INFORMATION MEMORANDUM FOR AFFIN HWANG AIIMAN CONSTANT CASH FUND

Transcription

1 INFORMATION MEMORANDUM FOR AFFIN HWANG AIIMAN CONSTANT CASH FUND Manager Trustee : Affin Hwang Asset Management Berhad ( T) : TMF Trustees Malaysia Berhad ( W) This Information Memorandum is dated 10 October The Affin Hwang Aiiman Constant Cash Fund was constituted on 10 October 2018*. * The constitution date of this Fund is also the launch date of this Fund. This Information Memorandum has been seen and approved by the directors of Affin Hwang Asset Management Berhad and they collectively and individually accept full responsibility for the accuracy of all information contained herein and confirm, having made all enquiries which are reasonable in the circumstances, that to the best of their knowledge and belief, there are no other facts omitted which would make any statement herein misleading. A copy of this Information Memorandum has been lodged with the Securities Commission Malaysia. The Securities Commission Malaysia will not be liable for any non disclosure on the part of Affin Hwang Asset Management Berhad and takes no responsibility for the contents of this Information Memorandum, makes no representation as to its accuracy or completeness and expressly disclaims any liability whatsoever for any loss howsoever arising from, or in reliance upon the whole or any part of the contents of this Information Memorandum. Sophisticated Investors should note that they may seek recourse under the Capital Markets and Services Act 2007 for breaches of securities laws including any statement in this Information Memorandum that is false, misleading, or from which there is a material omission; or for any misleading or deceptive act in relation to this Information Memorandum or the conduct of any other person in relation to the Fund. This Information Memorandum is to be issued and distributed in Malaysia only. Consequently, no representation has been and will be made as to its compliance with the laws of any foreign jurisdiction. INVESTORS ARE ADVISED TO READ AND UNDERSTAND THE CONTENTS OF THIS INFORMATION MEMORANDUM AND OBTAIN PROFESSIONAL ADVICE BEFORE SUBSCRIBING TO THE UNITS OF THE FUND. IF IN DOUBT, PLEASE CONSULT A PROFESSIONAL ADVISER.

2 TABLE OF CONTENTS CHAPTER PAGE GLOSSARY... 1 ABOUT AFFIN HWANG AIIMAN CONSTANT CASH FUND... 4 ABOUT THE FEES AND CHARGES... 7 UNDERSTANDING THE RISKS OF THE FUND DEALING INFORMATION RELATED PARTIES TO THE FUND ABOUT THE MANAGER - AHAM ABOUT THE TRUSTEE - TMF TRUSTEES MALAYSIA BERHAD ABOUT THE EXTERNAL FUND MANAGER ABOUT THE SHARIAH ADVISER RELEVANT INFORMATION INVESTORS INFORMATION i

3 CORPORATE DIRECTORY The Manager/AHAM Affin Hwang Asset Management Berhad ( T) Registered Office 27 th Floor, Menara Boustead, 69 Jalan Raja Chulan, Kuala Lumpur Business Address Ground Floor, Menara Boustead, 69 Jalan Raja Chulan, Kuala Lumpur Tel No. : (603) Fax No. : (603) Toll free line: E mail: customercare@affinhwangam.com Website: Board of Directors of the Manager/AHAM Tan Sri Dato Seri Che Lodin bin Wok Kamaruddin Datuk Maimoonah binti Mohamed Hussain Mr Teng Chee Wai Ms Eleanor Seet Oon Hui Encik Abd Malik bin A Rahman (Independent Director) Dato Hj Latip bin Ismail (Independent Director) The Manager s Delegate (fund valuation & accounting function) TMF Trustees Malaysia Berhad ( W) Business Address 10 th Floor, Menara Hap Seng, No. 1 & 3, Jalan P. Ramlee, Kuala Lumpur Tel No. : (603) Fax No. : (603) The Trustee TMF Trustees Malaysia Berhad ( W) Registered & Business Address 10 th Floor, Menara Hap Seng, No. 1 & 3, Jalan P. Ramlee, Kuala Lumpur Tel No. : (603) Fax No. : (603) Trustee s Delegate (Local and Foreign Custodian) Standard Chartered Bank Malaysia Berhad ( W) Business Address Level 16, Menara Standard Chartered, 30 Jalan Sultan Ismail, Kuala Lumpur Tel No. : (603) Fax No. : (603) External Fund Manager AIIMAN Asset Management Sdn. Bhd. ( T) 14 th Floor, Menara Boustead, 69 Jalan Raja Chulan, Kuala Lumpur Tel No. : (603) Fax No. : (603) Website : The Shariah Adviser Amanie Advisors Sdn. Bhd. Level 33 Menara Binjai, No. 2, Jalan Binjai, Off Jalan Ampang, Kuala Lumpur Tel No. : (603) Fax No. : (603) Website : ii

