master prospectus - eunittrust.com.mya company incorporated in malaysia under the companies act 1965...
TRANSCRIPT
INVESTMENT FUNDS BERHAD
(334195-K)
Local Funds Constitution DateKAF First Fund 22 December 1995KAF Vision Fund 24 January 2000KAF Enhanced Bond Fund 27 December 2001KAF Tactical Fund 29 July 2004KAF Core Income Fund 29 July 2004KAF Jade Fund 26 July 2006
Shariah-compliant FundsKAF Dana Adib 25 February 2004KAF Dana al-Iddikhar 30 September 2005KAF Dana Alif 28 September 2007
Global Fund KAF Advantage GEM Bond Fund 27 August 2007
Manager KAF Investment Funds Berhad (334195-K)a company incorporated in Malaysia under the Companies Act 1965
Trustees CIMB Commerce Trustee Berhad (313031-A)RHB Trustees Berhad (573019-U) Universal Trustee (Malaysia) Berhad (17540-D)HSBC (Malaysia) Trustee Berhad (1281-T)
INVESTORS ARE ADVISED TO READ AND UNDERSTAND THE CONTENTS OF THE MASTER PROSPECTUS.IF IN DOUBT, PLEASE CONSULT A PROFESSIONAL ADVISER.
FOR INFORMATION CONCERNING CERTAIN RISK FACTORS, WHICH SHOULD BE CONSIDERED BYPROSPECTIVE INVESTORS SEE “RISK FACTORS” COMMENCING ON PAGE 22.
This Master Prospectus is dated 30 January 2015 and expires on 29 January 2016.
Master Prospectus
BACK COVER COVER
This Master Prospectus encompasses the following funds: KFF, KVF, KEBF, KTF, KCIF & KJF; (local funds) KDA, KDAI, KDL; (local Shariah-compliant funds) and KAGBF (global fund). Responsibility Statement •This Master Prospectus has been reviewed and approved by the directors of KAF Investment Funds 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 Master Prospectus false or misleading.Ž Statements of Disclaimer •The Securities Commission Malaysia has authorised the Funds and a copy of this Master Prospectus has been registered with the Securities Commission MalaysiaŽ. •The authorisation of the Funds, and the registration of this Master Prospectus, should not be taken to indicate that Securities Commission Malaysia recommends the said Funds or assumes responsibility for the correctness of any statement made or opinion expressed or report contained in this Master Prospectus.Ž •The Securities Commission Malaysia is not liable for any non-disclosure on the part of the KAF Investment Funds Berhad who is responsible for the said Funds and takes no responsibility for the contents in this Master Prospectus. The Securities Commission Malaysia makes no representation on the accuracy or completeness of this Master Prospectus, and expressly disclaims any liability whatsoever arising from, or in reliance upon, the whole or any part of its contents.Ž • INVESTORS SHOULD RELY ON THEIR OWN EVALUATION TO ASSESS THE MERITS AND RISKS OF THE INVESTMENT. IF INVESTORS ARE UNABLE TO MAKE THEIR OWN EVALUATION, THEY ARE ADVISED TO CONSULT PROFESIONAL ADVISERS. Additional Statements •No units of the said Funds will be issued or sold based on this Master Prospectus later than one (1) year after the date of this Master Prospectus.Ž Investors should note that they may seek recourse under the Capital Markets and Services Act 2007 for breaches of securities laws and regulations including any statement in this Master Prospectus that is false, misleading, or from which there is a material omission; or for any misleading or deceptive act in relation to this Master Prospectus or the conduct of any other person in relation to the Fund.Ž KAF Dana Adib, KAF Dana al-Iddikhar and KAF Dana Alif have been certified as being Shariah- compliant by the Shariah Adviser appointed for the said Funds.
PREFACE Dear Investors, On behalf of the Board of Directors of KAF Investment Funds Berhad (“KIFB”), I am pleased to introduce the range of unit trust funds that we can offer; which we believe is broad enough to meet your investment objective. The range is from conventional to local Shariah-compliant funds, from equities to bonds/sukuk to money market and from global bond to thematic mandates. As for different investment tenure of either short or long-term duration, we feel that there is a fund that will suit your investment need at a respective level of risk following your risk appetite. You may refer to pages 10 to 13 of the Key Data of the Funds’ section for a more detailed understanding of the objectives, investment strategies and specific risks as well as the investors’ profile of each of the respective Funds. It is equally important that you understand the various fees and charges payable for the Funds. Hence, please refer to page 17 to 19 for further information. If you find that any of our Funds fulfil your requirements and you decide to buy into the selected Fund, or should you have any further inquires, do call our toll-free line, 1-800-88-3065 to speak to our customer service officers who are ever ready to assist. You may also refer to our investment directory list on page 145. Thank you. Yours faithfully, for KAF Investment Funds Berhad Yong Yit Hin Executive Director
TABLE OF CONTENTS
PAGE
DEFINITIONS 1
CORPORATE DIRECTORY 5
KEY DATA OF THE FUNDS Funds Information - Fund Name, Category/Type of Fund, Fund Launch, Objective Asset Allocation, Investment Strategy, Benchmark, Principal Risks Financial Year End, Relative Risk Profile, Investor Profile, Distribution Policy Target Fund Information - Name of Target Fund, Manager of Target Fund, Location, Regulatory Authority, Date of Establishment Fees & Charges - Sales Charge, Repurchase Charge/Exit Fee, Switching Fee Annual Management Fee, Annual Trustee Fee, Management Expense Ratio (annualised), Transfer Fee & Other Charges, List of Expenses Directly Related To The Funds Other Information - Deed, Avenue for Advice
10 10 11 14 17
17 19 19 20
RISK FACTORS General risks of investing in unit trust fund Specific risks associated with the Funds Specific risks associated with the Target Fund Risk management Management of specific risks
22 22 22 26 27 28
THE FUND•S PROFILE KAF First Fund (•KFFŽ) KAF Vision Fund (•KVFŽ) KAF Enhanced Bond Fund (•KEBFŽ) KAF Tactical Fund (•KTFŽ) KAF Core Income Fund (•KCIFŽ) KAF Jade Fund (•KJFŽ) KAF Dana Adib (•KDAŽ) KAF Dana al-Idhikhar KAF Dana Alif (•KDLŽ) Shariah Investment Guidelines KAF ADVANTAGE GEM Bond Fund (•KAGBFŽ) Information on the Target Fund The permitted investments for KFF, KVF, KEBF, KTF, KCIF, KDA, KDL & KDAI The permitted investments for KJF The investment restrictions for KFF, KVF, KEBF, KTF, KCIF, KDA, KDAI & KDL The investment restrictions for KJF The investment restrictions for KAGBF Bases of valuation of investments Gearing and other policies
31 31 33 35 37 39 41 42 43 45 47 50 53
62 64 64 67 68 69 69
THE FUNDS• PERFORMANCE KFF KVF KEBF KTF KCIF KJF KDA KDAI KDL KAGBF
70 70 71 72 73 74 76 77 78 79 80
PAGE
HISTORICAL FINANCIAL HIGHLIGHTS OF THE FUNDS KFF KVF KEBF KTF KCIF KJF KDA KDAI KDL KAGBF Total annual expenses incurred by the Funds The MER of the Funds for the past 3 financial years
82 82 82 83 84 84 85 86 86 87 88 89 90
FEES, CHARGES AND EXPENSES CHARGES DIRECTLY INCURRED Sales charge Repurchase/Redemption charge FEES AND EXPENSES INDIRECTLY INCURRED Goods & Services Tax (GST) Annual management fee Computation of management fee Annual trustees• fee Computation of trustee fee EXPENSES OF THE FUNDS OTHER FEES AND CHARGES Switching fee Transfer fee Other charges Management Expense Ratio (MER) POLICY ON REBATES AND SOFT COMMISSION POLICY ON ROUNDING ADJUSTMENT
91 91 91 91 92 92 92 95 92 93 93 93 93 93 94 94 94 94
TRANSACTION INFORMATION COMPUTATION OF PRICES Valuation point Pricing policy Computation of NAV per unit Selling price per unit Repurchase price per unit Exit fee/Redemption charge Switching between Funds Transfer of units Cooling-off period Incorrect pricing A QUICK REFERENCE ON HOW TO INVEST, REDEEM, SWITCH AND TRANSFER Purchasing units of the Fund Making additional investments How to redeem/repurchase your investment Where units can be purchased and redeemed Frequency of valuation-redemption request What is the minimum balance to be held in the Fund•s account Switching Transfer Income distribution and reinvestment policies Policy on unclaimed money/unclaimed distributions/unclaimed redemptions
95 95 95 95 95 96 96 97 97 98 98 98 99 99
100 100 101 101 101 101 101 101 102
PAGE
Statements/reports to Unit holders and the availability of daily prices Keeping the Manager informed Customer information service
102 102 102
THE MANAGER OF THE FUNDS Background of the Manager Past performance of the Manager The Board of Directors Key Management Staff Fund Management Team Functions, duties and responsibilities of the Manager The Investment Committee Impending litigation External investment manager for KFF and KVF External Investment Manager for KDA & KDL
103 103 103 104 104 105 105 106 106 106 107
SHARIAH ADVISER Shariah Adviser•s Profile General Information of IBFIM Experience in Advisory and Services Roles and Responsibilities of IBFIM Profile of Shariah Team
108 108 108 108 108 108
THE TRUSTEES Universal Trustee (Malaysia) Berhad CIMB Commerce Trustee Berhad RHB Trustees Berhad HSBC (Malaysia) Trustee Berhad
110 112 115 118
SALIENT TERMS OF THE DEED The Deeds Unit holders' rights Unit holders• liabilities Unit holders' limitations and restrictions Maximum fees and charges permitted by the respective Deeds Increase in fees and charges Permitted expenses Retirement, removal or replacement of the Manager Power of the Manager to remove/replace the Trustee Retirement, removal or replacement of Trustees Power of the Trustee to remove the Manager Termination of the Fund Unit holders• meeting SALIENT TERMS OF THE DEED IN RELATION TO THE KAF JADE FUND
Rights of Unit holder Liabilities of Unit holders Maximum Fees and Charges Permitted Procedures to Increase the Direct and Indirect Fees & Charges
122 122 122 122 122 123 124 124 125 125 125 125 125 126
127 127 127 127 127 128
RELATED-PARTY TRANSACTIONS/CONFLICT OF INTEREST Related-party transactions Conflicts of interest Policy Control measure
134 134 134 134 135
TAXATION ADVISER•S LETTER 136
PAGE
ADDITIONAL INFORMATION Consent Meeting of Unit holders Customer information Anti-Money Laundering and Anti-Terrorism Financing Policies (AML/ATF) Documents available for inspection
143 143 143 143 143 144
INVESTMENT DIRECTORY 145
APPLICATION FORM -
1
DEFINITIONS In this Master Prospectus, the following abbreviations or words shall have the following meanings unless otherwise stated.
Act or CMSA The Capital Markets and Services Act 2007 including all amendments thereto and all regulations, rules and guidelines issued in connection therewith.
Base Currency or MYR or RM The lawful currency of Malaysia, Ringgit Malaysia.
BNM Bank Negara Malaysia.
Bursa Malaysia The stock exchange managed and operated by Bursa Malaysia Securities Berhad.
Business Day A day on which Bursa Malaysia is open for trading. Note: The Manager may declare certain business days to be non-business days although Bursa Malaysia is open for business, if more than 50% of the foreign markets in which the Funds are invested therein are closed for business.
CP Commercial Papers.
CSSF Commission de Surveillance du Secteur Financier (Luxembourg financial supervisory authority).
Deed The deeds and supplemental deeds of the respective Funds entered into between the Manager and the respective Trustee of the Funds.
EEC European Economic Community.
EPF Employees Provident Fund.
EPRA/NAREIT European Public Real Estate Association/National Association of Real Estate Investment Trusts.
Eligible Market A market that is regulated by a regulatory authority, operates regularly, is open to the public and has adequate liquidity for the purposes of the Fund in question. Note: A non-exhaustive list of eligible markets includes stock exchange, derivative exchange, over-the-counter debt securities market and money market.
Emerging Markets Refer to developing countries, which include many of the countries in Asia, Latin America, Europe, Africa, and the Middle East (i.e a country which is considered middle income or low income by the World Bank, and which may or may not be sub-investment grade).
FBSI FTSE Bursa Malaysia EMAS Shariah Index.
FBM KLCI FTSE Bursa Malaysia Kuala Lumpur Composite Index.
FTSE Financial Times Stock Exchange.
FTSE Emas FTSE Bursa Malaysia Emas Index.
2
Funds Collectively KFF, KVF, KEBF, KTF, KCIF, KJF, KDA, KDAI, KDL & KAGBF
Group of Twenty the informal group of twenty finance ministers and central bank governors from twenty major economies: Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, South Korea, Turkey, UK, USA and the European Union.
Guidelines Guidelines on Unit Trust Funds including any amendments, guidance notes and circulars issued by SC from time to time.
HGAM HSBC Global Asset Management (USA) Inc
HGB/Target Fund HSBC Global Investment Funds … Global Emerging Markets Bond.
Investment Grade fixed income securities that are rated at least Baa3/BBB- by Moody•s, Standard & Poor•s or another recognised credit rating agency.
IUTA Institutional unit trust adviser registered with FIMM.
KAGBF KAF Advantage GEM Bond Fund
KEBF KAF Enhanced Bond Fund.
KCIF KAF Core Income Fund.
KDA KAF Dana Adib.
KDAI KAF Dana al-Iddikhar.
KDL KAF Dana Alif.
KFF KAF First Fund.
KJF KAF Jade Fund
KTF KAF Tactical Fund.
KVF KAF Vision Fund.
LPD 15 December 2014.
Long-term A period of more than three (3) years.
Manager or KIFB KAF Investment Funds Berhad
MARC Malaysian Rating Corporation Berhad.
Master Prospectus Refers to this master prospectus dated 30 January 2015.
Medium-term A period between one (1) year to three (3) years.
MER Management expense ratio.
MSCI Morgan Stanley Capital International.
NAV per Unit The net asset value of the Fund divided by the number of Units in circulation, at the valuation point.
3
Net Asset Value or NAV means the value of all the fund•s assets less the value of all the fund•s liability at the valuation point.
Non-Investment Grade fixed income securities that are rated Ba1/BB+ or lower by Moody•s, Standard & Poor•s or another recognised credit rating agency.
RAM RAM Rating Services Berhad.
Sales Charge A fee imposed on the purchase of Units.
SACSC Shariah Advisory Council of the SC.
SC Securities Commission Malaysia established under the Securities Commission Act 1993.
Shariah means Islamic Law comprising the whole body of rulings pertaining to human conducts derived from the sources of the Shariah.
Shariah requirements A phrase or expression, which generally means making sure that any human conduct must not involve any elements which are prohibited by the Shariah and that in performing that conduct all the essential elements that make up the conduct must be present and each essential element must meet all the necessary conditions required by the Shariah for that element.
Short-term A period of not more than one (1) year.
SICAV Societe d•investissement•a capital variable.
Special Resolution A resolution passed by a majority of not less than three-fourth of Unit holders voting at a meeting of Unit holders. For the purposes of termination or winding-up of the Fund, a special resolution is passed by a majority in number representing at least three-fourth of the value of the Units held by the Unit holders voting at the meeting.
Sukuk Refers to certificates of equal value which evidence undivided ownership or investment in the assets using Shariah principles and concepts approved by the SAC.
Note: Extracted from Securities Commission Guidelines of Sukuk; Revised: 8 January 2014, Effective: 8 January 2014
Trustee(s) Refers to the respective trustee of the Funds i.e Universal Trustee (M) Bhd, CIMB Commerce Trustee Bhd, RHB Trustees Berhad and HSBC (Malaysia) Trustee Berhad.
UCITS An Undertaking for Collective Investment in Transferable Securities authorised pursuant to Council Directive 85/611/EEC, as amended from time to time.
Unit(s) Unit(s) of the Funds.
Unit holders
The person registered for the time being as a holder of Units in accordance with the provisions of the Deeds.
Unit Trust Consultant or Tied-Agents
An individual who is duly registered with the Federation of Investment Managers Malaysia to market and distribute unit trust funds.
USA or US Unites States of America.
USD United States Dollars.
4
UK United Kingdom.
Definition or meaning of words not otherwise expressed above shall follow the meaning or interpretation as ascribed in the Guidelines and the CMSA.
5
CORPORATE DIRECTORY
Manager KAF Investment Funds Berhad (334195-K) Registered Office & Business Office: 11th Floor, Chulan Tower No.3 Jalan Conlay 50450 Kuala Lumpur Tel: 03-2168 8823 Fax: 03-2168 8769 Customer Service Hotline: 1-800-88-3065 Email: [email protected] Website: www.kaf.com.my
Board of Directors
Tan Sri Abu Talib bin Othman (Non-independent Non-executive) Datuk Khatijah binti Ahmad (Non-independent Non-executive) Yong Yit Hin (Non-independent Executive) Dato• Zakri Afandi bin Ismail (Independent Non-executive) Chan Hwang Hsiung (Independent Non-executive)
Investment Committee Tan Sri Abu Talib bin Othman (Non-independent) Datuk Khatijah binti Ahmad (Non-independent) Dato• Zakri Afandi bin Ismail (Independent) Chan Hwang Hsiung (Independent)
Company Secretary Siti Nurmazita binti Mustapha (LS0009160) Level 14, Chulan Tower No.3 Jalan Conlay 50450 Kuala Lumpur
External Investment Manager External Investment Manager for KFF & KVF Amundi Malaysia Sdn Bhd (Company No.855330-P) Level 29, Integra Tower The Intermark 348, Jalan Tun Razak 50400 Kuala Lumpur Tel: 03-2716 1688 Fax: 03-2716 1699 External Investment Manager for KDA & KDL Amundi Islamic Malaysia Sdn Bhd (Company No.855330-P) Level 29, Integra Tower The Intermark 348, Jalan Tun Razak 50400 Kuala Lumpur Tel: 03-2716 1688 Fax: 03-2716 1699
Federation of Investment Managers Malaysia (FIMM)
19-06-1, 6th Floor, Wisma Tune 19 Lorong Dungun, Damansara Heights 50490 Kuala Lumpur Tel: 03-2093 2600 Fax: 03-2093 2700 Email: info@fimm,.com.my Website: www.fimm.com.my
Trustees & Trustee•s Delegate For KFF, KTF, KCIF, KDA, KDAI and KDL Universal Trustee (Malaysia) Berhad (17540-D) Registered and Business Office 3rd Floor, 1 Jalan Ampang 50450 Kuala Lumpur
6
Tel: 03-2070 8050 Fax: 03-2031 8715 Website: www.universaltrustee.com.my Trustee•s Delegate (foreign) for AFF and ATGF only Standard Chartered Bank Malaysia Berhad (115793-P)
Registered Office Level 16, Menara Standard Chartered 30, Jalan Sultan Ismail 50250 Kuala Lumpur Tel: 03-2117 7777 Website : www.standardchartered.com.my
Business Office Mezzanine Floor, Menara Standard Chartered 30, Jalan Sultan Ismail 50250 Kuala Lumpur Tel: 03-2781 7319/03-2781 7327 Fax: 03-2711 6060 E-mail : [email protected]
For KEBF CIMB Commerce Trustee Berhad (313031-A) Registered Office Level 13, Menara CIMB Jalan Stesen Sentral 2 Kuala Lumpur Sentral 50470 Kuala Lumpur Tel: 03-2261 8888 Fax: 03-2261 0099 Website: www.cimb.com Business Office Level 21, Menara CIMB Jalan Stesen Sentral 2 Kuala Lumpur Sentral 50470 Kuala Lumpur Tel: 03- 2261 8888 Fax: 03- 2261 9889 Trustee•s Delegate CIMB Group Nominees (Tempatan) Sdn Bhd (274740-T) (As Custodian)
Registered Office Level 13, Menara CIMB Jalan Stesen Sentral 2 Kuala Lumpur Sentral 50470 Kuala Lumpur Tel: 03- 2261 8888 Fax: 03- 2261 8889 Website: www.cimb.com
Business Office Level 21, Menara CIMB Jalan Stesen Sentral 2 Kuala Lumpur Sentral 50470 Kuala Lumpur Tel: 03-2084 8888 Fax: 03-2261 9892
7
For KVF & KAGBF RHB Trustees Berhad (573019-U) Registered Office Level 9, Tower One RHB Centre, Jalan Tun Razak 50400 Kuala Lumpur Tel: 03- 9287 8888 Fax: 03- 92806507 Business Office 6th Floor, Plaza OSK Jalan Ampang 50450 Kuala Lumpur Tel: 03-9207 7777 Fax: 03-2175 3288 e-mail:[email protected] Website: www.rhbgroup.com Trustee•s Delegate for KVF ( as custodian) OCBC Bank (M) Berhad (295400-W) Business Office 13th Floor, Menara OCBC 18, Jalan Tun Perak 50050 Kuala Lumpur Tel: 03-2034 5034 Fax: 03-2698 4420
Trustee•s Delegate for KAGBF (as Custodian) United Overseas Bank (Malaysia) Berhad (271809-K) Registered Office Level 12, Menara UOB Jalan Raja Laut 50350 Kuala Lumpur Business Office Level 9, Bangunan UOB Medan Pasar, 10-12 Medan Pasar 50050 Kuala Lumpur Tel: 03-2772 8000 Fax: 03-2031 0470 For KJF HSBC (Malaysia) Trustee Berhad (1281-T) Registered and Business Office 13th Floor, Bangunan HSBC South Tower, No.2 Leboh Ampang 50100 Kuala Lumpur Trustee’s Delegate (foreign) HSBC Institutional Trust Services (Asia) Limited 6th Floor, Tower One HSBC Centre 1, Sham Mong Road Kowloon, Hong Kong Tel: (852) 2822 1111 Fax: (852) 2810 5259
8
Trustee’s Delegate (local) The Hongkong and Shanghai Banking Corporation Limited (as Custodian) and assets held through HSBC Nominees (Tempatan) Sdn Bhd (258854-D) No.2, Leboh Ampang 50100 Kuala Lumpur Tel: 03-2075 3000 Fax: 03-2179 6488
Auditors For KFF, KVF, KEFB, KTF, KCIF, KDA, KDAI, KDL, KJF & KAGBF
PricewaterhouseCoopers (AF1146) Level 10, 1 Sentral Jalan Travers 50706 Kuala Lumpur Tel:03-2173 1188 Website: www.pwc.com
Tax Consultants For KFF, KVF, KEFB, KTF, KCIF, KDA, KDAI, KDL & KAGBF
PricewaterhouseCoopers Taxation Services Sdn Bhd (464731-M) Level 10, 1 Sentral Jalan Travers 50706 Kuala Lumpur Tel: 03-2173 1188 Website: www.pwc.com
For KJF
KPMG Tax Services Sdn Bhd (Co.No.96860-M) Level 10, KPMG Tower 8, First Avenue, Bandar Utama 47800 Petaling Jaya
Principal Bankers For KFF, KVF, KEFB, KTF, KCIF, KDA, KDAI, KDL & KAGBF:
Alliance Bank Malaysia Berhad (88103-W) 3rd Floor, Menara Multi-Purpose Capital Square 8 Jalan Munshi Abdullah 50100 Kuala Lumpur Tel: 03-2694 8800 Fax: 03-2698 6200 Website: www.alliancebank.com.my
For KJF: HSBC Bank Malaysia Berhad No.2, Leboh Ampang 50100 Kuala Lumpur
Solicitors Naqiz & Partners No. 42A, Lorong Dungun Damansara Heights 50490 Kuala Lumpur Tel: 03-2081 7888
Shariah Adviser IBFIM (763075-W) Registered Office No. 149A, 149B, 151B Persiaran Raja Muda Musa 42000 Port Klang Selangor Darul Ehsan
9
Business Office 3rd Floor, Menara Takaful Malaysia Jalan Sultan Sulaiman 50000 Kuala Lumpur Tel: 03-2031 1010 Fax: 03-2078 5250 Website: www.ibfim.com
For agency offices, please refer to the Investment Directory/Distribution Channels on page 145.
10
KE
Y D
AT
A O
F T
HE
FU
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S
Fu
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s in
form
atio
n
Th
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on
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KF
F
Bal
ance
d/
Inco
me
& G
row
th
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anua
ry
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T
o pr
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vest
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ch 2
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me/
In
com
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etur
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vest
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oney
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and
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and
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tal a
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ity/
Gro
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tem
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To
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quity
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ruar
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It is
inte
nded
that
the
retu
rns
will
be
furt
her
enha
nced
thro
ugh
capi
tal a
ppre
ciat
ion
of
inve
stm
ents
.
GL
OB
AL
FU
ND
KA
GB
F
Fee
der
Fun
d (B
ond)
/
Inco
me
& G
row
th
23 O
ctob
er
2007
T
he F
und
aim
s to
ach
ieve
tot
al i
nves
tmen
t re
turn
con
sist
ing
of i
ncom
e an
d ca
pita
l ap
prec
iatio
n by
inv
estin
g in
the
T
arge
t Fun
d kn
own
as th
e H
SB
C G
loba
l Inv
estm
ent F
unds
… G
loba
l Em
ergi
ng M
arke
ts B
ond.
No
te:
Th
e F
un
d is
no
t a
cap
ital
gu
aran
teed
/pro
tect
ed f
un
d.
FU
ND
N
AM
E
AS
SE
T A
LL
OC
AT
ION
IN
VE
ST
ME
NT
ST
RA
TE
GY
B
EN
CH
MA
RK
P
RIN
CIP
AL
RIS
KS
LO
CA
L F
UN
DS
KF
F
Eq
uit
ies:
Min
imum
40%
& M
axim
um
60%
F
ixed
-in
com
e se
curi
ties
&
liq
uid
ass
ets:
Min
imum
40%
&
Max
imum
60%
To
inve
st i
n a
bala
nced
por
tfolio
of
equi
ties
&
fixed
inco
me
secu
ritie
s.
60%
of
the
FB
M K
LCI
& 4
0%
of
the
curr
ent
Mal
ayan
B
anki
ng
Ber
had
(•M
ayba
nkŽ)
tw
elve
(1
2)
mon
th
fixed
-de
posi
t rat
e.
spec
ific
stoc
k ris
k, i
nter
est
rate
ris
k, c
redi
t/def
ault
risk,
cur
renc
y ris
k &
cou
ntry
ris
k
KV
F
Eq
uit
ies:
Min
imum
70%
& M
axim
um
95%
F
ixed
-in
com
e se
curi
ties
&
liqu
id
asse
ts:
Min
imum
5%
&
M
axim
um 3
0%
To
inve
st
mai
nly
in
smal
l to
m
ediu
m-s
ized
co
mpa
nies
th
at
has
the
pote
ntia
l to
gr
ow
stea
dily
.
FT
SE
Em
as
spec
ific
stoc
k ris
k, c
urre
ncy
risk
& c
ount
ry r
isk
KE
BF
F
ixed
-in
com
e se
curi
ties
&
liq
uid
as
sets
: M
inim
um 9
0% &
Max
imum
10
0%
Eq
uit
ies
& e
qu
ity-
rela
ted
se
curi
ties
: M
inim
um
0%
&
Max
imum
10%
To
inve
st p
rimar
ily i
n fix
ed i
ncom
e se
curit
ies
with
a p
ortio
n al
loca
ted
to i
nves
ting
in e
quiti
es
& e
quity
-rel
ated
sec
uriti
es.
RA
M-Q
uant
S
hop
MG
S
All
Bon
d In
dex
spec
ific
stoc
k ris
k, i
nter
est
rate
ris
k &
cre
dit/d
efau
lt ris
k
KT
F
Eq
uit
ies:
Min
imum
70%
& M
axim
um
95%
(w
ithin
the
rang
e of
40%
to 7
0%
of
equi
ties
in
indu
stry
se
ctor
s th
at
To
empl
oy a
n ac
tive
man
agem
ent
appr
oach
in
deci
ding
app
ropr
iate
ass
et a
lloca
tion
& in
sto
ck
sele
ctio
n.
FT
SE
Em
as
spec
ific
stoc
k ris
k, c
urre
ncy
risk
& c
ount
ry r
isk
12
are
expe
cted
to o
utpe
rfor
m)
Fix
ed-i
nco
me
secu
riti
es &
liq
uid
as
sets
: M
inim
um
5%
&
Max
imum
30%
The
focu
s is
to s
trat
egis
e th
e bu
lk o
f the
Fun
d•s
inve
stm
ents
in s
ecto
rs a
nd m
arke
t th
emes
tha
t ar
e ex
pect
ed to
out
perf
orm
.
KC
IF
Eq
uit
ies:
Min
imum
70%
& M
axim
um
98%
F
ixed
-in
com
e se
curi
ties
&
liqu
id
asse
ts:
Min
imum
2%
&
M
axim
um 3
0%
To
empl
oy a
top
-dow
n ap
proa
ch i
n de
cidi
ng
appr
opria
te a
sset
allo
catio
n at
any
one
tim
e an
d a
botto
m-u
p ap
proa
ch
in
sele
ctin
g se
curit
ies.
T
he f
ocus
will
be
on h
igh
yiel
ding
sto
cks
and
fixed
inc
ome
secu
ritie
s th
at w
ill p
rovi
de s
tabl
e in
com
e.
FB
M K
LCI
spec
ific
stoc
k ris
k, i
nter
est
rate
ris
k &
cre
dit /
defa
ult r
isk
KJF
T
he F
und
will
inv
est
a m
inim
um o
f 70
% o
f th
e F
und•
s N
AV
in
the
Asi
a P
acifi
c re
gion
re
late
d in
vest
men
ts
that
co
mpr
ise
of
equi
ties
and
colle
ctiv
e in
vest
men
t sc
hem
es w
hich
in
vest
in e
quiti
es.
The
M
anag
er
will
m
aint
ain
a m
inim
um o
f 1%
of
the
Fun
d•s
NA
V in
liq
uid
asse
ts s
uch
as m
oney
mar
ket
inst
rum
ents
or
pl
acem
ents
in
de
posi
ts
to
mee
t re
purc
hase
re
ques
ts.
The
Fun
d w
ill in
vest
a m
inim
um o
f 70
% u
p to
a
max
imum
of
100%
of
its i
nves
tme
nts
in A
sia
Pac
ific
regi
on
rela
ted
inve
stm
ents
to
be
nefit
fr
om t
he s
tron
g gr
owth
of
the
econ
omie
s in
the
A
sia
Pac
ific
regi
on w
hich
has
su
rpas
sed
the
grow
th
of
econ
omie
s of
de
velo
ped
coun
trie
s.
The
F
und
will
be
in
vest
ed
in
a po
rtfo
lio
of
Asi
a P
acifi
c re
gio
n re
late
d in
vest
men
ts
cons
istin
g of
eq
uitie
s an
d co
llect
ive
inve
stm
ent
sche
mes
whi
ch i
nves
t in
eq
uitie
s.
MS
CI A
C A
sia
Pac
ific
mar
ket
risk,
spe
cific
sto
ck r
isk,
liq
uidi
ty
risk,
cu
rren
cy
risk,
co
untr
y ris
k, f
und
man
agem
ent
risk
& d
eclin
e in
val
ue r
isk.
FU
ND
N
AM
E
AS
SE
T A
LL
OC
AT
ION
IN
VE
ST
ME
NT
ST
RA
TE
GY
B
EN
CH
MA
RK
P
RIN
CIP
AL
RIS
KS
LO
CA
L S
HA
RIA
H-C
OM
PL
IAN
T F
UN
DS
KD
A
Sh
aria
h-c
om
plia
nt
equ
itie
s:
Min
imum
70%
& M
axim
um 9
0%
Su
kuk
& Is
lam
ic li
qu
id a
sset
s:
The
Man
ager
will
com
bine
bot
h to
p-do
wn
and
botto
m-u
p ap
proa
ch a
fter
havi
ng a
scer
tain
ed
the
dire
ctio
n of
the
eco
nom
y. T
he f
ocus
will
be
on t
he v
alue
and
gro
wth
of
Sha
riah-
com
plia
nt
stoc
ks.
The
F
und
will
al
so
inve
st
in
Isla
mic
FB
SI
spec
ific
stoc
k ris
k &
re
clas
sific
atio
n of
Sha
riah
stat
us
risk
13
Min
imum
10%
& M
axim
um 3
0%
mon
ey
mar
ket
inst
rum
ents
fo
r ca
sh
man
agem
ent
purp
oses
. A
ll in
vest
men
ts
will
ad
here
str
ictly
to S
haria
h re
quire
men
ts.
KD
AI
To
inve
st a
t le
ast
90%
of
the
Fun
d•s
NA
V
in
a di
vers
ified
po
rtfo
lio
of
shor
t-te
rm
Isla
mic
m
oney
m
arke
t in
stru
men
ts,
whi
ch h
ave
a re
mai
ning
m
atur
ity p
erio
d of
up
to 3
65 d
ays.
T
he F
und
may
als
o in
vest
up
to
10%
of
its
N
AV
in
S
ukuk
w
ith
long
er
rem
aini
ng m
atur
ity p
erio
d, w
hich
is
mor
e th
an
365
days
bu
t do
es
not
exce
ed 7
32 d
ays.
The
F
und
seek
s to
ac
hiev
e its
ob
ject
ive
by
inve
stin
g pr
imar
ily
in
Isla
mic
m
oney
m
arke
t in
stru
men
ts a
nd o
ther
Suk
uk. T
he M
anag
er w
ill
deci
de
whi
ch
inst
rum
ent
or
secu
rity
to
buy
base
d pr
imar
ily o
n th
eir
yiel
d, r
elat
ive
to t
heir
cred
it qu
ality
and
the
per
iod
to m
atur
ity.
The
F
und
will
at
all
times
pla
ce/in
vest
its
cas
h in
Is
lam
ic
mon
ey
mar
ket
depo
sits
/inst
rum
ents
an
d S
ukuk
(lis
ted
or u
nlis
ted)
, w
hich
are
rat
ed
by
RA
M,
MA
RC
or
ot
her
appr
oved
ra
ting
agen
cies
.
Mal
ayan
B
anki
ng
Ber
had
(•M
ayba
nkŽ)
on
e (1
) m
onth
G
ener
al
Inve
stm
ent
Acc
ount
(•
GIA
Ž) r
ate
Inte
rest
rat
e ris
k &
cre
dit/d
efau
lt ris
k
KD
L
Sh
aria
h-c
om
plia
nt
equ
itie
s:
Min
imum
40%
& M
axim
um 6
0%
Su
kuk
&
Isla
mic
liq
uid
as
sets
: M
inim
um 4
0% &
Max
imum
60%
The
ass
et a
lloca
tion
stra
tegy
is
depe
nden
t on
th
e st
ate
of t
he m
acro
pic
ture
as
perc
eive
d by
th
e M
anag
er
afte
r go
ing
thro
ugh
a st
rict
inve
stm
ent
proc
ess
to r
evie
w t
he o
utlo
ok o
f th
e ec
onom
y, s
tock
and
mon
ey m
arke
ts o
ver
the
med
ium
to
lo
ng-t
erm
ho
rizon
. T
his
enta
ils
rele
vant
an
alys
is
on
econ
omy
and
busi
ness
st
atis
tics
in o
rder
to
prod
uce
fore
cast
s fo
r st
ock
mar
ket
and
inte
rest
ra
tes
dire
ctio
ns.
The
M
anag
er
adop
ts
an
activ
e as
set
allo
catio
n po
licy
and
will
tim
e th
e in
vest
men
t st
rate
gies
to
suit
mar
ket
deve
lopm
ents
and
glo
bal e
cono
mic
co
nditi
ons.
60%
F
BS
I &
40
%
Mal
ayan
B
anki
ng B
hd (
•May
bank
Ž)
one
(1)
mon
th G
ener
al I
nves
tmen
t A
ccou
nt (
•GIA
Ž)
rate
spec
ific
stoc
k ris
k, i
nter
est
rate
ris
k,
cred
it/de
faul
t ris
k &
re
clas
sific
atio
n of
Sha
riah
stat
us
risk
GL
OB
AL
FU
ND
FU
ND
N
AM
E
AS
SE
T A
LL
OC
AT
ION
IN
VE
ST
ME
NT
ST
RA
TE
GY
B
EN
CH
MA
RK
P
RIN
CIP
AL
RIS
KS
GL
OB
AL
FU
ND
S
KA
GB
F
In H
GB
: M
inim
um 9
5%
Liq
uid
ass
ets:
The
bal
ance
of
up t
o
To
inve
st a
min
imum
of
95%
of
the
NA
V o
f th
e F
und
in th
e H
GB
; the
bal
ance
of t
he N
AV
of t
he
Fun
d w
ill b
e in
vest
ed in
liqu
id a
sset
s.
JP
Mor
gan
Em
ergi
ng
Mar
ket
Bon
d In
dex
(EM
BI)
G
loba
l co
unte
r-pa
rty
risk,
co
untr
y ris
k,
curr
ency
ris
k,
decl
ine
in
valu
e ris
k &
der
ivat
ives
ris
k.
14
5% to
mee
t red
empt
ions
Inde
x (R
M)
R
efer
to
p
age
26
for
Tar
get
Fun
d•s
risks
.
FU
ND
N
AM
E
FIN
AN
CIA
L
YE
AR
EN
D
RE
LA
TIV
E
RIS
K P
RO
FIL
E
INV
ES
TO
RS
• PR
OF
ILE
D
IST
RIB
UT
ION
PO
LIC
Y
LO
CA
L F
UN
DS
KF
F
31 D
ecem
ber
Med
ium
�
Wan
t a
prof
essi
onal
ly
man
aged
po
rtfo
lio
of
equi
ties
and
fixed
-inco
me
secu
ritie
s;
� H
ave
a m
ediu
m to
long
-ter
m in
vest
men
t hor
izon
of t
hree
(3)
to fi
ve (
5) y
ears
or
mor
e;
� W
ant
to a
chie
ve a
n ad
equa
te l
evel
of
regu
lar
inco
me
and
capi
tal
gain
at
an
acce
ptab
le le
vel o
f ris
k.
Inco
me
dist
ribut
ion
(if
any)
is
in
cide
ntal
.
KV
F
31 M
arch
H
igh
� W
illin
g to
ado
pt a
fairl
y ag
gres
sive
app
roac
h to
war
ds in
vest
ing;
� W
illin
g to
acc
ept
a hi
gher
lev
el o
f ris
k in
ord
er t
o ob
tain
hig
her
grow
th o
f ca
pita
l;
� H
ave
a m
ediu
m to
long
-ter
m in
vest
men
t hor
izon
of t
hree
(3)
to fi
ve (
5) y
ears
or
mor
e.
Inco
me
dist
ribut
ion
(if
any)
is
in
cide
ntal
.
FU
ND
N
AM
E
FIN
AN
CIA
L
YE
AR
EN
D
RE
LA
TIV
E
RIS
K P
RO
FIL
E
INV
ES
TO
RS
• PR
OF
ILE
D
IST
RIB
UT
ION
PO
LIC
Y
LO
CA
L F
UN
DS
KE
BF
30
Jun
e Lo
w
� R
equi
re a
reg
ular
inco
me
dist
ribut
ion;
� W
ant a
pro
fess
iona
lly-m
anag
ed p
ortfo
lio o
f fix
ed-in
com
e se
curit
ies
and
mon
ey
mar
ket s
ecur
ities
;
� W
ant t
o pr
otec
t the
pur
chas
ing
pow
er o
f w
ealth
aga
inst
infla
tion;
� H
ave
a m
ediu
m-t
erm
inve
stm
ent h
oriz
on o
f one
(1)
to th
ree
(3)
year
s or
mor
e.
Inco
me
dist
ribut
ion
(if a
ny)
will
be
pai
d on
ce a
yea
r.
15
KT
F
31 A
ugus
t
Hig
h �
See
k to
ac
hiev
e m
axim
um
capi
tal
grow
th
by
inve
stin
g in
se
curit
ies
of
com
pani
es u
nder
cer
tain
pre
ferr
ed in
dust
ry s
ecto
rs;
� P
refe
r a
med
ium
to
long
-ter
m in
vest
men
t ho
rizon
to
achi
eve
pote
ntia
lly s
tron
g gr
owth
pro
spec
t;
� W
illin
g to
acc
ept m
ediu
m to
hig
h ris
k to
lera
nce
in o
rder
to o
btai
n hi
gher
gro
wth
of
cap
ital.
Inco
me
dist
ribut
ion
(if
any)
is
in
cide
ntal
.
KC
IF
Med
ium
�
See
k a
stab
le i
ncom
e st
ream
with
pot
entia
lly h
ighe
r th
an t
he p
reva
iling
fix
ed-
depo
sit r
ates
;
� P
refe
r a
med
ium
to
lo
ng-t
erm
in
vest
men
t ho
rizon
in
or
der
to
achi
eve
re
ason
able
cap
ital g
row
th;
� H
ave
a m
ediu
m d
egre
e of
ris
k to
lera
nce.
Inco
me
dist
ribut
ion
(if a
ny)
will
be
pai
d tw
ice
a ye
ar.
KJF
31
Aug
ust
Hig
h �
Inve
stor
s w
ith a
med
ium
to
high
ris
k pr
ofile
loo
king
for
cap
ital
gain
s ov
er t
he
med
ium
to
long
- te
rm f
rom
exp
osur
e to
the
sha
re m
arke
ts o
f th
e A
sia
Pac
ific
regi
on.
Dis
trib
utio
n of
inco
me,
if a
ny, w
ill
be in
cide
ntal
.
LO
CA
L S
HA
RIA
H-C
OM
PL
IAN
T F
UN
DS
KD
A
30 A
pril
Hig
h �
See
k hi
gh c
apita
l app
reci
atio
n ov
er a
long
er p
erio
d of
tim
e an
d do
not
exp
ect
any
divi
dend
or
regu
lar
inco
me
from
Sha
riah-
com
plia
nt in
vest
men
t;
� W
illin
g to
acc
ept m
oder
ate
to h
igh
risk
tole
ranc
e;
� P
refe
r to
inve
st in
Sha
riah-
com
plia
nt s
ecur
ities
.
Inco
me
dist
ribut
ion
(if
any)
is
in
cide
ntal
.
FU
ND
N
AM
E
FIN
AN
CIA
L
YE
AR
EN
D
RE
LA
TIV
E
RIS
K P
RO
FIL
E
INV
ES
TO
R P
RO
FIL
E
DIS
TR
IBU
TIO
N P
OL
ICY
LO
CA
L S
HA
RIA
H-C
OM
PL
IAN
T F
UN
DS
KD
AI
30 S
epte
mbe
r Lo
w
� C
onse
rvat
ive
in n
atur
e in
term
s of
Sha
riah-
com
plia
nt in
vest
men
t;
� P
refe
r a
cons
iste
nt, r
easo
nabl
e an
d st
able
leve
l of r
etur
n on
Sha
riah-
com
plia
nt
inve
stm
ent;
� P
refe
r a
low
er le
vel o
f inv
estm
ent r
isk;
� H
ave
a sh
ort-
term
inve
stm
ent h
oriz
on.
Inco
me,
if a
ny,
will
be
dist
ribut
ed
on
a m
onth
ly
basi
s.
All
such
di
strib
utio
n w
ill
be
rein
vest
ed
into
the
Fun
d.
16
KD
L
30 S
epte
mbe
r M
ediu
m
� H
ave
a m
ediu
m
to
long
-ter
m
inve
stm
ent
horiz
on
and
reas
onab
le
risk
tole
ranc
e;
� P
refe
r to
inve
st in
Sha
riah-
com
plia
nt s
ecur
ities
.
The
di
strib
utio
n po
licy
will
be
co
nsis
tent
w
ith
the
Fun
d•s
obje
ctiv
e. H
ence
, di
strib
utio
n of
in
com
e w
ill b
e in
cide
ntal
.
GL
OB
AL
FU
ND
FU
ND
N
AM
E
FIN
AN
CIA
L
YE
AR
EN
D
RE
LA
TIV
E
RIS
K P
RO
FIL
E
INV
ES
TO
R P
RO
FIL
E
DIS
TR
IBU
TIO
N P
OL
ICY
GL
OB
AL
FU
ND
KA
GB
F
30 S
epte
mbe
r M
ediu
m
� ha
s m
ediu
m to
long
term
inve
stm
ent h
oriz
on;
� w
ant d
iver
sific
atio
n in
to a
n E
mer
ging
Mar
ket p
ortfo
lio;
� ar
e ab
le
to
tole
rate
m
oder
atel
y hi
gh
vola
tility
an
d ris
k as
soci
ated
w
ith
Em
ergi
ng M
arke
t po
rtfo
lios
as t
he a
sset
s m
ay b
e in
vest
ed i
n bo
nds
rate
d be
low
Inve
stm
ent G
rade
.
In li
ne w
ith t
he d
istr
ibut
ion
polic
y of
the
Tar
get
Fun
d, th
e F
und
will
di
strib
ute
inco
me
at le
ast
once
a
year
, su
bjec
t to
av
aila
bilit
y of
in
com
e.
No
te:
Inv
esto
rs w
ill h
ave
thei
r ca
sh d
istr
ibut
ions
rei
nves
ted
into
add
ition
al U
nits
bas
ed o
n th
e F
und•
s N
AV
per
Uni
t on
the
rei
nves
tmen
t dat
e i.e
. fo
r m
oney
mar
ket
fund
s on
the
nex
t B
usin
ess
Day
afte
r th
e de
clar
atio
n of
the
dis
trib
utio
n (e
x-da
te)
is m
ade
and
for
othe
r F
unds
, at
the
las
t B
usin
ess
Day
of
the
seco
nd w
eek
imm
edia
tely
fo
llow
ing
the
decl
arat
ion
of d
istr
ibut
ion
(the
rei
nves
tmen
t dat
e is
the
date
on
whi
ch th
e di
strib
utio
ns w
ill b
e cr
edite
d in
to th
e U
nit
hold
ers•
acc
ount
).
