Manulife Investment Al-Fauzan Fund Report - August 2022

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1. RM Class 3-year Fund Volatility 16 .1 High Lipper Analytics 10 Jul 22 August 2022 Factsheet Manulife Investment Al-Fauzan Fund category Fund performance Equity (Islamic) 10-year performance as at 31 July 2022* 70% Fund objective To provide unit holders with a steady recurring income that is potentially higher than prevailing General Investment Accounts rates. At the same time, the Fund also attempts to attain medium- to long-term capital appreciation. Investor profile 60% 50% 40% 30% 20% 10% The Fund is designed for investors who prefer a regular income stream, stable investment returns and have a medium- to long- term capital appreciation. It is suitable for investors who seek relatively higher return than GIA rates and investments which comply with Shariah requirements. 0% -10% 07/2012 05/2013 03/2014 01/2015 11/2015 07/2017 05/2018 03/2019 01/2020 11/2020 09/2021 07/2022 ——— Benchmark in RM Total return over the following periods ended 31 July 2022* Fund manager Manulife Investment Management (M) Berhad 200801033087 (834424-U) Trustee HSBC (Malaysia) Trustee Berhad 193701000084 (1281-T) 1 month 3.03 2.00 Fund RM Class (%) Benchmark in RM (%) RM 0.2722 RM 445.02 mil 1,635.00 mil 06 Sep 2005 27 Sep 2005 30 Sep RM Up to 1.50% of NAV p.a. Up to 0.06% of NAV p.a. Up to 6.50% of NAV per unit Nil Semi-annually, if any. 90% FBMSHA + 10% CIMB Bank 12-month Fixed Return Income Account-i (FRIA-i) Fixed Maturity rate 6 month -3.16 -6.38 YTD -8.56 -11.15 1 year 3 year 5 year 10 year -5.60 -9.64 19.17 -8.71 9.08 -12.70 53.02 -1.01 Calendar year returns* Fund information (as at 31 Jul 2022) NAV/unit Fund size Units in circulation Fund launch date Fund inception date Financial year Currency Management fee Trustee fee Sales charge Redemption charge Distribution frequency Benchmark 09/2016 ——— Fund RM Class 2017 11.79 9.95 Fund RM Class (%) Benchmark in RM (%) 2018 -15.87 -11.90 2019 5.39 3.80 2020 19.01 9.52 2021 8.72 -5.93 * Source: Lipper; Past performance is not necessarily indicative of future performance. The performance is calculated on NAV-to-NAV basis. Top 5 holdings No. 1 2 3 4 5 Asset/sector allocation Security name Tenaga Nasional Bhd PETRONAS Chemicals Group Bhd. IHH Healthcare Bhd. Press Metal Aluminium Holdings Berhad Telekom Malaysia Bhd. % NAV 6.7 4.8 4.7 3.7 3.5 Highest & lowest NAV High Low 2019 0.2886 0.2629 2020 0.3034 0.2000 2021 0.3244 0.2952 Distribution by financial year Distribution (Sen) Distribution Yield (%) 2020 2021 1.66 2.00 6.5 6.7 **Interim distribution (semi-annual) 2022** 0.90 3.0 No. 1 2 3 4 5 6 7 8 9 10 Asset/sector name Ind prod & serv Plantation Consumer prod & serv Utilities Technology Telecomm & media Healthcare Construction Others Cash & Cash Equivalents % NAV 16.4 11.5 10.9 9.4 8.6 8.0 7.7 4.1 15.1 8.3 Geographical allocation No. 1 2 3 4 Geographical name Malaysia Singapore South Korea Cash & Cash Equivalents % NAV 91.2 0.5 0.0 8.3
2. August 2022 Factsheet Manulife Investment Al-Fauzan Market review For the month of July , global equity markets were generally positive, with MSCI All Country World Index rising by 6.9% MoM. In the US, the Federal Reserve (Fed) increased its benchmark interest rate by another 75bps after headline inflation in July once again beat expectations, standing at 9.1% YoY. Against the backdrop of increasing global recession risks due to elevated inflation and tightening financial conditions, markets are increasingly pricing in interest rate cuts from US Federal Reserve (Fed) in 2023. The anticipation of Fed policy pivot supported the equity market rally over the month. While US recorded a second consecutive quarters of negative GDP growth for 2Q22, which is often considered as a technical recession, the strength of the US labour market means that the National Bureau of Economic Research is unlikely to officially declare recession at this stage. In Europe, the higher inflation prompted the European Central Bank (ECB) to deliver its first interest rate hike in over a decade, taking the eurozone out of negative rates. Risks of further cuts in Russia natural gas supplies continued to weigh on the European outlook. The region’s recessionary risk has reflected in the currency market given the euro depreciation, where it briefly slipped below parity with the US Dollar. Meanwhile, MSCI China Index fell 10% in July 2022 as the concerns about its property market crisis triggered the sell-down in Chinese equities. There are warnings that the recent wave of mortgage suspensions and delayed property completion could damage China’s financial system. In Malaysia, the FBM KLCI Index rose 3.3% in July 2022 to close at 1,492 points. The gain was helped by the expectation that concerns over a US recession may have been priced in after the recent market sell-off. Foreign investors again turned net buyers in July at RM175mil, with net YTD trend remains positive at RM6.3bil cumulatively. Technology (+6.2%) was the best performing sector in the local market, followed by telecom (4.2%) and finance (4.1%). Overall, the FBM KLCI Index outperformed the broader market as the FBM 100 Index rose 3.0% while FBM EMAS Index rose 2.9%. Relative to the region, the FBM KLCI Index outperformed the MSCI Asia ex-Japan Index, which declined 1.7%. The top performers were India (+8.6%), South Korea (+5.1%) and Singapore (+3.5%) while the worst performers were Hang Seng China Enterprise Index (H-shares) (-10.2%), Hong Kong (7.8%) and Hang Seng China Affiliate Corp Index (-6.5%). Market outlook Job creation data in the US for June came in above expectation, indicating that the labour market remains strong despite pockets of weakness in the US economy. The overall sentiment was also somewhat helped by the news that China is mulling a USD220 bil stimulus package, an unprecedented acceleration of infrastructure funding aimed at shoring up its beleaguered economy. Unfortunately, market sentiment was subsequently impacted by the higher-than-expected US CPI number of 9.1% YoY in June, the highest since 1981. This has once again increased the probability of