Affin Hwang
Aiiman Select Income Fund
Prospectus
MANAGER
Affin Hwang Asset Management Berhad (429786-T)
(Formerly known as Hwang Investment Management Berhad)
TRUSTEE
HSBC (Malaysia) Trustee Berhad (1281-T)
This Prospectus is dated 1 March 2015 and expires on 29 February 2016.
The Affin Hwang Aiiman Select Income Fund was constituted on 12 December 2012.
PROSPECTIVE INVESTORS ARE ADVISED TO READ AND UNDERSTAND THE CONTENTS OF THIS PROSPECTUS. IF IN DOUBT,
PLEASE CONSULT A PROFESSIONAL ADVISER. FOR INFORMATION CONCERNING CERTAIN RISK FACTORS WHICH SHOULD
BE CONSIDERED BY PROSPECTIVE INVESTORS, SEE “RISK FACTORS” COMMENCING ON PAGE 15.
Responsibility Statements
This Prospectus has been reviewed and approved by the directors of Affin Hwang Asset Management
Berhad (formerly known as Hwang Investment Management 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, that there are no false or misleading statements, or
omission of other facts which would make any statement in the Prospectus false or misleading.
Statements of Disclaimer
The Securities Commission Malaysia has authorised the Fund and a copy of this Prospectus has been
registered with the Securities Commission Malaysia.
The authorisation of the Fund, and registration of this Prospectus, should not be taken to indicate that
Securities Commission Malaysia recommends the said Fund or assumes responsibility for the correctness of
any statement made, opinion expressed or report contained in this Prospectus.
The Securities Commission Malaysia is not liable for any non-disclosure on the part of Affin Hwang Asset
Management Berhad (formerly known as Hwang Investment Management Berhad), the management
company responsible for the said Fund and takes no responsibility for the contents in this Prospectus. The
Securities Commission Malaysia makes no representation on the accuracy or completeness of this
Prospectus, and expressly disclaims any liability whatsoever arising from, or in reliance upon, the whole or
any part of its contents.
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 PROFESSIONAL ADVISERS.
Additional Statements
No Units will be issued or sold based on this Prospectus later than 29 February 2016.
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 the Prospectus that is false,
misleading, or from which there is a material omission; or for any misleading or deceptive act in relation to
the Prospectus or the conduct of any other person in relation to the Fund.
The Fund has been certified as being Shariah compliant by the Shariah Adviser appointed for the Fund.
This Prospectus is not intended to and will not be issued and distributed in any country or jurisdiction other
than in Malaysia (“Foreign Jurisdiction”). Consequently, no representation has been and will be made as to
its compliance with the laws of any Foreign Jurisdiction. Accordingly, no issue or sale of Units to which this
Prospectus relates may be made in any Foreign Jurisdiction or under any circumstances where such action is
unauthorised.
2
Message from the Managing Director
Dear investors,
Thank you for expressing your interest in our Affin Hwang Aiiman Select Income Fund (“the Fund”).
The Fund is a Shariah-compliant mixed asset (conservative) income unit trust fund that seeks to provide
investors with regular income stream through Shariah-compliant investments.
To achieve the Fund’s objective, the Fund will invest in a diversified portfolio of Sukuk, Shariah-compliant
equities and Islamic money market instruments. The Fund’s investments in Sukuk would consist of
Malaysian and foreign-issued Sukuk whether issued by government or companies, complemented by
dividend yielding Shariah-compliant equities with the anticipation to gain income from dividends.
The Fund’s investments are not risk free and you are firmly advised to consider the risks associated with
investing in this Fund. We consider that the following non-exhaustive specific risk factors are related to the
Fund: credit/default risk, counterparty risk, interest rate risk, equity investment risk, liquidity risk, currency
risk, country risk, regulatory risk and re-classification of Shariah status risk. As such, your risk appetite level
should be a consideration when deciding if the Fund is suitable for you. For further details on the risk
profiles of the Fund, please refer to Section 4 Risk Factors in this Prospectus.
This Fund is suitable for you if you:




expect to receive income distribution;
have a moderate risk appetite;
expect incidental growth in capital; and
want an investment that complies with Shariah requirements.
The fees and charges that may be imposed on you, are as follows:



A maximum Sales Charge of 3.00% of the NAV per Unit of the Fund;
An annual management fee of 1.20% per annum of the NAV of the Fund;
An annual trustee fee of up to 0.08% per annum of the NAV of the Fund (excluding foreign subcustodian fees and charges); and
Other fees and charges such as transfer fee and other fund expenses in relation to the administration
and operation of the Fund.
If you are interested in investing in this Fund, have any queries or require further information, please
contact our customer service at our toll free number 1-800-88-7080 or email to
customercare@affinhwangam.com. Alternatively, you may contact any of our distributors, the list of which
may be found in Section 18 of this Prospectus.
We look forward to being of service to you.
Best wishes,
Teng Chee Wai
Managing Director
3
CONTENTS
PAGE
1.
CORPORATE DIRECTORY................................................................................................ 7
2.
GLOSSARY .................................................................................................................... 8
3.
KEY DATA ................................................................................................................... 11
4.
4.1
4.2
4.3
RISK FACTORS ............................................................................................................. 15
General Risks .............................................................................................................. 15
Specific Risks of the Fund ............................................................................................ 15
Risk Management ....................................................................................................... 17
5.
5.1
5.2
5.3
5.4
5.5
5.6
5.7
5.8
5.9
5.10
5.11
5.12
5.13
5.14
5.15
5.16
FUND DETAILS ............................................................................................................ 19
Investment Objective .................................................................................................. 19
Investors' profile………………………………………………………………………………………………………….19
Tenure ........................................................................................................................ 19
Benchmark ................................................................................................................. 19
Asset Allocation .......................................................................................................... 19
Investment Strategy of the Fund ................................................................................. 20
Shariah Investment Guidelines .................................................................................... 21
Permitted Investments................................................................................................ 22
Investment Restrictions and Limits .............................................................................. 23
Valuation of the Fund ................................................................................................. 24
Valuation Point for the Fund ....................................................................................... 25
Policy on Gearing and Minimum Liquid Assets Requirements ....................................... 25
Zakat for the Fund....................................................................................................... 25
Distribution Policy ...................................................................................................... 26
Historical Performance................................................................................................ 27
Historical Financial Highlights ...................................................................................... 29
6.
6.1
6.2
6.3
6.4
6.5
6.6
6.7
6.8
FEES AND CHARGES..................................................................................................... 30
Sales Charge ............................................................................................................... 30
Repurchase Charge ..................................................................................................... 30
Transfer Fee ................................................................................................................ 30
Switching Fee.............................................................................................................. 30
Annual Management Fee ............................................................................................ 30
Trustee Fee ................................................................................................................. 30
Fund Expenses ............................................................................................................ 31
Policy on Stockbroking Rebates and Soft Commissions................................................. 31
7.
7.1
7.2
7.3
7.4
7.5
7.6
7.7
7.8
7.9
7.10
SALE AND PURCHASE OF UNITS ................................................................................... 32
Computation of NAV and NAV per Unit ....................................................................... 32
Pricing of Units ........................................................................................................... 32
Sale of Units ............................................................................................................... 34
Minimum Units Held ................................................................................................... 35
Repurchase of Units .................................................................................................... 35
Payment of Repurchase Proceeds ................................................................................ 35
Repurchase Frequency and Minimum Units Repurchase .............................................. 35
Cooling-off Period ....................................................................................................... 35
Switching Facility ........................................................................................................ 36
Transfer Facility .......................................................................................................... 36
4
7.11
7.12
7.13
Where to Purchase and Repurchase Units ................................................................... 36
Unclaimed Moneys ..................................................................................................... 36
Anti-Money Laundering Policies and Procedures.......................................................... 36
8.
8.1
8.2
8.3
8.4
8.7
SALIENT TERMS OF THE DEED ...................................................................................... 38
Rights and Liabilities of Unit Holders ........................................................................... 38
Provisions regarding Unit Holders Meetings ................................................................ 38
Termination of the Fund ............................................................................................. 39
The maximum fees and charges that may be imposed by the Manager and the steps to
be taken by the Manager to increase such fees and charges ......................................... 40
Other Expenses Permitted under the Deed .................................................................. 41
Circumstances that may Lead Towards the Retirement, Removal or Replacement of the
Manager ..................................................................................................................... 41
Powers of the Manager to Remove the Trustee………………………………………………………….42
9.
CLIENT COMMUNICATION ........................................................................................... 44
10.
10.1
10.2
10.3
10.4
10.5
10.6
10.7
10.8
10.9
10.10
THE MANAGEMENT COMPANY ................................................................................... 46
The Manager .............................................................................................................. 46
Role of the Manager ................................................................................................... 46
Financial Position ........................................................................................................ 46
Role of Directors ......................................................................................................... 47
Role of the Investment Committee .............................................................................. 47
The Team.................................................................................................................... 48
Manager’s Delegate .................................................................................................... 51
The Manager’s Disclosure on Related Party Transactions and Conflict of Interest ......... 51
Policy on Dealing with Conflict of Interest.................................................................... 52
Material Litigation ...................................................................................................... 53
11.
11.1
11.2
11.3
11.4
11.5
11.6
THE EXTERNAL FUND MANAGER ................................................................................. 54
Profile of the External Fund Manager - Asian Islamic Investment Management Sdn. Bhd.
(AIIMAN) .................................................................................................................... 53
Duties and Responsibilities of the External Fund Manager ........................................... 53
Key Personnel of the Management Team .................................................................... 53
Existing and Proposed Related Party Transaction and Conflict of Interest ..................... 54
Policy on Dealing with Conflict of Interest.................................................................... 56
Material Litigation ...................................................................................................... 56
12.
12.1
12.2
12.3
12.4
12.5
12.6
12.7
12.8
12.9
12.10
12.11
12.12
12.13
12.14
THE TRUSTEE .............................................................................................................. 58
Background Information ............................................................................................. 58
Board of Directors ....................................................................................................... 58
Financial Position ........................................................................................................ 58
Experience in Trustee Business .................................................................................... 58
Profile of Key Personnel .............................................................................................. 58
Duties and Responsibilities of the Trustee ................................................................... 58
Retirement or Removal or Replacement of the Trustee ................................................ 59
Power of Trustee to Remove, Retire or Replace the Manager ....................................... 59
Trustee’s Statement of Responsibility .......................................................................... 59
Trustee’s Disclosure of Material Litigation ................................................................... 59
Trustee’s Delegate ...................................................................................................... 59
Policy on Dealing with Related-Party Transactions/Conflict of Interest ......................... 60
Anti-money Laundering and Anti-Terrorism Financing Provisions ................................. 60
Statement of Disclaimer .............................................................................................. 61
8.5
8.6
5
12.15 Consent to Disclosure………………………………………………………………………………………………….60
13.
13.1
13.2
13.3
THE SHARIAH ADVISER ................................................................................................ 62
Background Information ............................................................................................. 62
Shariah Adviser’s Roles and Responsibilities ................................................................ 62
Designated Persons Responsible for Shariah Matters of the Fund................................. 62
14.
TAX ADVISERS LETTER ................................................................................................. 64
15.
STATEMENT OF CONSENT ........................................................................................... 69
16.
DOCUMENTS AVAILABLE FOR INSPECTION .................................................................. 70
17.
UNIT TRUST LOAN FINANCING RISK DISCLOSURE STATEMENT ...................................... 69
18.
DIRECTORY OF SALES OFFICE ....................................................................................... 70
6
1.
CORPORATE DIRECTORY
The Manager
Affin Hwang Asset Management Berhad
(formerly known as Hwang Investment
Management Berhad) (429786-T)
Registered Office
th
27 Floor, Menara Boustead
69 Jalan Raja Chulan
50200 Kuala Lumpur
Business address
th
Suite 11-01, 11 Floor
Menara Keck Seng
203 Jalan Bukit Bintang
55100 Kuala Lumpur
Tel No. : (603) 2116 6000
Fax No. : (603) 2116 6100
Toll free line : 1-800-88-7080
E-mail : customercare@affinhwangam.com
Website : www.affinhwangam.com
Board of Directors of the Manager
 Tan Sri Dato’ Seri Che Lodin Bin Wok
Kamaruddin (Non-independent Director)
 Puan Maimoonah Binti Mohamed Hussain
(Non-independent Director)
 YBhg Mej Jen Dato’ Hj Latip Bin Ismail
(Independent Director)
 Mr Teng Chee Wai (Non-independent
Director)
 Mr Blair Chilton Pickerell (Nonindependent Director)
 Encik Abd Malik Bin A Rahman
(Independent Director)
 Ms Seet Oon Hui Eleanor (Alternate
Director to Mr Blair Chilton Pickerell)
Investment Committee Members
 Dato’ V. Danapalan (Chairman,
Independent member)
 Puan Maimoonah Binti Mohamed Hussain
(Non-independent member)
 Mr Ong Teng Chong (Non-independent
member)
 Encik Mohammad Aminullah Bin Basir
(Independent member)
 Mr Phuah Eng Chye (Independent
member)
Manager’s Delegate
(fund valuation & accounting function)
HSBC (Malaysia) Trustee Berhad (1281-T)
Registered Office & Business Address
th
13 Floor, Bangunan HSBC
South Tower, No.2
Leboh Ampang
50100 Kuala Lumpur
Tel No. : (603) 2075 7800
Fax No. : (603) 2179 6511
External Fund Manager
Asian Islamic Investment Management Sdn.
Bhd. (256674-T) (AIIMAN)
Registered Address
th
27 Floor, Menara Boustead
69 Jalan Raja Chulan
50200 Kuala Lumpur
Tel No. : (604)-263 6996
Fax No. : (604)-263 9597
Business Address
th
Suite 10-03, 10 Floor
Menara Keck Seng
203, Jalan Bukit Bintang
55100 Kuala Lumpur
Tel No. : (603)-2142 1881
Fax No. : (603)-2116 6150
Company Secretary
Azizah Shukor (LS0008845)
th
27 Floor Menara Boustead
69 Jalan Raja Chulan
50200 Kuala Lumpur
The Trustee
HSBC (Malaysia) Trustee Berhad (1281-T)
Registered & Business Address
th
13 Floor,
Bangunan HSBC, South Tower
No 2, Leboh Ampang
50100 Kuala Lumpur
Tel No. : (603) 2075 7800
Fax No. : (603) 2179 6511
Trustee’s Delegate
The Hongkong and Shanghai Banking
Corporation Limited
(as Custodian) and assets held through:HSBC Nominees (Tempatan) Sdn. Bhd.
(258854-D)
Registered Address
Bangunan HSBC
No.2, Leboh Ampang
50100 Kuala Lumpur
Tel No. : (603) 2075 3000
Fax No. : (603) 2179 6488
Trustee’s Delegate (Foreign Custodian)
HSBC Institutional Trust Services (Asia)
Limited
6th Floor, Tower One
HSBC Centre
No 1 Sham Mong Road
Kowloon, Hong Kong
Tel No. : (852) 2822 1111
Fax No: (852) 2810 5259
7
The Shariah Adviser
Amanie Advisors Sdn Bhd (684050-H)
No. 2, Jalan Binjai
Off Jalan Ampang
50450 Kuala Lumpur
Malaysia
Tel No. : (603) 2181 8228
Fax No. : (603) 2181 8219
Tax Adviser
Deloitte Tax Services Sdn Bhd
Level 16, Menara GLB
1 Jalan Wan Kadir,
Taman Tun Dr. Ismail
60000 Kuala Lumpur
Auditor
PricewaterhouseCoopers
Level 10, 1 Sentral
Jalan Travers, KL Sentral
P.O. Box 10192
50706 Kuala Lumpur
Solicitors for the Manager
Messrs. Naqiz & Partners
No. 42A, Lorong Dungun
Damansara Heights
50490 Kuala Lumpur
Banker
HSBC Bank (M) Berhad
Head Office
2, Leboh Ampang
50100 Kuala Lumpur
FiMM
Federation of Investment Managers
Malaysia
th
19-06-1, 6 Floor
Wisma Tune
19, Lorong Dungun
Damansara Heights
50490 Kuala Lumpur
Tel No. : (603) 2093 2600
Fax No. : (603) 2093 2700
Email: info@fimm.com.my
Website: www.fimm.com.my
Agents
Registered unit trust consultants and
other approved Institutional Unit Trust
Advisers (as and when appointed) of the
Manager.
2.
GLOSSARY
assets of the Fund
Means the holdings of the Fund which include, Shariah-compliant
securities, Sukuk, cash and Shariah-based deposits, other Islamic
money market instruments and all amounts due to the Fund.
the Act or CMSA
Means the Capital Markets and Services Act 2007 as originally enacted
and amended or modified from time to time.
the Board
Means the Board of Directors of the Manager.
Bursa Malaysia
Means the Malaysian stock exchange managed and operated by the
Bursa Malaysia Securities Berhad.
Business Day
A day on which the Bursa Malaysia is open for trading. Information of
the Bursa Malaysia is close for trading can be obtained from
www.bursamalaysia.com.
Cooling – off Period
Means no more than six (6) Business Days after the purchase request
for Units is received by the Manager.
Cooling – off Right
A Cooling-off Right refers to the right of the Unit Holder to obtain a
refund of his investment in the Fund if the Unit Holder so requests
within the Cooling-off Period. This right is available if you are investing
in any funds managed by the Manager for the first time. This right is
not applicable to you if you are:
i.
A corporation or institution;
ii. A staff of the Manager; or
iii. Persons registered with a body approved by the SC to deal in unit
trusts.
The Unit Holder shall be refunded within ten (10) days from receipt of
the cooling-off application.
the Deed(s)
Refers to the deed dated 24 April 2012 and supplemental deed dated
27 June 2014 entered into between the Manager and the Trustee and
includes any subsequent amendments and variations thereto.
deposits
Refers to fixed deposits.
External Fund Manager
Asian Islamic Investment Management Sdn. Bhd. (AIIMAN)
FiMM
Means the Federation of Investment Managers Malaysia.
financial institution
Means
(a)
if the institution is in Malaysia:
(i) a licensed bank;
(ii) a licensed investment bank; or
(iii) a licensed Islamic bank;
(b) if the institution is outside Malaysia, any institution that is licensed,
registered, approved or authorised by the relevant banking regulator
to provide financial services.
Forward Pricing
Means the price of a Unit that is the Net Asset Value per Unit
calculated at the next valuation point after a purchase request or a
repurchase request, as the case may be, is received by the Manager.
Fund
Refers to the Affin Hwang Aiiman Select Income Fund.
8
Guidelines
Means the Guidelines on Unit Trust Funds issued by the SC and as may
be amended from time to time.
Institutional Unit Trust Advisers
(IUTA)
Means an institution, a corporation or an organisation that is
registered with the FiMM to market and distribute unit trust funds.
Latest Practicable Date (LPD)
Means 2 January 2015 and is the latest practicable date for the
purposes of ascertaining certain information in this Prospectus.
Long-term
Means a period of more than five (5) years.
the Manager
Refers to Affin Hwang Asset Management Berhad (formerly known as
Hwang Investment Management Berhad).
MARC
Refers to the Malaysian Rating Corporation Berhad.
Medium-term
Means a period between three (3) to five (5) years.
Net Asset Value or NAV
Means the value of all the Fund’s assets less the value of all the Fund’s
liabilities at the valuation point.
For the purpose of computing the annual management fee and annual
trustee fee, the NAV of the Fund should be inclusive of the management
fee and the trustee fee for the relevant day.
NAV per Unit
Means the Net Asset Value of the Fund at a particular valuation point
divided by the total number of Units in Circulation at that point.
Prospectus
Refers to this prospectus including any supplementary thereof or
replacement prospectus, as the case may be.
RAM Ratings
Refers to RAM Rating Services Berhad.
Repurchase Charge
Means a charge imposed pursuant to the Unit Holder’s request for
repurchase of Units of the Fund.
Repurchase Price
Means the price payable to a Unit Holder by the Manager for a Unit
pursuant to a repurchase request and it shall be exclusive of any
Repurchase Charge.
RM
Means Ringgit Malaysia, the lawful currency of Malaysia.
Sales Charge
Means a charge imposed pursuant to the Unit Holder’s purchase
request.
SBL
Means Securities Borrowing and Lending Guidelines
SC
Means the Securities Commission Malaysia.
Selling Price
Means the price payable by a Unit Holder for a Unit pursuant to a
purchase request and it shall be exclusive of any Sales Charge.
SAC
Refers to Shariah Advisory Council.
Shariah
Islamic law, originating from the Qur`an (the holy book of Islam), and
its practices and explanations rendered by the prophet Muhammad
(pbuh) and ijtihad of ulamak (personal effort by qualified Shariah
9
scholars to determine the true ruling of the divine law on matters
whose revelations are not explicit).
Shariah Adviser / Amanie
Refers to Amanie Advisors Sdn. Bhd.
Shariah requirements
Means a phrase or expression which generally means making sure that
any human conduct must not involve any prohibition 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 as required by the Shariah for that element.
Short-term
Means a period of less than 3 years.
Special Resolution
Means a resolution passed at a meeting of Unit Holders duly convened
in accordance with the Deed and passed by a majority of not less than
three forth (¾) of Unit Holders voting at a meeting of Unit Holders.
For the purpose of terminating or winding up the Fund, a Special
Resolution is passed by a majority in number representing at least three
quarter (¾) of the value of Units held by the Unit Holders voting at the
meeting.
Sukuk
Means a certificate of equal value which evidence undivided ownership
or investment in assets using Shariah principles and concepts endorsed
by the Shariah Advisory Council of the SC.
the Trustee
Refers to HSBC (Malaysia) Trustee Berhad.
Unit or Units
Means a measurement of the right or interest of a Unit Holder in the
Fund and includes any subunit thereof.
“Units in Circulation”
Means Units created and fully paid for and which has not been
cancelled.
Unit Holders
Means the person for the time being who, in full compliance to the
relevant laws and under the Deed, is registered pursuant to the Deed as
a holder of Units, including a jointholder.
Note: Reference to “day(s)” in this Prospectus will be taken to mean calendar day(s) unless otherwise
stated.
10
3.
KEY DATA
THIS SECTION IS ONLY A SUMMARY OF THE SALIENT INFORMATION ABOUT THE FUND, INVESTORS
SHOULD READ AND UNDERSTAND THE WHOLE PROSPECTUS BEFORE MAKING ANY INVESTMENT
DECISIONS.
Fund Information
The Fund
Fund Category
Page
Affin Hwang Aiiman Select Income Fund
Mixed asset (Conservative)
Fund Type
Base Currency
Income
Ringgit Malaysia
Financial Year End
Investment Objective
31 March
The Fund seeks to provide investors with regular income stream
through Shariah-compliant investments.
19
Note : Any material change to the Fund’s investment objective
would require Unit Holders’ approval. Income distribution will
either be made in the form of Units or in cash. Please refer to
Section 5.14 for more details.
Asset Allocation
The Fund’s asset allocation is as follows:
Sukuk and Islamic money market
instruments
Shariah-compliant equities
Cash and Shariah-compliant
deposits with financial
institutions
Investment Strategy
19
Minimum 60% to a
maximum 100% of the
Fund’s NAV
Maximum 40% of the
Fund’s NAV
The remaining balance of
the Fund’s NAV
The Fund will invest in a diversified portfolio of Sukuk, Shariahcompliant equities and Islamic money market instruments. The
Fund’s investments in Sukuk would consist of Malaysian and
foreign-issued Sukuk whether issued by government or companies.
20
In addition, the Fund will invest in equities with the anticipation to
gain income from dividends.
For further information, please refer to Section 5.6.
Investors’ Profile
This Fund is suitable for investors who: expect to receive regular income* distribution;
 have a moderate risk appetite;
 expect incidental growth in capital; and
 want an investment that complies with Shariah requirements.
*Income distribution will either be made in the form of Units or in
cash. Please refer to Section 5.14 for more details.
11
19
Fund Information
Page
Specific Risks of Investing in
the Fund









