PRODUCT HIGHLIGHTS SHEET PACIFIC DYNAMIC GLOBAL ISLAMIC FUND

Transcription

1 PRODUCT HIGHLIGHTS SHEET PACIFIC DYNAMIC GLOBAL ISLAMIC FUND RESPONSIBILITY STATEMENT This Product Highlights Sheet has been reviewed and approved by the directors or persons approved by the Board of Directors of Pacific Mutual Fund Bhd 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 the Product Highlights Sheet false or misleading. STATEMENT OF DISCLAIMER The Securities Commission Malaysia has authorised the issuance of Pacific Dynamic Global Islamic Fund and a copy of this Product Highlights Sheet has been lodged with the Securities Commission Malaysia. The authorisation of the Pacific Dynamic Global Islamic Fund and lodgement of this Product Highlights Sheet, should not be taken to indicate that the Securities Commission Malaysia recommends the Pacific Dynamic Global Islamic Fund or assumes responsibility for the correctness of any statement made, opinion expressed or report contained in this Product Highlights Sheet. The Securities Commission Malaysia is not liable for any non-disclosure on the part of Pacific Mutual Fund Bhd, which is responsible for the Pacific Dynamic Global Islamic 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. PRODUCT HIGHLIGHTS SHEET This Product Highlights Sheet only highlights the key features and risks of this unlisted capital market product. Investors are advised to request, read and understand the disclosure documents before deciding to invest. 1. What Is This Product About? BRIEF INFORMATION ON THE PRODUCT Product Type Manager Trustee Unlisted unit trust fund (open-ended) Pacific Mutual Fund Bhd ( U) CIMB Islamic Trustee Berhad ( M) 2. Who Is This Product Suitable For? PRODUCT SUITABILITY An investor who is seeking to invest in an actively managed Shariah-compliant portfolio; seeking access to global markets; seeking capital growth and income ; and who has a medium to long-term investment horizon. Income is in reference to the Fund s distribution, which could be in the form of cash or unit. Unit prices and distributions payable, if any, may go down as well as up. The investor may not get back the full amount invested and the principal amount invested may be at risk. PHS PDGIF 0317 l Page 1 of 11

2 KEY PRODUCT FEATURES 3. (a) What Am I Investing In? Fund Category Fund Type Distribution Financial Year End Mixed assets (Islamic) Growth and income Subject to the availability of income, distribution of income will be made once a year. 30 June Issuance Date 28 March 2017 Issuance Price RM INVESTMENT OBJECTIVE The Fund aims to provide capital growth and income in the medium to long term by investing in a global portfolio of Shariah-compliant equities, sukuk and Islamic money market instruments. Income is in reference to the Fund s distribution, which could be in the form of cash or unit. INVESTMENT POLICY AND STRATEGY In achieving the Fund s investment objective, the Manager invests the Fund s assets in the following investments that are available locally and overseas: A. Equity asset class: Shariah-compliant equities and equity-related securities. For this Fund, equity-related securities comprise only warrants and rights that are issued in relation to equities in which the Fund has invested; Shariah-compliant collective investment schemes (CIS) whose underlying investments are equities and equity-related securities; Shariah-compliant exchange traded funds (ETF) that track an equity index; B. Fixed income asset class: Sukuk and Islamic money market instruments; Shariah-compliant CIS whose underlying investments are sukuk and/or Islamic money market instruments; and Islamic deposits. Dynamic Asset Allocation Depending on expectations for economic and financial market conditions, there may be significant shifts into and out of asset categories via a dynamic asset allocation strategy and, active risk control measures for the Fund. The dynamic asset allocation means there are no restrictions to the Fund s percentage holdings in an asset category. The Fund may hold from 0% to 100% in Shariah-compliant equity asset class and 0% to 100% in Shariah-compliant fixed income asset class. The dynamic asset allocation is to enable the Fund to: Seek Shariah-compliant equity assets that generate capital and income returns during rising equity markets; and Mitigate risk by increasing allocation to Shariah-compliant fixed income assets which generate income and offer capital safety during declines in values of Shariah-compliant equity assets. An internal allocation of cash and cash equivalent will be maintained to ensure that the Fund is able to meet redemption requests without jeopardising the Fund s performance. Capital safety is in reference to fixed income assets that include Islamic deposits which do not fluctuate in value and in short-term Islamic money market instruments. The Fund is not a capital guaranteed and capital protected fund. Investment Strategy For Equity Assets (Shariah-Compliant Equities, Equity-Related Securities, CIS And ETF) The Fund will invest in Shariah-compliant equities and ETF listed on the Malaysian stock exchange and in overseas stock exchanges. The Fund may also invest in Shariah-compliant CIS which meet the Fund s objective. The overseas stock exchanges in which the Fund may invest are in Australia, Belgium, Brazil, Canada, Chile, Denmark, France, Germany, Hong Kong S.A.R, Indonesia, Italy, Japan, Luxembourg, Netherlands, New Zealand, Norway, Philippines, Singapore, South Africa, South Korea, Spain, Sweden, Switzerland, Taiwan, Thailand, UK and US. The Fund may also invest in listed and unlisted securities of other foreign markets not listed above, where the regulatory authority is an ordinary or associate member of the IOSCO. PHS PDGIF 0317 l Page 2 of 11

