PHEIM Annual Report

Transcription

1 31 DECEMBER 2017

2 PHEIM Annual Report TRUST DIRECTORY MANAGER Pheim Unit Trusts Berhad ( A) Registered Office and Head Office: 7th Floor, Menara Hap Seng (Letter Box 12) Jalan P. Ramlee, Kuala Lumpur Tel:(603) Fax:(603) BOARD OF DIRECTORS Dr. Tan Chong Koay (Non-independent) Azmi Malek Merican (Non-independent) (Resigned w.e.f. 25 July 2017) Leong Hoe Kit (Non-Independent) (Appointed w.e.f. 17 July 2017) Hoi Weng Kong (Independent) Lee Seng Young (Independent) Ahmad Subri Bin Abdullah (Independent) (Appointed w.e.f. 25 July 2017) INVESTMENT COMMITTEE Zarina Omar (Independent) Pee Ban Hock (Independent) Ho Sen Feek (Independent) Mark Wing Kong (Independent) Denys Antas (Independent) Ahmad Subri Bin Abdullah (Independent) (Appointed w.e.f. 25 July 2017) EXTERNAL INVESTMENT MANAGER Pheim Asset Management Sdn Bhd ( A) SHARIAH ADVISER IBFIM ( W) Amanie Advisors Sdn Bhd ( H) TRUSTEE Maybank Trustees Berhad (5004-P) AUDITORS Folks DFK & Co (AF0502) TAXATION CONSULTANT Folks Taxation Sdn Bhd ( M)

3 PHEIM Annual Report CONTENTS Page No 1. Fund Information Fund Performance Manager s Report Trustee s Report, Statement by the Manger, Shariah Adviser s Report and Audited Financial Statements: Pheim Emerging Companies Balanced Fund Dana Makmur Pheim Pheim Income Fund Pheim Asia Ex-Japan Fund Pheim Asia Ex-Japan Islamic Fund

4 PHEIM Annual Report Fund Information Dear Valued Unit Holders We are pleased to present the Manager s Report and the audited financial statements for the financial period from 1 January 2017 to 31 December 2017 for the following funds: i. Pheim Emerging Companies Balanced Fund (PECBF) ii. iii. iv. Dana Makmur Pheim (DMP) Pheim Income Fund (PIF) Pheim Asia Ex-Japan Fund (PAXJ) v. Pheim Asia Ex-Japan Islamic Fund (PAXJI) 1 FUND INFOATION 1.1 Fund Category and Type Fund PECBF Category and type PECBF is a balanced fund that aims to provide income and some capital growth. DMP PIF PAXJ PAXJI DMP is an Islamic balanced fund that aims to provide Shariah permissible income and some capital growth. PIF is a bond fund that aims to provide steady income. PAXJ is an equity growth fund that aims to achieve capital appreciation in the long term by investing primarily in Asian markets excluding Japan. PAXJI is an equity growth fund that aims to achieve capital appreciation in the long term by investing primarily in Asian markets excluding Japan through investments that comply with Shariah requirements. 1.2 Funds Investment Objective and Strategy Fund PECBF Investment objective and strategy PECBF aims to provide Unit Holders with steady income and some prospects for capital appreciation (income and growth) in the longer term. PECBF will invest in a balanced portfolio of equities and fixed income instruments subject to a maximum of 60% in equities and a minimum of 40% in fixed income instruments and liquid assets. support@pheimunittrusts.com 1 Your Need is our Focus

5 PHEIM Annual Report Fund Information DMP PIF DMP aims to provide Unit Holders with steady income and some prospects for capital appreciation (income and growth) in the longer term. DMP will invest in a balanced portfolio of Shariah-compliant equities and sukuk subject to a maximum of 60% in Shariah-compliant equities and a minimum of 40% in sukuk and Islamic liquid assets. All investment will be made in accordance to Shariah requirements. PIF aims to provide unit holders with consistent income returns in the medium to longer term. PIF will invest primarily in medium to long-term fixed income instruments subject to a minimum of 80% in fixed income instruments and liquid assets and a maximum of 20% in equities. PAXJ PAXJ aims to achieve capital appreciation in the long term by investing primarily in Asian markets excluding Japan. PAXJ will invest, without restraint, in securities listed on the stock exchanges of the Asia Pacific region excluding Japan with initial focus in ASEAN countries, Hong Kong SAR, China, Taiwan, Korea, Australia, New Zealand and India. PAXJI PAXJI aims to achieve capital appreciation in the long term by investing primarily in Asian markets excluding Japan through investments that comply with Shariah requirements. PAXJI will invest in securities listed on the stock exchanges of the Asia Pacific region excluding Japan with initial focus in ASEAN countries, Hong Kong SAR, China, Taiwan, Korea, Australia, New Zealand and India that comply with Shariah requirements. 1.3 Duration of the Funds Fund PECBF Duration of the Fund PECBF was launched on 28 January 2002 and its offer period ended on 15 February It shall exist for as long as it appears to the Manager and the Trustee that it is in the interest of the Unit Holders for it to continue. DMP DMP was launched on 28 January 2002 and its offer period ended on 15 February It shall exist for as long as it appears to the Manager and the Trustee that it is in the interest of the Unit Holders for it to continue. PIF PIF was launched on 28 January 2002 and its offer period ended on 15 February It shall exist for as long as it appears to the Manager and the Trustee that it is in the interest of the Unit Holders for it to continue. support@pheimunittrusts.com 2 Your Need is our Focus

