Manulife Shariah PRS-Conservative Fund Report - September 2021

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1. September 2021 Factsheet Manulife Shariah PRS-Conservative Fund Fund category Fund review and strategy Core (Conservative) Since inception performance as at 31 August 2021* Fund objective 30% The Fund aims to provide steady returns whilst preserving^ capital. 25% Investment Strategy 15% To achieve the objective of the Fund, the Provider will at all times invest a minimum of 80% of the Fund’s NAV in Malaysian sukuk (of which a minimum of 20% will be invested in Islamic money market instruments) and a maximum of 20% of the Fund’s NAV in Malaysian Shariah-compliant equities and/or equityrelated securities. 10% Fund manager Given that this is a conservative fund, we are staying entirely in fixed income at this juncture. As the domestic political impasse is resolved, the government is expected to focus its attention on controlling the Covid situation and continue its vaccination drive. The improving vaccination rates is expected to lead to further easing of movement restrictions and economic reopening. We believe that any dip could be buying opportunities for risk assets which benefit from reopening of economy if we look beyond the current Covid situation. Manulife Investment Management (M) Berhad 200801033087 (834424-U) Trustee 20% 5% 0% -5% 08/2013 03/2014 10/2014 05/2015 12/2015 06/2016 01/2017 08/2017 03/2018 ——— Fund Class A 10/2018 05/2019 12/2019 07/2020 02/2021 08/2021 ——— Benchmark in RM CIMB Islamic Trustee Berhad 198801000556 (167913-M) Fund information (as at 31 Aug 2021) NAV/unit (Class A) NAV/unit (Class C) Fund size Units in circulation Fund launch date RM 0.5443 RM 0.5692 RM 1.03 mil 1.87 mil Class A & B: 24 Jul 2013 Class C: 28 Apr 2016 Fund inception date 13 Aug 2013 Financial year 31 Aug Currency RM Management fee Class A: 1.20% p.a. of the NAV Class B: 1.00% p.a. of the NAV Class C: 1.00% p.a. of the NAV Trustee fee Class A, B & C: 0.025% p.a. of the NAV Sales charge Class A & B: Nil Class C: Up to 3.00% of the NAV per unit Redemption charge Class A: 3.00% of NAV per unit for withdrawal in the 2nd year; 2.00% of NAV per unit for withdrawal in the 3rd year; 1.00% of NAV per unit for withdrawal in the 4th year; No Redemption Charge from the 5th year onwards. Class B & C: Nil Distribution frequency Annually, if any, and will be automatically reinvested and distributed as additional units of the Fund. Benchmark Maybank 12-month Islamic fixed deposit-i rate Fees by Private Pension Administrator (PPA) Account opening fee Annual fee1 Pre-retirement withdrawal fee Transfer fee Administration fee ^ 1 RM10.00 (one-off) RM8.00 p.a. RM25.00 for each withdrawal Total return over the following periods ended 31 August 2021* 1 month 0.44 0.16 0.48 0.16 Fund Class A (%) Benchmark in RM (%) Fund Class C (%) Benchmark in RM (%) 6 month 0.55 0.93 0.67 0.93 YTD 2.02 1.23 2.17 1.23 1 year 3 year 5 year 3.10 1.85 3.33 1.85 11.20 7.96 12.68 7.96 12.26 14.98 15.48 14.98 Since inception 19.78 27.00 17.73 16.27 Calendar year returns* 2016 1.79 3.32 0.41 2.20 Fund Class A (%) Benchmark in RM (%) Fund Class C (%) Benchmark in RM (%) 2017 2.48 3.12 3.30 3.12 2018 0.44 3.33 1.21 3.33 2019 4.45 3.19 5.19 3.19 2020 4.12 2.22 4.34 2.22 * 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 Manulife Investment As-Saad Manulife Investment Al-Mamun CIMB Islamic Bank Bhd 1.7 09/02/21 Country Garden Real Estate Sdn Bhd 6.4 05/06/22 Fortune Premiere Sdn Bhd 5.05 10/31/25 % NAV 37.9 19.5 13.7 9.1 7.3 Highest & lowest NAV High Low 2018 0.5093 0.5026 2019 0.5246 0.5033 No. 1 2 3 4 Asset/sector name Fixed Income Money Market Equities Cash & Cash Equivalents % NAV 67.6 33.2 0.0 -0.8 Geographical allocation No. 1 2 Geographical name Malaysia Cash & Cash Equivalents % NAV 100.8 -0.8 2020 0.5396 0.5161 Distribution by financial year Distribution (Sen) Distribution Yield (%) 2019 2020 0.59 0.60 1.2 1.2 2021 0.76 1.4 RM25.00 for each transfer to another PRS provider 0.04% p.a. of the NAV Please note that this is neither a capital guaranteed nor a capital protected. Therefore, a member's capital is neither guaranteed nor protected. No annual fee will be charged during the 1st year of the opening of a private pension account; there will also be no annual fee payable if no contributions are made during a calendar year.
