ITTIZAN ISTIQRAR MYEQUITY INDEX FUND MYGROWTH FUND MYBLUE CHIPS FUND MYDIVIDEND FUND MYBALANCED FUND

Transcription

1 ITTIZAN ISTIQRAR MYEQUITY INDEX FUND MYGROWTH FUND MYBLUE CHIPS FUND MYDIVIDEND FUND MYBALANCED FUND

2 This document provides detailed features, investment objectives, strategy and approach of the 7 Shariah-compliant funds and all other important information that you will need to know regarding these investment funds. 1. ITTIZAN 2. ISTIQRAR 3. MYEQUITY INDEX FUND 4. MYGROWTH FUND 5. MYBLUE CHIPS FUND 6. MYDIVIDEND FUND 7. MYBALANCED FUND The choice of funds should be based on, among others, your tolerance to risk. Please seek advice from your Takaful Financial Consultants of the company on your tolerance to risk. For Ittizan and Istiqrar, the funds are no longer being offered for new investment. The above mentioned funds will be professionally managed by the. The investment team comprises of a group of professional portfolio managers and investment research analysts who possess an average of 15 years experience in fund management and has previously managed more than RM7 billion worth of funds. Note: The selection of investible securities is conducted in a systematic manner where the investment process is governed by internal policies. In addition to that, the systematic investment process is strictly guided by the Company s Shariah Advisory Body to ensure that the Shariah principles are not compromised in every investment decision made.

3 Dec-10 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec-11 Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Nov-12 Dec-12 Jan-13 Feb-13 FBMSI Index MARKET REVIEW & OUTLOOK FBM Emas Shariah Index and FBM KL Composite Index Market Highlights FBMSI FBMKLCI 28/2/13 Monthly Chg YTD Chg 12,000 1,800 FBM KLCI 1, (3.04) 11,500 11,000 10,500 10,000 9,500 9,000 8,500 1,700 1,600 1,500 1,400 1,300 FBMKLCI Index FBM Emas Shariah 11, (7) (3.60) US Dow Jones 14, Japan Nikkei , Hong Kong Hang Seng 23, (2.99) 1.60 Singapore Straits Times 3, (0.39) 3.25 Jakarta Composite 4, MGS Yield 5 year ,000 1,200 Crude Oil (USD/Barrel) 95 (5.58) (0.73) CPO (RM/MT) 2, (6.26) (91.01) Source: Bloomberg Ringgit/USD 3.09 (0.51) 0.99 Source: Bloomberg Stock Market Review Asian markets fell after the Federal Open Market Committee meeting minutes showed concern among Federal Reserve officials over the central bank's stimulus measures. The minutes from the Fed's January policy meeting revealed worries that its current stimulus measures could result in instability in financial markets and may be difficult to remove in the future. Some of the officials said the central bank should change the pace of its asset purchases, while others argued the easing might need to remain in place until the job market improves "substantially." The Fed's stimulus measures, which aim to keep interest rates low to stimulate economic activity, have been seen as a major support for stock prices in recent years. Markets are therefore sensitive to news that there could be a change in the direction of policy. Over in Europe, Britain lost its top credit rating by Moody s Investors Service, which cited weakness in the nation s growth outlook and challenges to the government s fiscal consolidation program. The rating on the UK was lowered one level to Aa1 from Aaa and the outlook on the nation s debt changed to stable from negative. Sentiments worsened further after an inconclusive Italian election renewing concerns about the future of the euro zone. Stock Market Outlook Bursa Malaysia remained in consolidation mode with rumours of possible dissolution of parliament in March or April. For the month of February, KLCI rebounded by 0.62 while FBM Emas Syariah Index fell marginally by 7. Nevertheless, YTD, both KLCI and FBM Emas Syariah Index still declined by 3.04 and 3.6 to close at 1, points and 11,105.7 points respectively. In terms of strategy, we are waiting to buy on any sharp selloff to increase our equity exposure as we are more optimistic about the equity market performance after the General Election especially in the 2 nd half of the year. Bond Market Review Latest release on the 4Q GDP 2012 by the Statistical Department in 22 February 2013 shows Malaysia's economy expanded at a faster pace of 6.4 per cent as compared to 5.3 per cent in the preceding quarter of Throughout the year, the economy has enhanced to 5.6 per cent after registering 5.1 per cent in For the period under review, RM33.68 billion worth of trades were transacted with a daily average trading volume of RM billion. The short to medium tenure benchmarks ended on deals done with yields easing lower. For the GII benchmarks, only the 5-yrs benchmark was traded with the yield remaining unchanged at In the MGS/GII market, buying activity dominated the strong MGS market, led by the the 7yrs MGS benchmark where the yield slipped by 1 bps to close at 3.41 while the 3yrs, and 5yrs benchmark yields lower by 5 bps and 3 bps to settle at 3.10 and 3.23 respectively.. Bond Market Outlook For the near term, the sovereign bonds will likely to soak in impact from the downgraded rating of the western countries especially Britain. Domestically, uncertainties on the election outcome may boost demand for safe haven securities. Nonetheless, political risk may relay temporary upward pressure on the yields as there may be outflow of foreign fund holdings on Malaysian debt securities. As for the inflation, it is estimated that the domestic inflation to be contained within the estimated forecast level. Moving forward, it is expected that there would be an increase in numbers of bonds issued by corporates before the emergence of election days as the uncertain market from the upcoming general election may probably stirred the market movement.