6 PHEIM Annual Report Fund Information PAXJ PAXJ was launched on 30 June 2006 and its offer period ended on 20 July It shall exist for as long as it appears to the Manager and the Trustee that it is in the interest of the Unit Holders for it to continue. PAXJI PAXJI was launched on 1 November 2006 and its offer period ended on 21 November It shall exist for as long as it appears to the Manager and the Trustee that it is in the interest of the Unit Holders for it to continue. 1.4 Funds Performance Benchmark The performance benchmarks deemed relevant to access the performance of the respective Funds are shown in the following table: Fund Performance Benchmark Source PECBF Weighted average of: 1. 60% of FTSE Bursa Malaysia EMAS Index return, and 2. 40% of Maybank 1-year fixed deposit rate at the beginning of the financial year. Bursa Malaysia & Maybank DMP PIF Weighted average of: 1. 60% of FTSE Bursa Malaysia EMAS Shariah Index*, and 2. 40% of Maybank 1-year General Investment Account (GIA) rate obtained at the beginning of the financial year. Maybank 1-year fixed deposit rate at the beginning of the financial year. Bursa Malaysia & Maybank Maybank The performance benchmark of the PAXJ and PAXJI is 7% growth in NAV per annum over the long term. This is not a guaranteed return and is only a measurement of fund performance. The PAXJ and PAXJI may or may not achieve the 7% per annum growth rate in any particular financial year but targets to achieve this growth over the long term. * KL Syariah Index was discontinued from 1 November 2007 by Bursa Malaysia. The new index that is substituting KL Syariah Index is FTSE Bursa Malaysia EMAS Shariah Index (FBMS). 1.5 Funds Distribution Policy Fund PECBF, DMP& PIF Distribution Policy The Funds intend to distribute income, if any, on an annual basis. The income distribution may be declared at the end of each financial year or any specified period as maybe approved by the Trustee. PAXJ & PAXJI Distribution by the Funds is incidental. support@pheimunittrusts.com 3 Your Need is our Focus

7 PHEIM Annual Report Fund Information 1.6 Breakdown Of Unit Holdings By Size As At PECBF No. of units held Unitholders Size of holding ( 000) % 5,000 and below No. of Accounts % No. of Unitholders % ,001 10, ,001-50,000 50, , ,001 and above 1, , Total 26, DMP No. of units held Unitholders Size of holding ( 000) % 5,000 and below 5,001 10,000 10,001-50,000 50, , ,001 and above No. of Accounts % No. of Unitholders % , , , Total 29, support@pheimunittrusts.com 4 Your Need is our Focus

8 PHEIM Annual Report Fund Information PIF No. of units held Size of holding ( 000) % 5,000 and below 5,001 10,000 10,001-50,000 50, , ,001 and above No. of Accounts % Unitholders No. of Unitholders % , , Total 8, PAXJ No. of units held Unitholders Size of holding ( 000) % 5,000 and below 5,001-10,000 10,001-50,000 50, , ,001 and above No. of Accounts % No. of Unitholders % , , Total 11, support@pheimunittrusts.com 5 Your Need is our Focus

9 PHEIM Annual Report Fund Information PAXJI No. of units held Unitholders Size of holding ( 000) % 5,000 and below 5,001-10,000 10,001-50,000 50, , ,001 and above No. of Accounts % No. of Unitholders % , , , Total 15, support@pheimunittrusts.com 6 Your Need is our Focus

10 PHEIM Annual Report Fund Performance 2 FUND PERFOANCE 2.1 Pheim Emerging Companies Balanced Fund Portfolio composition FYE (%) FYE (%) (Percentage of Net Asset Value) FYE (%) Construction Consumer Products Energy & Water Supply Finance Furniture Healthcare Infrastructure Industrial Products Manufacturing Material Plantations Pharmacy & Cosmetic Properties Technology Telecommunications Trading / Services Transportation Unquoted/Quoted Corporate Bonds Cash and cash equivalents Total support@pheimunittrusts.com 7 Your Need is our Focus

11 PHEIM Annual Report Fund Performance PECBF Other financial and performance data FYE FYE FYE Net asset value ( 000) 31, , , Units in circulation ( 000) 26, , , Net asset value per unit () NAV/ unit () ex-distribution NAV/ unit Highest NAV/ unit for the period NAV/ unit Lowest NAV/ unit for the period NAV/ unit Total returns for the period ( 000) Capital growth (900.42) (685.07) Income distribution 2, , , Income Distribution (Final) On On On Gross distribution per unit (sen) Net distribution per unit (sen) Management expense ratio (MER) (%) Portfolio turnover ratio (PTR) (time) Note: i) MER is calculated based on total fees and expenses incurred by the fund divided by average value of the fund calculated on a daily basis. The MER for the year reduced mainly due to higher average NAV during the year. ii) PTR is calculated based on the average of the acquisitions and disposals of investments of the Fund to the average value of the Fund calculated on a daily basis. The increase in PTR for the year was mainly due to the higher investment trading for the year. support@pheimunittrusts.com 8 Your Need is our Focus