3 1. Investment process The Manager is guided by the following principles in managing this segment of the Fund: Extensive top-down analysis local and global macroeconomic, social political issues and sector/industry analysis is undertaken to determine their potential impact on equities. From these analyses, the broad equity allocation is determined followed by allocation to sectors. Extensive bottom-up analysis to enable the Manager to identify individual investments suitable for inclusion in the Fund. Please refer to item 2 below (security selection) for the criteria used in this analysis. Valuations analyse prices of investments to ensure the Fund does not overpay for what the investments are determined to be worth. Volatility (i.e. rate at which an equity security moves up or down) of returns. 2. Security selection From the large number of Shariah-compliant equities, ETF and CIS available locally and overseas, the Manager conducts detailed research and applies various filters to identify those investments that are suitable for inclusion as the Fund s holdings. These filters are: Financial strength: Companies should produce cash flows that enable funding of their business operations. Companies must also have strong balance sheets, i.e. hold cash reserves that exceed borrowings or are in a borrowing position where the borrowings can be serviced. This financial strength will enable the companies to withstand any business downturn. Sustainable competitive advantage: Factors such as having very experienced staff, access to natural resources, possessing strong brands or having patents which enable a company to generate returns for the medium to long term. Management team that is experienced and of high calibre: Such a team would have a medium to long-term track record of growing a business and are expected to continue with the track record. Good corporate governance: Companies that have independent directors and protect the rights of minority shareholders (minority shareholders are those who do not have control of how a company is managed). For ETF, there is the consideration of how well an ETF s performance mirror the index performance that it attempts to replicate. Fees charged by the ETF are also taken into consideration. For CIS, analysis is made of the performance track record of a CIS, the credentials of the manager of the CIS and its investment team and fees charged. 3. Portfolio construction The portfolio construction process involves combining the following: From the top-down and bottom-up analyses described above, the list of potential investments is narrowed to one that fits the investment objective of the Fund. Analysis of valuations of investments is then applied to the list to further reduce it to a selection of investments that will be included in the Fund. The valuation analysis includes financial tools such as price-to-earnings ratio*, price-to-book ratio**, historic and expected dividend payments to determine value. * Price-to-earnings ratio: Ratio of the market price of an equity investment compared to its earnings. ** Price-to-book ratio: Ratio of the market price of an equity investment compared to its book value (book value is the tangible assets of a company less all liabilities). Investment Strategy For Fixed Income Assets (Sukuk, Shariah-Compliant CIS, Islamic Money Market Instruments And Islamic Deposits) The Fund will invest in Malaysian Shariah-compliant fixed income investments that are available either by direct market purchases or indirectly via CIS. Any exposure to Shariah-compliant foreign fixed income investments will be made via Shariah-compliant CIS. 1. Investment process The Manager is guided by the following principles in managing this segment of the Fund: Extensive top-down analysis Analysis is made of local and global macroeconomic conditions, interest/profit rates expectations, currency and sector analysis to determine their impact on values of fixed income investments, in particular on sukuk. From these analyses, the Manager will set the allocation level of fixed income investments for the Fund, determine the duration and desired yield. Extensive bottom-up analysis To enable the Manager to identify individual investments suitable for inclusion in the Fund. Please refer to item 2 below (security selection) for the criteria used in this analysis. Risk management by investing in a diverse portfolio of sukuk and Islamic money market instruments. PHS PDGIF 0317 l Page 3 of 11

