AmPRS-Islamic Fixed Income Fund 28 February 2018

Transcription

1 Semi-Annual Report for AmPRS-Islamic Fixed Income Fund 28 February 2018

2 TRUST DIRECTORY PRS Provider AmFunds Management Berhad 9 th & 10 th Floor, Bangunan AmBank Group 55 Jalan Raja Chulan Kuala Lumpur Board of Directors Raja Maimunah Binti Raja Abdul Aziz Dato Mustafa Bin Mohd Nor Tai Terk Lin Goh Wee Peng Sum Leng Kuang Investment Committee Sum Leng Kuang Tai Terk Lin Dato Mustafa Bin Mohd Nor Zainal Abidin Bin Mohd Kassim Goh Wee Peng Audit Committee Sum Leng Kuang Tai Terk Lin Dato Mustafa Bin Mohd Nor Trustee Deutsche Trustees Malaysia Berhad Auditors and Reporting Accountants Ernst & Young Taxation Adviser Deloitte Tax Services Sdn Bhd AmPRS Islamic Fixed Income Fund

3 CONTENTS 1 PRS Provider s Report 8 Condensed Statement of Financial Position 9 Condensed Statement of Comprehensive Income 10 Condensed Statement of Changes in Equity 11 Condensed Statement of Cash Flows 12 Notes to the Condensed Financial Statements 24 Statement by the Provider 25 Scheme Trustee s Report 26 Report of the Shariah Adviser to the Members 27 Directory AmPRS Islamic Fixed Income Fund

4 PRS PROVIDER S REPORT Dear Members, We are pleased to present you the PRS Provider s report and the unaudited accounts of AmPRS Islamic Fixed Income Fund ( Fund ) for the financial period from 1 September 2017 to 28 February Salient Information of the Fund Name Category/ Type Objective Performance Benchmark Income Distribution Policy Breakdown of Unit Holdings by Size AmPRS Islamic Fixed Income Fund ( Fund ) Fixed Income (Islamic) AmPRS Islamic Fixed Income Fund aims to provide Short to Medium Term capital growth by investing primarily in Sukuk and Shariah Compliant money market instruments. 1-year Malayan Banking Berhad General Investment Account Rate. Note: As the risk profile of the Fund is not the same as the risk profile of the performance benchmark; the Fund is expected to outperform its benchmark. However, there is no guarantee that the Fund will outperform the benchmark. Subject to availability of income, distribution (if any) is incidental. Note: Income distribution (if any) will be in the form of units. For the financial period under review, the size of the Fund for Class D stood at 105,009 units and for Class I stood at 249,430 units. Class D Size of holding As at 28 February 2018 As at 31 August 2017 No of units held Number of members No of units held Number of members 5,000 and below 14, , ,001-10,000 32, , ,001-50,000 58, , , , ,001 and above

5 Class I Size of holding As at 28 February 2018 As at 31 August 2017 No of units held Number of members No of units held Number of members 5,000 and below 3, , ,001-10,000 24, , ,001-50,000 99, , , , , , ,001 and above Fund Performance Data Portfolio Composition Details of portfolio composition of the Fund for the financial period as at 28 February 2018 and three financial years as at 31 August are as follows: As at % FY 2017 % FY 2016 % FY 2015 % Collective investment schemes Cash and others Total Note: The abovementioned percentages are calculated based on total net asset value. Performance Details Performance details of the Fund for the financial period ended 28 February and three financial years ended 31 August are as follows: 2 Half year ended FY 2017 FY 2016 FY 2015 Net asset value (RM)* - Class D 59,803 35,197 28,328 22,940 - Class I 142, ,372 77,343 47,397 Units in circulation * - Class D 105,009 63,308 53,016 45,407 - Class I 249, , ,708 93,789 Net asset value per unit (RM)* - Class D Class I Highest net asset value per unit (RM)* - Class D Class I Lowest net asset value per unit (RM)* - Class D Class I (Forward)