12 PHEIM Annual Report Fund Performance PECBF Average total return ended 31 December 2017 (%) One Year Three Years Five Years Annual total return for each of the last five financial years Financial year ended 31 December : (%) Note : All returns above are calculated based on NAV per unit adjusted for income distribution. Data source : Bloomberg Past performance is not necessarily indicative of future performance and unit prices and investment returns may go down, as well as up. support@pheimunittrusts.com 9 Your Need is our Focus

13 PHEIM Annual Report Fund Performance 2.2 Dana Makmur Pheim Portfolio composition FYE (%) FYE (%) (Percentage of Net Asset Value) FYE (%) Construction Consumer Products Industrial Products Manufacturing Plantations Properties Technology Trading / Services Sukuk Cash and Other Assets Total Other financial and performance data FYE FYE FYE Net asset value ( 000) 35, , , Units in circulation ( 000) 29, , , Net asset value per unit () support@pheimunittrusts.com 10 Your Need is our Focus

14 PHEIM Annual Report Fund Performance DMP Other financial and performance data (continued) FYE FYE FYE NAV/ unit () ex-distribution NAV/ unit Highest NAV/ unit for the period NAV/ unit Lowest NAV/ unit for the period NAV/ unit Total returns for the period ( 000) Capital growth 1, (475.09) Income distribution 2, , Income Distribution (Final) On On On Gross distribution per unit (sen) Net distribution per unit (sen) Management expense ratio (MER) (%) Portfolio turnover ratio (PTR) time) Note: i) MER is calculated based on total fees and expenses incurred by the fund divided by average value of the fund calculated on a daily basis. The MER for the year reduced mainly due to the higher average NAV during the year. ii) PTR is calculated based on the average of the acquisitions and disposals of Shariahcompliant investments of the fund to the average value of the fund calculated on a daily basis. The increase in PTR for the year was mainly due to the higher investment trading for the year. support@pheimunittrusts.com 11 Your Need is our Focus

15 PHEIM Annual Report Fund Performance DMP Average total return ended 31 December 2017 (%) One Year Three Years Five Years Annual total return for each of the last five financial years Financial year ended 31 December : (%) Note : All returns above are calculated based on NAV per unit adjusted for income distribution and unit split. Data source : Bloomberg Past performance is not necessarily indicative of future performance and unit prices and investment returns may go down, as well as up. support@pheimunittrusts.com 12 Your Need is our Focus

16 PHEIM Annual Report Fund Performance 2.3 Pheim Income Fund Portfolio composition FYE (%) FYE (%) FYE (%) (Percentage of Net Asset Value) Construction Consumer Products Finance Furniture Industrial Products Pharmacy and Cosmetic Plantation Properties Trading/ Services Technology Unquoted Corporate Bonds Cash and Other Assets Total Other financial and performance data FYE FYE FYE Net asset value ( 000) 9, , , Units in circulation ( 000) 8, , , Net asset value per unit () NAV/ unit () ex-distribution NAV/ unit Highest NAV/ unit for the period NAV/ unit Lowest NAV/ unit for the period NAV/ unit Total returns for the period ( 000) Capital growth (103.54) (159.68) Income distribution support@pheimunittrusts.com 13 Your Need is our Focus

17 PHEIM Annual Report Fund Performance PIF Other financial and performance data (continued) Income Distribution (Final) FYE On FYE On FYE On Gross distribution per unit (sen) Net distribution per unit (sen) Management expense ratio (MER) (%) Portfolio turnover ratio (PTR) (time) Note: i) MER is calculated based on total fees and expenses incurred by the fund divided by average value of the fund calculated on a daily basis. The MER for the year increased mainly due to lower average NAV during the period. ii) PTR is calculated based on the average of the acquisitions and disposals of investments of the fund to the average value of the fund calculated on a daily basis. The PTR for the year was lower than previous year as investments were sold to raise money to meet redemption payment in previous year Average total return ended 31 December 2017 (%) One Year Three Years Five Years support@pheimunittrusts.com 14 Your Need is our Focus

18 PHEIM Annual Report Fund Performance Annual total return for each of the last five financial years Financial year ended 31 December : (%) Note : All returns above are calculated based on NAV per unit adjusted for income distribution. Data source : Bloomberg PIF Past performance is not necessarily indicative of future performance and unit prices and investment returns may go down, as well as up. support@pheimunittrusts.com 15 Your Need is our Focus

19 PHEIM Annual Report Fund Performance 2.4 Pheim Asia Ex-Japan Fund Portfolio composition Industry Sector FYE (%) (Percentage of NAV) FYE (%) (Percentage of NAV) FYE (%) (Percentage of NAV) Computer Construction Consumer Products Electronic Energy and Water Supply Finance Furniture Healthcare Industrial Products Infrastructure Manufacturing Material Mining Oil & Gas related Pharmaceutical and Cosmetic Plantations Properties Technology Telecommunications Trading / Services Transportation Cash and cash equivalents Total support@pheimunittrusts.com 16 Your Need is our Focus