4 GLOSSARY the Act Bursa Malaysia Business Day Deed(s) deposit(s) Development Financial Institution External Fund Manager / AIIMAN Means the Capital Markets and Services Act 2007 as originally enacted and amended or modified from time to time. Means the stock exchange managed and operated by Bursa Malaysia Securities Berhad including such other name as it may be changed to from time to time. Means a day on which the Bursa Malaysia is open for trading. The Manager may declare certain Business Days a non Business Day when deemed necessary, such as in the event of market disruption. Refers to the Deed dated 19 September 2018 entered into between the Manager and the Trustee and includes any subsequent amendments and variations to the Deed. Has the same meaning as per the definition of "deposit" in the Financial Services Act 2013 and "Islamic deposit" in the Islamic Financial Services Act For the avoidance of doubt, it shall exclude structured deposits. Means a development financial institution under the Development Financial Institutions Act Refers to AIIMAN Asset Management Sdn. Bhd.. Financial Institution Means (1) if the institution is in Malaysia (i) Licensed Bank; (ii) Licensed Investment Bank; (iii) Development Financial Institution; or (iv) Licensed Islamic Bank; (2) if the institution is outside Malaysia, any institution that is licensed, registered, approved or authorised by the relevant banking regulator to provide financial services. Forward Pricing Fund Guidelines Information Memorandum Means the price of a Unit that is the NAV per Unit calculated at the next valuation point after a purchase or repurchase request, as the case may be, is received by the Manager. Refers to Affin Hwang Aiiman Constant Cash Fund. Refers to Guidelines on Unlisted Capital Market Products Under The Lodge And Launch Framework issued by the SC and as amended or modified from time to time. Means this offer document in respect of this Fund as may be, replaced or amended from time to time. Licensed Bank Means a bank licensed under the Financial Services Act Licensed Investment Bank Means an investment bank licensed under the Financial Services Act Licensed Islamic Bank Means an Islamic bank licensed under the Islamic Financial Services Act the Manager / AHAM MYR NAV NAV per Unit PHS Repurchase Charge Refers to Affin Hwang Asset Management Berhad. Means the Malaysian Ringgit, the lawful currency of Malaysia. Means the value of all the assets of the Fund less the value of all the liabilities of the Fund at a valuation point. Means the NAV of the Fund at a particular valuation point divided by the number of Units in Circulation at the same valuation point. Means the product highlights sheet, a disclosure document that contains clear and concise information of the salient features of the Fund. Means a charge imposed pursuant to the Unit Holder s repurchase request. Page 1

5 Repurchase Price SC Sales Charge Selling Price Shariah Means the price payable to a Unit Holder by the Manager for a Unit pursuant to a repurchase request and it shall be exclusive of any Repurchase Charge. Means the Securities Commission Malaysia established under the Securities Commission Malaysia Act Means a charge imposed pursuant to the Unit Holder s purchase request. Means the NAV per Unit payable by the Unit Holder for the Manager to create a Unit in the Fund and it shall be exclusive of any Sales Charge. Means Islamic law, originating from the Qur`an (the holy book of Islam), and its practices and explanations rendered by the prophet Muhammad (pbuh) and ijtihad of ulamak (personal effort by qualified Shariah scholars to determine the true ruling of the divine law on matters whose revelations are not explicit). Shariah Adviser Refers to Amanie Advisors Sdn Bhd. Sophisticated Investors Refers to (1) an individual whose total net personal assets, or total net joint assets with his or her spouse, exceed MYR 3 million or its equivalent in foreign currencies, excluding the value of the individual s primary residence; (2) an individual who has a gross annual income exceeding MYR 300,000 or its equivalent in foreign currencies per annum in the preceding 12 months; (3) an individual who, jointly with his or her spouse, has a gross annual income exceeding MYR 400,000 or its equivalent in foreign currencies per annum in the preceding 12 months; (4) a corporation with total net assets exceeding MYR 10 million or its equivalent in foreign currencies based on the last audited accounts; (5) a partnership with total net assets exceeding MYR 10 million or its equivalent in foreign currencies; (6) a unit trust scheme or prescribed investment scheme; (7) a private retirement scheme; (8) a closed end fund approved by SC; (9) a company that is registered as a trust company under the Trust Companies Act 1949 which has assets under management exceeding MYR 10 million or its equivalent in foreign currencies; (10) a corporation that is a public company under the Companies Act 2016 which is approved by the SC to be a trustee under the Act and has assets under management exceeding MYR 10 million or its equivalent in foreign currencies; (11) a statutory body established by an Act of Parliament or an enactment of any State; (12) a pension fund approved by the Director General of Inland Revenue under section 150 of the Income Tax Act 1967 [Act 53]; (13) central bank of Malaysia; (14) a holder of a capital markets services licence or an executive director or a chief executive officer of a holder of a capital markets services licence; (15) a licensed person as defined in the Financial Services Act 2013; (16) an Islamic bank as defined in the Islamic Financial Services Act 2013; (17) an insurance company licensed under the Financial Services Act 2013; (18) a takaful operator registered under the Islamic Financial Services Act 2013; (19) a bank licensee or insurance licensee as defined under the Labuan Financial Services and Securities Act 2010 [Act 704]; (20) an Islamic bank licensee or takaful licensee as defined under the Labuan Islamic Financial Services and Securities Act 2010 [Act 705]; and Page 2

