QUARTERLY REPORT For The Financial Period From 1 October 2016 To 30 June 2017 PACIFIC ISLAMIC CASH FUND www.pacificmutual.com.my PACIFIC MUTUAL FUND BHD (336059-U) A member of the OCBC Group
CONTENTS Fund Information Fund Performance Market Review Fund Review Fund Returns Asset Allocation Income Distribution Significant Changes In The State Of Affairs Of The Fund Shariah Adviser's Report Financial Statements Unaudited Statement Of Financial Position Unaudited Statement Of Comprehensive Income 2 3 6 7 8
FUND INFORMATION As at 30 June 2017 Name Of Fund : Manager Of Fund : Launch Date : Pacific Islamic Cash Fund Pacific Mutual Fund Bhd (336059-U) 13 January 2016 The Fund will continue its operations until terminated as provided under Section 25 of the Deed. Category Of Fund : Type Of Fund : Investment Objective : Islamic money market (wholesale) Income Pacific Islamic Cash Fund aims to provide income, liquidity and stability of capital by investing in a portfolio of Islamic deposits. Income is in reference to the Fund s distribution, which could be in the form of cash or units. Performance Benchmark : Distribution Policy : Fund Size : Maybank Islamic Overnight Deposit Rate Distribution of income, if any, at least on a monthly basis. 113.22 million units 2
FUND PERFORMANCE For The Financial Period From 1 October 2016 To 30 June 2017 Market Review Yields were on a steady uptrend during the review period as investors assessed the possibility of sequential hikes in the federal funds rate while wide swing in oil prices added to the uncertainty. Long-term yields were on a steady uptrend amid strong US data releases and concerns about the longevity of central bank accommodation. Trump s surprise victory in the US presidential election and a Republican sweep of the White House and Congress fuelled a global bond sell-off in late fourth quarter of 2016. Optimism over the strengthening global economy and potential pro-growth effects from President Trump s fiscal stimulus plans continued to drive markets in the first quarter of 2017. Thereafter, yields consolidated lower on further paring of optimism that President Trump s policies will filter down the US economy anytime soon following a failure to pass the healthcare legislation in March. Against the backdrop of strengthening growth and rising inflation, the Federal Reserve (Fed) raised its federal funds rate by 25 basis points in December and another cumulative 50 basis points in March and June this year. Additionally, the Fed laid out additional details of the balance sheet reduction plan which is expected to take place later part of the year. The rate hikes during the review period has worked to keep the yield curve adjusting higher with the 2-year increasing by 62 basis points to 1.38% while the 10-year increased by 71 basis points to 2.30%. The local bond market suffered heavy losses alongside the global bond rout and the Ringgit weakening to 4.46 levels against the Dollar in early November. Foreign led selling was seen across the MGS curve with yields surging as much as 100 basis points at the peak of the sell-off. The post US election surge in bond yields was primarily driven by concerns of fiscal led inflation and expectations of a continuation of the Fed s rate hiking cycle to begin in December. Thereafter, yields consolidated lower from the peak in the fourth quarter of 2016 but remained higher for the financial year as investors stayed cautious following higher price inflation and expectations of higher interest rates in the US. After five consecutive months of foreign outflows, the bond market witnessed its first inflow in April following a stronger Ringgit amid the central bank s continued efforts to enhance onshore foreign exchange hedging. Meanwhile, Bank Negara maintained a stable monetary policy with overnight policy rate unchanged at 3.00% on steady growth trajectory. In the 2016 annual report, Bank Negara expects a sustained growth of 4.30-4.80% on the back of higher inflation target of 3-4%. Over the review period, the 3-year MGS increased by 55 basis points to 3.39% while the 10-year yields increased by a lesser quantum of 36 basis points to 3.91%. Fund Review As at 30 June 2017, total net asset value (NAV) of the Pacific Islamic Cash Fund stood at RM114,293,365 while NAV per unit increased to RM1.0095 (net of distribution) from its initial offer price of RM1.0000. The Fund has consistently declared steady income distribution since inception. As at 30 June 2017, the portfolio was 100% invested in commodity murabahah deposits. During the review period (1 October 2016 to 30 June 2017), the Fund outperformed its benchmark by 136 basis points returning 2.67% while the benchmark returned 1.31%. Outperformance was due to active allocation of deposit placements as the Fund sought yields via longer tenured cash placements to mitigate reinvestment risks and to enhance the overall portfolio yield. 3