4 Return ITTIZAN To achieve reasonable returns and capital growth opportunities through selected investment in Shariah approved shares listed in Bursa Malaysia and Shariah compliant Islamic debt securities. Invest in a balanced asset allocation comprising of Shariah compliant equities and Islamic debt securities. Equity : Sukuk/Cash : Combination of 70 FBM Emas Shariah Index (FBMSI) 30 one-month return Maybank General Investment Account Rate (GIA)(source: FBMSI from Bloomberg, GIA from Maybank) Fund management fee Max 1.5 of fund s per annum Custodian fee 3 of fund s per annum Moderate As the Fund s investment involved marketable securities such as stocks and Islamic debt securities (IDS)/sukuk, the investors should be prepared to accept some interim price volatility. Investment in IDS carries some risks such as changes in interest rate and credit rating of the issuer. An increase in interest rate or downgrading of credit rating of the issuer would result to the fall in bond prices; hence impacted the performance of the Fund. The key risks for this Fund are market risk, interest rate risk, credit/default risk, specific security risk, liquidity risk, operational risk, reclassification of Shariah status risk. Please refer to Appendix 1 for further details. management are among the methods can be adopted by the to manage the Fund risks. If there is high possibility that the equity market may fall, the exposure in equity investment would be reduced to a lower level and vice versa. In managing the investment risks for IDS, the Fund Manager will adopt extensive research and analysis on the issuer, credit rating, maturity factor, liquidity and selected yield measures. The will also constantly monitor the macro economic factors that may impact the interest rate environment FY2010* 31-Dec-10 FY2011* 31-Dec-11 FY Dec-12 FY Feb-13 Ittizan () (1.70) () (2.39) For the period under review, the FBMSI declined by 3.60 to close at 11, point. Based on benchmark of 70 of the FBMSI and the remaining 30 on 1-Month Maybank GIA rate of 2.75, the blended benchmark recorded a negative return of In tandem with the benchmark, the performance of Ittizan recorded a negative return of 1.70 still beating the blended benchmark. performance is not guaranteed. The Fund returns are calculated based on the unit price of the Fund. Actual returns of the Fund are on a net basis (gross of tax and net of fees) and strictly based on the performance of the Fund, and not the returns earned on the actual premiums/ contributions paid for the investment-linked product. Sector 1 Trading/Services Industrial Products Consumer REIT Sukuk 20 Ittizan vs Ittizan Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Nov-12 Dec-12 Jan-13 Feb Trading/Services Industrial Products Consumer REIT Sukuk F The fund is no longer being offered for new investment. Security Name (Share) 1 Axiata Group Bhd Tenaga Nasional Bhd Telekom Malaysia Bhd Sime Darby Bhd Petronas Dagangan 3.49 PER UNIT As at 28 February Highest last 5-years Lowest last 5-years 1.100

