RHB Islamic Regional Balanced Fund Report - MYR Class - December 2017

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1. FUND FACTSHEET – DECEMBER 2017 All data expressed as at 30 November 2017 unless otherwise stated RHB ISLAMIC REGIONAL BALANCED FUND - MYR CLASS The Fund aims to provide regular income and capital growth over the medium to long term from a diversified portfolio of Shariah-compliant investments. INVESTOR PROFILE INVESTMENT STRATEGY This Fund Is Suitable For Investors Who: • want to have a balanced portfolio that provides both income and capital growth, and at the same time complies with the principles of Shariah; and • are willing to accept moderate risk in their investments. • At least 40% and up to 60% of NAV: Investments in Shariahcompliant equities. • At least 40% and up to 60% of NAV: Investments in Nonequity Shariah-compliant investments. FUND PERFORMANCE ANALYSIS FUND DETAILS Performance Chart Since Launch* Cumulative Performance (%)* 1 Month Fund -1.25 Benchmark -0.79 1 Year 6.45 14.37 Fund Benchmark Calendar Year Performance (%)* 2016 Fund 5.27 Benchmark 5.41 Investment Manager Trustee Fund Category Fund Type RM Class Launch Date USD Class Launch Date Domicile Base Currency Unit NAV Fund Size (million) Units In Circulation (million) Financial Year End MER (as at 30 Apr 2017) Min. Initial Investment Min. Additional Investment Benchmark 3 Months 2.01 2.30 6 Months 6.81 6.63 3 Years 31.57 38.02 Since Launch 32.69 44.66 YTD 5.75 13.96 Sales Charge Redemption Charge Annual Management Fee Annual Trustee Fee Switching Fee Distribution Policy 2015 18.90 14.33 FUND PORTFOLIO ANALYSIS 27.49% Malaysia 19.67% 27.88% Hong Kong 7.17% 4.96% 4.42% 3.85% 2.44% 2.38% 2.14% 1.81% 14.89% Taiwan 8.86% Korea 2.33% Cash 30% 23.67% 0% Top Holdings (%)* YTL POWER ISLAMIC MEDIUM TERM NOTE 5.050% 03.05.2027 SERBA DINAMIK HOLDINGS HIMAX TECHNOLOGIES PPSIB 4.350 09/10/24 MEDIUM TERM NOTE MAYBANKISLM 4.750% 05.04.2024 Since Launch 1.3616 0.9739 3.07% Others 25% 12 Months 1.3616 1.2420 4.17% Philippines 20% Historical NAV (RM) 1 Month High 1.3616 Low 1.3273 Source: Lipper IM 7.51% Japan 15% RM25.00 per switch* Annually, if any 7.62% Indonesia 23.67% 10% Up to 0.06% p.a. of NAV, subject to a min. of RM18,000p.a.* FUND STATISTICS Country Allocation* 5% Up to 5.00% of investment amount* None 1.80% p.a. of NAV* *For the purpose of computing the annual management fee and annual trustee fee, the NAV of the Fund is exclusive of the management fee and trustee fee for the relevant day. Sector Allocation* 0% 50% RAM QuantShop GII (medium term) Index + 50% Dow Jones Islamic Market Asia Pacific *The implementation of GST will be effective from 1 April 2015 at the rate of 6% and the fees or charges payable is exclusive of GST. Source: Lipper IM Bond I. Technology Materials Industrials C. Discretionary Others Trading/Services Health Care C. Staples Real Estate Cash RHB Asset Management Sdn. Bhd. TMF Trustees Malaysia Bhd Balanced (Shariah-compliant) Income and growth 08 April 2014 17 June 2014 Malaysia Malaysian Ringgit (RM) RM1.3273 RM100.61 75.80 30 April 2.18% RM1,000.00 RM100.00 10% 20% 30% 4.83 2.44 2.14 2.05 1.91 *As percentage of NAV RHB Asset Management Sdn Bhd (174588-x) Head Office: Level 8, Tower 2 & 3, RHB Centre, 50400 Kuala Lumpur General Line: 603-9205 8000
2. FUND FACTSHEET – DECEMBER 2017 All data expressed as at 30 November 2017 unless otherwise stated RHB ISLAMIC REGIONAL BALANCED FUND - MYR CLASS The Fund aims to provide regular income and capital growth over the medium to long term from a diversified portfolio of Shariah-compliant investments. MANAGER'S COMMENTS MARKET OUTLOOK AND STRATEGY Equity For the year 2017, the Asia Pacific market has delivered a decent return supported by the rally in Technology sector. However, we did see sign market weakness due to the profit taking in technology sector where investors have been sitting on hefty paper gains. We believe the reversed market sentiment is mainly due to investors shifting the asset allocation from technology as we seen rising appetite towards underperforming sectors Consumer, Utilities and Energy. Sharp rise in Malaysian Ringgit (“MYR”) has been a big threat to investment in foreign markets due currency translation loss. Strong Ringgit were mainly due to main reasons: 1. Rising crude oil price on expectation of extension of agreement to cut production. 