6 short term Special Resolution Trustee Unit(s) Unit(s) in Circulation Unit Holder(s) or You (21) such other investor(s) as may be permitted by the SC from time to time and/or under the relevant guidelines for wholesale funds. Means a period of less than three (3) years. Means a resolution passed at a meeting of Unit Holders duly convened in accordance with the Deed by a majority of not less than three fourths of the Unit Holders present and voting at the meeting in person or by proxy; for the avoidance of doubt, threefourths of the Unit Holders present and voting means three fourths of the votes cast by the Unit Holders present and voting; for the purposes of terminating the Fund, Special Resolution means a special resolution passed at a meeting of Unit Holders duly convened in accordance with the Deed by a majority in number holding not less than three fourths of the value of the votes cast by the Unit Holders present and voting at the meeting in person or by proxy. Refers to TMF Trustees Malaysia Berhad. Means an undivided share in the beneficial interest and/or right in the Fund and a measurement of the interest and/or right of a Unit Holder in the Fund. Means Units created and fully paid for and which has not been cancelled. It is also the total number of Units issued at a particular valuation point. Refers to the person or the persons registered for the time being who is in full compliance to the relevant laws is a Sophisticated Investor pursuant to the Guidelines and is registered pursuant to the Deed as a holder of Units, including a jointholder. In relation to the Fund, means all the Unit Holders of Units in the Fund. Reference to first person pronouns such as we, us or our in this Information Memorandum means the Manager/AHAM. Page 3

7 ABOUT AFFIN HWANG AIIMAN CONSTANT CASH FUND FUND CATEGORY : Money Market (Wholesale) BASE CURRENCY : MYR FUND TYPE : Income FINANCIAL YEAR END : 31 October OFFER PERIOD & OFFER PRICE The initial offer period shall be for a period of not more than 21 calendar days from the Commencement Date of the Fund. The initial offer period may be shortened if we determine that it is in your best interest. The initial offer price is the Selling Price and Repurchase Price for each Units of the Fund during the initial offer period and is set at MYR 1.00 only. INVESTORS PROFILE The Fund is suitable for you, if you: are a conservative investor; have a short term investment horizon; and prefer Shariah compliant investments. INVESTMENT OBJECTIVE The Fund aims to provide investors with a regular income stream while aiming to maintain the NAV per Unit at MYR All income distribution will be made in the form of Units only. Any material change to the Fund s investment objective would require Unit Holders approval. PERFORMANCE BENCHMARK Bank Islam Overnight Mudharabah Rate The risk profile of this Fund is different from the risk profile of the benchmark. ASSET ALLOCATION A minimum of 90% of the Fund s NAV to be invested in Islamic money market instruments and Islamic deposits with a maturity period of not more than one (1) year; and A remaining balance of the Fund s NAV to be invested in liquid assets. INVESTMENT STRATEGY The Fund will invest in Islamic money market instruments and Islamic deposits with Financial Institutions with a maturity period of not more than one (1) year. The value of the Fund s placements of deposits with any single Financial Institution must not exceed 50% of the Fund s NAV. Our basic investment philosophy is to provide regular income to the Fund at the same time preserving capital * and maintaining sufficient level of liquidity in order to meet repurchase requests by the Unit Holders without adversely impacting the Fund s NAV. We believe that an important way to accomplish this is by analysing various factors such as the current and anticipated changes in interest rates, economic statistics, yield curve changes and other general market conditions that could affect the Islamic money market instruments and Islamic deposits. There will be no foreign investments in this Fund. Generally, the Fund will adopt a hold to maturity policy. However, we will continuously monitor the investments within the portfolio actively. In the best interest of the Unit Holders, we will not hesitate to liquidate an investment if there are * This Fund is neither a capital guaranteed nor a capital protected fund. Page 4

8 potential signs of credit deterioration and to replace it with another permitted investment which closely matches the Fund s objective. This is done as part of our risk management process and it is to note that such replacement is not expected to alter the overall risk profile of the Fund. Cross Trades Policy We may conduct cross trades between funds that we currently manage provided that all criteria imposed by the regulators are met. Notwithstanding this, cross trades between the personal account of our employee and the Fund s account(s); and between our proprietary trading accounts and the Fund s account(s) are strictly prohibited. Compliance with the criteria are monitored by our compliance unit, and reported to our compliance and risk management committee, to avoid conflict of interests and manipulation that could have a negative impact on the investors. PERMITTED INVESTMENT The Fund will invest in the following investments: Islamic money market instrument; Islamic deposits; and Any other form of Shariah investments as may be determined by us from time to time that is in line with the Fund s objective. INVESTMENT RESTRICTIONS AND LIMITS (a) The value of the Fund s placements of Islamic deposits with any single Financial Institution must not exceed 50% of the Fund s NAV. SHARIAH INVESTMENT GUIDELINES The following are the Shariah investment guidelines for the Fund, which the Manager, is to strictly adhere to on a continuous basis. At all times, the Fund shall invest in activities and instruments that are allowed under Shariah principles and shall not invest in activities and instruments that are prohibited under Shariah principles based on the Shariah Adviser s established parameters which mutually is agreed by the Manager. Types of Islamic Money Market Instruments and Islamic Accounts: 1. Islamic money market instruments and Islamic deposits Any Islamic money market instruments and/or Islamic deposits as approved by Bank Negara Malaysia based on the data available at Islamic Interbank Money Market ( 2. Any other investments For avoidance of doubt, the documents relating to the Shariah liquidity management instrument should be submitted for prior approval by the Shariah Adviser. Divestment The Manager shall ensure that the Fund invests in Islamic money market instruments, Islamic deposits or any other form of Shariah investments. Reasonable steps shall be taken by the Manager to ensure that the Fund invests within the permitted investment. In the event the Fund invests in non Shariah compliant instruments by mistake, the Fund shall dispose of any such non Shariah compliant instruments, within a month of knowing the status of the instruments. Any gain made in the form of capital gain received after the disposal of the instruments shall be channelled to charitable bodies as approved by the Shariah Adviser and the Trustee whilst any loss caused by the Manager s negligence shall be borne by the Manager and paid back to the Fund. The Fund has a right to retain only the original investment cost, which may include transaction costs. Page 5

