RHB ABSOLUTE RETURN FUND

Transcription

1 Issuance Date: 15 November 2016 RHB ABSOLUTE RETURN FUND RESPONSIBILITY STATEMENT This Product Highlights Sheet has been reviewed and approved by the directors of RHB Asset Management Sdn Bhd and they have collectively and individually accepted full responsibility for the accuracy of the information. Having made all reasonable enquiries, they confirm to the best of their knowledge and belief, that there are no false or misleading statements or omission of other facts which would make any statement in the Product Highlights Sheet false or misleading. STATEMENT OF DISCLAIMER The relevant information and document in relation to RHB Absolute Return Fund, including a copy of this Product Highlights Sheet has been lodged with the Securities Commission Malaysia under the Lodge and Launch Framework. The lodgement of the relevant information and document in relation to the RHB Absolute Return Fund, including this Product Highlights Sheet, should not be taken to indicate that the Securities Commission Malaysia recommends the RHB Absolute Return Fund or assumes responsibility for the correctness of any statement made or opinion or report expressed in this Product Highlights Sheet. The Securities Commission Malaysia is not liable for any non-disclosure on the part of RHB Asset Management Sdn Bhd responsible for the RHB Absolute Return Fund and takes no responsibility for the contents of this Product Highlights Sheet. The Securities Commission Malaysia makes no representation on the accuracy or completeness of this Product Highlights Sheet, and expressly disclaims any liability whatsoever arising from, or in reliance upon, the whole or any part of its contents.

2 This Product Highlights Sheet only highlights the key features and risks of RHB Absolute Return Fund. Investors are advised to request, read and understand the Disclosure Documents before deciding to invest. PRODUCT HIGHLIGHTS SHEET RHB ABSOLUTE RETURN FUND Name of Fund Manager Trustee Fund Category RHB Absolute Return Fund ( Fund ). RHB Asset Management Sdn Bhd. HSBC (Malaysia) Trustee Berhad. Mixed asset fund. Launch Date 16 May PRODUCT SUITABILITY Subscription of Units of the Fund is ONLY open to the following sophisticated investors: 1. An individual whose total net personal assets, or total net joint assets with his or her spouse, exceed RM3 million or its equivalent in foreign currencies, excluding the value of the individual s primary residence; or 2. An individual who has a gross annual income exceeding RM300,000 or its equivalent in foreign currencies per annum in the preceding twelve months; or 3. An individual who, jointly with his or her spouse, has a gross annual income exceeding RM400,000 or its equivalent in foreign currencies per annum in the preceding twelve months; or 4. A corporation with total net assets exceeding RM10 million or its equivalent in foreign currencies based on the last audited accounts; or 5. A partnership with total net assets exceeding RM10 million or its equivalent in foreign currencies; or 6. A unit trust scheme or prescribed investment scheme; or 7. A private retirement scheme; or 8. A closed-ended fund approved by the Securities Commission Malaysia; or 9. A company that is registered as a trust company under the Trust Companies Act 1949 which has assets under management exceeding RM10 million or its equivalent in foreign currencies; or 10. A corporation that is a public company under the Companies Act 1965 which is approved by the Securities Commission Malaysia to be a trustee under the Capital Markets and Services Act 2007 and has assets under management exceeding RM10 million or its equivalent in foreign currencies; or 11. A statutory body established by an Act of Parliament or an enactment of any State; or 12. A pension fund approved by the Director General of Inland Revenue under section 150 of the Income Tax Act 1967; or 13. A holder of a capital markets services Licence or an executive director or chief executive officer of a holder of a capital markets services licence; or 14. A licensed institution as defined in the Financial Services Act 2013; or 15. An Islamic bank as defined in the Financial Services Act 2013; or 16. An insurance company registered under the Financial Services Act 2013; or 17. A takaful operator registered under the Islamic Financial Services Act 2013; or 18. A bank licensee or insurance licensee as defined under the Labuan Financial Services and Securities Act 2010; or 19. An Islamic bank licensee or takaful licensee as defined under the Labuan Islamic Financial Services and Securities Act 2010; or 20. Any other investor as may be defined by the Securities Commission Malaysia from time to time. KEY PRODUCT FEATURES INVESTMENT OBJECTIVE The Fund aims to achieve medium to long term* capital appreciation through investments in equity and equity related securities of companies, and exchange traded funds with the potential to deliver total return in excess of the Fund s benchmark^ return. *Note: medium to long term in this context refers to a period of between 3-7 years. ^The Fund s benchmark is a target return of 8.00% growth per annum. RHB Absolute Return Fund 2

