Kenanga Islamic Balanced Fund Report - April 2017

Transcription

1. May 2017 Market Review and Outlook Mixed Assets Market Review Global markets generally rose in April , driven by US and European earnings results, fluctuating oil prices, an outline on US President Trump's tax reform proposal and geopolitical issues in Syria and North Korea. Investors grew cautious on the meeting between US and Chinese leaders, and the first round of the French presidential elections, which saw centrist candidate Emmanuel Macron making it through to the second round. The Dow Jones Industrial Index rallied 1.3% in April on the back of strong corporate earnings in spite of an underwhelming tax proposal, a lower than expected 1Q GDP and a bipartisan agreement deal narrowly avoiding a government shutdown, as investors poured in US$14bn into US equities. Asian markets performance in April was mixed as MSCI Asia ex Japan (USD) gained 2.1%. In local currency terms, outperformers were Philippines (+4.8%), Jakarta (+2.1%), Korea (2.1%), Hong Kong (2.1%) and Malaysia (1.6%). In Malaysia, the FBM Small Cap beat the market with 3.4% gain vs the FBM100 (2.1%) KLCI (+1.6%), and FBM Shariah (+1.3%). MYR ended the month as the best Asian currency performer against the USD at (+1.19%) as selected Asian currencies rose against US dollar, Fed rate hike assumptions are pushed out and political uncertainty in the UK and Europe receded. Outperformers were chalked by Indian Rupees (+0.9%), Taiwan dollar (+0.5%), Philippine Peso (+0.2%). Underperformers were led by Thailand Baht (-0.7%) and Korean Won (1.7%) respectively. On the commodities front, Brent oil price fell 2.5% to settle at US$49.3/barrel on higher stock level as rising output from Libya and the US countered OPEC-led production cuts aimed at clearing a supply glut. Meanwhile, CPO price declined 5.2% to RM2508/tonne over worries about global oversupply of edible oils. During the month of April, the Malaysian Ringgit (MYR) strengthened by 1.91% against the US Dollar (USD) while 3-, 5-, 7- and 10-year benchmark Malaysian Government Securities (MGS) yields dropped by 32, 13, 14 and 8 bps respectively. The strengthening of the local currency was supported by foreign funds inflow in the stock market as well as a shift to Asia on the back of geopolitical tensions. Furthermore, industrial production rose 4.7% y-o-y in February due to a better performance in the manufacturing sector. Manufacturing sales posted a strong double-digit growth for the third consecutive month supported by demand and a weak MYR. Meanwhile, wholesale and retail trade grew 8.3% y-o-y in February to RM90.1 billion underpinned by a broad-based improvement in wholesale trade, retail trade and motor vehicle sales. Trading activity fell this month compared to previous month where local government bonds registered a trading volume of RM59.86 billion compared to the previous month’s value of RM85.24 billion. The secondary corporate bonds market also recorded lighter trading activities compared to previous month. M-o-m, total trading volume stood lower at RM11.78 billion while last month the market recorded RM21.29 billion. The US Treasury (UST) yields saw some rebound at the end of the month after Fed’s Dudley emphasized “little pause” in short-term rate normalization when the Fed starts to shrink its balance sheet possibly at the end of the year. At month-end closing, the 2- and 10-year UST traded at 1.26 (+8 bps) and 2.2802 (-11 bps) respectively. Mixed Assets Market Outlook The global economy being in a matured stage of the growth cycle is susceptible to an unpredictable Black Swan event although the threat of an imminent global recession has receded. While the Brexit process could be a source of volatility, the threat of Frexit appears to be diminishing. Donald Trump’s unpredictability and protectionist leanings are also a key risk. With the Fed meeting expected to leave 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. May 2017 Market Review and Outlook rates unchanged , investors are likely to focus on the upcoming French elections result on 7 May as Le Pen and Macron spar ahead of run-off. In the secondary market, we anticipate MGS and corporate bond yields to trend higher in 2017 as the Ringgit remains volatile due to, among other things, a stronger greenback. The Malaysian bond market ended 2016 on a negative note with benchmark yields for local government bonds rising between 3 bps to 27 bps from 2015 across all maturities. As a result, yield curves for both local government bonds and corporates