9 Shariah Approval Process The investment of the Fund would be restricted to instruments that are allowed under Shariah and the Fund is prohibited from investing in instruments which do not comply with the Shariah. The investment portfolio of the Fund comprises instruments which have been classified as Shariah compliant by the Bank Negara Malaysia ( BNM ). DISTRIBUTION POLICY Subject to the availability of income, the Fund will provide Unit Holders with monthly income by way of reinvestment in the form of additional Units. VALUATION POINT OF THE FUND As the Fund only has exposure to investments in Malaysia, the Fund shall be valued at 6.00 p.m. on every Business Day (or Trading Day or T day). VALUATION OF ASSETS In valuing the Fund s investments, we will ensure that all the assets of the Fund will be valued at fair value and in accordance to the Malaysian Financial Reporting Standard 9 issued by the Malaysian Accounting Standards Board. In the absence of daily price or value of the assets, we will use the latest available price or value of the assets respectively. Islamic Money Market Instruments Valuation of MYR denominated Islamic money market instruments will be done using the price quoted by a Bond Pricing Agency registered with the SC. Islamic Deposit Valuation of Islamic deposits placed with Financial Institutions will be made by reference to the principal value of such investments and the profit accrued thereon for the relevant period. Any Other Investment Fair value as determined in good faith by us, on methods or bases which have been verified by the auditor of the Fund and approved by the Trustee. Page 6

10 ABOUT THE FEES AND CHARGES There are fees and charges involved and investors are advised to consider the fees and charges before investing in the Fund. You should be aware that all fees, charges and expenses referred to or quoted in this Information Memorandum (including any supplemental information memorandum) and the Deed (including any supplemental deed) are referred to or quoted as being exclusive of any other applicable taxes. We (including the Trustee and other service providers) will charge any other applicable taxes on the fees, charges and expenses in accordance with any other relevant or applicable laws. SALES CHARGE Nil. REPURCHASE CHARGE Nil. TRANSFER FEE Not applicable. SWITCHING FEE Nil. The following are the charges that may be directly incurred by you. The following are the fees and expenses that you may indirectly incur when you invest in the Fund ANNUAL MANAGEMENT FEE The annual management fee is up to 1.00% per annum of the NAV of the Fund. The management fee is calculated and accrued daily and payable monthly to the Manager. Please note that the example below is for illustration only: Assuming that the NAV of the Fund is MYR 120 million for the day, then the daily accrued management fee would be: MYR 120 million x 1.00% 365 days = MYR 3, per day ANNUAL TRUSTEE FEE The Fund pays an annual trustee fee of up to 0.02% per annum of the NAV of the Fund (excluding foreign custodian fees and charges). The trustee fee is calculated and accrued daily and payable monthly to the Trustee. In addition to the annual trustree fee, the Trustee may be reimbursed by the Fund for any expenses properly incurred by it in the performance of its duties and responsibilities. Please note that the example below is for illustration only: Assuming that the NAV of the Fund is MYR 120 million for the day, then the daily accrued trustee fee would be: MYR 120 million x 0.02% 365 days = MYR per day Page 7

11 FUND EXPENSES Only the expenses (or part thereof) which are directly related and necessary to the operation and administration of the Fund may be charged to the Fund. These would include (but are not limited to) the following: commissions or fees paid to brokers/dealers in effecting dealings in the investments of the Fund, shown on the contract notes or confirmation notes; taxes and other duties charged on the Fund by the government and/or other authorities; costs, fees and expenses properly incurred by the auditor of the Fund; costs, fees and expenses incurred for the valuation of any investments of the Fund by independent valuers for the benefit of the Fund; costs, fees and expenses incurred for any modification of the Deed save where such modification is for the benefit of the Manager and/or the Trustee; costs, fees and expenses incurred for any meeting of the Unit Holders save where such meeting is convened for the benefit of the Manager and/or the Trustee; costs, commissions, fees and expenses of the sale, purchase, takaful and any other dealing of any asset of the Fund; costs, fees and expenses incurred in engaging any specialist approved by the Trustee for investigating or evaluating any proposed investment of the Fund; costs, fees and expenses incurred in engaging any adviser for the benefit of the Fund; costs, fees and expenses incurred in the preparation and audit of the taxation, returns and accounts of the Fund; costs, fees and expenses incurred in the termination of the Fund or the removal of the Trustee or the Manager and the appointment of a new trustee or management company; costs, fees and expenses incurred in relation to any arbitration or other proceedings concerning the Fund or any asset of the Fund, including proceedings against the Trustee or the Manager by the other for the benefit of the Fund (save to the extent that legal costs incurred for the defence of either of them are not ordered by the court to be reimbursed by the Fund); remuneration and out of pocket expenses of the independent members of the investment committee of the Fund, unless the Manager decides otherwise; costs, fees and expenses deemed by the Manager to have been incurred in connection with any change or the need to comply with any change or introduction of any law, regulation or requirement (whether or not having the force of law) of any governmental or regulatory authority; costs and expenses incurred in relation to the distribution of income (if any); (where the custodial function is delegated by the Trustee) charges and fees paid to sub custodians taking into custody any foreign assets of the Fund; fees, charges, costs and expenses relating to the preparation, printing, posting and/or lodgement of documents and reports which the Manager and/or the Trustee may be obliged to prepare, print, post and/or lodge in relation to the Fund by virtue of any relevant law; and any tax now or hereafter imposed by law or required to be paid in connection with any costs, fees and expenses incurred as mentioned above. Page 8