6 Half year ended FY 2017 FY 2016 FY 2015 Benchmark performance (%) - Class D Class I Total return (%) (1) - Class D Class I Capital growth (%) - Class D Class I Income distribution (%) Gross distribution (sen per unit) Net distribution (sen per unit) Management expense ratio (%) (2) Portfolio turnover ratio (times) (3) * Above prices and net asset value per unit are not shown as ex-distribution. Note: (1) Total return is the actual return of the Fund for the financial period/years computed based on the net asset value per unit and net of all fees. (2) Management expense ratio ( MER ) is calculated based on the total fees and expenses incurred by the Fund divided by the average fund size calculated on a daily basis. The MER decreased by 0.02% as compared to 0.05% per annum for the financial year ended 31 August 2017 mainly due to decrease in expenses. (3) Portfolio turnover ratio ( PTR ) is calculated based on the average of the total acquisitions and total disposals of investment securities of the Fund divided by the average fund size calculated on a daily basis. The PTR decreased by 0.06 times (31.6%) as compared to 0.19 times for financial year ended 31 August 2017 mainly due to decrease in investing activities. Average Total Return (as at 28 February 2018) AmPRS-Islamic Fixed Income Fund (a) % MBB (b) % One year - Class D Class I Three years - Class D Class I Since launch (25 November 2013) - Class D Class I

7 Annual Total Return Financial Years/Period Ended (31 August) AmPRS-Islamic Fixed Income Fund (a) % MBB (b) % Class D Class I Class D Class I Class D Class I (c) - Class D Class I (a) Source: Novagni Analytics and Advisory Sdn Bhd. (b) 1-year Malayan Banking Berhad General Investment Account Rate ( MBB ) (obtainable via (c) Total actual return for the financial period from 25 November 2013 (date of commencement) to 31 August Note: Past performance is not necessarily indicative of future performance and that unit prices and investment returns may go down, as well as up. Fund Performance Class D For the financial period under review, the Fund registered a return of 2.32% which was entirely capital growth in nature. Thus, the Fund s return of 2.32% has outperformed the benchmark s return of 1.63% by 0.69%. As compared with the financial year ended 31 August 2017, the net asset value ( NAV ) per unit of the Fund increased by 2.43% from RM to RM0.5695, while units in circulation increased by 65.87% from 63,308 units to 105,009 units. Class I For the financial period under review, the Fund registered a return of 2.32% which was entirely capital growth in nature. Thus, the Fund s return of 2.32% has outperformed the benchmark s return of 1.63% by 0.69%. As compared with the financial year ended 31 August 2017, the net asset value ( NAV ) per unit of the Fund increased by 2.45% from RM to RM0.5697, while units in circulation increased by 18.19% from 211,050 units to 249,430 units. The line chart below shows comparison between the annual performances of 4

8 AmPRS Islamic Fixed Income Fund and its benchmark, MBB, for the financial period/years ended 31 August. Note: Past performance is not necessarily indicative of future performance and that unit prices and investment returns may go down, as well as up. Strategies and Policies Employed For the financial period under review, the Fund invested its assets into a welldiversified portfolio comprising the following asset classes: Sukuk and Shariah Compliant money market instruments; Islamic Liquid Assets; Shariah Compliant equities; and Shariah Compliant REITs. The Shariah Compliant securities that the Fund invests in will be traded and/or listed in the following countries, which includes but not limited to Australia, Hong Kong, Malaysia, New Zealand, Singapore, South Korea, Taiwan and Thailand. Foreign investments (if any) will be limited to 20% of the Fund s NAV. In order to achieve the investment objective, the investment manager may opt to invest in the Shariah Compliant securities either directly or via collective investment schemes ( CIS ) of AmFunds Management Berhad ( AFM ) or other CIS such as ETF that comply with Shariah Principles. The Fund may also use Shariah Compliant hedging instruments for the purpose of hedging (subject to PRS Guidelines) if it is deemed necessary to do so. Portfolio Structure This table below is the asset allocation of the Fund for the financial period/year under review. 5