Distribution Policy
The Fund will distribute income on a semi-annual basis (subject to
income availability), after the end of its first financial year.
15
Credit/ default risk
Counterparty risk
Interest rate risk
Equity investment risk
Liquidity risk
Currency risk
Country risk
Regulatory risk
Reclassification of Shariah status risk
26
For further information, please refer to Section 5.14.
Benchmark
The benchmark will be a combination of the current Maybank 12month Maybank General Investment Account (GIA) weighing at
70% and FTSE Bursa Malaysia EMAS Shariah Index performance
(FBMSHA) weighing at 30%.*
19
*For further information, please refer to Section 5.4.
Fees and Charges
This table describes the charges that you may directly incur when you buy or redeem Units of this Fund.
Sales Charge
Distributors
Maximum Sales Charge as a
percentage of the NAV per
Unit of the Fund*
Institutional Unit Trust
Advisers
Internal distribution
channel of the Manager
Unit trust consultants
30
3.00%
*Investors may negotiate for a lower Sales Charge.
Switching Fee
Nil.
30
Transfer Fee
RM5.00 per transfer.
30
Repurchase Charge
Nil.
30
This table describes the fees that you may indirectly incur when you invest in the Fund.
Annual Management Fee
1.20% per annum of the NAV of the Fund.
30
Annual Trustee Fee
Up to 0.08% per annum of the NAV of the Fund (excluding foreign
sub-custodian fees and charges).
30
Fund Expenses
These include:
 Commissions/fees paid to brokers/dealers in affecting dealings
in the investments of the Fund;
 (where the custodial function is delegated by the Trustee) charges
and fees paid to sub-custodians taking into custody any foreign
assets or investments of the Fund;
 Tax and other duties charged on the Fund by the government
and other authorities;
31
12
Fund Information
Page
 The fee and other expenses properly incurred by the auditor
appointed for the Fund;
 Fees for the valuation of any investments of the Fund by
independent valuers;
 Cost incurred for the modification of the Deed of the Fund other
than those for the benefit of the Manager or the Trustee;
 Cost incurred for any meeting of the Unit Holders other those
convened for the benefit of the Manager or Trustee; and
 Other fees/expenses related to the Fund.
Transaction Details
Minimum Initial Investment
RM1,000
34
Minimum Units Held
2,000* Units
35
Minimum Additional
Investment
RM100*
34
Repurchase Frequency and
Minimum Units
Repurchased
There are no restrictions on the frequency of repurchases;
however, there is a minimum repurchase of 2,000 Units for each
repurchase application. Applications for repurchase must be
submitted to the Manager on any Business Day from 9.00 a.m. to
3.30 p.m. Such repurchases requests are deemed received only if all
documents and forms received by the Manager are duly and
correctly completed.
35
Period of Payment of
Repurchase Proceeds
Within ten (10) calendar days from the day the repurchase request
is received by the Manager.
35
Cooling-off Period
Within six (6) Business Days from the day the purchase request for
Units is received by the Manager.
35
Switching Facility
All Unit Holders are allowed to switch to any other funds managed
by the Manager at the prevailing net asset value per unit of the
intended funds .
36
Transfer Facility
Unit Holders are permitted to transfer their Units to another person
at any point in time by completing the transfer application form and
returning it to the Manager on any Business Day. The transfer must
be made in terms of Units and not in RM value.
36
The minimum amount for each transfer request is 2,000 Units. Unit
Holders who are effecting the transfer must maintain at least 2,000
Units in the Fund (the minimum holdings requirement) after the
transfer is effected to remain as a Unit Holder of the Fund.
Other Information

The Manager
Affin Hwang Asset Management Berhad (formerly known as Hwang
Investment Management Berhad)
Designated Fund Manager
David Ng Kong Cheong & Esther Teo Keet Ying
subject to change at the Manager’s discretion
13
46
48-49
Fund Information
Page
The Trustee
HSBC (Malaysia) Trustee Berhad
57
The External Fund Manager
Asian Islamic Investment Management Sdn. Bhd. (AIIMAN)
53
Designated Fund Manager
for the External Fund
Manager
Akmal Hassan & Sean Ramsey Lee
The Shariah Adviser
Amanie Advisors Sdn. Bhd.
61
Fund Accounting and
Valuation Agent
HSBC (Malaysia) Trustee Berhad
50
Deed (s) that govern the
Fund
Deed dated 24 April 2012 and supplemental deed dated 27 June
2014 relating to the Affin Hwang Aiiman Select Income Fund
entered into between the Manager and the Trustee.
53-54
Unit prices and distributions payable, if any, may go down as well as up.
For information concerning certain risk factors which should be considered by you, see “Risk Factors”
commencing on page 15.
You should read and understand the contents of the Prospectus and, if necessary, should consult
professional adviser(s).
There are fees and charges involved and you are advised to consider the fees and charges before investing
in the Fund.
All fees and charges payable by you are subject to all applicable taxes (including but not limited to goods
and services taxes) and/or duties as may be imposed by the government and/or the relevant authorities
from time to time.
Past performance of the Fund is not an indication of its future performance.
14
4.
RISK FACTORS
This section of the Prospectus provides you with information on the general risks involved when
investing in a unit trust fund and the specific risks associated with the securities/instruments that
the Fund will be investing in.
4.1
General Risks

Fund Management Risk - The performance of a unit trust fund depends on the experience
and expertise of the investment manager to generate returns. Lack of any of the above
mentioned may adversely affect the performance of the Fund.

Inflation Risk - Inflation risk is the risk of potential loss in the purchasing power of your
investment due to general increase of consumer prices. Inflation erodes the nominal rate
of your return giving you a lower real rate of return. Inflation is thus one of the major risks
to you and results in uncertainty over the future value of investments. You are advised to
take note that this Fund is not constituted with the objective of matching the inflation rate
of Malaysia. The Fund has a specified objective that it seeks to achieve without having
regard to the inflation rate. If your investment objective is to match the inflation rate (so
as not to lose your purchasing power over time), this Fund may not be suitable for you.

Loan / Financing Risk - If you intend to purchase Units of this Fund by means of borrowed/
financed monies and pledging those Units as collateral for the borrowed/ financed
monies, you should be aware that if the price of the Units falls below the borrowed/
financed amount, the lender/financier may require you to provide additional forms of
collateral/ Units. You should also be aware that the cost of borrowing/cost of financing
may rise if the interest/profit rates move up especially if your borrowing/ financing is
based on floating interest/profit rates (i.e. not a fixed rate). In addition, the cost of your
borrowings/cost of financing may even be higher than any returns that you eventually
make from your investments in this Fund.
Shariah-based unit trust fund’s investor is advised to seek for Islamic financing to finance
their acquisition.
4.2

Risk of Non-compliance - The establishment of this Fund follows rules set out in the Deed
and the Guidelines. There is a risk that the Manager may not observe the rules whether
intentionally or through inadvertence. Whilst not every non-observance to the rules
governing the Fund will necessarily result in some losses to the Fund, you cannot discount
the risk that losses may be suffered by the Fund if the non-observance of the rules is
serious. This may occur, for instance, if the Manager decides to buy an instrument which is
not permitted, whether intentionally or through inadvertence, and thereafter having to
sell that instrument which may be at a loss to the Fund.

Operational Risk - This risk refers to the possibility of a breakdown in the Manager’s
internal controls and policies. The breakdown may be a result of human error, system
failure or may be fraud where employees of the Manager collude with one another. This
risk may cause monetary loss and/or inconvenience to you. The Manager will regularly
review its internal policies and system capability to mitigate instances of this risk.
Additionally, the Manager maintains a strict segregation of duties to mitigate instances of
fraudulent practices amongst employees of the Manager.
Specific Risks of the Fund
The specific risks associated with the securities/instruments in which the Fund will invest include:

Credit / Default Risk - This risk concerns with issuers of Sukuk and Islamic money market
instruments. The risk arises when an issuer is unable to service any coupon payments or
pay the principal amount upon maturity. If such defaults were to occur, the Fund will
record significant losses with respect to the NAV and will also be forced to forfeit any
coupon entitlements. For Islamic money market instruments, the risk is that the issuers of
such instruments may not make timely payment of interest and principal. In the event of
15
any default in the payment of the interest and principal, the value of the Fund may be
adversely affected. The management of credit risk is largely accounted for by the
Manager’s management of issuer-specific risk. This refers to the emphasis on credit
analysis conducted to determine issuer’s or guarantor’s ability to service promised
payments.

Counterparty Risk – This risk concerns with the Fund’s investment in Shariah-compliant
derivatives where the other party in an agreement may default on the terms of the
agreement. Generally, counterparty risk can be reduced by emphasis on credit analysis of
the counterparty to determine its creditworthiness.

Interest Rate Risk – Prices of Sukuk are subject to interest rate fluctuations. Generally,
movement in interest rates affects the prices inversely. For example, when interest rates
rise, prices of Sukuk will fall. The fluctuations of the prices of Sukuk will also have an
impact on the NAV of the Fund. This risk can largely be eliminated by holding the Sukuk
until their maturity. The Manager also manages interest rate risk by considering each
Sukuk’s sensitivity to interest rate changes as measured by its duration. When interest
rates are expected to increase, the Fund would then likely seek to switch to Sukuk which
have a lower duration and are less sensitive to interest rate changes.
(Note: Interest rate is a general indicator that will have an impact on the management of
the Fund regardless of whether it is a Shariah-based fund or otherwise. It does not in any
way suggest that this Fund will invest in conventional financial instruments).

Equity Investment risk – The buying and selling of equities carry a number of risks. The
most important being the volatility of the capital markets on which those securities are
traded and the general insolvency risk associated with the issuers of equities. The value of
an equity investment also depends on its earnings potential, sound management,
treatment of minority shareholders, as well as a myriad of other factors. Failure to achieve
the expected earnings would result in declining investment value which in turn affects the
performance of the Fund. This risk could be mitigated by diversifying the Fund’s portfolio.
The Manager will employ stringent stock selection criteria which would effectively filter its
stock components to equities which can provide income to the Fund.

Liquidity risk – Liquidity risk arises in two scenarios. The first is where an investment
cannot be sold due to unavailability of a buyer for that investment. The second scenario
exists where the investment, by its nature, is thinly traded. This will have the effect of
causing the investment to be sold below its fair value.

Currency Risk – Whilst the Fund is denominated in RM, investments in countries other
than Malaysia will cause the Fund to be exposed to currency risks.
As a simple illustration, suppose a Fund intends to purchase a particular Sukuk which is
denominated in Singapore Dollar (SGD). Since the Fund is denominated in RM, in order to
purchase the Sukuk, the Fund would have to exchange RM for SGD at an exchange rate
valued at the date of purchase. When the Fund is valued, the Fund will take into account
the currency movement between RM and the SGD in order to determine the value of the
asset for that day. If the SGD is stronger than RM for that particular day, it would mean
that the asset has appreciated in value, all else being equal. Hence, even if the Sukuk price
in SGD terms remains unchanged, the value of the same Sukuk in RM terms would be
higher given the appreciation of the SGD against RM. However in the event, the SGD is
weaker than RM, it would mean that the Sukuk purchased has depreciated in value upon
translating the value of the same Sukuk back into RM.

Country Risk – Since the investments for the Fund may consist of investments issued in
various countries in addition to Malaysia, the foreign investment portion of the Fund may
be affected by the risks specific to the countries in which it invests. Such risks include
changes in a country’s economic fundamentals, changes in social and political stability and
16
foreign investment policies, which may have an adverse impact on the Fund’s
investments.
4.3

Regulatory Risk – The investments of the Fund will be exposed to changes in the laws and
regulations in the countries the Fund is invested in. These regulatory changes pose a risk
to the Fund as it may materially impact the investments of the Fund. In an effort to
manage and mitigate such risk, the Manager seeks to continuously keep abreast of
regulatory developments (for example, by closely monitoring announcements on
regulators’ website and mainstream medias) in that country. The Manager may dispose its
investments in that particular country should the regulatory changes adversely impact the
Unit Holders’ interest or diminish returns to the Fund.

