KAF Dana Al-Iddhikhar Fund Report - September 2020

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1. 0 .13 Very Low 10 Sep 2020 KAF DANA AL IDDHIKHAR (KDAI) SEPTEMBER 2020 The fund aims to seek to provide a regular stream of income by investing primarily in Islamic money market instruments and other fixed income securities, which comply with Shariah requirements. THE FUND IS SUITABLE FOR INVESTORS WHO:  Conservative in nature in terms of Shariah-compliant investment;  Prefer a consistent, reasonable and stable level of return on Shariah-compliant investment;  Prefer a lower level of investment risk; and  Have a short-term investment horizon. SECTOR ALLOCATION* AS AT 31 AUGUST 2020 MANAGER’S COMMENTS Malaysia’s exports expanded for the second straight month at 3.1% YoY to RM92.5 billion (bn) in July 2020 (July) faring better than the consensus estimate. Meanwhile, Malaysian imports declined by 8.7% YoY to RM67.4bn in July. As a result, Malaysia trade surplus reached a new high of RM25.1bn. Malaysia’s Consumer Price Index (CPI) fell lower by 1.3% YoY in July. Malaysian foreign reserves increased by United States Dollar (USD) 0.1bn in August 2020 (August) to USD104.3bn. Meanwhile, Malaysia’s manufacturing Purchasing Managers’ Index (PMI) slid to 49.3 in August from 50.0 in the previous month. US Treasury benchmark 2-year and 5-year yields rebounded in August to 0.13% and 0.27% from 0.10% and 0.20% in the previous month while the yield on the 10-year note increased further to 0.70% from 0.52% in August, as data showed US manufacturer growth rebounded its fastest improvement since January 2019. On the other hand, the Malaysian Government Securities (MGS) benchmark 3year saw yields dip to 1.85% from 1.90%, while the 5-year and 10-year yield increased to 2.13% and 2.61% in August from 2.11% and 2.55% respectively in July, as sentiment improved on the resumption of economic activities. End of August saw US Treasury (Treasury) yields rose as a result from Federal Reserve (Fed) Chairman Jerome Powell speech that the Fed will now allow inflation to range above 2.0% average. As the longer tenure bonds 10 year Treasury rose by 18 basis points (bps) to 0.70%, Malaysia Government long tenure bonds followed suit. 20 year and 30 year local govvies increased by 13bps to 3.47% and 3.75% as market saw weaker demand in recent Global Innovation Index (GII) 15 year’s auction and supply concern remain with potential for fiscal deficit to Gross Domestic Product (GDP) to reach 6.0% this year. Markets anticipate that global economic recovery will be uneven due to second wave COVID-19 cases sparked in certain countries. Malaysia August Purchasing Managers Index (“PMI”) slowed down slightly to 49.3 nd from 50 in July, while Australia marks its first recession since 1991 as 2 Quarter 2020 GDP is expected to contract 6.6%. Weak foreign demand will dampen the pace of Malaysia economic recovery as borders will remain closed as government tries its best to balance between protecting citizens while supporting economic activities. Low interest rate environment is expected to remain until end of the year as support is required to promote economic growth. Funds strategy remains investing in good quality credit papers with medium duration for yield enhancement opportunities. *As percentage Net Asset Value of the Fund. Asset exposure is subject to change on a daily basis. Source: KAF Investment Funds Berhad. Distribution History Month (2020) January February March April May June July August Distribution (sen) 0.14 0.14 0.11 0.13 0.11 0.10 0.10 0.08 FUND PERFORMANCE ANALYSIS AS AT 31 AUGUST 2020 Net Asset Value prices. Cumulative return over the period (% since inception) INVESTMENT STRATEGY The Fund seeks to achieve its objective by investing primarily in Islamic money market instruments and other Sukuk. The Manager will decide which instrument or security to buy based primarily on their yield, relative to their credit quality and the period to maturity. The Fund will at all times place/invest its cash in Islamic money market deposits/instruments and Sukuk (listed or unlisted), which are rated by RAM, MARC or other approved rating agencies. FUND DETAILS AS AT 31 AUGUST 2020 Manager Trustee Fund Category Fund Type Launch Date Unit net asset value (NAV) Fund size 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 Bhd. Islamic Money Market Fund. Income Fund. 6 October 2005. RM0.5002 RM314.902mil 629.515mil 30 September. RM1,000.00 RM1,000.00 Malayan Banking Berhad (“Maybank”) one (1) month General Investment Account (“GIA”) rate. None. None. 0.375% per annum of NAV. 0.025% of NAV per annum subject to a minimum trustee fee of RM 12,000. Within 10 days after receipt of the request to repurchase. Income, if any, will be distributed on a monthly basis. All such distribution will be reinvested into the Fund. % 1 Month 3 Months 6 Months 1 Year 3 Years 5 Years KDAI 0.16 0.56 1.29 2.88 10.41 17.86 Benchmark 0.08 0.28 0.71 1.83 7.48 15.08 Source: ExNovo Fund Analytics Portal by Novagni Analytics & Advisory Sdn Bhd LARGEST HOLDINGS* AS AT 31 AUGUST 2020 Bank Muamalat Malaysia Bhd IMTN 5.500% Sarawak Energy Bhd IMTN 5.150% Imtiaz Sukuk II Bhd IMTN Konsortium KAJV Sdn Bhd IMTN 5.150% Anih Bhd IMTN 4.690% 4.93% 3.28% 3.28% 3.26% 3.24% *as percentage of Net Asset Value. Disclaimer: Based on the Fund’s portfolio returns as at 10 September 2020, the Volatility Factor (VF) for this Fund is 0.13 and is classified as “Very Low” (source: Lipper). “Very Low” includes Funds with VF that are between 0 to 3.625 (source: Lipper). The VF means there is a possibility for the Fund in generating an upside return or downside return around this VF. The Volatility Class (VC) is assigned by Lipper based on quintile ranks of VF for qualified Funds. VF is subject to monthly revision and VC will be revised every six months. The Fund’s portfolio may have changed since this date and there is no guarantee that the Fund will continue to have the same VF or VC in the future. Presently, only Funds launched in the market for at least 36 months will display the VF and its VC. 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 Master Prospectus dated 15 January 2017 and its supplementary(ies) (if any) (“the Master Prospectus”) before investing. The Master Prospectus 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 Malaysian Ringgit will remain unchanged after the distribution of the additional units. Any issue of units to which the Master Prospectus relates will only be made on receipt of a form of application referred to in the Master Prospectus. For more details, please call 03-2171 0559 for a copy of the PHS and the Master Prospectus or collect one from any of our authorised distributors. The Manager wishes to highlight the specific risks of the Fund are interest rate risk and credit/default risk. These risks and other general risks are elaborated in the Master Prospectus. This factsheet is prepared for information purposes only and has not been reviewed by Securities Commission Malaysia. 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