For
KJF
, dis
trib
utio
n of
inco
me
can
eith
er b
e pa
id in
cas
h by
way
of c
hequ
e or
rei
nves
ted
as
addi
tiona
l Uni
ts o
f the
Fun
d. A
ny d
istr
ibut
ion
of in
com
e w
ill b
e pa
id w
ithin
21
days
of t
he d
istr
ibut
ion
decl
arat
ion
date
. If
the
Uni
t hol
der
opts
for
rein
vest
men
t or
in th
e ab
senc
e of
writ
ten
inst
ruct
ions
, the
ir di
strib
utio
n of
inco
me
will
be
rein
vest
ed in
to
addi
tiona
l Uni
ts b
ased
on
the
Fun
d•s
NA
V p
er U
nit o
n th
e re
inve
stm
ent d
ate,
whi
ch is
the
inco
me
paym
ent d
ate.
17
Tar
get
Fu
nd
s• in
form
atio
n
FU
ND
NA
ME
N
AM
E O
F
TA
RG
ET
FU
ND
M
AN
AG
EM
EN
T C
OM
PA
NY
OF
T
AR
GE
T F
UN
D
INV
ES
TM
EN
T
MA
NA
GE
R O
F
TH
E T
AR
GE
T
FU
ND
LO
CA
TIO
N
RE
GU
LA
TO
RY
A
UT
HO
RIT
Y
DA
TE
OF
E
ST
AB
LIS
HM
EN
T
KA
GB
F
Ref
er to
pag
e 50
HG
B
Ref
er to
pag
e 53
H
SB
C In
vest
men
t F
un
ds
(Lu
xem
bo
urg
) S
.A
Ref
er to
pag
e 53
HG
AM
Ref
er to
pag
e 53
Luxe
mbo
urg
Com
mis
sion
de
Sur
veill
ance
du
Sec
teur
Fin
anci
er
24 J
uly
1998
Fee
s &
ch
arg
es
Thi
s ta
ble
desc
ribes
the
char
ges
that
you
may
dir
ectl
y in
cur
whe
n yo
u bu
y or
red
eem
Uni
ts o
f the
Fun
ds.
FU
ND
NA
ME
S
AL
ES
CH
AR
GE
* R
EP
UR
CH
AS
E C
HA
RG
E/
EX
IT F
EE
S
WIT
CH
ING
FE
E
KF
F, K
VF
, KT
F
Man
ager
: U
p to
6.5
0% o
f the
NA
V p
er U
nit
Ag
ents
an
d IU
TA
s: U
p to
6.5
0% o
f the
NA
V p
er U
nit
EP
F In
vest
men
t: U
p to
3.0
% o
f the
NA
V p
er U
nit
NIL
N
o sw
itchi
ng fe
e.
Unl
imite
d sw
itchi
ng b
etw
een
Fun
ds.
KE
BF
M
anag
er:
Nil
Ag
ents
an
d IU
TA
s: N
il
Up
to
1%
of
the
NA
V
if U
nit
hold
ers
exit
with
in
a pe
riod
of
on
e (1
) ye
ar
from
th
e da
te
of
inve
stm
ent;
exce
pt
durin
g co
olin
g-of
f per
iod.
No
switc
hing
fee.
U
nlim
ited
switc
hing
be
twee
n fu
nds
man
aged
by
th
e M
anag
er.
Not
e: S
ales
Cha
rge
may
be
appl
icab
le i
f sw
itch
to K
FF
, K
VF
, KT
F, K
CIF
, KD
A, K
DL
& K
AG
BF
.
KC
IF, K
DA
, K
DL
M
anag
er:
Up
to 6
.50%
of t
he N
AV
per
Uni
t A
gen
ts a
nd
IUT
As:
Up
to 6
.50%
of t
he N
AV
per
Uni
t E
PF
inve
stm
ent:
Up
to 3
.0%
of t
he N
AV
per
Uni
t
NIL
N
o sw
itchi
ng fe
e.
Unl
imite
d sw
itchi
ng b
etw
een
Fun
ds.
KD
AI
Man
ager
: N
il A
gen
ts a
nd
IUT
As:
Nil
NIL
N
o sw
itchi
ng fe
e.
Unl
imite
d sw
itchi
ng b
etw
een
Fun
ds.
18
N
ote:
Sal
es C
harg
e m
ay b
e ap
plic
able
if
switc
h to
KF
F,
KV
F, K
TF
, KC
IF, K
DA
, KD
L &
KA
GB
F.
KJF
M
anag
er:
Nil
Ag
ents
an
d IU
TA
s: N
ot a
vaila
ble
EP
F in
vest
men
t: N
ot a
vaila
ble
NIL
N
o sw
itchi
ng fe
e.
Unl
imite
d sw
itchi
ng b
etw
een
Fun
ds.
Not
e: S
ales
Cha
rge
may
be
appl
icab
le i
f sw
itch
to K
FF
, K
VF
, KT
F, K
CIF
, KD
A, K
DL
& K
AG
BF
.
FU
ND
NA
ME
S
AL
ES
CH
AR
GE
* R
EP
UR
CH
AS
E C
HA
RG
E/
EX
IT F
EE
S
WIT
CH
ING
FE
E
KA
GB
F
Man
ager
: N
ot a
vaila
ble
IUT
As:
Up
to 2
.0%
of t
he N
AV
per
Uni
t E
PF
inve
stm
ent:
Not
ava
ilabl
e
N
IL
No
switc
hing
fee.
U
nlim
ited
switc
hing
bet
wee
n F
unds
.
* T
he m
axim
um S
ales
Cha
rge
to b
e im
pose
d by
eac
h di
strib
utio
n ch
anne
l (M
anag
er,
Age
nts
and
IUT
As)
dur
ing
the
life
of th
is M
aste
r P
rosp
ectu
s.
Inve
stor
s ar
e ad
vise
d th
at th
ey m
ay n
egot
iate
for
a lo
wer
Sal
es C
harg
e pr
ior
to th
e co
nclu
sion
of t
he s
ales
.
The
Man
ager
res
erve
s th
e rig
ht to
wai
ve o
r re
duce
the
Sal
es C
harg
e or
the
repu
rcha
se c
harg
e/ex
it fe
e fr
om ti
me
to ti
me
at it
s ab
solu
te d
iscr
etio
n.
Sw
itchi
ng fr
om S
haria
h-co
mpl
iant
Fun
d to
a c
onve
ntio
nal F
und
is d
isco
urag
ed e
spec
ially
for
Mus
lim U
nit h
olde
rs.
Thi
s ta
ble
desc
ribes
the
fees
and
exp
ense
s th
at y
ou m
ay i
nd
irec
tly
incu
r w
hen
you
inve
st in
the
Fun
ds.
19
FU
ND
N
AM
E
AN
NU
AL
M
AN
AG
EM
EN
T
FE
E
AN
NU
AL
T
RU
ST
EE
F
EE
MA
NA
GE
ME
NT
EX
PE
NS
E R
AT
IO
(a
nn
ual
ised
)
TR
AN
SF
ER
FE
E
&
OT
HE
R C
HA
RG
ES
LIS
T O
F E
XP
EN
SE
S
DIR
EC
TL
Y R
EL
AT
ED
T
O T
HE
FU
ND
S
KF
F
1.50
% o
f NA
V
The
ann
ual t
rust
ee fe
e is
dep
ende
nt o
n th
e si
ze o
f the
Fun
d.
Ref
er to
pag
e 92
for
deta
ils.
1.73
%
Cu
sto
dia
n f
ee
A
cust
odia
n fe
e w
ill
be
impo
sed
for
KF
F o
nly
. T
ran
sfer
fee
T
he
Man
ager
w
ill
not
impo
se a
ny tr
ansf
er fe
e.
For
K
JF
RM
50
per
tran
sfer
. T
his
fee
is
not
nego
tiabl
e.
Ban
k ch
arg
es/f
ee
Ban
k ch
arge
s w
ill
be
impo
sed
whe
n su
bscr
iptio
n or
with
draw
als
are
mad
e.
a)
Tru
stee
ex
pens
es
as
perm
itted
un
der
the
Dee
d(s)
; b)
C
omm
issi
ons/
fees
pa
id
to
brok
ers
in
effe
ctin
g de
alin
gs
in
the
resp
ectiv
e F
unds
in
vest
men
ts;
c)
T
ax
and
othe
r du
ties
char
ged
on
the
resp
ectiv
e F
unds
by
th
e go
vern
men
t an
d ot
her
auth
oriti
es
and
tax
advi
ser•
s fe
es;
d)
Fee
s an
d ot
her
expe
nses
pr
oper
ly
incu
rred
by
th
e au
dito
rs a
ppoi
nted
for
th
e F
unds
; e)
F
ees
for
valu
atio
n of
an
y in
vest
men
t of
the
re
spec
tive
Fun
ds
by
an i
ndep
ende
nt v
alue
r fo
r th
e be
nefit
of
th
e F
und;
f)
C
osts
inc
urre
d fo
r th
e m
odifi
catio
n of
th
e D
eed(
s) o
ther
tha
n fo
r th
e be
nefit
of
th
e m
anag
emen
t com
pany
or
Tru
stee
; g)
C
osts
inc
urre
d fo
r an
y m
eetin
g of
th
e U
nit
hold
ers
othe
r th
an
thos
e co
nven
ed b
y or
fo
r th
e be
nefit
of
th
e M
anag
er o
r T
rust
ee;
h)
Adm
inis
trat
ion
char
ges
like
prin
ting
of a
nnua
l
KV
F
1.50
% o
f NA
V
0.07
% o
f NA
V, s
ubje
ct to
a
min
imum
fee
of R
M18
,000
1.
69%
KE
BF
1.
00%
of N
AV
0.
05%
of N
AV
, sub
ject
to a
m
inim
um fe
e of
RM
18,0
00
4.57
%
KT
F
1.50
% o
f NA
V
0.07
% o
f NA
V
1.94
%
KC
IF
1.72
%
KJF
2.
00%
per
an
num
of t
he
NA
V o
f the
Fun
d
Up
to 0
.08%
per
ann
um o
f the
Fun
d•s
NA
V
calc
ulat
ed o
n a
daily
bas
is, s
ubje
ct to
a
min
imum
of R
M18
,000
per
ann
um (
excl
udin
g fo
reig
n cu
stod
ian
fee
and
char
ges)
2.16
%
KD
A
1.50
% o
f NA
V
0.07
% o
f NA
V
1.66
%
KD
AI
0.37
5% o
f NA
V
Firs
t RM
150
mill
ion
- 0.
07%
of N
AV
;
Abo
ve R
M15
0 m
illio
n …
0.03
% o
f NA
V; a
nd
Sub
ject
to
a
min
imum
tr
uste
e fe
e of
R
M18
,000
0.45
%
KD
L
1.50
% o
f NA
V
0.08
%
of
NA
V,
subj
ect
to
a
min
imum
fee
of R
M18
,000
1.
71%
KA
GB
F
1.50
% o
f NA
V
0.08
% o
f N
AV
, su
bjec
t to
a m
inim
um f
ee o
f R
M18
,000
in
clud
ing
loca
l cu
stod
ian
fee
but
excl
udin
g fo
reig
n cu
stod
ian
fee.
1.71
%
20
repo
rts,
dis
trib
utio
n of
ch
eque
s an
d po
stag
e;
and
i) In
vest
men
t co
mm
ittee
m
embe
rs•
fee
for
inde
pend
ent
mem
bers
.
No
te:
The
Man
ager
res
erve
s th
e rig
ht to
wai
ve o
r re
duce
the
annu
al m
anag
emen
t fee
from
tim
e to
tim
e at
its
abso
lute
dis
cret
ion.
O
ther
info
rmat
ion
T
he D
eeds
ent
ered
into
bet
wee
n th
e M
anag
er a
nd th
e T
rust
ees
are
as fo
llow
s:
FU
ND
NA
ME
D
EE
D
AV
EN
UE
FO
R A
DV
ICE
KF
F
� D
eed
of T
rust
dat
ed 2
2 D
ecem
ber
1995
� 1st
Sup
plem
enta
l Tru
st D
eed
date
d 8
July
199
6
� S
econ
d S
uppl
emen
tal D
eed
of T
rust
dat
ed 8
Jan
uary
199
9
� T
hird
Sup
plem
enta
l Dee
d da
ted
27 J
uly
2001
� F
ourt
h S
uppl
emen
tal D
eed
date
d 9
Janu
ary
2014
Inve
stor
s m
ay c
onta
ct t
he M
anag
er,
the
IUT
As
or a
utho
rised
age
nts.
KV
F
� D
eed
of T
rust
dat
ed 2
4 Ja
nuar
y 20
00
� S
uppl
emen
tal D
eed
date
d 20
Jul
y 20
01
� S
econ
d S
uppl
emen
tal D
eed
date
d 9
Janu
ary
2014
� T
hird
Sup
plem
enta
l Dee
d da
ted
7 O
ctob
er 2
014
KE
BF
�
Dee
d da
ted
27 D
ecem
ber
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. P
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22
RISK FACTORS
Any investment carries with it elements of risk. There is no assurance that a unit trust fund will achieve its investment objective. Therefore, prior to making any investment decision, prospective investors should consider the following risk factors in addition to the other information set out in this Prospectus.
Below are some of the general risks which Unit holders should be aware of when investing in unit trust funds:
General risks of investing in a unit trust fund � Market risk
Market risk refers to fluctuations in the market due to changes and developments in the economic climate, political stability and technology of the country. This risk will affect the market price of unit trust funds since investors are exposed to market uncertainties, fluctuations in the market caused by the economy, political and social uncertainties.
� Loan financing risk
Loan financing risk must be considered carefully when a unit trust fund’s investment is financed by a loan. Unit holders should be aware of the inherent risk of investing with borrowed money which include risk of increase in interest rates and risk of inability to provide additional collateral should the unit prices fall. Shariah-compliant unit trust fund’s investors are advised to seek Islamic financing to finance their acquisition.
� Inflation risk Inflation reduces the purchasing power of money. Therefore, in an inflationary environment, there is a possibility that income or proceeds from fixed income securities/bonds/sukuk may not be able to keep up with the inflation. A unit trust fund will be subject to the risk of an investor’s investment not growing proportionately to the inflation rate making the investor’s purchase power net of inflation fall over time.
� Management company risk
Management company risk arises when the management company does not adhere to the investment mandate of a unit trust fund.
� Non-compliance risk The risk arising from non-conformance with regulations and internal policies and procedures by the management company due to situation such as system failures and oversight may adversely affect the investment of unit holders. The non-compliance may also expose the unit trust fund to higher risks that may result in a fall in the value of the unit trust fund.
� Distribution risk There is no guarantee on the investment returns or on the distribution to investors.
Specific risks associated with the Funds Below are some of the specific risks when investing in the Funds; these may include but are not limited to: � Specific stock risk
Specific stock risk can be associated with the shift in consumer taste, advertising campaigns, lawsuits and competitive industry conditions. It can be minimised by diversifying the Fund’s investment over more companies in various segments of the economy, which operate independently from one another. Failing to achieve the expected earnings would result in the stock price declining, which in turn will affect the performance of the Fund. Specific stock risk is mitigated by exercising prudence in stock selection.
� Interest rate risk Interest rate risk is crucial in a bond/sukuk fund since bond/sukuk portfolio management depends on forecasting interest rate movements. Prices of bond/valuation of sukuk move inversely with interest rates and the degree of sensitivity to interest rates is a function of bond/sukuk maturity and coupon/profit payment as well as the level of interest rates. In the event of rising interest rates, prices of bond/valuation of sukuk will decrease and vice versa. Corporate profits may be affected by high interest rates, hence affecting the NAV of the Fund. Therefore, interest rate risk should be low for short-term bonds/sukuk, moderate for intermediate term bonds/sukuk and high for
23
long-term bonds/sukuk. Interest rate risk is mitigated by exercising prudence in the selection of investments, strict monitoring of those investments and ensuring sufficient diversification of the Fund’s investments. As for Shariah-compliant Fund, the interest rate is a general indicator that will have an impact on the management of the Fund regardless of whether it is a Shariah-compliant unit trust fund or otherwise. All the investment carried out for Shariah-compliant Fund is in accordance with Shariah requirements.
� Credit/default risk
Credit risk refers to the possibility that the issuer of a bond/sukuk will not be able to make timely payments of interest/profit on the coupon/profit payment date or principal repayment/payment on the maturity date. The risk is graded by credit rating agencies that rate the issuer’s ability to meet these obligations in a timely manner. Failure to comply with conditions attached to the issue or to make a repayment or a payment on time will result in an event of default with serious consequences for the issuer and loss to the investor. A default by the issuer will result in a fall in the value of bonds/sukuk which ultimately reduced the NAV of the Fund. The lower the rating, the greater the risk that the bond/sukuk issuer will default. All things being equal, the lower a bond’s/sukuk’s credit rating, the higher its yield should be to compensate investors for assuming higher risk. Mitigating credit risk involves diversification of the Fund’s investments.
� Currency risk It is also known as foreign exchange risk. It is a risk associated with investments that are denominated in foreign currencies. When the foreign currencies fluctuate with unfavourable movements against Ringgit Malaysia, the investments will face currency losses in addition to the capital gains/losses. This will lead to a lower NAV of the Fund. Currency risk is mitigated by exercising prudence in the selection of investments, strict monitoring of those investments and ensuring sufficient diversification of the Fund’s investments
� Liquidity risk Liquidity risk may be defined as the difficulty of selling components of an investment portfolio at or near its fair value without taking a significant discount. This risk depends on the volume of the particular security traded on the market. Investments in bonds/sukuk generally carry a higher degree of liquidity risk than investments in listed stocks and shares. For mitigation purposes, the fund manager will attempt to balance the entire portfolio by investing in a mix of bonds which have good credit ratings and satisfactory trading volume. This is expected to reduce the liquidity risk of the Fund.
� Country risk The investment of the Fund may be adversely affected by risks specific to the country which it invests. Such risks include changes in the country’s economic fundamentals, social and political instability as well as exchange control, changes in taxation, foreign investment policies and other restrictions and controls which may be imposed by the authority in the country that the Fund invests in. Country risk is mitigated by exercising prudence in the selection of investments, strict monitoring of those investments and ensuring sufficient diversification of the Fund’s investments.
� Derivatives risk
Investment in derivatives for hedging purposes may be subject to risks associated with such derivatives investments. Investments in derivatives may require the deposit of initial margin and additional deposit of margin on short notice within the prescribed time.
� Counterparty risk
The Manager may utilize over the counter (“OTC”) derivatives such as forward contracts to hedge currency risk. The use of these OTC derivatives instruments exposes the Fund to risks relating to the credit standing of counterparties and their ability to fulfill the conditions of the contracts when the contracts fall due. .
� Reclassification of Shariah status risk
This risk refers to the risk that the currently held Shariah-compliant investments in the portfolio of Shariah-compliant Funds may be reclassified to be Shariah non-compliant. The SACSC may reclassify any Shariah-compliant securities in the periodic review of the securities. If this occurs, the value of the Shariah-compliant Funds may be adversely affected where the Manager will take the necessary steps to dispose of such securities.
� Decline in value risk
The risk that the price of the Target Fund may go up or down. These price changes could cause an impact to the NAV of the Fund which invests in the Target Fund.
24
� Market risk Market risk cannot be eliminated by diversification. It stems from the fact that there are other economy-wide perils, which threaten all businesses. That is why investors are exposed to market uncertainties, no matter how many stocks they hold, fluctuation in the market caused by uncertainties in the economy, political and social environment will affect the market price of the Fund.
� Fund Management risk
As the Fund invests in collective investment schemes, poor management of those collective investment schemes due to the lack of experience, knowledge, expertise and poor management techniques would have an adverse impact on the performance of those collective investment schemes. This may result in those collective investment schemes suffering a loss which will in turn impact on the performance of the Fund.
Cus
tom
er S
ervi
ce H
otlin
e: 1
-800
-88-
3065
25
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26
Specific risks associated with the Target Fund Liquidity Risk The Target Fund is exposed to the risk that a particular investment or position cannot be easily unwound or offset due to insufficient market depth or market disruption. This can affect the ability of a shareholder to request the redemption of his shares from the Target Fund, and can also have an impact on the value of the Target Fund. Although the Target Fund will invest mainly in liquid securities in which the shareholders are entitled to request the redemption of their shares within a reasonable timeframe, there may be exceptional circumstances in which the liquidity of such securities cannot be guaranteed. Absence of liquidity may have a determined impact on the Target Fund and the value of its investments. Emerging Markets Because of the special risks associated with investing in Emerging Markets, the Target Fund which invests in such securities should be considered speculative. Investors are advised to consider carefully the special risks of investing in Emerging Market securities. Economies in Emerging Markets generally are heavily dependent upon international trade and, accordingly, have been and may continue to be affected adversely by trade barriers, exchange controls, managed adjustments in relative currency values and other protectionist measures imposed or negotiated by the countries with which they trade. These economies also have been and may continue to be affected adversely by economic conditions in the countries in which they trade. Brokerage commissions, custodial services and other costs relating to investment in Emerging Markets generally are more expensive than those relating to investment in more developed markets. Lack of adequate custodial systems in some markets may prevent investment in a given country or may require the Target Fund to accept greater custodial risks in order to invest, although the depository bank appointed by HSBC Global Investment Funds will endeavour to minimise such risks through the appointment of correspondents that are international, reputable and creditworthy financial institutions. In addition, such markets have different settlement and clearance procedures. In certain markets there have been times when settlements have been unable to keep pace with the volume of securities transactions, making it difficult to conduct such transactions. The inability of the Target Fund to make intended securities purchases due to settlement problems could cause the Target Fund to miss attractive investment opportunities. Inability to dispose of a portfolio security caused by settlement problems could result either in losses to the Target Fund due to subsequent declines in value of the portfolio security or, if the Target Fund has entered into a contract to sell the security, could result in potential liability to the purchaser.
The risk also exists that an emergency situation may arise in one or more developing markets as a result of which trading of securities may cease or may be substantially curtailed and prices for the Target Fund•s securities in such markets may not be readily available. Investors should note that changes in the political climate in Emerging Markets may result in significant shifts in the attitude to the taxation of foreign investors. Such changes may result in changes to legislation, the interpretation of legislation, or the granting of foreign investors the benefit of tax exemptions or international tax treaties. The effect of such changes can be retrospective and can (if they occur) have an adverse impact on the investment return of investors so affected. Interest Rate risk The Target Fund that invests in bonds and other fixed income securities may fall in value if interest rates change. Generally, the prices of debt securities rise when interest rates fall, whilst their prices fall when interest rates rise. Longer term debt securities are usually more sensitive to interest rate changes. Credit risk The Target Fund, which invests in bonds and other fixed income securities, is subject to the risk that issuers may not make payments on such securities. An issuer suffering an adverse change in its financial condition could lower the credit quality of a security, leading to greater price volatility of the security. A lowering of the credit rating of a security may also offset the security•s liquidity, making it more difficult to sell. The Target Fund investing in lower quality debt securities are more susceptible to these problems and their value may be more volatile.
Foreign exchange rate risk Because the Target Fund•s assets and liabilities may be denominated in currencies different to the base currency of the Target Fund, the Target Fund may be affected favourably or unfavourably by exchange control regulations or changes in the exchange rates between the base currency of the Target Fund and other currencies. Changes in currency exchange rates may influence the value of the Target Fund, the dividends or interest earned and the gains and losses realised. Exchange rates between currencies are determined by supply and demand in the currency exchange markets, the international balance of payments, governmental intervention, speculation and other economic and political conditions.
27
If the currency in which a security is denominated appreciates against the base currency of the Target Fund, the value of the security will increase. Conversely, a decline in the exchange rate of the currency would adversely affect the value of the security.
The Target Fund may engage in foreign currency transactions in order to hedge against currency exchange risk, however there is no guarantee that hedging or protection will be achieved. This strategy may also limit the Target Fund from benefiting from the performance of the Target Fund•s securities if the currency in which the securities held by the Target Fund are denominated rises against the base currency of the Target Fund. Non-Investment Grade Debt Credit risk is greater for investments in fixed-income securities that are rated below Investment Grade or which are of comparable quality than for Investment Grade securities. It is more likely that income or capital payments may not be made when due. Thus the risk of default is greater. The amounts that may be recovered after any default may be smaller or zero and the Target Fund may incur additional expenses if it tries to recover its losses through bankruptcy or other similar proceedings. Adverse economic events may have a greater impact on the prices of Non-Investment Grade fixed-income securities. Investors should therefore be prepared for greater volatility than for Investment Grade fixed-income securities, with an increased risk of capital loss, but with the potential of higher returns. The market liquidity for Non-Investment Grade fixed-income securities can be low and there may be circumstances in which there is no liquidity of for these securities, making it more difficult to value and/or sell these securities. Volatility The price of a financial derivative instrument can be very volatile. This is because a small movement in the price of the underlying security, index, interest rate or currency may result in a substantial movement in the price of the financial derivative instrument. Investment in financial derivative instruments may result in losses in excess of the amount invested. OTC Financial Derivative Transactions In general, there is less governmental regulation and supervision of transactions in the OTC markets (in which currencies, forward, spot and option contracts, credit default swaps, total return swaps and certain options on currencies are generally traded) than of transactions entered into on organized exchanges. In addition, many of the protections afforded to participants on some organized exchanges, such as the performance guarantee of an exchange clearing house, may not be available in connection with OTC financial derivative transactions. Therefore, the Target Fund entering into OTC transactions will be subject to the risk that its direct counterparty will not perform its obligations under the transactions and that the Target Fund will sustain losses. The HSBC Investment Funds (Luxembourg) S.A (•the CompanyŽ) will only enter into transactions with counterparties which it believes to be creditworthy, and may reduce the exposure incurred in connection with such transactions through the receipt of letters of credit or collateral from certain counterparties. Regardless of these measures, the Company may seek to implement to reduce counterparty credit risk, however, there can be no assurance that a counterparty will not default or that the Target Fund will not sustain losses as a result.
From time to time, the counterparties with which the Company effects transactions might cease making markets or quoting prices in certain of the instruments. In such instances, the Company might be unable to enter into a desired transaction in currencies, credit default swaps or total return swaps or to enter into an offsetting transaction with respect to an open position, which might adversely affect its performance. Further, in contrast to exchange-traded instruments, forward, spot and option contracts on currencies do not provide the investment adviser of the Target Fund with the possibility to offset the Company's obligations through an equal and opposite transaction. For this reason, in entering into forward, spot or options contracts, the Company may be required, and must be able, to perform its obligations under the contracts.
Risk management The respective Funds have implemented several risk management measures in relation to the Funds• portfolio management. The Manager will take the following measures in order to minimise the risk that is associated with the Funds: � Market risk, currency risk and interest rate risk
The primary responsibility for the management of these risks is vested with the Manager. The Manager will manage these risks by conducting a thorough and detailed analysis of such risks with the assistance of its investment personnel. The investment committee will also constantly review the Funds• asset allocation strategy, followed by active portfolio rebalancing to further minimise these risks. The Manager will regularly monitor all investments, including the use of derivatives for hedging purposes by the Funds.
28
� Specific stock risk This risk will be mitigated through diversification by investing in a wide range of securities from different industries.
� Liquidity risk The Manager will be able to reduce this risk by taking greater care in stock selection and diversification by minimising illiquid stocks from the portfolio.
Management of specific risks Local funds For KFF: Currency risk and interest rate risk will be managed through detailed analysis conducted by the Manager•s investment professionals. The specific stock risk may be greatly reduced through diversification. The Manager•s expertise in proper research prior to sector and stock selection by adopting defensive stock selection strategies will also help to reduce this risk. The country risk will be mitigated by investing into various Asia Pacific markets. The investment committee will also constantly review the Fund•s asset allocation strategy, followed by active portfolio rebalancing to further mitigate the risks. Credit/default risk will be reduced through rigorous and disciplined credit analysis besides spreading investment over many bond issues. For KVF: Actively monitor and manage the asset allocation to ensure there is minimum negative impact from any adverse market movements. The specific stock risk will be managed by investing in a well diversified portfolio of securities from different sectors. The country and currency risk will be mitigated by investing into various Asia Pacific markets and will be managed through detailed analysis conducted by the Manager•s investment professionals. For KEBF: Careful selection of the securities and money market instruments, which the Fund invests, ought to minimise the equity risk. The investment committee will constantly review the Fund•s asset allocation strategy, followed by active portfolio rebalancing to further minimise the risk. Credit/default risk will be managed through rigorous and disciplined credit analysis. Diversification of the bond portfolio over several industrial sectors will reduce the risk related to any particular sector. Articles in the media and credit rating by the rating agencies will be closely monitored for prospective changes in credit ratings. Interest rate risk is actively managed by duration targeting based on the interest rate outlook. The credit/default risk and specific stock risk are minimised through investing in a well diversified and wide range of companies in different sectors, which function independently from one another. For KTF: Currency risk will be managed through detailed and thorough analysis conducted by the Manager•s investment personnel. The investment committee will constantly review the Fund•s asset allocation strategy, followed by active portfolio rebalancing to further minimise risk. Specific stock risk will be mitigated through diversification by investing in a wide range of securities from different industries. The country risk will be mitigated by investing into various Asia Pacific markets.
29
For KCIF: Interest rate risk will be managed through detailed and thorough analysis conducted by the Manager•s investment professional. The investment committee will also constantly review the Fund•s asset allocation strategy, followed by active portfolio rebalancing to further mitigate the risk. Specific stock risk will be mitigated through diversification by investing in a wide range of securities from different industries. Credit/default risk will be reduced through rigorous and disciplined credit analysis besides spreading investment over many bond issues. For KJF: Proper risk management is ensured throughout the entire investment management process. Some of the general measures which the external investment manager of the KJF will employ are: � adhering to the Fund's investment objectives, policies and strategies of the Fund; � undertaking stringent evaluation of movements in market prices and regularly monitor, review and report to the
investment committee to ensure that the Fund•s investment objectives are met; � employing stringent screening process by conducting fundamental analysis of economic, political and social
factors to evaluate their likely effects on the performance of the markets and sectors; � practicing prudent liquidity management in a timely and cost effective manner; and � determining effective asset allocations. Local Shariah-compliant funds For KDA: Specific stock risk will be managed through the conduct of fundamental analyses of economic, social and political factors on a local and global basis to evaluate the likely effects on the performance of Shariah-compliant equities. Sukuk are screened for the underlying fundamentals before arriving at the final selection for a model portfolio, which serves as the guide for investment in the Fund. For overall Fund•s portfolio, risk is further controlled by strict diversification on both sector and Shariah-compliant stock picks. The Manager will be guided by the Guidelines and restrictions that are imposed internally where the management of the Fund is concerned. Investment in Sukuk by the Fund entails various risks as mentioned above. While these risks may not be entirely negated, they may be reduced. The Manager expects that by practising diversification of the investments of the Fund and careful selection of Shariah-compliant stocks and monitoring for changes to the operating environment, the risks of investing shall be reduced. For KDAI: Credit/default risk will be managed through rigorous and disciplined credit analysis. Diversification of the Islamic money market and Sukuk portfolio over several industrial sectors will reduce the risk related to any particular sector. Articles and credit rating by the rating agencies will be closely monitored for prospective changes in credit ratings. Credit/default risk will be mitigated by investing in a wide range of companies in different sectors (diversification). Since the nature of the investments is Short-term, exposure to interest rate risk is minimal. For KDL: Interest rate risk will be managed through detailed and thorough analysis conducted by the Manager•s investment professional. The specific stock risk may be greatly reduced through diversification. The Manager•s expertise in proper research prior to sector and Shariah-compliant stock selection by adopting defensive Shariah-compliant stock selection strategies will also help to reduce this risk.
30
The investment committee will also constantly review the Fund•s asset allocation strategy, followed by active portfolio rebalancing to further mitigate the risks. Credit/default risk will be mitigated by investing in a wide range of companies in different sectors (diversification). Note: for KDA & KDL Reclassification of Shariah status risk This risk refers to the risk that the currently held Shariah-compliant investments in the portfolio of Shariah-compliant funds may be reclassified to be Shariah non-compliant. The SACSC may reclassify any Shariah-compliant securities in the periodic review of the securities. If this occurs, the value of the funds may be adversely affected where the Manager will take the necessary steps to dispose of such securities. Global fund For KAGBF, the management of specific risk is carried out at the Target Fund level. Please refer to page 26. The abovementioned risks, which investors should consider before investing into a fund, should not be considered to be an exhaustive list. Investors should be aware that investment in a fund may be exposed to other risks of an exceptional nature from time to time.
31
THE FUNDS• PROFILE LOCAL FUNDS KAF First Fund (• KFFŽ)
Category/Type of fund KFF is a balanced/income and growth fund, which invests in both equities as well as fixed-income securities to provide capital appreciation and a meaningful level of income to its investors. By adopting a balanced approach, its volatility is expected to be lower than wholly equity funds as a large portion of the Fund•s assets are being invested in fixed-income securities such as money market deposits, corporate bonds and loan stocks.
Investment objective The Fund•s investment objective is to provide medium to long-term investors with a reasonable level of income and capital growth. * Any material changes to the investment objective of the Fund would be subject
to the Unit holders• approval.
Investors• profile � Want a professionally managed portfolio of equities and fixed income securities; � Have a medium to long-term investment horizon of three (3) to five (5) years or
more; � Want to achieve an adequate level of regular income and capital gain at an
acceptable level of risk.
Investment policy and strategy The strategic limit on asset allocation of the Fund is as follows: Equities - Minimum 40% & Maximum 60% Fixed-income securities & liquid assets - Minimum 40% & Maximum 60% The process begins with a top-down view for asset allocation decisions and a bottom-up view for stock selection. The asset allocation strategy is dependent on the state of the macro picture as perceived by the Manager after going through a strict investment process to review the outlook of the economy, stock and money markets over the medium to long-term horizon. This entails relevant analysis on economy and business statistics in order to produce forecasts for stock market and interest rates directions. The Manager adopts an active asset allocation policy and will time the investment strategies to suit market developments and global economic conditions. Where necessary, the Manager will switch the asset allocation appropriately between equities, bonds and money market instruments. The above asset allocation policy of the Fund may be reviewed from time to time based on the general market and economic situations. The Manager may take temporary defensive positions that may be inconsistent with the Fund•s principal strategy in attempting to respond to adverse market conditions, economic or political market conditions. This defensive position may take the form of holding significantly higher amount of liquid assets/cash and/or money market instruments and the Manager may also invest in equities which consist of stocks that provide stable earnings and regular dividend. The Manager will then decide on the best appropriate asset allocation strategy and reallocate the Fund•s equity investment into other more defensive investments. The weighting for equity investments then may be scaled down to not less than 20% of the Fund•s NAV.
For equity securities, the Manager adopts a bottom-up approach in selecting equities after having ascertained the direction of the economy. Portfolio construction will focus on the category of stocks, which will benefit most from the Manager•s view of the market. In order to enhance returns to the Fund, the Manager will conduct fundamental analysis on potential investable companies to determine the suitability of the investment. Information can be obtained from regular company visits and participation in various industry presentations and stockbrokers forums. Apart from stocks picks, the Manager will also actively monitor industry trends, earnings revision trends and financial performances of companies which the Fund has interest in, so that appropriate investment decisions can be made.
32
Accordingly, some of the important investment criteria for stocks selections are as follows:
� High earnings per share growth potential; � Low price earnings to growth ratio; � Strong balance sheets; � Cash flows and gearing levels; � Relatively high dividend yield; � Focused management team and its track records; and � Sustainable financial performance. The Fund has diversified its investments into foreign markets. It has also been permitted by the SC to invest in securities traded on the stock exchanges in the Asia Pacific region. As such, the Fund intends to invest up to 50% of the total aggregate value of the funds or any other limit imposed by BNM from time to time in securities of approved Asia Pacific markets such as Hong Kong, Japan, Indonesia, Philippines, Thailand, Singapore, Taiwan, South Korea, Australia, China, India and New Zealand. The Manager may also invest directly in equities and bonds and/or may invest through other collective investment schemes, which will complement the Fund•s investment objective. The Manager will only make an investment in collective investment schemes if those investment objectives complement the objective of the Fund and enhance the Fund•s return. To mitigate risks, the Manager may also invest (when necessary) in futures and options contracts to hedge against market volatility and protect the Fund•s value. Futures contract will only be used to hedge against the Fund•s equity exposure from any unexpected price movements in the underlying market and to hedge against any opportunity loss arising from its non-equity or bond investments. For fixed-income securities, the Fund will at all times place/invest its non-equity investments in money market deposits, Malaysian Government Securities (•MGSŽ) and a diversified portfolio of corporate bonds (listed or unlisted) rated at least •BBBŽ by RAM or other approved rating agencies. The fundamental investment process for the fixed-income investments is mainly driven by the interest rate outlook over the medium to long-term horizon. The Manager will from time to time, review the economic and interest rates outlook to determine the appropriate duration for the bond investments. Regular review on credit ratings of bond investments are conducted to seek for potential upgrades and avoid potential downgrades of bond investments to achieve better returns for the Fund. Accordingly, some of the important investment criteria or principal valuations measures for selections of fixed-income securities are as follows: � Issuer•s financial position and gearing levels; � Issuer•s cash flow quality; � Issue•s expected future cash flow and repayment ability; � Industry outlook; � Duration and interest rates sensitivity analysis; � Yield to maturity; � Yield to first call; � Ratings by RAM/MARC; and � Other applicable measures as and when necessary. The Manager may from time to time decide on hedging the bond investments against interest rate movements using interest rates swaps. Hedging with interest rates swap would be effective in an aggressive interest rate hikes environment. Liquid assets The Fund would have a minimum level of liquid assets set at 5% of the Fund•s NAV to enable the repurchase of Units, which may be reviewed from time to time by the investment committee and is subject to the approval of the Trustee. However, this does not preclude the Fund from increasing the liquid asset levels beyond the stipulated level to allow the Manager to react to the prevailing market conditions and manage investment risks when necessary.
33
Benchmark A selected benchmark is used by the Manager to measure the relative performance of the Fund. The benchmark used will be 60% of the FBM KLCI and 40% of the current Malayan Banking Berhad (•MaybankŽ) twelve (12)-month fixed-deposit rate. The performance of this Fund cannot be compared directly with any specific publicly available benchmark such as FBM KLCI or FTSE as the Fund is a balanced fund where investment in equities and fixed income securities are each restricted to a maximum of 60%. The combination in the benchmark is in line with the investment strategy of the Fund as stated in page 31. For information on the FBM KLCI, investors may refer to the Bursa Malaysia website at www.bursamalaysia.com.my while the Maybank twelve (12)-month fixed-deposit rate is obtainable at www.maybank2u.com.my. KAF Vision Fund (•KVFŽ)
Category/Type of fund KVF is an equities/growth fund, which invests a large portion of the Fund•s assets in stocks with market capitalisation not exceeding RM1 billion. This is because small-capital companies have the opportunities to provide higher capital appreciation as well as to grow at a faster rate but on the other hand, the share prices of such companies tend to be more volatile and hence involves a higher risk.
Investment objective The Fund•s investment objective is to provide Unit holders with medium to long-term capital growth. * Any material changes to the investment objective of the Fund would be subject
to the Unit holders• approval.
Investors• profile � Willing to adopt a fairly aggressive approach towards investing; � Willing to accept a higher level of risk in order to obtain higher growth of capital; � Have a medium to long-term investment horizon of three (3) to five (5) years or
more.
Investment policy and strategy The strategic limit on asset allocation of the Fund is as follows: Equities - Minimum 70% & Maximum 95% � Maximum 65% of the Fund•s NAV will be invested in smaller capitalised companies with market capitalisation not
exceeding RM1 billion at the time of purchase.
� Maximum 30% of the Fund•s NAV will be invested in larger capitalised companies with market capitalisation exceeding RM1 billion at the time of purchase.
Fixed-income securities & liquid assets - Minimum 5% & Maximum 30% The process begins with a top-down view for asset allocation decisions and a bottom-up view for stock selection. The asset allocation strategy is dependent on the state of the macro picture as perceived by the Manager after going through a strict investment process to review the outlook of the economy, stock and money markets over the medium to long-term horizon. This entails relevant analysis on economy and business statistics in order to produce forecasts for stock market and interest rates directions. The Manager adopts an active asset allocation policy and will time the investment strategies to suit market developments and global economic conditions. Where necessary, the Manager will increase / decrease the equity exposure appropriately between equities, bonds and money market instruments. The equity exposure of the Fund is expected to be within 60% to 95% in normal economic and investment circumstances.
34
The above asset allocation policy of the Fund may be reviewed from time to time based on the general market and economic situations. The Manager may take temporary defensive positions that may be inconsistent with the Fund•s principal strategy in attempting to respond to adverse market conditions, economic or political market conditions. This defensive position may take the form of holding a significantly higher amount of liquid assets/cash and/or money market instruments and the Manager may also invest in equities which consist of stocks that provide stable earnings and regular dividend. The Manager will then decide on the best appropriate asset allocation strategy and reallocate the Fund•s equity investment into other more defensive investments. The weighting for equity investments then may be scaled down to not less than 20% of the Fund•s NAV. For equity securities, the Fund will invest primarily in the common stocks of Malaysian companies that have the potential to grow steadily. In the selection process, the Manager will consider the price, risk, growth prospects, management quality, competitive position and prospects for investment return. The Manager will preferably concentrate on companies with the following characteristics: � Focused and competent top management; � Comparatively low gearing; � Markets leaders in growing industries, with significant competitive advantages; � High earning growth potential; � Low stock valuation in relation to book values and earnings. The Manager will conduct both on site company visits and financial analysis to determine the suitability of potential investments. In addition, the Manager will also take advantage of any special situation and mispricing opportunities in the market place. These opportunities generally represent short to medium-term inefficiencies in the market that are subsequently corrected to its fair value over the longer term. Companies offering the best growth prospects over the longer term horizon tend to be small to medium-sized companies. Hence, to achieve the Fund•s objective of attaining maximum capital growth in the Long-term, the Fund•s portfolio will have a significantly higher equities exposure in companies with market capitalisation of not more than RM1 billion at the time of purchase and above-average earnings growth. While the Fund•s primary objective is to invest in small to medium-sized companies, which would potentially realise faster earnings growth than the overall market, investments will also be made in larger capitalised companies with good earnings, growth prospect and attractive valuations. Depending on the view taken on the market, the Manager may reallocate the equity mix between the small-cap and larger cap stocks with the aim to enhance the Fund•s return. For example, the Manager has the option to raise its larger cap stocks to a maximum of 30% of the Fund•s NAV to take advantage of a rise in larger cap stocks, while maintaining between 30% and 65% of NAV in small-cap stocks. Similarly, the Manager may also have the option to scale down the larger cap stocks to zero while maintaining 60% of the Fund•s NAV in the smaller cap stocks. Below is an illustration on combination of equity mix between the small-cap and large-cap stocks in a bearish and bullish market.
Market view Bearish Bullish
Small-caps 30% - 70 % of the Fund•s NAV 65% of the Fund•s NAV
Large-caps 0% - 30 % of the Fund•s NAV 30% of the Fund•s NAV
Total equity exposure 70% (minimum) of the Fund•s NAV 95% (maximum) of the Fund•s NAV
The Fund has been permitted by the SC to invest in securities traded on the stock exchanges in the Asia Pacific region. As such, the Fund is allowed to invest up to 50% of the total aggregate value of the funds under management, or any other limit imposed by BNM from time to time in securities of approved Asia Pacific markets such as Hong Kong, Japan, Indonesia, Philippines, Thailand, Singapore, Taiwan, Australia, South Korea and China. The Manager may decide to invest directly in equities or bonds and/or may invest through other collective investment schemes, which will enhance the return of the Fund (only if it is cost effective) and complement the Fund•s investment objective. To mitigate risks, the Manager may also invest (when necessary) in futures and options contracts to hedge against market volatility and protect the Fund•s value. Futures contract will only be used to hedge against the Fund•s equity
35
exposure from any unexpected price movements in the underlying market and to hedge against any opportunity loss arising from its non-equity or bond investments. The Manager will ensure that any funds not invested in equities or equity-related securities will be invested in fixed-income securities and money market instruments. Liquid assets The Fund would have a minimum level of liquid assets set at 5% of the Fund•s NAV to enable the repurchase of Units, which may be reviewed from time to time by the investment committee and is subject to the approval of the Trustee. However, this does not preclude the Fund from increasing the liquid asset levels beyond the stipulated level to allow the Manager to react to the prevailing market conditions and manage investment risks when necessary. Benchmark A selected benchmark is used by the Manager to measure the relative performance of the Fund. The benchmark used is the FTSE Emas. For information on the FTSE Emas, investors may refer to the Bursa Malaysia website at www.bursamalaysia.com.my. KAF Enhanced Bond Fund (•KEBFŽ)
Category/Type of fund KEBF is a fixed-income/income and growth fund, which invests mainly in money market instruments and fixed-income securities.
Investment objective The Fund seeks to maximise total returns by investing primarily in money market securities and other fixed income securities which provide current income, capital appreciation or a combination of both income and capital appreciation.
* Any material changes to the investment objective of the Fund would be subject to the Unit holders• approval.
Investors• profile � Require regular income distribution; � Want a professionally-managed portfolio of fixed-income securities and money
market instruments; � Want to protect the purchasing power of wealth against inflation; � Have a Medium-term investment horizon of one (1) to three (3) years or more.
