Wednesday, April 23, 2008

AmFirst REIT moves to shed old perception

BusinessTimes

AMFIRST Real Estate Investment Trust (REIT), the country's oldest property trust, is working hard to shed a past perception when it comes to performance.

Previously known as the AmFirst Property Trust, the fund was the first to go public on the local bourse 18 years ago as part of the government's plan to kick-start the industry.

Performance of the sector was generally viewed as lacklustre as proper legislation was lacking before to spur growth."It is not that the market perception on AmFirst was bad. To put it in perspective, it was listed back then to answer to the government's call to set up property trusts.

The fund was started to include AmBank's own buildings," AmMerchant Bank Bhd's executive director Pushpa Rajadurai said in an interview with Business Times.

Since then, there was no change in the regulations that govern property trust, until 2005. And AmFirst had almost immediately taken steps to look at revamping the old property trust according to the new REIT guidelines. It remains the only one of three old property trusts that have been rebranded and re-listed on Bursa Malaysia.

We know that in REIT, it is good to bring in an independent property manager. ARA Management has the expertise in this area and that's why we've tied up with them," Pushpa pointed out.

Singapore-based ARA Asset Management Ltd, an affiliate of Hong Kong's real estate giant Cheung Kong Group, was roped in to own a 12.5 per cent share of AmFirst REIT. It also owns 30 per cent of the trust manager, Am ARA REIT Managers Sdn Bhd.

"The change has already been reflected in our strategy. Since ARA came in, our asset size has increased and the dividends per unit were boosted," she said.

AmFirst's asset size has swelled to RM835 million recently after it bought all the unsold units of The Summit Subang USJ, which comprises an office tower, a retail mall and a hotel.

The purchase boosted its dividends by two sen per unit for the financial year to March 2009, bringing the total forecast distributions to 9.3 sen gross per unit. Michael Lim, a director of ARA Management, said AmFirst will spend at least RM6.5 million this year to upgrade three buildings - Menara Ambank, Menara Merais, and AmBank Group Leadership Centre

Disclaimer: Reading materials in this site are obtained from its respective website and it is for information purposes only. It is not Malaysia Unit Trusts - administrator view and it is not to be used against Malaysia Unit Trusts - administrator.

OSK-UOB declares distributions for five funds

TheEdge

KUALA LUMPUR: OSK-UOB Unit Trust Management Bhd (OSK-UOB) has declared distributions of between 0.1775 sen and 10.4710 sen per unit for five of its funds.

In a statement yesterday, OSK-UOB said for the six months to March 31, 2008, it declared a gross distribution of 5.5201 sen per unit for OSK-UOB Smart Treasure Fund and 5.6784 sen per unit for OSK-UOB Smart Balanced Fund giving investors a yield of 6.0% and 6.9%, respectively.

For the 10 months to March 31, 2008, OSK-UOB declared a gross distribution of nine sen per unit for OSK-UOB KidSave Trust and 10.4710 sen per unit for OSK-UOB Emerging Opportunity Unit Trust, giving yields of 13.5% and 12.9%, respectively.

It also declared a final net distribution of 0.1775 sen per unit for its OSK-UOB Institutional Islamic Money Market Fund bringing the total paid out to 1.8095 sen per unit for the five to March 31, equivalent to a yield of 4.34% per annum.

OSK-UOB chief executive officer Ho Seng Yee said: “Moving forward, we are confident that we will continue to provide our investors with a consistent and regular stream of distributions in the coming year, including for our other funds under our management”.

Disclaimer: Reading materials in this site are obtained from its respective website and it is for information purposes only. It is not Malaysia Unit Trusts - administrator view and it is not to be used against Malaysia Unit Trusts - administrator.

Tuesday, April 22, 2008

CIMB unit launches 2 Islamic commodity funds

BusinessTimes

CIMB-PRINCIPAL Asset Management Bhd has launched two syariah-compliant funds that allow investors to benefit from the commodities boom.

The new funds will give them exposure to energy, agriculture products and metals via structured products.

"The commodities story is about supply not being able to keep up with very strong demand globally, particularly from the emerging economies in Asia," chief executive Datuk Noripah Kamso said at the launch in Kuala Lumpur yesterday.

Known as the CIMB Islamic Commodities Structured Fund 1 and 2, they invest in structured products, which are principal protected when held to maturity.

This makes them ideal for investors seeking refuge from market volatility, Noripah said.

She said these funds also allow investors to gain from the potential rise in commodities prices.

"The back testing of any commodities investment would show that the returns are high. Scarcity will drive up the prices," CIMB Group chief executive officer Datuk Nazir Razak said.

Chief investment officer Raymond Tang said the funds can potentially return between 10 per cent and 15 per cent per year.