3 INVESTMENT STRATEGY The Fund seeks to achieve its capital appreciation objective primarily through investments in equity and equity related securities of companies listed in Asia Pacific excluding Japan stock exchanges, capitalising on the economic growth potential of the region. These are equity and equity related securities of companies listed in stock exchanges in the Asia Pacific region excluding Japan such as Malaysia, Australia, China, Hong Kong, India, Indonesia, New Zealand, Philippines, Singapore, South Korea, Sri Lanka, Taiwan and Thailand. The Fund will invest in securities of companies with strong potential to deliver total returns above the benchmark return of 8% growth per annum #. The Manager views the Asia Pacific region as a vibrant economic growth region supported by factors such as favourable demographics, improving per capita incomes, positive foreign direct investment ( FDI ) flows, and vast natural resources. The Manager will evaluate investment opportunities in different countries based on the respective stage of economic cycle in that country, with a preference for countries with growth opportunities. Industry or sector preference within a country will also be determined by intra-country and inter-country comparisons including analysis and understanding of, amongst others, comparative advantages, market structure, and government policies. The Manager s strategy is to identify such investment opportunities in its early phase and select companies with strong fundamentals and attractive valuations to capitalise on its growth. Undervalued securities are uncovered through intensive and independent fundamental research. The Fund may also invest in exchange traded funds ( ETFs ) listed in Asia Pacific excluding Japan stock exchanges, which may consist of underlying assets including equity, equity related securities, and commodities. The Manager may use ETFs to access investment opportunities otherwise not directly available through investment in equity securities of companies. For investments in ETFs which consist of underlying assets in the form of commodities (e.g. the SPDR Gold Trust), whilst the ETF may be backed by and hold physical commodities, there is no intention by the Fund to make any in-kind redemptions of the ETF which require taking delivery of the physical commodity. The Fund can have a variable exposure to the above mentioned asset classes of up to 98% of the Fund s net asset value to generate returns to the Fund. Asset allocation decisions of the Fund are determined by, amongst others, global macroeconomic factors, both absolute and relative valuation of Asia Pacific excluding Japan markets, and availability of growth companies at attractive valuations. Notwithstanding the above equity and equity related securities of companies and ETFs exposure of up to 98% of the Fund s net asset value, the Manager may at any time lower such exposure of the Fund in favour of more defensive capital preservation type of investments such as deposits, money market instruments and fixed income securities as a capital preservation strategy in attempting to deliver medium to long term returns above the benchmark return of 8% growth per annum #. Accordingly, the Fund s exposure to deposits, money market instruments, and fixed income securities may increase up to 100% of the Fund s net asset value. This capital preservation strategy may be employed by the Manager for any length of time deemed appropriate by the Manager. # Note: The Fund may not achieve the targeted rate of return of 8% growth per annum in any particular financial year but targets to achieve this growth over the medium to long term. The Fund s portfolio will be structured as follows: ASSET ALLOCATION Up to 98% of Net Asset Value - Investments in equity, equity related securities of companies, and ETFs listed in Asia Pacific excluding Japan stock exchanges. 2% to 100% of Net Asset Value - Investments in deposits with financial institutions, money market instruments, and fixed income securities. BENCHMARK 8.00% growth per annum in net asset value of a Unit over the medium to long term. An absolute return benchmark is chosen as there is no suitable benchmark which can fairly reflect the Fund s investment strategy, and the target rate of 8.00% growth per annum in the medium and long term is deemed a fair and reasonable rate by the Manager. This is not a guaranteed return and is only a measurement of the Fund s performance. The Fund may not achieve the targeted rate of return of 8% growth per annum in any particular financial year but targets to achieve this growth over the medium to long term. Distribution Policy Distribution Mode DISTRIBUTION Distribution is of secondary importance. However, distributions (if any) will depend on the level of income generated at each relevant year/period. Distribution, if any, after deduction of taxation and expenses (i.e. net distribution), will generally be declared annually and will be reinvested to purchase additional Units of the Fund based on the net asset value per Unit as at the first Business Day when Units in the Fund are quoted ex-entitlement. Allotment of such Units shall be within two (2) weeks thereafter. RHB Absolute Return Fund 3