4 2. Security selection The Manager analyses the following factors to determine investment selection for the Fund: Credit quality: Indicates the capacity of a company issuing sukuk to meet repayment of the sukuk and/or profits from the sukuk when they mature. Selection of sukuk focuses on business and financial risk at the issuer level. For inclusion in the Fund, a local sukuk issue must have at least a long-term rating of A2 by RAM Ratings or A ID by MARC. The minimum short-term rating must be P2 by RAM Ratings or MARC-2 ID by MARC. Any exposure to foreign sukuk will be via Shariah-compliant CIS and the underlying investments of the CIS must be at least 80% invested in investment grade sukuk, i.e. rated as BBB and above by Standard & Poor s or an equivalent rating by other international credit rating agencies (i.e. Fitch or Moody s). Yield spread analysis: Yield spread is the difference in the rate of return between different sukuk usually of different credit quality. By tracking how particular patterns vary over time, the spread analysis provides an indication of the relative pricing of sukuk. Liquidity and marketability of sukuk: Liquidity and maturity profiling allows the Manager to determine the extent of liquidity risk and its commensurate returns. Liquidity risk is greater for thinly traded securities such as lower rated sukuk, sukuk that were part of a small issue or sukuk sold by an infrequent issuer. Analysis of sukuk issues: The analysis is to identify specific/unique risk with regards to the structure of sukuk by analysing sukuk agreements, terms and conditions of a sukuk issue and asset collateral (assets used in backing a sukuk issue). 3. Portfolio construction The portfolio construction process involves taking into account both the top-down and bottom-up analyses described above to construct a diversified portfolio focusing on credit quality, valuations and liquidity and marketability of the fixed income instruments. Note: Interest rates are a general indicator that will have an impact on the management of a fund regardless of whether it is a Shariah-compliant fund or otherwise. It does not in any way suggest that this Fund will invest in conventional financial instruments. All the investments carried out for this Fund are in accordance with requirements of the Shariah. Performance Benchmark Composite Benchmark (50% in Dow Jones Islamic Market World Index [DJIM] and 50% in 3-Month Islamic Interbank Money Market [IIMM] Rate) 3. (b) Who Am I Investing With? Manager Trustee Trustee s Delegate Auditors Tax Advisers Shariah Adviser Pacific Mutual Fund Bhd ( U) CIMB Islamic Trustee Berhad ( M) CIMB Islamic Bank Berhad ( H) Ernst & Young Ernst & Young Tax Consultants Sdn Bhd ( K) BIMB Securities Sdn Bhd ( X) 4. What Are The Possible Outcomes Of My Investment? The quantum of potential returns of the Fund would depend on the Fund s asset allocation decisions and performance of the underlying investments of the Fund. This is a non-guaranteed Fund and the investor may not get back the full amount invested and the principal amount invested may be at risk. Returns are also not fixed or guaranteed. PHS PDGIF 0317 l Page 4 of 11

5 KEY RISKS 5. What Are The Key Risks Associated With This Product? SPECIFIC RISKS OF THE FUND Reclassification of Shariah status risk This risk refers to the risk that the currently held Shariah-compliant investments in the Fund may be reclassified to be Shariah non-compliant. For Shariah-compliant securities, the reclassification may occur in the periodic review of the securities by the SACSC, the Shariah Adviser or the Shariah boards of the relevant Islamic indices. If this occurs, the Manager will take the necessary steps to dispose such investments. There may be opportunity loss to the Fund due to the Fund not being allowed to retain the excess capital gain derived from the disposal of the Shariah non-compliant investments. Please refer to pages 7 and 8 of the Product Highlights Sheet on the Fund s Shariah methodology on the treatment of gains and losses as a result of the reclassification of Shariah non-compliant investments. This risk is mitigated by constantly monitoring the Shariah compliance status of the securities. Detailed fundamental analysis of business stability, financial position and debt ratio analysis of the issuers of the securities would also help to mitigate such risk. Business stability is assessed to ensure there are no frequent business acquisitions that may potentially lead to a security being Shariah non-compliant. Fundamental (balance sheet) analysis is undertaken to ensure that financial ratio benchmarks are not borderline and thus susceptible to being Shariah non-compliant with just small increases in debt levels (from conventional debt financing). Timing of asset allocation risk This is the risk that given prevailing economic and financial market conditions, the Manager of the Fund makes inappropriate asset allocation decisions between the equity and fixed income asset categories, potentially resulting in lower returns to the Fund. To mitigate such risk, the Manager conducts detailed fundamental macro research and analysis on financial market trends and keeps regular updates on them. Factors such as economic and political conditions, interest rate environment, valuations of markets, liquidity and investor sentiment are taken into account before making asset allocation decisions