Prices of commodities generally do not move in tandem with those of the stocks and bonds, Noripah said, thus they provide a useful diversification tool to investors.

The first fund is a close-end fund. It will invest at least 95 per cent of assets in a three-year Islamic Dynamic Best of Commodity Structured Product, to be issued by CIMB Investment Bank. The second fund is similar in structure, but has a five-year tenure.

Disclaimer: Reading materials in this site are obtained from its respective website and it is for information purposes only. It is not Malaysia Unit Trusts - administrator view and it is not to be used against Malaysia Unit Trusts - administrator.

Fund houses appoint KFH

TheStar

KUALA LUMPUR: Seven fund houses have appointed Kuwait Finance House (M) Bhd (KFH) as their Islamic unit trust distributor, with an estimated total assets under management of RM6.6bil.

Country head of commercial, retail and consumer banking Ab Jabar Ab Rahman said this move would enable the bank to increase its fee-based income.

“We are keen to grow the business. It is something that we see a lot of potential in,” he told reporters after the launch of KFH's Priority banking and its appointment as an Islamic unit trust distributor yesterday.

The fund houses are Affin Fund Management Bhd, AmInvestment Bank Group, CMS Trust Management Bhd, ING Funds Bhd, OSK-UOB Unit Trust Management Bhd, Pheim Unit Trusts Bhd and Prudential Fund Management Bhd.

Jabar said KFH would collaborate with the fund houses to offer some 20 Islamic unit trust funds, selected based on their consistent track record and performance reflected in the top quartile of the unit trust fund industry.

KFH's involvement in unit trusts would be part of the phased rollout of its retail banking expansion programme and Jabar said it would continuously explore other fund management companies on the possibility of being a distributor for funds, or developing a unit trust, which would be exclusively sold via KFH.

While the funds would initially be offered locally, he did not discount the possibility of offering them elsewhere, including other Gulf Cooperation Council countries.

“It depends on how fast we can grow this business locally. We will see if the funds attract not only Malaysians but Middle Eastern investors as well,” he added.

KFH's Priority banking aims to tap the mass affluent market and high net-worth individuals who seek consistent rate of return on their investments.

Head of retail and consumer banking Baldev Singh Bhullar said KFH was targeting 200 clients for its Priority banking services this year. At present, it has five clients since its soft launch on April 8.

“The launch of KFH Priority banking and our appointment as a Islamic unit trust distributor enables the bank to successfully leverage on our ability to cross-sell products and services to tap into a new market segment,” Jabar said.

On new branches, Jabar said KFH expected the number to increase to seven this year with one branch slated to open in Penang by the third quarter. Currently it has four branches.

“We plan to open one branch each in Kuching and Kota Kinabalu by year-end,” he said, adding that KFH planned to have Priority banking centres in all its branches.

Disclaimer: Reading materials in this site are obtained from its respective website and it is for information purposes only. It is not Malaysia Unit Trusts - administrator view and it is not to be used against Malaysia Unit Trusts - administrator.

Friday, April 18, 2008

CIMB increases Islamic DALI fund sizev

TheStar

KUALA LUMPUR: CIMB-Principal Asset Management Bhd has increased the fund size of its CIMB Islamic DALI Equity Theme Fund to 900 million units from 600 million units.

The fund, which invests in Malaysia's promising sectors such as oil and gas, construction, and plantations, had received overwhelming response, chief executive Datuk Noripah Kamso said in a statement.

It seeks to provide investors with medium to long term capital appreciation by investing in Malaysian securities according to prevailing investment themes, she said.

The fund invests up to 98% of its net asset value in syariah-compliant equities listed on Bursa Malaysia. – Bernama

Disclaimer: Reading materials in this site are obtained from its respective website and it is for information purposes only. It is not Malaysia Unit Trusts - administrator view and it is not to be used against Malaysia Unit Trusts - administrator.

Thursday, April 17, 2008

Capturing the Benefits of Shariah-compliant Growth & Dividend Stocks

PublicMutual

Capital growth and income funds aim to achieve capital growth and provide income by investing in a diversified portfolio of growth and dividend stocks. Public Islamic Optimal Growth Fund (PIOGF) is a fund that invests 50% of its equity investment in Shariah-compliant growth stocks in the domestic market while the remaining 50% of its equity investment is invested in Shariah-compliant stocks which offer attractive dividend yields. Given its investment strategy, PIOGF is a capital growth and income fund that is suitable for medium- to long-term investors with aggressive risk-reward temperaments.

Share prices of growth companies may be more volatile than the broad market as these companies are focused on achieving strong earnings growth. On the other hand, dividend stocks are considered to be more stable and less risky as their dividend yields help to cushion potential declines in their share prices during periods of market volatility. Consequently, investors who are keen to invest in a portfolio of growth and dividend stocks in the domestic market would be able to achieve an optimal combination of capital appreciation and income growth over the long-term.

