To provide regular income to investors through investment in Islamic debt
securities and bonds which are acceptable investment under the principles of.
Shariah.
RHB-OSK ISLAMIC BOND FUND
FUND OBJECTIVE This Fund aims to provide regular income to investors through investment in Islamic debt securities and bonds which are acceptable investment under the principles of Shariah REVIEW & OUTLOOK AS AT 30/06/2015
FUND MANAGER RHB Asset Management Sdn. Bhd.
INVESTMENT STYLE
MARKET REVIEW
VALUE
X DISREGARD BENCHMARK
TOP DOWN
SMALL CAP
Domestic data released in June was neutral to positive, especially with the month-end Fitch rating announcement. April trade surplus surprised positively, mostly on import slump. While exports fell 8.8% YoY (March: 2.3% YoY, consensus: -5.5% YoY), imports also dropped 7.0% YoY (March: 5.8% YoY, consensus: 0.9% YoY), bringing trade surplus narrowed to RM6.89bil (March: 7.82bil, consensus: RM6bil), still beating expectation. The RM0.9bil MoM drop in trade balance, was led by Electrics and Electronics (“E&E”) and natural gas. April Industrial Production (“IP”) slowed to 4.0% YoY (March: 7.1% YoY, consensus: 4.5% YoY). Official data show a sequential contraction. With April IP flat versus 1Q2015, we might see slower sequential expansion in 2Q2015 GDP. Nevertheless, the main drag on IP seems to be weak external demand and drag from GST and domestically oriented production seems limited. Second month post GST, the headline inflation rose to 2.1% YoY (April: 1.8% YoY, consensus: 2.1% YoY). Acceleration was broad based with the increases led by food & non-alcoholic beverages. Finally in a surprised turn of event, Fitch reaffirmed Malaysia sovereign rating at A- and revised the outlook to Stable, from Negative previously. Fitch‟s decision not to downgrade acknowledged the reforms and improvement in the fiscal space but still concerns over the relatively high public debt verses similarly rated peers
X
LARGE CAP
The volatility in MGS also deterred trading interest in the corporate bond market. Secondary trading volume dropped in June, as bond investors took a cautious stance moving into 2H2015. June recorded average daily trading volume of RM608mil, moderately lower than May‟s RM748mil. GG/AAA bonds continue to be the flavor of the month, with 56.5% traded while AA bond recorded at 41.6%. The rest of the trades were single-A and unrated. Notable trades in the GG/AAA space including Govco 2021, with RM305mil volume exchanged hand and 8bps tighter to 4.10%. At this level, Govco 2021 is one of the more expensive GG compared with the rest trading at 4.12 – 4.15% levels. In the AA space, First Resource 2021, an Indonesia plantation issuer saw yields tightened by 6bps to 4.54%, with RM172mil of volume transacted. Likewise, Bumitama 2019 also traded 6bps inside the curve, with collectively RM90mil done. From the AA top traded issuers, we still notice corporate bond investors are favoring strong cash flow generating companies such as Sarawak Energy („SEB”), Malakoff and Binariang GSM (“BGSM”). SEB 2029, Malakoff 2019 and BGSM 2016 each tightened by 1 to 4bps, with individual bond transaction at RM120 – 170mil
CLOSE TO BENCHMARK
GROWTH
Yield curve steepening was the theme for Malaysia Government Securities (“MGS”) in June as better than expectation US economy data drives US Dollar and UST higher. The 7y MGS was especially weak in June, with the curve moved up 13bps within the month. At close, the 3-, 5-, 7, 10-, 15-, 20- and 30-year MGS were traded at 3.20% (May: 3.33%), 3.61% (3.60%), 3.95% (3.82%), 4.02% (3.92%), 4.18% (4.15%), 4.27% (4.27%) and 4.72% (4.65%) respectively. Similar performance was also observed in the Government Investment Issues (“GII”), where yield curve was noticeably steeper compared to previous month. The 3-, 5-, 7-, 10-, 15-year and 20-year benchmark GII yields were transacted at 3.38% (May: 3.47%), 3.69% (3.74%), 3.91% (3.92%), 4.02% (4.01%), 4.25% (4.15%) and 4.29% (4.27%) respectively. In June, there were a total of 3 auctions – reopening of 10-year MGS (MGS 9/25, RM3.0bil, average yield 4.037%), reopening of 7-year MGS (MGS 09/22, RM3.5bil, 4.002%) and reopening of 5-year GII (GII 08/20, RM3.0bil, 3.743%) received moderate to weak to moderate bid-to-cover (“btc”) ratio of 1.67x, 1.95x and 2.21x respectively.