20 PHEIM Annual Report Fund Performance PAXJ Other financial and performance data FYE FYE FYE Net asset value ( 000) 12, , , Units in circulation ( 000) 11, , , Net asset value per unit () NAV/ unit () ex-distribution NAV/ unit Highest NAV/ unit for the period NAV/ unit Lowest NAV/ unit for the period NAV/ unit Total returns for the period ( 000) Capital growth 1, (653.04) 1, Income distribution (906.05) Income Distribution (Final) n.a. n.a. n.a. Gross distribution per unit (sen) Net distribution per unit (sen) Management expense ratio (MER) (%) Portfolio turnover ratio (PTR) (time) Note: i) MER is calculated based on total fees and expenses incurred by the fund divided by average value of the fund calculated on a daily basis. The MER for the year was the same with that of previous year. ii) PTR is calculated based on the average of the acquisitions and disposals of investments of the fund to the average value of the fund calculated on a daily basis. The increase in PTR for the year was mainly due to the higher investment trading for the year. support@pheimunittrusts.com 17 Your Need is our Focus

21 PHEIM Annual Report Fund Performance PAXJ Average total return ended 31 December 2017 (%) One Year Three Years Five Years Annual total return for each of the last five financial years Financial year ended 31 December : (%) Note : All returns above are calculated based on NAV per unit adjusted for income distribution Data source : Bloomberg Past performance is not necessarily indicative of future performance and unit prices and investment returns may go down, as well as up. support@pheimunittrusts.com 18 Your Need is our Focus

22 PHEIM Annual Report Fund Performance 2.5 Pheim Asia Ex-Japan Islamic Fund Portfolio composition Industry Sector FYE (%) (Percentage of NAV) FYE (%) (Percentage of NAV) FYE (%) (Percentage of NAV) Computer Construction Consumer Products Electronic Energy and Water Supply Healthcare Industrial Products Manufacturing Material Mining Pharmacy and Cosmetics Plantations Properties Technology Telecommunications Trading / Services Cash and cash equivalents Total support@pheimunittrusts.com 19 Your Need is our Focus

23 PHEIM Annual Report Fund Performance PAXJI Other financial and performance data FYE FYE FYE Net asset value ( 000) 9, , , Units in circulation ( 000) 15, , , Net asset value per unit () NAV/ unit () ex-distribution NAV/ unit Highest NAV/ unit for the period NAV/ unit Lowest NAV/ unit for the period NAV/ unit Total returns for the period ( 000) Capital growth (226.53) Income distribution ( ) Income Distribution (Final) n.a. n.a. n.a. Gross distribution per unit (sen) Net distribution per unit (sen) Management expense ratio (MER) (%) Portfolio turnover ratio (PTR) (time) Note: i) MER is calculated based on total fees and expenses incurred by the fund divided by average value of the fund calculated on a daily basis. The MER for the year was lower due to higher average NAV during the year. ii) PTR is calculated based on the average of the acquisitions and disposals of investments of the fund to the average value of the fund calculated on a daily basis. The increase in PTR for the year was mainly due to the higher investment trading for the year. support@pheimunittrusts.com 20 Your Need is our Focus

24 PHEIM Annual Report Fund Performance PAXJI Average total return ended 31 December 2017 (%) One Year Three Years Five Years Annual total return for each of the last five financial years Financial year ended 31 December : (%) Note : All returns above are calculated based on NAV per unit adjusted for income distribution and unit split. Data source : Bloomberg Past performance is not necessarily indicative of future performance and unit prices and investment returns may go down, as well as up. support@pheimunittrusts.com 21 Your Need is our Focus

25 PHEIM Annual Report Manager s Report 3 MANAGER S REPORT 3.1 Performance Review PECBF The Fund has successfully met its investment objective of providing investors with capital appreciation in longer term by investing in a balanced portfolio of equities and fixed income instruments. The net asset value (NAV) per unit of the Fund stood at as at 31 December Taking into consideration the effects of income distribution for the year under review, the NAV per unit would have increased by 10.53%, underperforming the benchmark by 7.86%. In the second half of 2017, the Fund underperformed the benchmark by 0.99%. The total NAV increased to approximately million from million. The Fund has made an income distribution of 6.00 sen per unit (net of tax) on 20 April 2017 for the year ended 31 December After the income distribution, the NAV per unit adjusted to from Performance table since the last review period (6 months): As at Benchmark/ Fund As at Change % Benchmark of PECBF % % PECBF NAV per unit () ^ ^ Performance table for financial year 2017 (1 year): As at Benchmark/ Fund As at Change % Benchmark of PECBF % % PECBF NAV per unit () ^ a ^ adjusted for income distribution on a % of change is computed on a like-for-like basis after adjustments to neutralise the effects of the income distribution during the year support@pheimunittrusts.com 22 Your Need is our Focus