Prospect for Growth and Dividend Stocks in Malaysia

The prospects for Shariah-compliant growth and dividend stocks listed on Bursa Malaysia are bright as the broad base of the Malaysian economy offers vast opportunities for these two different types of companies to thrive in. In general, growth companies tend to be in the technology, construction, manufacturing and resource-based sectors while dividend stocks tend to be in the consumer, utilities, banks and services sectors. Over the years, these sectors have benefited from the sustained growth of the Malaysian economy and should continue to be supported by the country’s healthy economic prospects in the years ahead. After growing by 6.3% in 2007, the Malaysian economy is projected to grow by 5-6% in 2008 supported by resilient performance in the services, agriculture and construction sectors.

Prospects for Growth Stocks

The property sector is poised to perform well in the medium-to long-term supported by the liberalisation of foreign restrictions on property ownership and the removal of Real Property Gains Tax effective 1 April 2007. In addition, demand for residential properties is also expected to increase following the incentives unveiled in the Budget 2008 such as stamp duty waivers and allowing EPF contributors to make monthly withdrawals from their EPF accounts to repay their housing loans.

Meanwhile, the outlook for the construction sector depends on the roll-out of projects under the 9th Malaysian Plan (9MP) and the development of the various economic corridors. The building materials sector is expected to benefit from higher demand for steel and cement products due to the ongoing construction of commercial and residential properties.

The earnings of plantations stocks are supported by firm crude palm oil (CPO) prices on the back of rising global consumption. The plantation sector is expected to perform well in the medium to long-term as demand for CPO products is fuelled by sustained consumption in emerging economies and potential demand for biodiesel which is sourced from palm oil.

The oil & gas industry has benefited from high crude oil prices in recent years. Crude oil prices are expected to remain firm in the medium term. Consequently, oil & gas support services companies in Malaysia will benefit from increased exploration and production activities in the region.

Prospects for Dividend Stocks

Dividend yields in the Malaysian equity market are attractive and supported by sustained corporate earnings and dividend payouts. The estimated dividend yield for Bursa Securities is estimated at 4.25% as at 31 March 2008, above the long-term average yield of 2.59% as shown in chart 1 below.


High dividend yield stocks such as consumer stocks are expected to perform well in the medium- to long-term. In the medium-term, consumer spending in Malaysia is envisaged to remain robust, supported by the pay hike for civil servants in July 2007, rising disposable income and the strengthening of the Ringgit. The longer term outlook for consumer spending is driven by Malaysia’s favourable demographic profile. With half of the nation’s population currently below the age of 25 years, consumer spending in Malaysia is projected to gain pace over the longer term as a greater proportion of these young people enter the workforce and spend their incomes on consumer goods and services.

Malaysia’s telecommunications sector is expected to show robust pace growth over the medium term due to a growing subscriber base and increasing wireless broadband usage. In addition, telecommunications companies in Malaysia are able to maintain a stable stream of recurring cashflows that will support high dividend payouts.

Meanwhile, growth in the power sector will continue to be driven by demand for energy amidst resilient economic growth in Malaysia. The power sector may also benefit from the anticipated increase in long-term demand for electricity if the proposed infrastructure projects under the 9MP and the Iskandar Development region come on stream.w.

Performance of the Benchmark

An appropriate benchmark to be used to evaluate the performance of a Shariah-based fund such as PIOGF is the FTSE Bursa Malaysia EMAS Shariah Index as its component stocks comprise all Shariah-compliant stocks listed on the Main Board of Bursa Malaysia. This benchmark index has achieved commendable total returns of 5.68%, 50.13% and 94.09% respectively for the 1, 3 and 5 year periods up to 31 March 2008.


Disclaimer: Reading materials in this site are obtained from its respective website and it is for information purposes only. It is not Malaysia Unit Trusts - administrator view and it is not to be used against Malaysia Unit Trusts - administrator.

Unit trusts fell 3.8% in March

TheEdge

KUALA LUMPUR: A slump in the domestic stock market and pullbacks across major global bourses in March led to a dismal month for Malaysia’s managed funds industry, with unit trusts registered for sale declining 3.84% in aggregate.

According to the Lipper FundMarket Insight Reports, with the exception of money market funds, yielding a steady 0.22% return, all major asset groups finished the month in the red.

It said government-linked stocks would continue to remain under pressure, although plantation and natural resources-based counters should still see good support, given record commodity prices.

“With Malaysia’s domestic political outlook largely uncertain, following the ruling party’s setback in March’s general elections, sentiment in the domestic bourse is likely to be weak over the second and third quarters,” Lipper said.