Investment policy and strategy The strategic limit on asset allocation of the Fund is as follows: Fixed-income securities & liquid assets - Minimum 90% & Maximum 100% Equities & equity-related securities - Minimum 0% & Maximum 10% The Fund shall normally invest in the following fixed-income securities: � Fixed-income securities with a minimum rating of P3 or MARC-3 or equivalent for Short-term issues;
� Fixed-income securities with a minimum rating of BBB or equivalent for Long-term issues;
� Securities issued or guaranteed by Malaysia•s federal government, BNM or other related Malaysian government agencies or any state government of Malaysia;
� Securities/instruments issued or guaranteed/endorsed by the banks or other licensed financial institutions deposits with banks or government other licensed financial institutions;
� If a rated corporate issue is downgraded to below the minimum rating of local Short-term rating of P3 or MARC-3 or equivalent, or the local Long-term rating of BBB or equivalent and it causes the investment limit to be
36
breached, the Manager should use his best efforts to dispose of the holdings before maturity, failing which, it shall be held to maturity.
The Fund may invest up to a maximum of 10% of the Fund•s NAV in equities and/or equity-related securities. For fixed-income securities, the Fund seeks to achieve its objective by investing primarily in fixed-income securities and other money market instruments of investment grade. The fundamental investment process for the fixed-income investments is mainly driven by the interest rate outlook over the medium to long-term horizon. The Manager will from time to time, review the economic and interest rates outlook to determine the appropriate duration for the bond investments to match the Fund•s objective. The Manager will decide which security or instrument to buy based primarily on their yields relative to their credit qualities and the period to maturities. Regular review on credit ratings of bond investments are conducted to seek potential upgrades and to avoid potential downgrades of bond investments to achieve better returns for the Fund. The Fund will at all times place/invest its cash in money market deposits/instruments and Long-term fixed-deposit instruments rated by RAM or other approved rating agencies. Accordingly, some of the important investment criteria or principal valuations measures for selections of fixed-income securities are as follows: � Issuer•s financial position and gearing levels; � Issue•s expected future cash flows and repayment ability; � Industry outlook; � Duration and interest rates sensitivity analysis; � Price and yield to maturity; � Yield to first call; � Ratings by RAM/MARC; � Other applicable measures as and when necessary. The Manager may from time to time decide on hedging the bond investments against interest rate movements using interest rates swaps. Hedging with interest rates swap would be effective in an aggressive interest rate hikes environment. For equity securities, the Manager adopts a bottom-up approach in selecting equities after having ascertained the direction of the economy. Focus will be on good quality stocks to benefit from the asset allocation. The Manager will conduct fundamental analysis on potential investable companies to determine the suitability of the investment. Information can be obtained from regular company visits and participation in various industry presentations and stockbrokers forums. The Manager may participate in new issues, which are expected to yield good returns. The Manager will only make an investment in collective investment schemes if those investment objectives complement the Fund•s objective and enhance the return of the Fund. To mitigate risks, the Manager may also invest (when necessary) in futures and options contracts to hedge against market volatility and protect the Fund•s value. Futures contract will only be used to hedge against the Fund•s equity exposure from any unexpected price movements in the underlying market and to hedge against any opportunity loss arising from its non-equity or bond investments. Accordingly, some of the important investment criteria preferred by the Manager for stocks selections are as follows: � High earnings per share growth potential; � Low price earnings to growth ratio; � Strong balance sheets; � Focused management team; � Relatively high dividend yield; � Sustainable financial performance potential. Liquid assets The Fund would have a minimum level of liquid assets set at 5% of the Fund•s NAV to enable the repurchase of Units, which may be reviewed from time to time by the investment committee and is subject to the approval of the Trustee. However, this does not preclude the Fund from increasing the liquid asset levels beyond the stipulated level to allow the Manager to react to the prevailing market conditions and manage investment risk when necessary.
37
Benchmark A selected benchmark is used to measure the relative performance of the Fund. The benchmark used is RAM-Quant Shop MGS All Bond Index. For information on the RAM Quant Shop Index, investors may refer to the RAM Quant Shop website at www.quantshop.com. KAF Tactical Fund (•KTFŽ)
Category/Type of fund KTF is an equity/growth fund, which has an aggressive investment approach to seek potentially higher capital growth for the investors.
Investment objective The Fund•s investment objective is to provide Unit holders with enhanced capital growth through a focused investment approach in certain preferred industry sectors at any one time. * Any material changes to the investment objective of the Fund would be subject
to the Unit holders• approval.
Investors• profile � Seek to achieve maximum capital growth by investing in securities of companies under certain preferred industry sectors;
� Prefer a medium to long-term investment horizon to achieve potentially strong growth prospect;
� Willing to accept medium to high risk tolerance in order to obtain higher growth of capital.
Investment policy and strategy The strategic limit on asset allocation of the Fund is as follows: Equities - Minimum 70% & Maximum 95% The Fund equity exposure will be at 70% to 95% under normal economic conditions and at any one time the Fund will also invest between 40% to 70% of the total equity exposure in the preferred industry sectors that are expected to outperform. Fixed-income securities & liquid assets - Minimum 5% & Maximum 30% The above asset allocation policy of the Fund may be reviewed from time to time based on the general market and economic situations. The Manager may take temporary defensive positions that may be inconsistent with the Fund•s principal strategy in attempting to respond to adverse market conditions, economic or political market conditions. This defensive position may take the form of holding a significantly higher amount of liquid assets/cash and/or money market instruments and the Manager may also invest in equities which consist of stocks that provide stable earnings and regular dividend. The Manager will then decide on the best appropriate asset allocation strategy and reallocate the Fund•s equity investment into other more defensive investments. The weighting for equity investments then may be scaled down to not less than 20% of the Fund•s NAV. The investment process will be based on an active management strategy incorporating both the top-down view for asset allocation decisions and a bottom-up view for stock selection. The asset allocation strategy is dependent on the state of the macro picture as perceived by the Manager after going through a strict investment process to review the outlook of the economy, stock and money markets over the medium to long-term horizon. This entails relevant analysis on economy and business statistics in order to produce forecasts for stock market and interest rates directions. The Manager adopts an active asset allocation policy and will time the investment strategies to suit market developments and global economic conditions. Where necessary, the Manager will switch the asset allocation appropriately between equities and fixed-income securities. Once the equity allocation has been determined, the focus of this Fund will be for the Manager to invest the bulk, i.e. between 40% and 70% of the total equity investment in sectors and market themes that the Manager perceives to be
38
those capable of outperforming the benchmark. Greater emphasis will be placed in top-down views to identify sectors that are poised for an upturn, either cyclically or structurally, and for those that are peakish or on the decline. The Manager will also take short trading positions or situation plays such as merger & acquisitions, should opportunities arise. For equity securities, the Manager adopts a bottom-up approach in selecting equities after having ascertained the direction of the economy. Portfolio construction will focus on the category of stocks, which will benefit most from the Manager•s view of the market. Fundamental analysis will be conducted to determine the attractiveness of stock ideas based on sector and market themes. Information is obtained from regular company visits and participation in various industry presentations and stockbrokers forums. In addition to fundamental analysis, technical analysis also plays an important role in timing the purchases and sales. Apart from stock picks, the Manager will also actively monitor industries trends, earnings revision trends and financial performances of companies which the Fund has interests in, so that appropriate decisions can be made. Accordingly, some of the principal valuations for stock selections preferred by the Manager are as follows: � High earnings per share growth potential; � Low price earnings to growth ratio; � Strong balance sheets; � Focused management team; � Sustainable financial performance potential; � Industry/sectors trends. The Fund will diversify up to a maximum of 50% of the total aggregate value of the funds under management or any other limit imposed by BNM from time to time in foreign securities whenever opportunities arise. The Manager has been permitted by the SC to invest in securities traded on the stock exchanges in the Asia Pacific region such as Hong Kong, Japan, Indonesia, Philippines, Thailand, Singapore, Taiwan, South Korea, Australia and China. The Manager may invest directly in equities or bonds and/or may invest through other collective investment schemes, which will enhance the return of the Fund and complement the Fund•s investment objective. The Manager will only invest in futures and options when appropriate. The Manager will ensure that any funds not invested in equities or equity-related securities will be invested in fixed-income securities and money market instruments. Liquid assets The Fund would have a minimum level of liquid assets set at 5% of the Fund•s NAV to enable the repurchase of Units, which may be reviewed from time to time by the investment committee and is subject to the approval of the Trustee. However, this does not preclude the Fund from increasing the liquid asset levels beyond stipulated level to allow the Manager to react to the prevailing market conditions and manage investment risk when necessary. Benchmark A selected benchmark is used by the Manager to measure the relative performance of the Fund. The benchmark used will be the FTSE Emas. For information on the FTSE Emas, investors may refer to the Bursa Malaysia website at www.bursamalaysia.com.my.
39
KAF Core Income Fund (•KCIFŽ)
Category/Type of fund KCIF is an equity/income fund, which adopts the strategy of investing in securities, which have potentially sustainable and high dividend yields.
Investment objective The Fund•s investment objective is to provide Unit holders with a stable income that is potentially higher than the prevailing fixed-deposit rate by investing in high-dividend yielding portfolio of stocks and fixed-income securities. * Any material changes to the investment objective of the Fund would be subject
to the Unit holders• approval.
Investors• profile � Seek a stable income stream with potentially higher than the prevailing fixed- deposit rates;
� Prefer a medium to long-term investment horizon in order to achieve reasonable capital growth;
� Have a medium degree of risk tolerance.
Investment policy and strategy The strategic limit on asset allocation of the Fund will be as follows: Equities - Minimum 70% & Maximum 98% Fixed-income securities & liquid assets - Minimum 2% & Maximum 30% The investment process begins with a top-down view for asset allocation decisions and a bottom-up view for stock selection purposes. The asset allocation strategy between equities and fixed-income securities is dependent on the state of the macro picture as perceived by the Manager after going through a stringent investment process to review the outlook for the economy and business statistics in order to produce in-house views for the stock market and economy. Beneficiaries of this, sector-wise and stocks-wise, are then predetermined before being subject to a rigorous stock selection process. Once the rigorous stock selection process has been performed, the Manager adopts a relatively passive investment strategy in view of the underlying objective to provide stable income from high-yielding stocks and fixed-income securities. For equity securities, the Manager adopts a bottom-up approach in selecting equities after having ascertained the direction of the economy. Focus will be on the category of stocks to best take advantage of the asset allocation and view taken on the market whilst keeping with the Fund•s objective to provide stable income. Fundamental analysis will be conducted to determine the attractiveness of stock ideas. Information can be obtained from regular company visits and participation in various industry presentations and stockbroker forums. Accordingly, some of the principal valuations for stock selections preferred by the Manager are as follows: � Relatively high dividend yield; � Strong balance sheets; � Focused management team; � Sustainable financial performance potential. The Manager will only make an investment in collective investment schemes if those investment objectives complement the Fund•s objective and enhance the return of the Fund. To mitigate risks, the Manager may also invest (when necessary) in futures and options contracts to hedge against market volatility and protect the Fund•s value. Futures contract will only be used to hedge against the Fund•s equity exposure from any unexpected price movements in the underlying market and to hedge against any opportunity loss arising from its non-equity or bond investments.
40
The Manager will ensure that any funds not invested in equities or equity-related securities will be invested in fixed-income securities and money market instruments. For fixed-income securities, the Fund will at all times place/invest its non-equity investments in money market deposits, MGS and a diversified portfolio of corporate bonds (listed or unlisted) rated at least •BBBŽ by RAM or other approved rating agencies. The fundamental investment process for the fixed-income investments is mainly driven by the interest outlook over the medium to long-term horizon. The Manager will from time to time, review the economic and interest rates outlook to determine the appropriate duration for the bond investments. The focus of choices for fixed-income securities will be those issues, which have high relative yields to maturity / yields to first call within its rating category. Regular review on credit ratings of bond investments are conducted to seek for potential upgrades and avoid potential downgrades of bond investments to achieve better returns for the Fund. The above asset allocation policy of the Fund may be reviewed from time to time based on the general market and economic situations. The Manager may take temporary defensive positions that may be inconsistent with the Fund•s principal strategy in attempting to respond to adverse market conditions, economic or political market conditions. This defensive position may take the form of holding significantly higher amount of liquid assets / cash and / or money market instruments and the Manager may also invest in equities which consist of stocks that provide stable earnings and regular dividend. The Manager will then decide on the best appropriate asset allocation strategy and reallocate the Fund•s equity investment into other more defensive investments. The weighting for equity investments then may be scaled down to not less than 20% of the Fund•s NAV. Accordingly, some of the important investment criteria or principal valuations measures for selections of fixed-income securities are as follows: � Issuer•s financial position and gearing levels; � Issuer•s cash flows quality; � Issuer•s expected future cash flows and repayment ability; � Industry outlook; � Duration and interest rates sensitivity analysis; � Price and yield to maturity; � Yield to first call; � Ratings by RAM/MARC; � Other applicable measures as and when necessary. The Manager may from time to time decide on hedging the bond investments against interest rate movements using interest rates swaps. Hedging with interest rates swap would be effective in an aggressive interest rate hikes environment. Liquid assets The Fund would have a minimum level of liquid assets set at 5% of the Fund•s NAV to enable the repurchase of Units, which may be reviewed from time to time by the investment committee and is subject to the approval of the Trustee. However, this does not preclude the Fund from increasing the liquid asset levels beyond stipulated level to allow the Manager to react to the prevailing market conditions and manage investment risk when necessary. Benchmark A selected benchmark is used by the Manager to measure the relative performance of the Fund. The benchmark used will be the FBM KLCI. For information on the FBM KLCI, investors may refer to the Bursa Malaysia website at www.bursamalaysia.com.my.
41
KAF Jade Fund (•KJFŽ)
Category/Type of fund KJF is an equity/growth fund.
Investment objective The Fund aims to provide investors with capital appreciation by accessing the long-term growth potential of stock markets in Asia Pacific region. * Any material changes to the investment objective of the Fund would be subject
to the Unit holders• approval.
Investors• profile � Investors with a medium to high risk profile looking for capital gains over the medium to long-term from exposure to the share markets of the Asia Pacific region.
Investment Policies and Strategies Asset Allocation In order to meet its objectives, the Fund will invest a minimum of 70% of its NAV in Asia Pacific region related investments that comprise of equities and collective investment schemes which invest in equities. The Manager will maintain a minimum of 1% of the Fund•s NAV in liquid assets such as money market instruments or placements in deposits to meet repurchase requests. Investment Strategy The Fund will invest a minimum of 70% up to a maximum of 100% of its investments in Asia Pacific region related investments to benefit from the strong growth of the economies in the Asia Pacific region which has surpassed the growth of economies of developed countries. The Fund will be invested in a portfolio of Asia Pacific region related investments consisting of equities and collective investment schemes which invest in equities. The foreign markets in the Asia Pacific region that the Fund may invest include, but are not limited to, Australia, Hong Kong SAR, India, Indonesia, Japan, Korea, and the People•s Republic of China, Pakistan, the Philippines, Singapore, Sri Lanka, Taiwan and Thailand.
Generally, companies and collective investment schemes with growth prospects over the medium to long-term are sought. In identifying such companies, the Fund relies on fundamental research where the financial health and industry growth prospects are considered. In the selection of collective investment schemes, management process, quality and past track records will be the primary considerations. Risk Management in response to adverse market conditions, economic or political conditions The Fund will invest in a variety of equities and collective investment schemes which invest in equities as a means of diversifying risk. In response to adverse conditions, market, economic, political or otherwise, the Manager may temporarily adjust the asset allocation of the Fund by reducing its equity and collective investment schemes exposure and invest in permitted investments that have low correlation to market movements for example, to hold more cash through placement of deposits. Benchmark The Fund aims to consistently provide returns that equal to or better than that of the MSCI AC Asia Pacific. Source: www.bloomberg.com/markets/ Investors should be aware that the risk profile of the Fund differs from the risk profile of the benchmark.
42
LOCAL SHARIAH-COMPLIANT FUNDS KAF Dana Adib (•KDAŽ)
Category/Type of fund KDA is an Islamic equity/growth fund. KDA shall invest in Shariah-compliant securities, which are undervalued but offer good growth potential.
Investment objective The Fund•s investment objective is to attain capital growth in the medium to long-term through investing in securities listed in the Malaysian equities market whilst abiding by Shariah principles. * Any material changes to the investment objective of the Fund would be subject
to the Unit holders• approval.
Investors• profile � Seek high capital appreciation over a longer period of time and do not expect any dividend or regular income from Shariah-compliant investment;
� Willing to accept moderate to high risk tolerance; � Prefer to invest in Shariah-compliant securities.
Investment policy and strategy The strategic limit on asset allocation of the Fund is as follows: Shariah-compliant equities - Minimum 70% & Maximum 90% Sukuk & Islamic liquid assets - Minimum 10% & Maximum 30% In selecting Shariah-compliant equity securities, the Manager will combine both top-down and bottom-up approach after having ascertained the direction of the economy. The focus will be on value and growth Shariah-compliant stocks. The Fund will also invest in Islamic money market instruments for cash management purposes. All investments will adhere strictly to Shariah requirements. Shariah-compliant equities investments are subject to specific stock risk, market risk and reclassification of Shariah status risk. The Manager aims to reduce all these risks by using diversification that is expected to reduce the market volatility. Accordingly, the principal valuation for Shariah-compliant stock selection preferred by the Manager will comprise the following attributes: � High earnings per share growth potential; � Low price earnings to growth ratio; � Strong balance sheets; � Focused management team; � Relatively high-dividend yield; � Sustainable financial performance potential. The Fund•s asset allocation strategy is dependent on the state of the economy as perceived by the Manager after going through the investment process. The asset allocation may swing very widely in exceptional circumstances, i.e. the Asian Financial Crisis of 1997/98 being a prime example, but the Fund•s Shariah-compliant equity exposure is expected to be within 70% to 90% in normal economic and investment circumstances. A portion of the Fund may be utilised for Short-term trading from time to time as and when opportunities arise. Opportunities may include but are not limited to arbitrage situations, discrepancies in valuation, expected liquidity surge and thematic plays. The Manager may invest directly in Shariah-compliant equities and Sukuk and/or may invest through other Shariah-compliant collective investment schemes if those investment objectives complement the Fund•s objective and enhance the return of the Fund. The Manager will invest in Shariah-compliant derivatives when appropriate. The Fund will at all times place/invest its non-equity investments in Islamic money market. The tenure of Islamic deposits shall vary in accordance to the Manager•s outlook of the stock market. The Fund will at all times place/invest its cash in Islamic money market, Government Investment Issues (•GIIŽ) and/or Sukuk rated at least •BBBŽ by RAM or other approved rating agencies. The tenure of Islamic deposits shall vary in
43
accordance to the Manager•s outlook of the stock market. These Sukuk are mainly subject to interest rate risk and the credit risk. Islamic liquid assets The Fund would have a minimum level of Islamic liquid assets set at 2% of the Fund•s NAV to enable the repurchase of Units, which may be reviewed from time to time by the investment committee and is subject to the approval of the Trustee. However, this does not preclude the Fund from increasing the Islamic liquid asset levels beyond stipulated levels to allow the Manager to react to the prevailing market conditions and manage investment risk when necessary. Benchmark A selected benchmark is used by the Manager to measure the relative performance of the Fund. The selected benchmark is the FBSI. For information on the FBSI, investors may refer to the Bursa Malaysia website at www.bursamalaysia.com.my. KAF Dana al-Iddikhar (KDAI)
Category/Type of fund KDAI is an Islamic money market/income fund, which provides a low risk investment option by investing in Islamic money market instruments and Short-term Sukuk.
Investment objective The Fund seeks to provide a regular stream of income by investing primarily in Islamic money market instruments and other fixed income securities, which comply with Shariah requirements.
* Any material changes to the investment objective of the Fund would be subject to the Unit holders• approval.
Investors• profile � Conservative in nature in terms of Shariah-compliant investment; � Prefer a consistent reasonable and stable level of return on Shariah-compliant
investment; � Prefer a lower level of investment risk; � Have a Short-term investment horizon.
Investment policy and strategy The Fund will invest at least 90% of its NAV in a diversified portfolio of short-term Islamic money market instruments, which have a remaining maturity period of up to 365 days. Alternatively, the Fund may also invest up to 10% of its NAV in Sukuk with longer remaining maturity period, which is more than 365 days but does not exceed 732 days. The Fund shall normally invest in the following Shariah-compliant securities: � Islamic money market and Sukuk with a minimum local Short-term credit rating of P2 or MARC-2 or equivalent; � Sukuk with a minimum local Long-term credit rating of BBB or equivalent; � Sukuk issued or guaranteed by the Malaysia•s federal government, BNM or other related Malaysian government
agencies or any state government of Malaysia; � Sukuk issued or guaranteed/endorsed by banks or other licensed financial institutions; � Islamic deposits with banks or other licensed financial institutions; � Any other form of investment/instruments that comply with Shariah requirements and are approved by the
SACSC and/or the Shariah Adviser and in accordance with Shariah requirements from time to time. The credit/default risk is limited to the extent that any Sukuk invested must have credit ratings of no lower than BBB by RAM/MARC, for Long-term instruments and P2 by RAM or MARC2 by MARC for Short-term instruments. In the event that a Sukuk is placed under a negative outlook by any rating agencies, the Manager will immediately assess its continued investability and may take the necessary steps to mitigate any negative impact to the Fund. Should the instrument be downgraded below the minimum investment grade, the Manager will divest the instrument. However, in
44
order to protect the Fund•s best interest, the Manager has the discretion to take into consideration all relevant factors that affect the fair value of the investment via an internal credit assessment process before deciding on the manner and time frame of the sale. The Fund•s structure is such that it is confined to instruments of short duration of maturity in order to minimise the impact of fluctuations in interest rate on the Fund•s performance over the Short-term while the credit risks it may face are mitigated by strict limits on concentration of investments, i.e. diversification and due diligence in the credit assessments by ensuring high credit ratings as mentioned above. Commensurate to this requirement for high liquidity and low tolerance to credit risk, the overall risk profile of the Fund is low. The Fund seeks to achieve its objective by investing primarily in Islamic money market instruments and other Sukuk. The Manager will decide which instrument or security to buy based primarily on their yield, relative to their credit quality and the period to maturity. The Fund will at all times place/invest its cash in Islamic money market deposits/instruments and Sukuk (listed or unlisted), which are rated by RAM, MARC or other approved rating agencies. Some of the principal valuation measures used by the Manager for the analysis of Islamic money market instruments and Sukuk are as follows: � Yield to maturity; � Yield to first call; � Duration; � Other applicable measures as necessary. Islamic liquid assets The Fund would have a minimum level of Islamic liquid assets set at 5% of the Fund•s NAV to enable the repurchase of Units, which may be reviewed from time to time by the investment committee and is subject to the approval of the Trustee. However, this does not preclude the Fund from increasing the Islamic liquid asset levels beyond stipulated level to allow the Manager to react to the prevailing market conditions and manage investment risk when necessary. Benchmark A selected benchmark is used by the Manager to measure the relative performance of the Fund. The benchmark used will be Malayan Banking Berhad (•MaybankŽ) one (1)-month General Investment Account (•GIAŽ) rate. The information is obtainable at www.maybank2u.com.my. The performance of this Fund cannot be compared directly with any specific publicly available benchmark such as the 12-month KLIBOR in line with the conservative nature of the investments. Note: � The risk profile of the fund is different from risk profile of the benchmark; � The fund assumes a higher risk compared to the benchmark; and � As a result of the higher risk assumed by the Fund, investors should expect returns of the Fund to outperform that
of the benchmark. Investment in KDAI is not the same as placing funds in deposit with a financial institution. There are risks involved and investors should rely on their own evaluation to assess the merits and risks when investing in the Fund.
45
KAF Dana Alif (•KDLŽ)
Category/Type of fund KDL is an Islamic balanced/income and growth fund, which provides opportunities to investors for capital gains and income by investing in Shariah-compliant securities and Sukuk.
Investment objective The Fund aims to provide Unit holders with a steady and consistent dividend income over the medium-term to long-term investment period. It is intended that the returns will be further enhanced through capital appreciation of investments. * Any material changes to the investment objective of the Fund would be subject
to the Unit holders• approval.
Investors• profile � Have medium to long-term investment horizon and reasonable risk tolerance; � Prefer to invest in Shariah-compliant securities.
Investment policy and strategy The strategic limit on asset allocation of the Fund will be as follows: Shariah-compliant equities - Minimum 40% & Maximum 60% Sukuk & Islamic liquid assets - Minimum 40% & Maximum 60% The process begins with a top-down view for asset allocation decisions and a bottom-up view for Shariah-compliant stock selection. The asset allocation strategy is dependent on the state of the macro picture as perceived by the Manager after going through a strict investment process to review the outlook of the economy, stock and money markets over the medium to long-term horizon. This entails relevant analysis on economy and business statistics in order to produce forecasts for stock market and interest rates directions. The Manager adopts an active asset allocation policy and will time the investment strategies to suit market developments and global economic conditions. Where necessary, the Manager will switch the Fund•s asset allocation appropriately between Shariah-compliant equities, Sukuk and Islamic money market instruments. . The Manager aims to reduce all these risks by using diversification that is expected to reduce the market volatility. The above asset allocation policy of the Fund may be reviewed from time to time based on the general market and economic situations. The Manager may take temporary defensive positions that may be inconsistent with the Fund•s principal strategy in attempting to respond to adverse market conditions, economic or political market conditions. This defensive position may take the form of holding significantly higher amount of Islamic liquid assets/cash and/or Islamic money market instruments and the Manager may also invest in Shariah-compliant equities which consist of Shariah-compliant stocks that provide stable earnings and regular dividend. The Manager will then decide on the best appropriate asset allocation strategy and reallocate the Fund•s Shariah-compliant equity investment into other more defensive investments. The weighting for Shariah-compliant equity investments then may be scaled down to not less than 20% of the Fund•s NAV. For Shariah-compliant equity securities, the Manager adopts a bottom-up approach in selecting Shariah-compliant equities after having ascertained the direction of the economy. Portfolio construction will focus on the category of Shariah-compliant stocks, which will benefit most from the Manager•s view of the market. In order to enhance returns to the Fund, the Manager will conduct fundamental analysis on potential investable companies to determine the suitability of the investment. Information can be obtained from regular company visits and participation in various industry presentations and stockbrokers forums. Apart from Shariah-compliant stocks picks, the Manager will also actively monitor industry trends, earnings revision trends and financial performances of companies which the Fund has interest in, so that appropriate investment decisions can be made. Accordingly, some of the important investment criteria for Shariah-compliant stocks selections are as follows: � High earnings per share growth potential; � Low price earnings to growth ratio; � Strong balance sheets; � Cash flows and gearing levels;
46
� Relatively high dividend yield; � Focused management team and its track records; � Sustainable financial performance. The Manager will only make an investment in Shariah-compliant collective investment schemes if those investment objectives complement the Fund•s objective and enhance the return of the Fund. The Manager will invest in Shariah-compliant derivatives when appropriate. The Fund will at all times place/invest its non-equity investments in Islamic money market. The tenure of Islamic deposits shall vary in accordance to the Manager•s outlook of the stock market. The Fund will at all times place/invest its cash in Islamic money market, Government Investment Issues (•GIIŽ) and/or Sukuk that are Shariah-compliant rated at least •BBBŽ by RAM or other approved rating agencies. The tenure of Islamic deposits shall vary in accordance to the Manager•s outlook of the stock market. These Sukuk are mainly subject to interest rate risk and credit risk. Accordingly, some of the important investment criteria or principal valuations measures for selections of Sukuk are as follows: � Issuer•s financial position and gearing levels; � Issuer•s cash flows quality; � Issuer•s expected future cash flows and repayment ability; � Industry outlook; � Duration and interest rates sensitivity analysis; � Yield to maturity; � Yield to first call; � Ratings by RAM/MARC; � Other applicable measures as and when necessary. Islamic liquid assets The Fund would have a minimum level of Islamic liquid assets set at 5% of the Fund•s NAV to enable the repurchase of Units, which may be reviewed from time to time by the investment committee and is subject to the approval of the Trustee. However, this does not preclude the Fund from reducing or increasing the Islamic liquid asset levels to allow the Manager to react to the prevailing market conditions and manage investment risk when necessary. Benchmark A selected benchmark is used by the Manager to measure the relative performance of the Fund. The benchmark used will be 60% of the FBSI and 40% of the Malayan Banking Berhad (•MaybankŽ) one (1)-month General Investment Account (GIA) rate. The performance of this Fund cannot be compared directly with any specific publicly available benchmark such as the FBM KLCI or the FTSE Emas as the Fund is a balanced fund where investment in Shariah-complliant equities and Sukuk are each restricted to a maximum of 60%. The combination of the benchmarks is in line with investment strategy of the Fund. For information on the FBSI, investors may refer to the Bursa Malaysia website at www.bursamalaysia.com.my while the Malayan Banking Berhad (•MaybankŽ) one (1)-month General Investment Account (GIA) rate is obtainable at www.maybank2u.com.my.
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Shariah Investment Guidelines adopted by IBFIM, Cleansing/Purification Process and Zakat (tithe) for the KDA, KDAI and KDL 1. Shariah Investment Guidelines The following matters are adopted by IBFIM in determining the Shariah status of investments of the Fund. INVESTMENT IN MALAYSIA Equity: Reference for investment in local securities is based on the list of Shariah-compliant securities issued by the Shariah Advisory Council of the Securities Commission (•SACSCŽ) twice yearly on the last Friday of May and November which is readily available at the Securities Commission•s website. However, for Initial Public Offering (•IPOŽ) companies that have yet to be determined the Shariah status by the SACSC, IBFIM adopts the following analysis as a temporary measure in determining its Shariah status until the SACSC releases the Shariah status of the respective companies. � Core Business Activities Analysis
Companies whose activities are not contrary to the Shariah will be classified as Shariah-compliant securities. On the other hand, companies will be classified as Shariah non-compliant if they are involved in the following core business activities: a) Conventional financial services; b) Gambling and gaming; c) Manufacture or sale of non-halal products or related products (e.g. pork and liquor); d) Manufacture or sale of tobacco-based products or related products; e) Pornography; f) Weaponry; g) Entertainment activities that are not permitted by the Shariah; and h) Other activities considered non-permissible according to the Shariah.
� Mixed Business Activities Analysis
For companies with activities comprising both permissible and non-permissible elements, IBFIM applies two analyses before they can be classified as Shariah-compliant. The analyses are as follows: i) Qualitative Analysis
In this analysis, IBFIM will look into aspects of general public perception of the companies• images, core businesses which are considered important and maslahah (beneficial) to the Muslim ummah and the country, the non-permissible elements are very small and involve matters like umumbalwa (common plight and difficult to avoid), ‘uruf (custom) and rights of the non-Muslim community which are accepted by the Shariah.
ii) Quantitative Analysis
Companies which passed the above qualitative analysis will be further subjected to quantitative analysis. IBFIM deduces the following to ensure that they are lower than the Shariah tolerable benchmarks:
a) Business Activity Benchmarks
The 5% benchmark would be applicable to the following business activities: � Conventional banking; � Conventional insurance; � Gambling; � Liquor and liquor-related activities; � Pork and pork-related activities; � Non-halal food and beverages;
48
� Shariah non-compliant entertainment; � Interest income from conventional accounts and instruments; � Tobacco and tobacco-related activities; and � Other activities considered non-compliant according to Shariah. The 20% benchmark would be applicable to the following activities: � Hotel and resort operations; � Share trading; � Stockbroking business; � Rental received from Shariah non-compliant activities; and � Other activities considered non-compliant according to Shariah.
The contribution of Shariah non-compliant activities to the overall revenue/sales/turnover/income and profit before tax of the companies will be calculated and compared against the relevant business activity benchmarks.
b) Financial Ratio Benchmarks
The financial ratios applied are as follows: � Cash over Total Assets Cash will only include cash placed in conventional accounts and instruments, whereas cash placed
in Islamic accounts and instruments will be excluded from the calculation. � Debt over Total Assets Debt will only include interest-bearing debt whereas Islamic debt/financing or Sukuk will be
excluded from the calculation. Both ratios, which are intended to measure riba and riba-based elements within a companies• balance sheet, must be lower than 33%.
Should any of the above deductions fail to meet the benchmarks, IBFIM will not accord Shariah-compliant status for the companies.
Sukuk and Islamic Money Market Instruments: IBFIM will verify any Sukuk and/or Islamic money market instruments based on the data available at Bond Info Hub (www.bondinfo.bnm.gov.my) and Fully Automated System For Issuing/Tendering (https://fast.bnm.gov.my). 2. Cleansing Process for the Fund
a) Wrong Investment
This refers to Shariah non-compliant investment made by the fund manager. The said investment will be disposed of/withdrawn with immediate effect. In the event of the investment resulted in gain (through capital gain and/or dividend/profit), the gain is to be channelled to baitulmal or any other charitable bodies as advised by the Shariah Adviser. If the disposal of the investment resulted in losses to the Fund, the losses are to be borne by the fund manager.
b) Reclassification of Shariah Status of the Fund•s Investment
Reclassification of Shariah status refers to security which is reclassified as Shariah non-compliant by the Shariah Advisory Council of the Securities Commission, the Shariah Adviser or the Shariah Boards of the relevant Islamic Indices. The said security will be disposed soonest practical, once the total amount of
49
dividends received and the market value of the Shariah non-compliant security held equal the original investment cost.
Any capital gains arising from the disposal of the Shariah non-compliant security made at the time of the
announcement can be kept by the Fund. However, any excess capital gains derived from the disposal after the announcement day at a market price that is higher than the closing price on the announcement day is to be channelled to baitulmal or any charitable bodies as advised by the Shariah Adviser.
3. Zakat (tithe) for the Fund
The Fund does not pay zakat on behalf of Muslim individuals and Islamic legal entities who are investors of the Fund. Thus, investors are advised to pay zakat on their own.
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GLOBAL FUND KAF ADVANTAGE GEM Bond Fund (•KAGBFŽ) The KAGBF is an open ended feeder fund that is registered in Malaysia, offering investors an opportunity to invest in a diversified portfolio of investment grade and non-investment grade rated fixed income (e.g. bonds) and other similar securities either issued by companies which have their registered office in Emerging Markets around the world, primarily denominated in USD, or which are issued or guaranteed by governments, government agencies and supranational bodies of Emerging Markets via a Target Fund, i.e. the HSBC Global Investment Funds … Global Emerging Markets Bond (•HGBŽ). Investment objective The Fund aims to achieve total investment return consisting of income and capital appreciation by investing in the Target Fund known as the HSBC Global Investment Funds … Global Emerging Markets Bond.
Note: The Fund is not a capital guaranteed/protected fund.
Any material changes to the KAGBF•s objective would require Unit holders• approval. Investment strategy/Asset allocation The Fund is a feeder fund and it aims to invest a minimum of 95% of the NAV of the Fund in the HSBC Global Investment Funds … Global Emerging Markets Bond (•the Target FundŽ or •HGBŽ); the balance of the NAV of the Fund will be invested in liquid assets.
The Target Fund invests for total return primarily in a diversified portfolio of Investment Grade and Non-Investment Grade rated fixed income (e.g. bonds) and other similar securities either issued by companies which have their registered office in Emerging Markets around the world, primarily denominated in USD, or which are issued or guaranteed by governments, government agencies and supranational bodies of Emerging Markets.
The Target Fund may also invest in financial derivative instruments such as futures, forwards (including non-deliverable forwards), swaps, options, credit default swaps, as well as other structured products. The Target Fund intends to use such financial derivative instruments for, inter alia, return enhancement, hedging, tax-advantage access to instruments and whenever the investment adviser of the Target Fund believes the investment in financial derivative instruments will assist the Target Fund in achieving its investment objectives.
As the Fund is a feeder fund, it will stay invested in the Target Fund in so far as its investment strategy is consistent with the objective of the Fund. In view of the aforesaid, the Fund will not undertake any temporary defensive position.
As the Target Fund is denominated in USD, the Fund may be currency-hedged back to Ringgit Malaysia (RM). By currency hedging, the Manager aims to mitigate any erosion from currency movements against RM on the Fund•s portfolio.
KAF Advantage GEM Bond Fund (•K AGBFŽ) Manager: KAF Investment Funds Berhad
HSBC Global Investment Funds … Global Emerging Markets Bond (•HGBŽ)
Management company: HSBC Investment Funds (Luxembourg) S.A. Investment adviser : HSBC Global Asset Management (USA) Inc.
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Currency hedging
USD-RM Since the Fund•s Base Currency is denominated in RM whilst the Target Fund•s base currency is denominated in the USD, the Fund will be subjected to currency fluctuations between RM and the USD. In order to substantially mitigate these currency fluctuations, the Manager intends to hedge approximately 90% of the Fund•s NAV exposure to the USD. The hedging will be on monthly or quarterly rollover.
The Manager will utilise derivatives to hedge the Fund. A common instrument used is forward contract where the determination of the RM and the USD exchange value is made at a particular time and settled at some other time in the future.
As an illustration, we assume the following: hedging tenure of 25 June 2015 to 24 September 2015.
25 June 2015 24 September 2015
Mark-to-market exchange rate 2.9919 2.6000
Underlying asset USD1,000,000.00
(RM2,991,900.00)
-
Amount to be hedged (90% of the underlying asset)
USD900,000.00
(RM2,692,710.00)
USD900,000.00
(RM2,340,000.00)
Foreign contract details:-
Contract exchange rate 2.9968
Amount based on contract rate USD900,000.00
(RM2,697,120.00)
USD900,000
(RM2,697,120.00)
Maturity date 24 September 2015
Unrealised gain/(loss) (RM) 4,410.00
Realised gain/(loss) (RM) 357,120.00
During the hedging tenure, the amount of RM4,410.00 is the unrealised gain of income. Upon the maturity of the hedge period, the amount of RM357,120.00 will be the realized gain of income.
Due to currency fluctuation, cash flow would be affected, where if the USD weakens, the Fund would receive cash flow but the value of the underlying asset may be lesser than its initial investment value after conversion to RM. As illustrated above, when the hedge tenure matures, the Fund receives a cash flow of RM357,120.00 but the value of the underlying asset in RM denomination would be lesser than its initial investment value.
However, if the situation is of the opposite, where the USD has strengthened against the RM, the Fund would pay out the difference between the forward contract receivable and forward contract payable but the underlying asset would experience and appreciation in value when converted to RM as it would ride on the strength of the USD. As illustrated below, upon maturity of the hedge tenure, the Fund would have suffered a loss of RM92,880.00 but its underlying asset in RM denomination would have increased in value than its initial investment value due to the strengthening of the USD.
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20 January 2015 19 March 2015
Mark-to-market exchange rate 2.9919 3.1000
Underlying asset USD1,000,000.00
(RM2,991,900.00) -
Allocated amount for hedging
(90% of the underlying asset)
USD900,000.00
(RM2,692,710.00)
USD900,000.00
(RM2,790,000.00)
Foreign contract details:-
Contract exchange rate 2.9968
Amount based on contract rate USD900,000.00
(RM2,697,120.00)
USD900,000
(RM2,697,120.00)
Maturity date 19 September 2015
Unrealized gain/(loss) (RM) 4,410.00
Realized gain/(loss) (RM) (92,880.00)
The Manager will monitor the performance of the Target Fund on a weekly basis to determine the amount to hedge, to be unwound or to be initiated as a result of appreciation or diminution of the Target Fund•s net asset value. However, daily monitoring would be conducted in respect of the Fund to determine the appropriate level of hedge required taking into account the daily subscription and repurchase amount for the Fund. Unit holders are to note that in the event there are hedging losses, the Fund may have to liquidate its investments in the Target Fund to fund the hedging losses. Ancillary measures aimed at protecting the Unit holder•s interest The Manager may exercise their prerogative to replace the HGB with any other funds of similar objective or investment objectives with HGB, if based on the Manager•s assessment, the Luxembourg-based fund no longer satisfies the KAGBF•s investment objectives, or when acting in the best interest of the Unit holders. Prior approval of the Unit holders will be obtained before replacing the existing HGB with any other fund with a similar objective. These measures enable KAGBF to be switched to another global emerging market fund managed by any other external manager that is more aligned to the original objective of KAGBF, if by any means the investment adviser of the Target Fund deviates from the original investment objectives or in an attempt to protect the Unit holders• interest if HGB, consecutively underperforms its peers in the same fund category. Benchmark JP Morgan Emerging Market Bond Index (EMBI) Global Index (RM) The benchmark is chosen for the Fund as it is consistent and corresponds to the benchmark of the Target Fund, except that it is in RM in order to allow for similar comparison with the Fund which is denominated in RM. For ease of reference, investors may refer to Bloomberg L.P. or the Manager•s website.
Permitted investments of KAGBF
� Units or shares in other foreign collective investment schemes;
� Liquid assets which comprise of:
(a) Ringgit-denominated deposits placed with commercial banks, investment banks and placements of money at call with investment bank;
(b) Ringgit-denominated deposits and placement of money at call with any bank having Islamic banking
53
facilities; and
(c) Foreign currency deposits including placements of money at call.
� Any other form of investments as may be agreed upon between the Manager and the Trustee from time to time and permitted by the relevant authorities, where necessary.
Liquid assets The KAGBF will maintain a maximum of 5% of the NAV for the purpose of meeting redemptions and to enable proper and efficient management. Investors should note that the value of Units and the income accruing to Units may fall or rise and that investors may not get back their original investments. The HGB faces a number of investment risks greater than those normally associated with international investments in securities. Please refer to the prospectus of the Target Fund for the risk associated with HGB. INFORMATION ON THE TARGET FUND About HSBC Global Investment Funds … Global Emerging Markets Bond (•HGBŽ) The HSBC Global Investment Funds … Global Emerging Markets Bond (•the Target FundŽ or •HGBŽ) is a sub-fund of HSBC Global Investment Funds (•the CompanyŽ) which is a SICAV. HSBC Global Investment Funds is an investment company incorporated in the Grand Duchy of Luxembourg and the regulatory authority regulating the Fund is Commission de Surveillance du Secteur Financier (•CSSFŽ) (Luxembourg financial supervisory authority) and qualifies as an Undertaking for Collective Investment in Transferable Securities (UCITS) complying with the provisions of Part I of the Luxembourg Law 17 December 2010 (the •Law of 2010Ž). The Company offers investors, within the same investment vehicle under an umbrella structure, a choice of investments in one or more sub-funds, in respect of which a separate portfolio of investments is held, which are distinguished among others by their specific investment policy and objective and/or by the currency of denomination. The Company is responsible for the overall investment policy, objective and management of the Company and the Target Fund. The Company has appointed HSBC Investment Funds (Luxembourg) S.A. as the management company of the Target Fund to be responsible on a day to day basis under the supervision of the Company, for providing administration, marketing, investment management and advice services in respect of the Target Fund. The management company of the Target Fund has delegated the investment management services of the Target Fund to HSBC Global Asset Management (USA) Inc, the investment adviser of the Target Fund. The Management Company of the Target Fund HSBC Investment Funds (Luxembourg) S.A. was incorporated on 26 September 1988 as a société anonyme under the laws of the Grand Duchy of Luxembourg and the regulatory authority regulating the management company of the Target Fund is Commission de Surveillance du Secteur Financier (•CSSFŽ) (Luxembourg financial supervisory authority). The management company of the Target Fund is approved as a management company regulated by chapter 15 of the Law of 2010. As at 30 September 2014, it had USD365,385,000 on worth of funds under management.