steepened sharply. Going forward, we are of the view that the 10-year MGS yield will remain on the uptrend, ranging between 4.0% and 4.5%, as the Malaysian bond market continues to be closely monitored due to a high proportion of foreign holdings in the region. However, some stabilization will emerge in the medium term after there is greater clarity over Trump’s future economic plans. On the domestic front, Malaysian bond yields would also be pressured by higher inflation expectations and limited prospects of a rate cut by BNM. In its base case scenario, we expect the OPR to be left unchanged at the current level (3%). Should it be necessary for BNM to trim the policy rate, the rate cut would likely be limited to 25 bps, in our view. Mixed Assets Fund Strategy Stock picking remains key to outperformance. We continue to advocate a defensive portfolio strategy and prefer companies driven by resilient earnings with exposure to selective themes like USD beneficiaries (exporters), beneficiaries of rising foreign direct investment, GLC reform/restructuring plays, domestic consumption and infrastructure. For fixed income, the Fund will continue to invest in a diversified portfolio consisting principally of fixed income securities and other permissible investments. 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 2 Strictly for Clients of Kenanga Investors Berhad
3. Kenanga Islamic Balanced Fund 3-year Fund Volatility May 2017 Low Lipper Analytics 15 Apr 2017 FUND OBJECTIVE Aims to achieve steady capital growth and income distribution (if any) over the medium to long-term period by investing in a diversified portfolio of authorised investments in accordance with Shariah requirements. FUND PERFORMANCE (%) % Cumulative Return, Launch to 30/04/2017 140 120 100 80 60 Fund Category/Type Balanced (Islamic) / Growth & Income 40 20 0 Kenan ga Islamic Balanced : 122.47 Trustee CIMB Islamic Trustee Berhad Jun 16 Dec 16 Apr 17 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 Dec 09 Jun 08 Dec 08 Jun 07 Dec 07 Jun 06 Dec 06 Jun 05 Dec 04 Dec 05 -20 Launch Date 06 December 2004 60% FTSE Bursa Malaysia Emas Shariah In dex and 40% Mayban k 12-month GIA Rate : 82.86 Source: Novagni Analytics and Advisory Sdn Bhd Benchmark 60% FTSE Bursa Malaysia Emas Shariah Index and 40% Maybank 12-month GIA Rate External Investment Manager / Designated Fund Manager Ahmad Tajuddin Bin Yeop Aznan Sales Charge Max 5.50% CUMULATIVE FUND PERFORMANCE (%) # Period Fund Benchmark 0.86 0.94 1 month 6 months 1.48 3.74 1 year 3.89 5.39 3 years 5.33 2.08 5 years 24.39 20.12 Since Launch 122.47 82.86 CALENDAR YEAR FUND PERFORMANCE (%) # Period Fund Benchmark 2016 -0.77 -2.93 2015 6.56 2.74 2014 -1.40 -1.94 2013 11.04 10.04 2012 5.52 8.91 # Source: Lipper, 30 April 2017 Annual Management Fee 1.50% p.a. DISTRIBUTION HISTORY * Gross Distribution Unit Split RM Yield (%) 16-May-16 2.79 sen 6.62% 26-Feb-15 4.00 sen 8.71% 26-Feb-14 3.00 sen 6.27% - HISTORICAL FUND PRICE * Date Since Highest RM 0.6885 11-Jan-08 Lowest RM 0.3841 12-Mar-09 Date Annual Trustee Fee 0.05% p.a. of the NAV of the Fund Redemption Charge Nil FUND SIZE * RM15.34 million NAV PER UNIT * RM0.4114 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 (% NAV) * April 18.90% March 19.50% February CP / Sukuk / Others SECTOR ALLOCATION (% NAV) * ! 34.40% " # 46.70% 34.40% 18.60% Liquidity " " $ 46.10% 34.90% 46.50% ) Equity "* % %" " & " " !& & ' (" &! " "" ! " +, ! $- 1 2 3 4 5 TOP EQUITY HOLDINGS (% NAV) * TENAGA NASIONAL BHD MALAKOFF CORP BHD IJM CORPORATION BHD ECONPILE HOLDINGS BHD DIALOG GROUP BHD 4.09% 2.55% 2.51% 1.78% 1.73% 1 2 3 4 5 TOP FIXED INCOME HOLDINGS (% NAV) * MUMTALAKAT IMTN 5.35% 30.04.2018 GOLDEN ASSETS INTERNATIONAL 4.7520180803 DRB-HICOM BERHAD 4.850% 30/11/2018 WESTPORTS MALAY 4.950 20210503 ANIH BHD 5.2220221129 5.10% 4.12% 1.92% 1.64% 1.51% * Source: Kenanga Investors Berhad, 30 April 2017 Based on the fund’s portfolio returns as at 15 April 2017, the Volatility Factor (VF) for this fund is 5.26 and is classified as “Low”. (Source: Lipper). “Low” includes funds with VF that are above 1.785 and less than or equal to 5.965 (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 2016 and expires on 29 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. “Cooling-Off Period” or “Cooling-Off Right” is not applicable to EPF Member Investment Scheme (EPF MIS). 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 stock specific risk, credit and default risk, interest rate risk, reclassification of Shariah status risk, currency risk and country risk.