or changes. GENERAL RISKS OF THE FUND Company specific risk This risk refers to the individual risk of the respective companies issuing securities. This risk could be a result of changes to the business performance of the company, consumer tastes and demand, lawsuits, competitive operating environment and management practices. Developments in a particular company which the Fund has invested in would result in fluctuations in the security price of that company and thus the value of the Fund's investments. This risk is mitigated by diversification in a portfolio comprised of securities of many companies. In addition, this risk may occur when an investee company's business or fundamentals deteriorate or if there is a change in management policy resulting in a downward revision or even removal of the company's dividend policy. Such events may result in an overall decrease in dividend income received by the Fund and possible capital loss due to a drop in the security price of a company that cuts or omits its dividend payments. This risk may be mitigated by investing mainly in companies with a consistent historical record of paying dividends, strong cash flow, or operating in fairly stable industries. Country risk Investments of the Fund in any countries may be affected by changes in the economic and political climate, restriction on currency repatriation or other developments in the law or regulations of the countries in which the Fund invests in. For example, the deteriorating economic condition of such countries may adversely affect the value of the investments undertaken by the Fund in those affected countries. This may cause the NAV or prices of the Fund to fall. This risk may be mitigated by conducting thorough research on the respective countries, their regulatory framework, economics, companies, politics and social conditions as well as minimising or omitting investments in countries that are economically or politically unstable or lack a regulatory financial framework and adequate investor protection legislation. Credit risk and default risk Credit risk relates to the creditworthiness of the issuers of fixed income instruments and their expected ability to make timely payment of profits and/or principal. Any adverse situations faced by an issuer may impact the value as well as liquidity of fixed income instruments issued. In the case of fixed income instruments assigned a rating by a credit rating agency, this may lead to a lowering of the credit rating of the instrument. Default risk relates to the risk that an issuer of a fixed income instrument either defaults on payments or fails to make payments in a timely manner which will in turn adversely affect the value of the fixed income instrument and thus value of the Fund s investment in such instruments. This risk is reduced by analysis of companies issuing such instruments, taking into account the credit rating (which must have a long-term rating of at least A2 by RAM Ratings or an equivalent rating) and diversification in a range of fixed income investments issued by different companies and Islamic licensed financial institutions. PHS PDGIF 0317 l Page 5 of 11

6 Currency risk As the investments of the Fund are denominated in currencies other than Malaysian Ringgit ( Ringgit ), any fluctuations in the exchange rate between the Ringgit and the currencies in which the investments are denominated may have an impact on the value of these investments. If the currencies in which the investments are denominated depreciate against the Ringgit, this will have an adverse effect on the NAV of the Fund (on the reverse, if the foreign currencies appreciate against the Ringgit, the Fund s NAV may increase). Any of such gains or losses arising from fluctuations in exchange rates may decrease or increase returns on investment in the Fund. This risk may be mitigated by reducing exposure to investments denominated in a currency that is expected to decline versus the Ringgit. ETF risk Exchange traded funds (ETF) are collective investment schemes designed to replicate (to the best extent possible) the performance of an equity or a fixed income index or a portfolio of securities. ETF are listed on a stock exchange. The following are key risks of investing in ETF. Tracking error: ETF are designed to replicate the performance of a particular index. However, an ETF s return will be lower than the index it tracks owing to the following factors: i) An ETF charges management fees and has to pay fund administration expenses, compared to an index which does not have such fees and expenses; ii) Foreign currency movements; iii) An ETF s portfolio may not be constructed exactly the same as the index in terms of the securities held and/or the percentage holding of each security. For example, assume there is an equity index A that comprises 20 different stocks each with an allocation of 5% to make up the full index. Assume there is ETF A which attempts to mirror index A but its top 5 stocks each have an allocation of 6% of the ETF s holdings, with the remaining stocks each having an allocation of 4.7% in the ETF which may lead to some divergence in returns from the index tracked. Another difference would be where instead of