Re-classification of Shariah Status Risk – This risk refers to the risk that the currently held
Shariah-compliant securities by the Fund may be reclassified to be Shariah non–compliant.
If this occurs, then the value of the Fund may be adversely affected and the Manager will
take the necessary steps to dispose of such securities in accordance with the advice from
the Shariah Adviser.
Risk Management
In the Manager’s quest to provide returns to the Unit Holders, the Manager employs a proactive
risk management approach to manage risk thereby ensuring Unit Holders’ interest are not
jeopardised. The Manager’s Risk Management Committee is tasked by the Board to oversee the
Manager’s risk management activities both at operational level and at portfolio management level
to ensure that the risk management process is in place and functioning. The Risk Management
Committee comprises at least three board members and is chaired by an independent director. At
the operational level, the Manager has in place a Risk Committee (management level) to identify
and evaluate risks as well as formulate internal control measures to mitigate the Fund’s exposure to
these risks within a clearly defined framework and is primarily responsible to ensure that the
policies and procedures that have been implemented are reviewed on an on-going basis with
periodic assessments. The Risk Committee reports to the Risk Management Committee on a
quarterly basis.
The Manager has in place a system that is able to monitor the transactions to ensure compliance
with the Fund’s limits and restrictions. These limits are system-controlled and not manually tracked,
thus reducing the probability of human error occurring in ensuring the Fund’s limits and restrictions
are adhered to. The Manager also undertakes stringent evaluation of movements in market prices
and regularly monitors, reviews and reports to the investment committee to ensure that all the
Fund’s investment objectives are met. Regular portfolio reviews by senior members of the
investment team further reduce the risk of implementation inconsistencies and Guidelines
violations.
The Manager also employs a performance attribution system that enables the Manager to review
the performance of the Fund to determine the key factors that have contributed and detracted
from the Fund’s performance. This system complements the Manager’s overall risk management
process as the system also provides standard risk analytics on the portfolio such as the Fund’s
standard deviation, tracking error and measures of excess return. The data produced by the
performance attribution system is reviewed regularly and at least on a monthly basis in meetings
chaired by the managing director and participated by the portfolio managers and the performance
evaluation team.
The Manager engages a 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. Regular meetings are held to discuss investment themes and portfolio
decisions taken at the meetings are then implemented according to the investment guidelines
which also take into account requirements for minimum portfolio diversification across individual
investment holdings, sectors, geographies and asset classes (based on the respective portfolio’s
objective and strategy). The Manager also practises prudent liquidity management with the
objective to ensure that the Fund is able to meet its Short-term expenses.
17
It is important to note that events affecting the investments cannot always be foreseen.
Therefore, it is not always possible to protect investments against all risks. The various asset
classes generally exhibit different levels of risk.
The investments of the Fund carry risks and you are recommended to read the whole Prospectus
to assess the risks of the Fund. If necessary, you should consult your professional adviser(s) for a
better understanding of the risks.
18
5.
FUND DETAILS
5.1
Investment Objective
The Fund seeks to provide investors with regular income stream through Shariah-compliant
investments.
Note : Any material change to the Fund’s investment objective would require Unit Holders’
approval. Income distribution will either be made in the form of Units or in cash. Please refer to
Section 5.14 for more details.
5.2
Investors’ Profile
This Fund is suitable for investors who:



expect to receive regular income* distribution;
have a moderate risk appetite;
expect incidental growth in capital; and
want an investment that complies with Shariah requirements.
*Income distribution will either be made in the form of Units or in cash. Please refer to Section 5.14
for more details.
5.3
Tenure
The Fund does not have a fixed maturity date and may only be terminated in accordance with the
terms of this Prospectus and the provisions of the Deed.
5.4
Benchmark
The benchmark will be a combination of the current Maybank 12-month Maybank General
Investment Account (GIA) weighing at 70% and FTSE Bursa Malaysia EMAS Shariah Index
performance (FBMSHA) weighing at 30%.*
*As the Fund is a mixed asset fund, the Manager has used a weighted benchmark to enable Unit
Holders to evaluate the performance of the Fund against what Unit Holders would have earned if
they placed 70% of moneys in Islamic fixed deposit (equivalent to the 12-month Maybank GIA) and
30% in Shariah-compliant local equities (as reflected by the FTSE Bursa Malaysia EMAS Shariah
Index). Under normal market conditions, the ratio of the Fund’s asset allocation between fixed
income instruments and equities is expected to be 70 to 30. Regardless, the risk profile of the Fund
is higher than the benchmark.
Please note that the capital and returns of the Fund are not guaranteed.
The latest information on the Maybank 12-month Maybank General Investment Account (GIA) is
obtainable on Maybank’s website at www.maybank2u.com.my or from any Maybank branch
nationwide. As for the latest information on the FTSE Bursa Malaysia EMAS Shariah Index
performance (FBMSHA), investors can refer to www.ftse.com.
(Please note that investors may also obtain the benchmark from the Manager upon request.)
5.5
Asset Allocation
The Fund’s asset allocation is as follows:
Sukuk and Islamic money market
instruments
Minimum 60% to a maximum 100% of
the Fund’s NAV
Shariah-compliant equities
Minimum 0% to maximum 40% of the
Fund’s NAV
Cash and Shariah-compliant
deposits with financial
institutions
The remaining balance of the Fund’s NAV
19
5.6
Investment Strategy of the Fund
The Fund will invest in a diversified portfolio of Sukuk,Shariah-compliant equities and Islamic
money market instruments. The Fund’s investments in Sukuk would consist of Malaysian and
foreign-issued Sukuk whether issued by government or companies. These Sukuks are expected to
provide profit at intervals which are predetermined. These profits will then be distributed to Unit
Holders in the form of income.
Investments in dividend yielding Shariah-compliant equities are expected to enhance income and
returns to the Fund. The asset allocation decision between Sukuk and Shariah-compliant equity is
decided after considering the Sukuk and equity market outlooks over the medium to long-term
horizon. Due to investments in equities, the Manager expects the Fund to also yield incidental
growth in capital.
The Fund seeks to invest in foreign markets where the regulatory authorities are members of the
International Organization of Securities Commissions (“IOSCO”). These include, but are not limited
to, the following countries: Australia, Bahrain, China, Egypt, Hong Kong, India, Indonesia,
Kazakhstan, Korea, Philippines, Saudi Arabia, Singapore, Taiwan, Thailand, Turkey, Qatar and
United Arab Emirates.
The selection of Sukuk will depend largely on its credit quality where the respective Sukuk’s issuers
will have strong ability to meet their financial obligations and offer highest safety for timely
payment of interest and principal.
When choosing individual Sukuk, the following are the more important considerations:
•
issuer’s and/or guarantor’s industry and business medium- to long-term outlook;
•
issuer’s and/or guarantor’s financial strength and gearing levels;
•
issuer’s and/or guarantor’s cash-flow quality and volatility;
•
issuer’s and/or guarantor’s expected future cash-flow and ability to pay interest and
principal;
•
issuer’s and/or guarantor’s ratings by RAM or MARC or a recognized global credit rating
agency;
•
duration and interest rate sensitivity;
•
collateral type and value, and claims priority; and
•
price and yield-to-maturity.
In addition, the Fund will invest in equities with the anticipation to gain income from dividends.
When choosing individual equity, the following are the more important considerations:
•
historical and expected future dividend yield;
•
industry and business medium to long term outlook;
•
management track record/quality;
•
treatment towards minority shareholders by management and controlling shareholders;
•
financial strength and gearing levels;
•
earnings and cash flow volatility;
•
expected future earnings growth; and
•
share price valuation.
Based on the above, the Manager’s investment philosophy is to mainly invest in companies which
have medium to long-term investment horizon bias. These companies are expected to generate
sufficient cash flows to meet their debt obligations for fixed income instruments and/or distribute
dividends for equity investments. However, when opportunity arises, the Manager may take a
20
shorter period view (buying and selling in Short-term) to benefit from strong potential upside in
markets.
The use of money market instruments for this Fund is primarily bridging in nature. The Fund
intends to remain fully invested rather than merely holding cash while waiting for investment
opportunities to arise in the Sukuk or shariah-compliant equities markets. As such, while waiting for
that opportunity to arise, the Fund will place cash in Shariah-based deposits which will be relatively
Short-term in nature. Notwithstanding the aforesaid, the Fund may also selectively purchase
instruments such as Islamic commercial papers as part of its general investment. The Manager may
also selectively invest in Shariah-based collective investment schemes, such as Shariah-compliant
exchange traded funds, to gain broad exposure to certain market sectors.
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, economics, political or
any other conditions. In this regard, the Fund may allocate all of its holding into cash, Shariahcompliant deposits with financial institutions or money market instruments. The defensive
positions may be adopted up to such time as the Manager considers appropriate in consultation
with the Trustee.
Derivative Investments for Hedging Purposes Only
The Fund may employ Shariah-compliant derivatives in order to hedge the investments back to RM.
The decision to employ hedging would depend on the Manager’s outlook and views on the relevant
currencies in relation to the Ringgit Malaysia. Prior to hedging the investments of the Fund, the
Manager would also consider the cost of initiating such hedges against the potential benefit to the
Fund.
5.7
Shariah Investment Guidelines
The Fund will only invest in securities that are classified as Shariah-compliant based on the List of
Shariah-Compliant Securities by the Shariah Advisory Council (SAC) of the SC. The Fund will
comprise of Sukuk and Shariah-compliant equity that are endorsed and classified as Shariahcompliant by SAC of the SC. For securities which are not endorsed and certified by the SAC of the
SC, the securities will be determined in accordance with the ruling by the Shariah Adviser. The
Manager will provide to the Shariah Adviser on a quarterly basis the monthly report on the holding
of the Funds and transactions entered into for the Fund.
Securities will be duly screened by the Shariah Adviser based on screening methodology as set out
below. These securities would need to be approved by the Shariah Advisor before the Manager can
proceed with investments. A list of such securities shall be maintained and the Shariah Advisor shall
review the list on a quarterly basis.
Level 1: Business Activity Screening
Shariah Investment Guidelines do not allow investment in companies which are directly active in,
or derive more than 5% of their revenue (cumulatively) from, the following activities (“prohibited
activities”):

Alcohol;

Tobacco;

Pork related products;

Conventional financial services;

Defense/Weapons;

Gambling/Casino;

Music;

Hotels;

Cinema; and

Adult entertainment.
21
Level 2: Financial Screening
Shariah Investment Guidelines do not allow investment in companies deriving significant income
from interest or companies that have excessive leverage. The following three financial ratios are to
be met in order to qualify as Shariah-compliant:



Total debt (excluding Shariah-compliant debt and Shariah-compliant instruments) over 24
months market value must be less than 33%;
Sum of a company’s cash and interest-bearing securities (excluding Shariah-compliant debt
and Shariah-compliant instruments) over 24 months market value must be less than 33%;
and
Sum of a company’s accounts receivables and cash over 24 months market value must be
less than 45%.
Reclassification of Shariah-compliant securities
The Fund will invest in Shariah-compliant securities. However, the SAC of the SC and/ or the
Shariah Adviser may reclassify the Shariah-compliant securities to be Shariah non-compliant in the
periodic review of the securities.
For the securities that their market value exceeds the original investment cost on the
announcement day, those securities will be required to be disposed off immediately on the
announcement day itself. On the other hand, the Fund is allowed to hold the investment in the
Shariah non-compliant securities if the market price of the said securities is below the original
investment costs.
Shariah Adviser
Amanie Advisors Sdn Bhd (“Amanie’’) has been appointed as the Shariah Adviser for the Fund.
Amanie’s responsibility is to ensure that the Fund is managed and administered in accordance with
Shariah principles. Amanie is also responsible for scrutinizing the Fund’s compliance report and
investment transaction reports provided by, or duly approved by, the Trustee to ensure that the
Fund’s investment are in line with Shariah principles.
Amanie has viewed the Prospectus of the Fund and other documents in which relates to the
structure of the Fund.
Amanie confirms that the Fund’s structure and its investment process, and other operational and
administrative matters are Shariah-compliant in accordance with Shariah principles and complied
with applicable guidelines, rulings or decisions issued by the SC pertaining to Shariah matter.
Amanie is of the view that, given the prevailing circumstances, the Fund and the respective
investments as disclosed and presented are acceptable and within the Shariah principles, subject to
proper execution of the legal documents and other transactions related to the Fund.
5.8
Permitted Investments
The Fund may invest in the following assets, subject to the Deed, the Fund’s objective,
the Guidelines, the requirements of the SC and all relevant laws:(a)
Shariah-compliant securities of companies listed on the recognised Malaysian stock exchange
or any other market where the regulatory authority is a member of the International
Organisation of Securities Commission (IOSCO);
(b)
Unlisted Shariah-compliant securities;
(c)
Shariah-compliant warrants;
(d)
Government investment issues (GII), Islamic accepted bills, Bank Negara Malaysia negotiable
notes, negotiable islamic debt certificate (NIDC), Islamic negotiable instrument of deposits
(INID), Cagamas mudharabah bonds and any other government Islamic papers;
22
5.9
(e)
Other Shariah-compliant obligations issued or guaranteed by the Malaysian government,
Bank Negara Malaysia, state governments and government-related agencies;
(f)
Sukuk;
(g)
Shariah-based deposits with financial institutions and placements of money with investment
banks;
(h)
Islamic money market instruments and Sukuk traded in the Islamic capital market;
(i)
Other Shariah-based collective investment schemes;
(j)
Shariah-compliant derivatives including but not limited to options, futures contracts, forward
contracts and swaps for hedging purposes only; and
(k)
Any other Shariah-compliant investment instruments permitted by the Shariah Advisory
Council of the SC and/or the Shariah Adviser from time to time.
Investment Restrictions and Limits
Unless otherwise prohibited by the relevant authorities or any relevant law and provided always
that there are no inconsistencies with the objective of the Fund, the investment restrictions and
limits of the Fund shall be as follows:(a)
The value of the Fund’s Shariah-compliant investment in unlisted securities shall not
exceed 10% of the Fund’s NAV unless the investments are in:▪
▪
▪
equities not listed or quoted on a stock exchange but have been approved by the
relevant regulatory authority for such listing and quotation, and are offered directly
to the Fund by the issuer;
debentures traded on an organised over-the-counter (OTC) market; and
structured products.
(b)
The value of the Fund’s Shariah-compliant investment in Shariah-compliant structured
products issued by a single counter-party shall not exceed 15% of the Fund’s NAV;
(c)
The value of the Fund’s investments in Shariah-compliant ordinary share issued by any
single issuer shall not exceed 10% of the Fund’s NAV;
(d)
The value of the Fund’s placements in Shariah-based deposits with any single financial
institution shall not exceed 20% of the Fund’s NAV;
(e)
The value of the Fund’s investments in transferable Shariah-compliant securities (equity,
debentures, warrant) and Islamic money market instruments issued by any single issuer
shall not exceed 15% of the Fund’s NAV;
(f)
The aggregate value of the Fund’s investments in transferable Shariah-compliant
securities, Islamic money market instruments, OTC Islamic derivatives, Islamic structured
products and Shariah-based deposits issued or placed with (as the case may be) any single
issuer/institution shall not exceed 25% of the Fund’s NAV;
(g)
The value of the Fund’s investments in transferable Shariah-compliant securities and
Islamic money market instruments issued by any group of companies shall not exceed 20%
of the Fund’s NAV;
The value of the Fund’s investments in units/shares of any Shariah-based collective
investment scheme shall not exceed 20% of the Fund’s NAV;
(h)
(i)
The Fund’s investments in Shariah-compliant equities and warrants shall not exceed 10%
of the securities issued by any single issuer;
(j)
The Fund’s investment in Islamic debentures shall not exceed 20% of the debentures
issued by any single issuer;
23
(k)
The Fund’s investment in Islamic money market instruments shall not exceed 10% of the
instruments issued by any single issuer. This limit does not apply to Islamic money market
instruments that do not have a pre-determined issue size;
(l)
The Fund’s investments in Shariah-based collective investment schemes shall not exceed
25% of the units/ shares in any one Shariah-based collective investment scheme; and
(m)
Any other investments or restrictions imposed by the relevant regulatory authorities or
pursuant to the Guidelines, any laws and/ or regulations applicable to the Fund.
The abovementioned limits and restrictions will be complied with at all times based on the up-todate value of the Fund, and the value of its investments and instruments, unless the SC grants
the exemption or variation. However, a 5% allowance in excess of any limits or restrictions may
be permitted where the limit or restriction is breached through the appreciation or depreciation
of the NAV of the Fund (whether as a result of an appreciation or depreciation in value of the
investments, or as a result of repurchase of Units or payment made from the Fund).
The Manager will not make any further acquisitions to which the relevant limit is breached and
the Manager shall 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.
5.10
Valuation of the Fund
In undertaking any of its Shariah-compliant investments, the Manager will ensure that all the assets
of the Fund will be valued at fair value and at all times to be in compliance with the Guidelines.
Listed Shariah-compliant securities
For listed Shariah-compliant securities, the valuation shall be based on the market price i.e
closing bid price. Where no market value is publicly available or where the use of the quoted
market value is inappropriate, or where no market price is available, including in the event of
suspension in the quotation of the securities for a period exceeding fourteen (14) days, or such
shorter period as agreed by the Trustee; such investments will be valued at fair value
determined in good faith by the Manager, based on the methods or bases approved by the
Trustee after appropriate technical consultation.
Islamic money market instruments
Valuation of tradable and non-tradable Islamic money market instruments will be done by
reference to the 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.
Fixed deposit
Shariah-based deposits placed with financial institutions are valued by reference to the value
of such investments and profit accrued thereon for the relevant period.
Unlisted Shariah-based Collective Investment Schemes
Shariah-compliant investments in unlisted Shariah-based collective investment schemes shall
be valued based on the last published repurchase price.
Sukuk
For unlisted Sukuk denominated in Ringgit Malaysia, the valuation will be done using the fair
value as quoted by a bond pricing agency (“BPA”) registered with the SC. If the Manager is of
the view that the price quoted by BPA differs from the market price by more than 20 basis
points and the Manager determines that the methodology used by the independent dealers to
obtain “market price” is more appropriate, the Manager may elect to use the price quoted by
the independent dealers as the “market price”, provided that the Manager records its basis for
using a non-BPA price, obtains the necessary internal approvals to use the non-BPA price and
keeps an audit trail of all decisions and basis for adopting the “market yields”. Investments in
other unlisted Sukuk will be valued using the average indicative price quoted by at least 3
24
independent dealers. In the case of listed Sukuk, the last traded prices quoted on an exchange
will be used.
Other Islamic Securities
Investments such as Islamic accepted bills, government investment issues (GII), Bank Negara
Malaysia negotiable notes, Cagamas mudharabah bonds, negotiable islamic debt certificate
(NIDC), Islamic negotiable instrument of deposits (INID) and any other government Islamic
papers are valued by reference to the value of such investments and the profits accrued
thereon for the relevant period.
In accordance with the Financial Reporting Standard 139 issued by the Malaysian Accounting
Standards Board, the Manager will obtain the daily price or value of the assets for the purpose of
valuing the Fund. In the absence of daily price or value of the assets, the Manager will use the
latest available price or value of the assets respectively.
Investors are advised that certain types of Shariah-compliant securities are required to be held
until such Shariah-compliant securities mature for the “actual value” to be realised. Any sale of
such Shariah-compliant securities prior to its maturity may attract costs and penalties that would
result in a value which is less than its “actual value”. As such, any valuation of such Shariahcompliant securities (prior to its maturity) are merely indicative of what the value might be and
does not represent the “actual value” of such Shariah-compliant securities.
5.11
Valuation Point for the Fund
The Fund will be valued at 5.00 p.m on every Business Day (or “trading day” or “T” day). However,
if the Fund has exposure to investments outside of Malaysia, the Fund shall be valued at 11.00 a.m.
on the next Business Day (or “T + 1”). All foreign assets are translated into the base currency of the
Fund i.e RM, based on the bid exchange rate quoted by Bloomberg/Reuters at 4.00 p.m. (United
Kingdom time) which is equivalent to 11 p.m. or 12 a.m. midnight (Malaysian time) on the same
day, or at such time as stipulated in the investment management standards issued by the FiMM.
5.12
Policy on Gearing and Minimum Liquid Assets Requirements
The Fund is not permitted to obtain cash financing or other assets (including the financing of
Shariah-compliant securities within the meaning of the Guidelines on Securities Borrowing and
Lending [SBL Guidelines]) in connection with its activities. However, the Fund may obtain cash for
the purpose of meeting repurchase requests for Units and such financing is subjected to the
following:




The Fund’s cash financing is only on a temporary basis and that financings are not
persistent;
The financing period should not exceed a month;
The aggregate financing of the Fund should not exceed 10% of the Fund’s NAV at the time
the financing is incurred;
The Fund may only finance from financial institutions; and
The instruments for such activity must comply with the Shariah requirements.
Except for securities lending as provided under the SBL Guidelines, none of the cash or investments
of the Fund may be lent. Further, the Fund may not assume, guarantee, endorse or otherwise
become directly or contingently liable for or in connection with any obligation or indebtedness of
any person.
In structuring the portfolio of the Fund, the Manager will maintain sufficient liquid assets to ensure
Short-term liquidity in the Fund to meet operating expenses and possible repurchase of Units.
5.13
Zakat for the Fund
The Fund does not pay zakat on behalf of Muslim individuals and Islamic legal entities, who are Unit
Holders of the Fund. Such Unit Holders are thus required to pay on their own behalf.
25
5.14
Distribution Policy
The Fund will distribute income on a semi-annual basis (subject to income availability), after the
end of its first financial year.
Any distribution payable which is less than or equal to the amount of RM300.00 would be
automatically reinvested into additional Units on behalf of the Unit Holders. For distributions
amounting to more than RM300.00, Unit Holders may elect to either receive income payment i.e.
via cash payment mode by receiving cheque or reinvestment mode by reinvesting in new additional
Units. Unit Holders may, when filling up the account opening form, elect the mode of distribution
by ticking the appropriate box. Besides that, Unit Holders may also inform the Manager, at any
time, before the income distribution date, of their choice of distribution mode. All distribution will
be automatically reinvested into additional Units in the Fund if Unit Holders did not elect the mode
of distribution in the account opening form.
Cash Payment Process*
Unit Holders electing to receive income distribution by way of cash payment shall be paid via
cheque and shall receive the cheque by mail seven (7) Business Days after the distribution date,
which will be sent to the last known address as recorded in the register of Unit Holders of the
Fund. Where Units are held jointly, the cheque shall be issued in the name of the principal Unit
Holder i.e whose name stands first in the register of Unit Holders of the Fund. The Unit Holders
may also opt to receive the income distribution by way of cash payment via telegraphic transfer
where income will be transferred to the Unit Holder’s bank account, seven (7) Business Days after
the distribution date.
*A cheque which is not presented after six (6) months from the date of its issuance will be
reinvested into additional Units on behalf of the Unit Holder based on the NAV per Unit of the next
Business Day immediately after the six (6) months period from the issuance date of the cheque.
Reinvestment Process*
For Unit Holders who elect to reinvest the distribution in additional Units, the Manager will create
such Units based on the NAV per Unit at the income payment date which is two (2) Business Days
after the income distribution date.
*There will not be any additional cost to Unit Holders for reinvestments in new additional Units i.e.
no Sales Charge will be imposed on such reinvestment.
26
5.15
Historical Performance
Performance of the Fund (22 March 2013 to 31 March 2014)
For the period 22 March 2013 to 31 March 2014, the Fund has registered a 8.58% return as
compared to the benchmark return of 7.48%. The Fund thus outperformed the benchmark by
1.10%. The NAV per Unit of the Fund as at 31 March 2014 was RM0.5429 while the NAV per Unit as
at 21 March 2013 was RM0.5000. (See Table 1 for performance of the Fund and Figure 1 for the
movement of the Fund versus the benchmark respectively).
Given the performance during the period under review, we believe the Fund’s objective was met to
provide investors with a regular income stream through Shariah-compliant investments.
Figure 1: Movement of the Fund versus the benchmark
“This information is prepared by Affin Hwang Asset Management Berhad (formerly known as
Hwang Investment Management Berhad) for information purposes only. Past earnings or the Fund’s
distribution record is not a guarantee or reflection of the Fund’s future earnings/future distributions.
Investors are advised that Unit prices, distributions payable and investment returns may go down as
well as up. Source of Benchmark is from Bloomberg.”
Benchmark: 12-month Maybank General Investment Account (GIA) rate
Table 1: Performance of the Fund
For the period of
(22/3/13 - 31/3/14)
Fund
8.58%
Benchmark
7.48%
Outperformance
1.10%
Source of Benchmark: Bursa Malaysia & Maybank
Table 2: Average Total Return
For the period of
(22/3/13 - 31/3/14)
Fund
8.34%
Benchmark
7.27%
Outperformance
1.07%
Source of Benchmark: Bursa Malaysia & Maybank
27
Table 3: Annual Total Return
For the period of
(22/3/13 - 31/3/14)
Fund
8.58%
Benchmark
7.48%
Outperformance
1.10%
Source of Benchmark: Bursa Malaysia & Maybank
*Basis of calculation and assumption made in calculating the returns:The performance figures are a comparison of the growth/decline in NAV for the stipulated period
taking into account all the distribution payable (if any) during the stipulated period.
An illustration of the above would be as follow:Capital return =
NAV per Unit end / NAV per Unit begin - 1
Income return =
Income distribution per Unit / NAV per Unit ex-date
Total return
Capital return * income return - 1
=
Asset Allocation
As at 31 March 2014, the Shariah equities sector exposure of the Fund in the portfolio stood at
35.70%, Sukuk exposure stood at 61.47% with the balance 2.83% in cash and cash equivalents. For
a snapshot of the Fund’s asset allocation during the period under review as at 31 March 2014, refer
to Figure 2.
Figure 2: Summary of Asset Allocation
Asset Allocation
Shariah equities sector - local
Shariah equities sector - foreign
Sukuk - local
Sukuk - foreign
Cash
31 March 2014
22.98%
12.72%
59.20%
2.27%
2.83%
Total
100.00%
Income Distribution
2014
Gross distribution per Unit (sen)
Nil
Net distribution per Unit (sen)
Nil
Portfolio Turnover Ratio (PTR)
2014
PTR (time)
2.38%
28
5.16
Historical Financial Highlights
Extract of Statement of Income and Expenditure for the Financial Period of 1 March 2013 to 31
March 2014
1/3/13-31/3/14
(RM)
14,028,590
(3,505,795)
10,522,795
10,419,344
Investment income
Expenses
Net income before taxation
Net income after tax
Extract of Statement of Assets and Liabilities as at 31 March 2014
31 March 2014
232,411,313
305,773
7,737,299
240,454,385
1,249,986
239,204,399
Total investments
Cash and cash equivalents
Other assets
Total assets
Total liabilities
NAV / Unit Holders’ capital
Expenses Incurred by the Fund for the Financial Period of 1 March 2013 to 31 March 2014
Management
Fee
RM
%
2,541,620
1.3%
Trustee
Fee
RM
%
169,441
0.09%
Fund
Expenses
RM
%
60,704
0.03%
Total Annual
Expenses
RM
%
2,771,765
1.42%
Management Expense Ratio (MER)
The management expense ratio (MER) of the Fund as at 31 March 2014 is as follows:
2014
MER
1.42%
Past performance of the Fund is not an indication of its future performance.
The audited financial statements of the Fund are disclosed in the Fund’s annual report.
The Fund’s annual report is available upon request.
29
6.
FEES AND CHARGES
The following are the charges that you may directly incur when you buy or redeem Units of this
Fund.
6.1
Sales Charge
A Sales Charge will be imposed on you for your purchase of Units of the Fund. The Sales Charge is a
percentage of the NAV per Unit of the Fund.
The maximum Sales Charge that each of the distribution channels may impose is as stated below:Maximum Sales Charge (chargeable as a
percentage) of the NAV per Unit of the
Fund**
Distributors
Institutional Unit Trust Advisers
Internal distribution channel of the Manager
3.00%
Unit trust consultants
** Investors may negotiate for a lower Sales Charge.
Note :
6.2
All Sales Charge will be rounded up to two (2) decimal places and will be retained by the
Manager.
Repurchase Charge
There will be no Repurchase Charge levied on the repurchase of Units for the Fund.
6.3
Transfer Fee
A RM5.00 transfer fee will be levied for each transfer of Units.
6.4
Switching Fee
There will be no switching fee levied on any switching transactions.
The following are the fees that you may indirectly incur when you invest in the Fund
6.5
Annual Management Fee
The annual management fee is 1.20% of the NAV of the Fund per annum (before deducting the
management fee and trustee fee). This fee is calculated and accrued daily and payable monthly to
the Manager. For the avoidance of doubt, the fees payable to the External Fund Manager is fully
borne by the Manager.
Please note that the example below is for illustration only:
Assuming that the total NAV (before deducting the management fee and the trustee fee) in a Fund
is RM 200 million. The calculation of annual management fee based on the total NAV of the Fund is:
RM 200,000,000 x 1.20% = RM 6575.34 per day
365 days
6.6
Trustee Fee
The Trustee will be entitled to an annual trustee fee of 0.08% per annum of the NAV of the Fund
(excluding foreign sub-custodian fees and charges). In addition to the annual trustee fee which
includes the transaction fee i.e. the fee incurred for handling purchase/sale of investments, the
Trustee may be reimbursed by the Fund for any expenses properly incurred by it in the
30
performance of its duties and responsibilities. The trustee fee is accrued on a daily basis and paid
monthly to the Trustee.
Illustration:Assuming that the NAV of the Fund is RM200 million for the day, the accrued trustee fee for that
day would be:
RM200,000,000 x 0.08%
365 days
6.7
= RM 438.36 per day
Fund Expenses
The Deed also provide for payment of other expenses. The major expenses which may be charged
to the Fund include the following:

Commissions/fees paid to brokers/dealers in affecting dealings in the investments of the Fund;

(where the custodial function is delegated by the Trustee) charges and fees paid to subcustodians taking into custody any foreign assets or investments of the Fund;

Tax and other duties charged on the Fund by the government and other authorities;

The fee and other expenses properly incurred by the auditor appointed for the Fund;

Fees for the valuation of any investments of the Fund by independent valuers;

Cost incurred for the modification of the Deed of the Fund other than those for the benefit of
the Manager or the Trustee;

Cost incurred for any meeting of the Unit Holders other those convened for the benefit of the
Manager or Trustee; and

