MFA3023 MONEY AND CAPITAL MARKET

SEMESTER II, ACADEMIC 2022/2023

INDIVIDUAL ASSIGNMENT:

REPORT ON THE PERFORMANCE OF

PUBLIC ISLAMIC ASEAN GROWTH FUND

FOR UNIT TRUST

GROUP:

KMB 2

PREPARED FOR:

DR. HAMDI HAKEIM MUDASIR

PREPARED BY:

NURAINA FATINI BINTI MUHAMMAD

ASYRAF

1200770
 1. INTRODUCTION

Islamic finance, a unique form of investment that corresponds with the values of socially
responsible investing while also being Shariah compliant, is experiencing growing success in financial
markets. Islamic finance is a fair mode of finance based on the principles of Shariah, or Islamic law.
Shariah-compliant funds are a type of socially responsible investment. They are frequently regarded as
a subset of ethical investing. Companies involved in the following activities will be filtered out of a
Shariah-compliant fund: conventional finance (non-Islamic banking, finance, and insurance), alcohol,
pork-related products and non-halal food production, gambling, adult entertainment, tobacco,
weapons and defence.

Furthermore, there are restrictions on the use of debt and interest-bearing assets. Lenders and
investors are prohibited from collecting and paying interest under Islamic law. Islamic banks agree to
share in a portion of the business's profit or loss to earn money without charging interest. In Shariah
investing, there are also some generally accepted accounting constraints. Companies must maintain a
debt-to-equity ratio of less than 33%, which excludes high-risk businesses and favours more stable
ones. In addition, companies must typically have accounts receivable and cash that are less than 50%
of total assets.

Equity funds, private equity funds, trade finance funds, real estate funds, and money market
funds are the most common types of Shariah-compliant investment funds. These funds can be unlisted
private funds, listed funds, private or public partnerships, or a combination of the two. The fund
manager will first identify Shariah-compliant equities that meet their investment criteria before
submitting them to the Shariah Adviser for review. All relevant documents containing the most recent
information about business operations, financial statements, and other relevant information will be
submitted to the Shariah Adviser for the Shariah stock screening process, which includes both
quantitative and qualitative analysis.

2. BACKGROUND OF THE COMPANY ISSUING THE INSTRUMENT

Public Mutual has been managing funds for over 30 years and is dedicated to delivering
above-average medium- to long-term returns on all of its funds. With over 200 industry awards
won since 1999 and a good track record of fund performance, the company is the most awarded
unit trust fund manager in the country. Public Mutual, as a wholly-owned subsidiary of Public
Bank, upholds the group's high standards of financial integrity and corporate governance in all
aspects of its operations.
 Public Mutual is Malaysia's largest private unit trust company with more than 170 funds under
its management. A unit trust is a type of collective investment scheme that allows investors with
similar investment goals to pool their funds. Unit trust investing is an effective way of building
long-term wealth. Professional fund managers as well as their unit trust consultant will invest
these funds in a portfolio of securities based on the fund's objective and investment strategy.

The company recently won the most awards at the Refinitiv Lipper Fund Awards 2022, taking
home two Group Awards and 30 individual Fund Awards. Public Mutual also received
international recognition after winning 13 awards at the Refinitiv Lipper Fund Awards 2022. As
of end-March 2022, the company was managing a total fund size of approximately RM100
billion. Besides, Public Mutual is trusted by more than 3.8 million accountholders nationwide.

3. THE DESCRIPTIVE OF THE INSTRUMENT

The Public Islamic ASEAN Growth Fund (PIASGF) is a Malaysian open-end unit trust and was
officially launched by Public Mutual on 21 June 2018. The goal of the fund is to achieve capital
growth over the medium to long-term period by investing in a portfolio of Shariah- compliant
investments in ASEAN markets. PIASGF will invest up to 98% of its net asset value in a portfolio of
Shariah-Compliant investments primarily in the ASEAN markets such as Malaysia, Indonesia,
Singapore, Philippines, Singapore, Thailand, Vietnam and other permitted markets. The remaining
Net Asset Value (NAV) of the fund may be invested in sukuk and Islamic liquid assets such as
Islamic money market instruments, Islamic investment accounts, and Islamic deposits. If the equity
market outlook is unfavourable, Shariah- compliant equity exposure may be reduced to below the
above-mentioned range as a temporary defensive strategy. The top holding of this fund are PT
Telekom Indonesia (Persero) TBK, Airport of Thailand Public Company Limited - Foreign, United
Tractors TBK, Press Metal Aluminum Holdings Berhad and Genting Plantations Berhad

The investor that suitable to invest in this fund are those who are able to withstand stock market
ups and downs in pursuit of capital growth from medium to long-term investors. Investors will be
looking at inflation trends as well as the timeline for central banks to normalise their monetary
policies. Fiscal and monetary stimulus measures are expected to remain supportive in light of the
uneven recovery of key economies, as well as the potential threat of newer Covid-19 variants and the
reinstatement of lockdown measures. PIASGF’s risk level is very high which it is possible that this
investment will lose value as a result of a general decline
in financial markets caused by economic, political, and other factors, resulting in a decrease in the
fund's NAV. The fund may suffer opportunity loss as a result of not being permitted to retain the
excess capital gains derived from the sale of Shariah non-compliant equities. The fund's value may be
harmed if Shariah non-compliant equities are sold at a price lower than the investment cost.