holding 20 stocks, ETF A holds only 18 due to the remaining 2 stocks being difficult to purchase (as an example); or iv) Stocks are periodically added and removed (rebalancing) from an index and the rebalancing is immediate with no actual buy or sell transactions and thus with no costs involved. On the other hand, for an ETF to rebalance, there is a need to transact in stocks to reflect the changes in the index. Time will be needed by the ETF for a rebalancing effort and prices of stocks may fluctuate resulting in different transacted prices between the ETF and the index. Costs are also incurred in the rebalancing for the ETF. ETF trading at a premium or discount: ETF are traded on both a primary market (private market between creator of the ETF and selected parties called participating dealers) and a secondary market, i.e. the stock exchange that is open to the public. On the primary market, ETF are traded at the NAV of the ETF. On the secondary market, while the NAV of an ETF is a key factor in influencing the price of an ETF quoted on the exchange, it is also determined by the public s supply and demand of the ETF on the exchange. Thus, depending on investor sentiment, an ETF may be traded on the secondary market at a price that is lower or higher than the ETF s NAV. This discrepancy may be further accentuated in uncertain or volatile financial or economic conditions. The price discrepancies may lead to paying premiums to NAV on purchase of the ETF or selling at a discount to NAV leading to lower returns for the Fund. These ETF risks are mitigated by the Manager of the Fund investing in ETF that replicate widely followed equity indices such as the FTSE Bursa Malaysia Top 100 Index (local example), S&P 500 Index and MSCI World Index (foreign examples) where tracking error and price discrepancies are lower compared to ETF tracking less followed indices. Further, for tracking error, the Manager will invest in ETF with the highest cost efficiency (i.e. low fees and low ETF expenses relative to ETF asset size). Interest rate risk Interest rate risk refers to the impact of interest rate changes on the valuation of fixed income investments. When interest rates rise, prices of the fixed income investments generally decline and this may lower the market value of the Fund s investments. The reverse may apply when interest rates fall. This risk will be mitigated by managing the duration structure of the Fund s fixed income investments. Note: Islamic fixed income investments do not pay interest. However, the interest rate is a key financial indicator and factor that can have an impact on all fixed income investments, whether or not they are Shariah-compliant or otherwise. Liquidity risk Liquidity risk refers to the ease of liquidating an investment depending on the asset s volume traded in the market. If the Fund holds investments that are illiquid or are difficult to dispose of, the value of the Fund will be negatively affected when it has to sell such investments at unfavourable prices. The Fund will invest in investments that are highly liquid (easily bought and sold in the market) and this allows the Fund to meet sizeable redemptions without jeopardising returns. Market risk This risk refers to the possibility that an investment will lose value because of a general decline in financial markets cause by economic, political, social and/or other factors. This will result in a decline in the Fund s NAV. PHS PDGIF 0317 l Page 6 of 11

7 Warrants risk Warrants are financial instruments that give the buyer the right to purchase equity securities at a pre-determined price ( exercise period ) up to the expiry date of the warrants. The price movements of the equity security to which a warrant is linked affects the price of a warrant. Movements in price of an equity security will generally result in larger movements in the price of any warrants related to the equity meaning that warrants are expected to have high price volatility relative to the equity security. This means that when the price of an equity security falls, warrants may underperform the equity security, i.e. the price of a warrant may fall more than the percentage fall in the price of the equity security to which it is related. On the reverse, a warrant may outperform the equity security to which it is related, i.e. the warrant price may rise by a percentage that is higher than the rise of the equity security. Warrants have a limited life and will depreciate in value as they approach their expiry date. If at any time up to the expiry date of a warrant, the warrant s exercise price is above the market price of the equity security, the warrant is out of the money and has little or no value. Warrants that are not exercised at maturity become worthless. Holders of warrants are not entitled to any dividends that may be paid to investors in an equity security. Warrants risk may be mitigated by conducting extensive fundamental analysis of the warrants equity securities in relation to the market price and exercise price of the warrants and to determine if they should continue to be held for the Fund. The investment manager exercises diligence in minimising the above risks to the Fund. However, it is not