12 MAXIMUM RATE OF FEES AND CHARGES ALLOWABLE BY THE DEED We may impose higher fees and charges up to the following stated maximum rate, provided that we have taken the necessary procedures as stated in the Deed to increase the fees and charges. Sales Charge Repurchase Charge Annual Management Fee Annual Trustee Fee 3.00% of the NAV per Unit. 3.00% of the NAV per Unit. 5.00% per annum of the NAV of the Fund 0.10% per annum of the NAV of the Fund (excluding foreign custodian fees and charges) REBATES AND SOFT COMMISSIONS We or any of our delegates thereof will not retain any rebate or soft commission from, or otherwise share in any commission with, any broker or dealer in consideration for directing dealings in the investments of the Fund. Accordingly, any rebate or shared commission should be directed to the account of the Fund. The soft commission can be retained by us or our delegates provided that; the goods and services are of demonstrable benefit to the Unit Holder in the form of research and advisory services that assist in the decision making process relating to the Fund s investments; and any dealing with the broker or dealer is executed on terms which are the most favourable for the Fund. Page 9

13 UNDERSTANDING THE RISKS OF THE FUND Below are the risks associated with the investments of the Fund that you should consider before investing. GENERAL RISKS OF THE FUND Market risk Fund management risk Liquidity risk Performance risk Inflation risk Operational risk Market risk arises because of factors that affect the entire market place. Factors such as economic growth, political stability and social environment are some examples of conditions that have an impact on businesses, whether positive or negative. It stems from the fact that there are economy wide perils, or instances of political or social instability which threaten all businesses. Hence, the Fund will be exposed to market uncertainties and fluctuations in the economic, political and social environment that will affect the market price of the investments either in a positive or negative way. This risk refers to the day to day management of the Fund by us which will impact the performance of the Fund. For example, investment decisions undertaken by us as a result of an incorrect view of the market or any non compliance with internal policies, investment mandate, the Deed, relevant law or guidelines due to factors such as human error, fraud, dishonesty or weaknesses in operational process and systems, may adversely affect the performance of the Fund. Liquidity risk refers to two scenarios. The first is where an investment cannot be sold due to unavailability of a buyer for that investment. The second scenario exists where the investment, by its nature, is thinly traded. This will have the effect of causing the investment to be sold below its fair value which would adversely affect the NAV of the Fund. Upon such event and in the best interest of the Unit Holders, the Trustee may suspend the repurchase of Units requests. Please refer to What Is The Process of Repurchase Application on page 13 for more details. The performance of the Fund depends on the financial instruments that the Fund purchases. If the instruments do not perform within expectation or if there is a default, then, the performance of the Fund will be impacted negatively. The performance of the Fund may also be impacted if the allocation of assets is not properly done. This is where the experience and expertise of the fund managers are important and the risk on the lack of experience and expertise of the fund managers has been highlighted above. On that basis, there is never a guarantee that investing in the Fund will produce the desired investment returns or distribution of income. This is the risk that your investment in the Fund may not grow or generate income at a rate that keeps pace with inflation. This would reduce your purchasing power even though the value of the investment in monetary terms has increased. Operational risk is the risk of loss due to the breakdown, deficiencies or weaknesses in the operational support functions resulting in the operations or internal control processes producing an insufficient degree of customer quality or internal control by the Manager. Operational risk is typically associated with human error, system failure, fraud and inadequate or defective procedures and controls. Page 10