5 Return ISTIQRAR To achieve relatively stable pattern of investment returns over medium term trough selected investment in Shariah approved shares listed in Bursa Malaysia and Shariahcompliant fixed income securities. Invest in a balanced asset allocation comprising mainly in Islamic debt securities with smaller exposure in Shariahcompliant equity. Equity : up to 35 Sukuk/Cash : Combination of 30 FBM Emas Shariah Index (FBMSI) 70 one-month return Maybank General Investment Account Rate (GIA) (source: FBMSI from Bloomberg, GIA from Maybank) Fund management fee Max 1.5 of fund s per annum Custodian fee 3 of fund s per annum Low As the Fund s investment involved marketable securities such as stocks and Islamic debt securities (IDS)/sukuk, the investors should be prepared to accept some interim price volatility. Investment in IDS carries some risks such as changes in interest rate and credit rating of the issuer. An increase in interest rate or downgrading of credit rating of the issuer would result to the fall in bond prices; hence the impacted performance of the Fund Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 FY Dec-10 FY Dec-11 FY Dec-12 FY Feb-13 Istiqrar () (0.46) () (0.77) For the period ending February 2013, the FBMSI declined by 3.60 to close at 11, point. As the fund only benchmarked 30 of the FBMSI and the remaining 70 based on 1- Month Maybank GIA rate of 2.75, the blended benchmark recorded a negative return of In tandem with the negative movement of the benchmark, the performance of Istiqrar also recorded a negative return of 0.46 but still managed to outperform the blended benchmark. performance is not guaranteed. The Fund returns are calculated based on the unit price of the Fund. Actual returns of the Fund are on a net basis (gross of tax and net of fees) and strictly based on the performance of the Fund, and not the returns earned on the actual premiums/ contributions paid for the investment-linked product. Istiqrar vs Istiqrar Jul-12 Aug-12 Sep-12 Oct-12 Nov-12 Dec-12 Jan-13 Feb-13 The key risks for this Fund are market risk, interest rate risk, credit/default risk, specific security risk, liquidity risk, operational risk, reclassification of Shariah status risk. Please refer to Appendix 1 for further details. management are among the methods can be adopted by the to manage the Fund risks. If there is high possibility that the equity market may fall, the exposure in equity investment would be reduced to a lower level and vice versa. In managing the investment risks for IDS, the will adopt extensive research and analysis on the issuer, credit rating, maturity factor, liquidity and selected yield measures. The will also constantly monitor the macro economic factors that may impact the interest rate environment. The fund is no longer being offered for new investment. Sector 1 Trading/Services Industrial Products Consumer REIT Sukuk Security Name (Share) 1 Rantau Abang Capital 6.59 National Bank of Abu 2 Dhabi Kapar Energy Ventures Binariang GSM 9 5 Anih Bhd PER UNIT Trading/Services Industrial Products Consumer REIT Sukuk As at 28 February Highest last 5-years Lowest last 5-years 1.080

6 Return MyEquity Index Fund To achieve returns that tracks the performance of FBM Emas Shariah Index. Invest mainly in the top of the Index component stocks; closely tracking the movement of the in the medium to long term; Constant rebalancing of the component stocks to closely track the benchmark performance. Equity : Money Market : 5-10 MyEquity Index Fund vs 1 MyEquity Index Fund FBM Emas Shariah Index (FBMSI) (source : Bloomberg) Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Nov-12 Dec-12 Jan-13 Feb-13 0 F Fund management fee of fund s per annum Custodian fee 3 of fund s per annum Moderate As the Fund s stock investment consist of the top forty of the index component stocks which including blue chip and growth stocks, the investors should be prepared to accept some interim price volatility with possibility of a severe downturn in the equity markets. The key risks for this Fund are market risk, specific security risk, liquidity risk, operational risk, reclassification of Shariah status risk. Please refer to Appendix 1 for further details. FY2010 FY2011 FY2012 FY Dec Dec Dec Feb-13 MyEquity Index Fund () (2.83) FBM Emas Shariah (FBMSI) () (3.60) Tracking error (TE) For the period under review, FBMSI declined by 3.60 to close at 11, points. The performance of MyEquity Index Fund recorded a negative return of 2.83, but beating the benchmark. In line with the fund s strategy to track its benchmark closely, its tracking error has consistently within the parameters set by the fund. For the period, the fund s tracking error stood at performance is not guaranteed. The Fund returns are calculated based on the unit price of the Fund. Actual returns of the Fund are on a net basis (gross of tax and net of fees) and strictly based on the performance of the Fund, and not the returns earned on the actual premiums/contributions paid for the investment-linked product. management are among the methods can be adopted by the to manage the Fund risks such as market risk, specific security risk and liquidity risk. If there is high possibility that the equity market may fall, the exposure in equity investment would be reduced to a lower level and vice versa. The will also adopt a prudent investment selection process by investing in selected stock universe after undergoing some screening process. Customers who prefer moderate risk investment profile with a moderate expected return. Tracking Error (TE) TE is a measure of the deviation from the benchmark. It measures of how closely a portfolio follows the index to which it is benchmark. The closer its track the benchmark, the lesser is the amount of TE. Sector 1 Trading/Services Industrial Products Consumer No Security Name (Share) 1 Axiata Group Bhd Sime Darby Bhd Tenaga Nasional Bhd DiGi.Com Bhd Petronas Chemicals PER UNIT 6.34 Trading/Services Industrial Products Consumer As at 28 February Highest since inception Lowest since inception advised to contact Takaful Malaysia or its agents for further and better particulars and information pertaining to the products offered by us. Taka ful Malaysia hereby disclaims any liability of whatsoever nature