4. THE BEHAVIOR OF THE PRICE AND RETURN OF THE INSTRUMENT

This table shown the price from 27 March 2023 until 26 May 2023.
 The Public Islamic ASEAN Growth Fund (PIASGF), according to Public Mutual CEO Yeoh
Kim Hong, is well-positioned to benefit from Asean's economic growth, which is supported by rising
consumer demand, sustained investment spending, and resilient export growth. Additionally, the
region's rapid urbanisation, favourable population dynamics, and relatively young labour force will
help support Asean's economic performance in the coming years.

The Net Asset Value (NAV) of the PIASGF is calculated and the price of units published on
each business day at Public Mutual’s website. The Manager may at its discretion charge a lower sale
charge up to 5.0% of NAV per unit while there is no redemption charge applied. The management fee
and trustee fee are 1.65% and 0.06% per annum of the NAV.

2022 2021 2020

The total return of the fund can be calculating in the end of period current year NAV per unit over the end of
period previous year NAV per unit. While the average total refund can be calculating the total return divide
with the number of years under review. Past performance is not always indicative of future results, and unit
prices and investment returns can fall as well as rise.

6. PERFORMANCE AND VALUATION OF THE ASSET

 The Public Islamic ASEAN Growth Fund (PIASGF) is one of a track FTSE ASEAN 40
which is designed to represent the performance of the largest companies in the ASEAN region’s
markets. If we look at the movement, FTSE 40 are ready to move to new height. In the fundamental
point of view, we can see that Thailand and Indonesia are developing aggresively. Many projects has
been announced and it will help their economic growth as well as it will be the catalyst for stock
market to move upside. PIASGF have exposed with the ASEAN country that performed well and give
a good index returns.

Past performance of the fund is not an indication of its future performance and unit prices and
investment may go down, as well as up. Due to the higher level of rebalancing activities undertaken
by the fund, the fund's Portfolio Turnover Ratio (PTR) increased from
1.04 times for the fiscal period ended 2019 to 1.34 times for the fiscal year ended 2020 and further to
1.66 times for the fiscal year ended 2021. Meanwhile the net distribution per unit (sen) has increased
from 0.50 in 2020 to 3.00 in 2021. For 2022, the net distribution per unit (sen) has increased from
3.00 in 2021 to 3.20 in 2022.

From its commencement on 11 July 2018 (the last day of the initial offer period) to 31
December 2022, PIASGF generated a total return of +32.66%, outperforming its Benchmark's return
of +2.02%. The Fund returned +4.97% during the fiscal period under review, compared to its
Benchmark's return of +2.18%.
 The PIASGF will be valued after the close of business on the relevant day on Bursa Securities.
Due to the fact that certain foreign markets in which PIASGF may invest have yet to close due to the
different time zones of these countries, the valuation point may be extended to 9:00 a.m. (or any other
time permitted by the relevant authorities from time to time) on the following day when the Manager is
open for business. As a result of having a valuation point later than 5:00 p.m., the Fund's daily prices
will be published the following Business Day rather than the next Business Day.

The valuation of permitted investments including the listed Shariah-compliant equities and
warrants which is based on market price of the respective exchanges, listed and unlisted sukuk,
Islamic commercial paper which are valued at purchase yields with profit accrued daily, Islamic
money market instruments, Islamic investment accounts and Islamic deposits, units in other Shariah-
compliant investment schemes, foreign exchange forward contracts, and suspended Shariah-compliant
securities.

7. CONCLUSION

To sum up, during market downturns, Shariah-compliant equity funds tend to outperform
conventional equity funds. This is primarily due to the fact that Shariah-compliant funds do not invest
in the following stocks, which tend to underperform the broader markets during market
consolidation. Companies with high levels of debt are removed from the stock universe of Shariah-
compliant funds through the Shariah screening process. Companies with reasonable debt levels are
more resilient during economic downturns, which helps to reduce fund volatility.

Looking ahead, the pace of recovery in the key economies of the United States, Europe, and
the Asia Pacific region will determine the long-term performance of the equity markets. Investors will
also keep an eye on the economic F, as well as potential changes in fiscal and monetary policies. The
Public Islamic ASEAN Growth Fund (PIASGF) will continue to rebalance its investment portfolio in
accordance with its goal of achieving capital growth over the medium to long term by investing in
Shariah-compliant investments in ASEAN markets.

8. REFERENCES

https://www.investopedia.com/terms/s/shariah-compliant-funds.asp
https://www.thestar.com.my/business/business-news/2018/06/21/public-mutual-launches- islamic-
asean-growth-fund

https://my.morningstar.com/my/report/fund/performance.aspx?t=0P0001DWTY

https://www.publicmutual.com.my/Our-Products/Fund-Overview

https://www.publicmutual.com.my/Menu/Campaigns-Launches/2022-Re-Promote-Islamic- Fund

https://www.publicmutual.com.my/Our-Products/UT-Fund-Prices