9 As at % As at % Changes % Collective investment schemes Cash and others Total For the financial period under review, the Fund has increased weight in collective investment schemes from 94.73% to 95.30% of its NAV. Cross Trades Distribution/ Unit splits State of Affairs Rebates and Soft Commission There are no cross trades for the Fund during this financial period under review. There was no income distribution and unit split declared for the financial period under review. There has been neither significant change to the state of affairs of the Fund nor any circumstances that materially affect any interests of the members during the financial period under review. It is our policy to pay all rebates to the Fund. Soft commissions received from brokers/dealers are retained by the PRS Provider only if the goods and services provided are of demonstrable benefit to members of the Fund. During the financial period under review, the PRS Provider had received on behalf of the Fund, soft commissions in the form of fundamental database, financial wire services, technical analysis software and stock quotation system incidental to investment management of the Fund. These soft commissions received by the PRS Provider are deem to be beneficial to the members of the Fund. Market Review Malaysia s real GDP grew by 6.2% YoY in 3Q17, vs 5.8% in 2Q17, on the back of stronger export growth and overall domestic demand/private investment. This is the key driver for the strengthening of MYR as it reinforced rate hike expectations. Malaysia s 4Q2017 real GDP grew 5.9% YoY, slightly slower than the 6.2% recorded in 3Q2017. The slower pace was dragged down by slower export growth. Full year growth was stellar at 5.9%, the fastest in three years supported by a surge in exports, and resilient domestic demand. Full year current account ( CA ) surplus in the balance of payment remained healthy at RM40.3b or 3% of GDP (2.4% GDP 2016). With economic data showing the economy on a steady growth path and inflation still at elevated levels, BNM raised its policy rate by 25 basis points during its Monetary Policy Committee ( MPC ) held on 25 January The rate hike raised the Overnight Policy Rate ( OPR ) to 3.25% the first increase since July In its statement following the rate hike BNM stated that the OPR hike was not monetary tightening but rather normalisation of the degree of monetary accommodation. It further added that the MPC wants to pre-emptively ensure that the policy stance is appropriate, to prevent a build-up of risks that could arise from interest rates being too low for too long. Malaysia s Consumer Price Index ( CPI ) for January 2018 moderated further to 6

10 2.7%, a significant drop from the 3.5% increase in the previous month. The slowdown in inflation mirrors the transport inflation trend which continues to enjoy stable crude oil prices in recent months and a slower rise in the Food & Beverage component. Meanwhile, core inflation remains well controlled at 2.2% YoY. The recent inflation numbers are significantly lower than the 3.9% CPI inflation recorded for full year Meanwhile, Malaysia s foreign reserve as at 15th Feb 18 was reported at USD103.6b which is sufficient to finance 7.1 months of retained imports and 1.1 times in short-term external debt. During the period under review government bond yields traded higher, the 10 year MGS yield increased by 18 bps to 4.06% whilst the 20 year MGS yield increased by 8 bps to 4.63%. Market Outlook Following the release of the Federal Open Market Committee ( FOMC or Fed ) January 2018 policy meeting minutes and the subsequent heightening expectations of more aggressive Fed rate hikes, US Treasuries spiked to multi-year highs before easing off towards the end of February While the Fed s gradual tightening policy remains in place given the strengthening economic outlook, there is a growing awareness of the possibility of acceleration in inflation expectations in the year to come and its impact on the pace of the Fed rate hikes. As we have mentioned before, the threat of an increase in the interest rate trajectory is something the market is wary off and we foresee more volatilities across all asset classes throughout the year. In the near term, investors will be focusing on the FOMC meeting on 21 March 2018 where there is an almost near certainty that the Fed will raise the rate by another 25bp. Back home, the Central Bank is expected to stay put in the upcoming Monetary Policy Committee ( MPC ) meeting this month while the release of the Bank Negara Annual Report slated for the end of March will provide further color on the state of economy and in particular, the macro outlook of the country. As such, we believe investors will continue to be guided by external economic developments and in recent weeks, the impact of new trade policies emanating from the United States. Kuala Lumpur, Malaysia AmFunds Management Berhad 30 March

11 AmPRS Islamic Fixed Income Fund CONDENSED STATEMENT OF FINANCIAL POSITION AS AT 28 FEBRUARY (unaudited) (audited) Note RM RM ASSETS Shariah-compliant investments 4 192, ,533 Amount due from Provider ,438 Cash at bank 9,503 1,598 TOTAL ASSETS 201, ,569 Members capital 9(a)(b) 186, ,015 Retained earnings 9(c)(d) 15,740 11,554 TOTAL EQUITY 9 201, ,569 NET ASSETS ATTRIBUTABLE TO MEMBERS CLASS D 59,803 35,197 CLASS I 142, , , ,569 UNITS IN CIRCULATION CLASS D 9(a) 105,009 63,308 CLASS I 9(b) 249, ,050 NET ASSET VALUE PER UNIT CLASS D sen sen CLASS I sen sen The accompanying notes form an integral part of the financial statements. 8