14 SPECIFIC RISKS OF THE FUND Credit and default risk Concentration risk Interest rate risk NAV fluctuation risk Reinvestment risk Shariah compliance risk Credit risk relates to the creditworthiness of the issuers of the Islamic money markets instruments and their expected ability to make timely payment of profit and/or principal. Any adverse situations faced by the issuer may impact the value as well as liquidity of the instruments. In the case of rated investments, this may lead to a credit downgrade. Default risk relates to the risk of an issuer of the instruments either defaulting on payments or failing to make payments in a timely manner which will in turn adversely affect the value of the instruments. This could adversely affect the value of the Fund. This risk arises because the Fund may have up to 50% of the Fund s NAV into placement of Islamic deposits with a single Financial Institution. The Fund is subject to the risks linked to the particular Financial Institution. The risk may be in the form of credit risk, for example, when the particular Financial Institution is not able to pay the profit and/or repay the principal possibly due to its poor financial position. Therefore, should such risk happens, the Fund s concentrated portfolio will cause the Fund s overall value to decline to a greater degree than if the Fund was exposed to a less concentrated portfolio. This risk refers to the impact of interest rate changes on the valuation of the Islamic money market instruments. When interest rates rise, the instrument prices generally decline and this may lower the market value of the instrument. The reverse may apply when interest rates fall. This risk arises when the NAV per Unit of the Fund fluctuates hence the NAV per Unit of the Fund may not be maintained at MYR This risk may be due to the factors such as interest rate outlook where movement in interest rates affects the Islamic money market instruments ( investments ) prices inversely. For example, when interest rates rise, prices of the investments will fall. If the prices fall below the cost of the investments, this may incur losses to the Fund and the NAV of the Fund may not be maintained at MYR This risk can be mitigated by holding the investments until its maturity and the Manager will monitor the investments sensitivity to interest rate changes. Liquidity of the Fund is another factor which contributes to this risk. For example, a sudden liquidation of assets due to large repurchase requests may cause the assets to be sold not in the interest of existing Unit Holders due to lower selling price of the assets. The risk can be mitigated by enhancing the liquidity of the Fund through an increase of investments in assets with maturity of not more than one (1) year. This risk arises when payment of profit from Islamic money market instruments are reinvested at a rate lower than the prevailing profit rate when the investment was initially made. The risk is more likely to take place during a declining profit rate environment and may impact the yield of the investments which is calculated based on the assumption that all profit payments made on the investments are reinvested at the same profit rate when the investments were first made. We will mitigate this risk by closely monitoring the profit rate movements. As the Fund can only invest in Shariah compliant securities, there is always a risk that losses may be suffered by the Fund when the Manager is forced to dispose investments to rectify any Shariah non compliance. This risk is mitigated through the appointment of a Shariah Adviser for the Fund, who will be responsible to ensure that the Fund is managed and administered in accordance with Shariah requirements. It is important to note that events affecting the investments cannot always be foreseen. Therefore, it is not possible to protect investments against all risks. You are recommended to read the whole Information Memorandum to assess the risks associated with the Fund. If necessary, you should consult your professional adviser(s) for a better understanding of the risks. Page 11

15 DEALING INFORMATION You are advised not to make payment in cash to any individual agent when purchasing Units of the Fund. WHO IS ELIGIBLE TO INVEST? You must be a Sophisticated Investor in order to invest in this Fund. Please refer to the Glossary chapter of this Information Memorandum for the details. WHAT ARE THE MINIMUM INITIAL INVESTMENT, MINIMUM ADDITIONAL INVESTMENT, MINIMUM REPURCHASE AMOUNT AND MINIMUM HOLDING OF UNITS? Minimum Initial Investment MYR 100,000 Minimum Additional Investment MYR 10,000 Minimum Repurchase Amount Minimum Holding of Units 10,000 Units 100,000 Units At our discretion, we may reduce the minimum initial investment amount, minimum additional investment amount, minimum repurchase amount and minimum holding of Units. HOW TO PURCHASE UNITS? You may submit the purchase request by completing an application form and returning it to us between 8.45 a.m. to 2.30 p.m. on a Business Day. You are required to provide us with the following completed forms and documents. However, we reserve the right to request for additional documentations before we process the purchase application. Individual or Jointholder Account opening form; Suitability assessment form; Personal data protection notice form; A copy of identity card or passport or any other document of identification; Foreign Account Tax Compliance Act ( FATCA ) and Common Reporting Standard ( CRS ) Selfcertification Form. Corporation Account opening form; Suitability assessment form; Personal data protection notice form; Certified true copy of memorandum and articles of association*; Certified true copy of certificate of incorporation*; Certified true copy of form 24 and form 49*; Certified true copy of form 8, 9, 13, 20 and 44 (where applicable) *; Latest audited financial statement; Board resolution relating to the investment; A list of the authorised signatories; Specimen signatures of the respective signatories; Foreign Account Tax Compliance Act ( FATCA ) and Common Reporting Standard ( CRS ) Selfcertification Form. * or any other equivalent documentation issued by the authorities. Page 12

16 HOW TO MAKE PAYMENT FOR PURCHASE APPLICATION? Bank Transfer You may transfer the purchase payment into our bank account via telegraphic transfer or online transfer, and include your name in the transaction description for our reference. You may obtain our bank account details from our online download center at Cheque, Bank Draft or Money Order Issuance of cheque, bank draft or money order should be made payable to Affin Hwang Asset Management Berhad CTA, crossed and drawn on a local bank. You are to write your name, identity card number or business registration number at the back of the cheque, bank draft or money order. Bank charges or other bank fees, if any, will be borne by you. WHAT IS THE PROCESS OF THE PURCHASE APPLICATION? During the initial offer period, if we receive your purchase application on a Business Day, we will create your Units based on the initial offer price of the Fund. After the initial offer period, if we receive your purchase application at or before 2.30p.m. on a Business Day ( or T day ), we will create your Units based on the NAV per Unit of the Fund for that Business Day. Any purchase request received or deemed to have been received by us after 2.30p.m. will be transacted on the next Business Day (or T + 1 day ), unless a prior arrangement is made to our satisfaction. Sale of Units will be honoured upon receipt of complete set of documents together with the proof of payments. HOW TO REPURCHASE UNITS? You may submit the repurchase request by completing a transaction form and returning it to us between 8.45 a.m. to 2.30 p.m. on a Business Day. If you insist on making a repurchase request knowing that after the transaction you will hold less than the minimum holdings of Units, we may withdraw all your holding of Units and pay the proceeds to you. In the transaction form, you may choose to receive the repurchase proceeds in the manner of a cheque or bank transfer. If cheque is your option, we will issue the cheque in your name. If bank transfer is your option, proceeds will be transferred to your bank account. Where Units are held jointly, payment will be made to the person whose name appears first in the register of Unit Holders. Any incurred bank charges and other bank fees due to a withdrawal by cheque, bank transfer or other special arrangement method will be borne by you. WHAT IS THE PROCESS OF REPURCHASE APPLICATION? During the initial offer period, if we receive your repurchase application on a Business Day, we will repurchase your Units based on the initial offer price of the Fund. After the initial offer period, for a repurchase request received or deemed to have been received by us at or before 2.30p.m. on a Business Day (or T day ), Units will be repurchased based on the NAV per Unit of the Fund for that Business Day. Any repurchase request received after 2.30p.m. will be transacted on the next Business Day (or T + 1 day ). Processing is subject to receipt of a complete transaction form and such other documents as may be required by us. In addition, the Trustee may suspend the repurchase of Units requests: (i) (ii) where the Trustee considers that it is not in the interests of the existing Unit Holders to permit the assets of the Fund to be sold or that the assets cannot be liquidated at an appropriate price or on adequate terms and immediately call a Unit Holders meeting to decide on the next course of action; or without the consent of the Unit Holders, due to exceptional circumstances when there is a good and sufficient reason to do so having regard to the interests of the Unit Holders. In such case, the period of the suspension shall not exceed 21 days of the commencement of the suspension. Page 13

