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I
RESPONSIBILITY STATEMENTS AND STATEMENTS OF DISCLAIMER This Information Memorandum has been seen and approved by the directors of UOB Asset Management (Malaysia) Berhad (formerly known as UOB-OSK Asset Management Sdn Bhd) and they collectively and individually accept full responsibility for the accuracy of all information contained herein and confirm, having made all enquiries which are reasonable in the circumstances, that to the best of their knowledge and belief, there are no other facts omitted which would make any statement herein misleading. The Securities Commission Malaysia has authorized the United Trigger Bond Fund, the subject of this Information Memorandum, and the authorization shall not be taken to indicate that the Securities Commission Malaysia recommends the investment. The Securities Commission Malaysia will not be liable for any non-disclosure on the part of UOB Asset Management (Malaysia) Berhad (formerly known as UOB-OSK Asset Management Sdn Bhd) and takes no responsibility for the contents of this Information Memorandum, makes no representation as to its accuracy or completeness and expressly disclaims any liability whatsoever for any loss howsoever arising from, or in reliance upon the whole or any part of the content of this Information Memorandum. ADDITIONAL INFORMATION Qualified Investors are advised to read this Information Memorandum and obtain professional advice before subscribing for Units of the United Trigger Bond Fund. Qualified Investors are advised to note that recourse for false or misleading statements or acts made in connection with this Information Memorandum is directly available through sections 248, 249 and 357 of the Capital Markets and Services Act 2007. The United Trigger Bond Fund may only be offered for sale to Qualified Investors and investors must ensure that they are Qualified Investors before making an investment in the United Trigger Bond Fund. In the event that the Manager becomes aware that a person is not eligible to apply for Units is in fact holding Units, the Manager shall be deemed to have received a redemption request in respect of such Units on the Business Day following the day the Manager first became aware of the Unit Holder’s ineligibility. The Fund will not be offered for sale in the United States of America, its territories or possessions and all areas subject to its jurisdiction, or U.S. Person(s), except in a transaction which does not violate the securities laws of the United States of America. Accordingly, Qualified Investors may be required to certify that they are not U.S. Person(s) before making an investment in the Fund. This Information Memorandum is not intended to and will not be issued and distributed in any country or jurisdiction other than in Malaysia (‘Foreign Jurisdiction’). Consequently, no representation has been and will be made as to its compliance with the laws of any Foreign Jurisdiction. Accordingly, no offer or invitation to subscribe or purchase Units of the United Trigger Bond Fund to which this Information Memorandum relates, may be made in any Foreign Jurisdiction or under any circumstances where such action is unauthorized. ADDITIONAL DISCLOSURES ON PERSONAL INFORMATION Qualified Investors are advised to read and understand the full personal data/information related disclosures which will be given to you together with the application form before purchasing for Units of the Fund. The said disclosures consist of but is not limited to the following, where UOB Asset Management (Malaysia) Berhad (formerly known as UOB-OSK Asset Management Sdn Bhd) shall be entitled to transfer, release and disclose from time to time any information relating to the Unit Holders to any of UOB Asset Management (Malaysia) Berhad (formerly known as UOB-OSK Asset Management Sdn Bhd)’s parent company, subsidiaries, associate company, affiliates, delegates, service providers and/or agents (including any outsourcing agents and/or data processors) for any
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purpose on the basis that the recipients shall continue to maintain the confidentiality of information disclosed as required by laws, regulations or directives, or in relation to any legal action, or to any court, regulatory agency, government body or authority.
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CONTENTS
CORPORATE DIRECTORY ...................................................................................................... IV
DEFINITIONS............................................................................................................................ VI
CHAPTER 1: KEY DATA ............................................................................................................ 1
CHAPTER 2: RISK FACTORS .................................................................................................... 6
2.1 GENERAL RISKS OF INVESTING IN THE FUND ........................................................................ 6 2.2 SPECIFIC RISKS RELATED TO THE FUND ............................................................................... 6 2.3 RISK MANAGEMENT STRATEGIES ......................................................................................... 8
CHAPTER 3: FUND INFORMATION ........................................................................................... 9
3.1 INVESTMENT OBJECTIVE ..................................................................................................... 9 3.2 INVESTMENT POLICY AND STRATEGY .................................................................................... 9 3.3 ASSET ALLOCATION .......................................................................................................... 10 3.4 TRIGGER EVENT AND EARLY TERMINATION ......................................................................... 10 3.5 MATURITY OF THE FUND ................................................................................................... 14 3.6 BENCHMARK .................................................................................................................... 14 3.7 PERMITTED INVESTMENTS AND RESTRICTIONS ................................................................... 14 3.8 BASES OF VALUATION OF THE ASSETS OF THE FUND AND VALUATION FOR THE FUND............. 15
CHAPTER 4: FEES, CHARGES AND EXPENSES ................................................................... 18
4.1 SALES CHARGE ................................................................................................................ 18 4.2 REDEMPTION CHARGE....................................................................................................... 18 4.3 SWITCHING FEE ............................................................................................................... 18 4.4 TRANSFER FEE ................................................................................................................. 18 4.5 OTHER CHARGES .............................................................................................................. 18 4.6 MANAGEMENT FEE ............................................................................................................ 18 4.7 TRUSTEE FEE ................................................................................................................... 18 4.8 OTHER EXPENSES ............................................................................................................. 18 4.9 REBATES AND SOFT COMMISSION...................................................................................... 19
CHAPTER 5: TRANSACTION INFORMATION ......................................................................... 20
5.1 PRICING POLICY ............................................................................................................... 20 5.2 COMPUTATION OF NAV AND NAV PER UNIT ......................................................................... 20 5.3 INCORRECT PRICING ........................................................................................................ 20 5.4 APPLICATION FOR UNITS................................................................................................... 21 5.5 REDEMPTION OF UNITS ..................................................................................................... 22 5.6 SWITCHING OF UNITS ...................................................................................................... 23 5.7 TRANSFER OF UNITS ......................................................................................................... 23 5.8 POLICY ON ROUNDING ADJUSTMENTS ................................................................................ 23 5.9 PERIODIC REPORTING TO UNIT HOLDERS ........................................................................... 23 5.10 DISTRIBUTION POLICY ...................................................................................................... 23 5.11 MODE OF DISTRIBUTION ................................................................................................... 24
CHAPTER 6: THE PEOPLE BEHIND THE MANAGER ............................................................. 25
6.1 BACKGROUND & EXPERIENCE OF THE MANAGER .................................................................. 25 6.2 DUTIES AND RESPONSIBILITIES OF THE MANAGER .............................................................. 25 6.3 BOARD OF DIRECTORS ...................................................................................................... 25 6.4 KEY PERSONNEL OF THE MANAGER .................................................................................... 25 6.5 THE MANAGER’S DELEGATES ............................................................................................. 26
CHAPTER 7: THE TRUSTEE .................................................................................................... 28
7.1 ABOUT DEUTSCHE TRUSTEES MALAYSIA BERHAD ................................................................ 28 7.2 DTMB’S FINANCIAL POSITION ............................................................................................ 28
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7.3 EXPERIENCE IN TRUSTEE BUSINESS ................................................................................... 28 7.4 BOARD OF DIRECTORS ...................................................................................................... 28 7.5 CHIEF EXECUTIVE OFFICER ............................................................................................... 28 7.6 DUTIES AND RESPONSIBILITIES OF THE TRUSTEE ............................................................... 29 7.7 TRUSTEE’S STATEMENT OF RESPONSIBILITY ....................................................................... 29 7.8 MATERIAL LITIGATION & ARBITRATION .............................................................................. 29 7.9 TRUSTEE’S DELEGATE ....................................................................................................... 29 7.10 DISCLOSURE ON RELATED-PARTY TRANSACTIONS/CONFLICT OF INTERESTS .......................... 29
CHAPTER 8: RIGHTS AND LIABILITIES OF UNIT HOLDERS................................................. 30
8.1 RIGHTS OF UNIT HOLDERS ................................................................................................ 30 8.2 LIABILITIES OF UNIT HOLDERS .......................................................................................... 30
CHAPTER 9: POWER TO CALL FOR A UNIT HOLDERS’ MEETING ...................................... 31
9.1 MEETINGS DIRECTED BY THE UNIT HOLDERS ...................................................................... 31 9.2 MEETINGS SUMMONED BY THE TRUSTEE............................................................................. 31 9.3 MEETINGS SUMMONED BY THE MANAGER ........................................................................... 31 9.4 PROVISIONS GOVERNING UNIT HOLDERS’ MEETINGS .......................................................... 31 9.5 TERMINATION OF THE FUND .............................................................................................. 33
CHAPTER 10: ADDITIONAL INFORMATION ........................................................................... 35
10.1 UNCLAIMED MONEYS ........................................................................................................ 35 10.2 ANTI-MONEY LAUNDERING POLICIES .................................................................................. 35 10.3 REGULATORY AUTHORIZATION .......................................................................................... 35 10.4 NO GUARANTEE ................................................................................................................ 35 10.5 ENQUIRIES ...................................................................................................................... 35
IV
CORPORATE DIRECTORY
Manager Name: UOB Asset Management (Malaysia) Berhad
(formerly known as UOB-OSK Asset Management Sdn Bhd) (219478-X)
Registered Address and Business Address:
Level 22 Vista Tower The Intermark 348 Jalan Tun Razak 50400 Kuala Lumpur Malaysia
Telephone number: 03-2732 1181 Facsimile number: 03-2732 1100 Manager’s Delegate (Investment Management Function) Name:
UOB Asset Management Ltd
Address:
80 Raffles Place #03-00 UOB Plaza 2 048624 Singapore
Telephone number: (65) 6532 7988 Facsimile number: (65) 6532 3868 Manager’s Delegate (Fund Valuation Function) Name:
Deutsche Bank (Malaysia) Berhad (Company No. 312552-W)
Address:
Level 18-20, Menara IMC 8, Jalan Sultan Ismail 50250 Kuala Lumpur Malaysia
Telephone number: 03-2053 6788 Facsimile number: 03-2031 8710 Board of Directors of the Manager Names: Izlan bin Izhab Khoo Chock Seang Lim Suet Ling Ong Sea Eng
Choong Tuck Yew Seow Lun Hoo
Trustee Name:
Deutsche Trustees Malaysia Berhad (Company No. 763590-H)
Address: Level 20, Menara IMC 8 Jalan Sultan Ismail 50250 Kuala Lumpur Malaysia
Telephone number: 03-2053 7522 Facsimile number: 03-2053 7526
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The Trustee’s Delegate (Custodian) Name:
Deutsche Bank (Malaysia) Berhad (Company No. 312552-W)
Address:
Level 18-20, Menara IMC 8 Jalan Sultan Ismail 50250 Kuala Lumpur Malaysia
Telephone number: 03-2053 6788 Facsimile number: 03-2031 8710 Auditors for the Fund Name: Ernst & Young
Address: Level 23A, Menara Milenium,
Jalan Damanlela, Pusat Bandar Damansara 50490 Kuala Lumpur Malaysia
Tax Advisors for the Fund Name: Ernst & Young Tax Consultants Sdn. Bhd. (Company No. 179793-K)
Address: Level 23A, Menara Milenium
Jalan Damanlela Pusat Bandar Damansara 50490 Kuala Lumpur Malaysia
Solicitors for the Manager Name: Raja, Darryl & Loh
Address: 18th Floor, Wisma Sime Darby
Jalan Raja Laut 50350 Kuala Lumpur Malaysia
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DEFINITIONS
“the Act” or “CMSA” Means the Capital Markets and Services Act 2007 as may be amended from time to time.
“Business Day”
Means a day on which Bursa Malaysia is open for trading and which is also a business day in Singapore. A business day in Singapore means a day (other than a Saturday, Sunday or gazetted public holidays) on which commercial banks are open for business in Singapore.
“Bursa Malaysia”
Means the stock exchange managed and operated by Bursa Malaysia Securities Berhad.
