31 DECEMBER Pheim Emerging Companies Balanced Fund Dana Makmur Pheim. Pheim Income Fund Pheim Asia Ex-Japan Fund

Transcription

1 A N N U A L 31 DECEMBER 2014 R E P O R T PHEIM Pheim Emerging Companies Balanced Fund Dana Makmur Pheim Pheim Income Fund Pheim Asia Ex-Japan Fund Pheim Asia Ex-Japan Islamic Fund PHEIM UNIT TRUSTS BERHAD ( A) 7 th Floor, Menara Hap Seng (Letter Box 12) Jalan P.Ramlee, Kuala Lumpur, Malaysia. Tel No: (603) Fax No:(603) Your Need is our Focus

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) Wong Cheng Leong (Independent) Hoi Weng Kong (Independent) INVESTMENT COMMITTEE Ong Kheng Liat (Non-independent) Foong Mei Phong (Non-independent) Zarina Omar (Independent) Rostam Effendi Abdul Rahim (Independent) Pee Ban Hock (Independent) Ho Sen Feek (Independent) Mark Wing Kong (Independent) 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 TAXATION CONSULTANT Folks Taxation Sdn Bhd ( M)

3 PHEIM Annual Report CONTENTS Page No 1. Funds Information 2. Funds Performance 3. Manager s Report Trustee s Report, Statement by the Manager, 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 2014 to 31 December 2014 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 DMP is an Islamic balanced fund that aims to provide Shariah permissible income and some capital growth. PIF PAXJ PAXJI 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 DMP 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. 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. support@pheimunittrusts.com 1 Your Need is our Focus

5 PHEIM Annual Report Fund Information PIF 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. 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. support@pheimunittrusts.com 2 Your Need is our Focus

6 PHEIM Annual Report Fund Information 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 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. Bursa Malaysia & Maybank PIF Maybank 1-year fixed deposit rate at the beginning of the financial year. Maybank The performance benchmark for both 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 the respective Fund s performance. The Funds may or may not achieve the 7% per annum growth rate in any particular financial year but the manager 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 PAXJ & PAXJI 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. 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 Size of holding ( 000) % 5,000 and below No. of Accounts % Unitholders No. of Unitholders % ,001-10, ,001-50,000 50, , ,001 and above 1, , , Total 17, DMP No. of units held Size of holding ( 000) % 5,000 and below No. of Accounts % Unitholders No. of Unitholders % ,001-10, ,001-50,000 50, , ,001 and above 1, , , Total 6, 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 No. of Accounts % Unitholders No. of Unitholders % ,001-10, ,001-50,000 50, , ,001 and above , , Total 15, 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 30, 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 9, support@pheimunittrusts.com 6 Your Need is our Focus

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

11 PHEIM Annual Report Funds Performances PECBF Other financial and performance data FYE FYE FYE Net asset value ( 000) 20, , , Units in circulation ( 000) 17, , , 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 (1,181.27) (582.00) Income distribution 1, , , 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 decreased compare with the previous year due to the increase in averaged NAV for 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 higher investment trading. support@pheimunittrusts.com 8 Your Need is our Focus

12 PHEIM Annual Report Funds Performances PECBF Average total return ended 31 December 2014 (%) 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 Funds Performances 2.2 Dana Makmur Pheim Portfolio composition FYE (%) FYE (%) (Percentage of Net Asset Value) FYE (%) Construction Consumer Products Finance Industrial Products Infrastructure Plantations Properties Technology Trading / Services Sukuk Cash and Other Assets Total Other financial and performance data FYE FYE FYE Net asset value ( 000) 13, , , Units in circulation ( 000) 6, , , Net asset value per unit () support@pheimunittrusts.com 10 Your Need is our Focus

14 PHEIM Annual Report Funds Performances 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 (1,422.09) (517.93) 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 decrease mainly due to the increase in averaged NAV for 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 decrease in PTR for the year was mainly due to lower investment activity. support@pheimunittrusts.com 11 Your Need is our Focus

15 PHEIM Annual Report Funds Performances DMP Average total return ended 31 December 2014 (%) 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 12 Your Need is our Focus