7 Return () MyGrowth Fund To achieve capital growth opportunities and dividend income through selective investments in Shariah approved shares listed in Bursa Malaysia. Invest primarily in selected Shariah compliant equities that comprise of a diversified portfolio of index-linked companies, blue-chip stocks and companies with growth prospects and attractive dividend yields that are listed on Bursa Malaysia; Active portfolio management - constant review on asset allocation and stocks holding. Stock/portfolio turnover would be practically high in search for opportunities in capital gain and dividend yield stocks. Equity : Cash/Sukuk : 5-50 FBM Emas Shariah Index (FBMSI) (source : Bloomberg) Fund management fee of fund s per annum Custodian fee 3 of fund s per annum High Since the fund investment also consist of growth stocks which are normally more volatile in prices as compared to blue chips and high dividend yield stocks, the investors should be prepared to accept some interim price volatility, of which sometimes can be significant to achieve that higher return MyGrowth Fund vs MyGrowth Fund FY2010 FY2011 FY2012 FY Dec Dec Dec Feb-13 MyGrowth Fund () (2.14) FBM Emas Shariah (FBMSI) () (3.60) For the period under review, the fund s benchmark, FBMSI declined by 3.60 to close at 11, point. In tandem with the negative movement of the benchmark, the performance of MyGrowth Fund also recorded a negative return of 2.14 but still beating the benchmark. performance is not guaranteed. The Fund returns are calculated based on the unit price of the Fund. Actual returns of the Fund are on a net basis (gross of tax and net of fees) and strictly based on the performance of the Fund, and not the returns earned on the actual premiums/ contributions paid for the investment-linked product. F The key risks for this Fund are market risk, specific security risk, interest rate risk, credit/default risk, liquidity risk, operational risk, reclassification of Shariah status risk. Please refer to Appendix 1 for further details. management are among the methods can be adopted by the to manage the Fund risks. If there is high possibility that the equity market may fall, the exposure in equity investment would be reduced to a lower level and vice versa. The will also adopt a prudent investment selection process by investing in selected stock universe after undergoing some screening process. In managing the investment risks for IDS, the will adopt extensive research and analysis on the issuer, credit rating, maturity factor, liquidity and selected yield measures. The will also constantly monitor the macro economic factors that may impact the interest rate environment. Customers who prefer a high risk investment profile with a high expected return. Sector 1 Trading/Services Industrial Products REIT 1.44 Security Name (Share) 1 Petronas Chemicals Group Bhd Sime Darby Bhd Tenaga Nasional Bhd Sapura Kencana Petroleum Bhd Axiata Group Bhd PER UNIT Trading/Services Industrial Products REIT As at 28 February Highest since inception Lowest since inception 0.972