always possible to cover all investment risks in spite of best efforts as financial markets can be highly unpredictable. Investors are encouraged to consult their advisers such as financial/tax consultants, lawyers or bankers for a further understanding of these risks. SHARIAH INVESTMENT GUIDELINES ADOPTED BY BIMB SECURITIES SDN BHD (BSSB) The following guidelines are adopted by BSSB in determining the Shariah status of equity investments of Pacific Dynamic Global Islamic Fund: The Fund must at all times and all stages of its operation comply with Shariah principles. The Fund must be raised, operated, and finally redeemed by the investor on the basis of the contracts which are acceptable in Shariah. The banking facilities and short-term money market instruments used for the Fund have to be those which comply with Shariah principles. Similarly all the variable-income instruments, sukuk, etc. must be those which are Shariah-compliant. For securities listed on the Bursa Malaysia, the Fund s investments must be strictly confined to those securities on the list approved by the SACSC. For Islamic money market instruments and Islamic securities or sukuk based on the list readily available at Bank Negara Malaysia (for Islamic money market instruments) and SC (for Islamic securities or sukuk) websites. The SACSC has applied a standard criterion in focusing on the activities of the companies listed on Bursa Malaysia. As such, subject to certain conditions, companies whose activities are not contrary to the Shariah principles will be classified as Shariah-compliant securities. On the other hand, companies will be classified as Shariah non-compliant securities if they are involved in the following core activities: Financial services based on riba (interest); Gambling and gaming; Manufacture or sale of non-halal products or related products; Conventional insurance; Entertainment activities that are non-permissible according to Shariah; Manufacture or sale of tobacco-based products or related products; Stockbroking or share trading in Shariah non-compliant securities; and Other activities deemed non-permissible according to Shariah. The SACSC also takes into account contribution of Shariah non-compliant activities to the overall revenue and profit before tax of the listed companies. In addition, the financial ratios for cash in conventional accounts and instruments as well as interest bearing debts over the total assets of the listed companies are also considered in the analysis carried out by the SACSC. For companies with activities comprising both permissible and non-permissible elements, the SACSC considers two additional criteria: The public perception or image of the company must be good; and The core activities of the company are important and considered maslahah ( benefit in general) to the Muslim ummah (nation) and the country, and the non-permissible element is very small and involves matters such as umum balwa (common plight and difficult to avoid), uruf (custom) and the rights of the non-muslim community which are accepted by Islam. The SACSC had considered the following criteria for a Special Purpose Acquisition Company (SPAC) to be classified as Shariah-compliant: The proposed business activity should be Shariah-compliant; The proceeds raised from the IPO should be placed in an Islamic account; and In the event that the proceeds are invested, the investment should be Shariah-compliant. PHS PDGIF 0317 l Page 7 of 11

8 To determine the tolerable level of mixed contribution from permissible and non-permissible activities toward turnover and profit before tax of a company, the SACSC has established activity based and financial ratio benchmarks based on ijtihad (reasoning from the sources of Shariah by qualified Shariah scholars). If either the contributions from non-permissible activities exceed the benchmark, the securities of the company will be classified as Shariah non-compliant. Shariah-compliant securities include ordinary shares, warrants and transferable subscription rights (TSRs). This means that warrant and TSRs are classified as Shariah-compliant securities provided the underlying shares are also Shariah-compliant. On the other hand, loan stocks and bonds are Shariah non-compliant securities unless they are issued based on Shariah principles. The SACSC advises on the timing for the disposal of securities in the Fund which have been classified as Shariah non-compliant: Shariah-compliant securities which are subsequently reclassified as Shariah non-compliant These refer to those securities which were earlier classified as Shariah-compliant securities but due to certain reasons such as changes in the companies business operations and financial positions, are subsequently reclassified as Shariah non-compliant. In this regard, if on the date that this updated list takes effect, the value of the securities held exceeds the original investment cost, the Fund which holds such Shariah non-compliant securities must liquidate them. To determine the time frame to liquidate such securities, the Shariah Adviser advises that such securities should be disposed of within one (1) month. Any capital gain arising from the disposal of the said Shariah non-compliant