Kenanga Shariah OnePRS Conservative Fund Report - March 2021

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1. March 2021 Market Review and Outlook OnePRS Fund Review On the equity front , the vaccination roll-outs, flattening of the epidemiological curves in most parts of the world, and fiscal support by various governments have spurred a pick-up in demand recovery of risk assets in February. However, global markets sold off towards the end of the month due to rising US bond yields, fear of sharper inflation and an earlier than expected timeline in normalizing monetary policies. MSCI Asia ex-Japan gained 1.22% in February, underperforming both MSCI ASEAN (+1.57%) and Dow Jones (+3.17%). Outperformers were India (+6.08%), Taiwan (+5.39%), Philippines (+2.76%) and Hong Kong (+2.46%), while Shanghai (+0.75%) lagged, posting marginal MoM gains. Commodities had a particularly good month with CPO up by 7.22% to RM3,742 and crude oil gained 18.34% to end at USD66.1 pbl, the highest level since January 2020 as US production took a hit from freezing storms. Locally, FBMKLCI ended the month marginally higher (+0.72%) as Malaysia began easing lockdown measures and started to roll out its vaccination program. The FBM100 gained 1.7% while small caps (FBM SC) jumped 7.89%. All sectors (except healthcare) were broadly higher led by energy as oil prices trended higher and broke the USD60 pbl level. Retailers remained as net buyers at RM2.0 billion (versus RM1.8 billion in January) whilst local institutions were net sellers at RM1.7 billion. Foreign institutions remained net sellers at RM0.9 billion. On the fixed income front, the US Treasuries (UST) yield curve steepened given the brighter outlook for US growth and inflation, underpinned by optimism over the proposed USD1.9 trillion stimulus package. Risk-on sentiment was further driven by favourable economic data, amid a decline in new Covid-19 cases. Towards month-end, 10Y UST yields remained elevated on expectations of a heavier supply of government bonds once the stimulus package is approved. Month-on-month, the UST yield curve steepened as 2Y and 10Y UST yields ended the month at 0.13% and 1.40% respectively (end-January: 0.11% and 1.07%). Locally, Malaysian Government Securities (MGS) tracked global bond yield movements, as investors reassessed the improving outlook for the global economy. Given the positive news on vaccine rollouts domestically, investors looked past the softer 4Q2020 Gross Domestic Product (GDP) reading, which came in at a subdued -3.4%, dragged by the surge in Covid-19 cases and restrictive measures that followed. Risk sentiment remained buoyed by expectations of a pick-up in growth prospects for 2021, thus dampening rate cut expectations and easing demand for MGS during the shorter trading month. Overall, the MGS yield curve steepened in tandem with global bond markets, as the 3Y and 10Y MGS ended the month at 1.94% and 3.10% respectively (endJanuary: 1.84% and 2.70%). OnePRS Fund Outlook For the equity market, the vaccination drive should underpin economic recovery in 2021 as normality returns. While there is growing inflation concern, global fiscal and monetary policies should remain supportive. Locally, as widely expected, Bank Negara Malaysia (BNM) kept the Overnight Policy Rate (OPR) unchanged at 1.75% at its monetary policy meeting on 4th March. BNM expects Malaysia's economic growth to pick up in 2021, underpinned by improving global growth, various stimulus measures, as well as successful virus containment and vaccine rollouts that will boost both consumer and business sentiments. While near-term growth prospects have been affected by the re-imposition of containment measures in January, the impact will be less severe than before. However, the outlook is still subject to downside risks arising from ongoing uncertainties and potential challenges surrounding the course of the pandemic. Kenanga Investors Berhad Company No: 199501024358 (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. March 2021 Market Review and Outlook Meanwhile , domestic headline inflation remained subdued at -0.2% y-o-y in January (December: -1.4%), mainly due to lower fuel prices compared to the previous year. Headline inflation is likely to trend higher in 2021, with a temporary spike in 2Q2021 due to the low base effect, before moderating thereafter. Underlying inflation is expected to remain subdued amid continued spare capacity in the economy. Given the moderate inflation outlook and continued uncertainties ahead, BNM is widely anticipated to maintain its accommodative monetary policy stance, with the central bank assuring that it would utilize its policy levers as appropriate to enable a sustainable economic recovery. OnePRS Fund Strategy For all PRS funds (except Kenanga OnePRS Growth Fund); please refer to the respective underlying fund(s). For Kenanga OnePRS Growth Fund, we continue to adopt a barbell strategy in our sector positioning and maintain overweight in the technology sector to ride on secular growth trends. On the other hand, we also favour more cyclical sectors such as consumer discretionary, financials, energy and commodities to take advantage of the recovery. Kenanga Investors Berhad Company No: 199501024358 (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 Shariah OnePRS Conservative Fund March 2021 FUND PERFORMANCE (%) FUND OBJECTIVE Aims to provide income whilst providing capital preservation. % Cumulative Return, Launch to 28/02/2021 16 Fund Category/Type Core (Conservative) 14 12 10 Launch Date 18 August 2016 8 6 4 Trustee CIMB Islamic Trustee Berhad 2 0 (20%) Feb 21 Dec 20 Jun 20 Dec 19 Jun 19 Dec 18 Jun 18 Dec 17 Jun 17 Benchmark Maybank 1-Month GIA rate (80%) and FBM EMAS Shariah Index Dec 16 Aug 16 -2 Kenanga Shariah OnePRS Conservative Fund : 13.64 Maybank 1-Month GIA rate (80%) and FBM EMAS Shariah Index (20%) : 10.37 Designated Fund Manager Lee Sook Yee Source: Novagni Analytics and Advisory CUMULATIVE FUND PERFORMANCE (%) Period 1 month 6 months 1 year 3 years 5 years Since Launch Sales Charge Up to 1.50% Annual Management Fee 1.55% p.a. Annual Trustee Fee 0.02% p.a. # Redemption Charge Nil FUND SIZE * ASSET ALLOCATION (% NAV) * January 2.0% December 2.0% Liquidity 1 2 3 Period 2020 2019 2018 2017 2016 NAV PER UNIT * Fund 3.85 6.10 -1.62 4.27 -0.28 # Benchmark 3.94 3.42 0.28 5.32 0.42 HISTORICAL FUND PRICE * RM 0.5682 Highest Lowest All fees and charges payable to the Manager and the Trustee are subject to the goods and services tax /sales and services tax/other taxes of similar nature as may be imposed by the government or other authorities from time to time. 2.0% CALENDAR YEAR FUND PERFORMANCE (%) Source: Lipper, 28 February 2021 RM 0.25 million February # Benchmark 0.24 0.18 4.46 4.97 10.37 Fund 0.28 0.58 4.26 9.25 13.64 Since Inception RM 0.5716 RM 0.4958 Date 15-Feb-21 29-Nov-16 SECTOR ALLOCATION (% NAV) * 98.0% Collective Investment Schemes 98.0% 98.0% Short Term Deposit and Cash 98.0% 2.0% Collective Investment Schemes TOP HOLDINGS (% NAV) * KENANGA BON ISLAM FUND KENANGA ISLAMIC MONEY MARKET FUND KENANGA SYARIAH GROWTH FUND DISTRIBUTION HISTORY 0 60.12% 21.08% 16.80% 0.00% 0.00% Not Applicable * Source: Kenanga Investors Berhad, 28 February 2021 The Kenanga Disclosure Document (“DD”) in relation to the OnePRS Scheme dated 18 August 2016, its have been registered with the Securities Commission Malaysia, who takes no responsibility for its contents. The fund fact sheet has not been reviewed by the SC. A copy of the Disclosure Documents are obtainable at our offices. Application for Units can only be made on receipt of application form referred to in and accompanying the DD. Investors are advised to read and understand the DD 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/cumdistribution 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, liquidity risk, default and counterparty risk, collective investment scheme risk and reclassification of Shariah status risk.