2. Strong signal by Bank Negara Malaysia (“BNM”) to hike interest in view strong Gross Domestic Growth (“GDP”) in Third Quarter 2017. However, both factors are already being priced at the current MYR valuation. Overall, we maintain overweight on equities. Our key overweight remains in South Korean as we think the market unjustly trading at cheap valuation despite having the strongest earning growth among Asian market in 2017. On sectoral basis, we continue to favor Technology sector which benefited from structural change in consumer demand and rising penetration Internet of Things (“IoT”) products. We also now see value in Indonesia and Philippine markets due to weaknesses in both currencies this year. Consumer spending pattern in both market has already hit a trough, we foresee a huge upside to potential consumer spending as both market consumer penetration remain very low. Indonesia market sentiment could further supported by government spending as Djokowi administration prepare for provincipal and regional election beginning mid-2018 to early 2019. Sukuk Expectations of a December Fed hike still remains in the market, with Fed Fund futures implied expectations currently at 98.3% especially with members of the Fed FOMC still supporting this hawkish view. In the short term, the US funding appropriation bill is expected to cause consternation in the market as it comes to fore. In light of expected weaker USD against Ringgit, we shall underweight USD exposure for now. All USD investments will be hedged against Ringgit. A flat US yield curve should continue to support Emerging Market Foreign Exchange and Local Currency debt. Continue to selectively invest into USD Sukuk with cheaper valuation in rising rates environment. We will position a neutral duration on USD denominated investment grade sukuk. For Malaysia, we saw BNM staying pat at 3.00% in October Monetary Policy Committee ("MPC") meeting and is expected to remain status quo throughout this year as it balances firm economic growth trajectory against the benign inflationary environment. However we remain cautious on likelihood of large foreign fund outflows which would push yields higher both on govvies and corporate bonds. We are however comforted by the strength of the MYR and stability of the MGS yield curve which both signal investor confidence and investment opportunities for international investors. On that note, we remained moderately overweight duration on Ringgit Sukuk. Overweight Ringgit bonds exposure to reduce FX risk as well as local interest rates risk, as expectations of BNM to raise rates only once next year. DISCLAIMER: Based on the fund’s portfolio returns as at 15 November 2017, the Volatility Factor (VF) for this fund is 5.9 and is classified as “Low”. (source: Lipper) “Low” includes funds with VF that are above 1.9 but not more than 6.2 (source: Lipper). The VF means there is a possibility for the fund 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 is subject to monthly revision and VC will be revised every six months. The fund’s portfolio may have changed since this date and there is no guarantee that the fund 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 VC referred to was dated 30 June 2017 which is calculated once every six months and is valid until its next calculation date, i.e. 31 December 2017. A Product Highlights Sheet (“PHS”) highlighting the key features and risks of the Fund is available and investors have the right to request for a PHS. Investors are advised to obtain, read and understand the PHS and the contents of the Prospectus dated 3 November 2017 and its supplementary(ies) (if any) (“the Prospectus”) before investing. The Prospectus has been registered with the Securities Commission Malaysia who takes no responsibility for its contents. Amongst others, investors should consider the fees and charges involved. Investors should also note that the price of units and distributions payable, if any, may go down as well as up. Where a distribution is declared, investors are advised that following the issue of additional units/distribution, the NAV per unit will be reduced from cum-distribution NAV to ex-distribution NAV. Any issue of units to which the Prospectus relates will only be made on receipt of a form of application referred to in the Prospectus. For more details, please call 1-800-88-3175 for a copy of the PHS and the Prospectus or collect one from any of our branches or authorised distributors. The Manager wishes to highlight the specific risks for the Fund are equity risk, currency risk, country risk, interest rate risk, liquidity risk, regulatory risk, credit downgrade and credit/default risk, reclassification of shariah status risk, market risk in emerging and less developed markets, unrated securities risk and risk of use of rating agencies. These risks and other general risks are elaborated in the Prospectus. This factsheet is prepared for information purposes only. It does not have regard to the specific investment objectives, financial situation and the particular needs of any specific person who may receive it. Past performance is not necessarily a guide to future performance. Returns may vary from year to year. RHB Asset Management Sdn Bhd (174588-x) Head Office: Level 8, Tower 2 & 3, RHB Centre, 50400 Kuala Lumpur General Line: 603-9205 8000