16 PHEIM Annual Report Funds Performances 2.3 Pheim Income Fund Portfolio composition FYE (%) FYE (%) FYE (%) (Percentage of Net Asset Value) Construction Consumer Product Finance Home Furniture Industrial Products Infrastructure Manufacturing Mining Oil and Gas 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) 16, , , 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 (285.23) (423.06) Income distribution support@pheimunittrusts.com 13 Your Need is our Focus

17 PHEIM Annual Report Funds Performances Other financial and performance data (continued) PIF 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 remains consistent with the 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 increase in investment activity Average total return ended 31 December 2014 (%) One Year Three Years Five Years support@pheimunittrusts.com 14 Your Need is our Focus

18 PHEIM Annual Report Funds Performances PIF 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 15 Your Need is our Focus

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

20 PHEIM Annual Report Funds Performances PAXJ Other financial and performance data FYE FYE FYE Net asset value ( 000) 26, , , Units in circulation ( 000) 30, , , 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 (559.36) 2, , Income distribution (821.41) (1,062.61) 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 increased mainly due to the higher expenses incurred for 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 higher PTR for the year was mainly due to the increased investment trading for the year. support@pheimunittrusts.com 17 Your Need is our Focus

21 PHEIM Annual Report Funds Performances PAXJ Average total return ended 31 December 2014 (%) 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 Funds Performances 2.5 Pheim Asia Ex-Japan Islamic Fund Portfolio composition Industry Sector FYE (%) (Percentage of NAV) FYE (%) (Percentage of NAV) FYE (%) (Percentage of NAV) Biochemical and Biotechnology Computer Construction Consumer Products Energy and Water Supply Industrial Products Manufacturing Mining Oil & Gas related 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 Funds Performances PAXJI Other financial and performance data FYE FYE FYE Net asset value ( 000) 9, , , Units in circulation ( 000) 9, , , 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 (87.37) , Income distribution , (2,453.06) 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 decreased mainly due to the higher averaged NAV for 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 Funds Performances PAXJI Average total return ended 31 December 2014 (%) 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 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. For the year ended 31 December 2014, the net asset value (NAV) per unit of the fund declined by 0.46%, which has outperformed the benchmark by 4.67%. However, in the second half of 2014, the fund has outperformed the benchmark by 10.02%. The total NAV increased to approximately 20.8million from 18.5million The Fund had made an income distribution of 6.50 sen per unit (net of tax) on the 29 April 2014 for the period ended 31 December After the income distribution, the NAV per unit declined to from Performance table since the last review period (6 months): Benchmark/ Fund As at As at Change % Benchmark of PECBF % % PECBF NAV per unit () ^ Performance table for financial year 2014 (1 year): Benchmark/ Fund As at As at Change % Benchmark of PECBF % % PECBF NAV per unit () ^ ^adjusted for income distribution on 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. For the year ended 31 December 2014, the net asset value (NAV) per unit of the fund increased by 1.74%, which has outperformed the benchmark by 4.18%. However, in the second half of 2014, the fund has outperformed the benchmark by 5.04%. The total NAV increased to approximately 13.5 million from 13.4 million. The Fund had made an income distribution of 6.50 sen per unit (net of tax) on the 29 April 2014 for the period ended 31 December After the income distribution, the NAV per unit declined to from Performance table since the last review period (6 months): Benchmark/ Fund As at As at Change % Benchmark of DMP % % DMP NAV per unit () ^ Performance table for financial year 2014 (1 year): Benchmark/ Fund As at As at Change % Benchmark of DMP % % DMP NAV per unit () ^ ^adjusted for income distribution on 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. For the year ended 31 December 2014, the net asset value (NAV) per unit of the fund declined by 3.97%, which has underperformed the benchmark by 7.12%.However, in the second half of 2014, the fund has underperformed the benchmark by 1.36%. The total NAV increased to approximately 16.7 million from 14.5 million. support@pheimunittrusts.com 23 Your Need is our Focus