2. September 2021 Factsheet Manulife Shariah PRS-Conservative Fund Market Review Equity For the month of August , global equity markets were mostly positive as economic reopening continued, especially in developed markets where we see further lifting of restrictions despite the spread of the Delta variant. Daily new Covid19 cases picked up across the globe, but fortunately hospitalization rates have not risen as sharply due to the effectiveness of vaccination programmes. In response, some countries have authorised vaccine booster shots to boost protection for their population. In the US, the debate on whether the recent increase in inflation rate is transitory or persistent remained. At the Jackson Hole Economic Symposium, the Fed chairman Jerome Powell continued to emphasise that the high inflation rate will be transitory, but expects the labour market to reach the bar for tapering this year. Powell also indicated that the timeline for tapering is separate to that for rate hike. In emerging markets, equities were largely driven by events in China. The Chinese regulatory changes intensified with a widening number of industries impacted. China was also hit by the arrival of the Delta variant, but it responded well with stringent mass testing and mobility controls, which proved to effective in containing the outbreak. Outside of China, the Delta variant continued to pose a risk to those countries with slow pace of vaccination. For Malaysia, the FBM KLCI Index rose by 7.1% m/m to close at 1,601.38 points. This represents its strongest monthly gain since October 2011. The gain was driven by net buying by foreign investors, possibly due to the market’s attractive valuation and optimism that political concerns will subside following the appointment of Datuk Seri Ismail Sabri as the Prime Minister. Foreign investors net bought about RM1.0bn in the market in August after being persistent net sellers for a long period of time. Nevertheless, the market still registered a net foreign outflow of about RM4.5bn year-to-date. The best performing sectors in the month were plantation and transportation, while the worst performing sectors were healthcare and REIT. The FBM KLCI Index outperformed both the FBM100 Index (+6.2% m/m) and FBM Small Cap Index (+3.4% m/m) due to gains in the financial sector. Relative to the region, the FBM KLCI Index outperformed the MSCI Asia ex-Japan Index, which rose by 2.1% during the month. The top performers were India (9.4%), Philippines (9.3%) and China-HSCCI Index (9.2%), while the worst performers were Singapore (-3.5%), China-HSCEI Index (-0.5%) and the Hang Seng Index (-0.3%). Fixed Income The US Treasury (UST) yield curve shifted up in August 2021; 2-year, 5-year and 10-year UST yields moved +3 bps, +9 bps and +9 bps to close at 0.21%, 0.78% and 1.31% respectively. On 27 August 2021, Federal Reserve Chairman Jay Powell in his Jackson Hole Economic Policy Symposium speech reiterated that the tapering of the Fed’s monthly asset purchases could be happening by this year but stressed that the interest rate hike is not on the cards in the near future. The Malaysia Government Securities (MGS) yield curve bear flattened during the month. 3-year, 5-year and 10-year MGS yields moved +6 bps, +6 bps and +1 bps respectively to close at 2.34%, 2.68% and 3.19%. The domestic political development took centre stage as Prime Minister Muhyiddin Yassin tendered his resignation on 16 August 2021 following a failed attempt to salvage his premiership by extending an olive branch to opposition lawmakers to come together for the common good in the face of the Covid19 pandemic currently plaguing the country. Fund Review In the month of August 2021, the fund outperformed its benchmark, mainly due to running return of underlying Sukuk assets. Market Outlook Equity Global markets have reacted well to the Fed chairman Jay Powell’s signal at the Jackson Hole Economic Symposium that the US Federal Reserve would be cautious in its approach to tapering its bond purchase programme, which is expected to begin this year. Powell’s continued emphasis that inflation is transitory and repairing the jobs market is a priority suggests that the Fed will not be in a hurry to raise interest rate. The concerns on Delta variant and the efficacy of vaccines against it will remain as recent US data has started to show softness in consumer spending while some businesses have delayed return to offices. For Malaysia, with the political impasse resolved, the government is expected to focus its attention on controlling the Covid situation and continue its vaccination drive. Although daily new Covid cases remain stubbornly high, there are signs that hospitalisation and ICU utilisation rates in Klang Valley is falling, indicating that the increasing vaccination rate is having a positive impact. Meanwhile, it remains to be seen whether the momentum of foreign funds inflow will continue in the next few months following the strong buying in August. The market may take a breather as investors will want to see clearer signs of earnings recovery as our economy gradually reopens. In terms of strategy, we believe portfolio diversification will be key to navigate the current uncertain market. The main structural investment themes that we like, such as deglobalisation, digitalisation and clean energy, remain intact and will continue to anchor the basis of our stocks selection. On the longer term, we remain positive on the prospects of the markets, thanks to anticipation of eventual recovery from the Covid pandemic. Fixed Income The spread of Delta variant of Covid infections continues to hold back demand recovery and economy reopening across most of Asia, even as many countries ploughed ahead with vaccination efforts. In Malaysia, new cases remain elevated although early signs of vaccination success have emerged in the form of lower positive cases and hospitalization rates in states with high vaccination rates. Policy wise, we started seeing policy divergence among Asian central banks; China started easing, South Korea hiked rates while many other countries maintained highly accommodative monetary policies. As a result, investors will likely take a more nuanced approach on their investment selections and decisions. Within Malaysia, we expect economy reopening to proceed cautiously over the next few months, which would inadvertently lead to a rebound in mobility and economic activities. This should allow BNM to maintain its positive outlook on the economy and thus keep OPR unchanged at 1.75% for the rest of the year. Aside, domestic political risks have also abated with the recent change of Prime Minister and reshuffle of cabinet. Against this backdrop, we are of the view that MGS yields should trade rangebound in near term but trends higher over time as Malaysia gradually overcomes its Covid challenges. Yield curve is expected to remain steep as long-term yields are still pressured upwards by unfavourable supply-demand dynamics and inflation expectation. Ultimately, rate of policy normalization will depend on the pace of services recovery to reduce output gap and ease economic uncertainty.
3. September 2021 Factsheet Manulife Shariah PRS-Conservative Fund 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 Manulife Shariah PRS NESTEGG Series Disclosure Document dated 29 November 2019 and its First Supplemental Disclosure Document dated 10 February 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.