Kenanga Shariah OnePRS Moderate Fund Report - December 2020

Transcription

1. December 2020 Market Review and Outlook OnePRS Fund Review On the equity front , after 2 months of volatility, global markets went into risk-on mode in November as investors reversed their cautious positioning heading into the US presidential election. US equities welcomed the prospect of a Biden presidency with a divided congress, while incremental news flow on COVID-19 vaccine breakthroughs added fuel to the bullish sentiment. All major US equity indices - S&P500 (+10.8%), Dow Jones (+11.8%), Nasdaq 100 (+11.0%), and Russell 2000 (+18.3%) - closed the month near record highs. The relative outperformance of the small-cap Russell 2000 index signifies a style shift towards value-oriented stocks, with “reopening” beneficiaries such as the financial, tourism, and energy sectors gaining momentum against the high-growth technology sector, as investor looked through the current surging COVID19 cases in anticipation of an available vaccine next year. Asian equities weren’t left out. MSCI AC Asia ex-Japan (+8.0%) registered a new record high with MSCI AC ASEAN (+15.7%) leading the November rally. Leading markets in the region are Thailand (+17.9%), Singapore (+15.8%), and Korea (+14.3%), while Malaysia (+6.5%), Philippines (+7.4%), and Hong Kong (+9.3%) lagged behind despite posting respectable gains nonetheless. Commodities had a very good month as well with both Crude Oil (+26.7%) and CPO (+11.9%) rising on the back of a depreciating US Dollar – Dollar Index (-2.3%); USD/MYR (-1.9%). The KLCI gained +6.5% MoM in November to close at 1,562 points (YTD -1.6%) while the FBM 100 rose +6.4%, FBM Shariah +3.2%, and the FBM Small Cap +14.2%, following news of a COVID-19 vaccine breakthrough by Pfizer on 9 November and better than expected 3Q20 results season. These more than offset concerns on rising COVID-19 cases. Key events to watch in December are the FTSE Bursa Index December semi-annual review, update on COVID-19 vaccine development, final vote on Budget 2021 (15-17 December), and the Sarawak Elections. Retail participants’ share of average daily trades fell to 38% in November 2020 from 40% in October 2020, partly due to profit-taking on some COVID-19 recovery plays and rising participation from foreign investors. 11M20 retail participation rose to 35%, from 25% in 2019. Foreign shareholding of Bursa as at 30 November 2020 is at 20.8% (Jan-Mar: 22.3%). Bank Negara Malaysia's Monetary Policy Committee (MPC) maintained the Overnight Policy Rate (OPR) at 1.75%, which is in line with expectations. International reserves fell US$600 million to US$104.6 billion as at 30 October 2020 from US$105.2 billion two weeks earlier. Trade surplus in October 2020 widened to RM22.12 billion, registering a double-digit growth of 25.9% YoY. On the fixed income front, demand for US Treasuries (UST) in early November was underpinned by risk-off sentiment ahead of the closely-contested US presidential election. Nonetheless, risk appetite subsequently improved as clarity emerged, thus easing demand for UST and driving yields higher. Investor optimism was further boosted by positive vaccine developments, although this was tempered by the record number of COVID-19 cases, which dampened the near-term outlook for the US economy. Despite the fluctuations, UST yields edged slightly lower MoM, as 2Y and 10Y UST ended the month at 0.15% and 0.84% respectively (end-October: 0.16% and 0.87%). Locally, the Malaysian Government Securities (MGS) market was subdued in November, as investors remained on the sidelines ahead of the highly anticipated Budget 2021 announcement. The improvement in Malaysia’s 3Q20 GDP, with a slower contraction of -2.7% YoY (expected: 4.0%; 2Q20: -17.1%), also dampened the outlook for an interest rate cut in early 2021. Nonetheless, demand for MGS remained resilient as daily local COVID-19 infections remained high, with the momentum of economic recovery potentially stifled by the continued restrictive measures in place. Towards month-end, MGS prices were pressured lower on profit-taking activities, as investors digested the impact of the recently announced pension fund withdrawal 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. December 2020 Market Review and Outlook scheme (EPF’s i-Sinar) alongside other political developments. Overall, 3Y and 10Y MGS ended the