17 WHAT IS THE REPURCHASE PROCEEDS PAYOUT PERIOD? You will be paid within five (5) days from the day the repurchase request is received by us, provided that all documentations are completed and verifiable. WHAT IS THE PRICING OF UNITS? During the initial offer period, the Selling Price and the Repurchase Price is equivalent to the initial offer price and thereafter, the NAV per Unit of the Fund. Any applicable Sales Charge and Repurchase Charge are payable separately from the Selling Price and Repurchase Price. Forward Pricing will be used to determine the Selling Price and the Repurchase Price per Unit of the Fund after the initial offer period, i.e. the NAV per Unit of the Fund as at the next valuation point after we receive the purchase request or repurchase request. HOW TO CALCULATE THE NAV AND NAV PER UNIT? The NAV of the Fund is determined by deducting the value of all the Fund s liabilities from the value of all the Fund s assets, at a particular valuation point. The NAV per Unit is the NAV of the Fund divided by the number of Units in Circulation, at the same valuation point. Please refer to the Valuation Point Of The Fund section of this Information Memorandum for an explanation of the valuation point. Illustration on computation of NAV and NAV per Unit for a particular day: Units in Circulation 100,000, Investments 100,000, Add other Assets 50,000, Total assets 150,000, Less liabilities 30,000, NAV (before deduction of management fee and trustee fee for the day) 120,000, Less management fee for the day 3, trustee fee for the day distribution payable* 19,996, NAV 100,000, The NAV per Unit of the Fund = NAV Units in Circulation = MYR 100, 000, ,000,000 = MYR *Any income received by the Fund, will be declared and accrued on a daily basis as distribution payable. However, payment of income to the Unit Holders will only be made on a monthly basis (refer to Distribution Policy section of this Information Memorandum for further details). In order for the Fund to maintain its NAV per Unit at MYR 1.00, the Fund will declare and accrue income distribution of the Fund on a daily basis. Based on the above illustration, assuming the Fund has accumulated a total distribution payable of MYR 19,996, (after deduction of the relevant fees and expenses) for a particular day, this amount will be accrued and declared. The Fund will then have a total NAV of MYR 100,000, and the NAV per Unit of MYR 1.00 (NAV Units in Circulation). Note: The NAV per Unit will be rounded to two (2) decimal places for the purposes of publication of the NAV per Unit. MYR Page 14

18 WHERE TO PURCHASE AND REPURCHASE UNITS? Units can be purchased and repurchased at any of the location listed in Directory of Sales Office section. You may obtain a copy of the Information Memorandum, PHS and application forms from the abovementioned location. Alternatively, you may also visit our website at WHAT ARE THE SWITCHING OPTIONS? You must complete a switching transaction form and submit it to us at or before the cut off time of 2.30 p.m. on a Business Day (or T day ) together with relevant supporting documents, if any. You should note that the pricing day of a fund (or its class of units) may not be of the same day as we receive your switching application. Please see below the pricing policy of switching for all our funds: Switching Out Fund Money market fund Money market fund Non money market fund Money market fund Switching In Fund Money market fund Non money market fund Non money market fund Money market fund (which adopts historical pricing policy) Switching Out Fund T Day T Day Non money market fund Money market fund T Day Pricing Day Switching In Fund T Day T + 1 Day At the next valuation point, subject to clearance of payment and money received by the intended fund CAN I EXERCISE THE COOLING OFF RIGHT? You have the right to apply for and receive a refund for every Unit that you have paid for within six (6) Business Days from the date we received your purchase application. You will be refunded for every Unit held based on the NAV per Unit and the Sales Charge (if any) on the day those Units were first purchased and you will be refunded within ten (10) days from the receipt of the cooling off application. You may submit the request by completing a transaction form and returning it to us by 2.30 p.m. on a Business Day. Please note that the cooling off right is available to you if you are an individual investor and investing in any of our funds for the first time. However, if you are a staff of AHAM or a person registered with a body approved by the SC to deal in unit trusts, you are not entitled to this right. CAN I TRANSFER MY UNITS TO ANOTHER PERSON? Transfer facility is not available for this Fund. HOW DO I RECEIVE THE INCOME DISTRIBUTION? Distribution of income to the Unit Holders will be made on a monthly basis, within four (4) days after the last day of each month by way of reinvestment in the form of additional Units. We shall create Units for the Unit Holder based on the NAV per Unit of the Fund. There will not be any additional cost payable by the Unit Holder for reinvestments in new additional Units. Page 15