12 AmPRS Islamic Fixed Income Fund CONDENSED STATEMENT OF COMPREHENSIVE INCOME (Unaudited) FOR THE FINANCIAL PERIOD FROM 1 SEPTEMBER 2017 TO 28 FEBRUARY to to Note RM RM SHARIAH-COMPLIANT INVESTMENT INCOME Gross distribution income 1, Net gain from Shariah-compliant investments: Financial assets at fair value through profit or loss ( FVTPL ) 8 2, Gross Income 4,211 1,369 EXPENDITURE Management fee Trustee s fee Private Pension Administrator ( PPA ) administrative fee Other expenses (25) (23) Total Expenditure (25) (23) NET INCOME BEFORE TAX 4,186 1,346 LESS: INCOME TAX NET INCOME AFTER TAX 4,186 1,346 OTHER COMPREHENSIVE INCOME - - TOTAL COMPREHENSIVE INCOME FOR THE FINANCIAL PERIOD 4,186 1,346 Total comprehensive income comprises the following: Realised income 1, Unrealised gain 2, ,186 1,346 The accompanying notes form an integral part of the financial statements. 9

13 AmPRS Islamic Fixed Income Fund CONDENSED STATEMENT OF CHANGES IN EQUITY (Unaudited ) FOR THE FINANCIAL PERIOD FROM 1 SEPTEMBER 2017 TO 28 FEBRUARY 2018 Members Members capital - capital - Retained Total Class D Class I earnings equity Note RM RM RM RM At 1 September ,921 72,374 6, ,671 Total comprehensive income for the financial period - - 1,346 1,346 Creation of units 5,107 12,680-17,787 Balance at 28 February ,028 85,054 7, ,804 At 1 September , ,647 11, ,569 Total comprehensive income for the financial period - - 4,186 4,186 Creation of units 9(a)(b) 28,733 21,616-50,349 Cancellation of units 9(a)(b) (5,210) - - (5,210) Balance at 28 February , ,263 15, ,894 The accompanying notes form an integral part of the financial statements. 10

14 AmPRS Islamic Fixed Income Fund CONDENSED STATEMENT OF CASH FLOWS (Unaudited ) FOR THE FINANCIAL PERIOD FROM 1 SEPTEMBER 2017 TO 28 FEBRUARY to to RM RM CASH FLOWS FROM OPERATING AND INVESTING ACTIVITIES Proceeds from sale of Shariah-compliant investments Distributions received 1, Payments for other expenses (25) (23) Purchase of Shariah-compliant investments (45,001) (18,411) Net cash used in operating and investing activities (43,472) (16,733) CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from creation of units 56,587 15,838 Payments for cancellation of units (5,210) - Net cash generated from financing activities 51,377 15,838 NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS 7,905 (895) CASH AND CASH EQUIVALENTS AT BEGINNING OF FINANCIAL PERIOD 1,598 2,576 CASH AND CASH EQUIVALENTS AT END OF FINANCIAL PERIOD 9,503 1,681 Cash and cash equivalents comprise: Cash at bank 9,503 1,681 The accompanying notes form an integral part of the financial statements. 11

15 AmPRS Islamic Fixed Income Fund NOTES TO THE CONDENSED FINANCIAL STATEMENTS 1. GENERAL INFORMATION AmPRS Islamic Fixed Income Fund ( the Fund ) was established pursuant to a Deed dated 4 December 2012 as amended by Deeds Supplemental thereto ( the Deed ), between AmFunds Management Berhad as the PRS Provider ( the Provider ), Deutsche Trustees Malaysia Berhad as the Trustee and all members. The Fund aims to provide short to medium term capital growth by investing primarily in Sukuk and Shariah-compliant money market instruments. As provided in the Deed, the accrual period or financial year shall end on 31 August and the units in the Fund were first offered for sale on 25 November BASIS OF PREPARATION OF FINANCIAL STATEMENTS The financial statements of the Fund have been prepared in accordance with Malaysian Financial Reporting Standards 134: Interim Financial Reporting ( MFRS 134 ) as issued by the Malaysian Accounting Standards Board ( MASB ). The financial statements of the Fund have been prepared under the historical cost convention, unless otherwise stated in the accounting policies. Standards effective during the financial period The adoption of MFRS which have been effective during the financial period did not have any material financial impact to the financial statements. Standards issued but not yet effective As at the date of authorisation of these financial statements, the following Standards, which are relevant to the Fund, have been issued by MASB but are not yet effective and have not been adopted by the Fund. Effective for financial periods beginning on or after MFRS 9 : Financial Instruments MFRS 15: Revenue From Contracts With Customers 1 January January 2018 The Fund plans to adopt the above pronouncements when they become effective in the respective financial periods. These pronouncements are expected to have no significant impact to the financial statements of the Fund upon their initial application except as described below: 12