27 PHEIM Annual Report Manager s Report PIF (contd.) The Fund had made an income distribution of 7.00 sen per unit (net of tax) on the 29 April 2014 for the period ended 31 December After the income distribution, the NAV per unit declined 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) 44.58% 43.00% PIF NAV per unit () ^ Performance table for financial year 2014 (1 year): As at Benchmark/ Fund As at Change % 1-year fixed deposit rate (pro-rated) 44.58% 41.43% PIF NAV per unit () ^ ^adjusted for income distribution on 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. For the year ended 31 December 2014, the net asset value (NAV) per unit of the fund increased by 1.66%, which has underperformed the benchmark marginally by 5.34%. However, in the second half of 2014, the fund has underperformed the benchmark by 4.50%. The total NAV declined to approximately 26million from 28million. Performance table since the last review period (6 months): As at Benchmark/ Fund As at Change % 7% per annum (pro-rated) 59.20% 55.67% NAV per unit () Performance table for financial year 2014 (1 year): As at Benchmark/ Fund As at Change % 7% per annum (pro-rated) 59.20% 52.20% 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. For the year ended 31 December 2014, the net asset value (NAV) per unit of the fund increased by 3.66%, which has underperformed the benchmark by 3.34%. However, in the second half of 2014, the fund has underperformed the benchmark by 6.10%. The total NAV increased to approximately 9.6 million from 8.2 million. Performance table since the last review period (6 months): As at Benchmark/ Fund As at Change % 7% per annum (pro-rated) 56.82% 53.30% NAV per unit () Performance table for financial year 2014 (1 year): As at Benchmark/ Fund As at Change % 7% per annum (pro-rated) 56.82% 49.82% NAV per unit () Performance Chart Since Inception PECBF support@pheimunittrusts.com 25 Your Need is our Focus

29 PHEIM Annual Report Manager s Report DMP PIF support@pheimunittrusts.com 26 Your Need is our Focus

30 PHEIM Annual Report Manager s Report PAXJ PAXJI Note: The data source for all the above performance returns is Bloomberg. support@pheimunittrusts.com 27 Your Need is our Focus

31 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 As at As at Change Shariah-compliant equity securities in Malaysia 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 28 Your Need is our Focus

32 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 2014, Pheim Emerging Companies Balanced Fund s asset allocation was 39.18% in equities, 27.35% in fixed income securities and 33.47% in cash. We reduced our equity exposure to 39.18% from 56.33% as we took profits from selected stocks. During the year, the fund had invested in foreign equities listed in Hong Kong/China, Singapore, Indonesia, Thailand and South Korea as part of the diversification strategy. Going forward, we may increase our exposure in fixed income securities that offer good yield for the risks undertaken. We prefer to invest in fixed income securities which have a maturity of less than 5 years in order to mitigate interest rate risk. For the year ended 31 December 2014, PECBF recorded the following gains or losses in the various markets invested. Net realised and Market unrealised gain/ (loss) 000 Malaysia 1,103 Indonesia 348 Thailand (109) Korea 87 Philippines 46 Singapore (133) Hong Kong/China (421) support@pheimunittrusts.com 29 Your Need is our Focus

33 PHEIM Annual Report Manager s Report DMP As at end-december 2014, Dana Makmur Pheim s asset allocation was 37.37% in Shariah-compliant equities, 26.61% in sukuk and 36.02% in cash. We have reduced the Shariah-compliant equity exposure to 37.37% from 43.91% as we took profits from selective Shariah-compliant stocks. During the year 2014, the sukuk exposure increased to 26.61% from 3.74% in the preceding year as we increased our exposure on sukuk that offer good yield for the risks undertaken. For the year ended 31 December 2014, DMP recorded a net realised and unrealised gain of 1,363,182 due to investments in domestic Shariah-compliant equities PIF As at end-december 2014, Pheim Income Fund s asset allocation was 51.91% in corporate bonds, 32.34% in money market/cash and 15.75% in equities. Although we were cautiously optimistic on the Asia ex-japan equity market in the year 2014, the equity exposure of 15.75% was relatively unchanged (2013: 18.62%) as the maximum equity exposure allowable was 20%. As part of our diversification strategy, the fund had invested in foreign equities listed in Hong Kong/China, Singapore and Indonesia. Going forward, we may increase our exposure in fixed income securities that offer good yield for the risks undertaken. We are maintaining our stance of investing in fixed income securities which have a maturity of less than 5 years in order to mitigate interest rate risk. For the year ended 31 December 2014, PIF recorded the following gains or losses in the various markets invested. Net realised and Market unrealised gain/ (loss) 000 Malaysia 1 Indonesia 17 Philippines 42 Singapore (145) Hong Kong/China (43) Thailand 15 support@pheimunittrusts.com 30 Your Need is our Focus