Other fees/expenses related to the Fund.
Expenses related to the issuance of this Prospectus will be borne by the Manager.
6.8
Policy on Stockbroking Rebates and Soft Commissions
The Manager or any delegate thereof shall not retain any rebate from, or otherwise share in any
commission with, any broker/dealer in consideration for directing dealings in the investments of
the Fund. Accordingly, any rebate or shared commission should be directed to the account of the
Fund.
However, the Manager or any delegate thereof may retain goods and services (“soft commissions”)
from any broker/dealer, only if the goods and services are of demonstrable benefit to the Unit
Holders such as research materials and computer software which are incidental to the investment
management activities of the Fund.
There are fees and charges involved and investors are advised to consider the fees and charges before
investing in the Fund.
All fees and charges payable by you are subject to all applicable taxes (including but not limited to goods
and services taxes) and/or duties as may be imposed by the government and/or the relevant authorities
from time to time.
31
7.
7.1
SALE AND PURCHASE OF UNITS
Computation of NAV and NAV per Unit
The Net Asset Value of the Fund is determined by deducting the value of the Fund’s liabilities from
the value of the Fund’s assets, at the valuation point. For the purpose of computing the annual
management fee and annual trustee fee, the NAV of the Fund shall be inclusive of the management
fee and the trustee fee for the relevant day.
Illustration:
For illustration purposes, we assume the following for a particular day in relation to the Fund: Investments of the Fund
= RM195,000,000.00
Other assets including Cash
= RM5,700,000.00
Liabilities of the Fund
= RM700,000.00
Number of Units in Circulation
= 300,000,000.00
Management fee
= RM6,575.34
Trustee fee
= RM438.36
The NAV of the Fund will be:
RM
Investments
195,000,000.00
Add Other Assets
5,700,000.00
Total Assets
200,700,000.00
Less liabilities
700,000.00
NAV (before deduction of management fee and
trustee fee for the day)
Less management fee for the day
200,000,000.00
6575.34
trustee fee for the day
438.36
NAV
199,992,986.30
The NAV per Unit of the Fund will be:
NAV ÷ Units in Circulation = RM 199,992,986.30 ÷ 300,000,000 Units
= RM 0.666643 (before rounding adjustment)
= RM 0.6700
(rounded to 4 decimal points for publication purposes)
Note:
NAV per Unit will be rounded up to four (4) decimal places for the purposes of publication of the
NAV per Unit.
7.2
Pricing of Units
Under a single pricing regime, the Selling Price and the Repurchase Price of the Fund shall be
equivalent to the NAV per Unit of the Fund. Any applicable Sales Charge and Repurchase Charge
shall be payable separately from the Selling Price and Repurchase Price of the Fund. Forward
Pricing will be used to determine the Selling Price per Unit and the Repurchase Price per Unit of the
Fund, which are the NAV per Unit for the Fund as at the next valuation point after the purchase
request or repurchase request is received by the Manager.
32
An illustration of which is given below:Calculation of Selling Price
Units will be sold at the NAV per Unit of the Fund. Any Sales Charge payable by the Unit Holder
would be calculated as a percentage of the NAV per Unit of the Fund.
For illustration purposes, assume the following:
Amount invested:
RM 10,000.00
Sales Charge:
3.00% of NAV per Unit
NAV per Unit:
RM0.50 (Selling Price)
The investment amount, number of Units purchased and Sales Charge payable by the Unit Holder
are as follows:
Items
Formula
Amount
-
RM 10,000.00
Amount invested divided by NAV per
Unit
20,000 Units
Amount invested
Number of Units purchased
= RM10,000 / RM0.50
Sales Charge of 3.00% on the
NAV per Unit
Sales Charge x NAV per Unit x No. of
Units
RM300.00
= 3.00% x RM0.50 x 20,000 Units
Total amount invested
= RM10,000.00
Add Sales Charge paid @ 3.00% of NAV per Unit
= RM 300.00
Total amount paid by Unit Holder
= RM10,300.00
------------------------------------------------------------------------------------------------------------------------ ---------Calculation of Repurchase Price
The Repurchase Price is the NAV per Unit of the Fund. Any Repurchase Charge payable by the Unit
Holder would be calculated as a percentage of the Repurchase Price of the Fund.
For illustration purposes, we assume the following:Total of Units to be repurchased:
20,000 Units
Repurchase Charge:
Nil
NAV per Unit:
RM0.50 (Repurchase Price)
The repurchase proceeds payable to the Unit Holders are as follows:Items
Formula
Amount
-
20,000 Units
Total Units repurchased x NAV per Unit
= 20,000 Units x RM0.50
RM 10,000.00
Repurchase Charge x Amount
repurchased
= 0% x RM10,000
RM0.00
Number of Units repurchased
Amount repurchased
Repurchase Charge is 0% of the
NAV per Unit
33
Total amount repurchased
Less Repurchase Charge of 0% of NAV per Unit
= RM 10,000.00
= RM
0.00
----------------------------------------------------------------------------------------------------------------------Total amount paid to Unit Holder
= RM 10,000.00
=========================================================================
Incorrect Pricing
Subject to any relevant law, if there is an error in the pricing of the NAV per Unit of a Fund, the
Manager will take immediate remedial action to correct the error. Rectification shall, where
necessary, extend to the reimbursements of money as follows if the error is at or above the
significant threshold of 0.5% of the NAV per Unit:
(a)
if there is an over pricing in relation to the purchase and creation of Units, the Fund shall
reimburse the Unit Holder;
(b)
if there is an over pricing in relation to the repurchase of Units, the Manager shall reimburse
the Fund;
(c)
if there is an under pricing in relation to the purchase and creation of Units, the Manager
shall reimburse the Fund; and
(d)
if there is an under pricing in relation to the repurchase of Units, the Fund shall reimburse
the Unit Holder or former Unit Holder.
The Manager retains the discretion whether or not to reimburse if the error is below 0.5% of the
NAV per Unit and where the total impact on an individual account is less than RM10.00 in absolute
amount unless the Trustee directs the Manager to reimburse. This is because the reprocessing costs
may be greater than the amount of the adjustment.
7.3
Sale of Units
The minimum initial investment for Units of the Fund is Ringgit Malaysia One Thousand (RM1,000)
and the minimum additional investment for Units of the Fund is Ringgit Malaysia One Hundred
(RM100).
Investors can obtain the Prospectus, account opening form and investment application form from
any of the offices listed in Section 18 or any authorised agent. The Prospectus is also available at
the Manager’s website at www.affinhwangam.com. The Fund’s application form can be handed
directly to any of the said offices, or any authorised agent or sent by mail, together with a cheque
or bank draft made payable to “Affin Hwang Asset Management Berhad”. All cheques and bank
drafts have to be crossed and drawn on a local bank. Bank charges, where relevant, for outstation
cheques will be borne by the investors.
Sales of Units will be honoured upon cheque clearance. If sale of Units is by way of telegraphic
transfer, a bank validated fund transfer form must be presented as evidence as good for payment.
Existing Unit Holders of the Fund who wishes to purchase additional Units can also make payment
at any HSBC Bank branches.
For first time investors
Individual or joint-application must be accompanied by a copy of the applicant’s identity card or
passport or other document of identification. Application by a corporation must be accompanied
by a certified true copy of its Memorandum and Articles of Association, Certificate of Incorporation,
Form 24, Form 44, Form 49, the latest audited financial statement of the corporation and Board
Resolution relating to the investment, a list of their authorised signatories and their respective
specimen signatures.
Sale of Units will be honoured upon receipt of completed documents mentioned above and proof
of payments.
34
7.4
Minimum Units Held
Unit Holders must hold at least 2,000 Units in order to remain as a Unit Holder in the Fund.
If a Unit Holder insists on making a repurchase request knowing that after the repurchase request
is satisfied by the Manager, the Unit Holder will hold less than the minimum holdings of Units and
the Unit Holder may be required to make an application for the Manager to repurchase all the Unit
Holder’s holding of Units in the Fund.
7.5
Repurchase of Units
Unit Holders may request the Manager to repurchase Units held by the Unit Holder at any point in
time by simply completing the repurchase application form and returning it to the Manager on any
Business Day from 9.00 a.m. to 3.30 p.m. Repurchase of Units must be made in terms of Units and
not RM values. The amount to be received by the Unit Holder for the repurchase of Units will be
calculated in the manner illustrated under Section 7.2 above.
7.6
Payment of Repurchase Proceeds
The Manager may repurchase Units utilising its own monies or request the Trustee to cancel Units
of the Fund for the purpose of meeting Unit Holders’ repurchase requests. You will be paid within
10 days from the day the repurchase request is received by the Manager and provided that all
documentations are completed and verifiable.
Unit Holder must complete a repurchase form and elect whether to receive the proceeds in a
manner of cheque or telegraphic transfer. If a Unit Holder elects to receive the proceeds via
cheque, the cheque will be issued in the name of the Unit Holder. If a Unit Holder elects to receive
the proceeds via telegraphic transfer, the proceeds will be transferred to the Unit Holder’s account.
Where Units are held jointly, payment will be made to the principal Unit Holder i.e whose name
stands first in the register of Unit Holders of the Fund.
Any incurred bank charges and other bank fees due to a withdrawal by way of telegraphic transfer,
bank cheque or other special arrangement method will be borne by the Unit Holder.
7.7
Repurchase Frequency and Minimum Units Repurchase
There are no restrictions on the frequency of repurchases; however, there is a minimum
repurchase of 2,000 Units for each repurchase application. Applications for repurchase must be
submitted to the Manager on any Business Day from 9.00 a.m. to 3.30 p.m. Such repurchases
requests are deemed received only if all documents and forms received by the Manager are duly
and correctly completed.
The Manager may, with the consent of the Trustee, reserve the right to defer repurchase requests
if such request would adversely affect the Fund or the interest of Unit Holders of the Fund.
7.8
Cooling-off Period
A Cooling-off Right refers to your right to apply for and receive a refund for every Unit that you
paid for, provided that this right is exercised within the Cooling-off Period.
This right is available if you are investing in any funds managed by the Manager for the first time.
This right is not applicable to you if you are:
i.
A corporation or institution;
ii.
A staff of the Manager; or
iii.
Persons registered with a body approved by the SC to deal in unit trusts.
Unit Holders who exercise their Cooling-off Right will be refunded for every Unit held based on the
NAV per Unit and the Sales Charge per Unit, on the day those Units were first purchased. Unit
Holders shall be refunded within ten (10) days from receipt of the cooling-off application.
The Cooling-off Period is six (6) Business Days from the date the purchase request is received by
the Manager.
35
7.9
Switching Facility
Unit Holders are permitted to switch from and to other funds managed by the Manager.
Nonetheless, the Manager shall not be bound to comply with the request for switching, if this
request results in the Unit Holder’s holding in the Fund being less than the minimum Units held in
Section 7.4 above.
The switching will be made at the prevailing net asset value per unit of the intended funds to be
acquired on a Business Day when the switching request is received or deemed to have been
received by the Manager (subject to availability and terms of the intended fund).
If a Unit Holder of the Fund wishes to switch into another fund (e.g. fund A) and the Sales Charge
paid by the Unit Holder is less than the Sales Charge of fund A, the Unit Holder shall pay the
difference between the two (2) funds. Conversely, no Sales Charge on fund A will be imposed on
the Unit Holder, should it be less than or equal to the Sales Charge paid by the Unit Holder for the
Fund.
All Unit Holders are allowed to switch to any other funds managed by the Manager (subject to the
availability and terms of the intended fund).
Under no circumstances is the Unit Holder entitled to any refund of the Sales Charge paid on the
Fund being switched from, which exceeds that imposed on the intended fund to be acquired.
The Manager reserves the right to reject any switching request:(i)
that it regards as disruptive to efficient portfolio management; or
(ii)
if deemed by the Manager to be contrary to the best interest of the Fund.
Please note that switching from this Fund to a conventional fund is discouraged for Muslim Unit
Holders.
7.10
Transfer Facility
Unit Holders are permitted to transfer their Units to another person at any point in time by
completing the transfer application form and returning it to the Manager on any Business Day. The
transfer must be made in terms of Units and not in RM value. The minimum amount of Units per
transfer is 2,000 Units. Unit Holders who make partial transfer of Units must maintain at least 2,000
Units to remain as a Unit Holder of the Fund.
7.11
Where to Purchase and Repurchase Units
Unit Holders may make a purchase request or a repurchase request to the Manager on any
Business Day from Mondays to Fridays between 9:00 a.m. to 3.30 p.m. at any of the locations set
out in the Directory of Sales Offices listed under Section 18.
7.12
Unclaimed Moneys
Any monies payable to you which remain unclaimed after twelve (12) months from the date of
payment will be paid to the Registrar of Unclaimed Monies by the Manager in accordance with the
requirements of the Unclaimed Moneys Act, 1965.
7.13
Anti-Money Laundering Policies and Procedures
Pursuant to the Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful
Activities Act 2001, it is the responsibility of the Manager to prevent the use of the Fund for money
laundering and terrorism financing activities. To this end, the Manager has put in place anti-money
laundering policies and procedures to combat such activities. Amongst others, prior to the
Manager establishing or conducting business relations, particularly when opening new accounts for
clients and entering into a fiduciary transaction with a client, the Manager will conduct a “Know
Your Customer” procedures to identify and verify the client through documents such as identity
card, passport, birth certificate, driver’s licence, constituent documents or any other official
36
documents, whether in the possession of a third party or otherwise. Such documents shall be filed
and retained by the Manager in accordance with relevant laws.
The Manager will thereafter perform a Customer Due Diligence (CDD) to identify the risk profile of
each customer and will continuously monitor each customers risk profile should there be any
changes. Enhanced Customer Due Diligence (EDD) is performed on customers deemed as high risk
and senior management’s approval is required before a business relationship or account is opened
with such customers.
Where the Manager suspects that a particular transaction may not be genuine, a suspicious
transactions form (STF) shall be completed and the matter will be discussed with senior
management. If senior management ascertains there is a reasonable ground to suspect the
transaction to be a money laundering or terrorism financing activity, a Suspicious Transaction
Report will then be submitted to the Financial Intelligence and Enforcement Department of Bank
Negara Malaysia.
Investors are advised not to make payments in cash in respect of their investments when purchasing Units
of the Fund via any institutional/retail agent.
37
8.
SALIENT TERMS OF THE DEED
Generally, an investor would also be a registered Unit Holder unless the Units are purchased
through an IUTA or using a nominee. In such instance, the Units may not be registered in the
name of the investor and thus not a registered Unit Holder. Please be advised that the Manager
only recognises the rights attached to a registered Unit Holder.
8.1
Rights and Liabilities of Unit Holders
Rights of Unit Holders
A Unit Holder has the right, among others, to the following:
(a)
To receive the distribution of income, participate in any increase in the value of the Units
and to other such rights and privileges as set out under the Deed for the Fund;
(b)
To call for Unit Holders’ meetings, and to vote for the removal of the Trustee or the
Manager through a Special Resolution;
(c)
To exercise the Cooling-off Right (if applicable); and
(d)
To receive annual and interim reports.
No Unit Holder shall be entitled to require the transfer to him of any of the investments or assets of
the Fund or be entitled to interfere with or question the exercise by the Trustee, or the Manager
on its behalf, of the rights of the Trustee 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 asset of the Fund but only in such interest in the Fund
as a whole as may be conferred on Unit Holders by the provisions of the Deed.
Liabilities of Unit Holders
8.2
(a)
No Unit Holder is liable for any amount in excess of the purchase price paid for the Units
as determined pursuant to the Deed at the time the Units were purchased; and
(b)
A Unit Holder shall not be under any obligation to indemnify the Manager and/or the
Trustee in the event that the liabilities incurred by the Manager and/or the Trustee in the
name of or on behalf of the Fund pursuant to and/or in the performance of the provisions
of the Deed exceed the value of the assets of the Fund, and any right of indemnity of the
Manager and/or the Trustee shall be limited to recourse to the Fund.
Provisions regarding Unit Holders Meetings
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 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 voting
on a Special Resolution, 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 a direction 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 to each Unit Holder at his last known address or, in the case of jointholders,
to the jointholders whose name stands first in the records of the Manager to the
jointholder’s last known address at least seven (7) days before the date of the proposed
meeting a notice of the proposed meeting to all the Unit Holders;
38
(b)
(c)
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; and
specifying in the notice the place and time of the meeting and the terms of the resolutions to
be proposed at the meeting.
The Unit Holders of the Fund 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 direction
has been received from not less than fifty (50) or one-tenth (1/10) of all the Unit Holders,
whichever is less.
Unit Holders meeting convened by Manager or Trustee
Unless otherwise required or allowed by the relevant laws, the Manager or Trustee may convene a
Unit Holders’ meeting by giving Unit Holders fourteen (14) days written notice specifying the place,
time and terms of the resolutions to be proposed at the meeting.
Provided that where the Trustee summons a meeting in the event:
(a)
the Manager is in liquidation,
(b)
in the opinion of the Trustee, the Manager has ceased to carry on business, or
(c)
in the opinion of the Trustee, the Manager has, to the prejudice of Unit Holders of the Fund,
failed to comply with the Deed or contravened any of the provisions of the Act.
Or where the Trustee summons a meeting for the purpose of:
(a)
(b)
(c)
(d)
(e)
requiring the retirement or removal of the Manager;
giving instructions to the Trustee or the Manager if the Trustee considers that the
investment management policies of the Manager are not in the interests of Unit Holders of
the Fund, as the case may be;
securing the agreement of the Unit Holders to release the Trustee from any liability;
deciding on the next course of action after the Trustee has suspended the sale and
repurchase of Units pursuant to Clause 6.10.1 of the Deed; or
deciding on the reasonableness of the annual management fee charged to the Fund.
Then, a meeting of the Unit Holders summoned by the Trustee shall be summoned by:
(a)
sending by post at least twenty-one (21) days before the date of the proposed meeting a
notice of the proposed meeting to each of the Unit Holders at the Unit Holder’s last known
address or, in the case of jointholders, to the jointholder whose name stands first in the
records of the Manager at the jointholder’s last known address; and
(b)
8.3
publishing at least twenty-one (21) days before the date of the proposed meeting an
advertisement giving notice of the meeting in a national language newspaper published daily
and another newspaper approved by the relevant authorities.
Termination of the Fund
Circumstances that may lead to the termination of the Fund
The Fund may be terminated or wound up as provided for under the Deed as follows:(a)
The SC has withdrawn the authorization of the Fund pursuant to Section 256E of the
CMSA;
39
(b)
(c)
8.4
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 with the sanction of the court if so required under Section 301(2) of the CMSA; or
A Special Resolution is passed at a Unit Holders’ meeting to terminate or wind up the
Fund.
The maximum fees and charges that may be imposed by the Manager and the steps to be taken
by the Manager to increase such fees and charges
Maximum Rate of Direct Fees and Charges allowable by the Deed
 The maximum Sales Charge allowable by the Deed is 5.00% of the NAV per Unit.
 The maximum Repurchase Charge allowable by the Deed is 3.00% of the NAV per Unit.
Maximum Rate of Indirect Fees and Charges allowable by the Deed
 The maximum rate of the annual management fee shall be five per centum (5.00%) per annum
of the NAV of the Fund calculated and accrued daily.
 The maximum rate of the annual trustee fee shall be zero point two per centum (0.20%) per
annum of the NAV of the Fund subject to a minimum of RM18,000 per annum calculated and
accrued daily (excluding foreign sub-custodian fees and charges).
Procedures to be taken to increase the Direct and Indirect Fees from the current amount
stipulated in the Prospectus
Sales Charge
A higher Sales Charge than that disclosed in this Prospectus may only be imposed if:(a) the Manager has notified the Trustee in writing of the higher charge and the effective date for
the higher charge;
(b) a supplementary/ replacement prospectus setting out the higher charge is issued; and
(c) such time as may be prescribed by any relevant law has elapsed since the effective date of the
supplementary/ replacement prospectus.
Repurchase Charge
A higher Repurchase Charge than that disclosed in this Prospectus may only be imposed if:(a) the Manager has notified the Trustee in writing of the higher charge and the effective date of
the charge;
(b) a supplementary/ replacement prospectus setting out the higher charge is issued; and
(c) such time as may be prescribed by any relevant law has elapsed since the effective date of the
supplementary/ replacement prospectus.
Annual Management Fee
The Manager may not charge an annual management fee at a rate higher than that disclosed in this
Prospectus unless:
(a) the Manager has come to an agreement with the Trustee on the higher rate;
(b) the Manager has notified the Trustee and the Unit Holders in writing of the higher rate and the
date on which such higher rate is to become effective;
(c) a supplementary/ replacement 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 supplementary/
replacement prospectus is issued.
Annual Trustee Fee
The Trustee may not charge an annual trustee fee at a rate higher than that disclosed in this
Prospectus unless:
(a) the Manager has come to an agreement with the Trustee on the higher rate;
(b) the Manager has notified the Trustee and the Unit Holders in writing of the higher rate and the
date on which such higher rate is to become effective;
(c) a supplementary/ replacement prospectus stating the higher rate is issued thereafter; and
40
(d) such time as may be prescribed by any relevant law shall have elapsed since the supplementary/
replacement prospectus is issued.
Procedures to be taken to increase the Direct and Indirect Fees and Charges from the current
amount stipulated by the Deed
Any increase of any such fees and/or charges from the maximum amount stipulated in the Deed
shall require Unit Holder’s approval and will be in accordance to the procedure stipulated in
Division 21.1 of the Deed.
8.5
Other Expenses Permitted under the Deed
Only the expenses (or part thereof) which is directly related and necessary to the business of the
Fund may be charged to the Fund. These would include (but are not limited to) the following:
(a)
commissions/fees paid to brokers/dealers 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 appointed for 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 subcustodians taking into custody any foreign assets or investments of the Fund.
8.6
Circumstances that may Lead Towards the Retirement, Removal or Replacement of the Manager
The Manager may retire upon giving twelve (12) months’ notice (or such shorter period as the
Manager and the Trustee may agree) to the Trustee of its desire to do so, and may by deed appoint
in its stead a new management company approved by the Trustee and the SC.
The Manager shall also retire, if so required by the Trustee, on the grounds that:
(a)
(b)
a Special Resolution to that effect has been passed by the Unit Holders at a meeting called
for that purpose;
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
41
(c)
(d)
do so after the Trustee has given notice to it of that opinion and the reason for that
opinion, and after consultation with the relevant authorities and with the approval of Unit
Holders;