securities made with respect to the closing price on the announcement day can be kept by the Fund. However, any excess capital gain derived from the disposal after the announcement day at a market price that is higher than the closing price on the announcement day should be channeled to approved charitable bodies. The Shariah Adviser advises that this cleansing process should be carried out within two (2) months from the above disposal date. On the other hand, the Fund is allowed to hold investment in the Shariah non-compliant securities if the market price of the said securities is below the original investment cost. It is also permissible for the Fund to keep the dividends received during the holding period until such time when the total amount of dividends received and the market value of the Shariah non-compliant securities held equal the investment cost. At this stage, the Fund is to dispose of the holding within one (1) month. In addition, during the holding period, the Fund is allowed to subscribe to: (a) any issue of new securities by a company whose Shariah non-compliant securities are held by the Fund e.g. rights issues, bonus issues, special issues and warrants [excluding securities whose nature is Shariah non-compliant e.g. irredeemable convertible unsecured loan stock (ICULS)]; and (b) securities of other companies offered by the company whose Shariah non-compliant securities are held by the Fund, on conditions that the Fund expedites the disposal of the Shariah non-compliant securities. For securities of other companies [as stated in (b) above], they must be Shariah-compliant securities. Shariah non-compliant securities According to the SACSC, since the Fund invests based on Shariah principles, the Fund is to dispose any Shariah non-compliant securities which they presently hold, within a month of knowing the status of the securities. Any gain made in the form of capital gain or dividend received during or after the disposal of the securities has to be channeled to charitable bodies. The Fund has a right to retain only the original investment cost. For investment in foreign securities, the Pacific Dynamic Global Islamic Fund is only allowed to invest in securities which are on the Approved List of Dow Jones Islamic Index (DJII). With regards to the issue of delisting of Shariahcompliant securities from DJII and Shariah non-compliant foreign securities, the Fund is to abide by the same processes as laid down by SACSC above. In the rare event that the Fund wishes to invest in foreign securities not covered by DJII, the Fund must submit to the Shariah Adviser the latest information pertaining to business activities, complete financial statements and other related information on the relevant company to enable the Shariah Adviser to carry out stock screening. The decision of the Shariah Adviser is final. To facilitate the purchase and sale of foreign securities, there may be a need to have cash placement in a non-shariah bank account outside Malaysia. In such circumstances, the non-shariah account should be non-interest bearing and the sole purpose is only to facilitate purchase and sale of foreign securities. PHS PDGIF 0317 l Page 8 of 11

9 FEES AND CHARGES 6. What Are The Fees And Charges Involved? Sales Charge Annual Management Fee Annual Trustee Fee Redemption Fee Switching Fee Transfer Fee 5.50% of the Fund s NAV per unit Investors may negotiate for a lower sales charge. 1.50% p.a. of NAV of the Fund. The annual management fee is payable on a monthly basis. 0.06% p.a. of the NAV of the Fund calculated and accrued on a daily basis (excluding foreign custodian fees and charges). The annual trustee fee is payable on a monthly basis. Nil If you wish to switch into other Funds, you will have to pay the applicable differences in sales charge between the Funds to be switched from and the Funds to be switched into. There will be no sales charge imposed if the Funds to be switched into has a lower sales charge. Nil Despite the maximum fees and charges permitted by the deed, all current fees and charges are as disclosed above. All fees and charges quoted are subject to any applicable taxes (including but not limited to GST) and/or duties as may be imposed by the government or other authorities from time to time. You should NOT make payment in cash to a unit trust consultant or issue a cheque in the name of a unit trust consultant. 7. How Often Are Valuations Available? VALUATIONS AND EXITING FROM INVESTMENT This is a Fund with foreign investment exposure. The valuation of NAV of the Fund will be conducted on each business day after the close of the respective foreign stock exchanges on the same calendar day. Due to the different time zone of the foreign stock exchanges, the valuation point will be extended to 5.00 p.m. on the following business day. The daily unit price of the Fund will be published on the next business day after the valuation (T+2). Fund prices will be published in Pacific Mutual s website at 8. How Can I Exit From This Investment And What Are The Risks And Costs Involved? Investors can exit from the investment by completing the transaction form. The duly completed and accepted original transaction form must reach