KAF Islamic Dividend Income Fund Report - June 2019

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1. KAF ISLAMIC DIVIDEND INCOME FUND (KIDIF) JUNE 2019 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 MAY 2019 Seek income ; Are willing to accept medium degree of risk associated in investing in Shariah-complaint equities ; and Wish for investments that comply with Shariah requirements. MANAGER’S COMMENTS Regional markets ended with significant losses in May where in the US, the Dow Jones, S&P500 and NASDAQ closed -6.7%, -6.6% and -7.9% respectively as global trade tensions escalates with US and China show no signs of coming to a trade agreement any time soon while President Trump’s threat to impose tariffs on Mexico’s exports to US further dampened global investors’ sentiment. In other regions, the STOXX Europe 600 closed lower by -5.7% while the Japanese Nikkei tumbled by -7.4%. Hong Kong’s Hang Seng was one of the markets worst hit in May with a drop of -9.4%.Meanwhile in China, the Shanghai Composite Index and Shen Zhen Composite Index closed lower by-5.8% and -6.4% respectively. In the local bourse, the FBMKLCI Index bucked the regional trend with gains of 0.52%, powered by strong gains in selected index component stocks. This however could not mask the overall weakness in the domestic equity markets as the FBM Emas Index and the FBM Emas Shariah Index retreated by 0.55% and -0.35% respectively. The average value traded on the exchange in May decreased by -3.91% MoM. Crude oil price slumped 11.4% to a three-month low at USD64.49 per barrel as trade tensions raise concerns over global economic growth and demand. Crude palm oil price further declined by -1.2%, albeit finding some support from a rebound in soybean prices. Meanwhile, gold prices closed higher by 1.6% at USD1305.8 at the end of month as investors seek safe haven in the precious metal. For currencies, Ringgit closed at RM4.19 per USD at the end of May, depreciating 1.34% from the previous month. *As percentage of NAV. Asset exposure is subject to change on a daily basis. Source: KAF Investment Funds Berhad. Distribution History Year 2016 2017 2018 (Jan) Distribution (sen) 3.00 0.90 FUND PERFORMANCE ANALYSIS AS AT 31 MAY 2019 The global equity market sell-off was triggered by President Donald Trump’s tweet in which he threatened to hit China with tariffs on at least another $300 billion worth of Chinese goods. Domestically, we believe that the downside risks significantly outweigh the upside potential in the equity space as Malaysian stocks are currently trading at lofty valuation despite the expectation of weaker corporate earnings. We reiterate our bearish view of the local equity markets as we believe that we are currently in the later stage of the economic cycle hence our higher than usual cash holdings. 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 MAY 2019 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 RM0.5230 RM13.347mil 25.518mil 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 -3.00 2.37 3.46 10.76 12.75 N/A Benchmark -0.35 0.54 1.40 -3.12 -1.06 -10.20 Source: ExNovo Fund Analytics Portal by Novagni Analytics & Advisory Sdn Bhd LARGEST HOLDINGS* AS AT 31 MAY 2019 SPR Energy Sdn Bhd IMTN 4.630% Tanjung BP IMTN 4.540% Duopharma Biotech Bhd Kossan Rubber Industries Bhd Top Glove Corporation Bhd 7.63% 7.60% 5.66% 4.45% 3.78% *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 Master 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