X BOTTOM UP
BENCHMARK
%
Maybank's 12 mths GIA Rate
100
Based on the fund’s portfolio returns as at 15 June 2015, the Volatility Factor (VF) for this fund is 5.4 and is classified as “Low”. (source: Lipper) “Low” includes funds with VF that are above 1.0 but not more than 6.3 (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 31 December 2014 which is calculated once every six months and is valid until its next calculation date, i.e. 30 June 2015. A Product Highlights Sheet (“PHS”) highlighting the key features and risks of the Fund is available and investors have the ri ght to request for a PHS. Investors are advised to obtain, read and understand the PHS and the contents of the Master Prospectus dated 15 July 2015 and its supplementary(ies) (if any) (“the Master Prospectus”) before investing. The Master 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 Master Prospectus relates will only be made on receipt of a form of application referred to in the Master Prospectus. A copy of the Master Prospectus can be obtained from any of our offices. The Manager wishes to highlight the specific risks of the Fund are credit / default risk, issuer risk, interest rate risk, liquidity risk and shariah specific risk. These risks and other general risks are elaborated in the Master 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.
Issued by HSBC Bank Malaysia Berhad (Company no. 127776-V)
RHB-OSK ISLAMIC BOND FUND Date: 30/06/2015
FUND INFORMATION
HISTORICAL PRICE FUND SINCE LAUNCH
Launch date
25/08/2000
Fund category ( as per Lipper IM)
Bond (Islamic)
Fund type
Income Fund
Fund Size in RM
RM45.54 million
Launch price
RM 1.00
Initial investment
RM1,000
Subsequent investment
RM100
Sales charge
None
Annual management fee
Profit Sharing Scheme : 85:15 based on the Net Investment Income after deduction of trustee fee
Exit fees
Exit 1 year no exit fee
Annual expense ratio as at 30/09/2014
0.97%
EPF investment scheme
Yes I. II. III. IV.
Specific Risk
NAV line chart (based on NAV-to-NAV) Source: Lipper IM
Interest Rate Risk Credit / Default Risk Issuer Risk Liquidity Risk & Shariah Specific Risk
PERFORMANCE OF FUND SINCE LAUNCH
RISK* AS AT END 30/06/2015 3-YEAR Annualized Volatility
5.39
3-YEAR Annualized Sharpe Ratio
1.33
HSBC Risk Classification
2
**3-YEAR VOLATILITY AND SHARPE RATIO FIGURES ARE BASED ON NAV PRICES, ADJUSTED FOR DIVIDENDS RE-INVESTED AND IN MYR.
FUNDS NAV* AS AT END 30/06/2015 52-Week High
1.3939
52-Week Low
1.3056 Source: Lipper IM
TRAILING RETURNS*
1 MTH
3 MTH
6 MTH
1 YR
3YR
5YR
Absolute Returns To Date (%)
0.39
1.63
3.52
7.37
36.06
47.55
-
-
-
7.37
10.81
8.09
Annualized Returns To Date (%)
SECTOR ALLOCATION*
PERFORMANCE FIGURES ARE BASED ON NAV TO NAV PRICES, DIVIDENDS RE-INVESTED IN MYR *Source:Lipper IM
CALENDAR YEAR RETURNS
2010
2011
2012
2013
2014
RHB-OSK Islamic Bond Fund (%)
9.84
-0.06
15.28
10.80
5.91
Benchmark (%)
2.77
3.05
3.18
3.19
3.24
PERFORMANCE FIGURES ARE BASED ON NAV TO NAV PRICES, DIVIDENDS RE-INVESTED IN MYR. Source: RHB Asset Management Sdn. Bhd.
TOP 10 HOLDINGS AS AT END 30/06/2015 BGSM MANAGEMENT SDN BHD BUMITAMA AGRI LTD BRIGHT FOCUS BHD IMTN ANIH BERHAD TANJUNG BIN ENERGY ISSUER BERHAD MALAYSIA AIRPORTS HOLDINGS ALPHA CIRCLE SDN BHD WESTPORTS MALAYSIA SDN BHD GULF INVESTMENT CORPORATION G.S.C EDARAN SWM SDN BHD SOURCE: RHB Asset Management Sdn. Bhd. * as percentage of NAV
% OF FUND 16.27 15.77 13.03 9.55 7.07 5.78 4.42 4.36 2.77 2.23
* as percentage of NAV
