KAF Australia Islamic Property Fund Report - August 2017

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1. KAF AUSTRALIA ISLAMIC PROPERTY FUND (KAIPF-AUD) AUGUST 2017 The fund aims to provide income^ and capital growth by investing in one target fund i.e. must be Shariah-compliant. THE FUND IS SUITABLE FOR SOPHISTICATED INVESTORS WHO: • • • SECTOR ALLOCATION* AS AT 31 JULY 2017 Seek regular income payments ; Want a high degree of property and infrastructure exposure ; and Have at least a 5-years investment outlook. MANAGER’S COMMENTS Bond yields were little changed for the month while the AUD/USD rallied to 80c catching many market participants off-guard. The currency move had no direct impact on the portfolio.RBA talk of a 3.5% neutral cash rate raised some eyebrows this month. However, several days later, Reserve Bank of Australia (RBA) deputy governor Guy Debelle quickly reversed the messaging by stating “no significance should be read into the fact the neutral rate was discussed at this particular meeting”. *As percentage of NAV. Asset exposure is subject to change on a daily basis. Source: Crescent Wealth. ASSET CLASS ALLOCATION AS AT 31 JULY 2017 Two major property transactions caught our eye this month. In the retail space GPT’s Wholesale Shopping Centre Fund (GWSCF) purchased 25% of Highpoint Shopping Centre from the Besen family at an implied capitalization (‘cap’) rate of ~4.2%, or an 18% premium to the last reported book value. The Highpoint transaction provides a positive read through for the high quality retail landlords who have recently been blanketed with retail sentiment negativity. In the office space, Mirvac sold a 50% interest in 477 Collins Street Melbourne at a cap rate of 4.8%, this transaction comes on the back of a 50% sell down of 664 Collins St which traded on a cap rate of 4.97%. This evidence supports the tight cap rates being paid to own office assets in Central Business District (CBD) locations on the Eastern Seaboard. We expect a feature of the upcoming results season to be a discussion of buybacks for stocks trading at or below net tangible asset backing. We also expect REIT earnings growth to be more reliable and defensive than general equities leading to potential outperformance by the Real Estate Investment Trust (REIT) sector throughout reporting season. As always, we will pay particular attention to outlook statements made by the companies and will follow up on company meetings throughout August and September. *As percentage of NAV. Asset exposure is subject to change on a daily basis. Source: Crescent Wealth. Distribution History (AUD) Year 2016 2017 2017 INVESTMENT STRATEGY The Fund’s portfolio will be structured as follows: • At least 95% of NAV : Investments in units of Crescent DPF. • 2% to 5% of NAV : Investments in Islamic liquid assets including Islamic money market instruments and Islamic deposits with financial institutions. Distribution (cents) 1.35 0.06 FUND PERFORMANCE ANALYSIS AS AT 31 JULY 2017 NAV - NAV prices. Cumulative return over the period (%) FUND DETAILS AS AT 31 JULY 2017 Manager Trustee Fund Category Fund Type Launch Date Unit net asset value (NAV) Fund size (Base Currency) Units in Circulation Financial Year End Min. Initial Investment Min. Additional Investment Benchmark Sales Charge Repurchase Charge Annual management fee Annual trustee fee Redemption payment period Distribution policy KAF Investment Funds Bhd. CIMB Islamic Trustee Berhad. Wholesale feeder (Shariah-compliant). Income and growth. 1 August 2016 AUD0.9735 RM 3.936mil 1.185mil 31 July. AUD3,000.00 AUD1,000.00 Reserve Bank of Australia Cash Rate plus 3%. Up to 5.00% of NAV per Unit. None. 1.80% per annum of NAV of the respective Class before deducting the manager’s and Trustee’s fees for that particular day. 0.05% per annum of NAV, subject to a minimum fee of RM12,000 per annum (excluding foreign custodian fees and charges. Within 10 days after receipt of the request to repurchase. The Fund will distribute income on a half yearly basis, subject to the availability of income and/or realized gains. % 1 Month 3 Months 6 Months 1 Year 3 Years 5 Years KAIPF-AUD -1.94 1.49 8.42 N/A N/A N/A Benchmark 0.37 1.14 2.21 N/A N/A N/A Source: ExNovo Fund Analytics Portal by Perkasa Normandy Managers Sdn Bhd LARGEST HOLDINGS* AS AT 31 JULY 2017 Mirvac Group Goodman Group Folkestone Education Trust Stockland Property Trust Vicinity Centres 16.42% 12.83% 11.26% 9.23% 7.82% *as percentage of NAV. Disclaimer: A Product Highlights Sheet (“PHS”) highlighting the key features and risks of the Fund is available and investors have the right to request for a PHS. Investors are advised to obtain, read and understand the PHS and the contents of the Information Memorandum dated 1 August 2016 and its supplementary(ies) (if any) (“the Information Memorandum”) before investing. The Information Memorandum has been registered with the Securities Commission Malaysia who takes no responsibility for its contents. Amongst others, investors should consider the fees and charges involved. Investors should also note that the price of units and distributions payable, if any, may go down as well as up. Where a unit split/distribution is declared, investors are advised that following the issue of additional units/distribution, the NAV per unit will be reduced from pre-unit split NAV/cum-distribution NAV to post-unit split NAV/ex-distribution NAV; and where a unit split is declared, investors should be highlighted of the fact that the value of their investment in Australian Dollar will remain unchanged after the distribution of the additional units. Any issue of units to which the Information Memorandum relates will only be made on receipt of a form of application referred to in the Information Memorandum. For more details, please call 03-2171 0559 for a copy of the PHS and the Information Memorandum or collect one from any of our authorised distributors. The Manager wishes to highlight the specific risks of the Fund are fund management risk, currency risk and country risk. These risks and other general risks are elaborated in the Information Memorandum.This factsheet is prepared for information purposes only. It does not have regard to the specific investment objectives, financial situation and the particular needs of any specific person who may receive it. Past performance is not necessarily a guide for future performance. Returns may vary from year to year. Head Office: Level 11, Chulan Tower, No. 3, Jalan Conlay, 50450 Kuala Lumpur General Line: (603)-2171 0559 Fax: (603)-2171 0583 Website: www.kaf.com.my