month on a softer note at 1.92% and 2.76% respectively (end-October: 1.75% and 2.61%). Meanwhile, demand for primary MGS issuances remained resilient, as the RM3.0 billion 30Y MGS auction was oversubscribed by 2.0 times, whereas the RM4.0 billion 7Y Government Investment Issue (GII) auction garnered a healthy oversubscription rate of 1.6 times. OnePRS Fund Outlook For equity market, improving macro-economic fundamentals, ample liquidity, and bullish sentiment all point to strong equity market performance in the near term where cyclical sectors and value stocks are likely to outperform. For fixed income, while the global economy has seen some signs of recovery, US Fed Chair Jerome Powell noted that the pace of US economic recovery has moderated in recent months; highlighting the need for more fiscal and monetary support to restore the economy to pre-pandemic levels. The Fed pledged to use its full range of tools to support the US’ economy and continued to signal that interest rates will likely remain low for a prolonged period of time to support the recovery. Locally, the Malaysian economy is expected to continue its path to recovery in 2021, underpinned by improvements in global demand, as well as the turnaround in public and private sector spending amid continued policy support. For 2021, Malaysia’s GDP is expected to expand within a range of 6.5% to 7.5% (from a projected contraction of -4.5% in 2020). Nonetheless, the outlook is still subject to downside risks, stemming from uncertainties surrounding the course of the pandemic. Meanwhile, domestic headline inflation remained subdued at -1.5% YoY in October (September: 1.4%), reflecting the substantially lower fuel prices this year. Headline inflation is likely to remain negative in 2020, before trending higher in 2021, subject to global oil and commodity prices. Given the muted inflation outlook and continued uncertainties ahead, BNM is widely anticipated to remain accommodative to support domestic growth, 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 adopt a barbell strategy in our sector positioning. We remain overweight in the technology sector to ride on secular growth trends but are also now overweight cyclical sectors such as consumer discretionary, financial, energy, and commodities to take advantage of the value rebound. At the same time, we stick to our stock picking strategy and remain selective towards names that see earnings growth. 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 Moderate Fund December 2020 FUND PERFORMANCE (%) FUND OBJECTIVE Aims to provide income and capital growth over the long-term % Cumulative Return, Launch to 30/11/2020 through investments in Shariah-compliant equities and sukuk. 30 25 Fund Category/Type Core (Moderate) 20 15 Launch Date 18 August 2016 10 5 0 Trustee CIMB Islamic Trustee Berhad Benchmark Maybank 1-Month GIA rate (40%) FBM EMAS Shariah Index (45%) Dow Jones Islamic Market Asia Pacific ex-Japan Index (15%) Annual Management Fee 1.55% p.a. Nov 20 Jun 20 Source: Novagni Analytics and Advisory # Annual Trustee Fee 0.02% p.a. Dec 19 Maybank 1-Month GIA rate (40%) FBM EMAS Shariah Index (45%) Dow Jones Islamic Market Asia Pacific exJapan Index (15%) : 24.80 Period 1 month 6 months 1 year 3 years 5 years Since Launch Sales Charge Up to 1.50% Jun 19 Kenanga Shariah OnePRS Moderate Fund : 18.34 CUMULATIVE FUND PERFORMANCE (%)# Designated Fund Manager Lee Sook Yee Dec 18 Jun 18 Dec 17 Jun 17 Dec 16 Aug 16 -5 Fund 0.97 7.78 9.29 11.56 18.34 Benchmark 1.99 8.90 13.33 14.48 24.80 CALENDAR YEAR FUND PERFORMANCE (%) # Period 2019 2018 2017 2016 2015 Fund 11.96 -8.19 8.37 -0.82 - Benchmark 7.33 -5.72 11.65 -0.39 - Source: Lipper, 30 November 2020 FUND SIZE * RM 0.29 million Redemption Charge Nil NAV PER UNIT * RM 0.5917 HISTORICAL FUND PRICE * Since Inception Date Highest RM 0.6028 6-Aug-20 Lowest RM 0.4658 19-Mar-20 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. ASSET ALLOCATION (% NAV) * November 2.0% October 2.0% September 2.0% Liquidity 1 2 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 SYARIAH GROWTH FUND KENANGA BON ISLAM FUND DISTRIBUTION HISTORY 56.77% 41.22% - 0 0.00% 0.00% Not Applicable * Source: Kenanga Investors Berhad, 30 November 2020 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, stock-specific risk, collective investment scheme risk, currency risk and reclassification of Shariah status risk.