It said equity funds fell again on the back of heightened investor risk aversion to finish at the bottom of the scoreboard with a hefty 5.91% decline, weighed down notably by declines in funds investing in the domestic market.

“The fund sector scoreboard reflected the sorry state of March’s markets, with only three classifications managing to eke out a positive return among the 10 top fund groups,” Lipper said.

It said bond global offerings rose 1.47% on the back of declining sovereign bond yields, while money market funds provided investors a 0.22% return on their portfolios.

The only other category finishing in the black was Equity Emerging Markets Far East — consisting of a single fund offering investment in the Vietnam bourse that provided a marginal 0.02% gain.

Lipper said the other outperformers for the month in relative terms were a mixed bag, including Equity Sector Real Estate Global (-0.18%) and fixed income categories such as Bond MYR (-0.19%) and Bond Asia Pacific (-0.97%).

The ancillary product classes of protected (-0.40%) and guaranteed (-0.98%) unit trusts also finished among the 10-ten list, while rounding up the list were mixed-asset products with a conservative profile or a predominantly fixed income exposure (-1.06%).

Conversely, funds investing in the natural resources and precious metals sectors took a hard beating during the month, following a sharp pullback in oil and gold prices in March.

The former fell 11.06% in value while Equity Sector Gold & Precious Metals lost 9.37%. Gold prices had earlier peaked at US$1,030.8 per troy ounce, only to close at US$915.3 per troy ounce at the end of the month on heavy profit-taking.

Lipper said returns among the ten 10-performing Malaysia funds for March were largely muted, although several global equity funds managed to outperform, including Pacific S&P Global Stars Fund (+1.57%) and HLG Global Value Fund (+0.76%).

It said similarly, global real estate offerings such as HWANGDBS Global Property Fund (+2.75%), Alliance Global Diversified Property Fund (+1.69%), and ING Global Real Estate Fund (+0.74%) made tentative rebounds after having suffered substantial declines in the past year.

Ranking first for the month was AmDual Opportunities-Capital Protected Fund, rising 3.36% in value, while Bond Global products Alliance Global Bond Fund (+2.02%) and AmGlobal Bond Fund (+0.92%) also made an appearance on the top-10 list.

Lipper said domestic plays suffered large declines as a result of the poor showing of the Malaysian bourse, although Public Islamic Select Treasures Fund managed to buck the downtrend with a positive return of 0.64%.

The bottom-10 funds for the month were, however, invariably Equity Malaysia unit trusts, with key laggards being PB Islamic Equity Fund (-13.98%) and CIMB Islamic Equity Aggressive Fund (-11.26%) — both Islamic offerings. MAAKL-CM Shariah Flexi Fund (-11.51%) — a mixed-asset unit trust providing strategic and tactical exposure to Malaysian securities — placed second from last.

Disclaimer: Reading materials in this site are obtained from its respective website and it is for information purposes only. It is not Malaysia Unit Trusts - administrator view and it is not to be used against Malaysia Unit Trusts - administrator.

Maybank launches fund for European equities

TheEdge

KUALA LUMPUR: Malayan Banking Bhd has launched the Maybank Alpha Centurion Structured Deposit (MAC), a 100% capital protection fund that will invest via the Alpha Centurion European Index (ACEI).

In a statement yesterday, Maybank said the capital protection portion was provided via investment in floating rate negotiable instruments of deposits (FRIND), while the potential upside return was obtained from investments in ACEI, which comprises the 100 largest global companies listed on major European exchanges.

It said MAC had a short tenure of two to three years, without any upfront, management or exit fees. In addition, Maybank said its high upside potential did not rely on market timing or direction to generate returns.

Maybank added that MAC would be invested in accordance with the long-short market-neutral Alpha Centurion strategy that systematically and simultaneously bought low and sold high.

It said MAC had a deposit size of RM300 million with minimum investment at RM100,000 and subsequent subscription was RM50,000.

“We developed this product to cater to investment needs of high net worth and mass affluent individuals. Through research, we discovered that these groups of people are very exacting, expecting investments to generate returns regardless of how challenging the market environment might be,” said Maybank senior executive vice president and head of Maybank consumer banking, Spencer Lee.

Based on historical backtesting, he said the maximum upside potential returns was 29.9% for two years and 37.5% for three years.

Disclaimer: Reading materials in this site are obtained from its respective website and it is for information purposes only. It is not Malaysia Unit Trusts - administrator view and it is not to be used against Malaysia Unit Trusts - administrator.

Wednesday, April 16, 2008

Bondholders wary of inflation, political uncertainties

TheEdge

KUALA LUMPUR: Malaysian bonds are expected see a price slide as yields grind upwards this year, exacerbated by the country’s political uncertainties and rising inflation globally.