“Commencement Date” Means the date that falls on the seventh (7th) Business Day after the end of the Offer Period and is the date on which investments of the Fund may first be made.
“Deed” Means the deed dated 26 March 2014 in respect of the Fund entered into between the Manager and the Trustee.
“Early Termination” Means the termination of the Fund before the Maturity Date pursuant to a Trigger Event.
“Early Termination Date” Means a date before the Maturity Date on which the Fund is terminated pursuant to a Trigger Event; an Early Termination Date is determined by the Manager and is a Valuation Day which is no later than 30 days from the Trigger Event; the Manager shall inform Unit Holders of the Early Termination Date within 14 days of the Trigger Event.
“Eligible Market(s)” Means a market that: (a) is regulated by a regulatory authority; (b) operates regularly; (c) is open to the public; and (d) has adequate liquidity for the purposes of the Fund. A foreign market is an eligible market where it has satisfactory provisions relating to: (a) the regulation of the foreign market; (b) the general carrying on of business in the market with due
regard to the interests of the public; (c) adequacy of market information; (d) corporate governance; (e) disciplining of participants for conduct inconsistent with just and
equitable principles in the transaction of business, or for a contravention of, or a failure to comply with the rules of the market; and
(f) arrangements for the unimpeded transmission of income and capital from the foreign market.
Note: Investments in a foreign market are limited to markets where the regulatory authority is a member of the International Organization of Securities Commissions (IOSCO).
“Financial Year End” Means 30 April of every calendar year or if the Fund comes to an end on an Early Termination Date, the financial year end of the Fund shall be on the Early Termination Date. If the Fund comes to an end on the
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Maturity Date, the last financial year end of the Fund shall end on the Maturity Date.
“financial institution” Means, (a) if the institution is in Malaysia:
(i) licensed bank; (ii) licensed investment bank; or (iii) Islamic bank;
(b) if the institution is outside Malaysia, any institution that is licensed /
registered / approved / authorized to provide financial services by the relevant banking regulator.
“the Fund” Means the United Trigger Bond Fund which is a Wholesale Fund, the
subject of this Information Memorandum.
“the Guidelines” Means the Guidelines on Wholesale Funds issued by the Securities Commission Malaysia as may be amended from time to time.
“Information Memorandum”
Means this document, and includes any supplementary or replacement information memoranda.
“the External Investment Manager”
Means UOB Asset Management Ltd, incorporated in Singapore.
“Islamic bank” Means a bank licensed under the Islamic Financial Services Act 2013.
“IUTA” Means institutional unit trust advisers.
“Launch Date” Means the date of this Information Memorandum and is the date on which sale of Unit(s) of the Fund may first be made; the Launch Date is also the date of constitution of the Fund.
“licensed bank” Has the same meaning as prescribed under the Financial Services Act 2013.
“licensed investment bank”
Has the same meaning as prescribed under the Financial Services Act 2013.
“the Manager” or “UOBAM(M)” or “we” or “us” or “our”
Means UOB Asset Management (Malaysia) Berhad (formerly known as UOB-OSK Asset Management Sdn Bhd).
“Management Fee” Is a percentage of the NAV of the Fund that is paid to the Manager for managing the Fund.
“Maturity Date” The maturity date is the last day of the Maximum Tenure of the Fund.
“Maximum Tenure” The maximum tenure of the Fund is 3 years and 6 months as measured from the Commencement Date.
“Medium Term” Means a period of 3 years and 6 months.
“MYR” or “RM” Means Ringgit Malaysia, the official currency of Malaysia.
“Net Asset Value” or “NAV”
Means the value of the Fund’s assets less the value of the Fund’s liabilities at a particular Valuation Point except that, for the purpose of computing annual Trustee Fee, the NAV of the Fund should be inclusive (that is, before any deduction) of the Trustee Fee for the
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relevant period.
“NAV per Unit” or “Price” Means the NAV of the Fund at a particular Valuation Point divided by the number of Units in circulation at the same Valuation Point. The NAV per Unit is also the price of a Unit.
“Net Total Return” Means the return of the Fund on a Valuation Day which comprises capital appreciation and Cumulative Gross Distribution2 with reference to the Price for that Valuation Day and the Offer Price, and taking into account the maximum sales charge. The Net Total Return is calculated according to the formula below : (Price1–Offer Price-(maximum sales charge x Offer Price)+Cumulative Gross Distribution2) x100%
Offer Price
1Price is the NAV per Unit on a Valuation Day. 2Cumulative Gross Distribution is the sum of all distribution paid up to a Valuation Day before deducting taxes and expenses (if any).
“Observation Year”
1st Observation Year: a period of 12 months as measured from the Commencement Date. 2nd Observation Year: a period of 12 months as measured from the end of the 1st Observation Year. 3rd Observation Year: a period of 12 months as measured from the end of the 2nd Observation Year.
“Offer Period”
Is the period of forty-five (45) days which Units of the Fund are offered for sale.
“Offer Price” Means the price payable by an applicant for the purchase of Units which is fixed throughout the Offer Period at RM1.0000 per Unit; for the avoidance of doubt, the Offer Price does not include any sales charge which may be imposed.
“OTC” Means over-the-counter.
“Qualified Investors” Refers to: an individual whose total net personal assets, or total net joint
assets with his or her spouse, exceed three million ringgit or its equivalent in foreign currencies, excluding the value of the individual’s primary residence;
an individual who has a gross annual income exceeding three hundred thousand ringgit or its equivalent in foreign currencies per annum in the preceding twelve months;
an individual who, jointly with his or her spouse, has a gross annual income exceeding four hundred thousand ringgit or its equivalent in foreign currencies in the preceding twelve months;
a corporation with total net assets exceeding ten million ringgit or its equivalent in foreign currencies based on the last audited accounts;
a partnership with total net assets exceeding ten million ringgit or its equivalent in foreign currencies;
a unit trust scheme or prescribed investment scheme; a private retirement scheme; a closed-end fund; a company that is registered as a trust company under the Trust
Companies Act 1949 which has assets under management exceeding ten million ringgit or its equivalent in foreign currencies;
a corporation that is a public company under the Companies Act
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1965 which is approved by the Securities Commission Malaysia to be a trustee under the CMSA and has assets under management exceeding ten million ringgit or its equivalent in foreign currencies;
a statutory body established by an Act of Parliament or an enactment of any state in Malaysia;
a pension fund approved by the Director General of Inland Revenue under section 150 of the Income Tax Act 1967;
a holder of a Capital Markets Services License issued pursuant to the CMSA;
a licensed institution; an Islamic bank; an insurance company licensed under the Financial Services Act
2013; a takaful operator registered under the Islamic Financial Services
Act 2013; a bank licensee or insurance licensee as defined under the Labuan
Financial Services and Securities Act 2010; and an Islamic bank licensee or takaful licensee as defined under the
Labuan Islamic Financial Services and Securities Act 2010.
“Redemption Price” Is the NAV per Unit payable to a Unit Holder pursuant to a redemption of a Unit; for the avoidance of doubt, Redemption Price does not include any redemption charge which may be imposed. The Redemption Price in respect of requests for redemption received by the Manager before the cut-off time of 4.00pm on a Valuation Day will be processed based on the NAV per Unit for that Valuation Day. The Redemption Price in respect of requests for redemption received after the cut-off time of 4.00pm on a Valuation Day will be processed based on the NAV per Unit for the next Valuation Day.
“relevant laws” Means laws, rules, regulations, guidelines, directives, circulars, guidance notes and investment management standards passed or issued by any relevant authority relating to or connected with the unit trust and fund management industry in Malaysia.
“Securities Commission” or “SC”
Means the Securities Commission Malaysia established under the Securities Commission Act 1993.
“Special Resolution” Means a resolution passed at a meeting of Unit Holders duly convened in accordance with the Deed by a majority of not less than three-fourths of the Unit Holders present and voting at the meeting in person or by proxy; for the avoidance of doubt, “three-fourths of the Unit Holders present and voting” means three-fourths of the votes cast by the Unit Holders present and voting; for the purposes of winding-up the Fund, “Special Resolution” means a resolution passed at a meeting of Unit Holders duly convened in accordance with the Deed by a majority in number holding not less than three-fourths of the value of the votes cast by the Unit Holders present and voting at the meeting in person or by proxy.
“Standard & Poor’s” Means Standard & Poor's Financial Services LLC
“Termination Price” IF A TRIGGER EVENT DOES NOT OCCUR : If there is no Trigger Event, the Termination Price on the Fund’s Maturity Date shall be the NAV per Unit on the Maturity Date. IF A TRIGGER EVENT OCCURS :
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The Termination Price on the Early Termination Date shall be the NAV per Unit on the Early Termination Date, provided that all the assets held by the Fund can be sold for cash by 5.00pm on the Early Termination Date. However, if the External Investment Manager is not able to complete selling all the assets of the Fund for cash on the Early Termination Date, the Termination Price shall be the NAV per Unit on the first Valuation Day after all the assets held by the Fund have been sold for cash (“First Cash Day”), and such day shall be a day that falls within six (6) weeks from the Early Termination Date. IMPORTANT NOTE : A) Qualified Investors should note that the NAV per Unit on the First
Cash Day after all the assets held by the Fund have been sold for cash, may be higher or lower than the NAV per Unit on the Early Termination Date due to :
i) the fluctuation of bond prices while the External Investment
Manager is in the process of selling the bonds for cash, and ii) the accrual of the relevant fees and expenses such as
Trustee Fee. B) All investments held by the Fund will be sold for cash and the
investment proceeds shall be paid out to Unit Holders within 2 months from the Early Termination Date, except if any of the bonds held by the Fund are in default, the portion of the Fund’s NAV attributable to such bonds shall not be included in the payment of investment proceeds. However, the amount recovered from such bonds, when received by the Fund (which may be later than 2 months from the Early Termination Date) will be repatriated to Unit Holders on a pro-rated basis, according to the number of Units held by each Unit Holder on the Early Termination Date.
“Trigger Event” If the Net Total Return is above the relevant trigger level as set out in
Section 3.4 below for 4 consecutive Valuation Days in an Observation Year, a Trigger Event shall have occurred on the 4th Valuation Day.
“Trustee”
Means Deutsche Trustees Malaysia Berhad.
“Trustee Fee” Is a percentage of the NAV of the Fund that is paid to the Trustee for acting as the trustee for the Fund.
“Unit(s)” Refers to an undivided share in the beneficial interest and/or right in the Fund and a measurement of the interest and/or right of a Unit Holder in the Fund and means a Unit of the Fund.
“Unit Holder(s)” Refers to a Qualified Investor registered pursuant to the Deed as the holder of Units including persons jointly registered.
“U.S. (United States) Person(s)”
Means: a) a U.S. citizen (including dual citizen); b) a U.S. resident alien for tax purposes; c) a U.S. partnership; d) a U.S. corporation; e) any estate other than a non-U.S. estate;
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f) any trust if: i) a court within the U.S. is able to exercise primary
supervision over the administration of the trust; and ii) one or more U.S. Persons have the authority to control all
substantial decisions of the trust; and iii) any other person that is not a non-U.S. person.
“Valuation Day” Means the day on which the price of the Fund is calculated, and shall
be every Friday which is a Business Day for the Fund. If a Friday is a non-Business Day, then the next Business Day will be the Valuation Day.
“Valuation Point” Means a particular point in time on a Business Day at which the NAV per Unit of the Fund is calculated. As the Fund is invested in foreign markets, the foreign portfolio shall be valued based on the last done prices at the close of the business day of the respective markets on the same calendar day as the Valuation Day. Therefore, the Valuation Point shall be 5.00pm on the Business Day immediately following a Valuation Day. Assuming a Valuation Day is “T” where “T” is a Business Day, the Valuation Point shall be T+1 at 5.00pm
“Wholesale Fund” Means a unit trust scheme, the units of which are issued, offered for subscription or purchase, or for which invitations to subscribe for or purchase of units have been made, exclusively to Qualified Investors.