26 PHEIM Annual Report Manager s Report DMP The Fund has successfully met its investment objective of providing investors with capital appreciation in longer term by investing in a balanced portfolio of equities and fixed income instruments which strictly comply with the principles of the Shariah. The net asset value (NAV) per unit of the Fund stood at as at 31 December Taking into consideration the effects of income distribution and unit split for the year under review, the NAV per unit would have increased by 20.70%, outperforming the benchmark by 4.5%. In the second half of 2017, the Fund outperformed the benchmark by 1.43%. The total NAV increased to approximately million from million. The Fund has made an income distribution of 6.00 sen per unit (net of tax) on 20 April 2017 for the year ended 31 December After the income distribution, the NAV per unit adjusted to from On 25 August 2017, the Fund has declared a 1:1 unit split exercise for the existing unit holders, who received one new unit for every one unit held, while maintaining the value of total holdings. After the unit split, the NAV per unit adjusted to from Performance table since the last review period (6 months): As at Benchmark/ Fund As at Change % Benchmark of DMP % % DMP NAV per unit () ^^ ^ a Performance table for financial year 2017 (1 year): As at Benchmark/ Fund As at Change % Benchmark of DMP % % DMP NAV per unit () ^^ a ^ adjusted for income distribution on ^^ adjusted for income distribution on & unit spilt on a % of change is computed on a like-for-like basis after adjustments to neutralise the effects of the income distribution and unit split during the year PIF The Fund has successfully met its investment objective of providing investors with consistent income returns in the medium to longer term by investing primarily in medium to long term fixed income instruments and also equities and other high yielding instruments. The net asset value (NAV) per unit of the Fund stood at as at 31 December Taking into consideration the effects of income distribution for the year under review, the NAV per unit would have increased by 5.36%, outperforming the benchmark by 2.27%. In the second half of 2017, the Fund outperformed the benchmark by 1.26%. The total NAV declined to approximately 9.94 million from million. support@pheimunittrusts.com 23 Your Need is our Focus

27 PHEIM Annual Report Manager s Report PIF (contd.) The Fund has made an income distribution of 4.00 sen per unit (net of tax) on 20 April 2017 for the year ended 31 December After the income distribution, the NAV per unit adjusted to from Performance table since the last review period (6 months): As at Benchmark/ Fund As at Change % 1-year fixed deposit rate (pro-rated) 54.28% 52.72% PIF NAV per unit () ^ ^ Performance table for financial year 2016 (1 year): As at Benchmark/ Fund As at Change % 1-year fixed deposit rate (pro-rated) 54.28% 51.19% PIF NAV per unit () ^ a ^adjusted for income distribution on a % of change is computed on a like-for-like basis after adjustments to neutralise the effects of the income distribution during the year PAXJ The Fund has successfully met its investment objective of providing investors with capital appreciation in long term by investing primarily in Asian markets excluding Japan. The net asset value (NAV) per unit of the Fund stood at as at 31 December outperforming the benchmark by 11.24%. In the second half of 2017, the Fund has outperformed the benchmark by 3.47%. The total NAV declined to approximately million from million. There is no income distribution for year Performance table since the last review period (6 months): As at Benchmark/ Fund As at Change % 7% per annum (pro-rated) 80.22% 76.69% NAV per unit () Performance table for financial year 2017 (1 year): As at Benchmark/ Fund As at Change % 7% per annum (pro-rated) 80.22% 73.22% NAV per unit () support@pheimunittrusts.com 24 Your Need is our Focus

28 PHEIM Annual Report Manager s Report PAXJI The Fund has successfully met its investment objective of providing investors with capital appreciation in long term by investing primarily in Asian markets excluding Japan through investments that comply with Shariah requirements. The net asset value (NAV) per unit of the Fund stood at as at 31 December Taking into consideration the effects of unit split for the year under review, the NAV per unit would have increased by 21.39%, outperforming the benchmark by 14.39%. In the second half of 2017, the Fund outperformed the benchmark by 1.97%. The total NAV increased to approximately 9.88 million from 6.89 million. On 30 November 2017, the Fund has declared a 1:1 unit split exercise for the existing unit holders, who received one new unit for every one unit held, while maintaining the value of total holdings. After the unit split, the NAV per unit adjusted to from There is no income distribution for year Performance table since the last review period (6 months): As at Benchmark/ Fund As at Change % 7% per annum (pro-rated) 77.84% 74.31% NAV per unit () ^ a Performance table for financial year 2016 (1 year): As at Benchmark/ Fund As at Change % 7% per annum (pro-rated) 77.84% 70.84% NAV per unit () ^ a ^adjusted for unit split on a % of change is computed on a like-for-like basis after adjustments to neutralise the effects of the unit split during the year support@pheimunittrusts.com 25 Your Need is our Focus

29 PHEIM Annual Report Manager s Report 3.2 Performance Chart Since Inception PECBF DMP support@pheimunittrusts.com 26 Your Need is our Focus

30 PHEIM Annual Report Manager s Report PIF PAXJ support@pheimunittrusts.com 27 Your Need is our Focus

31 PHEIM Annual Report Manager s Report PAXJI Note: The data source for all the above performance returns is Bloomberg. support@pheimunittrusts.com 28 Your Need is our Focus

32 PHEIM Annual Report Manager s Report 3.3 Changes in Asset Allocation since the last review (in percentage) PECBF Asset Class As at As at Change Equity Securities in Malaysia Equity Securities outside Malaysia Corporate Bonds Cash and cash equivalent Total DMP Asset Class Shariah-compliant equity securities in Malaysia As at As at Change Sukuk Cash and cash equivalent Total PIF Asset Class As at As at Change Corporate Bonds in Malaysia Money market & cash Equity Securities in Malaysia Equity Securities outside Malaysia Total support@pheimunittrusts.com 29 Your Need is our Focus