Bond analysts said like the country’s equity market, Malaysian bonds’ attractiveness had diminished after Barisan Nasional lost five states to the Opposition at the recent general elections, causing uncertainties in the country’s political landscape.

“Bondholders are holding back as they are waiting for clarity in the country’s political scene, especially on the party leadership of Umno,” an analyst told The Edge Financial Daily yesterday.

He, however, did not expect the Malaysian government to arrive at a solution to appease bondholders’ jitters in the immediate term, as Umno had decided to have its annual general meeting to elect its party leaders only in December.

The bond market jitters were exacerbated by rising inflation in the region, as countries continued to battle higher prices of food including rice, wheat and milk.

An analyst said: “Fixed income holders hate inflation, and although Malaysia’s inflation rate is still under control, we do not know when rising food prices, which contribute to higher inflation rates, will recede.”

“Although the government had reiterated that it would not raise oil prices at the moment, consumers are most likely to suffer from a transparent price hike in oil as well as in food,” he said.

Additionally, he said both three-year and five-year government bonds were currently trading below the overnight policy rate (OPR) of 3.5%, but the situation would not be sustainable if Bank Negara Malaysia does not reduce the OPR.

However, bondholders would be more concerned with the rising inflation than the OPR, the analyst said, adding that another concern that bondholders raised were the sudden influx of Korean and Indian issuers into the country’s bond market causing a widening of credit spread.

The trend of foreign issuers raising funds in the Malaysian market had become apparent since the first issue by Middle Eastern multilateral institution Gulf Investment Corporation (GIC), which was rated AAA+ by Ratings Agency Malaysia Bhd and were oversubscribed by 2.76 times in mid-January.

The Edge Financial Daily had earlier reported that more foreign issuers were raising debt papers here, as it was cheaper to do so, but local industry players were concerned that these issuers’ entry would pose more difficulty for local issuers to issue papers cheaply.

Disclaimer: Reading materials in this site are obtained from its respective website and it is for information purposes only. It is not Malaysia Unit Trusts - administrator view and it is not to be used against Malaysia Unit Trusts - administrator.

Tuesday, April 15, 2008

New feeder fund from MAA

TheStar

KUALA LUMPUR: MAA International Assurance Ltd, an offshore composite insurance arm of MAA Holdings Bhd, is targeting about S$30mil sales in the first year for its latest product, the Global Natural Resources Fund.

The Singapore dollar-denominated feeder fund will officially hit the local market on April 28 and invest in equities of high quality global companies involved in the extraction, processing, transportation and distribution of natural resources.

The fund, which will be managed by US-based investment management company Newgate Capital Management LLC, will be fed or invested into Newgate Capital's existing underlying Global Natural Resources Fund.

Chief executive officer Richard Goh said the launch was timely in view of the rising prices of natural resources due to the shortage of global supply. The company is anticipating an annual return of about 20% for the fund.

“Going forward, the supply of natural resources is likely to get tighter with massive demand from countries like China, India and other emerging markets, and this will drive natural resources prices through the roof.

“In 2002, the price of crude oil was US$18 to US$20 a barrel and today it is more than US$100. Consumption, on the other hand, will also surge as half of the world population's wealth rises,” Goh told StarBiz.

According to Goh, the governments of different countries were currently taking steps to address the issue of food shortage. Thailand, Ecuador, Senegal, Egypt, Argentina and Venezuela had capped food prices.

Zambia, Ethiopia and Pakistan had suspended food exports, while Malaysia – together with Jordan, Ethiopia and Pakistan – were stockpiling major foodstuff, he said, adding that others were cutting import tariffs and increasing food subsidies.

Base metals like copper, iron, lead and aluminium were also in great demand in line with the global entry of a huge cycle of infrastructure spending, he said.

Morgan Stanley estimated that emerging markets would spend US$21.7 trillion on infrastructure over the next 10 years.

Goh welcomed investors to get into the booming natural resources sector as he felt the growth cycle had only started at the turn of the decade.

“Historically, most commodity bull markets tend to span 10 to 15 years, with super cycles stretching out to 20 years. That means the current boom in commodities shall not peak until 2012, indicating another four more years of rising prices.

“But odds are high that we are in a super boom cycle, which will mean we would not see the top in prices until 2022,” he said.

The minimum initial investment for the Global Natural Resources Fund is S$2,500, and additional investments can be made at anytime with just S$1,000. All investors will also be covered with a free group life insurance of 1% on the initial and all top-up investment.

Disclaimer: Reading materials in this site are obtained from its respective website and it is for information purposes only. It is not Malaysia Unit Trusts - administrator view and it is not to be used against Malaysia Unit Trusts - administrator.