8 Return () MyBlue Chips Fund To achieve consistent capital growth in the long run through investments in Shariah Compliant Blue Chip Shares. Invest primarily in Shariah compliant equities with higher market capitalisation to achieve long term capital growth; Active portfolio management - constant review on asset allocation and stock holding in search of stocks that meet the objective of the Fund. Equity : Money Market : FBM Emas Shariah Index (FBMSI) (source : Bloomberg) Fund management fee of fund s per annum Custodian fee 3 of fund s per annum Moderate As the Fund s stock investment focus mainly in blue chip stocks whose prices normally do not fluctuate as much as growth stocks, the investors should be willing to accept some moderate growth in principal. The key risks for this Fund are market risk, specific security risk, liquidity risk, operational risk, reclassification of Shariah status risk. Please refer to Appendix 1 for further details. management are among the methods can be adopted by the to manage the Fund risks. If there is high possibility that the equity market may fall, the exposure in equity investment would be reduced to a lower level and vice versa. The will also adopt a prudent investment selection process by investing in selected stock universe after undergoing some screening process. Customers who prefer moderate risk investment profile with a high expected return. FY2010 FY2011 FY2012 FY Dec Dec Dec Feb-13 MyBlue Chips Fund () (0) FBM Emas Shariah (FBMSI) () (3.60) For the period under review, FBMSI declined by 3.60 to close at 11, point. In tandem with the negative movement of the benchmark, the performance of MyBlue Chips Fund also recorded a negative return of 0 but still beating the benchmark. performance is not guaranteed. The Fund returns are calculated based on the unit price of the Fund. Actual returns of the Fund are on a net basis (gross of tax and net of fees) and strictly based on the performance of the Fund, and not the returns earned on the actual premiums/ contributions paid for the investment-linked product. Sector 1 Trading/Services Industrial Products Consumer Security Name (Share) 1 Axiata Group Bhd Sime Darby Bhd Tenaga Nasional Bhd Petronas Chemicals Group Bhd Sapura Kencana Petroleum Bhd 4.92 MyBlue Chips Fund vs MyBlue Chips Fund PER UNIT Trading/Services Industrial Products Consumer As at 28 February Highest since inception Lowest since inception F recommendation to sell or buy any security or financial product. Although the materials used in preparing this presentation are obtained from source s believed to be reliable, Takaful Malaysia makes no

9 Return () MyDividend Fund To achieve dividend income in the long term trough selective investments in high dividend yield shares that provide a minimum annual gross dividend of 4. To achieve capital growth through selective investments in Blue Chips Shares that could potentially provide capital growth in the long run. Invest primarily in dividend yield stocks that provide a minimum annual gross dividend of 4 as well as blue-chip stocks that could potentially grow in the long run; At all times, exposure in stocks that yield a minimum of 4 annual gross dividend shall be at least 50 of the equity exposure; Constant review on asset allocation and stock holding in search of stocks that comply with the objective of the Fund. FBM Emas Shariah Index (FBMSI) (source : Bloomberg) Fund management fee of fund s per annum Custodian fee 3 of fund s per annum Equity : (at least 50 in dividend yield shares) Money Market : Moderate As the Fund s stock investment focus mainly in high dividend yield stocks whose prices normally do not fluctuate as much as growth stocks, the investors should be willing to accept some moderate growth in principal FY2010 FY2011 FY2012 FY Dec Dec Dec Feb-13 MyDividend Fund () (2.17) FBM Emas Shariah (FBMSI) () (3.60) For the period under review, the fund s benchmark, FBMSI declined by 3.60 to close at 11, point. In tandem with the negative movement of the benchmark, the performance of MyDividend Fund also recorded a negative return of 2.17 but still beating the benchmark. performance is not guaranteed. The Fund returns are calculated based on the unit price of the Fund. Actual returns of the Fund are on a net basis (gross of tax and net of fees) and strictly based on the performance of the Fund, and not the returns earned on the actual premiums/ contributions paid for the investment-linked product. MyDividend Fund vs MyDividend Fund F The key risks for this Fund are market risk, specific security risk, liquidity risk, operational risk, reclassification of Shariah status risk. Please refer to Appendix 1 for further details. management are among the methods can be adopted by the to manage the Fund risks. If there is high possibility that the equity market may fall, the exposure in equity investment would be reduced to a lower level and vice versa. The will also adopt a prudent investment selection process by investing in selected stock universe after undergoing some screening process. Customers who prefer moderate risk investment profile with a moderate expected return. Sector 1 Trading/Services Industrial Products Consumer REIT 3.50 No Security Name (Share) 1 Axiata Group Bhd Maxis Bhd Digi.com Bhd Telekom Malaysia 4.83 Petronas Dagangan 5 Bhd Trading/Services PER UNIT Industrial Products Consumer REIT As at 28 February Highest since inception Lowest since inception 1.002

