Kenanga Shariah Balanced Fund Report - April 2018

Transcription

1. April 2018 Market Review and Outlook Mixed Assets Market Review Global equities declined in March as investors concerns grew amid indications of potentially higher inflation and tighter monetary policy , as well as the implementation of aggressive trade protectionism measures from the US, which could potentially escalate into a US-China trade war. The correction began in early March as US President Trump imposed tariffs on steel and aluminium imports, after announcing levies on up to $60bn in Chinese goods, to which the Chinese government responded with planned tariffs on more than 100 American goods. US also faced a massive sell down in tech stocks as a data privacy scandal engulfs Facebook, prompting speculation on a regulatory crackdown on antitrust concerns. Asian equities dropped in line with global trend while the FOMC raised benchmark interest rate by 25bps, marking the sixth increase since the start of monetary policy tightening. The PBOC also lifts short-term interest rates, following the Fed’s move of rate normalization. The national people’s congress approved merging China Insurance Regulatory Commission with the China Banking Regulatory Commission, while Yi Gang has been appointed as the new PBOC governor, as part of a sweeping reshuffle of China’s cabinet cementing President Xi Jinping already strong influence. Domestically, the local market closed marginally positive, up 0.4% m/m as foreign net selling eased compared to February. The KLCI continued to outperform the FBM100, FBMS, and small caps, which saw a correction of -0.6%,-1.5% and -11.2% respectively for the month of March. BNM kept its OPR unchanged at 3.25%, as Feb CPI came in soft and Saudi Aramco confirms RAPID investment via the establishment of two JVs along with Petronas. From concerns over increased interest rates for the rest of the year, trade war concerns took over and pressured yields lower towards the final week of the month. Consequently, the US Treasuries (UST) yield curve flattened in March, with the 2x10 spread narrowed to 47 bps from 61 bps in previous month led by 10-year UST yield -13 bps to 2.86%, while the 2-year yield increased by 2 bps to 2.27%. Boosted by UST rally, MYR strength, central bank policy and buying on dip opportunities, the 3-, 5- and 10year benchmark MGS yields fell by 12 bps, 15 bps and 9 bps to close at 3.45%, 3.48% and 3.95% respectively. As a result, foreign funds net bought RM2.9 billion of domestic bonds in March, recouping most of the RM3.9 billion outflows in February. The foreign share of MGS rose to 45.6% (Feb: 45.4%). In terms of Private Debt Securities (PDS) market, primary issuances totalled to RM16.2 billion in March, mainly from quasi-government, construction and financial sectors. Mixed Assets Market Outlook As US-China trade war looms ahead, expect investors to focus on Trump’s tariff tantrums. Fortunately, Trump’s tax cuts may trigger some optimism in the next reporting season. Given the unprecedented surge in volatility for the first quarter, the expected strong earnings may provide a much needed catalyst to restore investor confidence. Closer to home, BN will soon unveil its manifesto, prompting the much anticipated GE14, with polls pointing towards a status quo outcome. Risk aversion in the local market remains high, with the small cap index down 12.87% YTD while blue chips and other large-cap defensives remain steady. While the market could remain lacklustre in the short term due to election uncertainty, we remain positive on Malaysia post-election as the country should benefit from strong fundamentals, improving commodity prices and currency, rising FDI, China’s Belt Road Initiatives, railway construction awards and GLC transformations. 