4 KEY RISKS Currency Risk Country Risk Market Risk Particular Security Risk Credit/Default Risk Inflation/Purchasing Power Risk Interest Rate Risk Derivatives Risk Liquidity Risk Single Issuer / Concentration Risk Where a percentage of the value of the Fund is invested in foreign currency or assets denominated in a foreign currency, the Fund will then be exposed to currency risk. Fluctuation in foreign exchange rates will affect the value of the Fund s foreign investments when converted into local currency and subsequently the value of the Fund s Unit Holders investments. This risk can be mitigated by investing in a wide range of foreign currency denominated asset thus diversifying the risk of single currency exposure. Hedging may be applied to mitigate the currency risk, if necessary. In addition to currency risk, the value of the assets of the Fund may also be affected by uncertainties such as currency repatriation restrictions or other developments in the law or regulations of the countries in which the Fund may invest. Further, when investing in foreign markets, there are countries which may require prior approvals before investments can take place. For example, if and when the Fund invests in countries such as China, Taiwan, South Korea and India, such countries require the prior application / registration of an investment licence / investor code before any investment can be made in these countries. As such, if investments in such countries are undertaken, there may be a risk that such registration or licence may be revoked or not renewed by the relevant authority and the Fund s investment in these countries may be affected. The effect on the Fund s investments will depend on the regulatory requirements of the respective countries. For example, if a foreign market requires the Fund to obtain an investment licence which is subject to renewal and if such investment licence is not renewed in a timely manner, this may result in the Fund s investment account in that country being frozen by the regulator resulting in investment activities for the Fund in that country being suspended. To mitigate this, the Manager will monitor closely the adherence of investment regulatory requirements in such countries. Market risk is a risk that arises when the prices of investments in the marketplace are affected by situational circumstances such as political or economic events. These situational circumstances, which may be a local or global event can affect a local market or global markets where the Fund is invested in and subsequently the value of the Fund s investments. The Fund s portfolio comprises of equity and fixed income securities. The fluctuation in the performance of each individual security that the Fund invests in will affect the price of the Units of the Fund. Not all companies issuing the securities (equity and fixed income securities) are successful. The success or failure of the companies will cause its securities value to rise or fall. Valued collectively, the performance of individual securities comprising the Fund s portfolio will cause the Unit price of the Fund to rise or fall accordingly. This refers to the creditworthiness of the fixed income / debt securities issuer and the financial institutions where placements of deposits are made, and its expected ability to make timely payment of interest and principal. Default happens when the fixed income / debt securities issuer or the financial institutions where the placements of deposits are made are not able to make timely payments of coupons / interest on the coupon / interest payment date and / or principal payment on the maturity date. Inflation can be defined as increases of price level of goods and services and is commonly reported using the Consumer Price Index as a measure. Inflation is one of the major risks to investors over the long term and results in uncertainty over the future value of the investments. Inflation reduces purchasing power of money. In an inflationary environment, fixed income securities are exposed to higher inflation risks than equities. Fixed income instruments are more directly affected by inflation than equities due to its fixed returns nature as compared to equity returns where its returns are