10 Return () MyBalanced Fund To achieve moderate streams of income and consistent capital growth over the medium-to-long term period by investing in a diversified portfolio of investments; To construct a diversified portfolio containing a balanced mixture of equities and fixed income securities. Invest in a balanced asset allocation comprising of Shariah-compliant equity, debt securities and money market. Equity : Sukuk/cash : Combination of 40 FBM Emas Shariah Index (FBMSI) month return Maybank General Investment Account Rate (GIA) (source: FBMSI from Bloomberg, GIA from Maybank) Fund management fee : of fund s per annum Custodian fee : 3 of fund s per annum Low As the Fund s investment involved marketable securities such as stocks and Islamic debt securities (IDS), the investors should be prepared to accept some interim price volatility. Investment in IDS carries some risks such as changes in interest rate and credit rating of the issuer. An increase in interest rate or downgrading of credit rating of the issuer would result to the fall in bond prices; hence impacted the performance of the Fund FY Dec-11 FY Dec-12 FY Feb-13 Ihsan () (0.97) () (1.13) For the period under review, FBMSI declined by Being a balanced fund, the fund is being benchmarked with 40 of the FBMSI and the remaining 60 based on 12-Months Maybank GIA rate of 3.19, with the blended benchmark recorded a negative return of In tandem with the negative movement of FBMSI, the performance of MyBalanced Fund recorded a negative return of 0.97 but still beating the blended benchmark. performance is not guaranteed. The Fund returns are calculated based on the unit price of the Fund. Actual returns of the Fund are on a net basis (gross of tax and net of fees) and strictly based on the performance of the Fund, and not the returns earned on the actual premiums/ contributions paid for the investment-linked product. MyBalanced Fund vs MyBalanced Fund F The key risks for this Fund are market risk, interest rate risk, credit/default risk, specific security risk, liquidity risk, operational risk, reclassification of Shariah status risk. Please refer to Appendix 1 for further details. management are among the methods can be adopted by the to manage the Fund risks. If there is high possibility that the equity market may fall, the exposure in equity investment would be reduced to a lower level and vice versa. In managing the investment risks for IDS, the Fund Manager will adopt extensive research and analysis on the issuer, credit rating, maturity factor, liquidity and selected yield measures. The will also constantly monitor the macro economic factors that may impact the interest rate environment. Customers who prefer a moderate risk investment profile with a moderate expected return. Sector 1 Trading/Services Industrial Products Sukuk No Security Name (Sukuk/bond) 1 Projek Lebuhraya Usahasama Padiberas Nasional Bhd National Bank of Abu Dhabi Lingkaran Trans Kota Sdn Bhd Westports Malaysia Sdn Bhd PER UNIT Trading/Services Industrial Products Sukuk As at 28 February Highest since inception Lowest since inception 0.996

11 Appendix 1 Definition of Risks and Techniques 1. Market risk Refers to potential impact arising from adverse price movements that affects the market values of the investments due to changes in economic cycles, financial market conditions, currency and interest rate. The risk may also arise due to changes in any political and regulatory forms. Market risk is managed through portfolio diversification and asset allocation whereby the securities exposure is monitored / reduced in the event of anticipated market weaknesses. 2. Liquidity risk Refers to potential impact of not being able to convert Shariah compliant investment into cash at or near its fair value, which primarily depends on the volume traded for that particular Shariah compliant investments in the market. The investment policy is to always maintain a prudent level of liquid assets so as to reduce liquidity risk. 3. Interest rate risk Refers to potential impact affecting the market values of investment into Islamic debt securities arising from adverse movement in interest rates. When interest rate rise, the value of Islamic debt securities fall and vice versa, thus affecting the market value of the fund. Although the fund does not invest in conventional bonds, any changes in interest rate trend could also affect the price and yield of Islamic debt securities as conventional interest rate is generally used as indicative rate to determine the profit rate for the Islamic debt securities. In managing the risks, the will adopt an active investment management by constantly review the fund s strategy and portfolio. 4. Credit/Default risk Refers to potential decrease in credit worthiness of the issuers for Islamic debt investments in the event that the issuer is faced with unexpected financial difficulties. In the worst case scenario, the issuer may default in the payment of principal and profits for the Islamic debt securities issued, decreasing the prices and value of that particular Islamic debt securities and thus affecting the market value of the fund. The manages the risk by setting internal counterparty limits and undertaking internal credit evaluation to minimise such risk. 5. Specific security risk Refers to the risk of individual security including stock or Islamic debt security invested in the portfolio. A major price change of any particular security, which is a component of the fund s portfolio, would affect the and daily prices of the Fund. The mechanism employed to minimize the risk is through the process of portfolio diversification and prudent investment selection process by the. 6. Operational risk Refers to the risk that the Company fails to fulfill its obligation or perform other required actions because of inadequate policies and procedures, human resources, information systems or internal control. To minimize the risks, the will work with the Fund s Trustee, internal compliance unit and other divisions to ensure compliance with all relevant legislations and policies and procedures are put in place at all the time. 7. Reclassification of Shariah status risk Refers to potential revision on the status of Shariah compliant securities in the fund to become non-shariah compliant in the periodic review by the SAC. The will take the necessary steps to dispose such securities in accordance with the advice from the SAC and the Shariah Advisor. The will manage the investment-linked funds according to the fund strategy and target asset allocation policy. Nevertheless, the may take temporary steps which may not be consistent with the stated strategy and asset allocation policy in attempting to respond to adverse market, economic conditions.