General Words and Expressions In this Information Memorandum, unless the context otherwise requires, words importing the singular shall include the plural and vice-versa. References to any law, rules, guidelines or orders shall include such law, rules, guidelines or orders as may be amended from time to time.
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CHAPTER 1: KEY DATA
This section contains a summary of the salient information about the Fund.
Fund Information
Name of Fund United Trigger Bond Fund
Fund Type Income
Fund Category Bond (close-ended)
Investment Objective
The investment objective of the Fund is to provide income* and outperform the relevant trigger level by investing in a portfolio of bonds. Note: *Income distribution (if any) will be paid out to Unit Holders in the form of cash. Any material change to the Fund’s investment objective would require Unit Holders’ approval.
Investment Policy and Strategy
The Fund is structured as a close-ended fund with a Maturity Date and has an Early Termination feature where the Manager shall terminate the Fund before the Maturity Date if there is a Trigger Event. The External Investment Manager seeks to invest in a portfolio comprising not more than 30 bonds to capture both yield and capital appreciation, with a focus on yield. Such bonds must be listed or traded in Eligible Markets and may be issued by corporations, financial institutions, governments, government agencies, supra-nationals and their agencies, and may be denominated in any currency. The External Investment Manager will generally hold bonds purchased until their respective maturity but may have flexibility to trade the bonds for the purpose of maximizing gains if there are decrease or expected decrease in interest rates resulting in an increase of bond price or to manage risks such as credit/default risk or currency risk which may adversely affect the bonds in the Fund’s portfolio. The Fund will generally be invested in bonds with durations that match or are similar to the Maximum Tenure so that the maturity dates of such bonds match or are close to the Maturity Date. However, it may not be possible to purchase bonds which have exactly the same duration as the duration of the Fund. If a Trigger Event does not occur, the Fund will terminate on the Maturity Date. The investment policy and strategy of the Fund will be further elaborated in Chapter 3.
Asset Allocation
A minimum of 70% of the Fund’s NAV will be invested in bonds. A minimum of 2% of the Fund’s NAV will be invested in liquid
assets.
Principal Risks Associated with the Fund
Credit/default risk Currency risk Interest rate risk
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Country risk Concentration risk Fixed maturity risk Early termination risk
Benchmark
12 month fixed deposit rate by Malayan Banking Berhad as at the Commencement Date of the Fund. You may visit www.uobam.com.my or call us at 03-27321181 to find out the 12 month fixed deposit rate by Malayan Banking Berhad as at the Commencement Date. As the Fund invests across various bonds of different ratings, Qualified Investors of this Fund should be aware that the risk of investing in the Fund would be higher than the risk of investing in a 12 month fixed deposit.
Investors’ Profile
The Fund is suitable for Qualified Investors: (i) whose risk appetite is moderate; (ii) who seek income*; (iii) who wish to have exposure to a bond portfolio; and (iii) who have a Medium Term (i.e. 3 years and 6 months) investment
horizon. Note: *Income distribution (if any) will be paid out to Unit Holders in the form of cash.
Offer Price
RM1.0000
Offer Period A period of 45 days from the date of this Information Memorandum which is 26 May 2014 and ending on 9 July 2014.
Option not to commence the Fund
If the number of Units sold during the Offer Period is less than 30,000,000 Units, the Manager reserves the right not to commence the Fund on the Commencement Date as a fund size which is less than 30,000,000 Units is small and not economically viable, in which case the Manager will return the subscription monies and the sales charge to Unit Holders within one (1) month from the end of the Offer Period.
FEES AND CHARGES RELATED TO THE FUND
This table describes the fees and charges that you may incur DIRECTLY when you buy or sell Units of the Fund. Sales Charge
Up to a maximum of 3.00% of the Offer Price An investor may expect differing sales charge to be levied when buying Units from the various distribution channels and within each distribution channel, subject to the maximum sales charge stipulated herein.
Redemption Charge
Up to 1.00% of the Redemption Price All redemption charges levied will be retained by the Manager.
Note: The Manager reserves the right to waive or reduce the sales charge or redemption charge from time to time at its absolute discretion.
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Switching Fee
Not applicable.
Other Charges Charges, for instance bank charges, telegraphic charges and courier charges, shall be borne by the Unit Holder.
This table describes the fees, charges and expenses that you may incur INDIRECTLY when you invest in the Fund:
Management Fee Not applicable.
Trustee Fee
0.06% per annum of the NAV of the Fund, accrued periodically and paid monthly, subject to a minimum of RM15,000 per annum (excluding foreign custodian fees and charges).
Other Expenses
Only fees and expenses that are directly related and necessary in operating and administering the Fund may be charged to the Fund in accordance with the Deed. Please refer to Section 4.8 for details of such fees and expenses.
TRANSACTION INFORMATION
Minimum Initial Investment
RM20,000 or such other lower amount as the Manager may from time to time accept.
Minimum Additional Investment
RM10,000 or such other lower amount as the Manager may from time to time accept
Minimum Redemption Amount
10,000 Units or such other lesser Units as the Manager may from time to time decide.
Minimum Holding 10,000 Units or such other lesser Units as the Manager may from time to time decide.
Payment of investment proceeds on Early Termination Date or on the Maturity Date
Investment proceeds shall be paid to Unit Holders within two (2) months from the Early Termination Date or Maturity Date, as the case may be.
Redemption Requests The Manager accepts redemption requests on any Business Day. However, the redemption requests are processed only once a week, on every Valuation Day. Redemption requests received before the cut-off time of 4.00pm on a Valuation Day will be deemed received on that Valuation Day and shall be processed based on the NAV per Unit for that Valuation Day. Redemption requests received after the cut-off time of 4.00pm on a Valuation Day will be deemed received on the next Valuation Day and shall be processed based on the NAV per Unit on the next Valuation Day. If there is a Trigger Event, requests for redemptions will not be accepted on or after the Early Termination Date. Investment proceeds will be paid to Unit Holders based on the number of Units held on Early Termination Date and the Termination Price.
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Redemption Payment Period
Redemption proceeds shall be paid within ten (10) days from the day on which the redemption requests are deemed received.
Switching Facility
Switching facility is not available for the Fund.
Eligibility to Subscribe The Fund is only offered for sale to Qualified Investors. In the event that the Manager becomes aware that a person is not eligible to apply for Units is in fact holding Units, the Manager shall be deemed to have received a redemption request in respect of such Units on the Business Day following the day the Manager first became aware of the Unit Holder’s ineligibility.
OTHER INFORMATION
Distribution Policy Subject to the availability of income, the Manager will distribute income
once a year. Distribution of income will only be made from realized gains or realized income.
Mode of Distribution
Distributions, if any, will be paid out in cash to Unit Holders.
Reports Unit Holders will receive the following statements and reports: Confirmation of investment statements detailing his investment,
which will be sent within 10 Business Days from the date monies are received by the Manager for investment in the Fund. This confirmation will include details of the Units purchased;
Monthly statements of account which shows the balance of Unit Holders’ investments and all transactions made during the month, distribution details and investment value;
Quarterly reports which provides a brief overview of the Fund including key risk factors, investment outlook for the quarter, the Fund’s financial performance, credit risk, market outlook, changes in the key investment team, illiquid holdings, details on portfolio holdings, information on fund performance and volatility and unaudited accounts of the Fund for the quarter. The quarterly reports will be sent to all Unit Holders within 2 months from the end of each financial quarter;
An annual report which provides a detailed overview of the Fund including key risk factors, investment outlook for the year, the Fund’s financial performance, credit risk, market outlook, changes in the key investment team, illiquid holdings, details on portfolio holdings, information on fund performance and volatility and audited accounts of the Fund for the year. The annual report will be sent to all Unit Holders within 2 months from the end of each Financial Year; and
If distribution is declared by the Fund, Unit Holders will receive a statement of distribution, detailing the nature and amount of distribution by the Fund and a tax statement/voucher for submission to the Inland Revenue Board of Malaysia.
Deed The Deed dated 26 March 2014 in respect of the Fund entered into
between the Manager and the Trustee.
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THE ABOVE KEY DATA IS ONLY A SUMMARY OF THE FUND’S SALIENT INFORMATION. QUALIFIED INVESTORS SHOULD READ AND UNDERSTAND THE CONTENTS OF THIS INFORMATION MEMORANDUM AND, IF NECESSARY, CONSULT THEIR ADVISER(S) BEFORE MAKING AN INVESTMENT DECISION. THERE ARE FEES AND CHARGES INVOLVED AND QUALIFIED INVESTORS ARE ADVISED TO CONSIDER THE FEES AND CHARGES BEFORE INVESTING IN THE FUND. FOR INFORMATION CONCERNING CERTAIN RISK FACTORS WHICH INVESTORS SHOULD CONSIDER, PLEASE REFER TO THE “RISK FACTORS” SECTION COMMENCING ON PAGE 6.
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CHAPTER 2: RISK FACTORS
The Manager encourages Unit Holders to give careful consideration to the risks associated when investing in the Fund and, accordingly, to obtain independent financial and taxation advice before investing in the Fund.