19 RELATED PARTIES TO THE FUND ABOUT THE MANAGER AHAM AHAM was incorporated in Malaysia on 2 May 1997 and began its operations under the name Hwang DBS Capital Berhad in In early 2014, AHAM was acquired by the Affin Banking Group ( Affin ) and hence, is now supported by a homegrown financial services conglomerate. Affin has over 39 years of experience in the financial industry which focuses on commercial, Islamic and investment banking services, money broking, fund management and underwriting of life and general insurance business. Meanwhile, AHAM has 15 years experience in the fund management industry. Additionally, AHAM is also 30% owned by Nikko Asset Management International Limited, a wholly owned subsidiary of Tokyo based Nikko Asset Management Co. Ltd, an Asian investment management franchise. Our Role as the Manager We are responsible for the investment management and marketing of the Fund; servicing Unit Holders needs; keeping proper administrative records of Unit Holders and the Fund; ensuring compliance with stringent internal procedures and guidelines of relevant authorities. Our Investment Team Our investment team comprises a group of portfolio managers who possess the necessary expertise and experience to undertake the fund management of its funds. The investment team will meet at least once a week or more should the need arise. The designated fund manager of the Fund is: Ms Esther Teo Keet Ying Head, Fixed Income Investment Ms Esther Teo is the Head of Fixed Income Investment. Prior to joining the Manager, she was attached with the fixed income division of RHB Asset Management Sdn. Bhd. covering both institutional and unit trust mandates for three (3) years. She began her career in KPMG Malaysia in 1999 as a consultant in financial advisory services specializing in corporate debt restructuring and recovery. Esther graduated from the University of Melbourne, Australia with a Bachelor of Commerce majoring in Accounting and Finance. She has also obtained her licence from the SC on 29 April 2004 to act as a fund manager. ABOUT THE TRUSTEE TMF TRUSTEES MALAYSIA BERHAD The Trustee is part of TMF Group, an independent global service provider in the trust & fiduciary sector. The group has more than 125 offices in 80 jurisdictions in the world. The Trustee started in Malaysia in 1992 with its first office in Labuan International Business Financial Centre (IBFC), providing trust and fiduciary services. The Kuala Lumpur office was established in 2003 to support the Labuan office in servicing Malaysian clients and to undertake domestic trust business. Duties and Responsibilities of the Trustee The Trustee s main functions are to act as trustee and custodian of the assets of the Fund and to safeguard the interests of Unit Holders of the Fund. In performing these functions and duties, the Trustee has to exercise all due care and vigilance and is required to act in accordance with the provisions of the Deed, all relevant laws and the Guidelines. Apart from being the legal owner of the Fund s assets, the Trustee is also responsible for ensuring that the Manager performs its duties and obligations in accordance with the provisions of the Deed, all relevant laws and the Guidelines. Page 16

20 ABOUT THE EXTERNAL FUND MANAGER AIIMAN Asset Management Sdn. Bhd. ( AIIMAN ) is an Islamic investment management company managing assets for pension funds, institutions, corporates, high net worth and mass affluent individuals. Headquartered in the world s Islamic financial hub of Kuala Lumpur, Malaysia, AIIMAN is focused on providing clients exceptional and innovative Shariah investment solutions that focus on Asian equities and global Sukuk. AIIMAN was licensed by the SC to undertake the regulated activity of Islamic fund management on 17 November 2008 and is a wholly owned subsidiary of Affin Hwang Asset Management Berhad and a member of the Affin Hwang Investment Banking Group. AIIMAN has more than seven (7) years experience in fund management industry. The designated external fund manager of the Fund is: Mohd Shahir Bin Seberi Portfolio Manager Prior to joining AIIMAN, Shahir worked with Bank Muamalat Malaysia Berhad under treasury & capital markets division. His initial position was credit analyst before leaving as the head of investments with primary responsibility of managing the bank s fixed income investment portfolio. He began his career as an executive in corporate banking department (subsequently under special recovery department) of Bank Islam Malaysia Berhad where he received his early exposure on corporate credit analysis and corporate debt restructuring. Later, Shahir gained his economics and financial markets research experience through his stint with Malaysian Rating Corporation Berhad (MARC) and Employee Provident Fund (EPF). Shahir is a certified credit professional (CCP) and a holder of Persatuan Kewangan Malaysia certificate. He graduated with a bachelor of Accounting from International Islamic University Malaysia and completed his master s degree (majoring in Finance) from the same institution. ABOUT THE SHARIAH ADVISER Amanie Advisors Sdn Bhd ( Amanie ) is a Shariah advisory, consultancy, training and research and development boutique for institutional and corporate clientele focusing on Islamic financial services. Amanie is a registered Shariah advisory company for Islamic unit trust with the SC. It has been established with the aim of addressing the global needs for experts' and Shariah scholars' pro active input. This will ultimately allow the players in the industry to manage and achieve their business and financial goals in accordance with the Shariah Principles. Amanie also focuses on organizational aspect of the development of human capital in Islamic finance worldwide through providing updated quality learning embracing both local and global issues on Islamic financial products and services. Page 17