KENANGA YIELD ENHANCEMENT FUND

Transcription

1 KENANGA YIELD ENHANCEMENT FUND RESPONSIBILITY STATEMENT This Product Highlights Sheet has been reviewed and approved by the directors or authorized committee or persons approved by the Board of Kenanga Investors Berhad and they collectively and individually accept full responsibility for the accuracy of the information. Having made all reasonable enquiries, they confirm to the best of their knowledge and belief, there are no false or misleading statements, or omission of other facts which would make any statement in the Product Highlights Sheet false or misleading. STATEMENT OF DISCLAIMER The Kenanga Yield Enhancement Fund ( the Fund ) has been lodged with the Securities Commission Malaysia and a copy of this Product Highlights Sheet has been lodged with the Securities Commission Malaysia. The lodgement of the Fund and lodgement of this Product Highlights Sheet should not be taken to indicate that the Securities Commission Malaysia recommends the Fund or assumes responsibility for the correctness of any statement made or opinion or report expressed in this Product Highlights Sheet. The Securities Commission Malaysia is not liable for any non-disclosure on the part of Kenanga Investors Berhad responsible for the Fund and takes no responsibility for the contents of this Product Highlights Sheet. The Securities Commission Malaysia makes no representation on the accuracy or completeness of this Product Highlights Sheet, and expressly disclaims any liability whatsoever arising from, or in reliance upon, the whole or any part of its contents. 1

2 This Product Highlights Sheet only highlights the key features and risks of this unlisted capital market product. Investors are advised to request, read and understand the Information Memorandum of the Fund before deciding to invest. PRODUCT HIGHLIGHTS SHEET KENANGA YIELD ENHANCEMENT FUND 1. What is this product about? BRIEF INFORMATION ABOUT THE PRODUCT The Kenanga Yield Enhancement Fund ( the Fund ) seeks to provide Investors with income and capital growth by investing into short to medium-term money market instruments and fixed income securities. 2. Who is this product suitable for? PRODUCT SUITABILITY The Fund is suitable for Investors who are seeking income and capital growth, have low risk tolerance and who have a short to medium-term* investment horizon. * short to medium-term means a period of less than 2 years. 3. What am I investing in? KEY PRODUCT FEATURES Fund Type Fund Category Income and growth Fixed income Launch Date 18 th January 2016 Investment Objective Investment Strategy The Fund seeks to provide Investors income and capital growth by investing into short to medium-term money market instruments and/or fixed income securities. The Fund seeks to achieve its objective by investing a minimum of 60% of its NAV and a maximum of 100% of its NAV in fixed income securities. The Fund will invest up to 40% of its NAV in placements of fixed deposits with financial institutions and development financial institutions, money market instruments and fixed income securities with a maturity period of 2 years and below. Asset Allocation The investment strategy will involve actively managing the maturities and durations of each investment in order to have a well-diversified portfolio for the Fund. The Fund will be strategized to focus on exceeding the average yield without compromising on the capital preservation. The Fund will also be proactively managed to meet the potential liquidity requirements. The Fund s portfolio will be structured as follows: Minimum of 60% to a maximum of 100% of its NAV will be invested in fixed income securities; and Up to 40% of its NAV will be invested in placements of fixed deposits, money market instruments and fixed income securities with a maturity period of 2 years and below. 4. Who am I investing in? Fund Manager / Manager Trustee Auditor Tax Adviser Solicitor Kenanga Investors Berhad ( Manager ) CIMB Islamic Trustee Berhad ( Trustee ) Ernst & Young Ernst & Young Tax Consultants Sdn Bhd Naqiz and Partners 2

