECESSARY, CONSULT YOUR ADVISERS BEFORE MAKING ANY INVESTMENT DECISIONS. THERE ARE FEES AND CHARGES INVOLVED AND INVESTORS ARE ADVISED TO CONSIDER THEM BEFORE INVESTING IN THE FUND. UNIT PRICES AND DISTRIBUTIONS PAYABLE, IF ANY, 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 20.

26 2 RISK FACTORS GENERAL RISKS OF INVESTING IN THE FUND Prior to making an investment in the Fund, investors should be aware that there are risks associated with investments in the Fund. Below are some of the general risks which investors should be aware of when investing in the Fund: a) Market risk Market risk refers to potential losses that may arise from adverse changes in the market prices of the investments of the Fund. Prices of securities (be it stocks or fixed income securities) fluctuate in response to various factors, for example, events or news that relates to securities as well as general market or economic conditions. b) Management company risk The performance of the Fund depends on, amongst other things, the expertise of its management company. Any error in the investment techniques and processes adopted by the management company may have an adverse impact on the Fund s performance which in turn may affect the investments of Unit Holders through, including but not limited to, the loss of their capital invested in the Fund. c) Liquidity risk Liquidity risk refers to the ease of liquidating an investment at or close to its fair value. The Fund may be exposed to liquidity risk when it experiences large redemptions. If the Fund does not hold enough liquid assets to meet such redemptions, it may have to sell its holdings in securities at unfavourable prices to pay redemption proceeds to investors. This risk is mitigated by ensuring that the Fund at all times holds sufficient liquid assets. d) Inflation Risk Inflation risk refers to the risk of an investor s investment not keeping in pace with the inflation rate, thereby decreasing the investor s purchasing power even though the investment in monetary terms may have increased. e) Non-compliance risk Non-adherence with laws, rules, regulations, prescribed practices, internal policies and procedures may result in the performance or the management of the Fund being affected adversely. For example, human error or oversight may cause breaches in investment limits. In such instance, the management company may have to dispose of its investment prematurely which maybe at a loss in order to adhere with the investment parameters of the Fund. This risk may be mitigated by a management company having stringent internal controls and ensuring compliance monitoring processes are undertaken.

27 2 RISK FACTORS GENERAL RISKS OF INVESTING IN THE FUND (CONT D) f) Loan financing risk This risk occurs when investors take a loan to finance their investment. The inherent risks of investing with borrowed money includes investors being unable to service the loan repayments or the possibility of having to service a higher loan repayment that may be greater than the returns on investments in the Fund due to an increase in the interest rates on the loan. Further, in the event units are used as collateral, an investor may be required to either provide additional collateral or to pay an additional amount on top of the investor s existing installment if the prices of units fall below a certain level due to market conditions. If the investor fails to honor the additional collateral required within the prescribed time, the units may be sold at a lower net asset value per unit as compared to the net asset value per unit at the point of purchase, towards settling the loan. g) Reinvestment risk This refers to the risk that the proceeds from investment into bonds may have to be reinvested into another bond at lower rate of returns from the original investment. In situation of declining interest rate, the proceeds from coupon payments and principal repayments of the bond may have to be reinvested in another bond with lower rate of returns. Conversely, in a rising interest rate environment, there is also no guarantee that the proceeds can be reinvested into another bond at similar or higher rate of returns as compared to the original investment. 2.2 SPECIFIC RISKS RELATED TO THE FUND Below are some of the specific risks when investing in the Fund; these may include but are not limited to: a) Loss of opportunity risk This Fund has a defined investment universe. The Manager adopts a buy and hold strategy for this Fund, meaning that there will not be active trading on an ongoing basis. By and large, by taking a buy and hold strategy, the Manager may disregard any new issuance of bonds even though it may provide better returns than the bonds that the Fund is currently holding (whether as a result of, for instance, interest rate movements, rating or seniority). You are advised to judge the performance of the Fund solely on its objective and disregard comparison to funds that invest in other asset classes or funds that are performing based on different interest rate cycles.

