Manulife Shariah India Equity Fund Report - August 2022

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1. August 2022 Factsheet Manulife Shariah India Equity Fund Fund category Fund performance Equity (Shariah-Compliant) Fund objective Not available as the Fund is less than one year The Fund aims to achieve capital appreciation by investing in Shariah-compliant equities and Shariahcompliant equity-related securities of companies in India market. Investor profile The Fund is suitable for investors who seek capital appreciation, prefer Shariah-compliant investment, have a long-term investment horizon and wish to seek investment exposure in India market. Total return over the following periods Not available as the Fund is less than one year Fund manager Manulife Investment Management (Hong Kong) Limited Trustee Calendar year returns HSBC (Malaysia) Trustee Berhad 193701000084 (1281-T) 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 RM 0.4693 USD 9.88 mil 93.69 mil 26 Oct 2021 15 Nov 2021 31 Jul USD Up to 1.80% of NAV p.a. 0.06% of NAV p.a. including local custodian fees but excluding foreign custodian fees and charges Up to 5.00% of NAV per unit Nil Incidental, if any Nifty Shariah 25 Index Not available as the Fund is less than one year Top 5 holdings No. 1 2 3 4 5 Asset/sector allocation Security name Infosys Limited Tata Consultancy Services Limited Asian Paints Ltd. Hindustan Unilever Limited Godrej Consumer Products Limited % NAV 9.3 6.7 4.8 4.8 4.6 Highest & lowest NAV High Low 2019 - 2020 - 2021 0.5051 0.4740 2019 - 2020 - 2021 - Asset/sector name Information Technology Consumer Staples Healthcare Materials Industrials Consumer Discretionary Energy Real Estate Utilities Cash & Cash Equivalents % NAV 25.6 20.8 12.2 10.6 8.6 7.7 4.6 2.3 2.3 5.2 Geographical allocation No. 1 2 Distribution by financial year Distribution (Sen) Distribution Yield (%) No. 1 2 3 4 5 6 7 8 9 10 Geographical name India Cash & Cash Equivalents % NAV 94.8 5.2
2. August 2022 Factsheet Manulife Shariah India Equity Fund Market review Indian equities posted a sharp rebound in July as the Reserve Bank of India governor issued comments that the central bank would not sacrifice too much growth for monetary tightening , as inflation in June (7.01%- year-on-year) decelerated for the second consecutive month. Foreign institutional investors turned to net buyers (US $0.7 billion) for the first time in nine months, while domestic institutional investors (US $1.3 billion) were net buyers for 17th consecutive month. Market outlook Current geopolitical events and the global supply side disruptions has added cyclical pressures to India’s growth outlook. This has shown up recently with higher-than-expected inflation and higher trade deficit, prompting the Indian central bank to cut the real GDP growth outlook and join other central banks around the world with front ended rate hikes to rein in inflation and protect the currency. We believe the current spike in inflation for India to be cyclical and not structural. India has strengthened its supply side through key reforms over the last 7 years and this has raised the productivity of the economy, tax compliance and potential growth. We believe India also has enough spare capacity in the labour market with the youngest average age among major economies. We also believe that household, government, and corporate balance sheet is at a healthy level that can withstand the cyclical challenges. A key risk to our outlook remains the supply side pressures continuing long enough to become embedded in longer term inflation expectations. The current cyclical pressures do not detract from the reform-driven longer-term growth story. If anything, this is likely to strengthen the government’s reinvestment-led reform agenda designed to reduce net imports. Even at an average crude oil price of US $120 a barrel, the effect on real GDP growth and inflation can be partly contained by the available fiscal buffer. Of course, if oil were to rally and stay beyond the levels we envisage in our assumptions, it would add further pressure to macro stability and growth estimates. Ultimately, this remains a critical risk to our outlook. We are positive on India’s long-term structural story that will be led by the formalisation of the economy (leading to high growth in the digital economy and a better fiscal position) and a growing manufacturing sector led by government policy. We are more optimistic on 1) plays on urban demand that is benefitting from the economic re-opening as well as a cyclical uptick. Hotels, movie exhibition, retail space owners, and automobiles will see earnings revival and high operating leverage as service sector GDP in India bounces back and benefits from a resilient demand and income growth in urban India (led by strong white collar job market). These companies are present in Consumer Discretionary, Communication and Real Estate Sectors, 2) India manufacturing plays where we are positive on select industrials companies that are benefitting from short cycle capex on automation and robotics in new age manufacturing capex. We are also positive on select materials names in the chemicals space that are seeing strong re-investment opportunities and pricing power as they gain market share globally from supply dislocations. We are cautious IT Services as companies are facing rising wage costs and may see client specific challenges from worsening global growth outlook. Fund review and strategy The Fund underperformed the benchmark on the back of asset allocation decisions. Stock selection added value. The underweight to materials and consumer staples and the overweight to real estate and consumer discretionary were the primary detractors to performance. Contributing positively was stock selection in healthcare, energy and consumer discretionary and the underweight to technology and overweight to industrials. 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 Prospectus dated 26 October 2021 and its First Supplemental Prospectus dated 26 October 2021 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.