3 5. What are the possible outcomes of my investment Unit prices for this Fund may go down as well as up. The Fund is exposed to a variety of risks by nature of the investment strategy of the Fund. As such, the Fund does not provide guarantee on the investment amount nor does it guarantee a fixed rate of return. 6. What are the key risks associated with this product? KEY RISKS General Risk related to the Fund Market 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. The Fund will be exposed to market uncertainties due to the factors stated above and this in turn will affect the value of the investments either in a positive or negative way. Fund Management Risk Performance Risk Inflation Risk Risk of noncompliance Operational Risk Specific Risks related to the Fund Interest Rate Risk Liquidity Risk Counterparty Risk Investors rely on the experience and expertise of the fund management team of the Manager to make investment decisions for the Fund. A failure on the part of the fund management team to display the requisite experience and expertise expected of them in making such decisions may jeopardize the Fund s performance and returns. The performance of the Fund depends on the investments of the Fund. If there is a default, there will be a negative impact on the performance of the Fund. The performance of the Fund may also be affected if the allocation of assets is not properly done. This is where the experience and expertise of the fund managers are important as highlighted in the fund management risk write-up above. In view of the aforesaid, there is never a guarantee that investing in the Fund will produce the desired investment returns or the distribution of income. Inflation rate risk is the risk of potential loss in the purchasing power of investment due to a general increase of consumer prices. Inflation erodes the nominal rate of return giving a lower real rate of return. Investors are advised to take note that the Fund is not designed with the objective of matching the inflation rate of Malaysia. The Fund has been established in accordance with the provisions of the Deed and the Guidelines. There is a risk that the Manager may not observe the rules whether intentionally or inadvertently. Whilst non-compliance with the rules governing the Fund will not necessarily result in losses to the Fund, Investors cannot discount the risk that losses may be suffered by the Fund if the noncompliance with the rules is sufficiently serious and may affect the value of the Fund. This may occur, for instance, if the Manager decides to buy an instrument which is not permitted, whether intentionally or inadvertently, and thereafter having to sell that instrument at a loss to the Fund. This risk refers to the possibility of a breakdown in the Manager s internal controls and policies. The breakdown may be a result of human error (for instance the keying of wrong details), system failure (causing unnecessary downtime) or even fraud (where employees of the Manager colludes with one another). This risk may cause monetary loss to the Fund and/or inconvenience to Investors. The Manager will regularly review its internal policies and system capability to minimize the occurrence of this risk. Additionally the Manager maintains a strict segregation of duties to minimize occurrence of fraudulent practices amongst employees of the Manager. This risk refers to how changes in the interest rate environment would affect the performance of the Fund. In the event of a decreasing interest rate environment, lower interest rates may increase the prices of investment instrument; which in turn will reduce the potential returns of the Fund. In essence, there is an inverse relationship between interest rate and prices of investment instrument. This risk refers to the possibility that the investments of the Fund cannot be readily sold or converted into cash without incurring significant loss in value. For example, disposing a relatively illiquid instrument may result in a disadvantage to the Fund as there may not be a buyer, or sufficient buyers, available for the said instrument. This lack of demand or low trading volume may cause the value of the Fund to drop. This risk is mitigated through a diversified asset allocation in terms of the type of instruments and the tenure of the investment instruments, which include fixed deposits, money market instruments and fixed income securities. This risk refers to the counterparty (in the contract) is not live up to its contractual obligations. For example, the counterparty s non-payment or untimely payment of the principal and/or profit will subsequently lead to the reduction of the NAV of the Fund; which in turn will affect the performance of the Fund. The Manager may need to perform fundamental research and analysis to determine the creditworthiness of its counterparties. The Manager will have to also diversify its investments in fixed income securities, money market instruments and placements in fixed deposits by limiting its exposure on each of its counterparties. THE ABOVEMENTIONED RISK FACTORS SHOULD NOT BE CONSIDERED AS AN EXHAUSTIVE LIST OF RISKS. INVESTORS ARE ADVISED THAT IT IS NOT ALWAYS POSSIBLE TO PROTECT INVESTMENTS AGAINST ALL RISKS. 3

4 FEES AND CHARGES 7. What are the fees and charges involved? The table below describes the charges that you may DIRECTLY incur when you buy or redeem Units of the Fund. Sales Charge Redemption Charge Transfer Fee Switching Fee Other Charges The Manager does not intend to impose any sales charge. The Manager does not intend to impose any redemption charge. Transfer facility is not available for the Fund. Switching facility is not available for the Fund. There are no other charges (except charges levied by banks on remittance of money) payable directly by investors when purchasing or redeeming units of the Fund. The table describes the fees that you may INDIRECTLY incur when you invest in Units of the Fund. Annual Management Fee Performance Fee Annual Trustee Fee Up to zero point five per centum (0.50%) per annum of the NAV of the Fund. The Management Fee is calculated on a daily basis and payable monthly. The Manager will earn a 20% performance fee on the appreciation in the NAV per Unit over and above the Hurdle Value during a particular Performance Period. However, in the interest of Investors, the Manager imposes a Hurdle Value, that is HWM plus 4.5%, in which the Fund s performance have to exceed before the Manager is eligible for a performance fee. Up to zero point zero two per centum (0.02%) per annum of the NAV of the Fund. The Trustee Fee is calculated daily and payable monthly. All fees and charges payable to the Manager and the Trustee are subject to goods and services tax that is imposed by the government or other authorities from time to time. VALUATIONS AND EXITING FROM INVESTMENTS 8. How often are valuations available? Valuations are valued daily and you may refer to for the unit price. 9. How do I exit from this investment and what are the risks and costs involved Unit Holders may request to redeem the investments in the Fund on any Business Day by completing the redemption request form and returning it to the Manager on or before the cut-off time of 11 a.m. on any Business Day. Redemption proceeds will be paid to you within seven (7) Business Days from the day the redemption request form is received by the Manager and provided that all documentations are completed and verifiable. *Business Day means a day on which banks in Kuala Lumpur are open for business 4

5 CONTACT INFORMATION 10. Who do I contact for further information or to lodge a complaint? You can contact the below for further information or to lodge a complaint: Kenanga Investors Berhad Suite 12.02, 12 th Floor, Kenanga International, Jalan Sultan Ismail,50250 Kuala Lumpur. General Line No : Facsimile no : Customer Service Toll Free No : Website : investorservices@kenanga.com.my 1. For internal dispute resolution, you may contact: Kenanga Investors Berhad Suite 12.02, 12 th Floor, Kenanga International, Jalan Sultan Ismail,50250 Kuala Lumpur (a) General Line No : (b) Facsimile No : (c) Customer Service Toll Free No : (d) Website : (e) investorservices@kenanga.com.my 2. If you are dissatisfied with the outcome of the internal dispute resolution process, please refer your dispute to the Securities Dispute Resolution Corporation (SIDREC): (a) via phone to : (b) via fax to : (c) via to : info@sidrec.com.my (d) via letter to : Securities Industry Dispute Resolution Center (SIDREC) Unit A-9-1, Level 9, Tower A Menara UOA Bangsar No. 5, Jalan Bangsar Utama Kuala Lumpur 3. You can direct your complaint to the SC even if you have initiated a dispute resolution process with SIDREC. To make a complaint, please contact the SC s Investor Affairs & Complaint Department: (a) via phone to Aduan Hotline at : (b) via fax to : (c) via to : aduan@seccom.com.my (d) via online complaint form available at (e) via letter to : Investors Affairs and Complaints Department, Securities Commission Malaysia No.3, Persiaran Bukit Kiara Bukit Kiara Kuala Lumpur 5