28 2 RISK FACTORS SPECIFIC RISKS RELATED TO THE FUND (CONT D) b) Interest rate risk Interest rate risk arises from adverse fluctuations in bond prices due to interest rate movements. Generally, bond prices will decline when interest rate rises and vice versa. The sensitivity of bond prices movements to interest rates is dependent on factors such as the outstanding tenure of the bond, time to maturity and its coupon rate. Bonds with longer maturities and lower coupon rates are more sensitive to interest rate changes. However, such risk can be mitigated as the Fund will be managed with a buy and hold strategy. c) Credit / default risk Investments in bonds are subject to the risk of non-payment and/or untimely payment of the principal amount as well as the coupon payments when they fall due. An issuer suffering an adverse change in its financial condition could have the credit quality of a bond lowered, leading to price volatility of the bond. Investing in non-investment grade bonds may result in the Fund being more susceptible to greater price volatility and hence may have an adverse impact on the Fund s valuation. However, such risk can be mitigated through credit analysis and having regular updates on the business profile and the financial position of the bond issuer whereby the Manager will be able to monitor the creditworthiness of the bond issuer. Such monitoring is important to enable the Manager to take the necessary actions required to mitigate against credit/default risk. d) Country risk The Fund will have exposure to countries such as Australia, China, Hong Kong, India, New Zealand, Singapore, South Korea and Thailand. As such, the Fund will be exposed to the risks applicable to each of those countries. The Manager will give due consideration to the risk factors such as currency stability, political, regulatory, legal and economic environment before any investments are made in those countries. e) Currency risk This risk is associated with investments denominated in currencies different from the base currency of the Fund. Whilst the Fund is denominated in Malaysian Ringgit, investments denominated in foreign currencies will cause the Fund to be exposed to currency risks. When foreign currencies move unfavourably against Malaysian Ringgit, these investments may face currency loss when converted into Malaysian Ringgit, in addition to any capital gains or losses, which will affect the NAV of the Fund, and consequently the unit price of the Fund. Such movements in the foreign currency rates will also impact the amount of income that the Fund may be able to declare and distribute. The Manager will manage this risk by hedging the foreign currency exposure.

29 2 RISK FACTORS SPECIFIC RISKS RELATED TO THE FUND (CONT D) f) Mismatch risk This risk arises when the maturity date of the bond exceeds the Maturity Date of the Fund. A mismatch of maturities may potentially result in a loss to the Fund. For example, assuming that the Maturity Date of the Fund is on 30 June 2017 (3 years from Commencement Date, i.e. 30 June 2014) and the Fund is holding a bond that only matures in year On the Maturity Date, the Fund will need to sell that bond (to liquidate all investments) at the prevailing market price (as at 30 June 2017) which may be lower than the par value of the bond had the bond been held until Therefore, the Manager seeks to mitigate such risk by investing in bonds which match the Maturity Date of the Fund. g) Commitment risk Unit Holders should be prepared to commit their investments in the Fund up to the Maturity Date. The investment strategy adopted by the Fund is aimed at providing returns exceeding the benchmark for Unit Holders who stay invested throughout the tenure of the Fund. Unit Holders must be aware that if they redeem their Units prior to the Maturity Date, the redemption request will be calculated based on the NAV per Unit as at the next valuation point after the redemption request is received and the amount redeemed may be lower than the initial capital outlay of the Unit Holder. Unit Holders should also be aware that they will incur a Redemption Charge if they redeem their investment prior to the Maturity Date of the Fund which may further reduce the amount the Unit Holders will receive. Please note that although the investment strategy adopted by the Fund is aimed at providing returns exceeding the benchmark for Unit Holders who stay invested up to the Maturity Date, such returns are by no means guaranteed and are dependent on the performance of the underlying investments of the Fund. h) Derivatives risk Depending on the prevailing market circumstances at a particular point in time, the Manager may choose to use financial derivatives to hedge against currency movements. While the use of derivatives can be beneficial, it also involves special risks, including but not limited to: - the risk of derivative transactions having the effect of increasing the volatility of the Fund s NAV; and - the risk of loss in the value of derivatives when the counterparty defaults typically as a consequence of insolvency or failed settlement. To mitigate these risks, all investment in derivatives will be closely monitored.