2.1 GENERAL RISKS OF INVESTING IN THE FUND Below are some of the general risks which Unit Holders should be aware of when investing in the Fund: Market risk Market risk stems from the fact that there are economy-wide perils which affect large portions of the market and cannot be eliminated. The value of investments may increase or decrease due to changes in market factors such as uncertainties in the economic, political and social environment that impact global markets generally, or the market(s) where the Fund is invested in. Liquidity risk This is the risk that the Fund may not be able to honour requests for redemption or to pay Unit Holders in a timely manner. Factors affecting liquidity risk include the Fund’s holding of adequate liquid assets and/or its ability to borrow on a temporary basis as permitted by the relevant laws and the ease with which a bond can be sold at or near its fair value to meet the redemption requests by Unit Holders. Should a bond become illiquid, it may be sold at a discount to its fair value, thus lowering the value of the Fund’s investments and subsequently the value of Unit Holders’ investments. Inflation/purchasing power risk Inflation risk is the potential loss of purchasing power due to an increase of consumer prices. Inflation risk therefore, is the risk of an investor’s investment in the Fund may not grow or generate income at a rate that keeps pace with inflation. Inflation erodes the real rate of return (that is, the return less the inflation rate) from an investment. This may lead to a decrease in the investor’s purchasing power even though the investment in monetary terms may have increased. Risk of non-compliance This risk refers to the possibility that the Manager may not follow the provisions set out in this Information Memorandum or the Deed or the laws, rules, guidelines or internal operating policies which governs the Fund. Non-compliance may occur directly due to factors such as human error or system failure and can also occur indirectly due to amendment on the relevant regulatory frameworks, laws, rules, and other legal practices affecting the Fund. This risk may result in operational disruptions and potential losses to the Fund. The Manager aims to mitigate this risk by placing stringent internal policies and procedures and compliance monitoring processes to ensure that the Fund is in compliance with the relevant regulations or guidelines. Returns are not guaranteed Unit Holders should be aware that there is no guarantee of any returns by investing in the Fund. Unlike fixed deposits placed directly by the Unit Holders into any financial institutions which carry a specific rate of return, the Fund does not provide a fixed rate of return. Additionally, Unit Holders should also note that returns of the Fund is not guaranteed and may be subject to loss. 2.2 SPECIFIC RISKS RELATED TO THE FUND Below are some of the specific risks when investing in the Fund; they may include but are not limited to:
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(a) Credit/default risk This refers to the creditworthiness of the issuers of bonds and its expected ability to make timely payment of interest and/or principal. Default happens when the issuers are not able to make timely payments of interest and/or principal. Bonds are subject to both actual and perceived measures of creditworthiness. The downgrading of a rated bond or adverse publicity and investor perception could decrease the market value and liquidity of the bond, particularly in a thinly traded market. An economic recession may also adversely affect an issuer’s financial condition and the market value of bonds issued by such an entity. Moreover, the issuer’s ability to service its debt obligations may be adversely affected by specific issuer developments, or the issuer’s inability to meet specific projected business forecasts, which in turn will cause the market value of bonds issued by such an issuer to decrease. All the events mentioned above may have a negative impact on the valuation of the Fund or result in the Fund experiencing losses if the External Investment Manager opt to dispose-off that particular bond at a price lower than its initial purchase price. (b) Currency risk As the Fund may invest up to 98% of its Net Asset Value in bonds denominated in multiple currencies, the Fund is, therefore, subject to currency risk. Fluctuation in foreign exchange rates will affect the value of the Fund’s foreign investments when converted into the currency which the Fund is denominated in (i.e. MYR or RM) and subsequently the value of Unit Holders’ investments. Hedging may be applied to mitigate the currency risk, if necessary. (c) Interest rate risk This Fund is also subject to interest rate risk. This risk refers to the effect of interest rate changes on the market value of a bond portfolio. In the event of rising interest rates, prices of bonds will generally decrease and vice versa. Meanwhile, bonds with longer maturities and lower coupon / profit rates are more sensitive to interest rate changes. (d) Country risk In addition to currency risk, the Fund is also subject to country risk, for example, the value of the assets of the Fund may be affected by the economic and political climate, restriction on currency repatriation or other developments in the law or regulations of the countries in which the Fund may invest. Further, when investing in foreign markets, there are countries which may require prior approvals before investments can take place. For example, if and when the Fund invests in countries such as China, Taiwan, South Korea and India, such countries require the prior application / registration of an investment license / investor code before any investment can be made in these countries. As such, if investments in such countries are undertaken, there may be a risk that such registration or license may be revoked or not renewed by the relevant authority and the Fund’s investment in these countries may be affected. The effect on the Fund’s investments will depend on the regulatory requirements of the respective countries. For example, if a foreign market requires the Fund to obtain an investment license which is subject to renewal and if such investment license is not renewed in a timely manner, this may result in the Fund’s investment account in that country being frozen by the regulator resulting in investment activities for the Fund in that country being suspended. To mitigate this, the Manager will monitor closely the adherence of investment regulatory requirements in such countries. (e) Concentration risk The Fund’s investment in bonds may be highly concentrated on certain bonds. As such, a decline in the relative performance of any of the bonds in the Fund’s concentrated portfolio will cause the Fund’s overall value to decline to a greater degree than if the Fund was exposed to a less concentrated portfolio. The Fund may, therefore, be subject to a higher level of risk than a portfolio with more bonds or a more diversified exposure. (f) Fixed maturity risk The External Investment Manager must sell the bonds held by the Fund by the Maturity Date to ensure that the investment proceeds are paid to Unit Holders within 2 months of the Maturity Date. Consequently, if the Maturity Date occurs during a period when the bond markets are depressed, bonds which have a later maturity date than the Maturity Date may be liquidated at unfavourable prices, and this would negatively affect the investment proceeds paid to Unit Holders when the Fund is wound up.
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(g) Early termination risk In the case of Early Termination, the Termination Price on the Early Termination Date shall be the NAV per Unit on the Early Termination Date, provided that all the assets held by the Fund can be sold for cash by 5.00pm on the Early Termination Date. If the External Investment Manager is not able to complete selling all the bonds held by the Fund for cash on the Early Termination Date, and the performance of the bond markets deteriorate subsequent to the Early Termination Date while the External Investment Manager is in the process of liquidating the Fund’s investments, the bonds may be liquidated at unfavourable prices, resulting in the Termination Price being less than the NAV per Unit on the Early Termination Date. In such case, the Termination Price shall be the NAV per Unit on the first Valuation Day after all the assets held by the Fund have been sold for cash (“First Cash Day”), and such day shall be a day which falls within 2 months from the Early Termination Date.
2.3 RISK MANAGEMENT STRATEGIES The External Investment Manager may take temporary defensive positions that may be inconsistent with the Fund’s investment strategy in response to adverse economic, political or market conditions. In such circumstances, the Fund may hold up to 100% of its assets in liquid assets as a defensive strategy. Other risk management strategies and techniques employed by the External Investment Manager include diversification in terms of its exposure to various industries, sectors and countries. Periodic credit review is conducted to identify changes in credit profiles and credit spreads of existing credit exposures as well as to evaluate new credit investments. Investment decisions to buy, hold or sell the specific credit are based on the review. The Fund is monitored daily to ensure compliance with the permitted investments and restrictions. THE ABOVE SHOULD NOT BE CONSIDERED TO BE AN EXHAUSTIVE LIST OF THE RISKS WHICH POTENTIAL INVESTORS SHOULD CONSIDER BEFORE INVESTING INTO THE FUND. POTENTIAL INVESTORS SHOULD BE AWARE THAT AN INVESTMENT IN THE FUND MAY BE EXPOSED TO OTHER RISKS FROM TIME TO TIME. YOU SHOULD RELY ON YOUR OWN EVALUATION TO ASSESS THE MERITS AND RISKS OF AN INVESTMENT. YOU SHOULD READ AND UNDERSTAND THE CONTENTS OF THIS INFORMATION MEMORANDUM AND, IF NECESSARY, CONSULT YOUR ADVISER(S) BEFORE MAKING AN INVESTMENT DECISION.
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CHAPTER 3: FUND INFORMATION
3.1 INVESTMENT OBJECTIVE
The investment objective of the Fund is to provide income* and outperform the relevant trigger level by investing in a portfolio of bonds. Note: *Income distribution (if any) will be paid out to Unit Holders in the form of cash. Any material change to the Fund’s investment objective would require Unit Holders’ approval.
3.2 INVESTMENT POLICY AND STRATEGY The Fund is structured as a close-ended fund with a Maturity Date and has an Early Termination feature where the Manager shall terminate the Fund before the Maturity Date if there is a Trigger Event. The External Investment Manager seeks to invest in a portfolio comprising not more than 30 bonds to capture both yield and capital appreciation, with a focus on yield. Such bonds must be listed on an exchange or traded over-the-counter in Eligible Markets and may be issued by corporations, financial institutions, governments, government agencies, supra-nationals and their agencies, and may be denominated in any currency. The External Investment Manager will generally hold bonds purchased until their respective maturity but may have flexibility to trade the bonds for the purpose of maximizing gains or to manage risks such as credit/default risk or currency risk which may adversely affect the bonds in the Fund’s portfolio. The Fund will generally be invested in bonds with durations that match or are similar to the Maximum Tenure so that the maturity dates of such bonds match or are close to the Maturity Date. However, it may not be possible to purchase bonds which have exactly the same duration as that of the Fund. Bonds which the Fund invests in must be bonds listed or traded in Eligible Markets and which carry a rating of BB- or higher at the point of purchase by Standard & Poor’s or an equivalent rating by a reputable rating establishment. In the event the rating of a bond held by the Fund falls below the minimum rating stated above, the External Investment Manager will dispose of the bond as soon as practicable. The Eligible Markets which the Fund may invest in include but is not limited to markets in the United States of America, the European Union (i.e. Austria, Belgium, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden and the United Kingdom), Turkey, South Africa, Russia, Brazil, Mexico, Saudi Arabia, United Arab Emirates, Kazakhstan, Republic of the Philippines, Singapore, Indonesia, China, Hong Kong, Taiwan, South Korea, Thailand, Vietnam, India, Australia and New Zealand. The External Investment Manager shall use financial derivatives for hedging purposes. The portfolio’s foreign currency exposure will be hedged against the MYR, if deemed appropriate. The External Investment Manager may also hedge the portfolio’s interest rate exposure if required. The Fund’s investments in liquid assets may also include collective investment schemes which have the ability to pay the redemption proceeds with seven (7) calendar days, money market instruments and placement of deposits with financial institutions. The External Investment Manager may take temporary defensive positions that may be inconsistent with the Fund’s investment strategy in response to adverse economic, political or any market
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conditions. In such circumstances, the Fund may hold up to 100% of its NAV in liquid assets as a defensive strategy. The External Investment Manager’s investment philosophy is to achieve consistent performance through rigorous and independent fundamental research to uncover relative value opportunities. The External Investment Manager will adopt diversified strategies in selecting bonds combined with active risk management to generate returns for the portfolio. The External Investment Manager’s investment approach embodies two key principles:
Adding value through credit or security selection backed by their independent fundamental bottom-up research.
Adopting a disciplined top-down strategy including adjustments to traditional variables such
as sector, duration and currency. The External Investment Manager employs both a top-down and bottom-up approach. The macroeconomic fundamentals of different countries are analysed to form a medium-term outlook of different countries. At the same time, credit analysts look at investment potential of different companies operating in different industries to form a bottom-up view.
3.3 ASSET ALLOCATION The asset allocation of the Fund is as follows: A minimum of 70% of the Fund’s NAV will be invested in bonds. A minimum of 2% of the Fund’s NAV will be invested in liquid assets.
3.4 TRIGGER EVENT AND EARLY TERMINATION If a Trigger Event occurs, the Manager shall terminate the Fund before the Maturity Date (Early Termination). A Trigger Event shall have occurred on the fourth (4th) consecutive Valuation Day if the Net Total Return exceeds the relevant trigger level for an Observation Year on four (4) consecutive Valuation Days. The trigger levels are as follows: Observation Year Trigger Level
1st Observation Year Trigger level for 1st Observation Year = 6.50% 2nd Observation Year Trigger level for 2nd Observation Year = 12.50% 3rd Observation Year Trigger level for 3rd Observation Year = 18.50%
If a Trigger Event occurs, the Manager shall inform Unit Holders that a Trigger Event has occurred and announce the Early Termination Date within 14 days from the date of the Trigger Event. The Early Termination Date shall be a Valuation Day which is no later than 21 days from the date of the announcement. The Fund will terminate on the Early Termination Date and Unit Holders will receive their investment proceeds based on the number of Units held on the Early Termination Date and the Termination Price. Termination Price on the Early Termination Date The Termination Price on the Early Termination Date shall be the NAV per Unit on the Early Termination Date, provided that all the assets held by the Fund can be sold for cash by 5.00pm on the Early Termination Date.
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However, if the External Investment Manager is not able to complete selling all the assets of the Fund for cash on the Early Termination Date due to liquidity constraints, the Termination Price shall be the NAV per Unit on the first Valuation Day after all the assets held by the Fund have been sold for cash (“First Cash Day”), and such day must be a day falling within six (6) weeks from the Early Termination Date. IMPORTANT NOTE : A) Investors should note that the NAV per Unit on the First Cash Day after all the assets held by
the Fund have been sold for cash, may be higher or lower than the NAV per Unit on the Early Termination Date due to :
i) the fluctuation of bond prices while the External Investment Manager is in the process of
selling the bonds for cash, and ii) the accrual of the relevant fees and expenses.
B) All investments held by the Fund will be sold for cash and the investment proceeds shall be
paid out to Unit Holders within two (2) months from the Early Termination Date, except that if any of the bonds held by the Fund is in default, the portion of the Fund’s NAV attributable to such bonds shall not be included in the payment of investment proceeds. However, the amount recovered from such bonds, when received by the Fund (which may be later than two (2) months from the Early Termination Date) will be repatriated to Unit Holders on a pro-rated basis, according to the number of Units held by each Unit Holder on the Early Termination Date.
