Kenanga Bon Islam Fund Report - August 2017

Transcription

1. August 2017 Market Review and Outlook Bond Market Review US Treasury yields were up across the curve in July despite Fed ’s cautiousness over the subdued inflation. The Fed kept rates steady at 1.00% - 1.25% but reiterated concerns about the low inflation which had dampened expectations of another rate hike this year. As expected, the Fed had confirmed it would start shrinking its balance sheet “relatively soon”. Yields were pushed up by strong durable goods data which had increased growth and inflation expectations. At month-end, yields were weighed down by 2Q2017 GDP which rose in line with expectations to 2.6% q-o-q from 1.2% q-o-q in 1Q2017. In the GDP report, PCE index eased to 0.3% q-o-q from 2.2% q-o-q in 1Q2017 while the employment cost index had also moderated to 0.5% q-o-q from 0.8% q-o-q. At month-end, the 2- and 10-year UST closed at 1.35% (-3 bps) and 2.29% (-1 bp) respectively. The Ringgit (MYR) strengthened by 0.27% against the US Dollar (USD) over the month prompted by the Fed’s decision to keep interest rates low longer. Producer prices in Malaysia rose 8% y-o-y in May, compared to 7.5% in April as costs rose for most sectors, mainly agriculture, forestry & fishing, water supply and manufacturing. Malaysia’s Coincident Index increased by 1.1 index points to 129.90 in May, while its Leading Economic Index advanced 1.2% m-o-m in May following a decrease of 1.3% in the previous month. Local government bonds yield curve rose towards the end of the month driven by the rise in US Treasury yields and higher oil prices. At month-end, the 3-, 5-, 7- and 10-year benchmark MGS yields settled at 3.30% (-9 bps), 3.70% (+8 bps), 3.91% (+1 bp) and 3.99% (+8 bps) respectively. Trading activities decreased this month compared to the previous month where local government bonds registered a trading volume of RM41.9 billion compared to the previous month’s value of RM49.9 billion. Meanwhile, the secondary corporate bonds market recorded lighter trading activities compared to last month. During the month, total trading volume was lower at RM9.8 billion compared to last month’s RM15.9 billion. Bond Market Outlook The surge in the 2-year UST yield to above 1.4% in July, its highest since 2008, is no surprise given the two US Fed rate hikes thus far, as well as expectations of further hikes. We expect the Fed to stay on course, likely hiking rates again in 2H2017. We expect foreign holdings of local government bonds to continue rising, albeit at a moderate pace. In Malaysia, the benchmark Overnight Policy Rate (OPR) is expected to remain status quo at 3.00% for the rest of 2017. In the secondary market for Malaysian Government Securities (MGS) and corporate bonds, we anticipate bond yields to trend higher in 2017, albeit at a moderate pace. Bond Fund Strategy The Fund will continue to invest in a diversified portfolio consisting principally of fixed income securities and other permissible investments. The Fund will continue to invest in securities that have a minimum rating of “investment grade” i.e. rated at least BBB3 by RAM or equivalent rating by MARC or other rating agencies. The Fund will continue to invest in a diversified portfolio of sukuk and islamic money market instruments. The Fund will continue to invest in sukuk that have a minimum rating of “investment grade” i.e. rated at least BBB3 by RAM or equivalent rating by MARC or other rating agencies. The Fund will continue to invest in a portfolio of fixed income securities, equities and equity related securities (warrants, convertible loan stocks, transferable subscription rights and depository receipts) of companies in the Asia Pacific region. Kenanga Investors Berhad (353563-P) Level 14, Kenanga Tower, 237, Jalan Tun Razak, 50400 Kuala Lumpur Tel: 03-2172 3000 Toll Free: 1800-88-3737 www.kenangainvestors.com.my 1 Strictly for Clients of Kenanga Investors Berhad