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The Investment Adviser of the Target Fund HSBC Global Asset Management (USA) Inc. was incorporated under the laws of New York State, United States on 29 January 1986, and is ultimately a wholly owned subsidiary of HSBC Holdings plc. As at 30 September 2014, HSBC Global Asset Management(USA) Inc. had USD465.518 million worth of funds under management. Regulatory Authority regulating the Investment Adviser of the Target Fund U.S. Securities and Exchange Commission (SEC) Investment Objective The HGB invests for total return primarily in a diversified portfolio of Investment Grade and Non-Investment Grade rated fixed income (e.g. bonds) and other similar securities either issued by companies which have their registered office in Emerging Markets around the world, primarily denominated in USD, or which are issued or guaranteed by governments, government agencies and supranational bodies of Emerging Markets. HGB may invest more than 10% and up to 30% of its net assets in securities issued by or guaranteed by a single sovereign issuer with a Non-Investment Grade credit rating. This is due to the fact that the HGB•s reference benchmark, the JP Morgan Emerging Market Bond Index, may contain sovereign issuers that may have a Non-Investment Grade rating. The investment adviser of HGB may decide to invest in a specific non-investment grade sovereign issuer and/or to overweight (in relation to the reference benchmark) a particular Non-Investment Grade sovereign issuer. The Non-Investment Grade sovereign issuers that HGB may invest up to 30% of its net assets in include, but are not limited to, Venezuela, Turkey and the Philippines. However, this list may change at any time as a result of: changes in credit ratings, changes in the HGB•s benchmark weights, the investment adviser of HGB•s decision to allocate a higher or lower proportion of the HGB•s net assets to a particular benchmark constituent and/or market movements. The HGB may also invest in financial derivative instruments such as futures, forwards (including non-deliverable forwards), swaps, options, credit default swaps, as well as other structured products. The HGB intends to use such financial derivative instruments for, inter alia, return enhancement, hedging, tax-advantage access to instruments and whenever the investment adviser of the Target Fund believes the investment in financial derivative instruments will assist the HGB in achieving its investment objectives. Investment Strategy The Target Fund aims to provide income whilst maintaining a prudent policy of capital conservation*. The Company's view of interest rate trends will be reflected in the type and the maturity dates of securities in which the Target Fund is invested. *Note: Please note that this is not a capital guaranteed Fund. Overall returns will be achieved through both capital appreciation and income, which may result in lower income yields than might otherwise normally be obtainable from the relevant securities markets. The Target Fund aims to provide investors with an actively managed portfolio of interest bearing transferable securities. Such securities are generally denominated in the currency of the Target Fund and include those traded both domestically and internationally. The portfolio may also include ancillary liquid assets and from time to time other permitted assets with a short remaining maturity, especially in times of rising interest rates. Financial derivative instruments may be used for investment, hedging and efficient portfolio management purposes Country of Origin of the Target Fund Grand Duchy of Luxembourg Regulatory Authority regulating the Target Fund Commission de Surveillance du Secteur Financier (ŽCSSFŽ) Applicable Legislation Luxembourg law of 17 December 2010 on undertakings for collective investment, implementing UCITS IV directive2009/65/EC into the Luxembourg law
55
Distribution of Income The Fund will be investing in Class A Monthly Distribution Shares (USD) of the Target Fund. The Monthly Distribution Shares will pay a dividend normally on a monthly basis. Authorised Investments and Investment Restrictions of the Target Fund
I. (1) The Company may invest in:
(a) transferable securities and money market instruments admitted to or dealt in on a regulated market; (b) transferable securities and money market instruments dealt in on another market in a member state
of the European Union (•EUŽ) which is regulated, operates regularly and open to the public; (c) transferable securities and money market Instruments admitted to official listing on a stock exchange
in a non-member state of the EU or dealt in on another market in a non-member state of the EU which is regulated, operates regularly and is recognised and open to the public provided that the choice of the stock exchange or market has been provided for in the constitutional documents of the Company;
(d) recently issued transferable securities and money market instruments, provided that the terms of
issue include an undertaking that application will be made for admission to official listing on a stock exchange or on another regulated market which operates regularly and is recognised and open to the public, provided that the choice of the stock exchange or the markets has been provided for in the constitutional documents of the Company and such admission is secured within one year of the issue;
(e) units of UCITS and/or other UCIs, whether situated in a member state of the EU or not, provided
that:
� such other UCIs have been authorised under the laws which provide that they are subject to supervision considered by the CSSF to be equivalent to that laid down in European Community law, and that cooperation between authorities is sufficiently ensured,
� the level of protection for unit holders in such other UCIs is equivalent to that provided for unit
holders in a UCITS, and in particular that the rules on assets segregation, borrowing, lending, and uncovered sales of transferable securities and money market instruments are equivalent to the requirements of directive 2009/65/EC, as amended,
� the business of such other UCIs is reported in half-yearly and annual reports to enable an
assessment of the assets and liabilities, income and operations over the reporting period, � no more than 10% of the assets of the UCITS or of the other UCIs, whose acquisition is
contemplated, can, according to their constitutional documents, in aggregate be invested in units of other UCITS or other UCIs;
(f) deposits with credit institutions which are repayable on demand or have the right to be withdrawn,
and maturing in no more than 12 months, provided that the credit institution has its registered office in a country which is a member state of the EU or if the registered office of the credit institution is situated in a third country provided that it is subject to prudential rules considered by the CSSF as equivalent to those laid down in European Community law;
(g) financial derivative instruments, including equivalent cash-settled instruments, dealt in on a regulated
market referred to in subparagraphs I. (a), (b) and (c) above and/or financial derivative instruments dealt in over-the-counter ("OTC derivatives"), provided that:
� the underlying consists of instruments covered by this section I. (1), financial indices, interest
rates, foreign exchange rates or currencies, in which the Target Fund may invest according to its investment objective;
56
� the counterparties to OTC derivative transactions are institutions subject to prudential supervision,
and belonging to the categories approved by the CSSF; and � the OTC derivatives are subject to reliable and verifiable valuation on a daily basis and can be
sold, liquidated or closed by an offsetting transaction at any time at their fair value at the Company's initiative;
and/or
(h) money market instruments other than those dealt in on a regulated market and defined in Appendix 1
"Glossary" of the Target Fund prospectus, if the issue or the issuer of such instruments are themselves regulated for the purpose of protecting investors and savings, and provided that such instruments are:
� issued or guaranteed by a central, regional or local authority or by a central bank of a member
state of the EU, the European Central Bank, the EU or the European Investment Bank, a non-member state of the EU or, in case of a federal state, by one of the members making up the federation, or by a public international body to which one or more member states of the EU belong, or
� issued by an undertaking any securities of which are dealt in on regulated markets referred to in
subparagraphs I. (a), (b) or (c) above, or � issued or guaranteed by an establishment subject to prudential supervision, in accordance with
criteria defined by the European Community law, or by an establishment which is subject to and complies with prudential rules considered by the Luxembourg supervisory authority to be at least as stringent as those laid down by European Community law, or
� issued by other bodies belonging to the categories approved by the CSSF provided that
investments in such instruments are subject to investor protection equivalent to that laid down in the first, the second or the third indent and provided that the issuer is a company whose capital and reserves amount to at least ten million euro (Euro 10,000,000) and which presents and publishes its annual accounts in accordance with the fourth directive 78/660/EEC, is an entity which, within a group of companies which includes one or several listed companies, is dedicated to the financing of the group or is an entity which is dedicated to the financing of securitisation vehicles which benefit from a banking liquidity line.
(2) In addition, the Company may invest a maximum of 10% of the net assets of the Target Fund in
transferable securities and money market instruments other than those referred to under I. (1) above.
II. The Company may hold ancillary liquid assets. III (a) (i) The Company will invest no more than 10% of the net assets of the Target Fund in transferable
securities or money market instruments issued by the same issuing body.
(ii) The Company may not invest more than 20% of the net assets of the Target Fund in deposits made with the same body. The risk exposure of the Target Fund to a counterparty in an OTC derivative transaction may not exceed 10% of its net assets when the counterparty is a credit institution referred to in I. (1) (f) above or 5% of its net assets in other cases.
(b) Moreover, where the Company holds on behalf of the Target Fund investments in transferable securities
and money market instruments of issuing bodies which individually exceed 5% of the net assets of the Target Fund, the total of all such investments must not account for more than 40% of the total net assets of the Target Fund.
This limitation does not apply to deposits and OTC derivative transactions made with financial institutions subject to prudential supervision. Notwithstanding the individual limits laid down in paragraph III. (a), the Company shall not combine, where this would lead to investing more than 20% of its assets in a single body, any of the following for the Target Fund:
57
� investments in transferable securities or money market instruments issued by that body; � deposits made with that body; or � exposure arising from OTC derivative transactions undertaken with that body.
(c) The limit of 10% laid down in sub-paragraph III. (a) (i) above is increased to a maximum of 35% in respect
of transferable securities or money market instruments which are issued or guaranteed by a member state of the EU, its public local authorities, or by another eligible state or by public international bodies of which one or more member states of the EU are members.
(d) The limit of 10% laid down in sub-paragraph III. (a) (i) is increased to 25% for certain bonds when they are
issued by a credit institution which has its registered office in a member state of the EU and is subject by law, to special public supervision designed to protect bondholders. In particular, sums deriving from the issue of these bonds must be invested in conformity with the law in assets which, during the whole period of validity of the bonds, are capable of covering claims attaching to the bonds and which, in case of bankruptcy of the issuer, would be used on a priority basis for the repayment of principal and payment of the accrued interest.
If the Target Fund invests more than 5% of its net assets in the bonds referred to in this sub-paragraph
and issued by one issuer, the total value of such investments may not exceed 80% of the net assets of the Target Fund.
(e) The transferable securities and money market instruments referred to in paragraphs III. (c) and (d) shall
not be included in the calculation of the limit of 40% in paragraph III. (b).
The limits set out in paragraphs III. (a), (b), (c) and (d) may not be aggregated and, accordingly, investments in transferable securities or money market instruments issued by the same issuing body, in deposits or in financial derivative instruments effected with the same issuing body may not, in any event, exceed a total of 35% of the Target Fund•s net assets; Companies which are part of the same group for the purposes of the establishment of consolidated accounts, as defined in accordance with directive 83/349/EEC or in accordance with recognised international accounting rules, are regarded as a single body for the purpose of calculating the limits contained in this paragraph III. The Company may cumulatively invest up to 20% of the net assets of the Target Fund in transferable securities and money market instruments within the same group.
(f) Notwithstanding the above provisions, the Company is authorised to invest up to 100% of the net assets of
the Target Fund, in accordance with the principle of risk spreading, in transferable securities and money market instruments issued or guaranteed by any member state of the EU, by one or more of its local authorities or agencies, a non-member state of the EU or by another member state of the Organisation for Economic Co-operation and Development, Singapore or any member state of the Group of Twenty or by public international bodies of which one or more member states of the EU are members, provided that the Target Fund must hold securities from at least six different issues and securities from one issue do not account for more than 30% of the net assets of the Target Fund.
IV (a) Without prejudice to the limits laid down in paragraph V., the limits provided in paragraph III. are raised to
a maximum of 20% for investments in shares and/or bonds issued by the same issuing body if the aim of the investment policy of the Target Fund is to replicate the composition of a certain stock or bond index which is sufficiently diversified, represents an adequate benchmark for the market to which it refers, is published in an appropriate manner and disclosed in the Target Fund's investment policy.
(b) The limit laid down in paragraph IV. (a) is raised to 35% where this proves to be justified by exceptional
market conditions, in particular on regulated markets where certain transferable securities or money market instruments are highly dominant. The investment up to this limit is only permitted for a single issuer.
V. (a) The Company may not acquire shares carrying voting rights which should enable it to exercise significant
influence over the management of an issuing body.
58
(b) The Company may acquire no more than:
� 10% of the non-voting shares of the same issuer; � 10% of the debt securities of the same issuer;
� 10% of the money market instruments of the same issuer.
(c) These limits under second and third indents may be disregarded at the time of acquisition, if at that time
the gross amount of debt securities or of the money market instruments or the net amount of the instruments in issue cannot be calculated.
The provisions of paragraph V. shall not be applicable to transferable securities and money market instruments issued or guaranteed by a member state of the EU or its local authorities or by any other eligible state, or issued by public international bodies of which one or more member states of the EU are members. These provisions are also waived as regards shares held by the Company in the capital of a company incorporated in a non-member state of the EU which invests its assets mainly in the securities of issuing bodies having their registered office in that state, where under the legislation of that state, such a holding represents the only way in which the Company can invest in the securities of issuing bodies of that state provided that the investment policy of the company from the third country EU complies with the limits laid down in paragraph III., V. and VI. (a), (b) and (c). VI (a) The Company may acquire units of the UCITS and/or other UCIs referred to in paragraph I. (1) (e),
provided that no more than 10% of the Target Fund's net assets be invested in the units of UCITS or other UCIs or in one single such UCITS or other UCI.
(b) The underlying investments held by the UCITS or other UCIs in which the Company invests do not have to
be considered for the purpose of the investment restrictions set forth under paragraph III. above. (c) If the Company invests in the units of UCITS and/or other UCIs that are managed, directly or by
delegation, by the management company of the Target Fund or by any other company with which the management company of the Target Fund is linked by common management or control, or by way of a substantial direct or indirect holding stake of more than 10% of the capital of votes then there will be no duplication, subscription or repurchase fees between the Company and the UCITS and/or UCIs into which the Company invests.. In derogation of this, if the Company invests in shares of HSBC ETFs PLC, then there may be duplication of management fee of the Target Fund. The Company will indicate in its annual report the total management fee charged both to the Target Fund and to HSBC ETFs PLC. The management company of the Target Fund or other company cannot charge subscription, redemption or management fee on account of the Company•s investment in the units of such other UCITS and/or other UCIs.
If the Target Fund's investments in UCITS and other UCIs constitute a substantial proportion of the Target Fund's assets, the total management fee (excluding any performance fee, if any) charged both to the Target Fund itself and the other UCITS and/or other UCIs concerned shall not exceed 3.00% of the relevant assets. The Company will indicate in its annual report the total management fees charged both to the Target Fund and to the UCITS and other UCIs in which the Target Fund has invested during the relevant period.
(d) The Company may acquire no more than 25% of the units of the same UCITS or other UCI. This limit may be disregarded at the time of acquisition if at that time the gross amount of the units in issue cannot be calculated. In case of a UCITS or other UCI with multiple compartments, this restriction is applicable by reference to all units issued by the UCITS or other UCI concerned, all compartments combined.
(e) To the extent that, pursuant to Section 3.2. "Sub-Fund Details" of the Target Fund•s prospectus, the Target
Fund may invest more than 10% of its net assets in the units of UCITS or other UCIs or in one single such UCITS or other UCIs (including target sub-funds), the following will apply:
- The Target Fund may acquire units of the UCITS and/or other UCIs referred to in paragraph I (1) e), provided that no more than 20% of the Target Fund's net assets be invested in the units of a single UCITS or other UCI.
59
For the purpose of the application of the investment limit, each compartment of a UCITS and/or UCI with multiple compartments is to be considered as a separate issuer provided that the principle of segregation of the obligations of the various compartments vis-à-vis third parties is ensured.
- Investments made in units of other UCIs may not in aggregate exceed 30% of the net assets of the
Target Fund.
VII. The Target Fund (the "Investing Sub-Fund") may subscribe, acquire and/or hold securities to be issued or issued by one or more sub-funds of the Company (each a "Target Sub-Fund") without the Company being subject to the requirements of the 1915 Law with respect to the subscription, acquisition and/or the holding by a company of its own shares; under the condition however that:
a. The Investing Sub-Fund may not invest more than 10% of its net asset value in a single Target Sub-
Fund, this limit being increased to 20% if the Investing Sub-Fund is permitted, pursuant to Section 3.2. "Sub-Fund Details" of the Target Fund•s prospectus, to invest more than 10% of its net assets in the units of UCITS or other UCIs or in one single such UCITS or other UCIs; and
b. The Target Sub-Fund(s) do(es) not, in turn, invest in the Investing Sub-Fund invested in this (these) Target Sub-Fund(s); and
c. The investment policy(ies) of the Target Sub-Fund(s) whose acquisition is contemplated does not allow such Target Sub-Fund(s) to invest more than 10% of its(their) net asset value in UCITS and other UCIs; and
d. Voting rights, if any, attaching to the Shares of the Target Sub-Fund(s) held by the Investing Sub-Fund are suspended for as long as they are held by the Investing Sub-Fund concerned and without prejudice to the appropriate processing in the accounts and the periodic reports; and
e. In any event, for as long as these securities are held by the Investing Sub-Fund, their value will not be taken into consideration for the calculation of the net assets of the Company for the purposes of verifying the minimum threshold of the net assets imposed by the 2010 Law; and
f. There is no duplication of management/subscription or repurchase fees between those at the level of the Investing Sub-Fund(s).
VIII. The Company shall ensure for the Target Fund that the global exposure relating to derivative instruments
does not exceed the net assets of the Target Fund. The exposure is calculated taking into account the current value of the underlying assets, the counterparty
risk, foreseeable market movements and the time available to liquidate the positions. This shall also apply to the following subparagraphs.
If the Company invests in financial derivative instruments, the exposure to the underlying assets may not
exceed in aggregate the investment limits laid down in paragraph III. above. When the Company invests in index-based financial derivative instruments, these investments do not have to be combined to the limits laid down in paragraph III.
When a transferable security or money market instrument embeds a derivative, the latter must be taken
into account when complying with the requirements of this paragraph VIII. IX. (a)The Company may not borrow for the account of the Target Fund amounts in excess of 10% of the net
assets of the Target Fund, any such borrowings to be from banks and to be effected only on a temporary basis, provided that the Company may acquire foreign currencies by means of back-to-back loans;
(b) The Company may not grant loans to or act as guarantor on behalf of third parties.
This restriction shall not prevent the Company from (i) acquiring transferable securities, money market instruments or other financial instruments referred to in paragraph I. (1) (e), (g) and (h) which are not fully paid, and (ii) performing permitted securities lending activities, that shall not be deemed to constitute the making of a loan.
(c) The Company may not carry out uncovered sales of transferable securities, money market instruments or
other financial instruments. (d) The Company may not acquire movable or immovable property. (e) The Company may not acquire either precious metals or certificates representing them.
60
X. (a) The Company need not comply with the limits laid down in the above mentioned investment restrictions
when exercising subscription rights attaching to transferable securities or money market instruments which form part of its assets. While ensuring observance of the principle of risk spreading, recently created sub-funds may derogate from paragraphs III., IV. and VI. (a), (b) and (c) for a period of six months following the date of their creation.
(b) If the limits referred to in paragraph X. (a) are exceeded for reasons beyond the control of the Company or
as a result of the exercise of subscription rights, it must adopt as a priority objective for its sales transactions the remedying of that situation, taking due account of the interest of its shareholders.
Dealing Currency of the Target Fund
The base currency of the Target Fund is the USD. Any payment made in a currency different to the base currency of the HGB will be converted prior to purchasing the units. The cost of the currency conversion and other expenses will be borne by the investors of the HGB.
Risk Management The global exposure relating to the Target Fund will be calculated using a relative Value-at-Risk (VaR) approach benchmarked against the JP Morgan Emerging Market Bond index. The average leverage of the Target Fund, under normal market conditions, calculated as the sum of the notionals of the financial derivative instruments used, is expected to be 100%, although higher levels are possible, under certain circumstances, including but not limited to, during high levels of market volatility (when financial derivative instruments are generally used to manage the risk of the portfolio) or stability (when financial derivative instruments are generally used to access the relevant markets or securities in a more cost efficient way). In financial risk management, VaR is a risk assessment technique used to estimate for a fund the probability of loss over a given time horizon. The relative VaR approach is used to measure market risk as the Target Fund has a consistent benchmark called the JP Morgan EMBI Global. The relative VaR is the ratio between the VaR of the fund and the VaR of the benchmark. The VaR of the Target Fund is limited to no more than twice the VaR on the benchmark i.e. relative VaR � 200%.
Risk Management Process The management company of the Target Fund, on behalf of the Company, will employ a risk-management process which enables it with the investment adviser of the Target Fund to monitor and measure at any time the risk of the positions and their contribution to the overall risk profile of the Target Fund. The investment adviser of the Target Fund will employ, if applicable, a process for accurate and independent assessment of the value of any OTC derivative instruments. Upon request of an investor of the Target Fund, the investment adviser of the Target Fund will provide to the management company of the Target Fund supplementary information relating to the quantitative limits that apply in the risk management of the Target Fund, to the methods chosen to this end and to the recent evolution of the risks and yields of the main categories of instruments. In summary: (1) Responsibility of the risk management team of the Investment Adviser of the Target Fund The management company of the Target Fund, responsible for the risk management of the Company, has delegated the day to day implementation to the risk management team of the investment adviser of the Target Fund. They are in charge of the implementation of risk control procedures for the Target Fund. This team will collaborate with the investment team of the investment adviser of the Target Fund to determine various control limits in order to match the risk profile and strategy of the Target Fund. The management company of the Target Fund will supervise these risk management functions and will receive appropriate reports. When the investment adviser of the Target Fund invests, on behalf of the Target Fund, in different types of assets pursuant to the investment objective, it will follow the risk management and control mechanism as described in the risk management procedure of the management company of the Target Fund.
61
(2) Value-at-Risk approach The Target Fund applies a relative VaR approach to measure market risk. The relative VaR approach is used where a consistent reference portfolio or benchmark reflecting the investment strategy which the Target Fund is pursuing is defined. The relative VaR of the Target Fund is expressed as a multiple of the VaR of a benchmark or reference portfolio. The relative VaR is limited to no more than twice the VaR on the comparable benchmark. The risk management methodology for the Target Fund and the expected level of leverage, the approach used and the reference portfolio or benchmark used to express the relative VaR will be specified in Section 3.2. "Sub-Fund Details" of the Target Fund prospectus. (3) Risk monitoring systems Appropriate tools and systems are utilised to monitor different areas of risk, including but not limited to counterparty risk, market risk, liquidity risk, concentration risk and operational risks. (4) Procedure for counterparty approval Systematic procedures are in place to select and approve counterparties, and to monitor the exposure to various counterparties. (5) Investment Breach reporting In case of any investment breach, an "escalation process" up to the management company of the Target Fund will be triggered to inform relevant parties in order for necessary actions to be taken. The compliance team of the investment adviser of the Target Fund will provide investment breach report to the management company of the Target Fund for review. Fees charged by HGB Currently HGB charges a fee as management fee, which will be paid from the portion of management fee received from KAGBF respectively. There will be no double charging of management fee.
Fund Management Fee Trustee Fee Other Fees
HGB 1.25% p.a.
Not applicable 0.35% p.a. for the operating, administrative and servicing expenses
Performance of Target Fund 1 mth
(cumulative) 3 mths (cumulative)
6 mths (cumulative)
1 yr (cumulative)
3 yrs (annualised)
Since inception until 30 Nov 2014 (annualised)
GEM Bond Fund
Class A shares (in USD)
-0.30% -1.98% -1.01% 7.46% 5.64% 5.56%
Benchmark*
JP Morgan Emerging Market Bond Index (EMBI) Global Index (in USD)
-0.39% -1.19% 0.18% 9.28% 6.77% 6.90%
* Inception date for Class A Monthly Distribution Shares – USD : 1 January 2011. Past performance is not indicative of future performance. Note: Investors may be subjected to higher fees arising from layered investment structure by the Target Funds.
62
The permitted investments for KFF, KVF, KEBF, KTF, KCIF, KDA, KDL & KDAI The Funds are permitted by its Deed to invest in the following:
LOCAL FUNDS LOCAL SHARIAH-COMPLIANT FUNDS
KFF KVF KEBF KTF KCIF KDA KDL KDAI
Securities of companies listed on Bursa Malaysia;
� � � � �
Securities of Shariah-compliant companies listed on Bursa Malaysia;
� � � � � � �
Securities listed on a foreign stock exchange; � � �
Units or shares of local collective investment schemes;
� � � � �
Units or shares of foreign collective investment schemes;
� � �
Securities not traded in, or under the rules of an Eligible Market but that have been approved by the SC for listing and quotation on Bursa Malaysia, which are offered directly by the company approved for listing, by way of private placement or on a tender basis;
� � � � �
Securities not traded that have been approved by the SC for listing and quotation on Bursa Malaysia, which are offered directly by the company approved for listing by way of private placement or a tender basis and for Shariah-compliant Funds, the securities must be classified as Shariah-compliant;
� � � � � � �
Malaysia Government Securities, Treasury Bills, Bank Negara Malaysia Certificates and Government Investment Certificates;
� � � � �
Malaysian Government Investment Issues (•GIIŽ), Bank Negara Malaysia Monetary Notes-i/Certificates, Islamic Accepted Bills, Cagamas Sukuk and any other government Islamic papers;
� � � � � � � �
63
LOCAL FUNDS LOCAL SHARIAH-COMPLIANT FUNDS
KFF KVF KEBF KTF KCIF KDA KDL KDAI
Malaysian currency balances in hand, Malaysian currency deposits with commercial banks, finance companies, merchant banks and Bank Islam Malaysia Berhad including Negotiable Certificates of Deposit and placements of money at call with discount houses;
� � � � �
Negotiable Islamic Debt Certificates (•NIDCŽ), General Investment Account, Islamic money market instruments, Islamic time deposit and placements of money at call with licensed financial institution;
� � � � � � � �
Cagamas bonds and Bankers Acceptances, unlisted loan stocks and corporate bonds that are traded in the money market and either bank-guaranteed or carrying at least a BBB rating by RAM and private debt securities that have an equivalent rating by RAM;
� � � � �
Futures contracts traded in a futures market of an exchange company approved or an exempt futures market declared, by the Minister under the CMSA 2007 and securities lending subject to the provisions in the Guidelines;
� � � � �
Warrants and Options including futures option and eligible exchange traded options as permitted by the SC;
� � � � �
Fixed-income securities of foreign governments and companies that meet a minimum rating of •BBB• as ascertained by reputable international rating agencies like those by Standard & Poor•s or Moody•s;
� � �
Fixed-income securities/Sukuk and approved Stock Market and non-traded fixed-income securities/Sukuk or any other market considered as Eligible Market and non-traded fixed-income securities which are either bank-guaranteed or rated by RAM and/or other recognised rating agencies;
� � � � � �
Any other form of investments as may be permitted by the SC from time to time;
� � � � �
Any other form of investments as may be approved by the SACSC and/or the Shariah Adviser and in accordance with Shariah requirements from time to time.
� � � � � � � �
64
Permitted Investments (continues•)
KAF Jade Fund
1. Securities in Asia Pacific region which are consistent with the Fund•s objective;
2. Unlisted securities approved or an exempt stock market declared by the Minister under the Act, which are offered directly to the scheme;
3. Malaysian government securities, Malaysian treasury bills, Bank Negara Malaysia bills, Cagamas notes/bonds, government instrument issues, commercial papers, Medium-term notes;
4. Private debt securities and bonds, which include foreign debt securities traded on Eligible Markets and
approved stock exchanges, both local and foreign; 5. Bankers• acceptances, negotiable certificates of deposits and other tradable money-market instruments
in the money market, both local and foreign;
6. Ringgit-denominated deposits placed with financial institutions;
7. Foreign currency deposits placed with financial institutions; 8. Convertible loan stocks and exchangeable bonds traded on Eligible Markets, both local and foreign;
9. Units or shares in other collective investment schemes, both local and foreign;
10. Any other form of investments as may be permitted by the relevant authorities from time to time where
necessary. The investment restrictions for KFF, KVF, KEBF, KTF, KCIF, KDA, KDAI & KDL The Funds are subject to the following restrictions imposed by the Deed and/or the Guidelines:
LOCAL FUNDS LOCAL SHARIAH-COMPLIANT FUNDS
KFF KVF KEBF KTF KCIF KDA KDL KDAI
The value of a fund•s investments in ordinary shares issued by any single issuer must not exceed 10% of the Fund•s NAV;
� � � � � � �
The value of a Fund•s investments in unlisted securities must not exceed 10% of the Fund•s NAV;
� � � � � � �
The value of a Fund•s investments in transferable securities and money market instruments issued by any single issuer must not exceed 15% of the Fund•s NAV;
� � � � � �
The value of a Fund•s placement in deposits with any single institution must not exceed 20% of the Fund•s NAV;
� � � � � � � �
65
For investments in derivatives: (a) the exposure to the underlying assets
must not exceed the investment spread limits stipulated in this Guidelines;
(b) the value of a Fund•s OTC derivaties transaction with any single counter-party must not exceed 10% of the Fund•s NAV.
� � � � � � �
The value of the Fund•s investments in structured products issued by a single counter-party must not exceed 15% of the Fund•s NAV;
� � � � � � �
The aggregate value of a Fund•s investments in transferable securities, money market instruments, deposits, OTC derivatives and structured products issued by or placed with (as the case may be) any single issuer/institution must not exceed 25% of the Fund•s NAV;
� � � � � � �
The value of a Fund•s investments in units/shares of any collective investment scheme must not exceed 20% of the Fund•s NAV;
� � � � � � �
LOCAL FUNDS LOCAL SHARIAH-COMPLIANT FUNDS
KFF KVF KEBF KTF KCIF KDA KDL KDAI
The value of a Fund•s investments in transferable securities and money market instruments issued by any group of companies must not exceed 20% of the Fund•s NAV;
� � � � � �
The value of a bond/fixed-income Fund•s investments in debentures issued by any single issuer must not exceed 20% of the Fund•s NAV;
�
The single issuer limit of 20% for bond/fixed-income/sukuk Fund•s may be increased to 30% if the debentures are rated by any domestic or global rating agency to be of the best quality and offer highest safety for timely payment of interest/profit and principal;
Where the single issuer limit is increased to 30%, the aggregate value of a Fund•s investments in transferable securities, money market instruments, deposits, OTC derivatives and structured products issued
�
�
66
by or placed with (as the case maybe) any single issuer/institution must not exceed 30%.
The value of a bond/fixed-income Fund•s investments in debentures issued by any group of companies must not exceed 30% of the Fund•s NAV;
�
A Fund•s investments in transferable securities (other than debentures) must not exceed 10% of the securities issued by any single issuer;
� � � � � � �
A Fund•s investments in debentures must not exceed 20% of the debentures issued by any single issuer;
� � � � � � � �
A Fund•s investments in money market instruments must not exceed 10% of the instruments issued by any single issuer; however, this limit is not applicable to money market instruments that do not have a pre-determined issue size;
� � � � � � �
A Fund•s investment in collective investment schemes must not exceed 25% of the units/shares in any one collective investment scheme;
� � � � � � � �
The value of a Fund•s investments in permitted investments must not be less than 90% of the Fund•s NAV (applicable for money market fund only);
�
The value of Fund•s investments in permitted investments which have a remaining maturity period of not more than 365 days must not be less than 90% of the Fund•s NAV (applicable for money market fund only);
�
LOCAL FUNDS LOCAL SHARIAH-COMPLIANT FUNDS
KFF KVF KEBF KTF KCIF KDA KDL KDAI
The value of a Fund•s investments in permitted investments which have a remaining maturity period of more than 365 days but fewer than 732 days must not exceed 10% of the Fund•s NAV (applicable for money market fund only);
�
The value of Fund•s investments in Islamic debentures and Islamic money market instruments issued by any single issuer
�
67
must not exceed 20% of the Fund•s NAV. The single issuer limit may be increase to 30% if the Islamic debentures are rated by any domestic or global rating agency to be of the best quality and offer higher safety for timely payment of profit and principle (applicable for money market fund only);
The value of a Fund•s investments in Islamic debentures and Islamic money market instruments issued by any group of companies must not exceed 30% of the Fund•s NAV;
�
A Fund•s investments in Islamic money market instruments must not exceed 20% of the instruments issued by any single issuer (applicable for money market fund only).
�
Investment Restrictions and Limits for KJF
The investments of the Fund shall not contravene the following limits, unless otherwise revised by the SC from time to time:
KAF Jade Fund
(a) The value of the Fund•s investment in unlisted securities must not exceed 10% of the Fund•s NAV. This limit
however does not apply to securities that have been approved for listing and offered directly to the Fund by the issuer;
(b) The value of the Fund•s investments in ordinary shares issued by any single issuer must not exceed 10% of the Fund•s NAV;
(c) The value of the Fund•s investment in transferable securities and money market instruments issued by any
single issuer must not exceed 15% of the Fund•s NAV. The Manager has sought and received approval from the SC for this limit to be increased to 30% of the Fund•s NAV for the investment into the Amundi Funds - Greater China;
(d) The value of the Fund•s placement in deposits with any single institution must not exceed 20% of the Fund•s
NAV; (e) The Fund•s exposure from derivatives positions must not exceed the Fund•s NAV at all times; (f) The value of the Fund•s over-the-counter (OTC) derivative transaction with any single counter-party must not
exceed 10% of the Fund•s NAV; (g) The aggregate value of the Fund•s investments in transferable securities, money market instruments,
deposits and OTC derivatives issued by or placed with (as the case may be) any single issuer/institution must not exceed 25% of the Fund•s NAV (please take note of the exemption from the Guidelines as set out under item (c) above);
(h) The value of the Fund•s investments in units/shares of any collective investment scheme must not exceed
20% of the Fund•s NAV; (i) The value of the Fund•s investments in transferable securities and money market instruments issued by any
group of companies must not exceed 20% of the Fund•s NAV (please take note of the exemption from the Guidelines as set out under item (c) above);
68
(j) The Fund•s investments in transferable securities must not exceed 10% of the securities issued by any single issuer;
(k) The Fund•s investments in debentures must not exceed 20% of the debentures issued by any single issuer; (l) The Fund•s investments in money market instruments must not exceed 10% of the instruments issued by
any single issuer (This limit does not apply to money market instruments that do not have a pre-determined issue size);
(m) The Fund•s investment in collective investment schemes must not exceed 25% of the unit/shares in any one
collective investment scheme; and (n) There will be no restriction or limit for securities issued or guaranteed by the Malaysian Government or Bank
Negara Malaysia.
The above limits and restrictions must be complied with at all times based on the most up-to-date value of the Funds and value of the investments. However, under the Guidelines, a 5% allowance in excess of any limit or restriction may be permitted where the limit or restriction is breached through the appreciation or depreciation of the NAV of the respective Fund (whether as a result of an appreciation or depreciation in the value of the investments, or as a result of repurchase of Units or payment made from the respective Fund). The Manager will not make any further acquisitions to which the relevant limit is breached and the Manager should within reasonable period of not more than 3 months from the date of the breach take all necessary steps and actions to rectify the breach. Investment restrictions for KAGBF
The Fund may not invest in: (a) a fund-of-funds; (b) a feeder fund; and (c) any sub-fund of an umbrella scheme which is a fund-of funds or a feeder fund.
The Target Fund has to be regulated and registered or authorised or approved by the relevant regulatory authority in its home jurisdiction;
The Target Fund has to be managed by another management company or a foreign operator;
The Fund•s net market exposure of the futures contracts position must not exceed the Fund•s NAV. The participation of the Fund in future contacts must be for hedging purposes only. In addition, the future contracts must be traded in or under the rules of Eligible Market;
The value of a Fund•s placement in deposits with any single institution must not exceed 20% of the fund•s NAV.
The investment restrictions and limits must be complied with at all times based on the most up-to-date value of the Funds• investments. However, a 5% allowance in excess of the restrictions is permitted where the restrictions is breached because of increase or decrease in value of investments. Once the relevant limit is breached, no further acquisitions of the particular security involved shall be made and the Manager should, within a reasonable period of not more than three (3) months from the date of the breach, take all necessary steps and actions to rectify the breach.
69
Bases of valuation of investments The Funds shall adopt the bases of valuation of investments prescribed in the Guidelines.
Securities listed on any exchange
Market price. However, if : a) a valuation based on the market price does not represent the fair value of the
securities, for example during abnormal market conditions; or b) no market price is available, including in the event of a suspension in the quotation
of the securities for a period exceeding fourteen (14) days, or such shorter period as agreed by the trustee;
then the securities should be valued at fair value, as determined in good faith by the Manager, based on the methods or bases approved by the Trustee after appropriate technical consultation.
Unlisted bonds/Sukuk denominated in Malaysian Ringgit
Price quoted by a bond pricing agency (•BPAŽ) registered with the SC. Where the Manager is of the view that the price quoted by a BPA for a specific bond/Sukuk differs from the •market priceŽ by more than twenty (20) basis points, the Manager may use the •market priceŽ, provided that the Manager: (a) records its basis for using a non-BPA price; (b) obtains necessary internal approvals to use the non-BPA price; and (c) keeps an audit trail of all decisions and basis for adopting the •market yieldŽ.
Other unlisted bonds/Sukuk
Fair value by reference to the average indicative yield quoted by three (3) independent and reputable institutions.
Unlisted collective investment schemes
Last published repurchase price.
Foreign Exchange Rate Conversion
Where the value of an asset of the Fund is denominated in a foreign currency (if any), the assets are translated on a daily basis to Ringgit Malaysia using the bid foreign exchange rate quoted by either Reuters or Bloomberg, at United Kingdom time 4.00 p.m. the same day.
Any other investment (including suspended counter)
Fair value as determined in good faith by the Manager on methods or bases, which have been verified by the auditor of the Fund and approved by the Trustee.
Gearing and other policies There shall be at all times a level of liquid assets in the Funds to pay for the repurchase of Units. Except for securities lending as provided under the Guidelines or CMSA, none of the cash or investments of the Funds may be lent. Furthermore, the Funds may not assume, guarantee, endorse or otherwise become directly or contingently liable for or in connection with any obligation or indebtedness to any person. However, the Funds are allowed to borrow cash for the purpose of meeting redemption/repurchase requests of Units. The Manager should ensure that the Fund•s cash borrowing is only on a temporary basis and the borrowings are not persistent. The borrowing period should not exceed one (1) month and the aggregate borrowings of the Funds should not exceed 10% of the respective Funds• NAV at the time it is incurred. As for Shariah-compliant Funds, such Funds shall seek an Islamic financing facility to meet the above conditions.
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THE FUNDS• PERFORMANCE LOCAL FUNDS KFF Average total return of KFF for the financial years ended 31 December 2013
Details 1-Year 3-Years 5-Years 10-Years Since Inception
KFF (%) 11.82 6.94 14.62 75.38 175.30
Benchmark (%) 7.62 5.93 14.22 96.75 103.60
Annual total return for the financial years ended 31 December
Details 2013 2012 2011 2010 2009 2008 2007 2006 2005 2004
KFF (%) 11.82 8.51 -0.44 15.36 24.19 -25.85 19.58 17.88 -7.55 5.02
Benchmark (%) 7.62 7.50 1.89 12.80 28.97 -24.34 21.98 15.49 0.75 10.59
Benchmark 60% FBM KLCI and 40% of the current Malayan Banking Berhad (Maybank) 12 month fixed-deposit rate. 1 year fund performance review For the financial year ended 31 December 2013, based on its NAV, the Fund recorded a return of 11.82% against its benchmark performance of 7.62%. The out-performance was largely due to equity selections were focused on mainly in large-caps and high dividend yielding stocks, while fixed-income exposure was raised to 43.10% after the yields rise. During the period, our investments were focused on a combination of sectors such as banks, oil and gas, real estate investment trust (REITS) and telecommunication sectors; and high dividend yielding stocks to enhance Fund income. For bond holdings, we maintained low exposure given the low yields and expensive valuations. Distribution
Details 2013 2012 2011
Distribution record (sen) (gross) 4.50 4.50 4.50
Distribution record (sen) (net) 4.48 4.45 4.43
Distribution is by cash and reinvestment into additional Units. Please refer to page 101 for further details. Portfolio Turnover Ratio (PTR)
Details 2013 2012 2011
PTR 0.46 times 0.31 times 0.38 times
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The portfolio turnover ratio was consistent with those of previous year. Asset allocation as at 31 December
Asset class (% of NAV) 2013 2012 2011
Equity & derivative securities 48.90 62.90 58.74
Unquoted fixed-income securities/Sukuk 43.10 36.60 12.02
Liquid assets 8.00 0.50 29.24
We maintained our equity exposure at close to the maximum allowed level for most periods of the year. Equity selections were focused mainly in large caps and high dividend yielding stocks, while fixed-income exposure was raised to 43.10%. For bond holdings, we held on to bonds that yielded good returns and had low credit risk. The cash portion was invested in the money market (repurchase agreement/Short-term deposits) with financial institutions at prevailing interest rates. KVF Average total return of KVF for the financial years ended 31 March 2014
Details 1-Year 3-Years 5-Years 10-Years Since Inception
KVF (%) 42.11 17.80 36.00 157.95 260.6
Benchmark (%) 12.06 6.86 24.90 106.26 79.10
Annual total return for the financial years ended 31 March
Details 2014 2013 2012 2011 2010 2009 2008 2007 2006 2005
KVF (%) 42.11 9.01 -0.97 21.00 50.85 -30.27 9.36 41.40 -3.62 -11.38
Benchmark (%) 12.06 4.40 3.08 18.48 57.11 -32.32 1.09 38.88 4.09 -6.73
Benchmark FTSE Emas. 1 year fund performance review For the financial year ended 31 March 2014, the Fund outperformed its benchmark by 30.05 percentage points. The Fund recorded a return of 42.11% compared with the FTSE EMAS, which rose by 12.06% during the period. The out performance was attributable to our defensive asset allocation and good stock selection during the period. Strong performance of selected stocks in Constructions, Oil & Gas and Trading sectors contributed to the Fund outperforming its benchmark during the financial year. Distribution No distribution has been declared for KVF for the past three financial years.
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Portfolio Turnover Ratio (PTR)
Details 2014 2013 2012
PTR 0.89 times 0.39 times 0.39 times
The PTR for the year 2014 was higher by 0.50 times due to portfolio re-balancing activities. Asset allocation as at 31 March 2014
Asset class (% of NAV) 2014 2013 2012
Equity & derivative securities 73.76 78.05 75.92
Unquoted fixed-income securities/Sukuk - - -
Liquid assets 26.24 21.95 24.08
For the financial year ended 31 March 2014, the Fund continued to invest in undervalued mid and small capitalised companies with good fundamentals. During the period under review, the market traded higher in the second half of the financial year, thus offering good opportunities to dispose certain stocks in the portfolio. A trading strategy was also employed to enhance fund performance. Equity exposure was trimmed to 73.8%. KEBF Average total return of KEBF for the financial years ended 30 June 2014
Details 1-Year 3-Years 5-Years 10-Years Since Inception
KEBF (%) -2.86 0.11 1.34 30.60 44.50
Benchmark (%) 2.17 1.34 4.19 54.54 62.00
Annual total return for the financial years ended 30 June
Details 2014 2013 2012 2011 2010 2009 2008 2007 2006 2005
KEBF (%) -2.86 1.43 1.84 2.60 3.65 1.67 4.37 10.62 -1.66 6.05
Benchmark (%) 2.17 2.93 5.20 4.16 4.94 7.82 -1.40 10.23 0.22 8.80
Benchmark RAM Quant Shop MGS All Bond Index. 1 year fund performance review For the financial year ended 30 June 2014, we maintained liquidity due to the low yields and high valuations of bond. The Fund had also invested in high dividend yielding REITs to enhance the rate of return. Based on its Net Asset Value, the Fund recorded a negative return of -2.90%. It underperformed the benchmark Quant Shop MGS All Bond Index which fell 2.20%.
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Distribution
Details 2014 2013 2012
Distribution record (sen) (gross) Nil 1.00 1.00
Distribution record (sen) (net) Nil 0.95 0.97
Distribution is by cash and reinvestment into additional Units. Please refer to page 141 for further details. Portfolio Turnover Ratio (PTR)
Details 2014 2013 2012
PTR 0.10 times 0.01 times 0.23 times
The PTR for the year 2014 was slightly higher at 0.10 times due to overall increase in equities turnover. Asset allocation as at 30 June
Asset class (% of NAV) 2014 2013 2012
Equity & derivative securities 8.37 18.96 9.02
Unquoted fixed-income securities/Sukuk 45.90 46.77 25.53
Liquid assets 45.73 34.27 65.45
As at 30 June 2014, KEBF•s exposure to fixed-income securities was 45.90% compared with 46.77% as at the end of last financial year. This is due to the effect of fund redemptions. The strategy adopted was to maintain moderate exposure. The Fund•s equity exposure was at 8.37% from 18.96% as at the end of the last financial year due to redemptions. Currently, the portfolio is holding REITs, which are high yielding and low volatility property trusts. KTF Average total return of KTF for the financial years ended 31 August 2014
Details 1-Year 3-Years 5-Years Since Inception
KTF 6.15 10.22 10.91 119.00
Benchmark (%) 8.58 10.38 12.80 130.20
Annual total return for the financial years ended 31 August
Details 2014 2013 2012 2011 2010 2009 2008 2007 2006
KTF (%) 6.15 13.91 8.07 0.69 17.48 1.19 -14.23 49.07 6.14
Benchmark (%) 8.58 6.58 13.33 4.49 19.67 7.89 -14.86 38.78 5.30
74
Benchmark FTSE Bursa Malaysia EMAS Index (FTSE EMAS) 1 year fund performance review For the financial year ended 31 August 2014, KTF has achieved positive return of 119.0% since inception. The Fund marginally underperformed to the FTSE Emas Index which grew to 130.2% during the same period. Distribution No distribution has been declared for the past three (3) financial years for the Fund. Please refer to page 141 for further details. Portfolio Turnover Ratio (PTR)
Details 2014 2013 2012
PTR 1.10 times 1.21 times 1.59 times
The PTR for the year 2014 was lower than the previous period due to decrease in portfolio rebalancing activities undertaken by the Fund. Asset allocation as at 31 August
Asset class (% of NAV) 2014 2013 2012
Equity & derivative securities 94.10 92.65 94.56
Liquid assets 5.90 7.35 5.44
As at 31 August 2014, KTF•s investment focus was mainly in large capitalized stocks. As at 28 August 2014, the Fund•s equity exposure stood at 94.10% with 70.60% of its NAV being invested in the current preferred stocks. These are the banking & finance, construction, property and oil& gas sectors. The Fund adopted an aggressive asset allocation model through out the period due to an expectation of an economic recovery. KCIF Average total return of KCIF for the financial years ended 31 August 2014
Details 1-Year 3-Years 5-Years Since Inception
KCIF 11.22 16.39 17.09 153.00
Benchmark (%) 8.02 9.65 11.78 117.90
Annual total return for the financial years ended 31 August
Details 2014 2013 2012 2011 2010 2009 2008 2007
KCIF (%) 11.22 13.21 18.48 11.86 11.13 10.82 -18.03 31.25
Benchmark (%) 8.02 4.95 13.74 1.74 21.14 6.70 -13.61 32.96
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Benchmark FBM KLCI 1 year fund performance review For the financial year ended 31 August 2014, the Fund outperformed its benchmark as the designated Fund Manager restructured the portfolio. Funds were reallocated into carefully selected stocks which we deemed undervalued and offered potential gains on investment. Distribution
Details 2014 2013 2012
Distribution record (sen) (gross) Interim: 1.50 Final: 2.50 Total: 4.00
Interim: 1.50 Final: 2.50 Total: 4.00
Interim: 1.50 Final: 2.50 Total: 4.00
Distribution record (sen) (net) Interim: 1.50 Final: 2.50 Total: 4.00
Interim: 1.50 Final: 2.49 Total: 3.99
Interim: 1.50 Final: 2.35 Total: 3.85
Distribution is by cash and reinvestment into additional Units. Please refer to page 101 for further details. Portfolio Turnover Ratio (PTR)
Details 2014 2013 2012
PTR 1.46 times 1.96 times 1.13 times
The PTR for the year 2014, which shows lower turnover at 1.46 times mainly due to decrease in portfolio rebalancing activities undertaken by the Fund. Asset allocation as at 31 August
Asset class (% of NAV) 2014 2013 2012
Equity & derivative securities 80.00 87.80 74.59
Unquoted fixed-income securities/Sukuk 9.70 7.91 10.05
Liquid assets 10.30 4.30 15.36
As at 31 August 2014, KCIF continued to invest in companies that pay high dividends to its shareholders. The search for these companies is a continuous effort aimed at replacing stocks that have been disposed for profits or change in the company•s fundamental outlook. The Fund currently holds a relatively low cash position as we took positions in stocks we assessed to be undervalued.