Wednesday, April 9, 2008

Investing in hedge funds

TheStar

LATELY, there has been talk about buying into hedge funds to lower portfolio risk. Should I buy them now, given that there have been reports that some US hedge funds may be the next victim of the recent issue on subprime?

As a result of the recent credit crunch, some US banks and brokers may need to write down their lending to hedge funds as the latter were unable to come up with cash to meet the margin call. Some hedge funds, especially those highly leveraged, fear that their account could be frozen if their broker runs into trouble.

Besides, the cutting off of financing from a broker, like Bear Stearns, to hedge funds has sparked some fear that their broker might force them to liquidate investments to repay loans as well.

In Malaysia, we believe some US and Europe hedge funds had already pulled out their money during the previous market crash in August 2007. After the recent general election, some fund managers may also view our country as having increased political risk.

Therefore, we suspect that further withdrawal of some hedge funds could be one of the contributors to the recent weakening of the ringgit.

Even though the hedge fund party may not be over in Asia, there has been talk or promotion in the market about hedge fund products recently, which have caught the attention of some local investors. These alternative investment vehicles might seem foreign to our local investors.

However, in seeking higher returns, they are willing to take some risk to venture into these new instruments. Therefore, further education is required to help local investors have a better understanding of these alternative investment vehicles, so that they are aware of the degree of risk that they will be taking.

What is a hedge fund? The original concept of a hedge fund was to offer plays against the markets, using short selling, futures and other derivative products. At present, most hedge funds are structured as a limited partnership. They are classified by their investment strategies.

The common categories include long/short, market-neutral, global macro, and event-driven funds. Their fund managers will receive a base management fee, plus an additional incentive fee.

To get higher returns, some hedge funds may borrow to invest. In good times, it can enhance returns.

However, during any financial crisis, like the recent liquidity crisis in the US, the pullback on lending may magnify the losses.

Nevertheless, the key advantage of investing in hedge funds is that it has low correlation to other conventional investments like equity and bond. Hence, it can be used to enhance portfolio diversification and lower the overall portfolio risk.

Due to certain investment strategies, some hedge funds may claim that they have lower volatility compared with bonds or equity investments. Even though not all hedge funds will be affected by the US subprime issues, we believe that at this moment, investing in some hedge funds may result in higher instead of lower risk.

Risk will be higher when hedge funds borrow money to invest or invest in illiquid markets, which may have very high risk of mispricing. Besides, as the submission of performance by fund managers is voluntary, we may have problems to accurately track the performance record of hedge funds.

Retailers are always excited whenever they look at the historical performance of certain hedge funds. However, we must always remember that past performance does not guarantee future performance.

Besides, investors do not realise that some hedge fund reports might be misleading, as the performance period selected in the reports does not include results during a downturn.

Therefore, when evaluating the hedge funds, investors should pay attention to the time period of the report to better judge the performance of the funds.

We should only choose hedge funds that are managed by experienced fund managers. As retailers may face higher risk when investing in hedge funds, investors need to know their risk-tolerance level.

Even though some investors may have big amounts of money, they need to know whether they can accept those levels of uncertainties in returns.

Investors need to know the details and background of those hedge funds. They need to know whether they are willing to accept the risk before considering the potential returns.

Ooi Kok Hwa is an investment adviser licensed by Securities Commission and managing partner of MRR Consulting.

Disclaimer: Reading materials in this site are obtained from its respective website and it is for information purposes only. It is not Malaysia Unit Trusts - administrator view and it is not to be used against Malaysia Unit Trusts - administrator.

ING sees up to 10% returns from new fund

TheStar

KUALA LUMPUR: ING Funds Bhd expects its latest product, the ING Annual Alpha Access Capital Protected fund, to provide annual returns of 7% to 10%.

Chief executive officer Steve Ong said the three-year close-ended capital-protected fund would provide investors with 100% capital protection while seeking to generate high returns.

“The fund’s capital-protected value is derived from investing in ringgit-denominated financial instruments from local financial institutions that will return 100% of the invested capital to investors at the end of the three-year period,” he told reporters at the launch of the fund yesterday.

To generate potential high returns, the fund will invest up to 10% of its net asset value in the ING Outperformance Alpha Option, a three-year ringgit hedged over-the-counter call option, consisting of global emerging markets ex-Asia and the Asia emerging markets indices versus the US S&P 500 index.

“The two global emerging markets’ basket of indices offers investors diversification as they are not correlated with one another. The composition of global emerging markets ex-Asia includes Russian Depository Index, Central and European Europe Index, iShares MSCI Brazil Index Fund and iShares MSCI Mexico Index Fund.

“The Asia emerging markets consist of Hang Seng China Enterprises Index, Kospi 200 Index, MSCI Taiwan Index and ASX 200 Index,” Ong said.