unless expressly directed otherwise by the relevant authorities, if the Manager 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
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.
Power of Trustee to Remove or Replace the Manager
The Manager may be removed by the Trustee on the grounds that the Manager:
(a)
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)
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 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 being necessary or desirable to secure the due performance of
its duties as management company for the Fund.
8.7
Powers of the Manager to Remove the Trustee
The Trustee may be removed and another trustee may be appointed by a Special Resolution of the
Unit Holders at a Unit Holders’ meeting convened in accordance with the Deed.
The Manager shall take all reasonable steps to replace a Trustee as soon as practicable after
becoming aware that:
(a)
(b)
(c)
(d)
(e)
(f)
(g)
The Trustee has ceased to exist;
The Trustee has not been validly appointed;
The Trustee was not eligible to be appointed or to act as trustee under any relevant laws;
The Trustee has failed or refused to act as trustee in accordance with the provisions or
covenants of the Deed or any relevant laws;
A receiver is appointed over the whole or a substantial part of the assets or undertaking of
the Trustee and has not ceased to act under the appointment,
A petition has been 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 relevant laws.
Retirement or Removal or Replacement of the Trustee
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 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
42
agree, and may by deed appoint in its stead 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 or as stipulated in the Act.
43
9.
CLIENT COMMUNICATION
How can I keep track of my contribution?
(i)
Newspapers
Unit Holders will be able to obtain information pertaining to the Fund from the press. The
NAV per Unit of the Fund will be quoted in at least two (2) major daily newspapers to
enable Unit Holders to monitor their investments. As the Fund has exposure to
investments in foreign jurisdiction, these daily prices shall be based upon information
available two (2) Business Days prior to publication.
(ii)
The Manager’s Company Website
Unit Holders will be able to obtain information pertaining to the Fund from the Manager’s
company website at www.affinhwangam.com. The Fund’s daily NAV per Unit will be
quoted in the website to enable Unit Holders to monitor their investments. The daily
prices may be based on information available one (1) Business Day prior to publication.
(iii)
Financial Reports
The Manager will provide Unit Holders with an annual report within two (2) months of the
Fund’s financial year-end and quarterly report within two (2) months of the end of the
period covered. A financial statement audited by the Fund’s appointed auditor will be
included in the annual report. The Trustee will prepare a report to Unit Holders in both the
annual and quarterly reports stating its opinion on the conduct of the Manager, in
particular whether the Manager had managed the Fund in accordance with the limitation
on its investment powers as set out in the Deed and whether the Manager had acted in
accordance with the Deed, Guidelines and any other relevant laws.
(iv)
Statement of Account
The Manager will issue a monthly statement to Unit Holders confirming the current Unit
holdings and transactions relating to their Units in the Fund.
(v)
Customer Service
Unit Holders can seek assistance from the customer service personnel at the Manager’s
office or at any location listed in Section 18 during the stated office hours. Alternatively,
investors can communicate with the Manager via its toll free number 1-800-88-7080 or
email to customercare@affinhwangam.com.
How do I make a complaint?
(i)
For internal dispute resolution, please contact our customer service personnel at the
Manager’s office or at any of their offices listed in Section 18 of this Prospectus during the
office hours (between 8.45a.m.–5.30p.m). Alternatively, you can email to
customercare@affinhwangam.com.
Complaints should be made in writing with the following information:
(a) particulars of the complainant which include name, correspondence address, contact
number, e-mail address (if any) and other relevant information;
(b) circumstances of the non-compliance or improper conduct;
(c) parties alleged to be involved in the improper conduct; and
(d) any other supporting documentary evidence (if any).
(ii)
If you are dissatisfied with the outcome of the internal dispute resolution process, please
refer your dispute to the following regulatory bodies, details of which are as follows:
44
Federation of Investment Managers Malaysia (FiMM):
(a) via email to
: legalcomp@fimm.com.my
(b) via online complaint form
: www.fimm.com.my
(c) via letter to
: Complaints Bureau
Legal, Secretarial & Regulatory Affairs
Federation of Investment Managers Malaysia
19-06-1, 6th, Wisma Tune
No. 19, Lorong Dungun Damansara Heights,
50490 Kuala Lumpur.
OR
Securities Industry Dispute Resolution Corporation (SIDREC):
(a) via phone to :
03-2282 2280
(b) via fax to
:
03-2282-3855
(c) via email to :
info@sidrec.com.my
(d) via letter to :
Securities Industry Dispute Resolution Center
(SIDREC) Unit A-9-1
Level 9, Tower A
Menara UOA Bangsar
No. 5, Jalan Bangsar Utama 1
59000 Kuala Lumpur
(iii)
You can also direct your complaint to the SC even if you have initiated a dispute resolution
process with SIDREC. You can lodge a complaint to the SC by contacting the SC’s Investor
Affairs & Complaints Department, details of which are as follows:
(a) via phone to the Aduan Hotline at
: 03 – 6204 8999
(b) via fax to
: 03 – 6204 8991
(c) via e-mail to
: aduan@seccom.com.my
(d) via online complaint form available at www.sc.com.my
(e) via letter to
: Investor Affairs & Complaints
Department
Securities Commission Malaysia
No 3 Persiaran Bukit Kiara Bukit Kiara
50490 Kuala Lumpur
45
10.
THE MANAGEMENT COMPANY
10.1
The Manager
Background
The Manager was incorporated in Malaysia on 2 May 1997 under the Companies Act 1965 and
began its operations under the name Hwang-DBS Unit Trust (HDBSUT) Berhad in 2001. In early
2014, the Manager was acquired by the Affin Banking Group (“Affin”) and hence, is now supported
by a home-grown financial services conglomerate. Affin has over 38 years of experience in financial
industry which focuses on commercial, Islamic and investment banking services, money broking,
fund management and underwriting of life and general insurance business. Additionally, the
Manager is also 30% owned by Nikko Asset Management Asia “(Nikko AM Asia”), a wholly-owned
subsidiary of Tokyo-based Nikko Asset Management Co. Ltd, an Asian investment management
franchise.
The Manager distributes its funds through the following various channels:
(i) In-house/internal sales team;
(ii) IUTA & CUTA (Corporate Unit Trust Advisers); and
(iii) Unit trust consultants.
The Manager’s head office is located in Kuala Lumpur and has a total of 7 main sales offices located
in Peninsular and East Malaysia. They are in Penang, Ipoh, Johor Bharu, Melaka, Kuching, Miri and
Kota Kinabalu.
Milestones
As at LPD, the Manager has in its stable a total of 40 unit trust funds and 32 wholesale funds,
offering a complete and essential range of products, comprising conventional equity, balanced,
bond, money market, capital guaranteed, capital protected, global, structured and feeder funds, as
well as Islamic equity, Islamic money market and Islamic fixed income funds.
As at LPD, the total AUM, comprising in-house unit trust funds as well as corporate and
discretionary portfolios stood at approximately RM 28.3 billion.
As at LPD, the Manager has a staff force of 258, of whom, 225 are executive and 33 are nonexecutive.
10.2
Role of the Manager
The Manager is responsible for the investment management and marketing of the Fund, servicing
Unit Holders’ needs, keeping proper administrative records of Unit Holders and the Fund, ensuring
compliance with stringent internal procedures and guidelines of relevant authorities.
10.3
Financial Position
Financial Year Ended
1 August 2013 to 30
November 2014
(RM)
Unaudited
31 July
2013
(RM)
Audited
31 July
2012
(RM)
Audited
31 July
2011
(RM)
Audited
Turnover
275,634,110
183,948,110
111,904,655
71,452,499
Profit Before Tax
67,863,464
40,159,749
23,045,297
13,143,632
Profit After Tax
52,935,041
31,394,865
18,675,603
10,350,141
Issued/Paid-up Capital
10,000,000
10,000,000
10,000,000
10,000,000
Shareholders’ Fund
52,935,041
79,481,517
53,127,381
39,072,778
46
10.4
Role of Directors
The Board is responsible for the overall management of the Manager and its funds. The Board not
only ensures corporate governance is practised but policies and guidelines are adhered to. The
Board sits at least four (4) times every year, or more should the need arise.
Board of Directors
Tan Sri Dato’ Seri Che Lodin Bin Wok Kamaruddin (Non-independent Director)
Puan Maimoonah Binti Mohamed Hussain (Non-independent Director)
YBhg Mej Jen Dato’ Hj Latip Bin Ismail (Independent Director)
Mr Teng Chee Wai (Non-independent Director)
Mr Blair Chilton Pickerell (Non-independent Director)
Encik Abd Malik Bin A Rahman (Independent Director)
Ms. Eleanor Seet Oon Hui (Alternate Director to Mr. Blair Chilton Pickerell)
10.5
Role of the Investment Committee
The investment committee (“Committee”) formulates, establishes and implements investment
strategies and policies. The committee will continually review and monitor the success of these
strategies and policies using predetermined benchmarks towards achieving a proper performance
for the Fund. The Committee will also ensure investment guidelines and regulations are complied
with. The Committee meets at least once every quarterly or more should the need arise.
The Investment Committee Members
Dato’ V. Danapalan (Chairman, Independent member)
Dato' V. Danapalan holds a B.A. (Hons) from University Malaya and Masters in Public
Administration from Pennsylvania State University, United States of America. He was previously the
chairman of the Malaysian Communications and Multimedia Commission (MCMC) until his
retirement in March 2006. Prior to joining MCMC, he was a senior vice-president at the Multimedia
Development Corporation Sdn. Bhd. Before this, he was the secretary-general at the Ministry of
Science, Technology and Environment, a position he held from 1991 to 1998. He currently serves
on the board of Malaysia University of Science and Technology (MUST), Multimedia University
(MMU), Sirim QAS Sdn. Bhd., Gibraltar BSN Life Insurance, Telekom Malaysia Berhad, Maybank
Foundation and Tun Sambanthan Scholarship Board.
Puan Maimoonah Binti Mohamed Hussain (Non-independent member)
Puan Maimoonah Binti Mohamed Hussain graduated from University of Singapore with a Bachelor
of Accountancy and was the director, debt & capital markets of Affin Bank Berhad prior to her
appointment as managing director at Affin Investment Bank Berhad. Prior to this, she had been the
head of syndications at Standard Chartered Bank’s debt syndications business for Malaysia,
Singapore, Thailand, Indonesia and the Philippines. She was also seconded to Standard Chartered
Bank Malaysia Berhad for three years to develop the local as well as cross border debt business.
She was prior thereto attached to Morgan Grenfell (Asia) Ltd where she was involved in structured
finance and project advisory across South East Asian markets. She also served as a director on the
board of Affin Investment Bank Berhad, Merchant Nominees (Tempatan) Sdn Bhd and Affin
Nominees (Asing) Sdn Bhd.
Mr. Ong Teng Chong (Non-independent member)
Mr. Ong is currently the head of institutional business (securities division) at Affin Hwang
Investment Bank. Graduated with a Bachelor of Commerce Degree majoring in accounting and
finance from Monash University (Clayton campus, Australia), Mr. Ong has around 20 years of
working experience in the investment banking industry, specializing in investment research. Mr.
Ong has worked at a number of investment banks in Malaysia with the last six years leading the
research and analytics department of the bank before taking the role of head of institutional
business (securities division) in January 2014. As head of research, Mr. Ong has led the overall
research team's improvement in rankings - both clients and external surveys. In the category of
equity strategy under his direct coverage, Mr. Ong has ranked well in the AsiaMoney Brokers Polls
over the last few years. In addition, Mr. Ong was ranked amongst the top 20 analysts in Malaysia in
AsiaMoney Brokers Polls. As head of institutional business, his primary focus today is on building
47
the bank's institutional brokerage business as well as providing advisory role to the bank's research
and analytics team.
En. Mohammad Aminullah Bin Basir (Independent member)
Encik Mohammad Bin Aminullah Basir is an independent member of the investment committee for
the Fund. He has vast experience in matters relating to collective investment schemes from his long
serving tenure in the SC. Encik Aminullah retired as the deputy general manager and head of
investment products in the corporate finance and investment division, after serving for 20 years
covering various aspects of the capital market industry such as corporate finance (e.g. initial public
offerings, acquisitions and mergers), collective investment schemes (e.g unit trust funds, real estate
investment trusts, exchange traded funds, business trusts) and Private Retirement Scheme. He
started his career as an auditor with Ivor Barry and Co, a firm of Chartered Accountants in United
Kingdom before returning to Malaysia as an internal auditor with Sime Darby Berhad. Encik
Aminullah is a Fellow of the Association of Chartered Certified Accountants (ACCA), a Chartered
Accountant with the Malaysian Institute of Accountants and he is also a certified member of
Financial Planning Association of Malaysia (FPAM).
Mr. Phuah Eng Chye (Independent member)
Mr. Phuah was previously the senior general manager and the head of the strategy & research
department at the SC. For a period of 10 years, he was involved in various capital market
development and regulatory projects and led the project team that developed the Capital Market
Masterplan 2. Prior to joining the SC, he was a regional bank analyst with Dresdner Kleinwort
Benson where he was ranked among the top banking analysts in South East Asia. He was also head
of Malaysian equities research for PB Securities and K&N Kenanga. He also previously worked as a
remisier, a fund manager and as a financial journalist. He graduated with a degree in economics
from the University of Manchester, United Kingdom in 1981. He is currently writing a book on
economics and regulatory policies.
10.6
The Team
The Investment Team
The investment team comprises a group of portfolio managers (eight (8) personnel from fixed
income team and ten (10) personnel from equity team) who posses the necessary expertise and
experience to undertake the fund management of its unit trust funds. The investment team is
assisted by seven (7) research analyst.
Mr Teng Chee Wai – Managing Director
Mr Teng is the founder of the Manager. Over the past fourteen (14) years, he has built the
company to its current position with an excess of RM 20 billion in assets under management. In his
capacity as managing director and executive director of the Manager, Teng manages the overall
business and strategic direction as well as the management of the investment team. His hands on
approach sees him actively involved in investments, product development and marketing. Teng’s
critical leadership and regular participation in reviewing and assessing strategies and performance
has been pivotal in allowing the Manager to successfully navigate the economically turbulent
decade. Teng’s investment management experience spans more than twenty four (24) years, and
his key area of expertise is in managing absolute return mandates for insurance assets and
investment-linked funds in both Singapore and Malaysia. Prior to his current appointments, he was
the assistant general manager (investment) of Overseas Assurance Corporation (OAC) and was
responsible for the investment function of the Group Overseas Assurance Corporation Ltd. Teng
began his career in the financial industry as an investment manager with NTUC Income, Singapore.
He is a Bachelor of Science graduate from the National University of Singapore and has a PostGraduate Diploma in Actuarial Studies from City University in London.
Mr David Ng Kong Cheong – Chief Investment Officer
Mr David Ng joined the Manager in September 2002 as a Portfolio Manager and was appointed as
Chief Investment Officer on 1 September 2006, to oversee the equities, fixed income and the
central dealing units. He graduated with both Bachelor of Commerce (Accounting) and Bachelor of
Law degrees from Monash University in Melbourne, Australia and he is also Chartered Financial
48
Analyst charter holder. In total, David has over fifteen (15) years of investment experience in
managing both institutional and unit trust funds. David’s key responsibilities at the Manager is
setting of investment strategy for the assets under management, and the management of selected
portfolios. He is the designated fund manager for equity portion of the Fund.
Ms Esther Teo Keet Ying – Head, Fixed Income Investment
Ms Esther Teo is the Head of Fixed Income Investment. Prior to joining the Manager, Esther Teo
was a portfolio manager with HwangDBS Asset Management and was responsible for managing
fixed income investment of corporate clients and unit trust funds. Prior to this, she was attached
with the fixed income division of RHB Asset Management Sdn. Bhd. covering both institutional and
unit trust mandates for three (3) years. She began her career in KPMG Malaysia in 1999 as a
consultant in financial advisory services specializing in corporate debt restructuring and recovery.
Esther graduated from the University of Melbourne, Australia with a Bachelor of Commerce
majoring in Accounting and Finance. She has also obtained her licence from the SC on 29 April 2004
to act as a fund manager. She is the designated fund manager for fixed income portion of the Fund.
Mr Gan Eng Peng – Head, Equity
Mr Gan Eng Peng joined the Manager in April 2008, bringing with him more than twenty (20) years
of experience in regional and local equities investment, corporate finance and business
management. Prior to joining the Manager, Gan was Head of Equities of Investments at Pacific
Mutual Fund Berhad where he led a six (6) person strong regional fund management team. Prior to
that, he was the General Manager of Business Development at Pacific Mutual Fund Berhad, being
overall in charge of six (6) departments and driving the business function of the company. His other
work experience includes investment research at local and foreign research houses, corporate
finance and running and owning an independent research house. Gan graduated with a Bachelor of
Science (Industrial and Business Economics) from the London School of Economics, England.
Key Personnel of the Management Team
Mr Teng Chee Wai – Managing Director
(Please refer to the above)
Mr David Ng Kong Cheong – Chief Investment Officer
(Please refer to the above)
Ms Peggy Liew Li Choo – Chief Operating Officer
Ms Peggy Liew is currently the chief operating officer of the Manager. She joined the Manager in
July 2008 as head of operations. Ms Peggy brings with her more than twenty (20) years of work
experience in various industries, of which seventeen (17) years of her professional experience have
been in the capital market industry. Prior to joining the Manager, Ms Peggy spent seven years in
Prudential Fund Management Berhad as the head of operations and six years in HLB Unit Trust
Management overseeing fund valuations, sales and office administration as well as the operational
activities within the company. She holds certifications from the Chartered Institute of Marketing
(CIM).
Ms Esther Thye Yee Meng – Chief Strategy Officer
Ms Esther Thye has more than 19 years of experience in marketing and sales, primarily in the
financial services industry. She has been with the Manager for 8 years and is responsible for
managing key initiatives and overall business strategy, which includes the establishment of a
wealth management platform and business expansion into international markets. Prior to joining
the Manager in 2005, Ms Esther was attached to a number of local and international asset
management companies. Ms Esther is an Associate Financial Practitioner (AFP) and holds an
Advanced Diploma from the Chartered Institute of Marketing (CIM).
Ms Chan Ai Mei – Chief Marketing Officer
Ms Chan joined the Manager in 2010 as a head of financial institution distribution and assumed the
role of chief marketing officer in January 2014. Her role encompasses marketing &
49
communications, product, capital market and structuring, and driving the growth and development
of private retirement scheme for the Manager. She has been responsible for overseeing and driving
the growth of third party distribution channels for the Manager since 2010 and developing a team
that services the financial institutions and business partnership teams to distribute the Manager’s
products. Prior to her career with the Manager, she was with Standard Chartered Bank for five (5)
years where she was involved in the wealth management business driving sales of investment
products as well as leading a team of investment consultants. She also spent almost seven (7)
years in Citibank as a personal banker and managed a sales team. She graduated with a degree in
Bachelor of Commerce (majoring in Marketing) from Auckland University, New Zealand and is also
a member of the Association of Financial Planning Malaysia.
Mr Steve Lim Lip Hoong – Chief Learning Officer
Mr Steve Lim joined the Manager on 1 June 2010 as a chief product office. He then took on a new
role as chief learning officer in January 2014 and was instrumental in setting up an academy to
cater to the learning and training needs of various clients. In his previous role as chief product
officer, he leads the strategic management as well as structuring, developing and positioning of all
the Manager’s products of the respective client segments. He has over twenty (20) years
experience in portfolio management, marketing and product development for the fund
management, stock-broking, onshore and offshore private banking industries. Prior to joining the
Manager, Mr Steve was attached to offshore global private banks in Singapore. His offshore
experience includes marketing of wealth management services and formulating investment
strategies for the high net worth individual market segment. Before moving offshore, he also
covered various aspects of the capital market as fund manager for institutional sales and product
director in several renowned financial groups in Malaysia. Mr Steve graduated from the University
of Hawaii with a double major in Finance and Accounting, and is a chartered financial analyst (CFA)
charter holder.
Mr Vincent Siau Kee Yen - Chief Sales Officer
Mr Vincent has more than thirteen (13) years experience in the financial services industry,
specifically in share trading and investment account servicing. He has been with the Manager for
nine (9) years. He is responsible to establish and implement strategies to retain, penetrate, cross
and up-sell to retail customers and platforms to accomplish growth goals and objectives. He is also
responsible to lead, develop and coach the retail and partnership business teams to ensure a
cohesive team which is aligned with the company’s interest. Mr Vincent began his career in share
trading at a local bank; responsible for marketing their share trading accounts, share margin
facilities, execution of share trading orders, and the provision of services for their customer
banking needs. He was then head hunted by Public Bank to set up share trading centre for the bank
branches and was then transferred to the bank’s main branch in Johor Bahru to head the share
investment business, which eventually became one of the top performing branches. Mr Vincent
studied and trained in the field of accounting and marketing, having completed diploma courses in
Marketing from the Chartered Institute of Marketing (CIM), the LCCI diploma in Accounting and the
CIMA certificate in Management Accounting.
Mr Shahrin Shaikh Mohd – Chief Compliance, Risk and Legal Officer
Mr Shahrin Shaikh Mohd joined the Manager as the chief compliance, risk and legal officer in
January 2012 and has over eighteen (18) years experience in the fund management, unit trusts and
capital market regulatory framework. He is entrusted by the Board and managing director of the
Manager to supervise the overall implementation and communication of risk governance and
compliance framework on top of overseeing legal matters and risk management for the company.
He is the designated person responsible for the compliance matters of the company. Mr Shahrin
began his career with the SC where he spent more than fifteen (15) years in various capacities
covering various areas such as reviewing corporate proposals which includes Initial Public Offering
(“IPO”), acquisitions, rights issues, unit trusts; development of policies and guidelines as well as
supervision and examination of unit trusts and fund management companies. Mr Shahrin’s
experience include a 1-year stint at the Capital Market Authority of Saudi Arabia as a consultant in
reviewing the mutual funds regulatory framework in Saudi Arabia. Mr Shahrin graduated with a
double major in Accounting and Finance from the University of Warwick, England.
50
10.7
Manager’s Delegate
The Manager has appointed HSBC (Malaysia) Trustee Berhad to undertake the accounting and
valuation function for the Fund. The Trustee has invested significantly into information technology
to offer accounting and valuation services to its clients. Under the terms of the Service Agreement,
the Trustee would maintain proper records, and carry out daily valuation/pricing and sending the
Unit prices for publication in the newspaper. All fees and expenses arising out of this appointment