Illustration on determining a Trigger Event :
For the purposes of this illustration, the Commencement Date is 1 November 2013. The first time the Net Total Return in the 1st Observation Year exceeded the trigger level of 6.50% was on 24 October 2014, and thereafter, on 3 consecutive Valuation Days. The prices for the 4 consecutive Valuation Days are as follows : Valuation Day Price 24 October 2014 RM1.0638 31 October 2014 RM1.0778 7 November 2014 RM1.0828 14 November 2014 RM1.0913 Gross distribution made on 16 May 2014 was 4 sen per Unit 1ST OBSERVATION YEAR (1 November 2013 – 31 October 2014) Net Total Return on Valuation Day, 24 October 2014
(Price – Offer Price - (maximum sales charge x Offer Price)+ Cumulative Gross Distribution) x 100% Offer Price
(RM1.0638 - RM1.0000 - (3% x RM1.0000) + RM0.0400) x100% RM1.0000 = 7.38% (above trigger level for 1st Observation Year of 6.50%)
Net Total Return on Valuation Day, 31 October 2014
(Price – Offer Price - (maximum sales charge x Offer Price)+Cumulative Gross Distribution) x100% Offer Price
(RM1.0778 - RM1.0000 - (3% x RM1.0000) + RM0.0400) x100% RM1.0000 = 8.78% (above trigger level for 1st Observation Year of 6.50%)
2ND OBSERVATION YEAR (1 November 2014 – 31 October 2015) Net Total Return (Price – Offer Price - (maximum sales charge x Offer Price)+Cumulative Gross Distribution) x 100%
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on Valuation Day, 7 November 2014
Offer Price
(RM1.0828 - RM1.0000 – (3% x RM1.0000) + RM0.0400) x100% RM1.0000 = 9.28% (below trigger level for 2nd Observation Year of 12.50%)
Net Total Return on Valuation Day, 14 November 2014
(Price – Offer Price - (maximum sales charge x Offer Price)+Cumulative Gross Distribution) x 100% Offer Price
(RM1.0913- RM1.0000 - (3% x RM1.0000) + RM0.0400) x100% RM1.0000 = 10.13% (below trigger level for 2nd Observation Year of 12.50%)
A Trigger Event did not occur. The Manager shall NOT effect an Early Termination as the Net Total Return did not exceed the Trigger Level for 4 consecutive Valuation Days in either the 1st Observation Year or 2nd Observation Year. (The Valuation Days of 24 October 2014 and 31 October 2014 falls in the 1st Observation Year; whereas the Valuation Days of 7 November 2014 and 14 November 2014 falls in the 2nd Observation Year.) In 2nd Observation Year, the gross distribution is 4.5 sen per Unit made on 8 January 2015. For the first time in the 2nd Observation Year, the Net Total Return exceeded the trigger level of 12.50% when the Price was RM1.1019 on the Valuation Day of Friday, 20 March 2015. The Net Total Return was above 12.50% for the next 3 consecutive Valuation Days. The prices for the 4 consecutive Valuation Days are as follows : Valuation Days Price 20 March 2015 RM1.1019 27 March 2015 RM1.1028 3 April 2015 RM1.1035 10 April 2015 RM1.1021 2ND OBSERVATION YEAR (1 November 2014 – 31 October 2015) Net Total Return on Valuation Day, 20 March 2015
(Price – Offer Price - (maximum sales charge x Offer Price) + Cumulative Gross Distribution) x 100% Offer Price
(RM1.1019 - RM1.0000 - (3% x RM1.0000) + RM0.0400+RM0.045) x 100% RM1.0000 = 15.69% (above trigger level for 2nd Observation Year of 12.50%)
Net Total Return on Valuation Day, 27 March 2015
(Price – Offer Price - (maximum sales charge x Offer Price) + Cumulative Gross Distribution) x 100% Offer Price
(RM1.1028 - RM1.0000 - (3% x RM1.0000) + RM0.0400+RM0.045) x100% RM1.0000 = 15.78% (above trigger level for 2nd Observation Year of 12.50%)
Net Total Return on Valuation Day, 3 April 2015
Price – Offer Price - (maximum sales charge x Offer Price) + Cumulative Gross Distribution) x 100% Offer Price
(RM1.1035- RM1.0000 - (3% x RM1.0000) + RM0.0400+RM0.045) x100% RM1.0000 = 15.85% (above trigger level for 2nd Observation Year of 12.50%)
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Net Total Return on Valuation Day, 10 April 2015
Price – Offer Price - (maximum sales charge x Offer Price) + Cumulative Gross Distribution) x100% Offer Price
(RM1.1021- RM1.0000 - (3% x RM1.0000) + RM0.0400+RM0.045) x100% RM1.0000 = 15.71% (above trigger level for 2nd Observation Year of 12.50%)
In view of the 4 consecutive Valuation Days where the Net Total Return was above 12.50% which is the Trigger Level for the 2nd Observation Year, a Trigger Event has occurred on 10 April 2015, i.e. the 4th Valuation Day. Within 14 days of the Trigger Event (i.e. by 24 April 2015), the Manager shall inform Unit Holders that a Trigger Event has occurred, and announce the Early Termination Date which shall be a Valuation Day which is no later than 21 days from the date of the announcement. Assuming the Manager makes an announcement on 20 April 2015 (Monday) that a Trigger Event has occurred on 10 April 2015 and that the Early Termination Date shall be 8 May 2015 (Friday), Unit Holders will receive their investment proceeds within 2 months from the Early Termination Date i.e. no later than 7 July 2015. The investment proceeds will be calculated based on the number of Units held on the Early Termination Date and the Termination Price. However, in the event the External Investment Manager is not able to complete selling all the assets of the Fund for cash on the Early Termination Date due to liquidity constraints, the External Investment Manager must be within six (6) weeks from the Early Termination Date liquidate all the assets of the Fund. In such case, the Termination Price shall be the NAV per Unit on the first Valuation Day after all the assets held by the Fund have been sold for cash, which is the First Cash Day (i.e. 18 May 2014).
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3.5 MATURITY OF THE FUND If there is no Trigger Event, the Fund shall mature and terminate on the Maturity Date. The Termination Price on the Maturity Date shall be the NAV per Unit on the Maturity Date. The investment proceeds shall be paid out to Unit Holders within two (2) months from the Maturity Date, except that if any of the bonds held by the Fund are in default, the portion of the Fund’s NAV attributable to such bonds shall not be included in the payment of investment proceeds. However, the amount recovered from such bonds, when received by the Fund (which may be later than two (2) months from the Maturity Date) will be repatriated to Unit Holders on a pro-rated basis, according to the number of Units held by each Unit Holder on the Maturity Date.
3.6 BENCHMARK 12 month fixed deposit rate by Malayan Banking Berhad as at the Commencement Date of the Fund. You may visit www.uobam.com.myor call us at 03-27321181 for the 12 month fixed deposit rate by Malayan Banking Berhad as at the Commencement Date. As the Fund invests across various bonds of different ratings, Qualified Investors of this Fund should be aware that the risk of investing in the Fund would be higher than the risk of investing in a 12 month fixed deposit.
3.7 PERMITTED INVESTMENTS AND RESTRICTIONS Unless otherwise prohibited by the relevant authorities or any relevant law and provided always that there is no inconsistency with the objective of the Fund, the Fund’s permitted investments are:
(i) bonds Bonds which the Fund invests in must be listed or traded in Eligible Markets and must carry a rating of BB- or higher by Standard & Poor’s or an equivalent rating by a reputable rating establishment at the point of purchase.
(ii) collective investment schemes The External Investment Manager will only make such investments if the collective investment scheme is registered/authorised/approved by the relevant regulatory authority.
(iii) financial derivatives
Financial derivative instruments including but not limited to futures contracts, currency forwards and swaps for hedging purposes only. . The Fund’s net market exposure owing to its financial derivatives positions must not exceed its NAV.
(iv) money market instruments (v) placement of deposits with financial institutions, and
(vi) any other investments as may be agreed between the Manager and the Trustee
from time to time.
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3.8 BASES OF VALUATION OF THE ASSETS OF THE FUND AND VALUATION FOR THE FUND
3.8.1 BASES OF VALUATION OF THE ASSETS OF THE FUND
Investment Instruments
Valuation Basis
Bonds Listed local and foreign bonds will be valued based on the last
done prices as at the close of the business day of the respective markets on the same calendar day as the Valuation Day. However, if (a) a valuation based on the market price does not represent the fair value of the securities, for example during abnormal market conditions; or (b) no market price is available, including in the event of a suspension in the quotation of securities for a period exceeding 14 days, or such shorter period as agreed by the Trustee, then the securities would be valued at fair value, as determined in good faith by the Manager based on the methods or bases approved by the Trustee after appropriate technical consultation. Investments in bonds denominated in MYR which are not listed on any recognised stock exchange will be valued on each Valuation Day by reference to the fair value prices quoted by a bond pricing agency (BPA) registered with the Securities Commission, or in the case of foreign bonds, the price quoted on Reuters. Where quotations are not available, such bonds will generally be valued by reference to the average indicative price quoted by three independent and reputable financial institutions in over-the-counter markets at the close of trading. These institutions include investment banks and commercial banks dealing in bonds. However, when the Manager is unable to obtain quotations from three independent and reputable financial institutions due to circumstances such as extreme market conditions, such bonds will be valued according to an alternative method determined in good faith by the Manager, which has been verified by the auditor of the Fund and approved by the Trustee provided that the Manager records its basis for using the alternative method having obtained necessary internal approvals to use the alternative method and the Manager keeps an audit trail of all decisions and basis for adopting the alternative method. Any alternative method shall be consistently applied unless advised otherwise by the auditor of the Fund and the Trustee.
In a case where the Manager is of the view that the price quoted by BPA or Reuters or the average indicative price quoted by 3 independent and reputable financial institutions for a specific bond differs from its view of the market price of the bond by more than 20 basis points, the Manager may use the market price of its view, provided that the Manager records its basis for using such price, obtains necessary internal approvals to use such price and keeps an audit trail of all decisions and basis of adopting such price.
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Collective investment schemes which are quoted on an exchange
Collective investment schemes which are quoted on an exchange shall be valued based on the last done prices as at the close of the business day of the respective markets on the same calendar day as the Valuation Day.
Unlisted collective investment schemes
Investments in unlisted collective investment schemes will be valued based on the last published redemption price.
Financial derivatives Financial derivatives positions will be marked to market using valuation prices quoted by the derivatives provider as at the close of the business day of the respective markets on the same calendar day as the Valuation Day.
Malaysian and/or foreign currency deposits
Malaysian and/or foreign currency-denominated deposits placed with banks or other financial institutions and placement of money at call with investment banks are valued for each Valuation Day by reference to the value of such investments and the interest accrued thereon for the relevant period.
Money market instruments Money market instruments will be valued based on the accretion of discount or amortisation of premium on a yield to maturity basis.
Foreign exchange rate conversion
Where the value of an asset of the Fund is denominated in a foreign currency (if any), the assets are translated to MYR for a Valuation Day using the bid foreign exchange rate quoted by Reuters, at United Kingdom time 4.00 p.m on the same calendar day as the Valuation Day.
Any other instruments Fair value as determined in good faith by the Manager, based on methods or bases which have been verified by the auditors of the Fund and approved by the Trustee.
3.8.2 VALUATION OF THE FUND In undertaking any of the Fund’s investments, the Manager will ensure that all the assets of the Fund will be valued appropriately, that is, at market value, failing which, such assets will be valued at fair value and at all times in compliance with the relevant laws (including approved accounting standards). Upon the Commencement Date, the assets of the Fund will be valued every Friday that is a Business Day (“Valuation Day”). Should a Friday be a non-Business Day, then the valuation of assets will take place on the next Business Day. As certain foreign markets which the Fund may invest in may have different time zones from that of Malaysia, the valuation of the Fund for a Valuation Day will be conducted at 5.00 p.m. (or such other time as may be determined by the Manager from time to time) on the Business Day immediately following the Valuation Day (“Valuation Point”). The price of the Fund will be published on the following Business Day (i.e. on the 2nd Business Day after the Valuation Day). As an illustration, if the Commencement Date falls on 1 November 2013 (Friday), the first Valuation Day will be 1 November 2013. The Valuation Point for the first Valuation Day of 1 November 2013 will be 5.00pm on 4 November 2013 (Monday). The 2nd Valuation Day shall be 8 November 2013 (Friday), and if that day is a non-Business Day then the Valuation Day will fall on the next Business Day i.e. 11 November 2013 (Monday). Accordingly, as the Fund invests in foreign markets, the valuation of the assets of the Fund for the Valuation Day of 11 November 2013 will be conducted at 5.00pm on 12 November 2013 and the price of the Fund will be published on 13 November 2013.