The interesting feature of the fund was its strategy, which aimed to provide investors with an annual payout regardless of bull or bear market conditions with the potential out performance of the two global emerging markets’ basket of indices versus the US S&P 500, he said.

Based on historical data, these markets have been registering higher returns than the US S&P 500.

According to ING Bank Singapore director for exotic equity derivatives trading Camiel Houwen, the US recession was likely to last up to 18 months, affecting the country’s growth, while the China economy was well geared to weather a global slowdown as it had demonstrated a lower degree of sensitivity to a downshift in the US demand.

The fund has an approved fund size of 500 million units with a minimum initial investment amount of RM5,000.

ING Funds targets to increase the size of its funds under management to RM3bil from about RM2bil as at end-2007 with the launch of three more products this year.

Disclaimer: Reading materials in this site are obtained from its respective website and it is for information purposes only. It is not Malaysia Unit Trusts - administrator view and it is not to be used against Malaysia Unit Trusts - administrator.

Tuesday, April 8, 2008

AmInvestment declares income for AmBon Islam, AmBond

TheEdge

KUALA LUMPUR: AmInvestment Bank group has declared a semi-annual interim distribution of two sen per unit for AmBon Islam and a final distribution of two sen per unit for AmBond.

In a statement yesterday, AmInvestment Bank said the distribution for AmBon Islam represented a six-month yield of 1.84% based on the net asset value of RM1.089 as at Sept 28, 2007.

The distribution for AmBond brought the total to four sen per unit for the year ended March 31, 2008, representing an annualised yield of 3.78% based on the NAV of RM1.0579 as at March 30, 2007.

As at Feb 29, 2008, AmBon Islam and AmBond gave a one-year return of 3.96% and 4.75%, respectively.

Disclaimer: Reading materials in this site are obtained from its respective website and it is for information purposes only. It is not Malaysia Unit Trusts - administrator view and it is not to be used against Malaysia Unit Trusts - administrator.

Friday, April 4, 2008

Public Islamic Optimal Growth Fund to capitalise on dividend and growth stocks in the domestic market

PublicMutual

Public Bank’s wholly-owned subsidiary, Public Mutual will launch a domestic Islamic fund, Public Islamic Optimal Growth Fund (PIOGF) on 8 April 2008 (Tuesday). Investors who wish to achieve an optimal combination of capital appreciation and income growth over the long-term can invest in the PIOGF.

PIOGF is open for EPF Members Investment Scheme.

Public Mutual’s Chairman Tan Sri Dato’ Sri Dr. Teh Hong Piow said PIOGF is an Islamic equity fund that seeks to provide income and capital growth by investing in Shariah-compliant stocks which offer attractive dividend yields and growth stocks in the domestic market.

“PIOGF invests 50% of its equity investment in Shariah-compliant growth stocks in the domestic market while the remaining 50% of its equity investment is invested in Shariah-compliant stocks which offer attractive dividend yields,” he added.

Tan Sri Teh explains that PIOGF is a capital growth and income fund that is suitable for medium to long-term investors with aggressive risk-reward temperaments. The equity exposure of PIOGF will generally range from 75% to 95% of its net asset value (NAV). PIOGF distributes annual income to the investors on a best effort basis.

The Initial Offer Price of PIOGF is at RM0.2500 per unit during the 21-day initial offer period of 8 April 2008 to 28 April 2008. The minimum initial investment is RM1,000.

PIOGF is distributed by Public Mutual unit trust consultants. Interested investors can contact any Public Mutual unit trust consultant or call its Customer Service Hotline at 03-6207 5000 for more details of the fund.

Public Mutual is the largest private unit trust company in Malaysia, and it manages 61 funds for more than 1,650,000 accountholders. As at 31 December 2007, the total NAV of the funds managed by the company was RM28.4 billion.

Disclaimer: Reading materials in this site are obtained from its respective website and it is for information purposes only. It is not Malaysia Unit Trusts - administrator view and it is not to be used against Malaysia Unit Trusts - administrator.

Thursday, April 3, 2008

Public Mutual declares distributions for two funds

TheEdge

KUALA LUMPUR: Public Mutual Bhd has declared distributions of 15 sen per unit for Public Aggressive Growth Fund (PAGF) and 10 sen per unit for Public Regular Savings Fund (PRSF) for the financial year ended March 31, 2008.

In a statement yesterday, Public Mutual’s chairman Tan Sri Teh Hong Piow said PAGF and PRSF had generated a five-year return of 150.8% and 119.2%, respectively, for the period ended March 7, 2008, according to The Edge-Lipper Fund Table.

He said these funds had outperformed the benchmark Kuala Lumpur Composite Index, which registered a gain of 103.9% for the same period.