are not charged to the Fund and are solely borne by the Manager as required by the Guidelines.
Please refer to Section 12 “The Trustee” for more details on the corporate profile.
10.8
The Manager’s Disclosure on Related Party Transactions and Conflict of Interest
Save for the transaction disclosed below, as at LPD, the Manager is not aware of any existing
and/or proposed related party transactions or conflict of interest situations or other subsisting
contracts of arrangements involving the Fund.
Related Party Transactions
Name of Party
Involved in the
Transaction
The Manager
Nature of
Transaction
Name of Related
Party
Placement of
deposits
Affin Hwang
Investment Bank
Berhad
(Affin Hwang IB)
Nature of Relationship
Affin Hwang IB holds 70% equity
interest in the Manager.
Conflict of Interest
The directors of the Manager have either direct or indirect interest in other corporations carrying
on a similar business and this is disclosed below:
Nature of Interest
Name of
Director
Name of Corporation or
Business
Puan
Maimoonah
Binti Mohamed
Hussain
Asian Islamic Investment
Management Sdn. Bhd.
(“AIIMAN”)
-
Director
Teng Chee Wai
Asian Islamic Investment
Management Sdn. Bhd.
(“AIIMAN”)
-
Director
Nikko AM Limited
-
Director
Nikko Asset Management
International Limited
-
Director
SIM Funds
Limited
-
Director
Nikko Asset Management
Asia Limited
-
Director
Nikko Asset Management
Australia Limited
-
Director
Blair Chilton
Pickerell
Management
51
Shareholding
(Direct/ Indirect)
Directorship
Name of
Director
Seet Oon Hui
Eleanor
10.9
Name of Corporation or
Business
Nature of Interest
Shareholding
(Direct/ Indirect)
Directorship
Nikko Asset Management
Hong Kong Limited
-
Director
Nikko Asset Management
New Zealand Limited
-
Director
Rongtong
Fund
Management Co., Ltd
-
Director
Asian Islamic Investment
Management Sdn. Bhd.
-
Asian Islamic Investment
Management Sdn. Bhd.
Director
(Non-executive)
Director
-
Nikko Asset Management
Asia Limited
-
Nikko Asset Management
(Mauritius) Limited
-
Nikko Asset Management
International Limited
-
Singapore Consortium
Investment Management
Limited
-
TAAM (Singapore) Pte. Ltd
-
Nikko AM Japan Property
Fund I Pte. Ltd
-
Nikko AM Japan Property I-I
Pte. Ltd
-
Nikko AM Japan Property III Pte. Ltd
-
(Non-executive)
Director
Director
Director
Director
Director
Director
Director
Director
Policy on Dealing with Conflict of Interest
The Manager has in place policies and procedures to deal with any conflict of interest situations. In
making an investment transaction for the Fund, the Manager will not make improper use of its
position in managing the Fund to gain, directly or indirectly, any advantage or to cause detriment
to the interests of Unit Holders. Where the interests of the directors or the Committee member’s
interests may conflict with that of the Fund, they are to refrain from participating in the decisionmaking process relating to the matter. Staff of the Manager are required to seek prior approval
from the executive director or the managing director before dealing in any form of securities. All
transactions with related parties are to be executed 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.
52
10.10
Material Litigation
As at LPD, the Manager is not engaged in any material litigation and arbitration, including those
pending or threatened, and the Manager and its delegate are not aware of any facts likely to give
rise to any proceedings which might materially affect the business/financial position of the
Manager and any of its delegates.
53
11.
THE EXTERNAL FUND MANAGER
11.1
Profile of the External Fund Manager - Asian Islamic Investment Management Sdn. Bhd. (AIIMAN)
is an Islamic investment management company managing assets in excess of RM7.53 billion (as of
31 December 2014) for pension funds, institutions, corporates, high net worth and mass affluent
individuals.
Headquartered in the world’s Islamic financial hub Kuala Lumpur, Malaysia, AIIMAN is focused on
providing clients exceptional and innovative Shariah investment solutions that focus on Asian
Equities and Global Sukuk.
AIIMAN was licensed by the Securities Commission Malaysia to undertake the regulated activity of
Islamic fund management on 17 November 2008 and is a wholly owned subsidiary of Affin Hwang
Asset Management Bhd (“Affin Hwang AM”) and a member of the Affin Hwang Investment Banking
Group.
11.2
Duties and Responsibilities of the External Fund Manager
The Manager has delegated the investment management function of the Fund to the External Fund
Manager. Some of the main duties of the External Fund Manager for this delegated role are as
follows:(a)
to comply with the operations procedures and invest the Fund in accordance with the
objectives of the Fund, the Permitted Investments and Investment Restrictions described
in Section 5.8 and Section 5.9 herein and the Guidelines;
(b)
to exercise due care and vigilance in carrying out its function and duties and comply with
the relevant laws, directives and guidelines issued by the relevant authorities from time to
time;
(c)
to employ an appropriate investment process for the Fund;
(d)
to seek to invest in assets which are in the External Fund Manager’s opinion, the most
appropriate assets in relation to the Fund’s objectives; and
(e)
to report to the Manager on a periodic basis for oversight and monitoring purposes,
including to discuss and review the performance of the Fund and its strategies.
Financial Position
Financial Year Ended
31 March 2014
(RM)
11.3
31 March 2013 (RM)
For the 15 months
period from 1 Jan 2011
to 31 March 2012 (RM)
Audited
Turnover
Audited
11,415,858
Audited
6,306,621
Profit/(loss) Before Tax
5,540,834
1,464,213
347,306
Profit/(loss) After Tax
5,539,313
1,430,891
295,106
Issued/Paid-up Capital
10,000,000
10,000,000
10,000,000
Shareholders’ Fund
14,065,038
8,464,718
7,024,255
4,795,525
Key Personnel of the Management Team
Akmal Hassan – Managing Director/Executive Director
Akmal Hassan is one of the three pioneering senior members in the establishment of Asian Islamic
Investment Management Sdn. Bhd. (AIIMAN). He took over the helm as its Chief Executive Officer
(CEO) and Executive Director on 18 November 2010. Under his leadership, AIIMAN has grown its
asset under management (AUM) by more than five-fold from RM 1.3 billion as at end-2010 to RM
7.5 billion as of 31 December 2014, making it one of the top three Islamic investment management
companies in Malaysia. Under his management, the business has since turned profitable.
54
As Managing Director of AIIMAN, Akmal is actively involved in all aspects of the business’ day-today management from leading the investment team, driving marketing strategies, building the
business, to guiding the back office team. He believes in development through empowerment and
synergy with a clear focus on delivering positive results, from investment performance, AUM
growth, adding value to AIIMAN’s shareholders as well as contributing to the government’s push to
develop Malaysia as the global international Islamic financial hub.
Akmal is the driving force behind the strong returns and low volatility performance of its
investment portfolios as well as Hwang Investment Management’s award winning Shariah unit
trust funds. People and performance is the source of AIIMAN’s success today.
Prior to his current appointment, Akmal was the Chief Investment Officer at a subsidiary of a local
Islamic Bank. He has more than 15 years experience in the investment management industry
primarily in portfolio management, investment research and marketing strategy.
Akmal graduated from Oklahoma State University, USA with a degree in Business Administration,
majoring in Finance (BSc). He completed his Master in Business Administration (MBA) at the
University of the Sunshine Coast, Queensland, Australia.
Sean Ramsey Lee – Assistant Portfolio Manager
Sean joined Asian Islamic Investment Management Berhad (AIIMAN) in 2011 as an Investment
Analyst. He was responsible for conducting credit analysis on corporates in the commodities, and
oil and gas sector prior to assuming his current position in 2014. Sean currently assists in managing
Ringgit bond portfolios for institutional clients and he is responsible for ASEAN local currency bond
and FX for Indonesia, Thailand and Malaysia.
Prior to this, Sean was an Associate in the Finance Department of CIMB Investment Bank after
having joined the company as a management trainee in 2010. As part of the programme, he gained
exposure to ASEAN research, consumer banking, credit analysis and finance.
Sean has completed his professional qualification with the Association of Chartered Certified
Accountants. He also graduated with a Bachelor of Science (Honours) in Applied Accounting from
the Oxford Brookes University in the United Kingdom.
11.4
Existing and Proposed Related Party Transaction and Conflict of Interest
Save for the transactions as disclosed below, as at the LPD, the External Fund Manager is not aware
of any existing and/or proposed related party transactions or possible conflict of interest situations
or other subsisting contracts of arrangements involving the Fund.
Related Party Transaction
Name of Party
Involved in the
Transaction
AIIMAN
Nature of Transaction
Appointment of Asian Islamic
Investment Management by the
Manager as the External Fund
Manager of the Fund and
payment of fee by the Manager
in connection with the provision
of services thereon.
55
Name of Related
Party
the Manager
Nature of Relationship
External Fund Manager to
the Fund
Conflict of Interest
As at the LPD, the External Fund Manager is a wholly-owned subsidiary of the Manager.
Name of Substantial
Shareholder
Interest in Other Corporation
Carrying on a Similar Business
Nature of Business
Affin Hwang Asset
Management Berhad
(“The Manager”)
Nil
The Manager is a Malaysia registered fund
management company that had obtained the
Capital Markets and Services Licence from SC.
As at the LPD, the directors of the External Fund Manager have, either direct or indirect interest in
other corporations carrying on a similar business with the Manager, details of which are as follows:
Name of Director
Teng Chee Wai
Maimoonah Binti
Mohamed Hussain
Blair Chilton
Pickerell
Name of Corporation or
Business
Nature of Interest in
Shareholding
(Direct/ Indirect)
Nature of Interest in
Directorship
(Direct / Indirect)
The Manager
-
Director
The Manager
-
Director
The Manager
-
Director
Nikko AM Limited
-
Director
-
Director
-
Director
-
Director
-
Director
-
Director
-
Director
-
Director
-
Alternate Director to Mr.
Blair Chilton Pickerell (Nonexecutive)
-
Director
-
Director
-
Director
-
Director
-
Director
-
Director
-
Director
-
Director
Nikko Asset Management
Asia Limited
Nikko Asset Management
Australia Limited
Nikko Asset Management
Hong Kong Limited
Nikko Asset Management
International Limited
Nikko Asset Management
New Zealand Limited
Rongtong Fund
Management Co., Ltd
SIM Funds Management
Limited
Seet Oon Hui
Eleanor
The Manager
Nikko Asset Management
(Mauritius) Limited
Nikko Asset Management
International Limited
Singapore Consortium
Investment Management
Limited
Nikko Asset Management
Asia Limited
TAAM (Singapore) Pte. Ltd
Nikko AM Japan Property
Fund I Pte. Ltd
Nikko AM Japan Property II Pte. Ltd
Nikko AM Japan Property III Pte. Ltd
56
11.5
Policy on Dealing with Conflict of Interest
The External Fund Manager will conduct all transactions with or for the Fund at arm’s length. To
the extent that there are overlapping areas, the securities will be allocated on a pro-rata basis
among the funds.
11.6
Material Litigation
As at the LPD, the External Fund Manager 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 External Fund
Manager.
57
12.
THE TRUSTEE
12.1
Background Information
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.
12.2
Board of Directors
Mr Baldev Singh A/L Gurdial Singh
Ms On Bee Heong
Mr Yee Yit Seeng
12.3
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 audited accounts for
the last 3 years:
Year Ended 31 December
12.4
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 171 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 nonexecutives. A good number of the staff has been with the Trustee for many years.
12.5
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.
12.6
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
58
provisions of the Deed, Capital Markets and Services Act 2007 and the Guidelines. Apart from being
the legal owner of the Fund’s assets, the Trustee is also responsible for ensuring that the Manager
performs its duties and obligations in accordance with the provisions of the Deed, 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 repurchase request, the Trustee’s
responsibility is discharged once it has paid the repurchase amount to the Manager.
12.7
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.
12.8
Power of Trustee to Remove, Retire or Replace the Manager
The Manager may be removed by the Trustee on the grounds that the Manager:
(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 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.
12.9
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 of the Fund, 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 the 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.
12.10
Trustee’s Disclosure of 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.
12.11
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
59
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)20753000 Fax No: (603)21796488
2) HSBC Institutional Trust Services (Asia) Limited
6th Floor, Tower One
HSBC Centre
No 1 Sham Mong Road
Kowloon, Hong Kong
Telephone No: (852)28221111 Fax No: (852)28105259
12.12
Policy on Dealing with 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.
12.13
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
60
from compliance of such policies, except in the case of negligence, willful default or fraud of the
Trustee.
12.14
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.
12.15
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.
61
13.
THE SHARIAH ADVISER
13.1
Background Information
Amanie Advisors Sdn Bhd (''Amanie'') is a Shariah advisory, consultancy, training and research and
development boutique for institutional and corporate clientele focusing on Islamic financial
services. Amanie is a registered Shariah advisory company for Islamic unit trust with the SC. It has
been established with the aim of addressing the global needs for experts' and Shariah scholars' proactive input. This will ultimately allow the players in the industry to manage and achieve their
business and financial goals in accordance with the Shariah Principles. Amanie also focuses on
organizational aspect of the development of human capital in Islamic finance worldwide through
providing updated quality learning embracing both local and global issues on Islamic financial
products and services.
The company is led by Datuk Dr. Mohd Daud Bakar and teamed by an active and established panel
of consultants covering every aspect related to the Islamic banking and finance industry both in
Malaysia and the global market. Currently the team comprises of five (5) full-time consultants who
represent dynamic and experienced professionals with a mixture of corporate finance, accounting,
product development, Shariah law and education.
Amanie meets the fund manager every quarter to address Shariah advisory matters pertaining to
our Shariah funds. Since 2005, Amanie has acquired ten (10) years of experience in the advisory
role of unit trusts and as at 31 December 2014 there are 27 funds which Amanie acts as Shariah
adviser.
13.2
Shariah Adviser’s Roles and Responsibilities
(1)
(2)
(3)
(4)
(5)
(6)
13.3
To ensure that the Fund is managed and administered in accordance with Shariah principles.
To provide expertise and guidance in all matters relating to Shariah principles, including on
the Fund's Deed and Prospectus, its structure and investment process, and other operational
and administrative matters.
To consult with SC where there is any ambiguity or uncertainty as to an investment,
instrument, system, procedure and/or process.
To act with due care, skill and diligence in carrying out its duties and responsibilities.
Responsible for scrutinizing the Fund's compliance report as provided by the compliance
officer, and investment transaction reports provided by, or duly approved by, the Trustee to
ensure that the Fund's investments are in line with Shariah principles.
To prepare a report to be included in the Fund's interim and annual reports certifying
whether the Fund has been managed and administered in accordance with Shariah
principles for the period concerned.
Designated Persons Responsible for Shariah Matters of the Fund
Datuk Dr. Mohd Daud Bakar
Shariah Advisor
Datuk Dr. Mohd Daud Bakar is the founder and group chairman of Amanie Advisors, a global
boutique Shariah advisory firm with offices located worldwide. He currently sits as a chairman of
the Shariah Advisory Council at the Central Bank of Malaysia, the Securities Commission of
Malaysia, the Labuan Financial Services Authority and the International Islamic Liquidity
Management Corporation (IILM). He is also a Shariah board member of various financial
institutions, including the National Bank of Oman (Oman), Noor Islamic Bank (Dubai), Amundi Asset
Management (France), Morgan Stanley (Dubai), Bank of London and Middle East (London), BNP
Paribas (Bahrain), Islamic Bank of Asia (Singapore), Dow Jones Islamic Market Index (New York),
amongst many others.
Prior to this, he was the deputy vice-chancellor at the International Islamic University Malaysia. He
received his first degree in Shariah from University of Kuwait in 1988 and obtained his PhD from
University of St. Andrews, United Kingdom in 1993. In 2002, he completed his external Bachelor of
Jurisprudence at University of Malaya. He has published a number of articles in various academic
journals and has made many presentations in various conferences both local and overseas. On the
recognition side, Datuk Dr. Mohd Daud has been honored with “The Asset Triple A Industry
62
Leadership Award” at The Asset Triple A Islamic Finance Award 2014 by The Asset magazine and
been named as the “Most Outstanding Individual”, awarded by His Majesty, the King of Malaysia,
in conjunction with the national-level Prophet Muhammad's birthday 2014.
63
14.
TAX ADVISERS LETTER
Taxation adviser’s letter in respect of the taxation
of the unit trust and the unit holders
(prepared for inclusion in this Prospectus)
The Board of Directors
Affin Hwang Asset Management Berhad
(formerly known as Hwang Investment Management Berhad)
th
Suite 11-01, 11 Floor
Menara Keck Seng
203, Jalan Bukit Bintang
55100 Kuala Lumpur
22 January 2015
Dear Sirs
Affin Hwang Aiiman Select Income Fund
Taxation of the Fund and Unit Holders
1.
This letter has been prepared for inclusion in this Prospectus in connection with the offer of units in Affin
Hwang Aiiman Select Income Fund (hereinafter referred to as “the Fund”).
2.
Taxation
The following is general information based on Malaysian tax law in force at the time of lodging the
Prospectus with the Securities Commission Malaysia and investors should be aware that the tax law may
be changed at any time. To an extent, the application of tax law depends upon an investor’s individual
circumstances. The information provided below does not constitute tax advice. The Manager therefore
recommends that an investor consult his accountant or tax adviser on questions about his individual tax
position.
As the Fund’s Trustee is resident in Malaysia, the Fund is regarded as resident in Malaysia and is liable to
pay Malaysian income tax (“income tax” or “tax”). The taxation of the Fund is governed principally by
Sections 61 and 63B of the Malaysian Income Tax Act, 1967 (“MITA”).
Pursuant to the Section 2(7) of MITA, any reference to interest shall apply, mutatis mutandis, to gains or
profits received and expenses incurred, in lieu of interest, in transaction conducted in accordance with
the principles of Shariah. 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 Shariah, will be accorded
the same tax treatment as if they were interest.
Unit Holders are also liable to pay income tax on income distributions paid by the Fund.
3.
Taxation of the Fund
3.1
Income Tax
The income of the Fund in respect of dividends, interest or profits from deposits and other
investment income (other than income which is exempt from tax) derived from or accruing in
Malaysia is liable to income tax. The income tax rate applicable to the Fund is 25%.
Profit from disposal of share investments, tax exempt dividends and tax exempt interest as listed
in the Appendix attached received by the Fund are not subject to income tax. The Fund may be
receiving income such as exit fee which will be subject to tax at the prevailing tax rate applicable
on the Fund.
th
It has been gazetted in the Finance (No.2) Act 2014 on 30 December 2014 that with effect from
year of assessment 2016, the income tax rate applicable to the Fund would be reduced to 24%.
Discount or profit received from the sale of bonds or securities issued by Pengurusan Danaharta
Nasional Berhad or Danaharta Urus Sendirian Berhad within and outside Malaysia is exempt
from the payment of income tax.
The Fund may receive dividends, profits and other income from investments outside Malaysia.
Income derived from sources outside Malaysia and received in Malaysia by a resident unit trust is
64
exempt from Malaysian income tax. However, such income may be subject to foreign tax in the
country from which the income is derived.
Income received by the Fund from Sukuk Ijarah, other than convertible loan stock, issued in any
currency by 1Malaysia Sukuk Global Berhad and Sukuk Issue which has been issued by the
Malaysia Global Sukuk Inc is exempt from the payment of income tax.
Pursuant to the Income Tax (Exemption) Order 2011, the statutory income from a business
dealing in non-ringgit sukuk by a resident person licenced under the Capital Markets and Services
Act 2007 is exempted from tax provided the non-ringgit sukuk originates from Malaysia and is
issued or guaranteed by the government of Malaysia or approved by the Securities Commission
Malaysia.
The tax treatment of hedging instruments would depend on the particular hedging instruments
entered into. Generally, any gain or loss relating to the principal portion will be treated as capital
gain or loss. Gains or losses relating to the income portion would normally be treated as revenue
gains or losses. The gain or loss on revaluation will only be taxed or claimed upon realisation. Any
gain or loss on foreign exchange is treated as capital gain or loss if it arises from the revaluation
of the principal portion of the investment.
Expenses being manager’s remuneration, maintenance of register of Unit Holders, share
registration expenses, secretarial, audit and accounting fees, telephone charges, printing and
stationery costs and postage, which are not allowed under the general deduction rules, qualify
for a special deduction, subject to a minimum of 10% and a maximum of 25% of such expenses
pursuant to Section 63B of the MITA.
The tax credit attached to taxable dividends received by the Fund i.e. tax deducted at source at
the prevailing tax rate is available for set-off against tax payable by the Fund. No additional tax
will be payable by the Fund on the taxable dividends received. However, such tax or part thereof
will be refundable to the Fund if the total tax so deducted at source exceeds the tax liability of
the Fund by virtue of deduction of allowable expenses.
With effect from the year of assessment 2008, a single-tier company income tax system has
replaced the imputation system. The Fund is not liable to tax on any dividends paid, credited or
distributed to the Fund under the single tier tax system, where the company paying such
dividend is not entitled to deduct tax under the MITA.
Generally, income from distribution from Malaysia Real Estate Investment Trusts will be received
net of withholding tax of 10%. No further tax will be payable by the Fund on the distribution.
Distribution from such income by the Fund will also not be subject to further tax in the hands of
the Unit Holders.
3.2
Gains on Disposal of Investments
Gains on disposal of investments by the Fund will not be subject to income tax but where the
investments represent shares in real property companies, such gains may be subject to Real
Property Gains Tax (“RPGT”) under the RPGT Act, 1976. A real property company is a controlled
company which owns or acquires real properties or shares in real property companies with a
market value of not less than 75% 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.
3.3
Goods and Service Tax (“GST”)
st
GST will commence from 1 April 2015 and will replace the current sales and service tax regime.
GST will apply at 6% on most goods and services with some exceptions.
If it is determined that Fund is required to register for GST, any fees it charges to unitholders will
be subject to GST at 6%.
The issuance of units by the Fund to investors will be exempt from GST. To the extent that the
Fund invests in any financial services products (e.g. securities, derivatives, units in a fund or unit
trust), the acquisition of these interests will be exempted from GST. To the extent that fees are
charged to the Fund in relation to these products, these fees would be subject to 6% GST.
The GST paid on acquisitions made by the Fund (e.g. fund manager fees, trustee fees etc.) would
either unrecoverable in whole or in part and would be subject to further analysis to determine
the extent that GST can be recovered.
65
4.
Taxation of Unit Holders
4.1
Taxable Distribution
Unit Holders will be taxed on an amount equivalent to their share of the total taxable
income of the Fund to the extent such income is distributed to them. Taxable distributions
carry a tax credit in respect of the tax chargeable on that part of the Fund. Unit Holders will
be subject to tax on an amount equal to the net taxable distribution plus attributable
underlying tax paid by the Fund.
Income distributed to Unit Holders is generally taxable as follows in Malaysia :Unit Holders
Malaysian Tax Rates
Malaysian tax residents:


Individual and noncorporate Unit Holders

Co-operative societies

Proposed in the 2015 Budget
Speech
With effect from year of
assessment 2015:
Progressive tax rates
ranging from 0% to 26%

Progressive tax rates
ranging from 0% to 25%
Progressive tax rates
ranging from 0% to 25%

Progressive tax rates
ranging from 0% to 24%
With effect from year of
assessment 2016:

Trust bodies

25%

24%

Corporate Unit Holders

20% for every first
RM500,000
of
chargeable income

19% for every first
RM500,000
of
chargeable income

25% for chargeable
income in excess of
RM500,000

24% for chargeable
income in excess of
RM500,000

25%

24%
Malaysian Tax Rates
Proposed in the 2014 Budget
Speech
With effect from year of
assessment 2015:
26%

25%
With effect from year of
assessment 2016:
 24%
i.
A company with
paid up capital in
respect
of
ordinary shares of
not more than
RM2.5
million
where the paid up
capital in respect
of ordinary shares
of
other
companies within
the same group as
such company is
not more than
RM2.5 million (at
the beginning of
the basis period
for a year of
assessment)
ii. Companies
other
than those in (i)
above
Unit Holders
Non-Malaysian tax residents:

Individual and noncorporate Unit Holders

Corporate Unit Holders
and trust bodies


66
25%
The tax credit that is attributable to the income distributed to the Unit Holders will be available
for set off against tax payable by the Unit Holders. There is no withholding tax on taxable
distributions made to non-resident 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 treaties with
Malaysia, the Malaysian tax suffered may be creditable in the foreign tax jurisdictions.
4.2
Tax Exempt Distribution
Tax exempt distributions made out of gains from realisation of investments and other exempt
income earned by the Fund will not be subject to Malaysian tax in the hands of Unit Holders,
whether individual or corporate, resident or non-resident. All Unit Holders do not pay tax on that
portion of their income distribution from the Fund’s distribution equalisation account.
4.3
Distribution Voucher
To help complete a Unit Holder’s tax returns, the Manager will send the Unit Holder a
distribution voucher as and when distributions are made. This sets out the various components
of the income distributed and the amount of attributable income tax already paid by the Fund.
4.4
Sale, Transfer or Redemption of Units
Any gains realised by a Unit Holder on the sale, transfer or redemption of his units are generally
tax-free capital gains unless the Unit Holder is an insurance company, a financial institution or a
person trading or dealing in securities. Generally, the gains realised by these categories of Unit
Holders constitute business income on which tax is chargeable.
4.5
Reinvestment of Distribution
Unit Holders who receive their income distribution by way of investment in the form of the
purchase of new units will be deemed to have received their income distribution after tax and
reinvested that amount in the Fund.
4.6
Unit Splits
Unit splits issued by the Fund are not taxable in the hands of the Unit Holders.
4.7
GST
The Unit Holders should not be subject to GST on the following:•
•
withdrawal / redemption from the Fund
income distribution from the Fund
However, any fee-based charges related to buying and transfer of units charged to the Unit
Holders should be subjected to GST at the standard rate of 6%.
Yours faithfully
67
Appendix
Tax Exempt Interest Income of Unit Trusts
1.
2.
Interest or discount paid or credited to unit trusts in respect of the following will be exempt from tax: 
Securities or bonds issued or guaranteed by the government; or

Debentures or Islamic securities, other than convertible loan stock, approved by the Securities
Commission Malaysia; or

Bon Simpanan Malaysia issued by the Central Bank of Malaysia.
Interest derived from Malaysia and paid or credited by any bank or financial institution licensed under the
Banking and Financial Institutions Act 1989 (BAFIA) or the Islamic Banking Act 1983 (IBA). The BAFIA and the IBA
have been repealed with the coming into force of the Financial Services Act 2013 and Islamic Financial Services
th
Act 2013 on 30 June 2013. No amendment has been made to the Income Tax Act 1967 to reflect the above.
th
It has been gazetted in the Finance (No.2) Act 2014 on 30 December 2014 that with effect from year of
assessment 2015, the exemption is extended to the interest derived from Malaysia and paid or credited by any
bank or financial institution licensed under any development financial institution regulated under the
Development Financial Institutions Act 2002 (DFIA).
3.
Interest income derived from bonds, other than convertible loan stocks, paid or credited by any company listed in
Malaysia Exchange of Securities Dealing and Automated Quotation Berhad (“MESDAQ”) (now known as Bursa
Malaysia Securities Berhad ACE Market).
4.
Interest received in respect of bonds and securities issued by Pengurusan Danaharta Nasional Berhad within and
outside Malaysia.
5.
Interest in respect of any savings certificates issued by the government.
6.
Interest in respect of Islamic securities originating from Malaysia, other than convertible loan stock, issued in any
currency other than RM and approved by the Securities Commission Malaysia or Labuan Financial Services
Authority.
7.
Interest in respect of Sukuk Wakala, other than a convertible loan stock, issued in any currency by Wakala Global
Sukuk Berhad.
68
15.
STATEMENT OF CONSENT
The Trustee, the Trustee’s delegates, the auditor, the Shariah Adviser, the External Fund Manager
and the solicitors have given their consent to the inclusion of their names in the form and context
in which such names appear in this Prospectus and have not subsequently withdrawn such consent.
The Tax Advisers have given their consent to the inclusion of their names and the Tax Advisers’
letter on the Taxation of the Fund and Unit Holders in the form and context in which it appears in
this Prospectus and have not subsequently withdrawn such consent.
69
16.
DOCUMENTS AVAILABLE FOR INSPECTION
Unit Holders may inspect without charge, at the registered offices of the Manager and/or the
Trustee, for a period of not less than 12 months from the date of this Prospectus, the following
documents or copies thereof, where applicable:
(a)
The Deed of the Fund;
(b)
Each material contract disclosed in the Prospectus and, in the case of contracts not
reduced into writing, a memorandum which gives full particulars of the contracts;
(c)
The audited financial statements of the Fund for the current financial year (where
applicable) and the last 3 financial years or from the date of incorporation or
establishment, if less than three (3) years, preceding the date of this Prospectus;
(d)
All reports, letters or other documents, valuations and statements by any expert, any part
of which is extracted or referred to in the Prospectus;
(e)
Writ and relevant cause papers for all current material litigation and arbitration disclosed
in the Prospectus; and
(f)
Any consent given by experts whose statement appears in the Prospectus.
70
17.
UNIT TRUST LOAN FINANCING RISK DISCLOSURE STATEMENT
Investing in a unit trust fund 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 to risk and
financial circumstances. You should be aware of the risks, which would include the following:
(1)
The higher the margin of financing (that is, the amount of money you borrow for every RM
of your own money which you put in as deposit or down payment), the greater the loss or
gain on your investment.
(2)
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 be increased.
(3)
If Unit prices fall beyond a certain level, you may be asked to provide additional
acceptable collateral (where Units are used as collateral) or pay additional amounts on top
of your normal instalments. If you fail to comply within the time prescribed, your Units
may be sold towards the settlement of your loan.
(4)
Returns on unit trusts 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 experienced. Whether you eventually realise a gain or loss may be affected by the
timing of the sale of your Units. The value of Units may fall just when you want your
money back even though the 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 are
in doubt about any aspect of this risk disclosure statement or the terms of the loan financing, you
should consult the institution offering the loan.
ACKNOWLEDGEMENT OF RECEIPT OF RISK DISCLOSURE STATEMENT
I acknowledge that I have received a copy of this Unit Trust Loan Financing Risk Disclosure
Statement and understand its contents.
Signature
:
________________________________________________
Full Name
:
________________________________________________
Date
:
________________________________________________
71
18.
DIRECTORY OF SALES OFFICE
HEAD OFFICE
th
Suite 11-01, 11 Floor, Menara Keck Seng,
203, Jalan Bukit Bintang, 55100 Kuala Lumpur.
Tel : 03 – 2116 6000
Fax : 03 – 2116 6100
Toll Free No : 1-800-88-7080
Email: customercare@affinhwangam.com
PENANG
No. 10-C-23 & 10-C-24, Precinct 10,
Jalan Tanjung Tokong,
10470 Penang.
Tel : 04 – 899 8022
Fax : 04 – 899 1916
SABAH
Lot No. B-2-09, 2nd Floor,
Block B, Warisan Square,
Jalan Tun Fuad Stephens,
88000 Kota Kinabalu,
Sabah.
Tel : 088 - 252 881
Fax : 088 - 288 803
SARAWAK
Ground Floor, No. 69
Block 10, Jalan Laksamana Cheng Ho
93200 Kuching, Sarawak.
Tel : 082 – 233 320
Fax : 082 – 233 663
PERAK
13A Persiaran Greentown 7,
Greentown Business Centre,
30450 Ipoh, Perak.
Tel: 05 - 241 0668
Fax: 05 – 255 9696
st
1 Floor, Lot 1291,
Jalan Melayu, MCLD,
98000 Miri,
Sarawak.
Tel : 085 - 418 403
Fax : 085 – 418 372
JOHOR
st
1 Floor, No. 93, Jalan Molek 1/29,
Taman Molek,
81100 Johor Bahru, Johor.
Tel : 07 – 351 5677/ 5977
Fax : 07 – 351 5377
MELAKA
Ground Floor, No. 584 Jalan Merdeka,
Taman Melaka Raya
75000 Melaka
Tel: 06 -281 2890
Fax: 06 -281 2937
72
www.affinhwangam.com
Affin Hwang Asset Management Berhad (429786-T)
(Formerly known as Hwang Investment Management Berhad)
Suite 11-01, 11th Floor, Menara Keck Seng, 203 Jalan Bukit Bintang, 55100 Kuala Lumpur, Malaysia
Toll Free Number: 1800 88 7080 T: +603 2116 6000 F: +603 2116 6100