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. April 2018 Market Review and Outlook Bond yields globally are expected to rise as Fed remains on track to hike its benchmark interest rates 3-4 times in 2018 , and a steeper path of 3 hikes in 2019 and 2 hikes in 2020, while reducing holdings in Treasury under System Open Market Account (SOMA) at a faster pace than planned, underpinned by improving US macro outlook. In line with the anticipation of US economy expansion, the Fed has guided that inflation should move higher in the coming months but is expected to hover around FOMC’s 2% target in the medium term. In the recently released BNM Annual Report 2017, official real Gross Domestic Product (GDP) growth was raised to 5.5-6.0% from 5.0-5.5% on expectations of higher growth from private consumption, private investment and net external demand, while inflation forecast is trimmed to 2.0%-3.0% from 2.5%-3.5% previously. Having said that, we maintain our expectations that OPR will remain at this level through the rest of this year. Although monetary tightening risk still remains, BNM’s future actions on OPR are envisaged to be data-dependent going forward, such as GDP growth surprises on the upside and inflationary risk heightens. Mixed Assets Fund Strategy Stock picking remains key for outperformance. We are cautiously optimistic and continue to be selective towards stocks with stable earnings, growing momentum, as well as quality high yielders. 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. 3-year Fund Volatility Kenanga Islamic Balanced Fund Low April 2018 Lipper Analytics 15 Mar 2018 FUND PERFORMANCE (%) 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. % Cumulative Return, Launch to 31/03/2018 140 120 100 80 60 Fund Category/Type Balanced (Islamic) / Growth & Income 40 20 0 Launch Date 06 December 2004 Trustee CIMB Islamic Trustee Berhad Jun 17 Dec 17 Mar 18 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 Kenang a Islamic Balanced : 120.42 Dec 10 Jun 09 Dec 09 Jun 08 Dec 08 Jun 07 Dec 07 Jun 06 Dec 06 Jun 05 Dec 05 Dec 04 -20 60% FTSE Bursa Malaysia Emas Shariah In dex an d 40% Mayban k 12-month GIA Rate : 87.14 Source: Novagni Analytics and Advisory Sdn Bhd CUMULATIVE FUND PERFORMANCE (%) # Benchmark 60% FTSE Bursa Malaysia Emas Shariah Index and 40% Maybank 12-month GIA Rate Period 1 month 6 months 1 year 3 years 5 years Since Launch External Investment Manager / Designated Fund Manager Ahmad Tajuddin Bin Yeop Aznan Sales Charge Max 5.50% # Annual Management Fee 1.50% p.a. Fund -0.78 -0.27 -0.07 4.33 19.59 120.42 Benchmark -0.89 2.81 3.30 4.04 17.16 87.14 Redemption Charge Nil Period 2017 2016 2015 2014 2013 Fund 4.29 -0.77 6.56 -1.40 11.04 Benchmark 8.20 -2.95 2.74 -1.94 10.04 Source : Lipper, 31 March 2018 DISTRIBUTION HISTORY * Gross Distribution Date RM Yield (%) Unit Split 16-May-16 2.79 sen 6.62% 26-Feb-15 4.00 sen 8.71% 26-Feb-14 3.00 sen 6.27% - Annual Trustee Fee 0.05% p.a. CALENDAR YEAR FUND PERFORMANCE (%) # HISTORICAL FUND PRICE * Date Since Inception Highest RM 0.6885 11-Jan-08 Lowest RM 0.3841 12-Mar-09 FUND SIZE * RM 15.87 million NAV PER UNIT * RM 0.4076 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) * March February January CP / Sukuk / Others 1 2 3 4 5 24.40% SECTOR ALLOCATION (% NAV) * 34.10% 41.50% 35.80% 26.30% 26.10% 37.90% 33.80% Liquidity TOP EQUITY HOLDINGS (% NAV) * TENAGA NASIONAL BHD DIALOG GROUP BHD MALAYSIAN RESOURCES CORPORATION BHD TIME DOTCOM BHD IJM CORPORATION BHD 40.10% Equity 4.61% 2.63% 2.55% 2.12% 1.86% Corporate Sukuk (Unsecured) Short Term Islamic Deposits and Cash Trading and Services Construction Industrial Products Consumer Products Properties Corporate Sukuk (Secured) Plantations Finance Others 1 2 3 4 5 31.8% 24.4% 17.0% 7.9% 5.1% 3.3% 3.2% 2.1% 1.6% 1.2% 2.4% TOP FIXED INCOME HOLDINGS (% NAV) * MUMTALAKAT IMTN 5.35% 30.04.2018 GOLDEN ASSETS INTERNATIONAL 4.7520180803 MEX II SDN BHD 5.6020260429 BGSM MANAGEMENT SDN BHD 5.4520240628 CAHYA MATA SARAWAK 4.8020220505 5.03% 4.00% 2.29% 2.26% 2.20% * Source: Kenanga Investors Berhad, 31 March 2018 Based on the fund’s portfolio returns as at 15 March 2018, the Volatility Factor (VF) for this fund is 4.71 and is classified as “Low”. (Source: Lipper). “Low” includes funds with VF that are above 1.785 and less than or equal to 6.045 (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. “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.