34 PHEIM Annual Report Manager s Report PAXJ During the year, the Fund s total equity exposure decreased by 20.73% as the Fund decreased exposure in foreign equities as some foreign stocks have outrun the fundamental. As at 31st December 2014, PAXJ s total equity exposure was 67.96% whereby 47.82% 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, the Philippines and Korea. For the year ended 31 December 2014, PAXJ recorded the following gains or losses in the various markets invested. Net realised and Market unrealised gain/ (loss) 000 Malaysia 596 Indonesia 743 Korea (155) Thailand (957) Singapore (868) Hong Kong (1,547) Philippines 132 Taiwan (189) PAXJI During the year, the Fund s total equity exposure decreased by 15.55% as the Fund decreased exposure in foreign equities as some foreign stocks have outrun the fundamental. As at 31st December 2014, PAXJI s total equity exposure was 62.50% whereby 34.75% was invested in Shariah-compliant foreign equities and the remaining in domestic Shariah-compliant equities. During the year, the PAXJI has invested in Shariah-compliant foreign equities listed in Hong Kong/China, Singapore, Indonesia, Taiwan, Thailand, the Philippines and Korea. The fund has not invested in any sukuk. For the year ended 31 December 2014, PAXJI recorded the following gains or losses in the various markets invested. Net realised and Market unrealised gain/ (loss) 000 Malaysia 423 Indonesia (30) Korea (85) Thailand (240) Singapore 109 Philippines 10 Hong Kong (721) Taiwan (262) support@pheimunittrusts.com 31 Your Need is our Focus

35 PHEIM Annual Report Manager s Report 3.5 Market Review, Outlook and Strategy Malaysian Bond/Sukuk Market Bond/Sukuk Market Review On the local front, Bank Negara Malaysia increased the overnight policy rate (OPR) by 25 basis points on the 10th of July. The floor and ceiling rates of the corridor of the OPR rate were also similarly raised bringing these to 3.00% and 3.50% respectively. According to the monetary policy statement, the normalization of the monetary conditions were to mitigate the risk of broader economic and financial imbalances that could undermine the growth prospects of the Malaysian economy. Given the developments in monetary and financial conditions, the current monetary policy stance is considered accommodative and is assessed to be appropriate by Bank Negara Malaysia. As a result of sharply weaker oil prices (WTI is now down more than 50% from its peak of around USD100), there has been increasing concern that Malaysia would have its own twin deficit. The national oil company Petronas warned that its capital expenditure in 2015 might be cut by 15% to 20%. As revenue from oil accounts for more than 30% of the country s revenue collection, it is clear that there is a real risk that the government may not be able to achieve the fiscal deficit target of 3.0% of gross domestic product (GDP) for 2015 without trimming its outlays. On the external front, the US remains committed to keeping interest rates at exceptionally low levels. However, this could change anytime as the US economic recovery continues to be promising. That being said, we believe the hike in interest rates would be done on a gradual basis to avoid disrupting US economic recovery. In fact, the US Federal Reserve has reiterated that the interest rates would be kept low for a considerable time and signalled that it would be patient in deciding on the timing to raise the interest rates Bond/Sukuk Market Outlook and Strategy In its 2013 annual report, Bank Negara Malaysia mentioned that inflation in 2014 and 2015 is expected to be above the historical average of between 3% to 4%. We believe the higher inflationary pressure comes from higher domestic costs such as wages, electricity tariff increase and the gradual removal of subsidies coupled with the depreciation of the ringgit against the USD. Besides, the introduction of goods and services tax (GST) in April 2015 can be expected to result in a price spike, though this GST effect may only be oneoff. Due to higher inflationary pressures, we do not discount the possibility of another 25 basis points hike in the Malaysia s OPR rate in the year 2015 and therefore, we expect the yield on Malaysian government securities to steepen especially for the longer dated securities. We remain conservative and would prefer maturities of less than 5 years of maturity to mitigate interest rate risks. support@pheimunittrusts.com 32 Your Need is our Focus