12 Appendix 2 The Unit Price on any Valuation Date of the Investment Linked Fund shall be obtained by dividing the on the business day before the Valuation Date by the number of Units in issue of the Investment Linked Fund. In order to determine the Unit Price of each Unit on a Valuation Date, the Net Asset Value () of the Fund shall be calculated as follows: (a) (b) (c) (d) (e) (f) the amount for which in the opinion of the Company after taking such independent advice as they consider appropriate, the investments of the Investment Linked Fund could be transacted in the open market on the Valuation Date by reference where applicable to the market dealing prices quoted on a recognized stock exchange selected by the Company with the addition of expenses which would be incurred, plus in respect of the interests in the nature of land and other securities or properties of whatsoever nature held in the Investment Linked Fund the amount which in the opinion of the Company after taking such independent advice as they consider appropriate is the value of such interests on the Valuation Date with the addition of the expenses which would be incurred if such interests were transacted on the day, plus the amount of cash held uninvested in the Investment Linked Fund on the Valuation Date, less the amount (if any) which the Company shall determine on the Valuation Date shall be treated as liabilities of the Investment Linked Fund, less such amount as the Company shall consider to be just and equitable in respect of costs of valuation of any interests in the nature of land which are comprised in the Investment Linked Fund and other expenses and outgoings properly attributable to such interest, less the applicable Fund Management Charge There shall be deductions from the Investment Linked Fund of such amounts as the Company in its absolute discretion considers appropriate, as due allowances for any levy, tax, duties or any other charges of whatsoever nature arising in respect of which the Fund may become liable. To ensure fair treatment to all certificate owners of the fund, the Company may impute the transaction costs of acquiring or disposing of assets of the fund, if the costs are significant. To recoup the cost of acquiring and disposing of assets, the company may make a dilution or transaction cost adjustment to the per unit to recover any amount which the fund had already paid or reasonably expects to pay for the creation or cancellation of units. The Investment-linked Funds are valued on each business day. However, the Company may alter the frequency and date on which the Unit Price shall be calculated by giving three (3) calendar months prior written notice to the Certificate Owner. The Company reserves the right to take the following actions that may become necessary due to change of circumstances, as a means to protect the interest of the certificate owner. Subject to at least three (3) months written notice, the Company may: (a) close any of the Unit Fund or cease to allow the allocation of additional Contribution or to transfer the assets to a new fund which has similar investment objectives; (b) change the name of the Unit Funds; (c) split or combine existing units of Unit Funds; (d) make any changes that may be required due to regulatory requirement and/or the legislation. The Company may also choose to, without prior notice, suspend unit pricing and Certificate transactions if any of the exchanges in which the Unit Fund is invested is temporarily suspended for trading; In circumstances considered by the Company in its absolute discretion, to be prejudicial to the interests of participants, the Company reserves the right to defer Partial Withdrawal and Surrender payment for a period not exceeding six (6) months from the date of redemption. Issued by Syarikat Takaful Malaysia Berhad Syarikat Takaful Malaysia Berhad was incorporated on 29 November 1984 and commenced operations in July It has an authorised capital of RM500 Million and a paid up capital of RM162 Million. The Company was listed on the Main Board of the Malaysian Stock Exchange on 30 July In accordance with the Takaful Act 1984, Syarikat Takaful Malaysia Berhad provides two types of Takaful business namely Family Takaful Business and General Takaful Business. Syarikat Takaful Malaysia Berhad has 23 branches, 10 Takaful mycare Centres, 1 Retail Centre and 6 Takaful mydesks nationwide with total assets of RM6 Billion at Group level. Tel : , TAKAFUL( ) Fax : csu@takaful-malaysia.com.my Website : takaful-malaysia.com.my