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Investors may obtain the most current computed price of the Fund by contacting authorised distributors, the Manager directly or by visiting our website, www.uobam.com.my (Note: this website is under construction and is expected to be ready by July 2014).
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CHAPTER 4: FEES, CHARGES AND EXPENSES
Expenses directly incurred by Unit Holders. 4.1 SALES CHARGE Up to 3.00% of the Offer Price. Please refer to the illustration under Section 5.4 below to see how the sales charge is calculated. 4.2 REDEMPTION CHARGE Up to 1.00% of the Redemption Price will be imposed for redemption requests. All redemption charges levied will be retained by the Manager. Please refer to the illustration under Section 5.5 below to see how the redemption charge is calculated. 4.3 SWITCHING FEE Not applicable as switching facility is not available for the Fund. 4.4 TRANSFER FEE Not applicable as transfer facility is not available for the Fund. 4.5 OTHER CHARGES Charges, for instance bank charges, telegraphic charges and courier charges, shall be borne by the Unit Holder. Expenses indirectly incurred by Unit Holders. 4.6 MANAGEMENT FEE There is no Management Fee for this Fund. 4.7 TRUSTEE FEE 0.06% per annum of the NAV of the Fund, accrued periodically and paid monthly subject to a minimum of RM15,000 per annum (excluding foreign custodian fees and charges). . 4.8 OTHER EXPENSES Only the expenses which are directly related and necessary to the business of the Fund may be charged to the Fund. These would include (but are not limited to) the following: (a) commissions/fees paid to brokers in effecting dealings in the investments of the Fund;
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(b) taxes and other duties charged on the Fund by the government and/or other authorities; (c) costs, fees and expenses properly incurred by the auditor of the Fund; (d) costs, fees and expenses incurred for the valuation of any investment of the Fund by independent
valuers for the benefit of the Fund; (e) costs, fees and expenses incurred for any modification of the Deed save where such modification
is for the benefit of the Manager and/or the Trustee; (f) costs, fees and expenses incurred for any meeting of the Unit Holders save where such meeting
is convened for the benefit of the Manager and/or the Trustee; (g) costs, commissions, fees and expenses of the sale, purchase, insurance and any other dealing of
any asset of the Fund; (h) costs, fees and expenses incurred in engaging any specialist approved by the Trustee for
investigating or evaluating any proposed investment of the Fund; (i) costs, fees and expenses incurred in engaging any valuer, adviser or contractor for the benefit of
the Fund; (j) costs, fees and expenses incurred in the preparation and audit of the taxation, returns and
accounts of the Fund; (k) costs, fees and expenses incurred in the termination of the Fund or the removal of the Trustee or
the Manager and the appointment of a new trustee or fund manager; (l) costs, fees and expenses incurred in relation to any arbitration or other proceedings concerning
the Fund or any asset of the Fund, including proceedings against the Trustee or the Manager by the other for the benefit of the Fund (save to the extent that legal costs incurred for the defence of either of them are not ordered by the court to be reimbursed by the Fund);
(m) costs, fees and expenses deemed by the Manager to have been incurred in connection with any
change or the need to comply with any change or introduction of any law, regulation or requirement (whether or not having the force of law) of any governmental or regulatory authority; and
(n) (where the custodial function is delegated by the Trustee) charges and fees paid to sub-
custodians taking into custody any foreign assets of the Fund. 4.9 REBATES AND SOFT COMMISSION It is our policy to channel all rebates, if any, received from stockbrokers/dealers to the Fund. However, soft commissions received for goods and services which are of demonstrable benefit to Unit Holders such as fundamental databases, financial wire services, technical analysis software and stock quotation system incidental to investment management of the Fund are retained by us.
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CHAPTER 5: TRANSACTION INFORMATION
5.1 PRICING POLICY The Manager adopts the single pricing policy which is in line with the SC’s requirement for the Malaysian unit trust industry. Under this regime, both the selling price and redemption price of units will be quoted based on a single price i.e. the net asset value per unit of a fund. During the Offer Period, the Offer Price and Redemption Price shall be RM1.0000. As the Fund is a close-ended fund, there is no selling price as Units will no longer be offered for sale after the Offer Period. The Redemption Price will be the NAV per Unit for a Valuation Day after the Offer Period. The Fund also adopts a forward pricing policy which means that the Redemption Price in respect of requests for redemption received by the Manager before the cut-off time of 4.00pm on a Valuation Day will be the NAV per Unit for that Valuation Day. The Redemption Price in respect of requests for redemption received after the cut-off time of 4.00pm on a Valuation Day will be the NAV per Unit for the next Valuation Day.
5.2 COMPUTATION OF NAV AND NAV PER UNIT Investors should note that the NAV of the Fund is determined by deducting the value of all the Fund’s liabilities from the value of all the Fund’s assets, at a particular Valuation Point. The NAV per Unit of the Fund at a particular valuation point is the NAV of the Fund at that Valuation Point divided by the number of Units in circulation at the same Valuation Point. An illustration of computation of NAV and the NAV per Unit of the Fund Example: RM Investments 85,937,316 Other assets 3,596,911 Total assets 89,534,227 Less: Liabilities (508,561) NAV of the Fund (before deduction of Trustee Fee)
89,025,666
Less: Trustee Fee (0.06% per annum/365days x 7 days)
(1,024)
NAV of the Fund (after deduction of Trustee Fee)
89,024,642
Units in circulation 80,000,000 NAV per Unit 1.112808 NAV per Unit (Rounded up to 4 decimal points) 1.1128 Please note the above is for illustration purposes only 5.3 INCORRECT PRICING The Manager shall take immediate action to rectify any incorrect valuation and/or pricing of the Fund and/or the Units and to notify the Trustee and the relevant authorities of the same unless the Trustee
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considers the incorrect valuation and/or pricing of the Fund and/or the Units is of minimal significance. An incorrect valuation and/or pricing of the Fund and/or the Units shall result in a reimbursement of moneys unless the Trustee considers that such incorrect valuation and/or pricing of the Fund and/or the Units is of minimal significance. The Trustee shall not consider an incorrect valuation and/or pricing of the Fund and/or the Units to be of minimal significance if the error involves a discrepancy of 0.5% or more of the NAV per Unit unless the total impact on a Unit Holder’s account is less than RM10. An incorrect valuation and/or pricing not considered to be of minimal significance by the Trustee shall result in reimbursement of moneys and/or creation of Units in the following manner: (a) if there is an over valuation and/or pricing in relation to the redemption of Units, the Manager shall
reimburse the Fund; (b) if there is an under valuation and/or pricing in relation to the redemption of Units, the Fund shall
reimburse the Unit Holder or former Unit Holder.
5.4 APPLICATION FOR UNITS When purchasing Units, Qualified Investors must forward the following: 1) completed application form; 2) necessary remittance; and 3) relevant supporting documents such as a photocopy of their identity card (for an individual
applicant) or certified true copies of the certificate of incorporation or registration, memorandum and articles of association or constitution or by-laws, and relevant resolutions (for a corporate applicant);
to the Manager’s registered office or any of its branches, or to any of its authorised distributors or participating IUTAs before their respective cut-off times during the Offer Period. Subscriptions are deemed to be received and accepted upon the receipt of complete documentation and information above or as may be stipulated by the Manager in the application form from time to time. The minimum initial investment of this Fund is RM20,000 and the minimum additional investment is RM10,000 (or such other lower amount as the Manager may from time to time decide). The Fund is open for subscription every Business Day during the Offer Period. The Manager shall be entitled to reject any subscription and has the discretion whether to furnish the reasons for the rejection to the applicant. Note: Transactions made via our IUTA/distributors may be subject to different cut-off times which shall be no later than 4.00 p.m. and other terms and conditions of the respective IUTA/distributors. Below is an illustration on how Units are allocated when a Unit Holder purchases Units of the Fund: For example, an investor wants to invest RM10,000, the Offer Price is RM1.0000 and the sales charge is 3.00% of the Offer Price. The investment amount, number of Units purchased and sales charge payable are as follows: Information Formula Amount
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Amount invested - RM 10,000
Number of Units purchased
Amount invested divided by the Offer Price = RM 10,000 ÷ RM1.00 10,000 Units
Sales charge payable Sales charge x Offer Price x number of Units = 3.00% x RM 1.00 x 10,000 Units RM300
Total amount to be paid = Amount invested + sales charge payable = RM10,000 + RM300 = RM10,300
5.5 REDEMPTION OF UNITS The Manager accepts redemption requests on each Business Day. Redemption requests are deemed to be received and accepted upon the receipt of complete documentation and information as may be stipulated by the Manager in the redemption form from time to time. The minimum redemption amount is 10,000 Units or such other lesser Units as the Manager may from time to time decide. There is no restriction on the number of times a Unit Holder can redeem. For example, the price of Units in respect of redemption requests received before the cut-off time of 4.00pm on a Valuation Day, say 29 November 2013 will be based on the NAV per Unit for that Valuation Day (29 November 2013). Accordingly, the price of Units in respect of requests for redemption received after the cut-off time of 4.00pm on a Valuation Day, say Friday, 29 November 2013 will be based on the valuation of Units for the next Valuation Day, i.e. the following Friday, 6 December 2013. All redemption proceeds will be paid back to the Unit Holder(s) segregated personal or corporate banking account. Transaction costs such as charges for telegraphic transfers, if any, will be borne by the Unit Holders and offset against the redemption proceeds. Note: Transactions made via our IUTA/distributors may be subject to different cut-off times which shall be no later than 4.00 p.m. and other terms and conditions of the respective IUTA/distributors. Below is an illustration on how the redemption proceeds are calculated when a Unit Holder makes a redemption request on or after the Commencement Date: Assumption: The NAV per Unit is RM1.10 and a Unit Holder wants to redeem 10,000 Units. Number of Units redeemed = 10,000 Units Redemption charge = 1.00% of NAV per Unit NAV per Unit = RM1.10 The net repurchase request proceeds payable to you are as follows: Information Formula Amount Number of Units to be redeemed 10,000 Units Amount to be redeemed
Number of Units redeemed x NAV per
RM11,000
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Unit = 10,000 Units x RM1.10
Redemption charge of 1.00% of the NAV per Unit
Redemption charge x amount to be redeemed = 1.00% x RM11,000
RM110
Amount to be redeemed = RM11,000 Less redemption charge = RM110 Amount of redemption proceeds = RM10,890
5.6 SWITCHING OF UNITS Switching facility is not available for the Fund.
5.7 TRANSFER OF UNITS Transfer facility is not available for the Fund. 5.8 POLICY ON ROUNDING ADJUSTMENTS The calculation of the NAV per Unit is rounded up to 4 decimal points. The amount for application and redemption of Units will be rounded up to 2 decimal points.
5.9 PERIODIC REPORTING TO UNIT HOLDERS Unit Holders will receive the following statements and reports: Confirmation of investment statements detailing his investment, which will be sent within 10
Business Days from the date monies are received by the Manager for investment in the Fund. This confirmation will include details of the Units purchased;
Monthly statements of account which shows the balance of Unit Holders’ investments and all
transactions made during the month, distribution details and investment value; Quarterly reports which provides a brief overview of the Fund including key risk factors,
investment outlook for the quarter, the Fund’s financial performance, credit risk, market outlook, changes in the key investment team, illiquid holdings, details on portfolio holdings, information on fund performance and volatility and unaudited accounts of the Fund for the quarter. The quarterly reports will be sent to all Unit Holders within 2 months from the end of each financial quarter;
An annual report which provides a detailed overview of the Fund including key risk factors,
investment outlook for the year, the Fund’s financial performance, credit risk, market outlook, changes in the key investment team, illiquid holdings, details on portfolio holdings, information on fund performance and volatility and audited accounts of the Fund for the year. The annual report will be sent to all Unit Holders within 2 months from the end of each Financial Year; and
If distribution is declared by the Fund, Unit Holders will receive a statement of distribution,
detailing the nature and amount of distribution by the Fund and a tax statement/voucher for submission to the Inland Revenue Board of Malaysia.