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KJF Average total return of KJF for the financial years ended 31 August 2014
Details 1-Year 3-Years 5-Years Since Inception
KJF (%) 11.29 6.52 -0.91 1.4
Benchmark (%) 8.95 7.73 -1.54 8.3
Annual total return for the financial years ended 31 August
Details 2014 2013 2012 2011 2010 2009 2008
KJF (%) 11.29 9.37 -1.77 -10.18 -10.01 8.33 -17.25
Benchmark (%)
8.95 13.09 22.91 -19.94 5.27 24.59 -23.35
Benchmark The benchmark of the Fund is the MSCI AC Asia Pacific. Note: The benchmark of the Fund was changed from the Hang Seng Index to the MSCI AC Asia Pacific effective 30 April 2013 pursuant to a change to the investment objective of the Fund. 1 year fund performance review For the 12 months to August, the KJF returned 11.29% on a month to month TWRR basis against the stipulated benchmark which returned 8.95%. The slightly higher performance of the fund relative to the benchmark was due to the improved performance of stock element of the portfolio. There were no distributions, bonuses or splits for the KJF. Portfolio Turnover Ratio (PTR)
Details 2014 2013 2012
PTR 0.14 times 14.11 times 0.05 times
The PTR was lower than the previous year due to decrease in portfolio rebalancing activities undertaken by the Fund. Asset allocation as at 31 August
Asset class (% of NAV) 2014 2013 2012
Equity & derivative securities 87.70 88.22 74.47
Unquoted fixed-income securities/Sukuk 9.90 10.72 15.97
Liquid assets 2.40 1.06 9.56
The performance of the Asia Pacific markets kicked off the year strongly due to the QE programme introduced by the US Federal Reserve. However, the performance faced significant headwinds, in particular within the Emerging Market due to the tapering fears, as well as foreign funds beginning to pull out from Asia Pacific in search of higher yields at the domestic market. Regional markets continue to be volatile, including the benchmark MSCI AC Asia Pacific.
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LOCAL SHARIAH-COMPLIANT FUNDS KDA Average total return of KDA for the financial years ended 30 April 2014
Details 1-Year 3-Years 5-Years Since Inception
KDA (%) 15.16 7.44 14.88 128.60
Benchmark (%) 13.30 9.55 18.38 107.90
Annual total return for the financial years ended 30 April
Details 2014 2013 2012 2011 2010 2009 2008 2007 2006
KDA (%) 15.16 5.94 0.28 13.35 25.76 -19.90 3.62 49.85 3.37
Benchmark (%) 13.30 8.78 4.38 13.42 31.50 -24.21 -0.18 42.18 6.78
Benchmark FTSE Bursa Malaysia Emas Shariah Index (FBMS). FBMS took over as benchmark from the Kuala Lumpur Syariah Index (KLSI) effective November 2007. 1 year fund performance review
For the financial year ended 30 April 2014, Fund•s benchmark gained 4.52%. The Fund, based on its Net Asset Value per Unit, recorded a return of 15.16%. The Fund increased its Shariah-compliant equity to take advantage of the improving global economy market. In view of the positive market trend, the fund manager also implemented Short-term trades, when opportunities arose.
Distribution No distribution has been declared for the past three (3) financial years for the Fund. Portfolio Turnover Ratio (PTR)
Details 2014 2013 2012
PTR 0.64 times 0.63 times 0.55 times
The PTR for the year 2014 was consistent with those of the previous year. Asset allocation as at 30 April
Asset class (% of NAV) 2014 2013 2012
Shariah-compliant equity & Shariah-compliant derivative securities
90.20 90.99 82.31
Islamic liquid assets 9.80 9.01 17.69
78
For the financial year ended 30 April 2014, with Shariah-compliant equity exposure was kept higher towards the end of the period to take advantage of the improving global economic market. In view of the positive market trend, the Fund Manager also implemented Short-term trades when opportunities arose. Shariah-compliant equity weighting was kept high towards the end of the period under review. KDAI Average total return of KDAI for the financial years ended 30 September 2014
Details 1-Year 3-Years 5-Years Since Inception
KDAI 3.04 2.97 2.92 28.60
Benchmark (%) 2.80 2.90 2.89 27.40
Annual total return for the financial years ended 30 September
Details 2014 2013 2012 2011 2010 2009 2008 2007
KDAI (%) 3.04 2.75 2.86 2.79 2.36 2.59 3.12 3.16
Benchmark (%) 2.80 2.75 2.94 2.91 2.38 2.38 2.31 2.64
Benchmark Malayan Banking Berhad (Maybank) 1-month General Investment Account (GIA) rate. 1 year fund performance review For the financial year ended 30 September 2014, KDAI based on its NAV gave a return of 3.04%. The Fund performed in line with its benchmark, which recorded a return of 2.80%. The Fund managed to achieve its overall investment objective, which is to provide a regular stream of income by investing in Islamic money market instruments and other Sukuk. Distribution
Details 2014 2013 2012
Distribution record (sen) (gross)
Interim: 1.37 Final: 0.14 Total: 1.51
Interim: 1.24 Final: 0.11 Total: 1.35
Interim: 1.30 Final: 0.11 Total: 1.41
Distribution is reinvested in the form of additional Units. Portfolio Turnover Ratio (PTR)
Details 2014 2013 2012
PTR 28.39 times 29.67 times 19.84 times
The PTR for the year 2014 was lower mainly due to lesser in portfolio rebalancing activities undertaken by the Fund.
79
Asset allocation as at 30 September
Asset class (% of NAV) 2014 2013 2012
Unquoted Sukuk 31.80 1.91 12.58
Islamic liquid assets 68.20 98.09 87.42
For the year ended 30 September 2013, KDAI•s asset allocation was in Short-term Islamic CPs and Islamic deposits. We maintained exposure to Islamic CPs to achieve steady income. This was in line with our strategy, which is to achieve a stable rate of return. As at 30 September 2014, the Fund exposure to Islamic CPs stood at 2.5%. KDL Average total return of KDL for the financial years ended 30 September 2014
Details 1-Year 3-Year 5-Year 10-Year Since Inception
KDL 4.50 10.19 8.58 7.15 41.00
Benchmark (%) 5.14 9.76 8.06 8.38 32.90
Annual total return for the financial years ended 30 September
Details 2014 2013 2012 2011 2010 2009 2008 2007 2006 2005
KDL (%) 4.50 10.25 13.34 -3.50 13.42 15.72 -14.72 24.93 -2.31 -1.66
Benchmark (%) 5.14 6.59 15.40 -0.90 9.60 13.19 -26.96 48.38 5.79 0.80
Benchmark 60% FTSE Bursa Malaysia Emas Shariah Index and 40% Malayan Banking Berhad (Maybank) 1-month General Investment Account (GIA) rate. 1 year fund performance review For the financial year ended 30 September 2014, KDL based on its NAV gave a return of 41.00% compared to its benchmark of 32.90%. We increased Shariah-compliant equity exposure as the European Central Bank took steps to resolve the EU debt crisis. Market sentiment further improved as the recovery of the US economy strengthened, assisted by gains in consumer spending and business investment.
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Distribution
Details 2014 2013 2012
Distribution record (sen) (gross) 3.50 3.50 3.50
Distribution record (sen) (net) 3.50 3.50 3.50
Distribution is by cash and reinvestment into additional Units. Please refer to page 101 for further details. Portfolio Turnover Ratio (PTR)
Details 2014 2013 2012
PTR 1.08 times 0.77 times 0.50 times
The PTR for the year 2014 was higher as compared to last year due to increase in the average Net Asset Value. Asset allocation as at 30 September
Asset class (% of NAV) 2014 2013 2012
Shariah-compliant equity & Shariah-compliant derivative securities
56.40 55.98 55.82
Unquoted sukuk 23.50 8.84 13.52
Islamic liquid assets 20.10 35.18 30.66
The Fund Manager increased Shariah-compliant equity holdings progressively on expectation of progress in the management of the debt crisis in the euro region and improvement in the US economy. Shariah-compliant equity exposure was raised to benefit from a rising market. KAGBF Average total return of KAGBF for the financial years ended 30 September 2014
Details 1-Year Since Inception
KAGBF (%) 2.52 1.64
Benchmark (%) 6.03 4.80
Annual total return for the financial years ended 30 September
Details 2014 2013 2012
KAGBF (%) 7.89 -3.60 3.42
Benchmark (%) 9.04 1.95 6.69
81
Benchmark JP Morgan Emerging Market Bond Index (EMBI) Global Index (RM). 1 year fund performance review For the financial year ended 30 September 2014, the Fund recorded a return of 7.89% and underperformed its benchmark which recorded a return of 9.04%. The Fund did not achieve its objective of providing capital growth and income. Distribution
Details 2014 2013
Distribution record (sen) (gross) Interim: 1.45 Final: 1.25 Total: 2.70
Interim: 1.20 Final: 0.50 Total: 1.70
Portfolio Turnover Ratio (PTR)
Details 2014 2013 2012
PTR 0.14 0.17 1.04
The PTR for the financial year 2014 was showed a lower turnover at 0.14 times compared to the turnover in 2013 mainly due to decrease in portfolio rebalancing activities undertaken by the Fund during the year. Asset allocation as at 30 September
Asset class (% of NAV) 2014 2013 2012
Foreign collective investment scheme
101.29 95.79 97.31
Liquid assets -1.29 4.21 -0.94
The Fund maintained its exposure in the collective investment scheme above 95%, with little variation in line with the strategy as stated in the Master Prospectus. Basis of calculation Average total return of all the Funds above are based on the following calculation: Annualised return (%) = Total returns Number of years Annual Total return of all the Funds above are based on the following calculation: Annual Total return (%) = [(Rate of Price Return x Rate of Income Return) … 1] x 100 Past performance of the Fund is not an indication of its future performance.
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HISTORICAL FINANCIAL HIGHLIGHTS OF THE FUNDS LOCAL FUND Extracts of financial statements of the Funds KFF Extract of statement of income and expenditure for the financial years ended 31 December.
Details 2013 (RM•000) 2012 (RM•000) 2011 (RM•000)
Total investment income 5,076 4,267 579
Total expenses (753) (740) (810)
Net income/(loss) before tax 4,323 3,527 (231)
Net income/(loss) after tax 4,309 3,495 (284)
Extract of statement of assets and liabilities as at 31 December.
Details 2013 (RM•000) 2011 (RM•000) 2011 (RM•000)
Total investment 44,312 43,992 48,651
Total other assets 70 3,246 2,565
Total assets 44,382 47,238 51,216
Total liabilities (9,315) (9,594) (8,954)
NAV 35,067 37,644 42,262
Unit holders• capital 24,910 28,890 33,800
KVF Extract of statement of income and expenditure for the financial years ended 31 March.
Details 2014 (RM•000) 2013 (RM•000) 2012 (RM•000)
Total investment income 14,151 2,744 524
Total expenses (952) (442) (385)
Net income/(loss) before tax 13,199 2,302 139
83
Net income/(loss) after tax 13,181 2,272 97
Extract of statement of assets and liabilities as at 31 March.
Details 2014 (RM•000) 2013 (RM•000) 2012 (RM•000)
Total investment 44,091 23,462 18,674
Total other assets 438 7,156 6,310
Total assets 44,529 30,618 24,984
Total liabilities (999) (559) (385)
NAV 43,530 30,059 24,599
Unit holders• capital 18,794 18,503 15,316
KEBF Extract of statement of income and expenditure for the financial years ended 30 June.
Details 2014 (RM•000) 2013 (RM•000) 2012 (RM•000)
Total investment income 15 116 73
Total expenses (41) (63) (46)
Net income/(loss) before tax (26) 53 27
Net income/(loss) after tax (26) 52 26
Extract of statement of assets and liabilities as at 30 June.
Details 2014 (RM•000) 2013 (RM•000) 2012 (RM•000)
Total investment 1,106 592 577
Total other assets 83 617 1,408
Total assets 1,189 1,209 1,985
Total liabilities (281) (308) (316)
NAV 908 901 1,669
Unit holders• capital 999 965 1,768
84
KTF Extract of statement of income and expenditure for the financial years ended 31 August.
Details 2014 (RM•000) 2013 (RM•000) 2012 (RM•000)
Total investment income 2,495 4,510 3,519
Total expenses (757) (580) (664)
Net income/(loss) before tax 1,738 3,930 2,855
Net income/(loss) after tax 1,730 3,903 2,795
Extract of statement of assets and liabilities as at 31 August.
Details 2014 (RM•000) 2013 (RM•000) 2012 (RM•000)
Total investment 25,908 26,217 29,971
Total other assets 2,423 2,205 1,820
Total assets 28,331 28,422 31,791
Total liabilities (812) (131) (101)
NAV 27,519 28,291 31,690
Unit holders• capital 13,997 16,500 23,800
KCIF Extract of statement of income and expenditure for the financial years ended 31 August.
Details 2014 (RM•000) 2013 (RM•000) 2012 (RM•000)
Total investment income 2,339 2,419 2,655
Total expenses (480) (277) (243)
Net income/(loss) before tax 1,858 2,142 2,412
Net income/(loss) after tax 1,845 2,131 2,371
85
Extract of statement of assets and liabilities as at 31 August.
Details 2014 (RM•000) 2013 (RM•000) 2012 (RM•000)
Total investment 14,666 16,900 11,814
Total other assets 950 2,206 2,824
Total assets 15,616 19,106 14,638
Total liabilities (1,089) (1,450) (681)
NAV 14,527 17,656 13,957
Unit holders• capital 10,215 14,057 11,245
KJF Extract of statement of income and expenditure for the financial years ended 31 August.
Details 2014 (RM•000) 2013 (RM•000) 2012 (RM•000)
Total investment income 171 130 (12,691)
Total expenses (32) (28) (32)
Net income/(loss) before tax 139 101 (44,734)
Net income/(loss) after tax 139 101 (44,753)
Extract of statement of assets and liabilities as at 31 August.
Details 2014 (RM•000) 2013 (RM•000) 2012 (RM•000)
Total investment 1,333 1,230 769
Total other assets 46 15 79
Total assets 1,379 1,245 848
Total liabilities (13) (16) (20)
NAV 1,366 1,229 828
Unit holders• capital 1,334 1,336 1,036
86
LOCAL SHARIAH-COMPLIANT FUNDS KDA Extract of statement of income and expenditure for the financial years ended 30 April.
Details 2014 (RM•000) 2013 (RM•000) 2012 (RM•000)
Total Shariah-compliant investment income
8,037 4,917 1,803
Total expenses (968) (1,075) (1,059)
Net income/(loss) before tax 7,069 3,842 744
Net income/(loss) after tax 7,056 3,811 703
Extract of statement of assets and liabilities as at 30 April.
Details 2014 (RM•000) 2013 (RM•000) 2012 (RM•000)
Total Shariah-compliant investment
42,136 44,644 57,221
Total other assets 177 5,022 12,411
Total assets 42,313 49,666 69,632
Total liabilities (132) (596) (117)
NAV 42,181 49,070 69,515
Unit holders• capital 7,560 21,504 45,761
The Shariah Adviser confirms that the investment portfolio of the KDA comprises securities which have been classified as Shariah-compliant by the SACSC. As for the securities which are not certified by the SACSC, the Shariah Adviser has reviewed the said securities and opine that these securities are designated as Shariah-compliant.
KDAI Extract of statement of income and expenditure for the financial years ended 30 September.
Details 2014 (RM•000) 2013 (RM•000) 2012 (RM•000)
Total Shariah-compliant investment income
5,530 6,328 6,432
Total expenses (729) (903) (900)
Net income/(loss) before tax 4,801 5,425 5,532
Net income/(loss) after tax 4,801 5,425 5,532
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Extract of statement of assets and liabilities as at 30 September.
Details 2014 (RM•000) 2013 (RM•000) 2012 (RM•000)
Total Shariah-compliant investment 244,348 260,323 197,238
Total other assets 698 8,126 21,292
Total assets 245,046 268,449 218,530
Total liabilities (1,803) (8,384) (21,471)
NAV 243,243 260,065 197,059
Unit holders• capital 253,329 270,056 207,025
The Shariah Adviser confirms that the investment portfolio of the KDAI comprises securities which have been classified as Shariah-compliant by the SACSC. As for the securities which are not certified by the SACSC, the Shariah Adviser has reviewed the said securities and opine that these securities are designated as Shariah-compliant. KDL Extract of statement of income and expenditure for the financial years ended 30 September.
Details 2014 (RM•000) 2013 (RM•000) 2012 (RM•000)
Total Shariah-compliant investment income
1,540 1,564 1,982
Total expenses (555) (343) (254)
Net income/(loss) before tax 985 1,221 1,728
Net income/(loss) after tax 1,033 1,221 1,721
Extract of statement of assets and liabilities as at 30 September.
Details 2014 (RM•000) 2013 (RM•000) 2012 (RM•000)
Total Shariah-compliant investment
18,450 13,567 9,108
Total other assets 5,971 9,015 4,979
Total assets 24,421 22,582 14,087
Total liabilities (1,335) (1,662) (949)
NAV 23,086 20,920 13,138
Unit holders• capital 21,076 18,669 10,963
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The Shariah Adviser confirms that the investment portfolio of the KDL comprises securities which have been classified as Shariah-compliant by the SACSC. As for the securities which are not certified by the SACSC, the Shariah Adviser has reviewed the said securities and opine that these securities are designated as Shariah-compliant. GLOBAL FUND KAGBF Extract of statement of income and expenditure for the financial year ended 30 September.
Details 2014 (RM•000) 2013 (RM•000) 2012 (RM•000)
Total investment income 1,411 (239) 2,200
Total expenses (251) (336) (609)
Net income/(Loss) before tax 1,160 (575) 1,591
Net income/(Loss) after tax 1,160 (575) 1,591
Extract of statement of assets and liabilities as at 30 September.
The audited financial statements of the Funds are disclosed in the Funds• annual report and the annual report is available upon request. Past performance of the Funds is not an indication of its future performance. The Funds• annual report is available upon request.
Details 2014 (RM•000) 2013 (RM•000) 2012 (RM•000)
Total investment 12,760 15,700 23,159
Total other assets 671 729 710
Total assets 13,431 16,429 23,869
Total liabilities (833) (39) (70)
NAV 12,598 16,390 23,799
Unit holders• capital 27,752 31,442 37,461
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Total annual expenses incurred by the Funds The following are the total annual expenses incurred by the Funds in the preceding financial year ended:
Fund Name
Management Fee Trustee Fee Other Expenses Total Annual Expenses
RM % RM % RM % RM %
LOCAL FUNDS
KFF 580,484 1.65 21,348 0.06 151,256 0.44 753,088 2.15
KVF 606,687 1.39 40,446 0.09 305,128 0.70 952,261 2.18
KEBF 8,874 0.98 18,000 1.98 14,319 1.57 41,193 4.53
KTF 429,270 1.56 20,032 0.07 308,090 1.12 757,392 2.75
KCIF 259,511 1.79 12,110 0.08 208,851 1.44 480,472 3.31
KJF 12,180 0.89 959 0.07 19,040 1.39 32,179 2.35
LOCAL SHARIAH-COMPLIANT FUNDS
KDA 701,567 1.66 32,740 0.08 233,934 0.55 968,241 2.29
KDAI 602,332 0.25 104,197 0.04 22,583 0.01 729,112 0.30
KDL 365,615 1.58 19,499 0.08 169,457 0.74 554,571 2.40
GLOBAL FUND
KAGBF 221,026 1.75 18,000 0.14 12,116 0.10 251,142 1.99
The percentage is reflected as a percentage of average NAV. The audited financial statements of the Funds are disclosed in the respective Fund•s annual report. The annual report is available upon request.
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The MER of the Funds for the past 3 financial years:
Fund Name MER
2014 2013 2012
LOCAL FUNDS
KFF 1.73 1.72 1.70
KVF 1.69 1.77 1.79
KEBF 4.57 2.09 2.86
KTF 1.94 1.94 1.90
KCIF 1.72 1.73 1.75
KJF 2.16 2.63 3.80
LOCAL SHARIAH-COMPLIANT FUNDS
KDA 1.66 1.64 1.64
KDAI 0.45 0.45 0.46
KDL 1.71 1.66 1.81
GLOBAL FUNDS
KAGBF 1.71 1.66 1.81
Past performance of the Funds is not an indication of its future performance. The respective Funds• annual report is available upon request.
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FEES, CHARGES AND EXPENSES CHARGES DIRECTLY INCURRED Sales Charge The Manager will impose a Sales Charge to pay for advertising and promotion as well as commission to authorised agents/distributors, which are as follows:
FUND NAME SALES CHARGE*
KFF, KVF, KTF, KCIF, KDA & KDL Up to 6.50% of the NAV per Unit.
KAGBF Up to 2.00% of the NAV per Unit.
KEBF, KDAI & KJF Nil
* The maximum Sales Charge to be imposed by each distribution channel (Manager, agents and IUTAs) during the life of this Master Prospectus. For investment through the EPF Member•s Savings Investment Withdrawal Scheme, a Sales Charge of up to 3% of the NAV per Unit is imposed.
Sales Charge imposed by our respective distribution channels are as follows:
DISTRIBUTION CHANNEL SALES CHARGE
Direct investment with the Manager Up to 6.50% of the NAV
Investment through EPF Members Savings Investment Withdrawal Scheme
Up to 3.00% of the NAV
Authorised Tied-Agents Up to 6.50% of the NAV
Authorised IUTAs Up to 6.50% of the NAV
Investors may negotiate for a reduced/lower Sales Charge regardless of the quantum of Sales Charge that is disclosed in this Master Prospectus with their respective agents or IUTAs. The Manager will permit any investors to negotiate on the Sales Charge being paid or borne by them based on their respective investments/switching amounts or any other form of tiering that may be practised or imposed by the respective sales distribution channels/agents distributing the Funds. Please refer to page 96 for illustration of Sales Charge computation. Repurchase/Redemption charge The Manager does not impose any charges for repurchase purposes except for the exit fee/repurchase charge on KEBF which is as follows:
FUND NAME REPURCHASE CHARGE/EXIT FEE
KEBF Up to 1% of the NAV per Unit if Unit holders exit within a period of one (1) year from the date of investment; except during cooling-off period.
The Units are purchased back from investors at NAV per Unit, which is the repurchase price. Please refer to page 96 for illustration on repurchase charge computation.
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FEES AND EXPENSES INDIRECTLY INCURRED Goods and Services Tax (GST) Malaysia GST shall replace the current Sales and Services Tax effective from 1 April 2015. Supply of goods and services in Malaysia are taxable at a standard rate prescribed by the authorities unless exempted by law. Management fees, Trustee fees and any other expenditure incurred by the Funds in the course of business and any charges paid directly by the Unit Holders to the Manager and/or Trustee shall be subject to GST. Annual management fee The Manager is entitled to the following annual management fees during the term of this Master Prospectus, which are utilised for the administration expenses of the respective Funds. These fees are calculated and accrued on a daily basis and payable monthly to the Manager.
FUND NAME ANNUAL MANAGEMENT FEE
KFF, KVF, KTF, KCIF, KDA, KDL & KAGBF 1.50% of NAV
KEBF 1.00% of NAV
KDAI 0.375% of NAV
KJF 2.00% of the NAV
Illustration 1: Computation of the Fund•s Management Fee for the day Management fee for the day = NAV of the Fund x Management fee rate for the Fund (%)/365 days Example: Assuming the NAV of the Fund is RM100 million, the management fee for the day = RM100 million x 1.50%/365 days = [RM4,109.59 x 6%GST] = [RM4,109.59 + RM246.58] = RM4,356.17 Annual trustees• fee The Trustees are entitled to the following annual trustee fee during the term of this Master Prospectus in respect of each of the Funds. These fees are calculated on a daily basis and payable quarterly to the Trustees.
FUND NAME ANNUAL TRUSTEE FEE
KFF Size of the Fund
First RM20 million Next RM20 million Next RM20 million Next RM20 million Next RM20 million Any amount above RM100 million
Trustee fee
RM12,000 RM10,000 RM8,000 RM6,000 RM4,000 RM15,000
Being the custodian, the Trustee is also entitled to a custodian fee of RM30,000 per annum.
KVF 0.07% of NAV, subject to a minimum fee of RM18,000
KDAI First RM150 million - 0.07% of NAV; and
above RM150 million - 0.03% of NAV; subject to a minimum of RM18,000 per annum.
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KDA, KTF & KCIF 0.07% of NAV
KEBF & KDL 0.05% of NAV, subject to a minimum fee of RM18,000
KJF 0.07% of NAV, subject to a minimum of RM18,000 per annum (excluding foreign custodian fee and charges)
KAGBF 0.08% of NAV, subject to a minimum fee of RM18,000 including local custodian fee but excluding foreign custodian fee.
Illustration 2: Computation of the Trustee Fee for the day Trustee fee for the day = NAV of the Fund x Trustee fee rate 0.10% for the Fund/365 days Example: Assuming that NAV of the Fund is RM100 million, the trustee fee for the day = RM100 million x 0.10%/365 days = [RM273.97 x 6% GST] = [RM273.97 + RM16.44] = RM290.41 EXPENSES OF THE FUNDS There are annual operating expenses involved in running a Fund, including but not limited to those stated herein below and such expenses are paid out of the Fund•s assets: a) Trustee expenses as permitted under the Deed(s); b) Commissions/fees paid to brokers in effecting dealings in the respective Funds investments; c) Tax and other duties charged on the respective Funds by the government and other authorities; d) Fees and other expenses properly incurred by the auditors and tax advisers appointed for the Funds; e) Fees for valuation of any investment of the respective Funds by an independent valuer for the benefit of the
Fund; f) Costs incurred for the modification of the Deed(s) other than for the benefit of the management company or
Trustee; g) Costs incurred for any meeting of the Unit holders other than those convened by or for the benefit of the
Manager or Trustee; h) Administration charges like printing of annual reports, distribution of cheques and postage; and i) Investment committee members• fee for independent members. The expenses incurred by each Fund over the past three (3) financial years may be obtained from the historical financial highlights included in this Master Prospectus. OTHER FEES AND CHARGES Switching fee Switching among funds managed by the Manager is allowed at any period of time. Unit holders may switch their Units between funds managed by the Manager and this facility enables Unit holders to change their investment from one fund to another to suit their investment objectives. Switching fee is waived for the duration of this Master Prospectus. The Manager provides unlimited switches (either fully or partially). Please refer to page 97 for details on switching. Transfer fee Unit holders may transfer their Units in a Fund to another person without selling their Units provided that the principal transferor has attained the age of eighteen (18) at the time of the transfer. The transfer is allowed within the same Fund by completing a Transfer Form and signed by both the transferor and the transferee.
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For KJF transfers must be in terms of Units and not in Ringgit Malaysia (RM) value. A fee of RM50 will be charged for each transfer of ownership. The Manager does not intend to charge a transfer fee for all Funds except for KJF. Other charges Unit holders will incur bank charges/fees when they place a subscription based on accepted banking charges related to remittance of money. Management Expense Ratio (•MERŽ) Management Expense Ratio (•MERŽ) is the ratio of the sum of the fees and the recovered expenses of the Fund to the average value of the Fund calculated on a daily basis. This is the inherent cost incurred by the Fund and this includes the management fee, trustee fee and expenses incurred for the Fund•s administration service. It also allow Unit holders to compare the cost effectiveness of other funds within the same category, i.e. growth fund category; to see if the costs incurred are reasonable and justifiable to its performance. The lower the MER, the more beneficial it is to the Unit holders. The MER is calculated in the form of percentage of the total size of the Fund. The calculation of MER is as follows:
MER (%) = Fees of the unit trust fund + Recovered expenses x 100 Average value of the Fund for the year calculated on daily basis Portfolio Turnover Ratio (•PTRŽ) Portfolio turnover of the Fund is the ratio of the total acquisitions and disposals of the Fund for the year to the average value of the Fund for the year calculated on a weekly basis. PTR = (Total acquisitions of the Fund for the year + Total disposals of the Fund for the year) / 2 Average value of the Fund for the year calculated on a weekly basis POLICY ON REBATES AND SOFT COMMISSION It is the Manager•s policy to credit all rebates and soft commission to the account of the respective Funds. The Manager does not receive any soft commissions from the brokers/dealers in consideration for directing dealings in the investments of the respective Funds. However, in the event the Manager were to receive any soft commission in future, they will only be retained by the Manager if they are in the form of goods and services which are of demonstrable benefit to the Unit holders. POLICY ON ROUNDING ADJUSTMENT The computation of buying and selling prices and also the NAV of the Funds will be rounded to four (4) decimal places. For Units allocated to Unit holders, it will be rounded to two (2) decimal places. There are fees and charges involved and investors are advised to consider the fees and charges before investing in the Funds.
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TRANSACTION INFORMATION COMPUTATION OF PRICES Valuation point Valuation point refers to such a time(s) on a Business Day as may be decided by the Manager wherein the NAV of the Fund is calculated. A final calculation for each Business Day is carried out at the end of the day immediately upon closing of Bursa Malaysia (i.e. forward pricing). Pricing policy We have adopted the single pricing policy in order to provide greater clarity on the cost incurred by investors for investments made in the Funds. This will provide a greater degree of transparency to Investors on the charges imposed by each respective distribution channel. The prices of Units of KFF, KVF, KEBF, KTF, KCIF, KJF, KDA, KDL & KDAI are calculated based on the forward pricing basis, which means that the investment will be calculated based on the end of the next valuation point, following an application either to purchase or to redeem the Units of the respective Funds. The computation of repurchase and selling price will be based on the NAV per Unit of the Funds. The NAV per Unit is derived at by dividing the total NAV for the day by the Units in circulation. For KAGBF, Unit prices are determined using the forward pricing (i.e. the Unit prices based on the closing market price of the Funds• underlying value of securities at the end of the Business Day), which are calculated on every Business Day. Example: Valuation for KAGBF for the market close on 7 January 2015, the valuation date will be the next day in which the Manager is open for trading, that is on 8 January 2015. Computation of NAV per Unit NAV is defined as the value of the cash, accrued income and investment together with an adjustment for brokerage, stamp duties, transfer fees and other charges, if any, in respect of such investments less liabilities including provisions and allowances for contingences for the time being in the Fund(s), at the valuation point. For the purposes of computing annual management fee and annual trustee fee, the NAV of the Fund(s) should include management and trustee fee for that day. The NAV per Unit of the Fund is calculated at the end of each Business Day. It is determined by deducting the value of all the Fund•s liabilities from the total assets value of the Fund to arrive at NAV, at the valuation point. Then, the total NAV of the Fund is divided by the number of Units in circulation. As for KAGBF, the price per Unit of the Funds are determined using the forward pricing basis, the valuation point for the NAV per Unit is based on the valuation of the Fund•s investments, performed at the end of the next Business Day upon closing of the Luxembourg collective investments schemes. Illustration 1: The calculation of NAV per Unit for the Funds as at 7 January 2015 (hypothetical figures are used for the purpose of this illustration). RM Equity securities/Money market instruments 77,196,497.84 Bonds/Other fixed-income securities 20,256,452.63 Other assets & income 2,801,163.93 100,254,114.40 Less: Liabilities (1,152,553.83) NAV before deducting management fee and trustee fee for the day 99,101,560.57 Less: Management fee for the day @ 1.50%/365days (4,072.67) Trustee fee for the day @0.10/365days (271.51) NAV 99,097,216.39 Units in circulation 98,100,000 NAV per Unit 1.010165304 NAV per Unit rounded up to nearest four (4) decimal places 1.0102
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Selling price per Unit The Manager•s NAV per Unit may be subject to a maximum Sales Charge of up to 6.50% for direct investment in KIFB, up to 3% for investment through EPF Members• Savings Investment Withdrawal Scheme and up to 6.50% through other authorised distributional channels. Investors of the Funds will have to pay the Sales Charge separately on top of their investment, as computed below. The Manager utilises 90% to 100% of the Sales Charge to pay the authorised agents commission. The Manager of the Fund may, for any reason at any time, waive, or reduce the amount of any fees (except for trustee fee) or other charges payable by the investor in respect of the Funds. This may apply either generally (for all investors) or specifically (for any particular investor) and for any period or periods of time at the Manager•s discretion. Illustration 2 (hypothetical figures are used): Assuming: NAV per Unit = RM0.50 Sales Charge = 6.50% Amount invested = RM10,000 Total amount invested = RM10,000.00 Add: Sales Charge paid @ 6.50% = RM 650.00 Total amount payable by investor = RM10,650.00 Since, the Unit holder invested RM10,000 on that day, the number of Units credited into his/her investment account would be as follow:
Amount invested =RM10,000 = 20,000.00 Units NAV per Unit RM0.50 For KEBF & KJF, the selling price per Unit will be equivalent to the NAV per Unit as no Sales Charges are imposed when the investor invests in these Funds. Repurchase price per Unit The repurchase price per Unit is the same as the NAV per Unit of the Funds and the formula used to compute the repurchase proceeds are as follows: Illustration 3 (hypothetical example for the computation on the repurchase charge and proceeds of the Funds): Assuming NAV per Unit = RM0.6627 Redemption amount = RM10,000 Total amount redeemed = RM10,000.00 Less: Redemption charge paid (if any) = RM 0.00 Total amount payable to Unit Holder = RM10,000.00 If the Unit holder wishes to redeem RM10,000 based on the NAV per Unit of RM0.6627, he/she has to redeem 15,089.78 Units from his or her account; as per the illustration shown below: Total amount to be redeemed = RM10,000.00 NAV per Unit RM 0.6627 = 15,089.78 Units
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For KAGBF, the repurchase/redemption price will only be available after one (1) day, i.e. assume that an investor redeems his/her Units on 7 January 2015 and these Units will be computed as per the NAV per Unit, which will be available on 8 January 2015 and published on 9 January 2015. For investment made under the EPF Members• Investment Scheme, redemption proceeds will be paid to the EPF to be credited back into the Unit holder•s EPF account. Exit fee/Redemption charge The Manager does not impose any charges for repurchase purposes except for the exit fee/repurchase charge on KEBF. Exit fee of 1% of the NAV per Unit shall be imposed on redemption/switching; within the first year (for KEBF) from the date of such investment. No exit fee shall be incurred for the redemption or switching after the said first year or six (6) months (whichever applicable). However, the exit fee will not be applicable during the cooling off period. Illustration 4: The computation on how the exit fee/redemption charge is charged to KEBF: Assuming: Redemption amount = RM10,000.00 Exit fee/Redemption charge = 1% of NAV per Unit Total amount redeemed = RM10,000.00 Less: Exit fee/Redemption charge = RM 100.00 RM 9,900.00 Switching between Funds This is considered as a redemption/repurchase from one Fund and a simultaneous investment into another Fund based on the prevailing Manager•s NAV per Unit (using forward pricing) of the Fund after the •Request to SwitchŽ form or letter is received by the Manager. Switching fee is waived for the duration of this Master Prospectus. The Manager provides unlimited switches (either fully or partially). For the purpose for switching, balanced/equity Funds managed by the Manager are KFF, KVF, KTF, KCIF & KJF (local funds), KDA, KDL, (local Shariah-compliant funds) & KAGBF (global fund). The non-equity Funds are KEBF (local fund) & KDAI (local Islamic fund). In summary, the switching mechanism is as follows:
TYPES OF FUNDS PRICING
Existing Fund Intended Fund Units redeemed at
Units purchased at
1 Balanced/Equity Funds Balanced/Equity Funds NAV per Unit NAV per Unit
Note (i) 2 Non-equity Funds Non-equity Funds NAV per Unit NAV per Unit
3 Balanced/Equity Funds Non-equity Funds NAV per Unit NAV per Unit
4 Non-equity Funds Balanced/Equity Funds NAV per Unit NAV per Unit + Sales Charge
Note (ii)
Note (i) The minimum amount to switch is RM1,000 for KFF, KVF, KEBF, KTF, KCIF (local funds); for KDA & KDL (local Shariah-compliant funds); for KAGBF (global fund). For KDAI (local Islamic fund), the minimum amount to switch is RM10,000. For KJF (local fund), the minimum amount to switch is RM50,000.
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Note (ii) If the Unit holders intend to switch their non-equity Funds to the Balance/Equity Funds, then there will be a Sales Charge imposed during switching as illustrated in the table above. However, switching from Shariah-compliant Funds to conventional funds is discouraged especially for Muslim Unit holders. For exit fee/repurchase charge on switching, please refer to Illustration 4 for further information. The Manager reserves the right to waive or reduce the Sales Charge or the repurchase charge/exit fee from time to time at its absolute discretion. Transfer of Units A Unit holder can transfer all or part of his/her investments to another person provided that the principal transferor has attained the age of eighteen (18) at the time of the transfer. The transfer is allowed within the same Fund by completing a Transfer Form and signed by both the transferor and the transferee. There are no fees charged for the transfer except for KJF where the Manager impose a fee of RM50.00 for each transfer of ownership. The minimum amount to be transferred is 500 Units for KFF, KVF, KEBF, KTF, KCIF(local funds) KDA, KDL, (local Shariah-compliant funds), KAGBF (global fund), for KDAI (local Islamic fund) is 10,000 Units , for KJF is 500 Units or RM50,000 whichever lower or any such amount that the Manager may decide from time to time. However, transfer between an individual account and a corporate account holder is not allowed for all the Funds. Cooling-off period The cooling-off period refers to the rights of a Unit holder to obtain a refund of his/her investment in the Funds. Any first time investor of any fund managed by the Manager, will be given a cooling-off period of six (6) Business Days from the date of receipt of the application by the Manager or any other period permitted by SC. However, the cooling-off rights would NOT be applicable to the following group of investors: � A corporation or institution; � A staff of the Manager; and � Persons registered to deal in unit trusts (PDUTs). During this period should a Unit holder change his/her mind about investing, he/she may exercise his/her right of cooling-off by calling for a refund of his/her investment without any deduction being made for Sales Charge or any other fees paid by him/her on the day the Units were purchased. The Manager will refund the money back to the Unit holder within ten (10) calendar days of receipt of the notice of cooling-off. In the case of a Unit holder under the EPF Members• Investment Scheme, cooling-off right is available subject to the terms and conditions imposed by EPF. Refund is based on the computation stated below: � The NAV per Unit on the day the Units were first purchased; and � The Sales Charge per Unit originally imposed on the day the Units were purchased. Incorrect pricing In the event there is incorrect/error to the pricing of the Fund and if the error is at or above the significant threshold of 0.5% of the NAV per Unit or if the impact is more than RM10.00, the Manager shall take immediate remedial action to rectify any incorrect valuation/pricing. Rectification shall be extended to the reimbursement of money… (a) by the Manager to the Fund; (b) from the Fund to the Manager; or (c) by the Manager to Unit holders and/or former Unit holders. However, if the error is below 0.5% of the NAV or the total impact on an individual is less than RM10.00 in absolute amount, of which no reimbursement is required as the reprocessing costs may in fact be greater than the amount of the adjustment.
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A QUICK REFERENCE ON HOW TO INVEST, REDEEM, SWITCH AND TRANSFER Purchasing Units of the Fund Any investor who wishes to purchase Units of any Funds must be willing to adhere to the following eligibility requirements and procedures.
Details Operational requirements
Eligibility requirements Individual investor For a single applicant The applicant must be eighteen (18) years of age and above. For joint applicants The first named applicant must be eighteen (18) years of age and above. The joint applicant can be anyone of any age including a minor. Corporate investor Companies, co-operatives, societies, sole proprietors, institutions, etc
Minimum initial investment amount
Cash plan:
RM1,000 for KFF, KVF, KEBF, KTF, KCIF (local funds), KDA, KDL, (local Shariah-compliant funds), KAGBF (global fund), or such amounts as the Manager may from time to time decide.
RM50,000 for KJF. RM10,000 for KDAI (local Islamic fund), or such amounts as the Manager may from time to time decide. Regular savings plan: RM100 for KFF, KVF, KEBF, KTF, KCIF, (local funds), KDA, KDL, (local Shariah-compliant funds), KAGBF (global fund) or such amounts as the Manager may from time to time decide.
Forms to be completed Individual investor Completed application form Completed KWSP 9F (AHL) Form (if individual is an investor investing via the EPF Member•s• Investment Scheme). Corporate investor Completed application form.
Attached compulsory documentation
Individual investor For a single applicant Photocopy of the national registration identity card (Mykad) or passport in the ase of a foreign Investor. For joint applicants Photocopy of the Mykad/passport of first-named joint applicant and photocopy of the Mykad/passport/birth certificate of joint applicant. Corporate investor 1. A certified true copy of the memorandum and articles of association or its equivalent; 2. A certified true copy of forms 24, 44 and 49 or their equivalent; 3. An original copy of a board resolution approving investments in the Funds or its equivalent; 4. A certified true copy of the certificate of incorporation or business registration/license (form 8 or 9); 5. Any other approvals necessary from the relevant authorities; and
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6. Any other supporting documents (as necessary) from time to time.
Manner of payment For KFF, KVF, KEBF, KTF, KCIF, KJF (local funds), KDA, KDAI, KDL, (local Shariah-compliant funds), KAGBF (global fund), payments should be made using cheque, bank draft or money order payable to KIFB. Any payments in terms of cash must be deposited into KIFB•s account before 4:00 pm and the copy of the bank-in slip must be provided to KIFB via fax on the same day when the transaction is transacted. Except for KJF, payments can also be made to any Alliance Bank branches, KIFB•s authorised independent Tied-Agents or any of KIFB•s approved distributors.
For KJF, payments can only be made to the Manager.
Submission The application form together with the bank-in slips should be faxed to KIFB at 03- 2168 6789, followed by the original application form and all other relevant documents as mentioned above within three (3) Business Days.
Notification to investors Applicants will be issued a statement of investment within a reasonable period of time and any unsuccessful applicants will be notified and the application money will be refunded to unsuccessful applicants within thirty (30) days from the receipt of the application.
Investors are to take note different procedures may apply when transaction is done via the Manager•s authorised distributors. Making additional investments Investors are allowed to make further additional investments or regular investments as they wish by completing the additional investment form and their investment will be computed based on the prevailing NAV per Unit (forward pricing) for that day. The regular investment plan will allow investors to invest on a regular monthly or quarterly basis. Regular investments plan are available for KFF, KVF, KEBF, KTF, KCIF (local funds), KDA, KDL (local Shariah-compliant funds), KAGBF (global fund) with minimum additional investment of RM100 under the cash plan and RM50 under the regular savings plan. For KDAI (local Islamic fund), the minimum additional investment is RM5,000. Investors either can pay the Manager by cheque, direct bank-in, draft/money order or standing instructions by debiting their account at Alliance Bank (Malaysia) Berhad or other authorised distributors. For KJF minimum additional investment is RM1,000. How to redeem/repurchase your investment The investors may redeem their Units on any Business Day by completing the Request for Redemption/Repurchase form. The redemption notice must be given to the Manager on the same Business Day and the application will be processed based on the price of the next valuation point. Payments will be made within ten (10) calendar days upon receipt of the request to redeem Units is received by the Manager. Any redemption request received after 4:00 pm, will be considered to be received on the next Business Day. The Manager reserves the right to vary the terms and conditions of redemption mode from time to time, which will be communicated to the Unit holder in writing.
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Where Units can be purchased and redeemed The Manager shall sell or buy the Units on any given Business Day, which is a day Bursa Malaysia is open for trading. Investors are advised to adhere to the cut-off time imposed and practised by the Manager as mentioned above for any investment or repurchase of Units. Unit holders can contact the customer service personnel or the marketing department for any general enquiries or for details of their investments in the Funds. A copy of the application form and the redemption form are available at: � The Manager•s business office; � Independent Tied-Agents appointed by the Manager with valid authorisation cards issued by the Federation of
Investment Managers Malaysia (FIMM); and � Any institutional advisers (IUTAs) appointed by the Manager, who is also a member of the FIMM. Please refer to page 145 for the investment directory. Frequency of valuation-redemption request Valuation of the Fund is carried out at the end of every Business Day. Any redemption request received by the Manager for any redemption of Units at or before 4:00 pm on any Business Day, the Units will be cancelled based on the NAV per Unit at the end of that particular Business Day. Any request received after the cut-off time will be deemed to be received on the next Business Day. What is the minimum balance to be held in the Fund•s account Unit holders of the Funds are required to maintain a minimum balance of Units in the respective accounts. The minimum balance of Units after partial repurchase/redemption at any time must be maintained on any such amount as the Manager may decide from time to time. The Manager will not be obliged to comply with any request to repurchase if the effect thereof would be that the Unit holder holds less than the limit imposed by the Manager. Further investments will be required until the balance of the investment is restored at any one time. Otherwise, the Manager can withdraw the entire investment and forward the proceeds to the Unit holder. There is no minimum repurchase amount subject to a minimum balance/Unit holding to be maintained by the Unit holders in their respective accounts as follows:
KFF, KVF, KEBF, KTF & KCIB (local funds): 500 Units KDA & KDL (local Shariah-compliant funds): 500 Units KAGBF (global fund): 500 Units KDAI (local Islamic fund): 10,000 Unit•; and KJF (local fund): 500 Units or RM50,000 whichever is lower. Switching Unit holders are allowed to switch between various funds within KIFB in response to changing market conditions and their own financial goals. They are required to complete the switching form, which is available at KIFB•s head office and KIFB•s independent Tied-Agents and return the same to KIFB•s head office. Switching from Shariah-compliant fund to a conventional fund is discouraged especially for Muslim Unit holders. Please refer to page 97 for further information on switching. Transfer Unit holders are allowed to transfer their Units to any person provided the transfer satisfies eligibility requirements as stated on page 98 of this Master Prospectus. A transfer form is required to be completed and details on affecting the transfer returned to the head office of KIFB. Income distribution and reinvestment policies Distribution may be declared by the Manager that is in line with the respective Funds• objective. Please refer to page 14 for the respective Fund•s distribution policy under the key data section. Generally, in the absence of written instructions in the application form, income distribution will be automatically reinvested into additional Units in the Fund at the NAV per Unit on the income payment date. The reinvestment will be executed based on the NAV per Unit
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of the Fund on the closing of the 15th day of the following month or such earlier date as may be determined by the Manager. There will be no additional charges incurred for any reinvestment of the income distribution. The Unit holder has the option to either re-invest his/her distribution or to be paid out in the form of a cheque for any amount that exceeds RM50.00. The Manager shall automatically reinvest without any notification to the Unit holder for any income amounting to less than RM50.00. Policy on unclaimed money/unclaimed distributions/unclaimed redemptions All unclaimed distribution will be automatically reinvested as additional Units at the expiry of the distribution warrant based on the Fund•s NAV per Unit on the expiry date of the cheque. For other cases, unclaimed monies shall be paid to the Federal Consolidated Trust Account in accordance with Unclaimed Moneys Act, 1965. As for the redemption cheques that have not been banked-in by investors within six (6) months from date of issuance, will automatically be reinvested at the Fund•s NAV per Unit upon the expiry of the cheque. Statements/reports to Unit holders and the availability of daily prices
When the first investment is made
A statement of investment will be sent to Unit holders within a reasonable period of time to notify them of their investments.