16 MFRS 9 Financial Instruments MFRS 9 reflects International Accounting Standards Board s ( IASB ) work on the replacement of MFRS 139 Financial Instruments: Recognition and Measurement ( MFRS 139 ). MFRS 9 will be effective for financial year beginning on or after 1 January Based on the Fund s preliminary assessment shows that there is a minimal impact on the classification and measurement of the Fund s financial assets and will continue to be measured at FVTPL. Further, there is no impact on the classification and measurement of the Fund s financial liabilities. 3. SIGNIFICANT ACCOUNTING POLICIES Income recognition Income is recognised to the extent that it is probable that the economic benefits will flow to the Fund and the income can be reliably measured. Income is measured at the fair value of consideration received or receivable. Distribution income is recognised when the Fund s right to receive payment is established. Income tax Current tax assets and liabilities are measured at the amount expected to be recovered from or paid to the tax authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted at the reporting date. Current taxes are recognised in profit or loss except to the extent that the tax relates to items recognised outside profit or loss, either in other comprehensive income or directly in equity. Functional and presentation transactions Functional currency is the currency of the primary economic environment in which the Fund operates that most faithfully represents the economic effects of the underlying transactions. The functional currency of the Fund is Ringgit Malaysia which reflects the currency in which the Fund competes for funds, issues and redeems units. The Fund has also adopted Ringgit Malaysia as its presentation currency. Statement of cash flows The Fund adopts the direct method in the preparation of the statement of cash flows. Cash equivalents are short-term, highly liquid Shariah-compliant investments that are readily convertible to cash with insignificant risk of changes in value. Distribution Distributions are at the discretion of the Fund. A distribution to the Fund s members is accounted for as a deduction from realised reserves. A proposed distribution is recognised as a liability in the period in which it is approved. 13

17 Members capital The members capital of the Fund meets the definition of puttable instruments and is classified as equity instruments under MFRS 132 Financial Instruments: Presentation ( MFRS 132 ). Financial assets Financial assets are recognised in the statement of financial position when, and only when, the Fund becomes a party to the contractual provisions of the financial instrument. When financial assets are recognised initially, they are measured at fair value, plus, in the case of financial assets not at fair value through profit or loss, directly attributable transaction costs. The Fund determines the classification of its financial assets at initial recognition, and the categories applicable to the Fund include financial assets at fair value through profit or loss ( FVTPL ) and receivables. (i) Financial assets at FVTPL Financial assets are classified as financial assets at FVTPL if they are held for trading or are designated as such upon initial recognition. Financial assets held for trading by the Fund include Shariah-compliant collective investment schemes acquired principally for the purpose of selling in the near term. Subsequent to initial recognition, financial assets at FVTPL are measured at fair value. Changes in the fair value of those financial instruments are recorded in Net gain or loss on financial assets at fair value through profit or loss. Distribution revenue element of such instrument is recorded separately in Gross distribution income. For Shariah-compliant investments in collective investment schemes, fair value is determined based on the closing net asset value per unit of the collective investment schemes. The difference between the cost and fair value is treated as unrealised gain or loss and is recognised in profit or loss. Unrealised gains or losses recognised in profit or loss are not distributable in nature. On disposal of Shariah-compliant investments, the net realised gain or loss on disposal is measured as the difference between the net disposal proceeds and the carrying amount of the Shariah-compliant investments. The net realised gain or loss is recognised in profit or loss. (ii) Receivables Financial assets with fixed or determinable payments that are not quoted in an active market are classified as receivables. Subsequent to initial recognition, receivables are measured at amortised cost using the effective profit method. Gains and losses are recognised in profit or loss when the receivables are derecognised or impaired, and through the amortisation process. 14

18 Impairment of financial assets The Fund assesses at each reporting date whether there is any objective evidence that a financial asset is impaired. (i) Receivables carried at amortised cost To determine whether there is objective evidence that an impairment loss on financial assets has been incurred, the Fund considers factors such as the probability of insolvency or significant financial difficulties of the debtor and default or significant delay in payments. If any such evidence exists, the amount of impairment loss is measured as the difference between the asset s carrying amount and the present value of estimated future cash flows discounted at the financial asset s original effective profit rate. The impairment loss is recognised in profit or loss. The carrying amount of the financial asset is reduced through the use of an allowance account. When a receivable becomes uncollectible, it is written off against the allowance account. If in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised, the previously recognised impairment loss is reversed to the extent that the carrying amount of the asset does not exceed its amortised cost at the reversal date. The amount of reversal is recognised in profit or loss. Financial liabilities Financial liabilities are classified according to the substance of the contractual arrangements entered into and the definitions of a financial liability. Financial liabilities, within the scope of MFRS 139, are recognised in the statement of financial position when, and only when, the Fund becomes a party to the contractual provisions of the financial instrument. The Fund s financial liabilities are recognised initially at fair value plus directly attributable transaction costs and subsequently measured at amortised cost using the effective profit method. A financial liability is derecognised when the obligation under the liability is extinguished. Gains and losses are recognised in profit or loss when the liabilities are derecognised, and through the amortisation process. Classification of realised and unrealised gains and losses Unrealised gains and losses comprise changes in the fair value of financial instruments for the period and from reversal of prior period s unrealised gains and losses for financial instruments which were realised (i.e. sold, redeemed or matured) during the reporting period. 15