2. Kenanga Bon Islam Fund 3-year Fund Volatility 1 .2 (A fund under Kenanga OneAnswer™ Investment Funds) Very Low August 2017 Lipper Analytics 15 Jul 2017 FUND PERFORMANCE (%) FUND OBJECTIVE Aims to provide investors with a regular income stream through investments in Islamic bonds and Islamic money market instruments. % Cumulative Return, Launch to 31/07/2017 90 80 70 60 Fund Category/Type Islamic Bond / Income 50 40 30 20 Launch Date 23 April 2004 10 0 Benchmark All Malaysian Government Investment Issue Jul 17 Jun 16 Dec 16 Jun 15 Dec 15 Jun 14 Dec 14 Jun 13 Dec 13 Jun 12 Dec 12 Jun 11 Dec 11 Jun 10 Dec 10 Jun 09 Ken an ga Bon Islam : 49.49 Dec 09 Jun 08 Dec 08 Jun 07 Dec 07 Jun 06 Dec 06 Jun 05 Dec 05 Apr 04 Trustee CIMB Commerce Trustee Berhad Dec 04 -10 All Malaysian Government Investment Issue : 77.13 Source: Novagni Analytics and Advisory Sdn Bhd CUMULATIVE FUND PERFORMANCE (%) # Fund Period Benchmark 0.07 1 month 0.36 1.14 6 months 2.23 1 year 1.84 1.88 3 years 6.57 13.18 19.27 8.47 5 years 77.13 49.49 Since Launch External Investment Manager / Designated Fund Manager Arieff Wahid Sales Charge Max 1.5% Annual Management Fee 1.00% p.a. # CALENDAR YEAR FUND PERFORMANCE (%) Period Fund Benchmark 2016 2.54 4.02 2015 1.42 4.19 2014 1.75 4.32 2013 -0.15 0.98 2012 3.35 3.96 # Source: Novagni Analytics and Advisory Sdn Bhd ; Lipper, 31 July 2017 Annual Trustee Fee 0.07% of the NAV of the Fund p.a., subject to a minimum of RM9,000 p.a. FUND SIZE * RM1.27 million Redemption Charge Nil NAV PER UNIT * RM0.7364 HISTORICAL FUND PRICE * Date Since Inception 25-Jul-17 Highest RM 0.7364 Lowest RM 0.4893 15-Jun-04 Initial Offer Price RM0.50 per unit All fees and charges payable to the Manager and the Trustee are subject to GST as may be imposed by the government or other authorities from time to time. ASSET ALLOCATION * July June Corporate Sukuk (Unsecured) 7.70% Short Term Islamic Deposits and Cash 88.10% 16.20% Liquidity 85.1% 92.30% 11.90% May 1 2 3 4 5 SECTOR ALLOCATION (% NAV) * 83.80% 7.7% Quasi Government Securities 4.0% Corporate Sukuk (Secured) 3.2% CP / Sukuk / Others TOP FIXED INCOME HOLDINGS (% NAV) * GOLDEN ASSETS INTERNATIONAL 4.7520180803 MUMTALAKAT IMTN 5.35% 30.04.2018 DIGI TELECOMMUNICATIONS 4.5320240412 MANJUNG ISLAND ENERGY B 4.00% 23.11.18 DRB-HICOM BERHAD 4.850% 30/11/2018 DISTRIBUTION HISTORY 9.65% 8.84% 4.04% 3.98% 3.94% Not Applicable * Source: Kenanga Investors Berhad, 31 July 2017 Based on the fund’s portfolio returns as at 15 July 2017, the Volatility Factor (VF) for this fund is 1.19 and is classified as “Very Low”. (Source: Lipper). “Very Low” includes funds with VF that are (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. The Master Prospectus dated 30 June 2017 and the Supplemental Prospectus (if any), its Product Highlights Sheets (“PHS”) or Supplemental Disclosure Document (“SDD”) (if any) have been registered with the Securities Commission Malaysia, who takes no responsibility for its contents. A copy of the Master Prospectus, Supplemental Prospectus (if any), SDD (if any) and the PHS are obtainable at our offices. Application for Units can only be made on receipt of application form referred to in and accompanying the Master Prospectus and/or Supplemental Prospectus (if any), SDD (if any) and PHS. Investors are advised to read and understand the Master Prospectus, its PHS and any other relevant product disclosure documents involved before investing. Investors are also advised to consider the fees and charges before investing. Unit prices and distributions 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. Where a unit split is declared, investors should note that the value of their investment in Malaysian Ringgit will remain unchanged after the distribution of the additional units. A Fund’s track record does not guarantee its future performance. Investors are advised to read and understand the contents of the unit trust loan financing risk disclosure statement before deciding to borrow to purchase units. Kenanga Investors Berhad is committed to preventing Conflict of Interest between its various businesses and activities and between its clients / directors / shareholders and employees by having in place procedures and measures for identifying and properly managing any apparent, potential and perceived Conflict of Interest by making disclosures to Clients, where appropriate. The Manager wishes to highlight the specific risks of the Fund are interest rate risk, credit and default risk, reinvestment risk and counterparty risk.