variable. The interest rate is a general economic indicator that will have an impact on the management of the Fund. This risk refers to the effect of interest rate changes on the market value of a fixed income portfolio. In the event of rising interest rates, prices of fixed income / debt securities will decrease and vice versa. Further, fixed income / debt securities with longer maturities and lower coupon rates are more sensitive to interest rate changes. This risk will be mitigated via the management of the duration structure of the fixed income portfolio. The Manager may use derivatives for efficient portfolio management, for investment purposes and/or to hedge the portfolio from any unexpected price movement in the underlying market and also the portfolio s exposure to foreign currency as well as to hedge against any opportunity loss arising from its uninvested cash. While the prudent and judicious use of derivatives can be beneficial, derivatives involve risks different from, and in some cases, greater than, the risks presented by more traditional securities investments. Some of the risks associated with derivatives are market risk, management risk, derivative s issuer risk, liquidity risk and leverage risk. Investments in over-the-counter (OTC) instruments may be illiquid and are sometimes subject to larger spreads than exchange-traded derivative instruments. Participants in such OTC markets are typically subject to less regulatory oversight than members of exchange-based markets. In managing a derivative s issuer risk, the Manager will purchase derivatives from a counterparty which is either a bank or financial institution with the issuer credit rating of at least A by Standard and Poor s or the equivalent rating by any other reputable domestic or global rating agency. Thereafter, the Manager will constantly monitor the credit rating of the said issuer. If the rating of the issuer falls below the aforesaid minimum requirements, or if the issuer ceases to be rated, then within six months or sooner, the Manager will dispose of the derivative. Investments in derivatives may require the deposit of initial margin and additional deposit of margin on short notice if the market moves against the investment positions. If no provision is made for the required margin within the prescribed time, the Fund's investments may be liquidated at a loss. Therefore, the Manager will closely monitor the Fund s investments in derivatives. This refers to the ease with which a security can be sold at or near its fair value depending on the volume traded on the market. Should a security become illiquid, it may be sold at a discount to its fair value, thus lowering the value of the Fund s investments and consequently Unit Holders investments. Concentration risk refers to the number / weight of underlying investments with an issuer or financial institutions which the Fund invests in / places deposit with. As the Fund may invest up to 20% of its net asset value in deposits with any single financial institution and/or invest in RHB Absolute Return Fund 4

5 Returns are not Guaranteed Subscription Fee 1 / Sales Charge 1 Redemption Charge Switching Fee 1 Transfer Fee 1 Annual Management Fee 1 Trustee Fee 1 fixed income securities and/or money market instruments from a single issuer, it is therefore exposed to concentration risk. This is because should any of the financial institutions / issuers default on their obligations, it would have a significant impact to the Fund. Although the Fund has a targeted rate of return of 8% growth per annum #, there is no guarantee of returns to Unit Holders of the Fund. Unlike fixed deposits which carry a specific rate of return, the Fund does not provide a specific rate of return per annum but only a target rate of return of 8% growth per annum #. # Note: The Fund may not achieve the targeted rate of return of 8% growth per annum in any particular financial year but targets to achieve this growth over the medium to long term. FEES & CHARGES Up to 2.00% of the investment amount. None. A switching fee of RM25.00 will be imposed and deducted from the redemption amount of the Units to be switched for a switch between funds that impose a similar sales charge or a switch to a fund that impose a lower sales charge. Unit Holders of the Fund switching to a fund that imposes a higher sales charge will pay the difference in sales charge which is deductible from the redemption amount of the Units to be switched. RM5.00 per transfer. 