KAF Islamic Dividend Income Fund Report- February 2017

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1. KAF ISLAMIC DIVIDEND INCOME FUND (KIDIF) FEBRUARY 2017 The fund aims to provide income by investing primarily in dividend yielding Shariah-compliant equities. THE FUND IS SUITABLE FOR INVESTORS WHO: • • • SECTOR ALLOCATION* AS AT 31 JANUARY 2017 Seek income ; Are willing to accept medium degree of risk associated in investing in Shariahcomplaint equities ; and Wish for investments that comply with Shariah requirements. MANAGER’S COMMENTS Global stock markets were mixed in January. The Dow Jones Industrial Average rose to record highs as US manufacturing expanded in December at the fastest pace in two years and consumer confidence increased more than expected. European markets fell on concerns of general elections in France, Germany and the Netherlands this year. The Shanghai Composite Index rose as the International Monetary Fund upgraded its growth forecast for China’s economy in 2017 on expectations for continued government stimulus. Japan’s Nikkei index fell after the Bank of Japan refrained from repeating its November offer to buy an unlimited amount of bonds at a fixed rate. The KL Composite Index gained 1.8% to 1,671 points in January after the central bank kept its benchmark rate unchanged for a third straight meeting to help bolster the currency and said the economy remains on track for expansion. The FBM Emas and Syariah indices rose 2.4% and 1.8% respectively. Average value traded on the exchange jumped 12.2% to RM1.74 billion daily on higher foreign fund buying. Crude oil fell 1.7% to US$52.81 per barrel as exports from south Iraq rose to a record high. Gold prices gained 5.1% as the dollar fell. Crude palm oil rose 3.2% to RM3,300 per metric ton as domestic production declined and Indonesian stockpiles fell. The ringgit rose 1.3% against the dollar. Based on fund flows, the Malaysian equities market kicked off in January 2017 with a net positive foreign investors fund flows of RM400 mil after being a net seller market for four consecutive months since September 2016. This affirmed our earlier view that the downside for the Malaysian market could be limited. The month of February will be the reporting season for 4Q16 results and we generally believe that it should benefit the export players due to the weaker ringgit. In the US, the financial markets have been very calm since Donald Trump entered the White House, despite the controversies surrounding his provocative executive orders and tweets. This shows that the president’s actions so far do not appear to have a huge bearing on the near-term outlook for the US economy. As for the recent two-day Federal Open Market Committee (FOMC) meeting, the Fed issued a near-identical statement to the one released in December, which strongly suggests that it has no intention of raising interest rates again at the upcoming March meeting. Unfortunately this poses further uncertainty over the direction of fiscal and trade policies in the US, we expect the Fed to stay put until June. We will continue to invest in selective sectors cautiously with external headwinds in mind. We continue to favor sectors such as plantation, infrastructure, construction, essential consumer stocks and export players (including selective technology stocks). *As percentage of NAV. Asset exposure is subject to change on a daily basis. Source: KAF Investment Funds Berhad. Distribution History Year 2016 2017 Distribution (sen) 1.00 FUND PERFORMANCE ANALYSIS AS AT 31 JANUARY 2017 NAV - NAV prices. Cumulative return over the period (%) INVESTMENT STRATEGY The Fund seeks to achieve its investment objective by investing primarily, i.e. at least 70% of its NAV in Shariah-compliant equities listed on Bursa Malaysia. The fund will focus its investments in Shariah-compliant equities with dividend yield that are able to generate income for the Fund. The Fund’s portfolio may also include sukuk, Islamic money market instruments, Shariah-compliant collective investment scheme and Islamic deposit. FUND DETAILS AS AT 31 JANUARY 2017 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. Maybank Trustees Berhad. Equity Fund (Shariah-compliant). Income Fund. 15 January 2016 RM0.5216 RM3.834mil 7.350mil 31 January. RM1,000.00 RM100.00 FTSE Bursa Malaysia Emas Shariah Index. Up to 6.50% of NAV per Unit. None. 1.50% per annum of NAV. 0.06% of NAV, subject to a minimum fee of RM12,000 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 KIDIF 2.39 N/A 1.52 4.32 N/A N/A Benchmark 1.77 -1.26 0.24 -1.56 -2.99 16.47 Source: ExNovo Fund Analytics Portal by Perkasa Normandy Managers Sdn Bhd LARGEST HOLDINGS* AS AT 31 JANUARY 2017 Tenaga Nasional Bhd CCM Duopharma Biotech Bhd TH Plantations Bhd TA Ann Holdings Bhd MKH Bhd 6.06% 5.01% 4.59% 4.34% 4.33% *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 Prospectus dated 15 January 2017 and its supplementary(ies) (if any) (“the Prospectus”) before investing. The 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 Prospectus relates will only be made on receipt of a form of application referred to in the Prospectus. For more details, please call 03-2171 0559 for a copy of the PHS and the Prospectus or collect one from any of our authorised distributors. The Manager wishes to highlight the specific risks of the Fund are specific equity risk, interest rate risk, credit/default risk, distribution risk and reclassification of Shariah status risk. These risks and other general risks are elaborated in the Prospectus. 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