33 PHEIM Annual Report Manager s Report PAXJ Asset Class As at As at Change Equity Securities outside Malaysia Equity Securities in Malaysia Cash and cash equivalent Total PAXJI Asset Class Shariah-compliant equity securities outside Malaysia Shariah-compliant equity securities in Malaysia As at As at Change Cash and cash equivalent Total Funds Strategies and Policies Employed PECBF As at end-december 2017, Pheim Emerging Companies Balanced Fund s asset allocation was 55.72% in equities, 9.52% in fixed income securities and 34.76% in cash. The equity exposure has increased by 4.71% as a result of the price appreciation of certain equities held in the portfolio. During the year, the Fund had invested in foreign equities listed in Hong Kong/China, Singapore, Indonesia, Thailand, Philippines and Korea as part of the diversification strategy. The exposure of fixed income securities has reduced by 4.93% in line with negative outlook in the rising interest-rate environment. For the year ended 31 December 2017, PECBF recorded the following gains or losses in the various markets invested. support@pheimunittrusts.com 30 Your Need is our Focus

34 PHEIM Annual Report Manager s Report Net realised and Market unrealised gain/ (loss) 000 Malaysia 2,673 Indonesia (254) Thailand 146 Philippines 175 Singapore (512) Hong Kong/China 391 Korea DMP As at end-december 2017, Dana Makmur Pheim s asset allocation was 51.91% in Shariah-compliant equities and 48.09% in cash. The Shariah-compliant equity exposure has increased to 51.91% from 48.05% as a result of price appreciation of certain equities held in the portfolio. During the year 2017, the sukuk exposure reduced to Nil from 15.73% in the preceding year after the sukuk reached maturity. The sukuk that matured was not replaced by another sukuk investment given the negative sukuk outlook in the rising interest rate environment. For the year ended 31 December 2017, DMP recorded a net profit of 3,961, (total of realised and unrealised) due to investments in domestic Shariah-compliant equities. Net realised and Market unrealised gain/ (loss) 000 Malaysia 3, PIF As at end-december 2017, Pheim Income Fund s asset allocation was 20.15% in corporate bonds, 59.33% in money market/cash and 20.52% in equities. As part of our diversification strategy, the Fund had invested in foreign equities listed in Hong Kong/China, Singapore, and Indonesia. The exposure of fixed income securities decreased by 30.69% as a result of a sukuk that had reached maturity. The sukuk that matured was not replaced by another sukuk investment given the negative fixed income outlook in the rising interest rate environment. For the year ended 31 December 2017, PIF recorded the following gains or losses in the various markets invested. support@pheimunittrusts.com 31 Your Need is our Focus

35 PHEIM Annual Report Manager s Report Net realised and Market unrealised gain/ (loss) 000 Malaysia 426 Indonesia (57) Singapore (86) Hong Kong/China PAXJ During the year, the Fund s total equity exposure in foreign and domestic equities increased by 8.52%. As at 31st December 2017, PAXJ s total equity exposure was 79.96% whereby 50.89% was invested in foreign equities and the remaining is in domestic equities. During the year, the PAXJ has invested in foreign equities listed in Hong Kong/China, Singapore, Indonesia, Taiwan, Thailand, Philippines and Korea. For the year ended 31 December 2017, PAXJ recorded the following gains or losses in the various markets invested. Net realised and Market unrealised gain/ (loss) 000 Malaysia 2,445 Indonesia (348) Korea 245 Thailand 130 Singapore (363) Hong Kong/China 270 Philippines 139 Taiwan PAXJI During the year, the Fund s total equity exposure in both foreign and domestic Shariahcompliant equities decreased by 12.33%. As at 31 December 2017, PAXJI s total equity exposure was 71.87% whereby 43.02% was invested in Shariah-compliant foreign equities and the remaining in domestic Shariah-compliant equities. support@pheimunittrusts.com 32 Your Need is our Focus

36 PHEIM Annual Report Manager s Report During the year, the PAXJI has invested in Shariah-compliant foreign equities listed in Hong Kong/China, Singapore, Indonesia, Taiwan, Thailand, Philippines and Korea. For the year ended 31 December 2017, PAXJI recorded the following gains or losses in the various markets invested. Net realised and Market unrealised gain/ (loss) 000 Malaysia 1,191 Indonesia (104) Korea 80 Thailand 115 Singapore (47) Philippines 72 Hong Kong/China 213 Taiwan 40 support@pheimunittrusts.com 33 Your Need is our Focus