1.80% per annum of the net asset value of the Fund calculated on a daily basis before deducting the Manager s fee and Trustee s fee for that particular day. 0.06% per annum of the net asset value of the Fund calculated on a daily basis before deducting the Manager s fee and Trustee s fee for that particular day. Expenses directly related to the Fund Auditors fee, custodial charges, other relevant professional fees, cost of distribution of quarterly / annual reports, tax certificates, reinvestment statements and other notices to the Fund s Unit Holders and taxes. Other expenses indirectly paid by an investor Nil. 1 The implementation of GST is effective from 1 April 2015 at the rate of 6% and the fees and charges payable are exclusive of GST. YOU SHOULD NOT MAKE PAYMENT IN CASH TO A UNIT TRUST CONSULTANT OR ISSUE A CHEQUE IN THE NAME OF A UNIT TRUST CONSULTANT. VALUATIONS AND EXITING FROM THIS INVESTMENT VALUATION OF ASSETS The assets of the Fund will be valued at least once every Business Day. As the Fund may invest up to 98% of its net asset value in securities of foreign markets, certain foreign markets in which the Fund may invest in have different time zones from that of Malaysia. Accordingly, the valuation of the Fund for a Business Day will be conducted before 5.00 p.m. on the following day in which the Manager is open for business, when the closing prices of the securities in foreign markets for that Business Day would be available. As such, the daily price of the Fund for a particular Business Day on the Valuation Day will not be published in the media on the next day but will instead be published the next following day (i.e. price will be two (2) days old). This will be specifically indicated in the media. Investors may also obtain the most current computed price by contacting the Manager directly or visiting our website, EXITING FROM THIS INVESTMENT Units of the Fund can be redeemed on any Business Day. Application for redemption of Units of the Fund can be submitted to the Manager s office during its business hours, before the cut-off time for the acceptance of such request. Any request received by the Manager after the cut-off time of 4 p.m. on a Business Day will be considered as transactions for the next Business Day. There is no redemption charge.the minimum redemption Units of the Fund is 10,000 Units or such other amount as the Manager may from time to time decide and for any partial redemption, the balance of Units of the Fund after the redemption must be at least 10,000 Units (the minimum holding at all times ). The Manager will pay redemption monies to the Unit Holders within ten (10) days after receipt by the Manager of the request to repurchase. RHB Absolute Return Fund 5

6 HOW CAN YOU CONTACT US? CONTACT INFORMATION To contact the Manager or to find out about the distribution channels of the Fund, you may call Unit Holders Services Toll-Free Hotline: at any time during office hours: Mondays through Fridays from 9.00 a.m p.m. or your enquiries to or visit our website, HOW DO YOU LODGE A COMPLAINT? 1. For internal dispute resolution, you may contact: (d) via phone to via Unit Holders Services Toll-Free Hotline at via to : : : : rhbam@rhbgroup.com (e) via website at : (f) via letter to : RHB Asset Management Sdn Bhd Level 8, Tower 2 & 3, RHB Centre Jalan Tun Razak Kuala Lumpur 2. If you are dissatisfied with the outcome of the internal dispute resolution process, please refer your dispute to the Securities Industry Dispute Resolution Center (SIDREC): (d) via phone to via to via letter to : : : info@sidrec.com.my : Securities Industry Dispute Resolution Center (SIDREC) Unit A-9-1, Level 9, Tower A Menara UOA Bangsar No. 5, Jalan Bangsar Utama Kuala Lumpur 3. You can also direct your complaint to the Securities Commission Malaysia ( SC ) even if you have initiated a dispute resolution process with SIDREC. To make a complaint, please contact the SC s Investor Affairs & Complaints Department: via phone to the Aduan Hotline at via to : : : aduan@seccom.com.my (d) via online complaint form available at : (e) via letter to : Investor Affairs & Complaints Department Securities Commission Malaysia No 3 Persiaran Bukit Kiara Bukit Kiara Kuala Lumpur 4. Federation of Investment Managers Malaysia (FIMM) s Complaints Bureau: via phone to via to : : : complaints@fimm.com.my (d) via online complaint form available at : (e) via letter to : Legal, Secretarial & Regulatory Affairs Business Day Disclosure Documents Fund Federation of Investment Managers Malaysia , 6 th Floor Wisma Tune No. 19 Lorong Dungun Damansara Heights Kuala Lumpur GLOSSARY A day (other than Saturdays, Sundays and public holidays) on which Bursa Malaysia is open for trading, and the markets in which investments of the Fund amounting to at least 50% of the Fund s net asset value (in aggregate values) are also open for trading. The Fund s prevailing information memorandum and its supplementary(ies) (if any). RHB Absolute Return Fund. RHB Absolute Return Fund 62

7 GST Unit Unit Holder(s) Goods and Services Tax. A unit of the Fund and includes fractions of a unit of the Fund. The person(s) for the time being registered under the provisions of the Deed as the holder of Units and person(s) jointly registered. RHB Absolute Return Fund 73