Half-yearly statement of investments
A statement of investment will be sent to Unit holders every six (6) months. The statement will show the balance of investment and all transactions made since the last statement was sent.
Reports Unit holders will receive an interim/annual financial report of the respective invested Fund(s) within two months of the financial period/year ended for the said Fund.
Income distribution Unit holders will receive the income distribution vouchers, if any, for purpose of tax return computation.
Website Unit holders can have access to the current NAV per Unit, which are available daily at the Manager•s website at www.kaf.com.my.
Keeping the Manager informed The Manager should be informed in writing if there is a change in the Unit holders• correspondence address and of any changes from their initial instructions, such as to distribution payment. Customer information service Customer service is available during normal office hours for any enquiries and assistance required by Unit holders pertaining to their investments. Enquiries can also be made via general telephone line at 03-2168 8823 and fax lines 03-2168 8769 during office hours. The Manager can be contacted at the following address and telephone numbers: KAF Investment Funds Berhad Level 11, Chulan Tower No.3 Jalan Conlay 50450 Kuala Lumpur Tel: 03- 2168 8823 Fax: 03- 2168 8769 Website: www.kaf.com.my Investors are advised not to make payment in cash to any individual agent when purchasing Units of the Funds.
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THE MANAGER OF THE FUNDS Background of the Manager KAF Investment Funds Berhad (•KIFBŽ) is a licensed fund management company under the CMSA. KIFB became a subsidiary of KAF Seagroatt & Campbell Berhad, with effect from 15 April 2013 when the latter acquired a 70% interest in Alliance Investment Management Berhad, being the shares owned by Alliance Bank Malaysia Berhad previously. Alliance Investment Management Berhad was later renamed KAF Investment Funds Berhad to reflect the change in ownership. KIFB is led by a experienced management team and was formed in by the merger of Alliance Unit Trust Management Berhad and Alliance Capital Asset Management Sdn Bhd, respectively, the unit trust and asset management companies of Alliance Financial Group. KIFB has an authorised share capital of RM25 million of which RM11,286,802 is paid-up capital and represented by 11,286,802 ordinary shares of RM1.00 each. Currently, KIFB has thirteen (13) local funds and one (1) global fund in its suite of offerings. The global fund is co-managed with an external investment manager HSBC Global Asset Management (USA) Inc. KIFB funds are distributed through IUTAs such as Alliance Bank Malaysia Berhad, Affin Bank Berhad, AmPrivate Banking, Areca Capital Sdn. Bhd., ECM Libra Avenue Securities Sdn. Bhd., HSBC Bank Malaysia Berhad, Phillip Mutual Berhad, RHB Investment Management Berhad, Standard Chartered Bank Malaysia Berhad and Maybank Berhad. In addition, KIFB has collaborated with iFast Capital Sdn Bhd to distribute eleven (11) of KIFB•s funds online. KIFB funds are also distributed by KIFB•s registered agents. The agency force is KIFB•s alternative distribution channel which enables KIFB to serve the investing public who seek personalized service. As at LPD, KIFB employs thirty-nine (39) personnel of whom thirty seven (37) are executives and two (2) are non-executives. Role of the Manager The Manager is responsible for the day-to-day management of the Funds in accordance with the provisions of the deed and all relevant laws and guidelines. The Manager•s functions include: � Valuation and pricing of Units; � Implementing appropriate investment strategies to achieve the Fund•s objectives; � Administering Unit holder•s transactions; � Issuing reports to Unit holders on a timely basis; � Distributing income to Unit holders; � Keeping proper records of the Funds; and � Marketing the Units of the Funds. Past performance of the Manager The following is a summary of the past performance of the Manager based on audited accounts for the last three (3) years.
DETAILS YEAR ENDED
31 May 2014 *31 May 2013 31 March 2012
Paid-up share capital (RM•000) 11,287 11,287 11,287
Shareholders• funds (RM•000) 16,768 16,354 16,525
Turnover (RM•000) 10,557 11,978 12,682
Pre-tax profit/(loss) (RM•000) 1,881 953 2,120
After tax profit/(loss) (RM•000) 1,451 705 1,594
* The financial year end was changed effective from 31 May 2013 to coincide with the financial year end of the holding company.
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The Board of Directors The board of directors takes a proactive role in the activities and affairs of the management company and the unit trust funds under its management. The board of directors meets once every three (3) months and more frequently should circumstances require, ensuring the objectives of all the Funds are achieved within the relevant guidelines and mandates. The following are the board of directors of KIFB:- Tan Sri Abu Talib bin Othman (Chairman and Non-Independent Non-Executive Director) Tan Sri Abu Talib Othman holds a Barrister at Law from Lincoln•s Inn, United Kingdom. He was a member of the Judicial and Legal Service of the Government of Malaysia from 1962 to 1993 where he served in various capacities including Attorney-General of Malaysia from 1980 to date of retirement. He was appointed Non-Executive Chairman of KIFB in 1999 and served in that capacity todate. He also sits on the Board of public and private companies. Datuk Khatijah Binti Ahmad (Non-Independent Non-Executive Director) Datuk Khatijah Binti Ahmad was appointed to Board of KAF Investment Funds Berhad (•KIFBŽ) on 15 April 2013. She holds a degree in Economics (Honours) from the London School of Economics & Political Science, University of London, United Kingdom. She is the Executive Chairman of the KAF Group of Companies, a financial services group that she founded in 1973. She also sits on the board of KAF Investment Bank Berhad and various private companies. Yong Yit Hin (Non-Independent Executive Director) Mr. Yong Yit Hin holds a Bachelor of Science degree with Honours from the University of Leeds majoring in Mathematics/Statistics. He is a member of the Malaysian Institute of Public Accountants and Malaysian Institute of Accountants. After a successful career with a leading accounting firm, Mr. Yong moved into the fund management industry with the investment department of Bumiputra Merchant Bankers Berhad in 1988. As a result of the banking mergers, group restructuring and corporatisation exercise, the investment department of Bumiputra Merchant Bankers Berhad evolved into KIFB. With over twenty (20) years of experience in the industry, Mr. Yong has been involved in various aspects of fund management, from serving as a research analyst, to leading a team of fund managers. He was seconded to KLCS Asset Management Sdn Bhd and served as the Chief Investment Officer/Executive Director for two (2) years from mid 2005. He returned to KIFB in mid 2007 and assumed the position of Chief Investment Officer with overall responsibility for the investment function of the company. With effect from 1st June 2011, Mr. Yong was appointed as the Acting-CEO of KIFB following the resignation of the previous CEO, Encik Nik Azhar. Dato• Zakri Afandi bin Ismail (Independent Non-Executive Director) Dato• Zakri Afandi Ismail was appointed to the board of KIFB on 15 May 2013. He holds a Bachelor of Accountancy from Universiti Putra Malaysia (UPM). He started out his career in the accounting firm of Pricewaterhouse Coopers, moving to stints as an Accounting Lecturer at Universiti Teknologi Malaysia as well as jobs in the corporate sector. He has held positions as Head of Internal Audit as well as Group Corporate Affairs. He is currently a director of various private companies incorporated in Malaysia. He is a chartered Accountant accredited by the Malaysian Institute of Accountants as well as an Australian CPA. Chan Hwang Hsiung (Independent Non-Executive Director) Mr. Chan was appointed to the Board of KIFB on 15 May 2013. He holds a Degree in Law (LLB Hons) from University of Nottingham, England as well as The Law Society-Solicitors• Final Examination. He started as a lawyer in Norton Rose, London & Hong Kong Office. He also worked in various fund management houses abroad i.e JF Bear Stearns Asia (HK) Ltd, Morgan Stanley Dean Witter (HK) Ltd and JF Asset Management (HK) Ltd as Head of Institutional equity sales as well as equity fund manager. He is currently a Director of various private companies in Malaysia. Key Management Staff Yong Yit Hin (Executive Director/Chief Investment Officer) Profile is as set out above. Kenny Tan Wai Kuen (Vice President, Business Development and Support Services) Mr. Kenny Tan Wai Kuen is a member of the Malaysian Institute of Certified Public Accountants (•MICPAŽ). He has over twenty (20) years of experience in financial services; of which seventeen (17) years are in the fund management industry, having joined an established unit trust management company in 1993 as an accountant. Prior to that, he received his articleship training with a leading accounting firm. He joined Multi-Purpose Unit Trust Management Bhd (now known as KIFB) in 1995 as Head of Finance and Operations and was instrumental in the setting up of the company. In 1997, he took charge of the overall management, covering business development, strategic and operative planning as well as operations aspects of the company.
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Lee Chee Ming (Manager, Investment Sales) Mr. Lee Chee Ming graduated with a Bachelor of Science in Business Administration, majoring in Finance from University of Missouri, Columbia, USA. He is a Certified Financial Planner with more than sixteen (16) years• experience in the financial services industry. He started his career in Malaysia British Assurance Berhad (now known as Allianz General Insurance Berhad) in 1992 and later joined Pacific Insurance Berhad in 1995. In 2000, he fast tracked his unit trust career by joining HLG Unit Trust Berhad. As the KL Branch Manager, he was responsible for managing and expanding the branch•s unit trust sales. In 2003, he joined ING Funds as the Senior Manager, Business Development before assuming the role of Senior Regional Manager, Northern Region where he played a pivotal role in developing its direct distribution channels. He took up the present position in KIFB in the year 2008. Ch•ng Soon Kim (Compliance Officer) Mr.Ch'ng Soon Kim is the designated officer for compliance matters. He graduated with Master in Business Administration, majoring in Islamic Finance from Open University Malaysia. He has over 10 years of experience in commercial banking, islamic banking and unit trust. Prior to joining KIFB, he was the officer in charge of a reputable and established asset management company, overseeing the compliance and Anti-Money Laundering and Counter Financing of Terrorism ("AMLCFT") functions. Fund Management Team Yong Yit Hin (Chief Investment Officer & Designated Fund Manager of KEBF, KDAI, KJF & KAGBF) Profile is as set out on page 104. Mohammed Reza Abu Talib (Fund Manager and Designated Fund Manager for KVF, KTF, KDA, KDL & direct mandates) Encik Mohammed Reza Abu Talib holds a Degree in Business Administration, majoring in Finance from Boston University, USA. He started his career with Hong Leong Finance as a credit risk management trainee in 1993. A year later, he moved to Inter-Pacific Securities Sdn Bhd as a company dealer, managing institutional sales. Subsequently in 1995, he joined Capital Corp Securities Sdn Bhd as a commission dealer, buying and selling shares for high net worth clients. In 2000, he joined Rashid Hussain Securities Sdn Bhd and was responsible for managing the company•s high net worth clients. He became a licensed Fund Manager of KIFB since 2003 and started his fund management career in the same year. Apart from handling the company•s money market transactions, he also manages retirement funds and portfolios of high net-worth clients• portfolio. He is the designated fund manager for KVF, KTF, KDA and KDL. Alex Teow (Designated Fund Manager for KFF & KCIF) Mr Alex Teow holds a Bachelor of Business majoring in Finance & Economics from the University of Monash Australia. He began his career as an investment analyst in K&N Kenanga Holdings Bhd in 2002. He subsequently moved to fund management at Mayban Fortis Holdings Bhd and Mercury Asset Management Sdn Bhd managing insurance funds and direct mandates for high net worth clients. He joined KIFB since 2007, conducting research on public listed companies and managing retirement funds and portfolios of high net worth clients. He was appointed as the designated fund manager for KCIF in January 2013 and for KFF in February 2014. Gan Kong Yik (Fund Manager) Gan Kong Yik joined KAF Investment Funds on 1st July 2014 as a fund manager managing a pension fund and private mandate funds. Before joining KAF Investment Funds, Kong Yik was a fund manager with Pheim Asset Management Sdn. Bhd since July 2012. In Pheim, he was given the task to co-manage 12 portfolios, ranging from pension funds, unit trusts to funds with individual mandates. For the regional market, he covered China, India, Vietnam and the Philippines. Prior to Pheim, Kong Yik was a Senior Dealer in Kenanga Investment Bank Berhad. The 12 years experience in the stock broking industry has equipped him with an in-depth understanding of the Malaysian stock market, trading mechanics and regulations governing the listing/trading of securities. Kong Yik has a degree in Economics and Finance from The Royal Melbourne Institute of Technology University, Melbourne, Australia.
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The Investment Committee The role of the investment committee is to ensure that the investment management of the respective Funds is consistent with the Funds• objectives, the Deed, the Guidelines and other securities laws, and that the internal investment restrictions are acceptable and efficacious investment management practices are in line within the unit trust industry. The investment committee meets once every two (2) months and more frequently as and when required. The investment committee members: � Monitor the investment strategy and investment allocation selected by the investment managers for the
respective Target Fund is in line with the stated investment objectives of the Funds; � Continually review and monitor the success of the investment managers• strategies and policies using the
predetermined benchmarks towards achieving the proper performance for the respective Funds; � Monitor, measure and evaluate the respective Funds• performance relative to benchmark and peers; and � Ensure that the investment management of the Funds complies with the provisions of the Deed, the CMSA, the
Guidelines, relevant securities law and all internal investment restrictions and policies. The following persons are members of the investment committee for the Funds: � Tan Sri Abu Talib Othman (Non-independent), appointed on 1 April 2010 as aforementioned; � Datuk Khatijah binti Ahmad (Non-independent), appointed on 30 April 2014; � Dato• Zakri Afandi Ismail (Independent) appointed on 15 May 2013 as aforementioned; � Chan Hwang Hsiung (Independent), appointed on 15 May 2013 as aforementioned. Material litigation As at LPD, there is no current material litigation or arbitration, including those pending or threatened, and any facts likely to give rise to any proceeding which might materially affect the business/financial position of the Manager or any of its delegates. External Investment Manager of KFF & KVF The Manager has delegated its investment management functions to Amundi Malaysia Sdn Bhd (•Amundi MalaysiaŽ) in respect of KFF and KVF. Amundi Malaysia is a holder of a Capital Markets Services License for regulated activity of fund management issued by the Securities Commission Malaysia under the CMSA that provides professional investment services for clients looking to invest in the fixed income and equity markets within Malaysia and globally. Amundi Malaysia was established and licensed in August 2008 as a foreign fund management company under the special scheme. As at LPD, Amundi Malaysia has a staff force of 19 personnel based here in the Kuala Lumpur office. Amundi Malaysia is a subsidiary of Amundi Group. With more than 30 international sites across five (5) continents, Amundi is committed to offering its clients a relationship defined by both proximity and a long term view. As at 30 November 2014, Amundi Malaysia has a total value of funds in excess of USD4 billion across all asset classes for institutional and distribution clients. Worldwide, Amundi is a European asset manager with over USD1 trillion in assets under management. Tan Ming Han (Designated Fund Manager for KFF and KVF) Tan Ming Han joined Amundi Malaysia in June 2012 as an investment manager. Prior to joining the firm, he was an investment manager at Meridian Asset Management where he was managing unit trust mandates specializing in Malaysian and small mid cap equities. From 2010 to 2011, he was with a hedge fund in Singapore as an investment manager managing the long short portfolio. Ming Han has past investment experiences in the investment management industry in Malaysia including in Hwang-DBS Investment Management and Phillip Capital Management where he was managing both unit trust funds and discretionary funds. He started his career in corporate finance advisory in Malaysia. Ming Han holds a Bachelor of Commerce degree majoring in Corporate Finance and International Business from the University of Adelaide in Australia. He is the designated fund manager for KFF and KVF.Ž
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External Investment Manager for KDA and KDL
The Manager has delegated its investment management functions to Amundi Islamic Malaysia Sdn. Bhd. (•Amundi Islamic MalaysiaŽ) in respect of KDA and KDL.
Amundi Islamic Malaysia is a holder of a Capital Markets Services License for the regulated activity of Islamic fund management issued by the Securities Commission Malaysia under the CMSA that provides professional investment services for clients looking to invest in Shariah-compliant securities within Malaysia and globally. Amundi Islamic Malaysia was established and licensed since November 2009 as an Islamic fund management company.
Amundi Islamic Malaysia is a wholy-owned subsidiary of Amundi Malaysia Sdn Bhd. (•Amundi MalaysiaŽ) and leverages on Amundi Malaysia for sales, client servicing, finance, compliance and administration functions. Its personnel consist of three fund managers, a credit analyst and a senior executive handling compliance related matters.
With a local presence, Amundi Islamic Malaysia is committed to offering its clients a relationship defined by both proximity and a long term view, particularly in developing the Islamic fund management business in Malaysia. As at 30 November 2014, Amundi Islamic Malaysia has a total assets under management of RM2.53 billion.
Muhammad Khairul Basyar Bin Mohd Salleh (Designated Fund Manager for KDA and KDL) Muhammad Khairul Basyar Bin Mohd Salleh joined Amundi Islamic Malaysia Sdn Bhd in Kuala Lumpur in October 2014 as an Investment Manager. He is responsible for the management of Shariah compliant equity funds as well as research coverage of the Malaysian market. Prior to joining the company, he was Senior Manager at MMC Corporation Berhad, an investment holding company with assets in ports, power generation and construction, and was tasked with overseeing the Group•s funding requirements and corporate exercises. Preceding that, he was Equity Analyst at Asian Islamic Investment Management from April 2011 to August 2012 where he researched Asia Pacific ex- Japan equities as well as managed Shariah compliant equity funds. Basyar has worked at CIMB Private Equity and Venture Capital as a Private Equity Analyst and begun his career in HwangDBS Investment Management as Equity Analyst from January 2008. Basyar holds a Bachelor degree of Science, Accounting and Finance from London School of Economics and Political Science.
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Shariah Adviser Profile of the Shariah Adviser
IBFIM has been appointed as the Shariah Adviser for KAF Dana Adib and KAF Dana al-Iddikhar, KAF Dana Alif (•the FundsŽ). Scheduled to meet the Manager and/or the investment committee of the Fund every quarter, IBFIM will advise the Manager on the selection of investment tools to be adopted. IBFIM will also counsel the mechanism of the operations of the Fund•s activities to ensure that the operations of the Fund comply with Shariah requirements.
General Information of IBFIM
IBFIM was incorporated as a company limited by guarantee and not having share capital in Malaysia under the Companies Act, 1965 on 15 February 2007.
Experience in Advisory and Services IBFIM is registered with the SC to act as a Shariah Adviser for Shariah-compliant collective investment schemes and Sukuk issuance. IBFIM is also involved in numerous Shariah-compliant private mandates as well as the Shariah Adviser for Islamic REITs and Islamic asset management houses.
As at 15 December 2014, IBFIM has total staff strength of 64 employees, and has 77 funds under its supervision.
Roles and Responsibilities of IBFIM as the Shariah Adviser As the Shariah Adviser, the role of IBFIM is to ensure that the operations and investments of the Funds are in compliance with Shariah requirements. The Shariah Adviser reviews the Funds• investments on a monthly basis to ensure compliance with Shariah requirements at all times and meets with the Manager on a quarterly basis to review and advise on the Funds• compliance with Shariah requirements. Final responsibility for ensuring Shariah compliance of the Funds with Shariah requirements in all relevant aspects rests solely with the Manager. In line with the Securities Commission (•SCŽ) Guidelines, the roles of IBFIM as the Shariah Adviser are; 1) ensuring that the Shariah-compliant unit trust funds (•the FundsŽ) are managed and administered in accordance
with the Shariah principles; 2) providing expertise and guidance for the Funds in all matters relating to Shariah principles, including on the
Funds• deed and prospectus, its structure and investment process, and other operational and administrative matters;
3) consulting the SC who may consult the Shariah Advisory Council where there is any ambiguity or uncertainty as to an investment, instrument, system, procedure and/or process;
4) scrutinising the Funds• compliance report as provided by the compliance officer, transaction report provided by or duly approved by the trustee and any other report deemed necessary for the purpose of ensuring that the Funds• investments are in line with the Shariah principles;
5) preparing a report to be included in the Funds• quarterly and annual report certifying whether the Funds have been managed and administered in accordance with the Shariah principles;
6) ensuring that the Funds comply, with any guideline, ruling or decision issued by the SC, with regard to Shariah matters;
7) vetting and advising on the promotional materials of the Funds; 8) assisting and attending to any ad-hoc meeting called by the SC and/or any other relevant authority. Profile of the Shariah Team IBFIM•s Shariah team consist of the following personnel; Dato• Mohd Bakir Bin Haji Mansor (Distinguished Shariah Advisor) Dato• Mohd Bakir is a member of the Shariah Supervisory Council of Bank Islam Malaysia Berhad (BIMB), the Shariah Advisory Body of Syarikat Takaful Malaysia Berhad and sits on the Shariah Panel Committee of Amanah Ikhtiar Malaysia. He is also the Chairman of the Shariah Advisory Committee of the Employees Provident Fund and the Shariah Advisory Committee of BIMB Securities Sdn. Bhd. Prior to joining IBFIM, Dato• Mohd Bakir was the Shariah Coordinator at BIMB, from 1984 to 2001. Previously, he served at the National Council for Islamic Religious Affairs in the Prime Minister's Department for 10 years from 1971.
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He was also a Chief Assistant Director at the Islamic Research Centre for 4 years from 1981. He holds a Shahadah Ulya from Kolej Islam Malaya.
Dato• Mohd Bakir was awarded •Anugerah Maulidur Rasul 1434H/2013MŽ by the government of Malaysia for his contributions in promoting the Islamic finance industry. Mohd Nasir Bin Ismail (Shariah Advisor) Mohd Nasir a holder of the Islamic Financial Planner (IFP) certification, has been with IBFIM since its incorporation in 2001. He is responsible in providing Shariah input on the advisory, consultancy and research functions with regard to Islamic banking, takaful, Islamic capital market and Shariah-compliant unit trust funds. Prior to joining IBFIM, he was a faculty member of a private higher learning institution specializing in Islamic studies, Institut Pengajian Ilmu-Ilmu Islam, Kelantan. He graduated with a Bachelor of Shariah (Honours) Degree from the University of Malaya. He is also the designated person responsible for Shariah matters related to the Shariah-compliant funds management-related activities.
Ahmad Zakirullah Bin Mohamed Shaarani (Senior Shariah Officer) Ahmad Zakirullah joined IBFIM in February 2008.He is responsible in providing Shariah input on the advisory, consultancy and research functions with regard to Islamic banking, takaful, Islamic capital market and Shariah-compliant unit trust funds. Prior to joining IBFIM, he served at University Sains Islam Malaysia and PTPL College. He obtained his Diploma of Shariah Islamiyyah (Honours) from Higher Institute of Islamic and Arabic Language (MADIWA), Perak, Bachelor of Shariah Islamiyyah (Honours) Degree from Al-Azhar University, Egypt and Master•s Degree (with Honours) of Islamic Revealed Knowledge and Heritage (Fiqh and Usul al-Fiqh) from the International Islamic University Malaysia. He is also the designated person responsible for Shariah matters related to the Shariah-compliant funds management-related activities.
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THE TRUSTEES
UNIVERSAL TRUSTEE (MALAYSIA) BERHAD (•UTMBŽ) Trustee for KFF, KTF, KCIF (local funds), KDA, KDAI & KDL (local Shariah-compliant funds). UTMB was incorporated on 5 March 1974 under the Companies Act, 1965. It has an authorised capital of RM5,000,000 divided into 500,000 ordinary shares of RM10 each of which 100,000 ordinary shares of RM10 each, are issued and RM5 called and paid-up. UTMB has more than thirty (30) years of experience in handling unit trust matters. Currently, UTMB has twenty seven (27) unit trust funds under its trusteeship. Board of Directors � Tan Sri Dato• IR. Talha Bin Haji Mohamad Hashim � Mr Huang Chang Yi � Emily Huang Ye (Alternate to Mr Huang Chang Yi) � Mr Wong Sai Fong � Putri Noor Shariza Binti Noordin Omar (Alternate to Mr Wong Sai Fong) � YM Tunku Mohamed Alauddin Tunku Naquiyuddin � Abu Zaekry Akmi Karim (Alternate to YM Tunku Mohamed Alauddin Tunku Naquiyuddin) Key Personnel UTMB presently has staff strength of twenty six (25) comprising sixteen (16) executives and nine (9) non-executives. Its senior members of management comprise the following:- Mr Stefan One Tee Vann is the Chief Executive Officer with effect from 1 November 2014. Prior to his appointment, he was heading the Corporate Business Development in one of the trustee company. He has more than 15 years of experience in the financial services industry covering life insurance, unit trust, consumer banking, retail & private banking and trustee services. He holds a Bachelor of Business Studies (Honours) degree from the University of Sheffield, UK and serves as a director for a non-profit organisation. Ms Punithamalar Veluppillai is the Senior Manager and is a Fellow Member of the ACCA and prior to joining UTMB in 1994, she was handling accounts and tax matters for one of the subsidiaries of Tanjung Plc. In 1997 she joined EON Berhad and was assisting the treasury department. In 1998 she was appointed as the Assistant Manager in UTMB. She is now responsible for supervising the overall functions of UTMB. Ms Agnes Lai Yoke Ping is the Manager and is an Associate Member of the Chartered Institute of Management Accountants, England. Prior to her present appointment in 1996, she has more than ten (10) years working experience in the finance and administration division with a wholly owned subsidiary of a public listed company. She has been handling unit trusts matters since joining UTMB and is currently responsible for the compliance division of unit trust funds and human resource function of UTMB. Mr Beninder Singh Johl is the Legal & Compliance Manager. He was appointed on 1st March 2011 and he graduated with LLB from the University of Northumbria, Newcastle. He is responsible for the overall legal and compliance matters of UTMB and is also responsible for private debt securities, clubs and timeshares. Prior to joining UTMB, he was working in the banking industry, attending to legal and regulatory compliance matters. In addition, he had also been dealing with various agreements in relation to the banking industry and also overseeing the Probates and Administration of Estates. Mr Ting Ching Hie is the Manager and is an Associate Member of the Institute of Chartered Secretaries and Administrators, England. Prior to his present employment in 2002, he has more than five (5) years working experience in the financial services industry. Since joining UTMB, he has been handling the accounts department, unit trust matters and also the trusts & estate matters. He is currently responsible for the retirement plans, compliance and entitlement division of unit trust funds.
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Financial highlights of the Trustee The following is a summary of the past performance of UTMB based on audited accounts for the last three (3) years.
FINANCIAL HIGHLIGHTS
YEAR ENDED 31 DECEMBER
2013 2012 2011
Paid-up capital (RM) 500,000 500,000 500,000
Shareholders• funds (RM) 4,028,962 3,982,526 6,260,591
Turnover (RM) 3,175,275 3,096,471 3,208,708
Pretax profit (RM) 675,435 678,968 799,627
After tax profit (RM) 421,436 534,436 616,278
Duties and Responsibilities of the Trustee UTMB has agreed willingly to assume all their obligations under the respective deeds and all written laws and SC Guidelines which cover the following:
� Take into custody the investments of the respective Funds and hold the investments in trust for the Unit holders.
� Ensure that the Manager operates and administers the Funds in accordance with the provisions of the respective deeds, SC Guidelines and acceptable business practice within the unit trust industry.
� As soon as practicable notify the Securities Commission of any irregularity or breach of the provisions of the deeds, SC Guidelines and any other matters which in the Trustees' opinions may indicate that the interests of Unit holders are not served.
� Exercise reasonable diligence in carrying out their functions and duties, in actively monitoring the operation and management of the Funds by the Manager to safeguard the interests of Unit holders.
� Maintain, or cause the Manager to maintain, proper accounting records and other records as are necessary to enable a complete and accurate view of the Funds to be formed and to ensure that the Funds are operated and managed in accordance with the deeds of the respective Funds, prospectus, the SC Guidelines and securities law.
� Require that the accounts be audited at least annually Disclosure on Related-party Transaction/Conflict of Interest UTMB confirms that it does not have any existing or proposed related party transactions involving or in connection with the Fund. Trustee•s Statement of Responsibility Universal Trustee (Malaysia) Berhad is willing to assume the position and all obligations that come with it under the deeds, all relevant written laws and rules of laws. Trustee•s Delegate (foreign) UTMB has delegated its foreign custodian function to Standard Chartered Bank Malaysia Berhad (•SCBMBŽ). SCBMB was incorporated in Malaysia on 29 February 1984 under the Act as a public limited company and has been providing custody services for more than twenty (20) years. The assets are held in the name of the Fund through the custodian•s wholly owned subsidiary and nominee company, Cartaban Nominees (Tempatan) Sdn Bhd. The assets are automatically registered into the name of the Fund. The custodian acts only in accordance with the instruction from UTMB. Material Litigation and Arbitration As at LPD, the Trustee is not engaged in any material litigation and arbitration, including those pending or threatened, and is not aware of any facts likely to give rise to any proceedings which might materially affect the business/financial position of the Trustee.
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CIMB COMMERCE TRUSTEE BERHAD (•CCTBŽ) Trustee for KEBF General Information CIMB Commerce Trustee Berhad was incorporated on 25 August 1994 and registered as a trust company under the Trust Companies Act, 1949 having its registered office at Level 13, Menara CIMB, Jalan Stesen Sentral 2, Kuala Lumpur Sentral, 50470 Kuala Lumpur, Malaysia. The Trustee is qualified to act as a trustee for collective investment schemes approved under the Capital Markets and Services Act, 2007. CIMB Commerce Trustee Berhad has an authorized capital of 5,000,000 divided into 500,000 ordinary shares of RM10 each of which the total issued capital is RM3,500,000 divided into 350,000 ordinary shares of RM10 each, and the total paid-up capital is RM1,750,000 divided into 350,000 ordinary shares of RM10 each and partly paid-up at RM5 each. Experience in Trustee Business As at LPD CIMB Commerce Trustee Berhad acts as trustee to one (1) real estate investment trust funds, sixty two (62) unit trust funds, one (1) private retirement scheme (consisting of four (4) funds) and thirteen (13) wholesale funds and has more than nineteen (19) years of experience as trustee to unit trust funds. In addition to overseeing these funds, CIMB Commerce Trustee Berhad also acts as trustee to private debt securities issues such as bonds and notes. Other than being the administrator of deceased•s estates, executor of wills, trustee for minors or incapacitated persons, CIMB Commerce Trustee Berhad also acts as trustee for public, charitable, staff retirement, and pension/ gratuity fund scheme, custodian trustee for associations, clubs and others. CIMB Commerce Trustee Berhad is supported by twenty two (22) executives comprise of twenty two (22) executives as at LPD. Board of Directors The following table sets out information regarding the Board of Directors of CIMB Commerce Trustee Berhad:- Name Directorship Zahardin Omardin Non-executive, Independent Director & Chairman Mohamad Safri Bin Shahul Hamid Non-executive, Non-independent Director Liew Pik Yoong Executive, Non-independent Director Liew Pik Yoong Head / Director, Group Trustee Services Lee Kooi Yoke Chief Operating Officer
Financial information about the Trustee The following is a summary of the past performance of CIMB Commerce Trustee Berhad based on audited accounts for the past three (3) financial years ended 31 December:-
2013 2012 2011
RM000 RM•000 RM•000
Paid-up capital 1,750 1,750 1,750
Shareholders• fund 11,739 8,600 6,601
Turnover 8,502 7,917 6,289
Pretax profit 4,216 2,596 1,802
Profit after tax 3,138 1,999 1,354 Profile of Key Personnel Liew Pik Yoong (Head/Director, Group Trustee Services) Ms Liew is responsible for the overall business direction and management of CIMB Trustee Services. In addition to holding the position as Head/Director of Group Trustee Services, she is also Head/Director of Securities Services in CIMB Group. She joined CIMB Group in 2011 and has over 25 years experience in the financial market and securities industry. Prior to CIMB Group, she held various positions as Head/Director of Investors & Intermediaries, Head of Securities Services, Vice President/HOD with local foreign banks mainly responsible for Custody Services,
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Nominees, Fund Services and Share Margin products. She was also previously the Chief Operating Officer with a local foreign trustee company. Susan has a degree from the Institute of Chartered Secretaries & Administrators (ICSA). Lee Kooi Yoke (Chief Operating Officer) Ms Lee holds a Bachelor Degree in Administration (Finance) from Griffith University, Australia and she is a member of both the Certified Practising Accountants (CPA) Australia and the Malaysia Institute of Accountant and Financial Planning Association Malaysia. She has more than 21 years of working experience in the financial industry. Prior to her current appointment, she headed the operations of a unit trust management company responsible for transfer agency, investment back-office, system and projects and retail and corporate agency operations. Also, prior to this position, she headed the investment operations of an established insurance company in Malaysia and Singapore. Ng Lai Peng (Director, Trust Operations) Ms Ng holds a Bachelor of Arts (Honours) Degree in Business Administration from the University of Bolton and a London Chamber of Commerce and Industry (LCCI) qualification. She has more than 10 years of experience in accounting and trust operations. Law Oi Meng (Associate Director … Corporate Trust) Ms. Law holds a Bachelor Degree in Information Technology from the University of Southern Queensland. She has more than 10 years of working experience in developing and implementing IT systems and trust operations. Linda Ong Gaik Bee (Director - Compliance) Ms Ong holds a Bachelor of Law degree from University of Buckingham and was admitted to the Malaysian Bar as an Advocate and Solicitor prior to joining the trust industry. She is currently overseeing the compliance of CIMB Trustee Services. She has more than 9 years experience in the trust industry. Azida Binti Abdul Aziz (Associate Director) Puan Aizda holds a Diploma in Accountancy from Universiti Teknologi Mara. She has more than 10 years experience in trust operations. Yvonne Fernandez (Manager) Ms Fernandez holds a Bachelor of Law degree from University of London (External Programme), a Master of Laws degree from University of Malaya and a Certificate in Legal Practice. She joined the CIMB group in November 2007. Prior to her current appointment, she was in legal practice for 3 years doing civil litigation. She handles the vetting of the legal documentation and all related legal issues relating to corporate trust. Duties and Responsibilities of the Trustee The Trustee•s functions, duties and responsibilities are set out in the deed. The general functions, duties and responsibilities of the Trustee include, but are not limited to, the following: a) Take into custody the investments of the Fund and hold the investments in trust for the Unit holders;
b) Ensure that the Manager operates and administers the Fund in accordance with the provisions of the deed, SC
Guidelines and acceptable business practice within the unit trust industry;
c) As soon as practicable notify the Securities Commission Malaysia of any irregularity or breach of the provisions of the deed, SC Guidelines and any other matters which in the Trustee's opinions may indicate that the interests of Unit holders are not served;
d) Exercise reasonable diligence in carrying out its functions and duties, actively monitoring the operation and
management of the Fund by the Manager to safeguard the interests of Unit holders;
e) Maintain, or cause the Manager to maintain, proper accounting records and other records as are necessary to enable a complete and accurate view of the Fund to be formed and to ensure that the Fund is operated and managed in accordance with the deed of the Fund, Prospectus, the SC Guidelines and securities law; and
f) Require that the accounts be audited at least annually.
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The Trustee has covenanted in the deed that it will exercise all due diligence and vigilance in carrying out its functions and duties, and in safeguarding the rights and interests of Unit holders. Disclosure on Related-Party Transactions/Conflict of Interests There may be proposed related party transactions involving or in connection with these Funds in the following circumstances: � where these Funds invest in instrument(s) offered by the CIMB Group; � where these Funds are being distributed by the CIMB Group as IUTA; and � where the assets of these Funds are being custodised by the CIMB Group as sub-custodian of these Funds (i.e.
Trustee•s delegate).
Statement of Responsibility by the Trustee The Trustee has given its willingness to assume the position as Trustee of the Funds and all the obligations in accordance with the deed, all relevant laws and rules of law. Trustee•s Declaration The Trustee is independent of the Manager. The Trustee will carry out transactions on an arm•s length basis and on terms which are best available for the Funds, as well as act at all times in the best interest of the Funds• Unit holders. The Trustee also has adequate procedures and processes in place to prevent or control conflicts of interest. Trustee•s Delegate CIMB Commerce Trustee Berhad has appointed CIMB Group Nominees (Tempatan) Sdn Bhd as the Trustee•s delegate to perform custodial function. CIMB Group Nominees (Tempatan) Sdn Bhd is a wholly owned subsidiary of CIMB Bank Berhad. Its custodial function includes safekeeping, settlement and corporate action related processing and cash and security reporting, All investments are automatically registered in the name of the Fund. CIMB Group Nominees (Tempatan) Sdn Bhd acts only in accordance with instructions from the Trustee. Material Litigation and Arbitration As at LPD the Trustee is not engaged in any material litigation and arbitration, including those pending or threatened, and any facts likely to give rise to any proceedings which might materially affect the business/financial position of the Trustee or any of its delegates. Trustee•s Obligations The Trustee•s obligation in respect of monies paid by an investor for the application of Units arises when the monies are received in the relevant account of the Trustee for the Funds and the Trustee•s obligation is discharged once it has paid the redemption amount over to the Manager
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RHB TRUSTEES BERHAD Trustee for KVF & KAGBF RHB Trustees Berhad was incorporated in Malaysia under the Companies Act, 1965 on 6 March 2002. It is registered as a trust company under the Trust Companies Act, 1949 and is also registered with the SC to conduct unit trust business. The principal activity of RHB Trustees Berhad is providing retail and corporate trustee services. RHB Trustees Berhad has been in the trustee business since 2002. The present authorised share capital of RHB Trustees Berhad is RM25,000,000 comprising 2,500,000 ordinary shares of RM10.00 each, of which 1,200,000 are currently issued and credited as partially paid-up of RM5.00 each in RHB Trustees Berhad. The shareholders are as follows: Shareholders % RHB Capital Berhad 20 RHB Investment Bank Berhad 20 RHB Nominees (Tempatan) Sdn Berhad 20 RHB Nominees (Asing) Sdn. Berhad 20 OSK Futures and Options Sdn. Berhad 20 Financial position of the Trustee The following is a summary of the past performance of the Trustee on audited accounts for the past 3 years:-
31 Dec 2013 31 Dec 2012 31 Dec 2011
RM•000 RM•000 RM•000
Paid-up capital 6,000 6,000 6,000
Shareholders• fund 7,578 5,267 5,657
Turnover 7,630 7,566 6,625
Pretax profit 711 1,924 475
Profit after tax 503 1,418 391 Experience in Trustee Business RHB Trustees Berhad undertakes all types of trustee business allowed under the Trust Companies Act 1949, ranging from corporate trustee services to retail services. RHB Trustees Berhad offers corporate trustee services such as trustee for real estate investment trusts (REITs), unit trust funds, private retirement schemes and custodian services. Its retail services include estate planning services (will writing, custodian and executor/trustee services) and private trustee services (private purpose trust, investment trust, charitable trust, insurance trust, business succession trust, estate administration trust, custodian and stakeholder services). As of 30 November 2014, RHB Trustees Berhad is the trustee for ten (10) unit trust funds, twenty (20) wholesale funds and three (3) REITs. As of 30 November 2014, RHB Trustees Berhad•s staff strength comprises 35 executives and 2 non-executive staff. The Board of Directors The following table sets out information regarding the Board of Directors of the Trustee:-
Name Directorship Foo San Kan Independent Non-Executive Director Dato• Nik Mohamed Din bin Datuk Nik Yusoff Non-Independent Non-Executive Director (Chairman) Datuk Haji Faizal @ Ibrahim bin Siraj Independent Non-Executive Director Ong Seng Pheow Independent Non-Executive Director Tony Chieng Siong Ung Executive Director
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Key Personnel Tony Chieng Siong Ung, Executive Director Mr Tony Chieng holds a Master of Business Administration specializing in finance from University of Southern Queensland and professional certification from The Institute of Chartered Secretaries & Administrators (ICSA). Prior to joining RHB Trustees Berhad, he is the Head of Operations with one of Malaysia•s leading financial institutions managing a team of 45 staff that covers trustee, custodian and fund accounting services with over 60 unit trust funds (UTF), 85 private debt securities (PDS) & real estate investment trusts (REITs) and over 3,500 accounts under custodianship with Asset under Custody (AUC) worth of more than 70 Billion Ringgit Malaysia. He has more than 17 years experience in financial services industry encompassing hands on experience in day to day operations of trusteeship such as UTF, PDS, REITs, Estate Administrations, Will & Wasiat; custodian roles such as trade settlement and corporate action, fund accounting, asset management, stock broking and insurance. He is responsible for overall business direction and management of RHB Trustees Berhad, including but not limited to business development and day-to-day operations for UTF, REITS and PDS. Ngu Kee Keong, Head of Business Development
Mr. Ngu holds a Bachelor of Science (Computer Science) Degree from Campbell University, North Carolina, USA. He is a Chartered Financial Practitioner and Chartered Life Planner from Financial and Life Practitioners Council, NAMLIFA, and a Registered Financial Planner from Malaysia Financial Planning Council (MFPC). He is also a qualified Trainer for Malaysian Insurance Institute (MII) and MFPC. He also holds Professional Qualifications such as Fellow of Life Underwriters Training Council (MII-LUTCF& LUTCF-USA), Fellow of Life Management Institute (FLMI), Associate of Customer Service (ACS), Associate Of Agency Administration (AIAA)(LOMA-USA), Associate Of Insurance Regulatory Compliance (AIRC), Associate of Reinsurance Administration (ARA), Certificate In Underwriting, Professional Customer Service(PCS) and Associate Of Annuity Product Administration (AAPA) where he emerged as Top Scorer for Asia Pacific. He has more than 20 years experience in various areas such as sales and marketing, agency management, product development, sales force development, financial planning, sales motivation and design and conduct training for sales personnel. He has also been invited as a speaker for many talks and seminars on Financial Planning and Estate Planning. He oversees the business development and training portfolios of RHB Trustees Berhad. Cheah Kuan Yoon, Head of Operations Mr Cheah holds a Bachelor of Arts majoring in Accountancy and Finance from University of Abertay Dundee, Scotland. Prior joining RHB Trustees Berhad, he was a functional consultant with OpenLink International Sdn Bhd. He was a manager in Operation Department, KAF Trustee Berhad for 4 years, where he specialised in fund accounting, administration and settlement operations of high net worth clients• (institutional and individual) transactional records. He is also involved in bond trustee activities including oversee and monitoring funds on designated accounts operations. Mr Cheah started his career as an Executive in CIMB Investment Bank Berhad for 3 years. He was in Financial Accounting Unit where he had extensive experience in firming the foundation of fund management for fixed income services and implementation projects in system user testing. He is currently oversees and manages all administration and operation function of RHB Trustees Berhad. Zulkifli Hassan, Senior Manager, Unit Trust/Client on-Boarding Mr. Zulkifli holds a Bachelor•s Degree in Economics majoring in Business Administration from the University of Malaya. He has more than 20 years of experience in the financial services industry including asset management, stock broking and retail banking services. Prior to joining RHB Trustees Berhad, he was an Assistant Manager with MIDF Amanah Asset Management Berhad and his main responsibility was then to oversee the company•s day-to-day operations department, specializing in trade settlement, money market placements, corporate actions and other back office functions. His current scope of work includes but is not limited to supervise the operations, administration and compliance of the Unit Trust•s Trustee services. Additionally, due to his experience with trustee operational matters, Mr. Zulkifli has also recently been placed in charge of all client on-boarding cases for the company. Sazali Alias, Head of Internal Process and Management Mr. Sazali holds a Bachelor of Arts in Business Administration (Marketing) from Benedictine College, Kansas, USA, and Diploma in Business Studies from University MARA Institute of Technology (UiTM). He has 10 years experience in financial services industries encompassing hands on experience in day to day operations of nominees, trusteeship services such as unit trust funds, clubs, real estate investment trust and private debt securities. Prior to joining RHB Trustees Berhad, he was a Compliance Manager with AmTrustee Berhad (AmTB) and his main responsibility then to set-up and oversee the Compliance Unit (CU) so as to ensure that the company•s day to day operations and compliance monitoring (internal processes) are in order and in line with the company•s standard operational procedures, trust deed, any other related guidelines, and rules & regulations. Prior to AmTB, he was an Assistant Vice President in ABB Trustee Berhad (ABBT) and last headed ABBT•s Finance & Operations Units. His scope of work at RHB Trustees includes ensuring that the company•s day to day operations and business are in compliance
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with the relevant laws and guidelines and that the necessary reporting to the relevant authorities and enquiries are attended to. Trustee•s Declaration RHB Trustees Berhad is independent of the Manager. The Trustee will carry out transactions on an arm•s length basis and on terms which are best available to the Fund, as well as act at all times in the best interest of the Unit holders. The Trustee also has adequate procedures and processes in place to prevent or control conflicts of interest. RHB Trustees Berhad•s Board of Directors declare that the requirements of the guidelines on allowing a person to be appointed or to act as trustee under subsection 290(1) of the Capital Markets and Services Act 2007 have been complied with at the point of application. Duties and Responsibilities of the Trustee The Trustee•s functions, duties and responsibilities are set out in the Deed. The general function, duties and responsibility of the Trustee include, but are not limited to, the following: a) acting as trustee and safeguarding the rights and interests of the Unit holders; b) holding the assets of the Fund for the benefit of the Unit holders; and c) exercising all the powers of a trustee and the powers that are incidental to the ownership of the assets of the
Fund The Trustee has covenanted in the Deed that it will exercise all due diligence and vigilance in carrying out its functions and duties, and in safeguarding the rights and interests of Unit holders. Anti Money Laundering Provisions RHB Trustees Berhad adopts the Anti-Money Laundering and Counter Financing of Terrorism (•AML/CFTŽ) Program for Investment Banking Business (•the ProgramŽ) in dealing with the principles to combat money laundering and terrorism financing. The Program inter alia provides guidance to all employees of RHB Investment Banking Group (•RHB IB GroupŽ) on the requirement of Know Your Client (•KYCŽ) / clients• due diligence (•CDDŽ), whereby they are required to obtain satisfactory evidence to establish the identity and legal existence of any person applying to do business with any companies of RHB IB Group. The employees should not compromise any attempt to circumvent the CDD requirement. The policies and procedures in the Program serve to prevent RHB Trustees Berhad from being used as a conduit for money laundering and terrorism financing activities. This is through the prevention and detection of AML/CFT suspicious transaction and fraud, and reporting of such activities to the relevant regulatory bodies. Disclosure on Related-Party Transactions/Conflict of Interests There are no existing and/or proposed related party transactions involving or in connection with the Fund. Should there be any proposed related party transaction(s) entered into by the Trustee, such transaction(s) will be on terms that are no less favourable to the Fund than an arms-length transaction between independent parties, neither will it be detrimental to the interest of the Unit holders. Trustee•s Statement of Responsibility RHB Trustees Berhad has given its willingness to assume the position as Trustee of the Fund and all the obligations in accordance with the Deed, the Guidelines, securities laws and other relevant law, and also its willingness to provide indemnity to the Manager for the benefit of the Unit holders of the Fund for any loss incurred as a result of any non-performance of the Trustee. Litigation and Arbitration As at 30 November 2014, RHB Trustees Berhad is not engaged in any material litigation and arbitration, including those pending or threatened, and is not aware of any fact likely to give rise to any proceedings which might materially affect the business or financial position of RHB Trustees Berhad.