5.10 DISTRIBUTION POLICY Subject to the availability of income, the Manager will distribute income once a year.
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Distribution of income will only be made from realized gains or realized income.
5.11 MODE OF DISTRIBUTION Distribution proceeds will be paid out in cash to Unit Holders.
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CHAPTER 6: THE PEOPLE BEHIND THE MANAGER
6.1 BACKGROUND & EXPERIENCE OF THE MANAGER UOB Asset Management (Malaysia) Berhad (formerly known as UOB-OSK Asset Management Sdn Bhd) holds the Capital Markets & Services License for fund management in Malaysia under the CMSA. UOBAM(M) has more than 16 years’ experience in fund management, with RM3.36 billion under management as at 30 September 2013. UOBAM(M) is a subsidiary of UOB Asset Management Ltd (“UOBAM”) and the United Overseas Bank group, headquartered in Singapore. UOBAM has more than 27 years of experience managing collective investment schemes and discretionary funds in Singapore and manages SGD44.7 billion worth of assets as at 30 September 2013. 6.2 DUTIES AND RESPONSIBILITIES OF THE MANAGER The Manager holds a Capital Markets and Services License for the regulated activity of fund management and is responsible for the day to day management of the Fund in accordance with, amongst others, the provisions of the Deed, the CMSA, the relevant SC guidelines and the Manager’s internal policies; and for the development and implementation of appropriate investment strategies. The main tasks performed by the Manager include: (a) managing the Fund; (b) executing, supervising and valuing investments of the Fund; (c) conducting the sale and redemption of Units in the Fund; (d) issuing reports on market and economic review, strategies and Fund performance; (e) distributing income to Unit Holders; and (f) keeping proper records of the Fund. In fulfilling these functions, the Manager has in place a strong and cohesive team of staff who are experienced in various aspects of the investment management industry, i.e. in administration, marketing and fund management; the fund management team holds investment meetings at least once a month. 6.3 BOARD OF DIRECTORS
Izlan bin Izhab Khoo Chock Seang Lim Suet Ling Ong Sea Eng Choong Tuck Yew Seow Lun Hoo
6.4 KEY PERSONNEL OF THE MANAGER Lim Suet Ling Lim Suet Ling is the Chief Executive Officer/Executive Director at UOBAM(M). She graduated with a Bachelor of Business Administration (Hons) from the National University of Singapore and is also a Chartered Financial Analyst. She has more than 20 years’ experience in the industry and has particular expertise in Malaysian and Asia ex-Japan equities. Her mandates have been wide ranging with varying investment styles and focus. She has held senior positions including the Malaysia equity team head of UOB Asset Management Ltd and has been portfolio manager of several funds in both Malaysia and Singapore. She was promoted to Executive Director and Chief Executive Officer of UOBAM(M) in 2005 to oversee the growth of the company. Prior to her appointment, she was an Associate Director of UOB Asset Management Ltd. Ms Lim holds a Capital Markets Services
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Representative’s License for the regulated activity of fund management. She is also the designated fund manager for the Fund. Chang Kang Shyang Chang Kang Shyang is the Head of Fixed Income at UOBAM(M). He holds a Bachelor of Accountancy (Hons) degree from Universiti Utara Malaysia and is also a CFA charterholder. He began his career in an audit firm before joining the financial industry. He has 18 years of experience in the financial industry and has been mainly involved in various treasury activities. Prior to joining UOBAM(M), he was attached to the fixed income desk at a local bank. Mr Chang holds a Capital Markets Services Representative’s License for the regulated activity of fund management.
6.5 THE MANAGER’S DELEGATES Investment Function UOB Asset Management Ltd, incorporated in Singapore The Manager has delegated the investment management function of the Fund to UOB Asset Management Ltd, Singapore (UOBAM/External Investment Manager), whose registered office is at 80, Raffles Place, UOB Plaza, Singapore 048624. UOBAM will manage the assets of this Fund in accordance with the investment objective of the Fund, the Deed and subject to the CMSA, the Guidelines on Wholesale Funds issued and updated from time to time by the Securities Commission, as well as the internal policies and procedures of the Manager. UOBAM is a wholly-owned subsidiary of United Overseas Bank Limited. Established in 1986, UOBAM has been managing collective investment schemes and discretionary funds in Singapore for 27 years and as of 30 September 2013 manages about S$44.7 billion in clients' assets. UOBAM is licensed and regulated by the Monetary Authority of Singapore. UOBAM also has investment operations in Malaysia and Thailand. UOBAM offers global investment management expertise to institutions, corporations and individuals, through customised portfolio management services and unit trusts. As at 30 September 2013, UOBAM manages 52 unit trusts in Singapore, with total assets of about S$4.3 billion under management. In terms of market coverage, UOBAM has acquired specialist skills in equity investment in Asian, Australian, European and US markets and in major global sectors. In the bond markets, UOBAM covers the Organisation of Economic Co-operation and Development (OECD) countries to emerging markets. UOBAM's investment philosophy is to emphasise on securities selection using a bottom-up approach. UOBAM makes regular company visits and supplements its fundamental investment approach with quantitative tools to control risks and to aid in the portfolio construction process. UOBAM has also established itself as one of the leading players in structured credits and investment solutions, managing third party investments in global emerging market securities as well as global investment grade, non-investment grade and multi-sector credits. As at 30 September 2013, UOBAM and its subsidiaries in the region have a staff strength of over 337 including about 56 investment professionals in Singapore. The designated fund manager responsible for the management of the Fund is Mr Chia Tse Chern and his profile is as set out below. Mr Chia Tse Chern, Senior Director and Portfolio Manager/ Head of Singapore & Asia Fixed Income Tse Chern joined UOBAM in 2008. He heads the Asia fixed income team and covers Asia macro, local rates and sovereign credits. In 2013, he was promoted to the rank of Senior Director. Prior to joining UOBAM, Tse Chern was an economist with Credit Suisse between 1998-2006, covering Southeast Asia and India. Tse Chern graduated with a Bachelor of Business (Financial
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Analysis, honours) from Nanyang Technological University in 1998 and holds a Masters of Applied Economics (Distinction) from Australian National University. He has over 13 years of industry experience Regulatory Authority of The External Investment Manager Monetary Authority of Singapore. Fund Valuation Functions Deutsche Bank (Malaysia) Berhad We have appointed Deutsche Bank (Malaysia) Berhad as the fund valuation and fund accounting agent. Deutsche Bank (Malaysia) Berhad is a wholly-owned subsidiary of the parent organisation, Deutsche Bank Aktiengesellschaft. Deutsche Bank Aktiengesellschaft established a presence in Kuala Lumpur, Malaysia in 1967 and this branch in Malaysia was thereafter incorporated as per local regulation requirement on 22nd August 1994 to Deutsche Bank Malaysia Berhad. Its roles and responsibilities as the fund valuation and fund accounting agent are: Maintaining financial accounting records of portfolio/s including all transactions data, records and
investment ledgers; Monitoring and recording of corporate actions; Performing cash and securities reconciliation with financial institutions and custodian records; Performing valuation of the investments and the Fund; Providing a reporting package which includes the following:
Statement of assets and liabilities; Statement of income and expenditure; Portfolio valuation report; and Transaction schedules;
Providing relevant information to facilitate the preparation of statistical returns for submission to regulatory bodies; and
Submitting accounts/accounting records to the appointed external auditors and providing relevant information for disclosure in the annual financial statements (whenever applicable).
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CHAPTER 7: THE TRUSTEE
7.1 ABOUT DEUTSCHE TRUSTEES MALAYSIA BERHAD Deutsche Trustees Malaysia Berhad (“DTMB”) (Company No. 763590-H) was incorporated in Malaysia on 22 February 2007 and commenced business in May 2007. The company is registered as a trust company under the Trust Companies Act 1949, with its business address at Level 20, Menara IMC, 8 Jalan Sultan Ismail, 50250 Kuala Lumpur. DTMB is a member of Deutsche Bank Group (“Deutsche Bank”), a global investment bank with a substantial private client franchise. With more than 100,000 employees in more than 70 countries, Deutsche Bank offers financial services throughout the world.
7.2 DTMB’S FINANCIAL POSITION 31 Dec 2012
(RM) 31 Dec 2011
(RM) 31 Dec 2010
(RM) Paid-up share capital 3,050,000 3,050,000 3,050,000 Shareholders’ funds 4,654,993 4,038,569 2,366,581 Revenue 5,725,581 4,162,341 1,856,706 Profit/(loss) before tax 3,066,962 2,282,980 459,216 Profit/(loss) after tax 2,288,412 1,671,988 616,827
7.3 EXPERIENCE IN TRUSTEE BUSINESS DTMB is part of Deutsche Bank’s Trust & Securities Services, which provides trust, agency, depository, custody and related services on a range of securities and financial structures. As at 25 October 2013, DTMB is the trustee for 151collective investment schemes including unit trust funds, wholesale funds, exchange-traded funds and private retirement schemes. DTMB’s trustee services are supported by Deutsche Bank (Malaysia) Berhad (“DBMB”), a subsidiary of Deutsche Bank, financially and for various functions, including but not limited to financial control and internal audit.
7.4 BOARD OF DIRECTORS Jacqueline William Chang Wai Kah Janet Choi Jalalullail Othman* Lew Lup Seong* * Independent director
7.5 CHIEF EXECUTIVE OFFICER Chua Mee Ling
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7.6 DUTIES AND RESPONSIBILITIES OF THE TRUSTEE DTMB’s main functions are to act as trustee and custodian of the assets of the Fund and to safeguard the interests of Unit holders of the Fund. In performing these functions, the Trustee has to exercise due care and vigilance and is required to act in accordance with the relevant provisions of the Deed, the Capital Markets & Services Act 2007 and all relevant laws. 7.7 TRUSTEE’S STATEMENT OF RESPONSIBILITY The Trustee has given its willingness to assume the position as trustee of the Fund and is willing to assume all its obligations in accordance with the Deed, the Capital Markets & Services Act 2007 and all relevant laws. In respect of monies paid by an investor for the application of units, the Trustee’s responsibility arises when the monies are received in the relevant account of the Trustee for the Fund and in respect of redemption, the Trustee’s responsibility is discharged once it has paid the redemption amount to the Manager. 7.8 MATERIAL LITIGATION & ARBITRATION As at 25 October 2013, neither the Trustee nor its delegate is (a) engaged in any material litigation and arbitration, including those pending or threatened, nor (b) aware of any facts likely to give rise to any proceedings which might materially affect the business/financial position of the Trustee and any of its delegate. 7.9 TRUSTEE’S DELEGATE The Trustee has appointed DBMB as the custodian of the assets of the Fund. DBMB is a wholly-owned subsidiary of Deutsche Bank AG. DBMB offers its clients access to a growing domestic custody network that covers over 30 markets globally and a unique combination of local expertise backed by the resources of a global bank. In its capacity as the appointed custodian, DBMB’s roles encompass safekeeping of assets of the Fund; trade settlement management; corporate actions notification and processing; securities holding and cash flow reporting; and income collection and processing. All investments are automatically registered in the name of, or to the order, of the Fund. DBMB shall act only in accordance with instructions from the Trustee. 7.10 DISCLOSURE ON RELATED-PARTY TRANSACTIONS/CONFLICT OF INTERESTS As the Trustee for the Fund(s), there may be related party transactions involving or in connection with the Fund(s) in the following events: (1) Where the Fund invests in the products offered by Deutsche Bank AG and any of its group
companies (e.g. money market placement, etc.); (2) Where the Fund has obtained financing from Deutsche Bank AG and any of its group
companies, as permitted under the Securities Commission’s guidelines and other applicable laws;
(3) Where the Manager appoints DBMB and/or DTMB to perform its back office functions (e.g. fund accounting and valuation and/or registrar and transfer agent); and
(4) Where DTMB has delegated its custodian functions for the Fund to DBMB. DTMB will rely on the Manager to ensure that any related party transactions, dealings, investments and appointments are on terms which are the best that are reasonably available for or to the Fund and are on an arm’s length basis as if between independent parties. While DTMB has internal policies intended to prevent or manage conflicts of interests, no assurance is given that their application will necessarily prevent or mitigate conflicts of interests. DTMB's commitment to act in the best interests of the unit holders of the Fund does not preclude the possibility of related party transactions or conflicts.