19 Realised gains and losses on disposals of financial instruments classified at fair value through profit or loss are calculated using the weighted average method. They represent the difference between an instrument s initial carrying amount and disposal amount. Significant accounting estimates and judgments The preparation of the Fund s financial statements requires the Provider to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the disclosure of contingent liabilities at the reporting date. However, uncertainty about these assumptions and estimates could result in outcomes that could require a material adjustment to the carrying amount of the asset or liability in the future. The Fund classifies its Shariah-compliant investments as financial assets at FVTPL as the Fund may sell its Shariah-compliant investments in the short-term for profit-taking or to meet members cancellation of units. No major judgments have been made by the Provider in applying the Fund s accounting policies. There are no key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial period. 4. SHARIAH-COMPLIANT INVESTMENTS Financial assets at FVTPL RM RM At cost: Collective investment schemes 181, ,946 At fair value: Collective investment schemes 192, ,533 Details of Shariah-compliant investments as at 28 February 2018 are as follows: Fair value as a percentage of Collective investment Number of Fair Purchase net asset scheme units value cost value RM RM % Collective investment schemes in Malaysia AmAl-Amin* 31,024 31,024 31, AmBon Islam* 30,459 37,288 37, AmDynamic Sukuk* 29,659 37,198 34, AmIslamic Balanced* 55,365 26,282 22, (Forward) 16

20 Fair value as a percentage of Collective investment Number of Fair Purchase net asset scheme units value cost value RM RM % Collective investment schemes in Malaysia AmIslamic Fixed Income Conservative* 30,528 37,363 34, AmIslamic Growth* 43,422 23,036 21, Total Shariah-compliant collective investment schemes 220, , , Total financial assets at FVTPL 192, , Excess of fair value over cost 10,244 * These collective investment schemes are managed by the Provider. 5. AMOUNT DUE FROM PROVIDER RM RM Creation of units* 200 6,438 * The amount represents amount receivable from the Provider for units created. Management fee is at 1.50% (2017: 1.50%) per annum for Class D and 1.25% (2017: 1.25%) per annum for Class I on the net asset value of the Fund. However, no management fee was charged in the previous financial year and current financial period. The normal credit period in the previous financial year and current financial period for creation and redemption of units is three business days. 6. TRUSTEE S FEE Trustee s fee is at 0.04% (2017: 0.04%) per annum for both Class D and Class I on the net asset value of the Fund. However, no Trustee fee was charged in the previous financial year and current financial period. 17

21 7. PPA ADMINISTRATIVE FEE PPA administrative fee is at a rate of 0.04% (2017: 0.04%) per annum for both Class D and Class I on the net asset value of the Fund, calculated on a daily basis. However, the fee was borne by the Provider in the previous financial year and current financial period. The normal credit period in the previous financial year and current financial period for PPA s administrative fee payable is one month. 8. NET GAIN FROM SHARIAH-COMPLIANT INVESTMENTS to to RM RM Net gain on financial assets at FVTPL comprised: - Net realised gain on sale of Shariah-compliant investments Net unrealised gain on changes in fair values of Shariah-compliant investments 2, , TOTAL EQUITY Total equity is represented by: Note RM RM Members capital - Class D (a) 55,891 32,368 Members capital - Class I (b) 130, ,647 Retained earnings Realised income (c) 5,496 3,967 Unrealised gain (d) 10,244 7,587 (a) MEMBERS CAPITAL/UNITS IN CIRCULATION - CLASS D 201, , Number of Number of units RM units RM At beginning of the financial period/year 63,308 32,368 53,016 26,921 (Forward) 18