36 PHEIM Annual Report Manager s Report We would continue to adopt a prudent approach with key assessment criteria that include the issuers credit profile, management, financial performance, asset quality, risk management and industry outlook. We would continue to focus on investment grade bonds/sukuks Stock Markets Review Malaysian Stock Market (Bursa Malaysia) The FBM KLCI registered a decline of 5.7% y.o.y in 2014 to close the year at 1, points. It was the worst performing market among the key Asian markets as oil prices tumbled and the ringgit weakened, aggravated by foreign outflows. The ringgit has weakened against the USD to /USD as at end of December 2014 compared to /USD from a year earlier. It is set to weaken further. GDP growth in the third quarter of 2014 expanded 5.6% y.o.y, decelerating from a revised 6.5% growth in the previous quarter as all sectors in the economy rose at a slower pace. The trade surplus in November expanded to 11.1 bil, the highest since November 2011, mainly driven by the surprising growth in exports and flattish imports. Budget 2015, tabled in October, sees a Gross Domestic Product (GDP) growth of 5-6%, with total federal government expenditure rising to bil. It also highlighted the government s commitment to roll out 160 bil in railway-related infrastructure over the next few years and leverage on the public-private partnership (PPP) model to develop further highway infrastructure. However, there are concerns that the government may have to revise Budget 2015 due to changing macro environment amid the plunge in the oil prices and weaker ringgit which may derail the government s 3% fiscal deficit target for The inflation rate, inched up to 3.0% y.o.y in November, from +2.8% in the previous month and compared with +2.6% in September. The higher inflation in November was reflected in a faster increase in the core inflation rate, largely due to a sharp increase in the prices of alcoholic beverages & tobacco. Bank Negara Malaysia maintained the Overnight Policy Rate after raising it by 25bps to 3.25% in July. With the implementation of the GST as well as subsidy reductions, the inflation is expected to trend higher going forward. We maintain our neutral view given that Malaysia runs the risk of a trade deficit and current account deficit with weaker oil and CPO prices, which may put pressure on the country s credit ratings. In addition, the government s fiscal reforms continue to be a drag on consumption with subsidy rationalization and the rollout of GST. Market valuation also remains relatively high compared to its regional peers. Although we do not see a quick return to bullish outlook, we believe there are companies that may benefit from weaker ringgit and lower commodity prices. We remain selective in our search for undervalued stocks in this challenging market environment. support@pheimunittrusts.com 33 Your Need is our Focus

37 PHEIM Annual Report Manager s Report Foreign Securities Investment - Market Review Singapore Market The FSSTI was up modestly in 2014 with a gain of 6.24% y.o.y. The top performers in 2014 included banks, land transport, S-REIT and telecommunications. S-REITs made a comeback after a poor performance in 2013, as interest rates remained low. The banking sector performed well in the 2nd half of 2014 as the market expected that the US Federal Reserve will increase interest rates due to strengthening in economy. In 2014, the SGD depreciated by 4.95% y.o.y against the USD to close at /USD. The Singapore economy grew a less-than-expected 1.5% in the last three months of 2014 compared to 2.8% in the previous quarter. On the quarter-on-quarter seasonally adjusted annualized basis, the economy expanded by 1.6%, slower than the 3.1% expansion in the previous quarter. The lackluster fourth quarter growth figure was dragged down mainly by the manufacturing and construction sectors. The manufacturing sector contracted 2% over same period in 2013, while the construction industry expanded by merely 0.8%. The services sector which makes up 70% of the Singapore economy, grew 2.6%. Singapore was hit by deflation for the first time in five years on the back of plummeting global crude oil prices. Consumer prices across the economy fell by 0.3% in November over the same month last year. This was mainly caused by declining private road transport costs, which includes car and petrol pump prices. Core inflation came in at 1.5% versus the previous month's 1.7%. Non-oil exports grew 2.3% in December over the same month in 2013, after the 0.8% growth in previous month, driven by higher shipments of both electronics and nonelectronics products. The top three contributors to non-oil export growth were South Korea, Malaysia and European Union. Corporate earnings in 2014 were generally below market expectations resulting in market consensus earnings downgraded throughout the year. Singapore market is expect to be volatile in the first half of 2015 given the rising concerns on external issues such as weaker growth in China, interest rate hike by US Federal Reserve and Greece possibly leaving the European Union. In addition, the domestic challenges of economic restructuring, tight labour market and elevated cost will remain key challenges for Singapore s economy growth Hong Kong/ China Market The Hang Seng Index rose 1.28% in 2014 to close at 23, points. Sector wise, telecom, REITs and utilities performed well while gaming sector was hit by negative news flows, driven by the junket default, tighter liquidity, corruption crackdown and economic slowdown in China. Total retail sales volume in Hong Kong increased 7.5% in November 2014 over the same month in the previous year, driven by the sales of food-related category, clothing and foodwear, jewellery, watches as well as the sales at department stores. However, some of the headwinds in Hong Kong s retail industry should not be neglected. Despite support@pheimunittrusts.com 34 Your Need is our Focus