37 PHEIM Annual Report Manager s Report 3.5 Market Review, Outlook and Strategy Malaysian Bond/Sukuk Market Bond Market Review Bank Negara Malaysia (BNM) decided to maintain its Overnight Policy Rate (OPR) at 3% at its latest Monetary Policy Committee Meeting (MPC) on 9 November 2017, following sudden 25bps cut mid Policymakers pointed that it may consider reviewing the current degree of monetary accommodation in the future given the strength of the global and domestic macroeconomic conditions. BNM opined that at current level, the stance of monetary policy remains accommodative, although the central bank agree that the Malaysian economy has become more entrenched, with both domestic and external sectors registering strong performances. The country s Gross Domestic Product (GDP) growth is estimated at 5.2% to 5.7% in 2017 and 5% to 5.5% in The central bank expects domestic demand to remain the key source of growth for 2018 as private consumption, supported by continued improvements in income and overall labor market condition, will be boosted. It also noted that investment will be sustained by infrastructure projects and higher capital investment in the manufacturing and services sector; whilst external sector will provide additional impetus to the economy. In another statement, BNM emphasized that the ringgit has strengthened to better reflect the economic fundamentals. Banking system liquidity remains sufficient with financial institutions continuing to operate with strong capital and liquidity buffers, with encouraging growth of financing to the private sector, which has been sustained and is supportive of economic activity. On the external front, BNM said the global economy continues to strengthen and global trade has picked up significantly, despite risks arising from geopolitical and policy developments in major economies. During the year of 2017, all three major credit rating agencies, i.e. Standard & Poor s (S&P), Moody s and Fitch, have affirmed Malaysia s sovereign ratings at A-, A3 and A- respectively, all with stable outlook. However, S&P and Fitch opined that, ongoing political challenges combined with approaching elections will pose as a threat to the sovereign rating over the near-to-medium term. These challenges, they further stressed, could manifest themselves via a rise in the cost of refinancing Malaysia s sizeable gross external financing needs, or via foreign outflows from Malaysia s deep local currency government bond market. Nonetheless, they affirmed that the credit rating reflects Malaysia s strong external position and monetary policy flexibility, as well as sound growth prospects. The total outstanding bond (including Sukuk) was bil as at end Nov17. The government 10-year bond yield dropped to 3.931% as at end of 2017 from 4.217% as at end of The bond yield swung between 4.263% (January) and 3.841% (September) during the year support@pheimunittrusts.com 34 Your Need is our Focus

38 PHEIM Annual Report Manager s Report Bond Market Outlook and Strategy 2018 sees challenges arising for Malaysia s debt market in the form of rising yields risk and potential outflows from further upside to the equities market and political tensions. On the external front, Trump s administration and implementation of his policies will continue to be the key theme to watch out for; whilst tensions amidst military powerhouses China, South Korea and US may threaten to undermine market s buoyancy. On the monetary policy front, with US Fed aggressively raising rates throughout 2017, market is expecting further rate hikes into 2018 with Jerome Powell, who is not unlike his predecessor in terms of policy preferences, replacing Janet Yellen as the new Fed chair. With higher inflationary pressure expected in the year 2018 on the back of rising oil price and improving wage growth, as well as the rising interest rates in the US, we opine that BNM may raise the OPR in 2018, which may further provide a boost to the strengthening Malaysian Ringgit. Given the challenging economic outlook, we would continue to adopt a tight credit assessment policy. Among the fundamental assessment on the bonds include the issuers credit profile, management, financial performance and industry outlook. In order to mitigate the interest rate risks, we would prefer to invest in fixed income securities/sukuk which offer shorter-dated maturities. Apart from investing in high quality bonds/sukuk that meet our investment criteria, we would ensure that the bonds/sukuk invested would be able to give investors a decent yield for the risks undertaken. support@pheimunittrusts.com 35 Your Need is our Focus

39 PHEIM Annual Report Manager s Report Stock Markets Review Malaysian Stock Market (Bursa Malaysia) The FBM KLCI closed the year 2017 in the positive territory, supported by stronger than expected domestic economic growth, after recording three consecutive annual declines in 2014, 2015 and The main Index closed at 1, points, up 9.5% y.o.y. The stronger than expected GDP growth in 2017 supported the market but it continued to underperform its ASEAN peers. The Ringgit appreciated by 10.5% y.o.y against the US Dollar, closing the year at /USD. Bank Negara Malaysia has been maintaining its overnight policy rate (OPR) at 3.0% throughout the year after a 25bps cut in July The Central Bank stated that the rate remains accommodative and supportive of economic activity and it also indicated in early November that the OPR may be raised, given the strength of the global and domestic macroeconomics. Headline inflation was recorded at 3.4% y.o.y in November, slowing from the 3.7% y.o.y rise in October. It was the lowest inflation rate since July. The easing inflation rate was mainly attributable to a slowdown in cost of food & non-alcoholic beverages, transport and housing & utilities. The Central Bank projected the headline inflation rate to be at the upper range of the forecast range of 3-4% for 2017 and will then moderate in 2018 on expectations of smaller effects from global cost factors. However, it will continue to be dependent on the global oil prices. The Malaysian economy expanded by 6.2% y.o.y in 3Q16, stronger than the 5.8% growth recorded in 2Q16. The strong growth was driven by domestic demand particularly private sector spending. The World Bank projects Malaysia's economy to continue at a strong pace of 5.2% y.o.y in 2018, though slightly slower compared with the expected 5.8% growth in The World Bank's Malaysia Economic Monitor report issued in December said the 5.8% y.o.y growth would be the country s highest annual growth rate since The U.S. fiscal and trade policies, the pace of Fed s rate hike and geopolitical tension in various regions of the world will remain as the ongoing uncertainties. On the domestic front, the 14th General Election is expected to be held in the first half of the year in which investors may stay on the sideline nearing the election date. The economy is expected to continue to grow at a strong pace in 2018 although a bit slower than the stronger than expected pace which had supported the market in We shall continue to be selective in seeking investment opportunities, favouring stocks with quality management, low valuation and not excessively geared while trimming those we deem have ran beyond fundamentals. support@pheimunittrusts.com 36 Your Need is our Focus