30 2 RISK FACTORS SPECIFIC RISKS RELATED TO THE FUND (CONT D) i) Concentration risk Concentration risk occurs when a portfolio is overweight on a particular sector. In a scenario where the Fund s investment is concentrated within a particular sector, it may be subjected to greater price volatility and may be adversely affected by the performance of that particular sector. The risk may be mitigated through diversification (i.e. invest in more than one sector) employed by the Manager in managing the Fund. j) Counterparty risk The Fund s placements of fixed deposits with financial institutions and money market instruments with issuers are subject to the risk of the counterparty. Counterparty risk refers to the possibility that the counterparty not being able to make timely payments of interest and/or principal repayment as and when the payment is due. This may lead to a default in the payment of principal and/or interest and ultimately a reduction in the value of the Fund. 2.3 RISK MANAGEMENT STRATEGIES Risk management is an integral part of the Manager s process. In ensuring compliance with the Guidelines, and the investment restrictions and limits of the Fund, the Manager has in place clearly defined policies and procedures that have been approved by the board of directors and also a system for the monitoring of the transactions. In addition, the Manager conducts regular review on the economic, political and social factors to evaluate the effects of those factors on the securities held. Regular meetings are also held to deliberate on these factors, investment themes and portfolio decisions. As the Fund invests primarily in bonds, the issue of credit/default risk is an important consideration for the Manager. Credit selection, i.e., the selection of bonds for this Fund is paramount to ensure that the Fund does not suffer a reduction in value as a result of defaults of such bonds. The Manager will select bonds that, as far as possible, match the Maturity Date of the Fund in order to mitigate the mismatch risk. A mismatch of maturities may potentially result in a loss to the Fund. The Manager may employ hedging to mitigate the currency risk. Interest rate risk is mitigated by the Manager employing a buy and hold investment strategy. IT IS IMPORTANT TO NOTE THAT THE ABOVE LIST OF RISKS MAY NOT BE EXHAUSTIVE. WHILE EVERY CARE WILL BE TAKEN BY THE MANAGER TO MITIGATE SUCH RISKS, INVESTORS ARE ADVISED THAT IT IS NOT ALWAYS POSSIBLE TO PROTECT INVESTMENTS AGAINST ALL RISKS.

31 3 DETAILED INFORMATION ON THE FUND INVESTMENT OBJECTIVE The Fund seeks to provide regular income* during the tenure of the Fund. *Note: Income distribution proceeds will be paid in Ringgit Malaysia by way of cheque, inter-bank GIRO payment or any other modes as agreed by the Trustee. Please refer to Section 5.11, Mode of Distribution for further details. Any material change to the Fund s investment objective would require the Unit Holders approval. 3.2 INVESTMENT POLICY AND STRATEGY The Fund aims to achieve its objective by investing a minimum of 70% of the Fund s NAV in local and/or foreign bonds which include sovereign bonds (including quasi-sovereign) and corporate bonds (listed and unlisted). The foreign countries include but are not limited to Australia, China, Hong Kong, India, New Zealand, Singapore, South Korea, Thailand and Indonesia. The Fund s exposure to non-asia countries such as Australia and New Zealand shall not be more than 20% of the Fund s NAV whilst the Manager will maintain a minimum of 70% of the Fund s NAV in Asia. The bonds are expected to provide regular income by way of coupon payments at intervals which are predetermined. The Manager may invest up to 40% of the Fund s NAV in bonds which are rated non-investment grade by RAM, MARC, S&P, Moody s, Fitch or its equivalent rating by other credit rating agencies while the remainder will be invested in bonds which are of investment grade. For the avoidance of doubt, a bond is deemed as an investment grade bond as long as it is rated investment grade by RAM, MARC, S&P, Moody s, Fitch or its equivalent rating by other credit rating agencies. Investments in non-investment grade bonds can potentially provide the Fund with higher yield but such investments will entail higher credit/default risk as compared to investment grade bonds. In general, the bond portfolio of the Fund will be managed with a buy and hold strategy as the Manager aims to lock in medium-term yields. Notwithstanding the above, the Manager may decide to trade or rebalance the portfolio for the following reasons: (a) For risk management purposes, in the event of the risk of a credit downgrade or risk of default on the bonds or adverse news on the bonds and/or issuer which can potentially lead to credit downgrade or default of the bonds; the Manager will review and may replace the particular bond that is affected. When such replacement is required, the Manager will ensure that the risk profile of the Fund s portfolio is not affected. (b) For liquidity purposes, in the event there are large redemptions made by Unit Holders and the Fund does not have sufficient liquid assets to meet those redemption requests, the Manager may have to sell the bonds held to honour the redemption requests.