Pacific Mutual s head office or its branches by 4.00 p.m. on any business day. Pacific Mutual will repurchase units at the Fund s NAV per unit calculated at the end of that business day. The investor will receive the prevailing price per unit. Transaction forms received after 4.00 p.m. will be treated as having been received on the next business day. Payments will be made to investors within 10 days (from the business day the redemption request is accepted). Note: If an investor is a first-time investor with Pacific Mutual, the investor is entitled to a cooling-off period of six business days. The refund for every unit with regards to the cooling-off is the sum of the NAV per unit on the day the units were purchased and, sales charge and GST on sales charge per unit originally imposed on the day the units were purchased. Essentially, you will receive a full refund of the initial investment paid by you within 10 days of receipt of the original notice of cooling-off by Pacific Mutual. However, this is not applicable to corporate/institutional investors; staff of Pacific Mutual and Lion Global Investors Limited (formerly known as Lion Capital Management Limited) and their immediate family members; and persons registered with a body approved by the Securities Commission Malaysia to deal in unit trusts. PHS PDGIF 0317 l Page 9 of 11

10 CONTACT INFORMATION 9. Who Should I Contact For Further Information Or To Lodge A Complaint? Contact Details Of The Manager Head Office Branches Pacific Mutual Fund Bhd ( U) A member of the OCBC Group 1001, Level 10, Uptown 1, No. 1 Jalan SS21/58, Damansara Uptown, Petaling Jaya, Selangor Tel: Fax: customercare@pacificmutual.com.my Website: Pulau Pinang Tel: Fax: penang@pacificmutual.com.my Perak Tel: Fax: ipoh@pacificmutual.com.my Melaka Tel: Fax: melaka@pacificmutual.com.my Sarawak Tel: Fax: kuching@pacificmutual.com.my Sabah Tel: Fax: kk@pacificmutual.com.my Please specify the nature of the complaint and the person(s) involved stating the date, time and place of occurrence. (i) For internal dispute resolution, you may contact: Pacific Mutual Fund Bhd Customer Care Hotline: (ii) If you are dissatisfied with the outcome of the internal dispute resolution process, please refer your dispute to the Securities Industries Dispute Resolution Corporation (SIDREC): (a) via phone to : (b) via fax to : (c) via to : info@sidrec.com.my (d) via letter to : Securities Industry Dispute Resolution Center (SIDREC) Unit A-9-1, Level 9, Tower A, Menara UOA Bangsar, No. 5, Jalan Bangsar Utama 1, Kuala Lumpur (iii) You can also direct your complaint to the Securities Commission Malaysia even if you have initiated a dispute resolution process with SIDREC. To make a complaint, please contact the Securities Commission Malaysia s Investor Affairs & Complaints Department: (a) via phone to the Aduan Hotline at : (b) via fax to : (c) 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 PHS PDGIF 0317 l Page 10 of 11

11 business day(s) A day on which Bursa Malaysia is open for trading. APPENDIX: GLOSSARY equity-related securities Shariah-compliant securities where the underlying asset is a Shariah-compliant equity security. The return on Shariah-compliant equity-related securities is dependent upon the performance of the underlying Shariah-compliant equities. For this Fund, the Shariah-compliant equity-related securities comprise only Shariah-compliant warrants and right issues that are issued in relation to Shariah-compliant equities in which the Fund has invested. Fund Pacific Dynamic Global Islamic Fund GST Tax levied on goods and services pursuant to the Goods and Services Tax Act NAV Net asset value (NAV) of the Fund is the total value of the Fund s assets minus its liabilities at a valuation point. In computing the annual management fee and annual trustee fee, the NAV of the Fund should include the management fee and the trustee fee for the relevant day. NAV per unit NAV per unit of the Fund is the NAV divided by the total number of units in circulation, at a particular valuation point. SACSC Shariah Advisory Council of the Securities Commission Malaysia Shariah Islamic law, originating from the Qur`an (the holy book of Islam), and its practices and explanations rendered by the prophet Muhammad (pbuh) and ijtihad of ulamak (personal effort by qualified Shariah scholars to determine the true ruling of the divine law on matters whose revelations are not explicit). Shariah adviser Means a person or a corporation approved and registered by the Securities Commission Malaysia as Shariah adviser under the Registration of Shariah Advisers Guidelines. Shariah-compliant equities/equity Securities providing the investor ownership in companies that are in compliance with the Shariah principles. sukuk Refers to certificates of equal value which evidence undivided ownership or investment in the assets using Shariah principles and concepts endorsed by the SACSC. warrants Shariah-compliant warrants are financial instruments that give the buyer the right to purchase Shariah-compliant equity securities at a fixed price up to the expiry date of the Shariah-compliant warrants. PHS PDGIF 0317 l Page 11 of 11

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