38 PHEIM Annual Report Manager s Report the improvement in retail sales during a 79 day-long street occupation by pro-democracy demonstrators, the market remained concerned about the change in tourism spending amid economic slowdown in China. The Hong Kong stock market is becoming more challenging as it is now facing both economic and political risks. China economy grew by 7.4% in 2014, in line with market expectations and was the weakest expansion in 24 years. The GDP growth was slightly below the government target of 7.5% for the year. The China government is focusing on a more sustainable path while tackling a housing slowdown, softening domestic demand and weak global recovery. Main contribution to GDP was spending on consumption, which up from 48.2% in 2013 to 51.2% in Industrial production grew 8.3% in 2014 versus 9.7% in 2013, while fixed-asset investment rose by 15.7% y.o.y, down from 19.6%, the slowest rate in 13 years. China s slowdown provided a huge impact on global commodity prices and exporters around the world. IMF lowered its forecast for China s economy in 2015 from 7.1% growth to 6.8% growth, due to the slowdown in property and investment. In November 2014, China cut benchmark interest rates for the first time since July 2012 with the one-year lending rate reduced by 0.4 percentage point to 5.6%, while the oneyear deposit rate was lowered by 0.25 percentage point to 2.75%. The policymakers also decided to increase ceiling for deposit rates to 1.2 times the benchmark rate from the previous 1.1 times. This was another move by its central bank to bolster flagging economic growth after the injection of more than USD 126 billion into the banking system in September and October. The rate cut boosted investors sentiments and drove strong gains in the stock market in the last quarter of The China economy is still facing downside risks as traditional industries continue to undergo capacity elimination process while the housing market down-cycle persists. With the recent macro data staying weak, the market is expecting further monetary easing in the first half of The China/Hong Kong market is expected to be liquiditydriven given a lack of fundamental support Indonesia Market The Indonesian stock market was among the best performers in The JCI closed the year at 5, points, up 22.3% y.o.y. Despite a hiccup in Sep-Oct period amid global jitters, the Index managed to recoup nearly all it had lost from the year s peak of 5, points. The rupiah depreciated by 1.8% y.o.y against the USD to close 2014 at IDR12,388/USD. The dollar gain on the JCI was 20.5% y.o.y. Bank Indonesia has maintained the policy rate at 7.75% in December after raising it by 25bps in an extraordinary meeting in November in an effort to tame the inflation following the hike of subsidized petrol and diesel prices in same month. The 2014 third quarter GDP growth slowed to 5.01% y.o.y, the weakest in 5 years, from 5.12% in previous quarter. Bank Indonesia in its December Monetary Policy Review projected economic growth to continue decelerating in the 2014 fourth quarter but will rebound in 2015 first quarter. The Central Bank projected the GDP growth in 2014 towards the lower end of the % range before rebounding to % in According to information from the Central Bank, the current account deficit narrowed to 3.1% of GDP in the third quarter from 4.3% of GDP in the previous quarter mainly due to support@pheimunittrusts.com 35 Your Need is our Focus