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The Trustee•s Delegate RHB Trustees Berhad has appointed Standard Chartered Bank Malaysia Berhad (•SCBMBŽ) as custodian of the quoted and unquoted investments of the Fund. The assets are held in the name of the Fund through the custodian•s wholly owned subsidiary and nominee company, Cartaban Nominees (Tempatan) Sdn Bhd. The assets are also automatically registered into the name of the Funds. SCBMB was incorporated in Malaysia on 29 February 1984 under the Companies Act 1965 as a public limited company and is a subsidiary of Standard Chartered plc (the holding company of a global banking group). SCBMB was granted a license on 1 July 1994 under the Banking and Financial Institutions Act, 1989. SCBMB has been providing custody services for more than twenty (20) years. SCBMB has been providing sub-custody services to local investors in Malaysia since 1995. The custodian acts only in accordance with instruction from the Trustee. HSBC (Malaysia) Trustee Berhad Trustee for KJF The Trustee is HSBC (Malaysia) Trustee Berhad (Company No. 1281-T), a company incorporated in Malaysia since 1937 and registered as a trust company under the Trust Companies Act 1949, with its registered address at 13th Floor, Bangunan HSBC, South Tower, No. 2, Leboh Ampang, 50100 Kuala Lumpur.
Financial Position The Trustee has a paid-up capital of RM500,000.00. As at 31 December 2013, its shareholders• funds totalled RM48.06 million and it achieved a profit before tax of RM12.38 million.
The following is a summary of the past performance of the Trustee based on the audited accounts for the last 3 years:
Year Ended 31 December
2011 (RM)
2012 (RM)
2013 (RM)
Paid-up Share Capital 500,000 500,000 500,000
Shareholders• Funds 30,214,518 38,785,020 48,058,506
Turnover 20,725,309 23,539,663 24,287,694
Profit before Tax 9,139,041 11,289,951 12,381,200
Profit after Tax 6,883,965 8,570,502 9,273,605
Experience in Trustee Business
Since 1993, the Trustee has acquired experience in the administration of unit trusts and as at LPD, is the Trustee for 172 funds (including unit trust funds, exchange traded funds, wholesale funds and funds under private retirement scheme). As at LPD, the Trustee has a workforce of 53 employees consisting of 44 executives and 9 non-executives. A good number of the staff has been with the Trustee for many years.
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Board of Directors Mr. Baldev Singh A/L Gurdial Singh Ms Ong Bee Heong Mr Yee Yit Seeng
Profile of Key Personnel Mr Kaleon Leong Bin Rahan … Chief Executive Officer He has been involved in the fund management industry since 1996, having served stints in a regulatory body, fund management company, trustee and audit firm. He is a Chartered Accountant and holds a Masters in Information Technology Management. Mr Yee Yit Seeng … Chief Operating Officer He joined HSBC Trustee in July 1984. He holds a Diploma in Banking and Finance and is a Senior Associate of Institut Bank-Bank Malaysia. He has more than 22 years of experience in trust operations including client service, systems/projects & office administration, compliance, internal control & audit, and business development. He was also seconded to the HSBC Back-end Processing Office in Cyberjaya, Malaysia to support the global securities operations. 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, the Trustee has to exercise all due care, diligence and vigilance and is required to act in accordance with the provisions of the Deed, Capital Markets and Services Act 2007 and the Securities Commission•s Guidelines on Unit Trust Funds (•GuidelinesŽ). 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, Capital Markets and Services Act 2007 and the Guidelines. In respect of monies paid by an investor for the application of Units, the Trustee•s responsibility arises when the monies are received in the relevant account of the Trustee for the Fund and in respect of redemption, the Trustee•s responsibility is discharged once it has paid the redemption amount to the Manager. Retirement or Removal or Replacement of the Trustee The Trustee may retire upon giving twelve (12) months• notice to the Manager of its desire to do so, or such shorter period as the Manager and the Trustee may agree, and may by Deed appoint in its stead or as an additional trustee a new trustee approved by the relevant authorities and under any relevant law. The Trustee may be removed and another trustee may be appointed by Special Resolution of the Unit holders at a duly convened meeting of which notice has been given to the Unit holders in accordance with the Deed. Power of Trustee to Remove, Retire or Replace the Manager The Manager may be removed by the Trustee on the grounds that: (a) the Manager has gone into liquidation, except for the purpose of amalgamation or reconstruction or some
similar purpose; or has had a receiver appointed; or has ceased to carry on business; or is in breach of any of its obligations or duties under the Deed or the relevant laws; or has ceased to be eligible to be a management company under the relevant laws;
or
(b) the Manager has failed or neglected to carry out its duties to the satisfaction of the Trustee and the Trustee
considers that it would be in the interests of Unit holders for it to do so after the Trustee has given notice to it of that opinion and the reasons for that opinion, and has considered any representations made by the Manager in respect of that opinion, and after consultation with the relevant authorities and with the approval of the Unit holders by way of a Special Resolution.
In any of the above said grounds, the Manager shall upon receipt of a written notice from the Trustee ipso facto cease to be the management company of the Fund. The Trustee shall, at the same time, by writing appoint some
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other corporation approved by the relevant authorities to be the management company of the Fund; such corporation shall have entered into such deed or deeds as the Trustee may consider to be necessary or desirable to secure the due performance of its duties as management company for the Fund.
Trustee•s Statement of Responsibility The Trustee has given its willingness to assume the position as Trustee of the Fund and all the obligations in accordance with the Deed, all relevant laws and rules of law. The Trustee shall be entitled to be indemnified out of the Fund against all losses, damages or expenses incurred by the Trustee in performing any of its duties or exercising any of its powers under this Deed in relation to the Fund. The right to indemnity shall not extend to loss occasioned by breach of trust, wilful default, negligence, fraud or failure to show the degree of care and diligence required of the Trustee having regard to the provisions of the Deed.
Material Litigation As at LPD, the Trustee is not engaged in any material litigation and arbitration, including those pending or threatened, and is not aware of any facts likely to give rise to any proceedings which might materially affect the business/financial position of the Trustee and any of its delegates.
Trustee•s Delegate The Trustee has appointed The Hongkong and Shanghai Banking Corporation Ltd as custodian of the quoted and unquoted local investments of the Fund. The assets of the Fund are held through their nominee company, HSBC Nominees (Tempatan) Sdn Bhd. If and when the Fund should invest overseas, HSBC Institutional Trust Services (Asia) Limited will be appointed as the custodian of the foreign assets of the Fund. Both The Hongkong And Shanghai Banking Corporation Ltd and HSBC Institutional Trust Services (Asia) Limited are wholly owned subsidiaries of HSBC Holdings Plc, the holding company of the HSBC Group. The custodian•s comprehensive custody and clearing services cover traditional settlement processing and safekeeping as well as corporate related services including cash and security reporting, income collection and corporate events processing. All investments are registered in the name of the Trustee for the Fund or to the order of the Trustee. The custodian acts only in accordance with instructions from the Trustee.
The Trustee shall be responsible for the acts and omissions of its delegate as though they were its own acts and omissions.
However, the Trustee is not liable for the acts, omissions or failure of third party depository such as central securities depositories, or clearing and/or settlement systems and/or authorised depository institutions, where the law or regulation of the relevant jurisdiction requires the Trustee to deal or hold any asset of the Fund through such third parties.
Trustee•s Delegates
1) The Hongkong And Shanghai Banking Corporation Limited (As Custodian) and assets held through HSBC
Nominees (Tempatan) Sdn Bhd (Co. No. 258854-D) No 2 Leboh Ampang 50100 Kuala Lumpur Telephone No: (603)2075 3000 Fax No: (603)2179 6488
2) HSBC Institutional Trust Services (Asia) Limited
6th Floor, Tower One HSBC Centre No 1 Sham Mong Road Kowloon, Hong Kong Telephone No: (852)2822 1111 Fax No: (852)2810 5259
Anti-money Laundering and Anti-terrorism Financing Provisions The Trustee has in place policies and procedures across the HSBC Group, which may exceed local regulations. Subject to any local regulations, the Trustee shall not be liable for any loss resulting from compliance of such policies, except in the case of negligence, willful default or fraud of the Trustee.
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Statement of Disclaimer The Trustee is not liable for doing or failing to do any act for the purpose of complying with law, regulation or court orders. Consent to Disclosure The Trustee shall be entitled to process, transfer, release and disclose from time to time any information relating to the Fund, Manager and Unit holders for purposes of performing its duties and obligations in accordance to the Deed, the Capital Markets and Services Act 2007, Guidelines and any other legal and/or regulatory obligations such as conducting financial crime risk management, to the Trustee•s parent company, subsidiaries, associate companies, affiliates, delegates, service providers, agents and any governing or regulatory authority, whether within or outside Malaysia (who may also subsequently process, transfer, release and disclose such information for any of the above mentioned purposes) on the basis that the recipients shall continue to maintain the confidentiality of information disclosed, as required by law, regulation or directive, or in relation to any legal action, or to any court, regulatory agency, government body or authority. Related Party Transactions/Conflict of Interest As Trustee for the Fund, there may be related party transaction involving or in connection with the Fund in the following events:- 1) where the Fund invests in instruments offered by the related party of the Trustee (e.g. placement of monies,
structured products, etc); 2) where the Fund is being distributed by the related party of the Trustee as Institutional Unit Trust Adviser
(IUTA); 3) where the assets of the Fund are being custodised by the related party of the Trustee both as sub-custodian
and/or global custodian of the Fund (Trustee•s delegate); and 4) where the Fund obtains financing as permitted under the Securities Commission•s Guidelines on Unit Trust,
from the related party of the Trustee. The Trustee has in place policies and procedures to deal with conflict of interest, if any. The Trustee will not make improper use of its position as the owner of the Fund•s assets to gain, directly or indirectly, any advantage or cause detriment to the interests of Unit holders. Any related party transaction is to be made on terms which are best available to the Fund and which are not less favourable to the Fund than an arms-length transaction between independent parties. Subject to the above and any local regulations, the Trustee and/or its related group of companies may deal with each other, the Fund or any Unit holder or enter into any contract or transaction with each other, the Fund or any Unit holder or retain for its own benefit any profits or benefits derived from any such contract or transaction or act in the same or similar capacity in relation to any other scheme.
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SALIENT TERMS OF THE DEEDS Salient terms of the Deeds in relation to KFF, KVF, KEBF, KTF, KCEF, KDA, KDAI, KDL & KAGBF The deeds are complex documents and the following is a summary only. Certain salient terms of the respective deeds are summarised in other sections of this Master Prospectus. Recipients of this Master Prospectus and all prospective investors in the Units should refer to the respective deeds itself to confirm specific information or for detailed information of the respective Funds. The respective deeds are available for inspection at the Manager•s principal place of business at Level 11, Chulan Tower, No.3 Jalan Conlay, 50450 Kuala Lumpur and at the principal business addresses of the respective Trustees. The Deeds The Funds are trust constituted by the respective deeds, entered into between the respective Trustees and KIFB. The respective deeds came into effect when they were registered by the SC. Each Unit holder shall be entitled to the benefit and shall be bound by the terms and conditions of the respective deeds. Pursuant to the respective deeds, the respective Trustees shall take into their custody and control all the assets of the respective Funds and hold the same in trust for the Unit holders in accordance with the respective deeds and all relevant laws. The respective deeds are governed by and shall be construed in accordance with the laws of Malaysia. Unit holders' rights Unit holders are entitled to the following: � The right to receive distributions of the respective Funds, participate in any increase in the value of the Units and
such other rights and privileges as provided in the respective deeds; � Entitled to receive annual and interim reports of the respective Funds and to call for Unit holders' meetings and to
vote for the removal of the Trustee or the Manager through a Special Resolution; and � Shall have the cooling-off right as explained on page 98. Unit holders• liabilities Unit holders• shall not be under any obligation to indemnify the Manager and/or the respective Trustees in the event that the liabilities incurred by the Manager and/or the respective Trustees in the name of or on behalf of the respective Funds pursuant to and/or in the performance of the provisions of the respective deeds exceed the value of the assets of the respective Funds and any right of indemnity of the Manager and/or the respective Trustees shall be limited to recourse to the respective Funds. No Unit holder shall by reason of any provision of the respective deeds and the relationship created hereby between the Manager, the respective Trustees and the Unit holders or in any event whatsoever, be liable for any amount in excess of the purchase price paid for the Units as determined in accordance with the respective deeds at the time the Units were purchased and any charges payable in relation thereto. Note: Please be advised that if a Unit holder invests in Units through an IUTA which adopts the nominee system of ownership, the Unit holder would not be considered to be a Unit holder under the deed and the Unit holder may consequently not have all the rights ordinarily exercisable by a Unit holder (for example, the right to call for a Unit holder’s meeting and to vote thereat and the right to have the Unit holder’s particulars appearing in the register of Unit holders of the Fund. Unit holders' limitations and restrictions No Unit holder shall be entitled to require the transfer to him of any of the investments or assets of the respective Funds or be entitled to interfere with or question the exercise by the respective Trustees or the Manager on its behalf, of the rights of the respective Trustees as the registered owner of such investments and assets. In amplification and not in derogation of the aforesaid, Units held shall not confer on any Unit holder any interest in any particular part or
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asset of the respective Funds but only in such interest in the respective Funds as a whole as may be conferred on Unit holders by the provisions of the respective deeds. No Unit holder shall have any right by reason of being a Unit holder to attend any meeting of shareholders, stockholders or debenture holders or to vote or take part in or consent to any company or shareholders', stockholders' or debenture holders' action. Maximum fees and charges permitted by the respective deeds The following are the maximum fees and charges as provided in the respective deeds.
Fund name
Sales Charge (% of the NAV per Unit of the Fund per annum)
Annual management fee (% of the NAV of the Fund per annum)
Annual trustee fee (% of the NAV of the Fund per annum)
Repurchase charge (% of the NAV per Unit of the Fund per annum)
LOCAL FUNDS
KFF Max of 10% Max of 1.50% Please refer to page 132 of this Master Prospectus.
Max of 5%
KVF Max of 10% Max of 1.50% Max of 0.10% subject to a minimum of RM35,000.
Nil
KEBF Max of 3% Max of 1.50% Max of 0.08% subject to a minimum of RM18,000.
Max of 1% in the event the request to repurchase is received by the Manager within one year of the purchase of the Unit by Unit holders.
KTF Max of 10% Max of 2% Max of 0.10% Max of 10%
KCIF Max of 10% Max of 2% Max of 0.10% Max of 10%
LOCAL SHARIAH-COMPLIANT FUNDS
KDA Max of 10% Max of 2% Max of 0.10% Nil
KDAI Max of 10% Max of 2% Max of 0.10% subject to a minimum of RM18,000.
Max of 5%
KDL Max of 10% Max of 2% Max of 0.10% subject to a minimum of RM18,000.
Nil
GLOBAL FUND
KAGBF Max of 6.50% Max of 2% Max of 0.10% subject to a minimum of RM18,000 (excluding foreign custodian fees and charges).
Max of 1%
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Increase in fees and charges A lower fee and/or charges than what is stated in the respective deeds may be charged. All current fees and/or charges will be disclosed in this Master Prospectus. Any increase of the fees and/or charges above that which are stated in the current Master Prospectus may be made provided that a Supplemental Master Prospectus is issued. Furthermore, the Manager has to notify the Unit holders of the higher rate and the effective date (where necessary or required to do so by the respective deeds) provided always that the maximum stated in the respective deeds shall not be breached. Any increase of the fees and/or charges above the maximum stated in the respective deeds shall require the Unit holders' approval in accordance with the respective deeds, Guidelines and/or the CMSA. Permitted expenses There are annual operating expenses involved in running a fund, including but not limited to those stated below and such expenses are paid out of the respective Funds• assets. � Commissions/fees paid to brokers/dealers in effecting dealings in the investments of the respective Funds,
shown on the contract notes or confirmation notes; � Taxes and other duties charged on the respective Funds by the government and/or other authorities; � Costs, fees and expenses properly incurred by the auditor appointed for the respective Funds; � Costs, fees and expenses incurred for the valuation of any investment of the respective Funds by independent
valuers for the benefit of the respective Funds; � Costs, fees and expenses incurred for any modification of the respective deeds save where such modification is
for the benefit of the Manager and/or the respective Trustees; � 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 respective Trustees; � Costs, commissions, fees and expenses of the sale, purchase, insurance/takaful and any other dealing of any
asset of the respective Funds*; � Costs, fees and expenses incurred in engaging any specialist approved by the respective Trustees for
investigating or evaluating any proposed investment of the respective Funds*; � Costs, fees and expenses incurred in engaging any valuer, adviser or contractor for the benefit of the respective
Funds*; � Costs, fees and expenses incurred in the preparation and audit of the taxation, returns and accounts of the
respective Funds*; � Costs, fees and expenses incurred in the termination of the respective Funds or the removal of the respective
Trustees 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 respective
Funds or any asset of the respective Funds, including proceedings against the respective Trustees or the Manager by the other for the benefit of the respective Funds (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 respective Funds)*;
� Remuneration and out of pocket expenses of the independent members of the investment committee, unless the
Manager decides otherwise*; and � 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*.
* Note … not applicable for KFF, KVF and KEBF
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Retirement, removal or replacement of the Manager The Manager shall have the power to retire in favour of some other corporation and as necessary under the written law upon giving twelve (12) months notice in writing to the respective Trustees of its desire to do so or such lesser time as the Manager and the respective Trustees may agree and subject to fulfilment of the conditions as stated in the respective deeds. The Manager may be removed and another corporation appointed as manager by Special Resolution of the Unit holders• at a duly convened meeting of which notice has been given to the Manager, the respective Trustees and the Unit holders. The respective Trustees shall take the necessary steps to remove and replace the Manager as soon as practicable after becoming aware of any such circumstances. Power of the Manager to remove/replace the Trustee A Trustee may be removed and another Trustee may be appointed by Special Resolution of the Unit holders at a Unit holders• meeting convened in accordance with the Deeds. The Manager shall take all reasonable steps to replace a Trustee as soon as practicable after becoming aware that: � The respective Trustees have ceased to exist; � The respective Trustees have not been validly appointed; � The respective Trustees are not eligible to be appointed or to act as Trustee under the CMSA; � The respective Trustees have failed or refused to act as Trustee in accordance with the provisions or covenants
of the respective deeds or the provisions of the CMSA; � A receiver is appointed over the whole or a substantial part of the assets or undertaking of the existing Trustee
and has not ceased to act under the appointment, or a petition is presented for the winding up of the existing Trustee other than for the purpose of and followed by a reconstruction, unless during or following such reconstruction the existing Trustee becomes or is declared to be insolvent; or
� The Trustee is under investigation for conduct that contravenes the Trust Companies Act 1949, the Trustee Act
1949, the Companies Act 1965 or any securities law. Retirement, removal or replacement of Trustees The Trustees may retire upon giving twelve (12) months• notice to the Manager of their desire to do so or such shorter period as the Manager and the respective Trustees may agree, and may by the respective deeds appoint in its stead a new Trustee, approved by the SC. A Trustee may be removed and another trustee may be appointed by Special Resolution of the Unit holders at a Unit holders• meeting convened in accordance with the respective deeds or as stipulated in the CMSA. Power of the Trustee to remove the Manager The Manager may be removed by the respective Trustees on the grounds that the Manager is into liquidation (except for the purpose of amalgamation or reconstruction or some other purpose approved by the relevant authorities); or has had a receiver appointed or has ceased to carry on business; or is in breach of its obligations under the respective deeds or it has failed or neglected to carry out its duties to the satisfaction of the respective Trustees and the respective Trustees consider that it would be in the interests of Unit holders for it to do so after the respective Trustees have given notice to it of that opinion and the reasons for that opinion and after consultation with the SC and with the approval of the Unit holders by way of a Special Resolution. Termination of the Fund The Funds may be terminated or wound-up upon the occurrence of any of the following events:
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� The SC's authorization has been withdrawn under Section 256Eof the CMSA; � A Special Resolution is passed at a Unit holders' meeting to terminate or wind up the Fund, following the
occurrence of events stipulated under Section 301(1) of the CMSA and the court has confirmed the resolution, as required under Section 301(2) of the CMSA;
� A Special Resolution is passed at a Unit holders' meeting to terminate or wind up the respective Funds; � On reaching the maturity date; or � The effective date of an approved transfer scheme, as defined under the Guidelines has resulted in the
respective Funds, which is the subject of the transfer scheme, being left with no asset/property. Unit holders• meeting A Unit holders' meeting may be called by the Manager, the respective Trustees and/or the Unit holders. Any such meeting must be convened in accordance with the respective deeds and/or the Guidelines. Every question arising at any meeting shall be decided in the first instance by a show of hands unless a poll is demanded or if it is a question, which under the respective deeds requires a Special Resolution, in which case a poll shall be taken. On a show of hands, every Unit holder who is present in person or by proxy shall have one (1) vote. Quorum Required for Convening a Unit Holders Meeting The quorum required for a meeting of the Unit holders of the Fund shall be five (5) Unit holders of the Fund, whether present in person or by proxy, provided always that the quorum for a meeting of the Unit holders of the Fund convened for the purpose of removing the Manager and/or the Trustee shall be ten (10) Unit holders of the Fund, whether present in person or by proxy, who must hold in aggregate at least fifty per centum (50%) of the Units of the Fund in circulation at the time of meeting. If the Fund shall have less than five (5) Unit holders, the quorum required for a meeting of the Unit holders of the Fund shall be any number of Unit holders, whether present in person or by proxy.* If the Fund has five (5) or less Unit holders, the quorum required for a meeting of the Unit holders of the Fund shall be two (2) Unit holders, whether present in person or by proxy; if the meeting has been convened for the purpose of removing the Manager and/or the Trustee, the Unit holders present in person or by proxy must hold in aggregate at least fifty per centum (50%) of the Units in circulation at the time of meeting.** Note : * applicable only for KDAI ** applicable only for KDA, & KAGBF
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Salient Terms of the Deeds in relation to KJF Rights and Liabilities as a Unit holder Rights of Unit Holders: As a Unit holder of the Fund, and subject to the provisions of the Deed, you have the right: � to receive distributions, if any, of the Fund; � to participate in any increase in the NAV of Units of the Fund; � to call for Unit holders• meetings and to vote for the removal of the Trustee or the Manager through a Special
Resolution; � to exercise the cooling-off right (only for qualified investors); � to receive annual and interim reports on the Fund; and � to exercise such other rights and privileges as provided for in the Deed. However, a Unit holder would not have the right to require the transfer to the Unit holder of any of the investments of the Fund. Neither would a Unit holder have the right to interfere with or to question the exercise by the Trustee (or the Manager on the Trustee•s behalf) of the rights of the Trustee as trustee of the investments of the Fund. Liabilities of Unit Holders As a Unit holder of the Fund, and subject to the provisions of the Deed, your liabilities would be limited to the following: � A Unit holder would not be liable for nor would a Unit holder be required to pay any amount in addition to the
payment for Units of the Fund as set out in this prospectus and the Deed. � A Unit holder would not be liable to indemnify the Trustee and/or the Manager in the event that the liabilities
incurred by the Trustee and/or the Manager on behalf of the Fund exceed the NAV of the Fund. Note: Please be advised that if a Unit holder invests in Units through an IUTA which adopts the nominee system of
ownership, the Unit holder would not be considered to be a Unit holder under the Deed and the Unit holder may consequently not have all the rights ordinarily exercisable by a Unit holder (for example, the right to call for a Unit holders’ meeting and to vote thereat and the right to have the Unit holder’s particulars appearing in the register of Unit holders of the Fund).
Maximum Fees and Charges Permitted The maximum rate of direct fees and charges allowable by the Deed are as follows:-.
Fund Maximum Sales Charge Maximum Repurchase Fee
KAF Jade Fund 10% of the Net Asset Value per Unit 5% of the Net Asset Value per Unit
The maximum rate of indirect fees and charges allowable by the Deed are as follows:-
Fund Maximum Annual Management Fee Maximum Annual Trustee Fee
KAF Jade Fund 2% of the Net Asset Value of the Fund
0.2% of the Net Asset Value of the Fund subject to a minimum of RM18,000 per annum (excluding foreign custodian fees and charges)
The maximum Sales Charge, repurchase fee, annual management fee or annual trustee fee set out in the Deed can only be increased if a Unit holders' meeting has been held in accordance with the Deed. Thereafter, a supplemental deed proposing a modification to the Deed to increase the aforesaid maximum charges and fees is required to be
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submitted for registration with the SC accompanied by a resolution of not less than two-thirds (2/3) of all Unit holders present and voting at the Unit holders' meeting sanctioning the proposed modification to the Deed. Procedures to Increase the Direct and Indirect Fees and Charges Sales Charge The Manager may not charge a Sales Charge at a rate higher than that disclosed in a prospectus unless: a) the Manager has notified the Trustee in writing of the higher rate and the date on which such higher rate is to
become effective;
b) a supplemental prospectus stating the higher rate is issued thereafter; and
c) such time as may be prescribed by any relevant law shall have elapsed since the supplemental prospectus is issued.
Repurchase Fee The Manager may not charge a repurchase fee at a rate higher than that disclosed in a prospectus unless: a) the Manager has notified the Trustee in writing of the higher rate and the date on which such higher rate is to
become effective;
b) a supplemental prospectus stating the higher rate is issued thereafter; and
c) such time as may be prescribed by any relevant law shall have elapsed since the supplemental prospectus is issued.
Annual Management Fee The Manager does not intend to impose an annual management fee; however, the Manager may not charge an annual management fee at a rate higher than that disclosed in a prospectus unless:
a) the Manager has come to an agreement with the Trustee on the higher rate;
b) the Manager has notified the Unit holders of the higher rate and the date on which such higher rate is to become effective;
c) a supplemental prospectus stating the higher rate is issued thereafter; and
d) such time as may be prescribed by any relevant law shall have elapsed since the supplemental prospectus
is issued. Annual Trustee Fee The Trustee may not charge an annual trustee fee at a rate higher than that disclosed in a Prospectus unless:
a) the Manager has come to an agreement with the Trustee on the higher rate;
b) the Manager has notified the Unit holders of the higher rate and the date on which such higher rate is to become effective;
c) a supplemental prospectus stating the higher rate is issued thereafter; and
d) such time as may be prescribed by any relevant law shall have elapsed since the supplemental prospectus
is issued.
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Permitted Expenses Only the expenses (or part thereof) which are directly related and necessary in operating and administering the Fund may be charged to the Fund. These would include (but are not limited to) the following:
a) commissions/fees paid to brokers in effecting dealings in the investments of the Fund, shown on the contract notes or confirmation notes;
b) taxes and other duties charged on the Fund by the Government and/or other authorities;
c) costs, fees and expenses properly incurred by the auditor of the Fund;
d) costs, fees and expenses incurred for the valuation of any investment of the Fund by independent valuers
for the benefit of the Fund;
e) 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;
f) 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;
g) costs, commissions, fees and expenses of the sale, purchase, insurance and any other dealing of any asset of the Fund;
h) costs, fees and expenses incurred in engaging any specialist approved by the Trustee for investigating or
evaluating any proposed investment of the Fund;
i) costs, fees and expenses incurred in engaging any valuer, adviser or contractor for the benefit of the Fund;
j) costs, fees and expenses incurred in the preparation and audit of the taxation, returns and accounts of the Fund;
k) 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;
l) 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);
m) remuneration and out of pocket expenses of the independent members of the Investment Committee of the
Fund, unless the Manager decides otherwise;
n) 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; and
o) (where the custodial function is delegated by the Trustee) charges and fees paid to custodians of the foreign
assets of the Funds. The Manager•s Right to Retire The Manager has the power to retire in favour of some other corporation by giving to the Trustee three (3) months' notice in writing of the Manager•s desire so to do, or such other period as the Trustee and the Manager may agree upon, and subject to the fulfilment of the following conditions:
� the retiring Manager shall appoint such corporation by writing under its seal as the management company of the Fund in its stead and assign and transfer to such corporation all its rights and duties as management company of the Fund;
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� such corporation shall enter into such deed or deeds as the Trustee may consider to be necessary or desirable to secure the due performance of its duties as management company for the Fund;
� upon the payment to the Trustee of all sums due from the retiring Manager to the Trustee at the date of such
retirement, the retiring Manager shall be absolved and released from all further obligations hereunder provided always that any release so provided for and given shall not extend to any of the retiring Manager•s antecedent neglect by or act or default but without prejudice to the rights of the Trustee or any Unit holder or other person in respect of any act or omission on the retiring Manager•s part prior to such retirement and the new management company may and shall thereafter exercise all the powers and enjoy all the rights and shall be subject to all the duties and obligations as fully as though such new management company had been originally a party to the Deed;
The Manager•s Powers to Remove / Replace Trustee The Manager acts on the Unit holders• behalf and in the Unit holders• interests in consultation with the Trustee and the relevant authorities and/or with the Unit holders• approval. The Manager is obliged to give the Unit holders notice in writing to consider the removal of the Trustee if the Trustee fails or neglects to carry out its duties as stipulated in the Deed and under the Act. The Manager shall take all reasonable steps to replace the Trustee as soon as practicable after becoming aware that:
� the Trustee has ceased to exist;
� the Trustee has not been validly appointed;
� the Trustee is not eligible to be appointed or act as a trustee under the Act;
� the Trustee has failed or refused to act as Trustee in accordance with the provisions and covenants of the Deed and the provisions of the Act;
� a receiver is appointed over the whole or substantial part of the assets or undertaking of the Trustee and has
not ceased to act under the appointment,
� a petition is presented for the winding up of the Trustee (other than for the purpose of and followed by a reconstruction, unless during or following such reconstruction the Trustee becomes or is declared to be insolvent); or
� the Trustee is under investigation for conduct that contravenes the Trust Companies Act 1949, the Trustee
Act 1949, the Companies Act 1965 or any securities law.
� The Trustee may be removed and another trustee may be appointed by Special Resolution of the Unit holders at a duly convened meeting of which notice has been given to the Unit holders in accordance with the Deed.
Trustee•s Right to Retire Provided always that the Manager has in place a corporation approved by the relevant authorities to act as the trustee of the Fund, the Trustee may retire upon the expiration of three (3) months' (or such other period as the Manager and the Trustee may agree upon), notice in writing to the Manager of its desire so to do. Power of Trustee to Remove or Replace the Manager The Manager may be removed by the Trustee on the grounds that:
� if the Manager has failed or neglected to carry out its duties to the satisfaction of the Trustee and the Trustee considers that it would be in the Unit holders• interest to do so after the Trustee has given notice to it of that opinion and the reasons for that opinion, and has considered any representations made by the
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Manager in respect of that opinion, and after consultation with the relevant authorities and with the approval of the Unit holders by way of a Special Resolution;
� unless expressly directed otherwise by the relevant authorities, if the Manager are in breach of any of its
obligations or duties under the Deed or the relevant laws, or has ceased to be eligible to be a management company under the relevant laws;
� the Manager has gone into liquidation, except for the purpose of amalgamation or reconstruction or some
similar purpose, or has had a receiver appointed or has ceased to carry on business;
� the Manager is under investigation for conduct that contravenes the Companies Act 1956 or any relevant law.
If any of the above occurs, the Manager shall upon receipt of a written notice from the Trustee to cease to be the management company of the Fund by the mere fact that the Manager has received the notice. The Trustee shall, at the same time, by writing appoint some other corporation already approved by the relevant authorities to be the management company of the Fund; such corporation shall have entered into such deed or deeds as the Trustee may consider to be necessary or desirable to secure the due performance of its duties as management company for the Fund. Termination of the Fund The Fund may be terminated or wound up should the following events occur:
� The SC•s authorization has been withdrawn under section 256E of the Act;
� A Special Resolution is passed at a Unit holders• meeting to terminate or wind up the Fund, following occurrence of events stipulated under section 301(1) of the Act and the court has confirmed the resolution, as required under section 301(2) of the Act;
� A Special Resolution is passed at a Unit holders• meeting to terminate or wind up the Fund;
� The Fund has reached its maturity date as specified in the Deed; and
� The effective date of an approved transfer scheme (if any) has resulted in the Fund, which is the subject of
the transfer scheme, being left with no asset/property. Upon the termination of the Fund, the Trustee shall: a) sell all the assets of the Fund then remaining in its hands and pay out of the Fund any liabilities of the Fund; such
sale and payment shall be carried out and completed in such manner and within such period as the Trustee considers to be in the best interests of the Unit holders; and
b) from time to time distribute to the Unit holders, in proportion to the number of Units held by them respectively:
i) the net cash proceeds available for the purpose of such distribution and derived from the sale of the investments and assets of the Fund less any payments for liabilities of the Fund; and
ii) any available cash produce;
provided always that the Trustee shall not be bound, except in the case of final distribution, to distribute any of the moneys for the time being in his hands the amount of which is insufficient for payment to the Unit holders of fifty (50) sen in respect of each Unit and provided also that the Trustee shall be entitled to retain out of any such moneys in his hands full provision for all costs, charges, taxes, expenses, claims and demands incurred, made or anticipated by the Trustee in connection with or arising out of the winding-up of the Fund and, out of the moneys so retained, to be indemnified against any such costs, charges, taxes, expenses, claims and demands; each such distribution shall be made only against the production of such evidence as the Trustee may require of the title of the Unit holder relating to the Units in respect of which the distribution is made.
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In the event of the Fund is terminated, the Trustee shall be at liberty to call upon the Manager to grant the Trustee, and the Manager shall so grant, a full and complete release from the Deed and the Manager shall indemnify the Trustee against any claims arising out of the Trustee's execution of the Deed provided always that such claims have not been caused by any failure on the part of the Trustee to exercise the degree of care and diligence required of a trustee as contemplated by the Deed and all relevant laws. The Trustee shall, as soon as it becomes aware that the Fund is to be terminated and wound-up, inform the relevant authorities of the same. Where the termination of the Fund and the winding-up of the Fund have been occasioned by any of the events set out herein;
� if the Manager has gone into liquidation, except for the purpose of reconstruction or amalgamation upon terms previously approved in writing by the Trustee and the relevant authorities;
� if, in the opinion of the Trustee, the Manager has ceased to carry on business; or
� if, in the opinion of the Trustee, the Manager has to the prejudice of Unit holders failed to comply with the
provisions of the Deed or contravened any of the provisions of any relevant law; the Trustee shall summon for a Unit holders meeting to get directions from the Unit holders and also arrange for a final review and audit of the final accounts of the Fund by the Auditor of the Fund; in all other cases of termination of the trust and winding-up of the Fund, such final review and audit by the Auditor of the Fund shall be arranged by the Manager. Meetings of Unit Holders The Deed provides that the Trustee, Unit holders or the Manager may convene Unit holders• meetings. A resolution of Unit holders may be required pursuant to the Deed for specific purposes, e.g. making certain amendments to the Deed, increasing the fees payable to the Trustee and the Manager, or removing the Trustee or the Manager. Quorum Required for Convening a Unit Holders Meeting The quorum required for a meeting of the Unit holders shall be five (5) Unit holders, whether present in person or by proxy, provided always that the quorum for a meeting of the Unit holders convened for the purpose of voting on a Special Resolution shall be five (5) Unit holders, whether present in person or by proxy, who must hold in aggregate at least twenty five per centum (25%) of the Units in circulation at the time of the meeting, and provided further that if the Fund has five (5) or less Unit holders, the quorum required for a meeting of the Unit holders of the Fund shall be two (2) Unit holders, whether present in person or by proxy; if the meeting has been convened for the purpose of removing the Manager and/or the Trustee, the Unit holders present in person or by proxy must hold in aggregate at least twenty five per centum (25%) of the Units in circulation at the time of the meeting. Unit Holders Meeting Convened by Unit Holders Unless otherwise required or allowed by the relevant laws, the Manager shall, within twenty-one (21) days of receiving an application from not less than fifty (50) or one-tenth (1/10) of all the Unit holders, whichever is less, summon a meeting of the Unit holders by:
a) sending by post at least seven (7) days before the date of the proposed meeting a notice of the proposed meeting to all the Unit holders; and
b) publishing at least fourteen (14) days before the date of the proposed meeting an advertisement giving
notice of the proposed meeting in a national language newspaper published daily and another newspaper approved by the relevant authorities.
c) specifying in the notice the place and time of the meeting and the terms of the resolutions to be proposed at
the meeting.
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The Unit holders may apply to the Manager to summon a meeting for any purpose including, without limitation, for the purpose of:
a) requiring the retirement or removal of the Manager;
b) requiring the retirement or removal of the Trustee;
c) considering the most recent financial statements of the Fund;
d) giving to the Trustee such directions as the meeting thinks proper; or
e) considering any matter in relation to the Deed. provided always that the Manager shall not be obliged to summon such a meeting unless application has been received from not less than fifty (50) or one-tenth (1/10) of all the Unit holders, whichever is the lesser number. Unit Holders Meeting Convened by Manager or Trustee The Manager or Trustee may convene a Unit holders• meeting by giving Unit holders written notice in the manner prescribed by the Deed or the relevant laws.
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RELATED-PARTY TRANSACTIONS/CONFLICT OF INTEREST Related-party transactions The Manager has existing, and proposes to continue having broker-dealer relationships with its related entities within its group of companies. However, the Manager has in place policies and procedures to deal with any conflict of interest and/or related party transactions situations. All transactions with related parties are to be executed on terms which are best available to the Funds and which are not less favourable to the Funds than an arms-length transaction between independent parties. As the manager of the Funds, KIFB observes high standards of integrity and fair dealing for the Unit holders• best and exclusive interests. The Manager will not conduct transactions in any manner which will result in unnecessary costs or risk to the Funds. The Manager shall not, without prior approval of the Trustees, invest any moneys available under the deeds in any securities, property and assets in which the Manager or any of its officers (including Directors and staff) has a financial interest or from which the Manager or any of its officers, derives a benefit. Conflict of interest The Manager will observe and maintain the highest standards of integrity and fair dealing to the best interests of the Unit holders. The Manager will not conduct transactions in any manner or fashion that will result in unnecessary costs or risks to the Funds. Transactions undertaken to the best knowledge of the Manager, on behalf of the Funds is done in the interest of the Unit holders. Where a conflict of interest arises due to the directors or investment committee members holding substantial shareholding or directorship of a company where the Funds invests in that particular company•s securities, the said member shall refrain from any decision-making relating to that particular company•s securities. In addition, all the employees of the Manager must disclose their shareholding interest or personal dealings, which are monitored by the compliance officer of the Manager. The Manager shall ensure that the following are strictly adhered to: � Any transactions or investments carried out by or on behalf of the Funds should be executed on an arm•s
length basis between independent parties; � The Funds may participate in securities lending in accordance with the Guidelines with any party related to
the Manager or the respective Trustees or any delegate thereof provided the terms of the securities lending agreement are the best available for the Funds and which is no less favourable to the Funds than an arm•s length transaction between independent parties;
� The Manager shall not make improper use of its position in managing the unit trust funds to gain, directly or
indirectly, an advantage for itself or for any other person or to cause detriment to the interest of Unit holders of such unit trust funds;
� The Manager must obtain prior approval from the respective Trustees to invest any money(s) available
under the respective deeds in any securities, property and assets in which the Manager or any officer of the Manager has a financial interest or from which the Manager or any officer of the Manager derives a benefit; and
� Cash and liquid assets of the respective Funds may only be placed in any current or deposit account with a
licensed institution or other institution, approved to accept deposits. Policy The Manager•s policy states that all directors (including executive director) and members of the investment committee are required to declare their securities holding on an annual basis. As at LPD, to the best of the Manager•s knowledge, there has been no event of conflict of interest by the Manager.
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Where a conflict or potential conflict of interest is identified, this must be evaluated by the Compliance Department and disclosed to the executive director of the Manager for the next course of action. Conflict of interest situations involving the executive director will be disclosed to the Manager•s board of directors for a decision on the next course of action. Directors or staff who are in advisory positions such as portfolio managers or staff that have access to information on transactions are not allowed to engage in dealings on their own account without prior approval or consent. Control measure The executive director and investment committee members are requested to complete the statement of securities holding form. All newly appointed directors and/or investment committee members are requested to complete the statement of securities holding form within three (3) weeks of the date of the appointment. Thereafter, the statement of securities holding form must be submitted to the compliance officer for his/her records within two (2) weeks from 31 December on an annual basis.
Related-party Transactions As at LPD, except for the following, none of the directors and substantial shareholders has any direct or indirect interest in any other corporation carrying out similar business with the Manager:
� Datuk Khatijah binti Ahmad, who is a director of the Manager, is a shareholder of AKKA Sdn Bhd, which indirectly owns KAF Seagroatt & Campbell Berhad. The Manager is a subsidiary of KAF Seagroatt & Campbell Berhad.
Advisers None of the advisers has any existing and potential interests/conflicts of interest in an advisory capacity with the Funds and/or the Manager.
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TAXATION ADVISER•S LETTER ON TAXATION OF THE FUND AND UNIT HOLDERS
(Prepared for inclusion in this Master Prospectus dated 30 January 2015)
PricewaterhouseCoopers Taxation Services Sdn Bhd Level 10, 1 Sentral, Jalan Travers Kuala Lumpur Sentral P.O.Box 10192 50706 Kuala Lumpur 15 January 2015 The Board of Directors KAF Investment Funds Berhad Level 11, Chulan Tower No.3, Jalan Conlay 50450 Kuala Lumpur TAXATION OF THE FUNDS AND UNIT HOLDERS Dear Sirs,
This letter has been prepared for inclusion in the Master Prospectus in connection with the offer of units in the following funds (•the FundsŽ): 1. KAF First Fund (formerly known as Alliance First Fund) 2. KAF Vision Fund (formerly known as Alliance Vision Fund) 3. KAF Enhanced Bond Fund (formerly known as Alliance Moneyplus Fund) 4. KAF Tactical Fund (formerly known as KAF Tactical Fund) 5. KAF Core Income Fund (formerly known as Alliance Optimal Income Fund) 6. KAF Dana Adib (formerly known as Alliance Dana Adib) 7. KAF Dana al-Iddikhar (formerly known as Alliance Islamic Money Market Fund) 8. KAF Dana Alif (formerly known as Alliance Dana Alif) 9. KAF ADVANTAGE GEM Bond Fund (formerly known as Alliance ADVANTAGE GEM Bond Fund) The taxation of income for both the Fund and the Unit holders are subject to the provisions of the Malaysian Income Tax Act 1967 (•the ActŽ). The applicable provisions are contained in Section 61 of the Act, which deals specifically with the taxation of Trust bodies in Malaysia. TAXATION OF THE FUNDS The Funds will be regarded as resident for Malaysian tax purposes since the Trustees of the Funds are resident in Malaysia. (1) Domestic Investments
(i) General Taxation
Subject to certain exemptions, the income of the Funds consisting of dividends, interest or profit1 (other than interest and profit1 which is exempt from tax) and other investment income derived from or accruing in Malaysia, after deducting tax allowable expenses, is liable to Malaysian income tax at the rate of 25 per cent. Gains on disposal of investments in Malaysia by the Funds will not be subject to income tax.