22 Number of Number of units RM units RM Creation during the financial period/year 50,859 28,733 30,755 16,754 Cancellation during the financial period/year (9,158) (5,210) (20,463) (11,307) At end of the financial period/year 105,009 55,891 63,308 32,368 (b) MEMBERS CAPITAL/UNITS IN CIRCULATION - CLASS I Number of Number of units RM units RM At beginning of the financial period/year 211, , ,708 72,374 Creation during the financial period/year 38,380 21,616 66,342 36,273 At end of the financial period/year 249, , , ,647 (c) REALISED DISTRIBUTABLE RM RM At beginning of the financial period/year 3,967 2,298 Total comprehensive income for the financial period/year 4,186 5,178 Net unrealised gain attributable to Shariahcompliant investments held transferred to unrealised reserve [Note 9(d)] (2,657) (3,509) Net increase in realised reserve for the financial period/year 1,529 1,669 At end of the financial period/year 5,496 3,967 19

23 (d) UNREALISED NON-DISTRIBUTABLE RM RM At beginning of the financial period/year 7,587 4,078 Net unrealised gain attributable to Shariahcompliant investments held transferred from realised reserve [Note 9(c)] 2,657 3,509 At end of the financial period/year 10,244 7, UNITS HELD BY RELATED PARTIES The Provider and parties related to the Provider did not hold any units in the Fund as at 28 February 2018 and 31 August INCOME TAX Income tax payable is calculated on Shariah-compliant investments income less deduction for permitted expenses as provided for under Section 63B of the Income Tax Act, Pursuant to Schedule 6 of the Income Tax Act, 1967, local profit income derived by the Fund is exempted from tax. A reconciliation of income tax expense applicable to net income before tax at the statutory income tax rate to income tax expense at the effective income tax rate of the Fund is as follows: to to RM RM Net income before tax 4,186 1,346 Taxation at Malaysian statutory rate of 24% 1, Tax effects of: Income not subject to tax (1,011) (329) Non-permitted expenses for tax purposes 6 6 Tax expense for the financial period DISTRIBUTION No distribution was declared by the Fund for the financial periods ended 28 February 2018 and 28 February

24 13. MANAGEMENT EXPENSE RATIO ( MER ) The Fund s MER is as follows: to to % p.a. % p.a. Fund s other expenses Total MER The MER of the Fund is the ratio of the sum of annualised fees and expenses incurred by the Fund to the average net asset value of the Fund calculated on a daily basis. 14. PORTFOLIO TURNOVER RATIO ( PTR ) The PTR of the Fund, which is the ratio of average total acquisitions and disposals of Shariahcompliant investments to the average net asset value of the Fund calculated on a daily basis, is 0.13 times (2017: 0.09 times). 15. SEGMENTAL REPORTING As the Fund invests primarily in the collective investment schemes, it is not possible or meaningful to classify its Shariah-compliant investments by separate business or geographical segments. A summary of the investments portfolio of the collective investment schemes are disclosed in Note TRANSACTIONS WITH THE PROVIDER Details of transactions with the Provider for the financial period ended 28 February 2018 are as follows: Provider Transaction value RM % AmFunds Management Berhad 45, There was no transaction with financial institutions related to the Provider during the financial period. The Provider and the Trustee are of the opinion that the above transactions have been entered in the normal course of business and have been established under terms that are no less favourable than those arranged with independent third parties. The above transactions were in respect of Shariah-compliant collective investment schemes. Transactions in this investment do not involve any commission or brokerage. 21

25 17. RISK MANAGEMENT POLICIES The Fund is exposed to a variety of risks that include market risk, credit risk, liquidity risk, single issuer risk, regulatory risk, management risk and non-compliance/shariah non-compliance risk. Risk management is carried out by closely monitoring, measuring and mitigating the above said risks, careful selection of Shariah-compliant investments coupled with stringent compliance to Shariah-compliant investments restrictions as stipulated by the Capital Market and Services Act 2007, Securities Commission s Guidelines on Private Retirement Schemes and the Deed as the backbone of risk management of the Fund. Market risk Market risk, in general, is the risk that the value of a portfolio would decrease due to changes in market risk factors such as equity prices, profit rates, foreign exchange rates and commodity prices. (i) Price risk Price risk refers to the uncertainty of an investment s future prices. In the event of adverse price movements, the Fund might endure potential loss on its investments in the collective investment schemes. In managing price risk, the Provider actively monitors the performance and risk profile of the investment portfolio. Credit risk Credit risk is the risk that the counterparty to a financial instrument will cause a financial loss to the Fund by failing to discharge an obligation. Credit risk applies to distributions receivable. The issuer of such instruments may not be able to fulfill the required profit payments or repay the principal invested or amount owing. These risks may cause the Fund s Shariah-compliant investments to fluctuate in value. Cash at bank is held for liquidity purposes and is not exposed to significant credit risk. Liquidity risk Liquidity risk is defined as the risk of being unable to raise funds or borrowings to meet payment obligations as they fall due. This is also the risk of the Fund experiencing large redemptions, when the Investment Manager could be forced to sell large volumes of its holdings at unfavourable prices to meet redemption requirements. The Fund maintains sufficient level of liquid assets, after consultation with the Trustee, to meet anticipated payments and cancellations of units by members. Liquid assets comprise of deposits with licensed financial institutions and other instruments, which are capable of being converted into cash within 5 to 7 days. The Fund s policy is to always maintain a prudent level of liquid assets so as to reduce liquidity risk. 22