Fund Returns 1.10.2016 to 31.12.2016 1.1.2017 to 31.3.2017 1.4.2017 to 30.6.2017 Financial Year-To-Date (1.10.2016 to 30.6.2017) Since Launch (13.1.2016 to 30.6.2017) Total Returns Pacific Islamic Cash Fund 0.86% 0.91% 0.87% 2.67% 5.44% Benchmark 0.44% 0.43% 0.43% 1.31% 2.63% Source: Lipper, Maybank Asset Allocation As At 30 June 2017 Cash And Islamic Money Market Instruments 100.00% Income Distribution Gross distribution per unit Net distribution per unit NAV per unit before declaration (as at 30 June 2017) NAV per unit after declaration (as at 30 June 2017) Pacific Islamic Cash Fund 2.40 sen (31.12.2016: 1.00 sen 31.3.2017: 1.00 sen 31.5.2017: 0.20 sen 30.6.2017: 0.20 sen) 2.40 sen (31.12.2016: 1.00 sen 31.3.2017: 1.00 sen 31.5.2017: 0.20 sen 30.6.2017: 0.20 sen) RM1.0115 RM1.0095 4
Significant Changes In The State Of Affairs Of The Fund Changes to the information memorandum of the Fund as follows: Previous provision: Financial Year End 30 September Performance Benchmark Maybank Corporate Commodity Murabahah Deposit Overnight Rate Annual Management Fee Annual Trustee Fee Minimum Additional Investment Distribution Policy 0.30% per annum of the net asset value of the Fund. 0.03% per annum of the net asset value of the Fund calculated and accrued on a daily basis. RM5,000 Deed Of The Fund 5 January 2016 Distribution of income, if any, is on a quarterly basis. New provision: Financial Year End Performance Benchmark Annual Management Fee Annual Trustee Fee Minimum Additional Investment Distribution Policy 31 December Maybank Islamic Overnight Deposit Rate Up to 0.25% per annum of the net asset value of the Fund. Up to 0.02% per annum of the net asset value of the Fund calculated and accrued on a daily basis. RM1,000 Distribution of income, if any, is on a monthly basis. Deed(s) Of The Fund Principal Deed: 5 January 2016 First Supplemental Deed: 29 August 2016 Second Supplemental Deed: 22 March 2017 Third Supplemental Deed: 12 April 2017 5
SHARIAH ADVISER'S REPORT To the Unitholders of PACIFIC ISLAMIC CASH FUND We have acted as the Shariah Adviser of PACIFIC ISLAMIC CASH FUND. Our responsibility is to ensure that the procedures and processes employed by its fund manager, PACIFIC MUTUAL FUND BHD as well as the provisions of its Master Deed dated 5 January 2016 as amended by the First Supplemental Deed dated 29 August 2016, Second Supplemental Deed dated 22 March 2017 and its Third Supplemental Deed dated 12 April 2017 are all in accordance with Shariah. In our opinion based on the portfolio reports submitted to us, PACIFIC MUTUAL FUND BHD has managed and administered PACIFIC ISLAMIC CASH FUND in accordance with Shariah and has complied with applicable guidelines, rulings and decisions issued by the Shariah Advisory Council of the Securities Commission Malaysia ( SACSC ) for the financial period from 1 October 2016 to 30 June 2017. We confirm that the investment portfolio of PACIFIC ISLAMIC CASH FUND consists of Islamic deposits which have been placed with Islamic Financial Institutions approved by Bank Negara Malaysia. For BIMB SECURITIES SDN BHD IR. DR. MUHAMAD FUAD ABDULLAH Designated Shariah Person Kuala Lumpur, Malaysia 2 August 2017 6
UNAUDITED STATEMENT OF FINANCIAL POSITION As at 30 June 2017 Assets Profit receivable Cash and cash equivalents Total Assets Liabilities Amount due to Manager Other payables Distribution payable Total Liabilities Net Asset Value Of The Fund Equity Unitholders' capital Retained earning Net Asset Value Attributable To Unitholders Total Equity And Liabilities Number Of Units In Circulation (Units) Net Asset Value Per Unit (ex-distribution) 2017 RM 197,161 114,356,575 114,553,736 23,343 10,592 226,436 260,371 114,293,365 113,233,652 1,059,713 114,293,365 114,553,736 113,217,900 RM1.0095 7
UNAUDITED STATEMENT OF COMPREHENSIVE INCOME For The Financial Period From 1 October 2016 To 30 June 2017 Shariah-Compliant Investment Income Profit from Islamic money market instruments Expenses Audit fee Tax agent's fee Manager's fee Trustee's fee Administration expenses Net Income Before Taxation Taxation Net Income After Taxation Total Comprehensive Income Total Comprehensive Income Is Made Up As Follows: Realised Unrealised 1.10.2016 to 30.6.2017 RM 1,362,245 5,086 1,758 87,790 8,695 11,941 115,270 1,246,975-1,246,975 1,246,975 1,246,975-1,246,975 8
Growing Together To reach out for excellence, to persevere, to mutually trust and support. That s the essence of growing together with Pacific Mutual for a brighter future. PACIFIC MUTUAL FUND BHD (336059-U) A member of the OCBC Group 1001, Level 10, Uptown 1, No. 1 Jalan SS21/58, Damansara Uptown, 47400 Petaling Jaya, Selangor Tel: 03-7725 9877 Fax: 03-7725 9860 E-mail: ib.support@pacificmutual.com.my Website: www.pacificmutual.com.my BRANCHES Pulau Pinang 04-644 7979 penang@pacificmutual.com.my Perak 05-242 4322 ipoh@pacificmutual.com.my Melaka 06-282 8788 melaka@pacificmutual.com.my Sarawak 082-233 933 kuching@pacificmutual.com.my Sabah 088-251 088 kk@pacificmutual.com.my INSTITUTIONAL UNIT TRUST ADVISERS ifast Capital Sdn Bhd (782978-H) Tel: 03-2149 0600 Phillip Mutual Berhad (570409-K) Tel: 03-2783 0300 Areca Capital Sdn Bhd (740840-D) Tel: 03-7956 3111 Our IUTA may not carry the complete set of our Funds. Investments made via our IUTA may be subject to different terms and conditions. INVESTORS ARE ADVISED TO PROVIDE UPDATED PERSONAL DETAILS TO PACIFIC MUTUAL ON A TIMELY BASIS. YOU MAY UPDATE YOUR DETAILS VIA OUR E-SERVICE AT www.pacificmutual.com.my OR CALL 03-7726 6332 E-MAIL ib.support@pacificmutual.com.my