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CHAPTER 8: RIGHTS AND LIABILITIES OF UNIT HOLDERS
8.1 RIGHTS OF UNIT HOLDERS As a Unit Holder of the Fund, and subject to the provisions of the Deed, you have the right to: receive distributions, if any, from the Fund; participate in any increase in the NAV per Unit of the Fund; call for Unit Holders’ meetings and to vote for the removal of the Trustee or the Manager through
a Special Resolution; receive monthly statements, quarterly and annual reports on the Fund; and exercise such other rights and privileges as provided for in the Deed. However, Unit Holders would not have the right to require the transfer to them any of the investments of the Fund. Neither would Unit Holders have the right to interfere with or to question the exercise by the Trustee (or by the Manager on the Trustee’s behalf) of the rights of the Trustee as trustee of the investments of the Fund.
8.2 LIABILITIES OF UNIT HOLDERS As a Unit Holder of the Fund, and subject to the provisions of the Deed, your liabilities would be limited to the following: 1) A Unit Holder would not be liable for nor would a Unit Holder be required to pay any amount in
addition to the payment for Units of the Fund as set out in the Information Memorandum and the Deed.
2) A Unit Holder would not be liable to indemnify the Trustee and/or the Manager in the event that
the liabilities incurred by the Trustee and/or the Manager on behalf of the Fund exceed the NAV of the Fund.
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CHAPTER 9: POWER TO CALL FOR A UNIT HOLDERS’ MEETING
9.1 MEETINGS DIRECTED BY THE UNIT HOLDERS Unless otherwise required or allowed by the relevant laws, the Manager shall, within 21 days of receiving a direction from not less than 50 or 1/10, whichever is less, of all the Unit Holders of the Fund or of a particular class of Units, summon a meeting of the Unit Holders of the Fund or of a particular class of Units by: (a) sending by post at least 7 days before the date of the proposed meeting a notice of the
proposed meeting to all the Unit Holders; (b) publishing at least 14 days before the date of the proposed meeting an advertisement giving
notice of the proposed meeting in a national language newspaper published daily and another newspaper approved by the relevant authorities; and
(c) specifying in the notice the place and time of the meeting and the terms of the resolutions to be
proposed at the meeting. The Unit Holders may direct the Manager to summon a meeting for any purpose including, without limitation, for the purpose of: (1) requiring the retirement or removal of the Manager; (2) requiring the retirement or removal of the Trustee; (3) considering the most recent financial statements of the Fund; or (4) giving to the Trustee such directions as the meeting thinks proper; (5) considering any matter in relation to the Deed; provided always that the Manager shall not be obliged to summon such a meeting unless direction has been received from not less than 50 or one-tenth 1/10 of the relevant Unit Holders, whichever is the lesser number.
9.2 MEETINGS SUMMONED BY THE TRUSTEE The Trustee may summon a meeting of Unit Holders for any purpose whatsoever by: (a) giving at least 14 days written notice of the meeting to Unit Holders; and (b) specifying in the notice the place and time of the meeting and the terms of the resolutions to
be proposed at the meeting.
9.3 MEETINGS SUMMONED BY THE MANAGER The Manager may summon a meeting of Unit Holders for any purpose whatsoever by: (a) giving at least 14 days written notice of the meeting to Unit Holders; and (b) specifying in the notice the place and time of the meeting and the terms of the resolutions to
be proposed at the meeting.
9.4 PROVISIONS GOVERNING UNIT HOLDERS’ MEETINGS Quorum
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The quorum required for a meeting of the Unit Holders shall be 5 Unit Holders, whether present in person or by proxy, provided that if the Fund has 5 or less Unit Holders, the quorum required for a meeting of the Unit Holders of the Fund shall be 2 Unit Holders, whether present in person or by proxy; if the meeting has been convened for the purpose of voting on a Special Resolution, the Unit Holders present in person or by proxy must hold in aggregate at least 25% of the Units in circulation at the time of the meeting.
If within 1 hour from the time appointed for the meeting a quorum is not present, the meeting if convened upon the request of Unit Holders shall be dissolved. In any other case, it shall stand adjourned to such day and time not being less than 7 days thereafter and to such place as may be appointed by the chairman of the meeting; at such adjourned meeting, the Unit Holders present in person or by proxy shall be the quorum for the transaction of business including the passing of Special Resolutions if the quorum prescribed by the Deed is not present after 1 hour from the time appointed for the adjourned meeting. Resolutions passed at a meeting of Unit Holders bind all Unit Holders whether or not they were present at the meeting at which the resolutions were passed. No objection may be made as to any vote cast unless such objection is made at the meeting. Voting by Proxy A notice calling a Unit Holders’ meeting will contain a statement that a Unit Holder is entitled to attend and vote or may appoint a proxy. The instrument appointing a proxy shall be duly stamped, if required, and deposited at the office of the Manager not less than 48 hours before the time appointed for the meeting or adjourned meeting as the case may be at which the person named in such instrument proposes to vote. A vote given in accordance with the terms of an instrument of proxy shall be valid notwithstanding the previous death or insanity of the principal or revocation of the proxy or the power of attorney or other authority under which the proxy was signed or the sale of Units in respect of which the proxy was given provided that no intimation in writing of such death, insanity, revocation or sale shall have been received at the place so appointed for the deposit of proxies or if no such place is appointed at the registered office of the Manager before the commencement of the meeting or adjourned meeting at which the proxy is used. Chairman of the Meeting The meeting will be chaired if the meeting was convened at the instance of the Unit Holders or the Trustee, by a person appointed by the Unit Holders present at the meeting or, where no such appointment is made, a nominee of the Trustee; or if the meeting was convened at the instance of the Manager, by a person appointed by the Manager. The decision of the chairman of the meeting on any matter shall be final. Casting of Votes Every question arising at any Unit Holders' meeting shall be decided in the first instance by a show of hands unless a poll be demanded or, if it be a question which under the Deed requires more than a simple majority for it to be resolved and passed, a poll shall be taken. A poll may be demanded before or immediately after any question is put to a show of hands.
On a show of hands every Unit Holder who is present in person or by proxy shall have one vote. Upon a poll every Unit Holder present in person or by proxy shall have one vote for every Unit held by him.
A poll may be demanded by the chairman of the meeting, the Trustee, the Manager or by Unit Holders holding (or representing by proxy) between them not less than 1/10 of the total number of Units then in issue.
Unless a poll is so demanded, a declaration by the chairman of the meeting that a resolution has been carried or carried unanimously or by a particular majority or lost shall be conclusive evidence of the
33
fact without proof of the number or proportion of the votes recorded in favour of or against such resolution. 9.5 TERMINATION OF THE FUND The Fund shall automatically terminate on an Early Termination Date or on the Maturity Date. For the avoidance of doubt, no Unit Holders’ approval shall be required for the automatic termination of the Fund on an Early Termination Date or on the Maturity Date. The Manager may terminate the trust hereby created and wind up the Fund for any reason whatsoever provided always that a Unit Holders' meeting is called and a Special Resolution is passed by the Unit Holders to terminate the trust and to wind-up the Fund. Upon the termination of the Fund, the Trustee shall: a) sell all the assets of the Fund then remaining in its hands and pay out of the Fund any liabilities of
the Fund; such sale and payment shall be carried out and completed in such manner and within such period as the Trustee considers to be in the best interests of the Unit Holders; and
b) from time to time distribute to the Unit Holders, in proportion to the number of Units held by them
respectively:
i) the net cash proceeds available for the purpose of such distribution and derived from the sale of the investments and assets of the Fund less any payments for liabilities of the Fund; and
ii) any available cash produce;
provided always that the Trustee shall not be bound, except in the case of final distribution, to distribute any of the moneys for the time being in his hands the amount of which is insufficient for payment to the Unit Holders of RM1.00 or its foreign currency equivalent, if applicable in respect of each Unit and provided also that the Trustee shall be entitled to retain out of any such moneys in his hands full provision for all costs, charges, taxes, expenses, claims and demands incurred, made or anticipated by the Trustee in connection with or arising out of the winding-up of the Fund and, out of the moneys so retained, to be indemnified against any such costs, charges, taxes, expenses, claims and demands; each such distribution shall be made only against the production of such evidence as the Trustee may require of the title of the Unit Holder relating to the Units in respect of which the distribution is made. Upon the termination of the Fund, the amount payable to Unit Holders shall be calculated in the manner adequately set out in the Information Memorandum. In the event the Fund is terminated, the Trustee shall be at liberty to call upon the Manager to grant the Trustee, and the Manager shall so grant, a full and complete release from the Deed and the Manager shall indemnify the Trustee against any claims arising out of the Trustee's execution of the Deed provided always that such claims have not been caused by any failure on the part of the Trustee to exercise the degree of care and diligence required of a trustee as contemplated by the Deed and all relevant laws. Where the termination of the Fund and the winding-up of the Fund have been occasioned by any of the events set out herein: a) if the Manager has gone into liquidation, except for the purpose of reconstruction or amalgamation
upon terms previously approved in writing by the Trustee and the relevant authorities; b) if, in the opinion of the Trustee, the Manager has ceased to carry on business; or c) if, in the opinion of the Trustee, the Manager has to the prejudice of Unit Holders failed to comply
with the provisions of the Deed or contravened any of the provisions of any relevant law;
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the Trustee shall summon for a Unit Holders’ meeting to get directions from the Unit Holders. If a Special Resolution is passed to terminate the trust and wind-up the Fund, the Trustee shall apply to the court for an order confirming such Special Resolution. The Trustee shall, as soon as practicable after the winding up of the Fund inform Unit Holders and the relevant authorities of the same. The Trustee shall also arrange for a final review and audit of the final accounts of the Fund by the auditor of the Fund;in all other cases of termination of the trust and winding-up of the Fund, such final review and audit by the auditor of the Fund shall be arranged by the Manager.
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CHAPTER 10: ADDITIONAL INFORMATION
10.1 UNCLAIMED MONEYS If the cheques for the payment of moneys to Unit Holders are not presented for payment, and those moneys remain unclaimed for such period as may be prescribed by the Unclaimed Moneys Act, 1965, the Manager shall lodge such moneys with the registrar of unclaimed moneys in accordance with the provisions of the Unclaimed Moneys Act, 1965.
10.2 ANTI-MONEY LAUNDERING POLICIES The Manager has in place a know your client (KYC) policy where procedures are in place to verify clients’ identification by obtaining satisfactory evidence of clients’ identity and source of funds before opening an account or establishing a business relationship. The Manager reserves the right to reject any subscription if information or documentation required is incomplete or insufficient.
10.3 REGULATORY AUTHORIZATION The Fund is subject to the authorization of the Securities Commission under section 212 (5) of the Act.
10.4 NO GUARANTEE The Manager does not guarantee the performance or success of the Fund. Qualified Investors are advised to read this Information Memorandum and obtain professional advice before subscribing to the Fund.
10.5 ENQUIRIES All enquiries about the investment should be sent via email to [email protected] or directed in writing to: The Marketing Department UOB Asset Management (Malaysia) Berhad (formerly known as UOB-OSK Asset Management Sdn Bhd) Level 22 Vista Tower The Intermark 348 Jalan Tun Razak 50400 Kuala Lumpur Tel: 03-2732 1181 Fax: 03-27321100
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