26 Single issuer risk Internal policy restricts the Fund from investing in securities issued by any issuer of not more than a certain percentage of its net asset value. Under such restriction, the risk exposure to the securities of any single issuer is diversified and managed based on internal/external ratings. Regulatory risk Any changes in national policies and regulations may have effects on the capital market and the net asset value of the Fund. Management risk Poor management of the Fund may cause considerable losses to the Fund that in turn may affect the net asset value of the Fund. Non-compliance/Shariah non-compliance risk This is the risk of the Provider, the Trustee or the Fund not complying with internal policies, the Deed of the Fund, securities law or guidelines issued by the regulators. In the case of an Islamic Fund, this includes the risk of the Fund not conforming to Shariah Investment Guidelines. Noncompliance risk may adversely affect the Shariah-compliant investment of the Fund when the Fund is forced to rectify the non-compliance. 23

27 AmPRS Islamic Fixed Income Fund STATEMENT BY THE PROVIDER I, GOH WEE PENG, for and on behalf of the Provider, AmFunds Management Berhad, for AmPRS Islamic Fixed Income Fund do hereby state that in the opinion of the Provider, the accompanying condensed statement of financial position, condensed statement of comprehensive income, condensed statement of changes in equity, condensed statement of cash flows and the accompanying notes are drawn up in accordance with Malaysian Financial Reporting Standards so as to give a true and fair view of the financial position of the Fund as at 28 February 2018 and the comprehensive income, the changes in equity and cash flows of the Fund for the half year then ended. GOH WEE PENG For and on behalf of the Provider AmFunds Management Berhad Kuala Lumpur, Malaysia 30 March

28 SCHEME TRUSTEE S REPORT 25

29 REPORT OF THE SHARIAH ADVISER TO THE MEMBERS of AmPRS Islamic Fixed Income Fund For The Financial Period from 1 September 2017 to 28 February 2018 We have acted as the Shariah Adviser of AmPRS Islamic Fixed Income Fund. Our responsibility is to ensure that the procedures and processes employed by AmIslamic Funds Management Sdn Bhd and that the provisions of the Deed in respect of the AmPRS dated 4 December 2012 and Supplemental Deed in respect of the AmPRS dated 22 October 2013 are in accordance with Shariah principles. In our opinion, AmIslamic Funds Management Sdn Bhd has managed and administered AmPRS Islamic Fixed Income Fund in accordance with Shariah principles and complied with applicable guidelines, ruling or decision issued by the Securities Commission (SC) pertaining to Shariah matters. We can confirm that the investment portfolio of the abovementioned Fund comprises of securities which have been classified as Shariah compliant by the Shariah Advisory (SAC) of the SC or the SAC of Bank Negara Malaysia (BNM). For securities not classified by the SAC of the SC or SAC of the BNM, we have determined that such securities are in accordance with Shariah principle and have complied with the applicable Shariah guidelines. For Amanie Advisors Sdn Bhd.. Datuk Dr Mohd Daud Bakar Chief Executive Officer 30 March

30 DIRECTORY Head Office Postal Address AmFunds Management Berhad 9 th & 10 th Floor, Bangunan AmBank Group 55, Jalan Raja Chulan, Kuala Lumpur Tel: (03) Facsimile: (03) aminvestprs@aminvest.com AmFunds Management Berhad P.O Box 13611, Kuala Lumpur Distributors For more details on the list of distributors, please contact the PRS Provider. For enquiries about this Scheme and any other funds offered by the PRS Provider, please call between 8.45 a.m. to 5.45 p.m. (Monday-Thursday) Friday 8.45 a.m. to 5.00 p.m. 27

31 Semi-Annual Report 28 February aminvest.com AmFunds Management Berhad ( A)