the US Federal Reserve hiking interest rate at a higher-than-expected quantum to combat the stubbornly high inflation. This, coupled with the concerns on rising recession risk which was already reflected in the inverted US yield curve, put more downward pressure on the global equity market. Adding to the gloomy and uncertain market outlook, IMF slashed global GDP growth for 2022 to 3.2% and 2023 to 2.9%, marking a downgrade of 0.4 and 0.7 percentage points respectively. Market was saved by Fed’s meeting in July where it raised the interest rate by 75 bps which was broadly in line with expectations. Furthermore, Powell mentioned that the Fed may slow hikes sometime in the future and he believes that US is not in a recession currently. US 2Q 2022 GDP contracted by 0.9% YoY after a 1.6% decline in 1Q22 which likely to lead Fed to be less hawkish given the threat of economic slowdown. In line with market expectations, Bank Negara Malaysia (BNM) raised its overnight policy rate (OPR) by 25bp to 2.25% on 6 Jul during their MPC meeting, its second consecutive increase after the unexpected 25bp hike on 11 May. BNM highlighted that while external demand is expected to moderate, weighed by headwinds to global growth, local economic growth will be supported by firm domestic demand, hinting the importance of the domestic economy in driving growth going forward. Labour numbers were mixed as employment growth moderated to 0.3% MoM in May but inched up to +3.4% YoY. Employment growth continued to be driven by services, manufacturing, construction and agricultural sectors. Going forward, recovery in the labour market is expected to continue as we move towards endemicity. Malaysia CPI for June continued to inch higher at 3.4% YoY as compared to 2.8% in May, driven by elevated food prices. The headline inflation numbers are expected to remain high due to external and domestic price pressures. The passing of the anti-hoping law by Malaysia’s parliament and Indonesian government’s lifting of restriction on workforce coming into Malaysia from 1st Aug are expected to improve local market sentiment in the near term. Given that equity market is expected to remain challenging in 2H22, we will continue to stay defensive by holding a well-balanced portfolio in the current volatile period. Based on market valuation, value has emerged after the recent sell-off. Rolling into the month of corporate results season in August, we are hopeful to see better clarity for the rest of 2022. We are taking the recent market sell-off as an opportunity to gradually accumulate undervalued stocks for our longer-term holdings. Fund review and strategy The Fund outperformed its benchmark in the month of July, mainly attributed to positions in the healthcare and technology sectors. Meanwhile, positions in the plantation sector offsets some of the outperformance. We will continue to stay invested, focusing on stocks with 1) compelling valuation; 2) strong cash flow preferably in net cash position; 3) strong management and 4) consistent dividend payout. Based on the Fund's portfolio returns as at 30 Jun 2022 the Volatility Factor (VF) for the Fund is as indicated in the table above and are classified as in the table (source: Lipper). "Very High" includes Funds with VF that are above 17.635, "High" includes Funds with VF that are above 14.210 but not more than 17.635, "Moderate" includes Funds with VF that are above 10.855 but not more than 14.210, "Low" includes Funds with VF that are above 4.440 but not more than 10.855 and "Very Low" includes Funds with VF that are above 0.000 but not more than 4.440 (source:FiMM). The VF means there is a possibility for the Funds 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 and VC are subject to monthly revision or at any interval which may be prescribed by FIMM from time to time. The Fund's portfolio may have changed since this date and there is no guarantee that the Funds 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 above information has not been reviewed by the SC and is subject to the relevant warning, disclaimer, qualification or terms and conditions stated herein. Investors are advised to read and understand the contents of the Master Prospectus dated 7 February 2020 and its First Supplemental Master Prospectus dated 13 November 2020 and its Second Supplemental Master Prospectus dated 5 April 2021 and its Third Supplemental Master Prospectus dated 13 September 2021 and its Fourth Supplemental Master Prospectus dated 29 November 2021 and its Fifth Supplemental Master Prospectus dated 28 February 2022 and all the respective Product Highlights Sheet(s) (collectively, the “Offering Documents”), obtainable at our offices or website, before investing. The Offering Documents have been registered with the Securities Commission Malaysia (SC), however the registration with the SC does not amount to nor indicate that the SC has recommended or endorsed the product. 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 the pre-unit split NAV/cum-distribution NAV to post-unit split NAV/ex-distribution NAV; and where a unit split is declared, the value of your investment in the Fund’s denominated currency will remained unchanged after the distribution of the additional units. Past performances are not an indication of future performances. There are risks involved with investing in unit trust funds; wholesale funds and/or Private Retirement Schemes. Some of these risks associated with investments in unit trust funds; wholesale funds and/or Private Retirement Schemes are interest rate fluctuation risk, foreign exchange or currency risk, country risk, political risk, credit risk, non-compliance risk, counterparty risk, target fund manager risk, liquidity risk and interest rate risk. For further details on the risk profile of all the funds, please refer to the Risk Factors section in the Offering Documents. The price of units and income distribution may go down as well as up. Investors should compare and consider the fees, charges and costs involved. Investors are advised to conduct own risk assessment and consult the professional advisers if in doubt on the action to be taken.