Disclaimer: Reading materials in this site are obtained from its respective website and it is for information purposes only. It is not Malaysia Unit Trusts - administrator view and it is not to be used against Malaysia Unit Trusts - administrator.

Pacific Mutual distributes RM26m

TheEdge

PETALING JAYA: Pacific Mutual Fund Bhd (PMFB) has announced income distributions of six sen per unit for Pacific Pearl Fund, four sen per unit for Pacific Dana Aman, 1.5 sen per unit for Pacific Dana Murni and 2.8 sen per unit for Pacific Asia Brands Fund for the year ended March 31, 2008.

It also declared a distribution of 0.4 sen per unit for Pacific Cash Fund for the interim period ended March 31. In a statement yesterday, PMFB said the distributions totalled RM26.09 million for the investors and translated into a yield of between 0.8% and 7.9%.

Disclaimer: Reading materials in this site are obtained from its respective website and it is for information purposes only. It is not Malaysia Unit Trusts - administrator view and it is not to be used against Malaysia Unit Trusts - administrator.

Distribution for RHB Mudharabah Fund, Global Fortune Fund

TheEdge

KUALA LUMPUR: RHB Investment Management Sdn Bhd (RHBIM) has declared a gross distribution of 8.3 sen per unit (or 9.97% yield) for its RHB Mudharabah Fund and 1.55 sen per unit (or 3.87% yield) for its Global Fortune Fund for the financial period ended Feb 29, 2008.

In a statement yesterday, RHBIM managing director Sharifatul Hanizah Said Ali said the income distribution for RHB Mudharabah Fund was the highest since its inception in May 1996, while the yields for both funds were also the highest since their launch.

She said the figures were reflective of a steady performance by the funds despite current difficult and volatile market conditions.

“Moving forward from the merging of RHB Asset Management and RHB Unit Trust into RHB Investment Management on Jan 1, 2008, we are now able to offer our customers an even more integrated and wholesome investment approach.

“We are currently working on several initiatives which are expected to be rolled out from the second quarter onwards this year,” Sharifatul said.

Disclaimer: Reading materials in this site are obtained from its respective website and it is for information purposes only. It is not Malaysia Unit Trusts - administrator view and it is not to be used against Malaysia Unit Trusts - administrator.

CMS Trust wins international Best Islamic Fund award

TheEdge

KUALA LUMPUR: CMS Trust Management Bhd's CMS Islamic Fund has garnered two "Best Malaysia Fund" awards by Islamic fund research Failaka Advisors for the highest returns focusing on Malaysian equities last year in the one-year and three-year categories.

The wins were announced at the Failaka Advisors' 3rd Annual Islamic Fund Awards event held recently in Dubai, United Arab Emirates.

"Our 3rd Annual event acknowledged excellence in 21 categories, but as Malaysia has the greatest number of Syariah-compliant funds, the Best Malaysian Fund was the most competitive category.

"In a year that saw great volatility, the steady-handed managers at CMS Trust remained focused on capturing high returns and creating value for their investors," said Failaka Advisors managing director Mark Smyth.

CMS Trust Management's director, Ian Tham, said: "The awards were presented to the best Syariah-compliant Malaysian equity funds with the highest one-year performance from year-end 2006 to year-end 2007, measured in terms of net asset value." CMS Islamic Fund was rated the highest returning fund for the one year ended Dec 31 2007 for its 73.85% returns and for the three-year period for its 125.65% returns for investors.

Disclaimer: Reading materials in this site are obtained from its respective website and it is for information purposes only. It is not Malaysia Unit Trusts - administrator view and it is not to be used against Malaysia Unit Trusts - administrator.

Tuesday, April 1, 2008

Public Bank’s first capital protected fund

TheStar

KUALA LUMPUR: Public Bank has launched its first capital protected fund, PB Capital Protected Dragon Fund (PBCPDF), which will invest at least 90% of its net asset value (NAV) in permitted investments comprising high quality debentures and money market instruments.

The balance would be invested in a portfolio of equities and equity-related securities in the Greater China region, said its unit Public Mutual, which is managing the fund.

Public Mutual chairman Tan Sri Teh Hong Piow said PBCPDF was a capital protected fixed income fund seeking to achieve capital appreciation over the tenure of the fund while providing capital protection upon maturity of the fund.

PBCPDF was designed for investors seeking to protect their capital while participating in the growth prospects of equity markets in the Greater China region, he said in a statement.

The initial offer price of the closed-end fund is at 99.01 sen per unit during the 45-day offer period ending May 7. The minimum investment is RM1,000. – Bernama


Disclaimer: Reading materials in this site are obtained from its respective website and it is for information purposes only. It is not Malaysia Unit Trusts - administrator view and it is not to be used against Malaysia Unit Trusts - administrator.