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(ii) Dividends and Other Exempt Income Effective 1 January 2014, all companies would adopt the single-tier system. Hence, dividends would be exempted from tax and the deductibility of expenses incurred against such dividend income would be disregarded. There will no longer be any tax refunds available for single-tier dividends received. Dividends received from companies under the single-tier system would be exempted. The Funds may receive Malaysian dividends which are tax exempt. The exempt dividends may be received from investments in companies which had previously enjoyed or are currently enjoying the various tax incentives provided under the law. The Funds will not taxable on such exempt income. Interest or discount income or profit1 derived from the following investments is exempt from tax: (a) Securities or bonds issued or guaranteed by the government; (b) Debentures2 or Islamic securities, other than convertible loan stocks approved by the Securities Commission
Malaysia; and (c) Bon Simpanan Malaysia issued by Bank Negara Malaysia. Interest income or profit1 derived from the following investments is exempt from tax: (a) Interest or profit1 paid or credited by any bank or financial institution licensed under the Financial Services
Act 2013 and Islamic Banking and Financial Services Act 2013 with effect from 30 June 2013; and (b) Bonds, other than convertible loan stocks, paid or credited by any company listed in Bursa Malaysia Berhad
Ace Market. The interest income / profit1 or discount exempted from tax at the Funds level will also be exempted from tax upon distribution to the Unit holders. (2) Foreign Investments Income of the Funds in respect of income received from overseas investment is exempt from Malaysian tax by virtue of Paragraph 28 of Schedule 6 of the Act and distributions from such income will be tax exempt in the hands of the Unit holders. Such income from foreign investments may be subject to foreign taxes or withholding taxes. Any foreign tax suffered on the income in respect of overseas investment is not tax refundable to the Funds. The foreign income exempted from Malaysian tax at the Funds level will be also be exempted from tax upon distribution to the Unit holders. (3) Hedging Instruments The tax treatment of hedging instruments would depend on the particular hedging instruments entered into. Generally any gain / loss relating to the principal portion will be treated as revenue as capital gains / loss. Gains / losses relating to the income portion would normally be treated as revenue gains / losses. The gain / loss on revaluation will be only taxed or claimed upon realisation. Any gain / loss on foreign exchange is treated as capital gain / loss if it arises from the revaluation of the principal portion of the investment.
(4) Tax Deductible Expenses Expenses wholly and exclusively incurred in the production of gross income are allowable as deductions under Section 33(1) of the Act. In addition, Section 63B of the Act provides for tax deduction in respect of managers• remuneration, expenses on maintenance of the register of Unit holders, share registration expenses, secretarial, audit and accounting fees, telephone charges, printing and stationery costs and postages based on a formula subject to a minimum of 10 per cent and a maximum of 25 per cent of the expenses. (5) Real Property Gains Tax With effect from 1 January 2014, any gains on disposal of real properties (•chargeable assetŽ) or shares in real property companies3 (•chargeable assetŽ) would be subject to real property gains tax (•RPGTŽ) 4 as follows:-
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Disposal time frame RPGT rates Within 3 years 30% In the 4th year 20% In the 5th year 15% In the 6th year and subsequent years 5%
(6) Goods and Services Tax (GST)
GST will be implemented on 1 April 2015 at the rate of 6% to replace the existing sales tax and service tax. Based on the draft guidelines5 issued, the Funds, being collective investment vehicle, will be making exempt supplies. Hence, the Funds are not required to be registered for GST purposes. However, the Funds will incur expenses such as management fees, trustee fees and other administrative charges which will be subject to 6% GST. The 6% input tax incurred on such expenses will not be claimable by the Funds.
TAXATION OF UNIT HOLDERS Unit holders will be taxed on an amount equivalent to their share of the total taxable income of the Funds to the extent of the distributions received from the Funds. The income distribution from the Funds will carry a tax credit in respect of the tax paid by the Funds. Unit holders will be entitled to utilise the tax credit against the tax payable on the income distribution received by them. No additional withholding tax will be imposed on the income distribution from the Funds. Corporate Unit holders, resident 6 and non-resident, will generally be liable to income tax at 25 per cent on distribution of income received from the Funds. The tax credits attributable to the distribution of income can be utilised against the tax liabilities of these Unit holders. Individuals and other non-corporate Unit holders who are tax resident in Malaysia will be subject to income tax at graduated rates ranging from 1 per cent to 26 per cent. Individuals and other non-corporate Unit holders who are not resident in Malaysia will be subject to income tax at 26 per cent. The tax credits attributable to the distribution of income will be utilised against the tax liabilities of these Unit holders. Non-resident Unit holders may also be subject to tax in their respective jurisdictions and depending on the provisions of the relevant tax legislation and any double tax treaty with Malaysia, the Malaysian tax suffered may be creditable in the foreign tax jurisdictions. The distribution of exempt income and gains arising from the disposal of investments by the Funds will be exempted from tax in the hands of the Unit holders. Any gains realised by Unit holders (other than those in the business dealing in securities, insurance companies or financial institutions) on the sale or redemption of the units are treated as capital gains and will not be subject to income tax. This tax treatment will include in the form of cash or residual distribution in the event of winding up of the Funds. Unit holders electing to receive their income distribution by way of investment in the form of new units will be regarded as having purchased the new units out of their income distribution after tax. Unit splits issued by the Funds are not taxable in the hands of Unit holders. We hereby confirm that the statements made in this report correctly reflect our understanding of the tax position under current Malaysian tax legislation. Our comments above are general in nature and cover taxation in the context of Malaysian tax legislation only and do not cover foreign tax legislation. The comments do not represent specific tax advice to any investors and we recommend that investors obtain independent advice on the tax issues associated with their investments in the Fund. Yours faithfully, for and on behalf of PRICEWATERHOUSECOOPERS TAXATION SERVICES SDN BHD
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Lim Phaik Hoon Senior Executive Director PricewaterhouseCoopers Taxation Services Sdn Bhd have given their written consent to the inclusion of their report as taxation adviser in the form and context in which it appears in this Master Prospectus and have not, before the date of the Master Prospectus, withdrawn such consent. ____________________________________________________________________ 1. Under section 2(7) of the Income Tax Act 1967, any reference to interest shall apply, mutatis mutandis, to gains
or profits received and expenses incurred, in lieu of interest, in transactions conducted in accordance with the principles of Syariah.
The effect of this is that any gains or profits received and expenses incurred, in lieu of interest, in transactions conducted in accordance with the principles of Syariah, will be accorded the same tax treatment as if they were interest. Pursuant to the Finance (No.2) Act 2014, which was gazetted on 30 December 2014, tax exemption would also apply to interest income paid or credited by any development financial institutions regulated under the Development Financial Institutions Act 2012 with effect from YA 2015.
2. Structured products approved by the Securities Commission Malaysia are deemed to be •debentureŽ under the Securities Commission Act 2007 and fall within the scope of exemption.
3. A real property company is a controlled company which owns or acquires real property or shares in real property
companies with a market value of not less than 75 per cent of its total tangible assets. A controlled company is a company which does not have more than 50 members and is controlled by not more than 5 persons.
4. Pursuant to the gazette order, P.U. (A) 415, Real Property Gains Tax (Exemption) Order 2012 revoked with effect
from 1 January 2014. 5. Pursuant to Goods And Services Tax Guide on Fund Management (draft as at 27 October 2013) issued by the
Royal Malaysian Customs, which may be amended upon implementation. 6. Resident companies with paid up capital in respect of ordinary shares of RM2.5 million and below will pay tax at
20 per cent for the first RM500,000 of chargeable income with the balance taxed at 25 per cent. With effect from year of assessment (•YAŽ) 2009, the above shall not apply if more than -
a) 50 per cent of the paid up capital in respect of ordinary shares of the company is directly or indirectly owned by a related company;
b) 50 per cent of the paid up capital in respect of ordinary shares of the related company is directly or indirectly
owned by the first mentioned company; c) 50 per cent of the paid up capital in respect of ordinary shares of the first mentioned company and the
related company is directly or indirectly owned by another company. •Related companyŽ means a company which has a paid up capital in respect of ordinary shares of more than RM2.5 million at the beginning of the basis period for a year of assessment.
7. Pursuant to the Finance (No.2) Act 2014 which was gazetted on 30 December 2014, the Malaysian corporate
income tax will be reduced to 24 per cent effective YA 2016. 8. Pursuant to the Finance (No.2) Act 2014 which was gazetted on 30 December 2014, the income tax for
individual tax residents in Malaysia will be reduced to rates ranging from 1 to 25 per cent effective YA 2015. 9. Pursuant to the Finance (No.2) Act 2014 which was gazetted on 30 December 2014, the income tax for non-
resident individual in Malaysia will be reduced to 25 per cent effective YA 2015.
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The Board of Directors KAF Investment Funds Berhad Level11, Chulan Tower No.3, Jalan Conlay 50450 Kuala Lumpur 13 January 2015 Dear Sirs, Re: Taxation of the Funds and Unit holders This letter has been prepared for inclusion in the Master Prospectus dated 30 January 2015 in connection with the offer of units in the KAF Jade Fund (•the FundŽ). Taxation of the Funds Income Tax The Funds is a unit trust for Malaysian tax purposes. The taxation of the Fund is therefore governed principally by Section 61 and 63B of the Income Tax Act, 1967 (•the ActŽ). Subject to certain exemptions, the investment income of the Fund derived from or accruing in Malaysia is liable to Malaysian income tax at the prevailing rate of 25%. It has been proposed that the tax rate of 25% be reduced to 24% with effect from Year of Assessment (•YAŽ) 2016. Gains from the realisation of investments Gains from the realization of investments by the Fund will not be subject to Malaysian income tax. Dividend Income Single tier dividends received by the Fund are exempt from tax and expenses incurred by the Fund in relation to such dividends are disregarded. Interest income Under Section 2(7) of the Act, any reference to interest in the Act shall apply, mutatis mutandis, to gains or profits received and expenses incurred, in lieu of interest, in transactions conducted in accordance with the principles of Shariah. Interest income derived by the Fund from the following are exempt from tax:- � savings certificated issued by the Government; or � securities or bonds issued or guaranteed by the Government; or � debentures or Islamic Securities, other than convertible loan stock, approved by the Securities Commission; or � Bon Simpanan Malaysia issued by the Central Bank of Malaysia; or � bonds or securities issued by Pengurusan Danaharta Nasional Berhad; or � a bank or financial institution licensed under the Financial Services Act 2013 or Islamic Financial Services Act
2013; or � Islamic securities originating from Malaysia, other than convertible loan stocks, issued in any currency other than
Ringgit and approved by the Securities Commission or Labuan Financial Services Authority; or � a Sukuk Wakala, under the concept Wakala Global Sukuk Berhad; or � A Sukuk Kijang. Sukuk Kijang means Islamic securities of nominal value of up to two hundred and fifty million
United States dollars (USD$250,000) issued or to be issued in accordance with the Shariah principle of Ijarah by BNM Kijang Berhad; or
� Islamic securities, other than convertible loan stock, which are issued in accordance with the principles of Mudharabah, Musyarakah, Ijarah, Istisna• or any other principles approved by the Shariah Advisory Council established by the Securities Commission; or
� Bonds (other than convertible loan stock) paid or credited by any company listed on Malaysia Exchange of Securities Dealing and Automated Quotation Berhad (now known as Bursa Malaysia Securities Berhad ACE Market).
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Any income derived by the Fund from the following are exempt from tax:- � a Sukuk Issue issued by the Malaysia Global Sukuk Inc; or � a Sukuk Ijarah, other than convertible loan stock, issued in any currency by 1Malaysia Sukuk Global berhad. Foreign sourced income Income derived from sources outside Malaysia and received in Malaysia by a resident unit trust is exempt from Malaysian income tax. However, such income may be subject to tax in the country from which it is derived. Discount or profit earned Discount or profit received by the Fund from sale of bonds or securities issued by Pengurusan Danaharta Nasional Berhad or Danaharta Urus Sendirian Berhad is exempt from tax. Discounts earned by the Fund from the following are also exempt from tax:- � securities or bonds issued or guaranteed by the Government; or � debentures of Islamic Securities, other than convertible loan stock, approved by the Securities Commission; or � Bon Simpanan Malaysia issued by the Central Bank of Malaysia. Tax deductions in respect of the Fund•s expenses such as manager•s remuneration, expenses on maintenance of a register of unit holders, share registration expenses, secretarial, audit and accounting fees, telephone charges, printing and stationery costs and postage (•permitted expensesŽ) are allowed based on a prescribed formula subject to a minimum of 10% and a maximum of 25% of the total permitted expenses. Real Property Gains Tax (•RPGTŽ) Gains on disposal of investments by the Fund will not generally be subject to Malaysian income tax. However, such gains may b subject to RPGT in Malaysia, if the gains are derived from sale of Malaysian real properties and shares in Malaysian real property companies. With effect from 1 January 2014, gains derived from the disposal of Malaysian real properties or shares in Malaysian real property companies by the Fund would be subject to RPGT at the following rates:-
Date of Disposal Rates
Disposal within 3 years from the date of acquisition 30%
Disposal after 3 years and within 4 years from the date of acquisition 20%
Disposal after 4 years and within 5 years from the date of acquisition 15%
Disposal after 5 years from the date of acquisition 0%
Goods and Services Tax (•GSTŽ) GST will be implemented in Malaysia with effect from 1 April 2015 at a standard rate of 6%. It will replace the current sales tax and service tax. Based on the Goods and Services Tax (Exempt Supply) Order 2014, the following activities are exempt supplies:- � The holding of bonds, debentures, notes or other similar instruments representing or evidencing indebtedness,
whether secured or otherwise; or � The transfer of ownership of any securities or derivatives relating to securities; or � The issue, holding or redemption of any unit trust or other similar instruments under a trust fund.
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If the Fund is wholly making such exempt supplies, the Fund is not required to register for GST purposes. However, all input GST incurred by the Fund cannot be claimed. Taxation of Unit Holders Income Tax Taxable distribution Unit holders are taxed on an amount equivalent to their share of the total taxable income of the Fund, to the extent that this is distributed to them. The distribution from the Fund carries tax credits proportionate to each Unit holder•s share of the total taxable income in respect of the income tax paid by the Fund. Unit holders will be entitled to utilise the tax credit as a set off against the tax payable by them. Any excess tax credit over their tax liability will be refunded to the Unit holders. No other withholding tax will be imposed on the distribution by the Fund. Corporate Unit holders, resident or non resident in Malaysia, would be taxed on the taxable distributions from the Fund at the corporate tax rate of 25%. Corporate Unit holders in Malaysia with an ordinary paid-up capital of RM2.5 million and below at the beginning of a YA will be subject to a tax rate of 20% on chargeable income of up to RM500,00. For chargeable income in excess of RM500,000, the prevailing tax rate of 25% is still applicable. However, the said tax rate of 20% on chargeable income of up to RM500,000 will not apply if more than 50% of the ordinary paid up share of that corporate Unit holder is directly or indirectly owned by a related company which has an ordinary paid-up share capital exceeding RM2.5 million, or vice versa, or more than 50% of the ordinary paid up share capital of both companies are directly or indirectly owned by another company which has an ordinary paid up share capital exceeding RM2.5 million. Individuals and other non-corporate Unit holders who are resident in Malaysia will be subject to Malaysian income tax at graduated rates of 1% - 26% whilst individuals and other non-corporate Unit holders who are not tax resident in Malaysia, will be subject to Malaysian income tax at the prevailing rate of 26%. It has been proposed that the highest tax rate of 26% be reduced to 25% with effect from YA 2015. Non resident unit holders may also be subject to tax in their respective jurisdictions and depending on the provisions of the relevant tax legislation and any double tax treaties with Malaysia, the Malaysian tax suffered may be creditable in the foreign tax jurisdictions. Exempt distribution The unit holders will be exempt from Malaysian income tax on the following:- � Distributions made by the Fund from income which is exempt from tax; � Units split by the Fund; � Gains realised by the Unit Holders (other than financial institutions, insurance companies and those dealing in
securities) from the transfers or redemptions of the Units. GST Based on the Goods and Services Tax (Exempt Supply) Order 2014, the following activities are exempt supplies:- � The holding of bonds, debentures, notes or other similar instruments representing or evidencing indebtedness,
whether secured or otherwise; or � The transfer of ownership of any securities or derivatives relating to securities; or � The issue, holding or redemption of any unit or other similar instruments under a trust fund. The above is based on the relevant provisions of the Malaysian tax legislation, the regulations therunder and judicial and administrative interpretation thereof as at the date of this letter. Such authorities are subject to change, retrospectively or prospectively, and any such changes could effect the validity of this letter. All prospective investors should not treat the contents of this letter as advice relating to their personal taxation matters and are therefore advised to consult their own professional advisers concerning their respective investments. Yours faithfully, Christina Wong Director KPMG Tax Services Sdn Bhd
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ADDITIONAL INFORMATION
Consent The Trustees, Shariah adviser, manager of the Target Fund, external investment manager, solicitor, taxation advisers and the auditors of the Funds have given and have not withdrawn their written consent to the inclusion in this Master Prospectus of their names and/or report/letter in the form and context in which their names appear prior to the issue of this Master Prospectus. Meeting of Unit holders The Deed(s) provides that the Trustee, you as the Unit holder, or we as the Manager may convene a Unit holder•s meeting. A resolution of Unit holders may be required pursuant to the Deed(s) for specific purposes, i.e. making certain amendments to the Deed, increasing the fees payable to the Trustee and to us, or removing the Trustee or us. Customer information Any information with regards to the Funds can be referred to our customer service department as disclosed on page 102 of this Master Prospectus. This includes the tracking of the NAV per Unit and the balance of Units available in Unit holders• accounts. Anti-Money Laundering and Anti-Terrorism Financing (•AML/ATFŽ) Policies Essentially, money laundering is recognised as a process whereby funds obtained through or generated by criminal activity are moved or concealed in order to obscure the link between the crime and the generated funds. All business units of KIFB must incorporate the following minimum AML/ATF control procedures into their own business processes/operations (where applicable) when establishing business relationship with potential investors. The minimum control procedures are: 1. Reasonable effort and measures must be taken to obtain proper identification of all customers. For example, the
adoption of an effective Know Your Customer (•KYCŽ) procedure has proven to be extremely effective in detecting suspicious activity by a customer of the institution in a timely manner;
2. Ascertain some basic background of the investors, i.e. occupation and employer; 3. For corporate investors, there is also a need to establish the nature and size of business as well as countries of
its business partners and any other information available to the Manager in order to understand the investor better;
4. The respective business units must observe the trend and pattern of transactions of each investor to enable
them to establish investors •transaction profileŽ, so that the type of transaction that investors are likely to engage in can be predicted and ascertained with relative certainty;
5. Employees must be alert and aware of any unusual transactions that is disproportionate to the investor•s known
business; 6. Any transactions which is deemed inconsistent or out of the normal course of business would warrant further
checking and verification; 7. Monitor investors• transactions for suspicious activity reporting, large cash transaction reporting and to comply
with all record keeping requirements; 8. Risk assess all investors as low or high risk for potential money laundering or terrorism financing activity; and 9. Ensure that investors information, profiles and risk assessment are updated on a timely basis such as when
there are significant changes in account ownership or account activities or where there are changes in the investors• employment or change of business. For existing investors, the Manager will update the relevant information especially when:
144
� A significant transaction is to take place; � There is a material change in the way the account is operated; � The customer•s documentation standards change substantially.
If the compliance officer discovers that the information held on the Unit holders account is insufficient or in the event a suspicious transaction is detected by the Manager, the compliance officer will then report to Bank Negara Malaysia via their Financial Intelligence Unit of such transactions. Documents available for inspection The following documents may be inspected at the Trustee•s (where applicable) and our offices without charge for a period of not less than twelve (12) months from the date of this Master Prospectus. � The Deed of the Funds; � Each material contract disclosed in this Master Prospectus and, in case of contracts not reduced into writing, a
memorandum which gives full particulars of the contract; � The audited financial statements of the Funds for the current financial year (where applicable) and for the last
three financial years or if the Funds has been established/incorporated for a period of less than three (3) years, the entire period preceding the date of the Prospectus;
� All reports, letters or other documents, valuations and statements by any expert, any part of which is extracted or referred to in this Master Prospectus. Where a summary expert•s report is included in this Master Prospectus, the corresponding full expert•s report shall be made available for inspection;
� Writ and relevant cause papers for all material litigation and arbitration disclosed in this Master Prospectus; and � Any consent given by experts disclosed in this Master Prospectus. Implementation of Goods and Services Tax Act 2014 All fees and charges payable to the Manager and the Trustee are subject to goods and services tax as may be imposed by the government or other authorities from time to time.
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INVESTMENT DIRECTORY
The Manager•s distribution channels are as follows. However the list is non-exhaustive. There will be other IUTAs appointed from time to time.
Alliance Bank (Malaysia) Berhad 3rd Floor, Menara Multi-Purpose, Capital Square 8 Jalan Munshi Abdullah 50100 Kuala Lumpur Tel: 03-26948800
iFast Capital Centre Sdn Bhd Level 28, Menara Standard Chartered 30 Jalan Sultan Ismail 50250 Kuala Lumpur Tel: 03-21490500
KAF Investment Funds Berhad Kuala Lumpur Agency Office 22nd Floor, Menara Multi-Purpose, Capital Square 9 Jalan Munshi Abdullah 50100 Kuala Lumpur
Malayan Banking Berhad 4th Floor, Menara Maybank Jalan Tun Perak 50050 Kuala Lumpur Tel: 03-20747058
Affin Bank Berhad 17th Floor, Menara Affin 80 Jalan Raja Chulan 50200 Kuala Lumpur Tel: 03-20559000
Philip Mutual Berhad B-2-7, Megan Avenue II Jalan Yap Kuan Seng 50450 Kuala Lumpur Tel: 03-27159802
Areca Capital Berhad 107, Block B Pusat Dagangan Phileo Damansara I 8 Jalan 16/11 Off Jalan Damansara 46350 Petaling Jaya Tel: 03-79563111
TA Investment Management Berhad 23rd Floor, Menara TA One 22 Jalan P. Ramlee 50250 Kuala Lumpur Tel: 03-20314479
DIRECTORS’ DECLARATION
This Master Prospectus dated 30 January 2015
(•the Master ProspectusŽ) has been reviewed and
approved by us, the directors of KAF Investment
Funds Berhad, and we collectively and
individually accept full responsibility for the
accuracy of the information contained in the
Master Prospectus. Having made all reasonable
enquiries, we confirm to the best of our
knowledge and belief, there are no false or
misleading statements, or omission of other facts
which would make any statement in this Master
Prospectus false or misleading.
DIRECTORS:
TAN SRI ABU TALIB BIN OTHMAN
DATUK KHATIJAH BTE AHMAD
DATO• ZAKRI AFANDI BIN ISMAIL
CHAN HWANG HSIUNG
YONG YIT HIN
You MUST be 18 years old and above as at the date of this application. Please provide a copy of your NRIC or Passport.
Name of Individual Applicant
NRIC(old)/Passport No./Company Registration No. - -
Date of Birth (DD/MM/YYYY) - - Male Female
Marital Status Single Married Widowed Divorced No. of Dependants (please indicate) ___________
Nationality Malaysian Others (please specify)
Bumiputera Status Yes No
Race Malay Chinese Indian Others
Occupation
Education Level Primary Secondary STPM / Diploma /PreU Degree Post Graduate
Source of Income Employment Business Savings / Inheritance Others (please specify)
Annual Household Income Below RM20,000 RM20,001 - RM60,000 RM60,001 - RM120,000
RM120,001 - RM180,000 RM180,001 - RM240,000 RM240,001 and above
Mother's Maiden Name
Individual Applicant Email Address :
Name as in NRIC/Passport
NRIC(old)/Passport No /Birth Certificate No
NRIC No (new)
2. PARTICULARS OF JOINT INDIVIDUAL APPLICANT (not applicable for EPF Investment Scheme("EPF"))
In compliance with the Capital Markets and Services Act 2007, this Form should not be circulated unless accompanied by the relevant master prospectus(es)/ prospectus(es) and its supplementary(ies) (if any).Investor(s) should read and understand the contents of the relevant master prospectus(es)/ prospectus(es) and its supplementary(ies) if any before completing this form.
(To be completed if Individual Applicant)
BY PROVIDING YOUR EMAIL ADDRESS TO KAF INVESTMENT FUNDS BERHAD ("KIF'), YOU HAVE CONSENTED TO RECEIVE COMMUNICATIONS AND/OR INFORMATION FROM KIF RELATING TO YOUR INVESTMENT VIA EMAIL.NOTICES DELIVERED VIA EMAIL TO APPLICANT ARE DEEMED SENT AND RECEIVED ON THE DATE SUCH EMAIL IS SENT.
Please complete in BLOCK LETTERS only, and tick( ) where applicable. For first time Investor(s), this Form is required to be completed.
1. PARTICULARS OF INDIVIDUAL APPLICANT
NRIC No. (new)
Gender
ACCOUNT OPENING FORMIndividual / Corporate
NRIC(old)/Passport No./Birth Certificate No. - -
Date of Birth (DD/MM/YYYY) - - Male Female
Nationality Malaysian Others (please specify)
Bumiputera Status Yes No
Occupation
Relationship to Individual Applicant Parent Spouse Child Sibling Relative Others _____________________
Name of Corporate Applicant
Nature of Business
Company Registration No. Date of Incorporation (DD/MM/YYYY) - -
Status Bumiputra Controlled Non-Bumiputra Controlled Non-Malaysian Controlled
Contact Person ( 1 )
Designation
Department
Tel No. - -
Office Email Address
Contact Person ( 2 )
Designation
Department
Tel No. - -
Office Email Address
Please refer to clause 4 of the Terms and Conditions to ascertain the documents required to be submitted with this application.
Address
Post Code Town / City
State Country
Tel No. - (house) - (mobile)
- (office) ext. Fax No. -
5. PARTICULARS OF INSURANCE (KAF DANA ADIB, KAF DANA ALIF & KAF FIRST FUND ONLY)
ext
NRIC No. (new)
Sex
4. CORRESPONDENCE ADDRESS
ext
3. PARTICULARS OF CORPORATE APPLICANT
Fax No.
Fax No.
Are you currently under medical treatment or taking prescribed drugs or receiving medical advice in connection with any illness including AIDS-related complex?
Yes No
If yes, please specify
( , & )
We would like to request the redemption payment to be issued in the name of : -
Applicant only Joint Applicant only All Applicants
7. FATCA COMPLIANCE REQUIREMENTAre you a US person? Yes No
[If you have ticked Yes, we will not be able to accept your application. Please speak to your Financial Adviser. ]A US person is a living individual to whom one or more of the following applies: – Dual citizens of the US and another country – Born in the US, unless citizenship is renounced – US citizen even if residing outside the United States – Lawful permanent resident of the US – US passport holder – A “substantially present” person as declared by the US tax regulator
8. DECLARATIONS AND SIGNATURES (all applicants must sign this form)INDIVIDUAL APPLICANT CORPORATE APPLICANT
DECLARATION FOR PERSONAL DATA PROTECTION ACT 2010 (A li bl f I di id l/C t A li t)
6. INSTRUCTION FOR REDEMPTION PAYMENT (for joint applicants account only)
Please tick ( ) one
I am/ We are 18 years old and above as at the date of this application. Copy/Copies of my/our NRIC/Passport is/are enclosed.
I/We hereby agree to indemnify KIF against all actions, suits, proceedings, claims, damages andlosses which may be suffered by KIF as a result of any inaccuracy of the declarations herein.
I/We do declare and represent that as at the date hereof, I/We am/are not an undischarged bankruptnor has any petition for bankruptcy been filed against me/us.I/We declare that I am/ We are neither engaged in any unlawful activity nor are my/our monies obtainedfrom any illegal source or related to any illegal activity.
I/We undertake to provide such information and documents that KIF may reasonably require for thepurpose of due diligence/ enhanced due diligence as required under the Anti-Money Laundering andCounter Financing Terrorism Act 2001 ("AMLCFTA").
I/We acknowledge that I/We have received, read and understood the relevant Master Prospectus(es) /Prospectus(es) for the Fund(s) to be invested in, the Terms and Conditions of this Form and I/Weundertake to be bound by them for my/our initial and subsequent transactions with KAF InvestmentFunds Berhad ("KIF").
I/We undertake to be bound by the provisions of the documents constituting the Fund(s) subscribed to as if I was/ We were a party thereto.
I/We undertake to provide KIF with all information as it may require for the purpose of and inconnection with completing the Account Application Form, including but not limited to, my/ourinformation on financial position, condition or prospect.I/We acknowledge that I/We shall keep KIF informed of any change of my/our particulars as stated inthis Account Application Form and/or of any material facts that will, direct or indirectly, affect my/ourfinancial position(s), condition(s) or prospect(s).
I/We hereby declare and acknowledge that I/We have sole legal and proprietary right over all moniesaccompanying this application.
I/We acknowledge that I/We are aware of the fees and charges that I/We will incur directly or indirectlywhen investing in the Fund(s).
I/We declare that I am/ We are in compliance and undertake that I/We will comply with all applicablelaws and regulations.
(Distribution Instruction as per Purchase/ Switch Form) Depending on the Fund invested and subjectto each respective Fund's Master Prospectus(es)/ Prospectus(es), income distribution will either bereinvested into further units in the relevant fund or be paid out.
(For joint application only) In the absence of written explicit instructions, I/We acknowledge thatinstructions must be given by both of us.
DECLARATION FOR PERSONAL DATA PROTECTION ACT 2010 (Applicable for Individual/Corporate Applicant)
I/We shall procure any third party that processes Disclosed Data for or on behalf of me/us to agree in writing to the same terms that I/We agree in line with the Act and in this declaration.
Applicant Only
Joint Applicant Only
Either Applicant to sign
Both Applicants to sign
TERMS AND CONDITIONS
3. JOINT INDIVIDUAL APPLICANT 4. CORPORATE APPLICANT 5. RIGHTS OF THE MANAGER
1. MINIMUM INVESTMENT
6. CUSTOMER CARE
2. INDIVIDUAL APPLCANT
Note: To repurchase, bothprincipal and joint applicants arerequired to sign the RepurchaseForm should the proceeds to becredited into a single account.
9. FOR DISTRIBUTOR / STAFF USE ONLY
For Joint Application, pleasetick ( ) account operating modefor future transactions
No delay or omission by KIF in exercising any right under this declaration will operate as a waiver of that or any other right. The covenants set out in this declaration are separate and severable and enforceableaccordingly and whilst the restrictions are considered by the parties to be reasonable in all the circumstances as at the date hereof, it is acknowledged that restrictions of such a nature may be invalid because ofchanging of the circumstances or other unforeseen reasons and accordingly, if any restrictions shall be adjudged to be void or ineffective for whatever reason but would be adjudged to be valid and effective if partof the wording thereof were deleted or the periods thereof reduced, such modifications shall be applied as may be necessary to make them valid and effective.
I/We shall immediately notify KIF in the event of any claim or complaint from any data subject of Disclosed Data and/or where there has been an event of non-compliance with the Act by me/us, whetherdiscovered by me/us or forming the subject of an investigation and/or action by the relevant authorities.I/We shall indemnify KIF against all proceedings, costs, expenses, liabilities or damages arising from my/our failure to comply with the Act with respect to Disclosed Data and the terms of this declaration. Theremedies available to KIF contained in this clause are without prejudice to and in addition to any warranties, indemnities, remedy or other rights provided by law or any prior agreement.
I/We shall fully comply with the provisions of the Personal Data Protection Act 2010 (“the Act”) applicable to the processing of personal data as defined in the Act and specifically, that all necessary consentshave been obtained from individuals whose personal data may be disclosed to KIF or its representatives (“Disclosed Data”) in respect of such disclosure to and processing by KIF and its representatives andthat I/We will always furnish KIF or its representatives with up-to-date Disclosed Data.
Based on the above declaration, I/we undertake that this declaration shall not be assigned without KIF's prior written consent; will be binding upon my/our servants, agents, personal representatives, assignsand successor-at-law; will inure to the benefit of KIF and its successors and assigns; and shall supersede all prior representations, negotiations, arrangements, understandings or agreements and all othercommunications between KIF and me/us in connection with the processing and disclosure of Disclosed Data to KIF.
Applicant / Authorised Signatory (ies)
Date
Applicant / Authorised Signatory (ies)
Date
You are advised to read andunderstand the relevant MasterProspectus(es)/ Prospectus(es)and deed(s) which shall be madeavailable upon request beforeinvesting in the fund(s).
Initial and subsequent investmentmust be for a minimum amountstated in the relevant MasterProspectus(es)/ Prospectus(es).
Please enclose a photocopy ofyour identity card or passport..
If aged 18 years old and above,he/she is also required to sign theapplication form.
In the case of death of a joint-holder, the surviving holder will bethe only person recognised by theManager and the Trustee ashaving any title to or interest inthe units held.
In the absence of written explicitinstructions, I/we acknowledgethat instructions must be given byboth of us.
Please enclose a copy of theMemorandum and Articles ofAssociation, Company's latestaudited accounts, list ofAuthorised Signatories andSpecimen Signatures.
For a corporation, the CommonSeal or the Company stamp willhave to be affixed. If theCompany stamp is used, anAuthorised Officer must sign andstate his/her representativecapacity.
Certified True Copy (by companysecretary, if applicable) of theBoard Resolution, Form 11, Form9, Form 13 (if applicable), Form24, Form 44 and Form 49.
If you require further informationor clarification, please contact ourCustomer Service for assistance.
All notices and othercommunications sent by or tothe applicant shall be sent atthe risk of the applicant. Unlessdue to willful default ornegligence of the Manager, theManager shall not beresponsible for any inaccuracy,interruption, error, delay orfailure in transmission ordelivery of any notices viawhatever means, or for anyequipment failure ormalfunction. The Manager shallnot be liable for any driect orindirect consequential lossesarising from the foregoing.
Applicant must be 18 years oldand above.
Please enclose a photocopy ofyour identity card or passport.
The Manager reserves the right toaccept or reject any application inwhole or in part thereof an.dreject any Fund Application Formwhich is not completed in full andsupported by the requesteddocuments and payments.
The information that you haveprovided will be used strictly forour own purpose and shall notbe shared with any other partiesunless as required by law.
Name UTC Code Date
Account No. Trans. No. Price of Transaction(RM)
10. FOR OFFICE USE ONLY
I/We acknowledge that I/We have received, read and understood the relevant Master Prospectus(es)/Prospectus(es) for the Fund(s) to be invested in, the Terms and Conditions of this Form and I/Weundertake to be bound by them for my/our initial and subsequent transactions with KAF InvestmentFunds Berhad ("KIF").
I/We acknowledge that I/We are aware of the fees and charges that I/We will incur directly or indirectlywhen investing in the Fund(s).
I/We do declare and represent that as at the date hereof, I/We am/are not an undischarged bankruptnor has any petition for bankruptcy been filed against me/us.
I/We undertake to be bound by the provisions of the documents constituting the Fund(s) subscribedto as if I was/ We were a party thereto.
I am/ We are duly authorised officer(s) of the Corporation, and warrant that the Corporation has thepower and capacity to enter into this agreeement and undertake transactions involving the Fund(s).Attached is a certified true copy of the Corporation's list of authorised signatories.
I/We, hereby declare and represent that as at this date, the Corporation is not wound up nor has therebeen any winding-up petition presented to the Corporation.
I/We, as directors(s) of the Corporation do hereby declare that the Corporation is a legallyincorporated Corporation. Copy of my/our Certificate of Incorporation is enclosed.
I/We declare that I am/ We are neither engaged in any unlawful activity nor are my/our moniesobtained from any illegal source or related to any illegal activity.
I/We hereby declare and acknowledge that I/We have sole legal and proprietary right over all moniesaccompanying this application.I/We hereby agree to indemnify KIF against all actions, suits, proceedings, claims, damages andlosses which may be suffered by KIF as a result of any inaccuracy of the declarations herein.We, the abovenamed authorised signatories and representatives for the Company, do declare andrepresent that as at the date hereof , no petition for winding-up has been filed against the Companynor any receiver has been appointed over any of its assets.
I/We undertake to provide KIF with all information as it may require for the purpose of and inconnection with completing the Account Application Form, including but not limited to, theCorporation and its group of companies' information on financial position, condition, operation,business or prospect.I/We acknowledge that I/We shall keep KIF informed of any change of the information stated in thisAccount Application Form and/or of any material facts that will, direct or indirectly, affect theCorporation and its group of companies' financial position, condition, operation, business orprospect.
I/We undertake to provide such information and documents that KIF may reasonably require for thepurpose of due diligence/ enhanced due diligence as required under the AMLCFTA.(Distribution Instruction as per Purchase/ Switch Form) Depending on the Fund invested and subjectto each respective Fund's Master Prospectus(es)/ Prospectus(es), income distribution will either bereinvested into further units in the relevant fund or be paid out.
y pp y
Level 11, Chulan Tower, No. 3 Jalan Conlay, 50450 Kuala LumpurTel:603 2168 8823 Fax: 603 2168 8754 Purchase Switch
Website: www.kaf.com.my
Name of Individual Applicant
NRIC (old) : Tel No. -
NRIC (new) : - -
Remain as previous application Update
Occupation
Education Level Primary Secondary STPM / Diploma /PreU Degree Post Graduate
Annual Household Income Below RM20,000 RM20,001 - RM60,000 RM60,001 - RM120,000
RM120,001 - RM180,000 RM180,001 - RM240,000 RM240,001 and above
Source of Income Employment Business Savings / Inheritance Others (please specify)
Name of Joint Individual Applicant (not applicable for EPF Investment Scheme ("EPF"))
NRIC No. (old) : Tel No. -
NRIC No. (new) : - -
Remain as previous application Update on Corporation's documents
Name of Company
Company Registration No
Name of Contact Person(s)
Tel - (office) ext. Fax No. -
Fund Name
1.
2.
3.
* Note: C - Cash PlanE - EPF Plan
Payment Mode for investment :
Cheque/Bank Draft (Bank _____________________________ No. ___________________ ) (Payable to "KAF Investment Funds Berhad")
EPF Investment Scheme ("EPF")
Note to be read before completing this section:
2. CORPORATE APPLICANT (not applicable for EPF)
Initial Additional
Distribution Instruction (not applicable for EPF)
Reinvest Pay by cheque
Reinvest Pay by cheque
Reinvest Pay by cheque
PURCHASE / SWITCH FORM
Please complete in BLOCK LETTERS only, and tick( ) where applicable. For first time investor(s), please fill up the Account Opening Form to be submitted with this Form.
Cheque/bank draft should be crossed and made payable to "KAF Investment Funds Berhad" for all funds and must be drawn on a bank located in Malaysia. You should write your full name and NRIC No. on theback of each cheque. The cheque(s)/ bank draft(s) must be attached with this Form.
In compliance with Section 232(2) of the Capital Markets and Services Act 2007, this Form must be circulated with the Master Prospectus(es)/ Prospectus(es) and Supplementary Master Prospectus(es)/Prospectus(es) (if any). Investors should read and understand the contents of the relevant Master Prospectus(es)/ Prospectus(es) and Supplementary Master Prospectus(es)/ Prospectus(es) if any beforecompleting this form.
1. INDIVIDUAL APPLICANT
3. DETAILS OF INVESTMENT APPLICATION
Amount(RM) Type
Investment
Initial Additional
Initial Additional
*Plan
TOTAL
Account No.
(for existing unit holders only)
1.
2.
3.
4.
5.
1. Reinvest Pay by cheque
2. Reinvest Pay by cheque
3. Reinvest Pay by cheque
4. Reinvest Pay by cheque
5. Reinvest Pay by cheque
(i)
(ii)
(iii)
(iv)
You should assess whether you have the ability to service the repayments on the proposed loan. If your loan is a variable rate loan, and if interest rates rise, your total repayment amount will beincreased.
Distribution Instruction (not applicable for EPF)
Investing in an investment scheme with borrowed money is more risky than investing with your own savings. You should assess if loan financing is suitable for you in light of your objectives, attitude torisk and financing circumstances. You should be aware of the risk, which would include the following:-
I/We acknowledge that I/We are aware that there are risks associated with the Fund(s) where the investment may go down as well as up.
Returns on investment are not guaranteed and may not be earned evenly over time. This means that there may be some years where returns are high and other years where losses are incurredinstead. Whether you eventually realise a gain or incur loss may be affected by the timing of the sale of your units. The value of units may fall just when you want you money back even thoughthe investment may have done well in the past.
This brief statement cannot disclose all the risks and other aspects of loan financing. You should therefore carefully study the terms and conditions before you decide to take the loan. If you havedoubts in respect of any aspect of this Risk Disclosure Statement or the terms of the loan financing, you should consult the institution offering the loan.
I/We acknowledge that I/We have received, read and understood the relevant Master Prospectus(es)/ Prospectus for the Fund(s) to be invested in, the Terms and Conditions of this Form and I/We undertake to be bound by them for my / our initial and subsequent transactions with KAF Investment Funds Berhad ("KIF").
6. DECLARATIONS & SIGNATURES (all applicants must sign this form)
The higher the margin of financing (that is, the amount of money you borrow for every Ringgit of your own money that you put in as deposit or down payment), the greater the potential for lossesas well as gains.
5. LOAN FINANCING RISK DISCLOSURE STATEMENT
7. FOR DISTRIBUTOR / STAFF USE ONLY
8. FOR OFFICE USE ONLY
4. DETAILS OF SWITCHING
SWITCH FROM
Fund Name
Please ensure you maintain the minimum amount required in the original Fund as stated in the relevant Master Prospectus(es)/ Prospectus(es) and Supplementary Master Prospectus(es)/Prospectus(es).
Fund Name
SWITCH TO
No of Units
If unit prices fall beyond a certain level, you may be asked to provide additional acceptable collateral or pay additional amount on top of your normal installments. If you fail to comply within theprescribed time, your units may be sold to settle your loan.
I/We undertake to be bound by the provisions of the documents constituting the Fund(s) subscribed to as if I was/We were a party thereto.
I/We acknowledge that I/We are aware of the fees and charges that I/We will incur directly or indirectly when investing in the Fund(s).
I/We hereby declare and acknowledge that I/We have sole legal and proprietary right over all monies accompanying this application.
I/We hereby agree to indemnify KIF against all actions, suits, proceedings, claims, damages and losses which may be suffered by KIF as a result of any inaccuracy of the declarations herein.
I / We acknowledge that I / We have read and understood the contents of the investment Loan Financing Risk Disclosure Statement. I /We do declare and represent that as at the date hereof, I / Weam / are not an undischarged bankrupt nor has any petition for bankruptcy been filed against me/us. With the completion of this form, it constitutes that I have read, understood and agreed to bebound by the notes, terms and conditions stated in this form. I also accept and acknowledge that KAF Investment Funds Berhad has absolute discretion to reply on facsimile confirmation from me andundertake to indemnify and hold harmless KAF Investment Funds Berhad, its employees and agents at all costs, expenses, loss of liabilities, claims and demands arising out of this confirmation.
Applicant / Authorised Signatory (ies)
Date
Joint Applicant / Authorised Signatory (ies)
Date
Name UTC Code Date
Account No. Trans No. Price of Trans(RM)
Trans Price Date
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INVESTMENT FUNDS BERHAD
(334195-K)
Local Funds Constitution DateKAF First Fund 22 December 1995KAF Vision Fund 24 January 2000KAF Enhanced Bond Fund 27 December 2001KAF Tactical Fund 29 July 2004KAF Core Income Fund 29 July 2004KAF Jade Fund 26 July 2006
Shariah-compliant FundsKAF Dana Adib 25 February 2004KAF Dana al-Iddikhar 30 September 2005KAF Dana Alif 28 September 2007
Global Fund KAF Advantage GEM Bond Fund 27 August 2007
Manager KAF Investment Funds Berhad (334195-K)a company incorporated in Malaysia under the Companies Act 1965
Trustees CIMB Commerce Trustee Berhad (313031-A)RHB Trustees Berhad (573019-U) Universal Trustee (Malaysia) Berhad (17540-D)HSBC (Malaysia) Trustee Berhad (1281-T)
INVESTORS ARE ADVISED TO READ AND UNDERSTAND THE CONTENTS OF THE MASTER PROSPECTUS.IF IN DOUBT, PLEASE CONSULT A PROFESSIONAL ADVISER.
FOR INFORMATION CONCERNING CERTAIN RISK FACTORS, WHICH SHOULD BE CONSIDERED BYPROSPECTIVE INVESTORS SEE “RISK FACTORS” COMMENCING ON PAGE 22.
This Master Prospectus is dated 30 January 2015 and expires on 29 January 2016.
Master Prospectus
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INVESTMENT FUNDS BERHAD
(334195-K)
Local Funds Constitution DateKAF First Fund 22 December 1995KAF Vision Fund 24 January 2000KAF Enhanced Bond Fund 27 December 2001KAF Tactical Fund 29 July 2004KAF Core Income Fund 29 July 2004KAF Jade Fund 26 July 2006
Shariah-compliant FundsKAF Dana Adib 25 February 2004KAF Dana al-Iddikhar 30 September 2005KAF Dana Alif 28 September 2007
Global Fund KAF Advantage GEM Bond Fund 27 August 2007
Manager KAF Investment Funds Berhad (334195-K)a company incorporated in Malaysia under the Companies Act 1965
Trustees CIMB Commerce Trustee Berhad (313031-A)RHB Trustees Berhad (573019-U) Universal Trustee (Malaysia) Berhad (17540-D)HSBC (Malaysia) Trustee Berhad (1281-T)
INVESTORS ARE ADVISED TO READ AND UNDERSTAND THE CONTENTS OF THE MASTER PROSPECTUS.IF IN DOUBT, PLEASE CONSULT A PROFESSIONAL ADVISER.
FOR INFORMATION CONCERNING CERTAIN RISK FACTORS, WHICH SHOULD BE CONSIDERED BYPROSPECTIVE INVESTORS SEE “RISK FACTORS” COMMENCING ON PAGE 22.
This Master Prospectus is dated 30 January 2015 and expires on 29 January 2016.
Master Prospectus
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