40 PHEIM Annual Report Manager s Report Foreign Securities Investment - Market Review Singapore Market FSSTI Index ended the year on a high note, gaining 18.13% in 2017 to close the index at 3, points. The Index experienced sharp correction mid-december following strong rally throughout October and November, before again surging to new high end December. The SGD appreciated 7.66% in 2017 against the USD and closed at SGD1.336/USD at the end of December. The stronger SGD can be attributed to improving market sentiments amidst higher than expected GDP growth and expectations of tightening monetary policy in Singapore s economy expanded 3.5% this year, more than double the government s initial forecast as the country benefitted from the global economic upswing. Singapore s 2017 growth comes at the top end of the most recent trade ministry prediction of 3-3.5% and compares with the median 3.3% forecast in a Bloomberg survey, though the manufacturing-led growth spurt lost some steam in the final three months of the year. 4Q17 GDP came in at 3.1%. Economists maintains that while 2018 s economy looks to be stable, it may not be as strong as 2017, coming from a high base. Manufacturing growth saw signs of tapering off with the gap being picked up by services sector, which showed encouraging growth throughout the year. Potential headwinds like the slowdown in China s investments and rising government s expenditure as highlighted by PM Lee Hsien Loong, may hamper growth prospects for the country. Already in talks is the implementation of higher GST rate from the current 7% to 8%-10% according to consensus, as a move to cushion rapidly increasing government financing needs. Monetary Authority of Singapore (MAS) has maintained the rate of appreciation of Singapore Dollar s nominal effective exchange rate policy band at zero percent previously, given the benign inflation level and soft labour market. However, with growth fundamentals improving (holding everything at status quo), rising inflation risk should not be ignored. Economists generally view that this is an appropriate timing for MAS to return to an exchange rate appreciation stance, in line with global monetary policies. Singapore home prices rose by 1% in 2017, signalling a turnaround after three straight years of declines as the government tweaked seller s stamp duty (SSD) in March17. A jump in home sales and developers aggressive bids for land are stoking optimism that the property market is indeed, making a comeback despite cooling measures still in place. Singapore s economy may not experience smooth sailing in 2018, as tapering of manufacturing sector and strong SGD will crimp on exports, on the other hand, impending implementation of GST hike may cause domestic consumption to weaken further. Although property sector and banking sector are slated to push the market to new highs, we remained cautious on the market on the back of rising rates and taxes, besides risk of potential outflows. support@pheimunittrusts.com 37 Your Need is our Focus

41 PHEIM Annual Report Manager s Report Hong Kong/ China Market In 2017, Hang Seng Index increased by 35.99% to 29, points while Hang Seng China Enterprise Index increased by 24.64% to 11, points. The strong performance of the indexes was due to recovery of global economy and strong China domestic economy which boosted China companies corporate earnings. China s gross domestic product expanded 6.9% y.o.y in 2017, beating official target of 6.5% and picking up steam for the first time since The economy expanded 6.8% y.o.y in 4th quarter The economy maintained stable momentum of growth despite its battles against massive debt and polluting factories. In 2017, central SOEs eliminated steel production capacity by 5.95mil tons and coal capacity by mil tons, both beating annual reduction target of 5.95 mil tons of steel and mil tons of coal. For 2018, central SOEs plan to shed coal production capacity by over 10 mil tons with coal industry restructuring a priority. Modern technology will be used to upgrade traditional steel industry, and efforts will be strengthened in overcapacity cuts in ship building, nonferrous metals and construction material sector, Shen Ying, the chief accountant of the State-owned Assets Supervision and Administration Commission (SASAC) said. In September 2017, S&P Global Ratings cut China s sovereign credit rating for the first time since 1999, citing the risks from soaring debt, and revised its outlook to stable from negative. The sovereign rating was cut by one step, to A+ from AA-. In May, Moody cut its rating on China to A1 from Aa3 citing similar concerns over economy wide debt. Moody's cited the likelihood of a "material rise" in debt and the burden that will place on the government s finances, while also changing the outlook to stable from negative. Global equity indexes provider MSCI announced that beginning in June 2018, it will include 222 China Large Cap A-shares in the MSCI Emerging Markets (EM) Index and the MSCI ACWI (All Country World Index) Index. It represents on a pro forma basis approximately 0.73% of the weight of the MSCI Emerging Markets Index at a 5-percent partial Inclusion Factor. MSCI will reflect a higher representation of China A shares when further alignment with international market accessibility standards occurs, sustained accessibility is proven within Stock Connect and international institutional investors gain further experience in the market, MSCI Managing Director Remy Briand said. Riding on global economy recovery, China managed to expedite its supply side structural reform and also deleveraging of its economy, without experiencing economic slowdown. The economy rebalancing act will provide a strong foundation for China to achieve long term sustainable growth. We are optimistic of China s long term prospect and will seize the opportunity to accumulate stocks with solid fundamentals. support@pheimunittrusts.com 38 Your Need is our Focus