The Public Islamic Asia Leaders Equity Fund (PIALEF) is designed to allow investors to capitalize on the growth potential of companies with market capitalization of US$1 billion and above in domestic and regional markets that comply with Shariah requirements. The fund focuses its investments on companies that have strong growth potential and are traded at attractive valuations with sound fundamentals. These companies are positioned to benefit from the recovery in regional economic growth.
Q1: What are the main features of Public Islamic Asia Leaders Equity Fund (PIALEF)?
- An Islamic equity fund that seeks to achieve capital growth over the medium to long term period by investing mainly in stocks of companies with market capitalization of US$1 billion and above in domestic and regional markets that complies with Shariah requirements.
- Equity exposure: Generally range from 75% to 98% of its net asset value (NAV).
Q2: What makes PIALEF attractive to prospective investors?
- PIALEF focuses its investments in domestic and regional Shariah compliant companies with market capitalization of US$1 billion and above. These companies will also be selected based on their sound fundamentals, good growth potential and attractive valuations. Supported by established market shares, these companies should benefit from Asia’s economic recovery in 2010. Hence, investing in PIALEF will enable investors to participate in the long-term growth potential of a portfolio of Shariah-compliant companies in regional and domestic stock markets.
Q3: What are the prospects of regional equity markets?
- Global and regional markets have rebounded strongly in 2009 on optimism that the global economy would continue to respond positively to government stimulus spending.
- Moving into 2010, the continued fiscal stimulus and supportive policy measures are expected to sustain the recovery of the global economy with growth of the regional economies envisaged to outpace developed economies.
- Global institutional funds are expected to continue to favor regional equity markets as developed economies expected to register a moderate recovery in 2010 amidst continued deleveraging of households.
- Over the medium-to-long term, regional markets are expected to outperform due to their reasonable valuations, high savings rates, brighter economic growth prospects and stronger fiscal positions.
Q4: Why does PIALEF focus on investing in companies with market capitalization of US$1 billion and above in domestic and regional markets that comply with Shariah requirements? What are their growth prospects?
- PIALEF provides investors with the opportunity to invest in mid to large corporations which are better positioned to benefit from the anticipated recovery in regional economies due to their financial strength and dominance in their respective industries. These companies tend to have leading positions and established market shares which enable them to perform well during favorable as well as challenging market conditions.
Q5: What are some of the sectors that PIALEF may be looking to invest in?
- Sectors that the Fund may focus its investments on include the infrastructure, telecommunications, manufacturing, consumer, technology, conglomerate and natural resources sectors.
Q6: What is the selected performance benchmark for PIALEF?
- The benchmark index for PIALEF comprises 90% customized index based on the Top 100 constituents by market capitalization of the S&P Shariah BMI Asia Ex-Japan Index comprising Malaysia, Singapore, Thailand, Indonesia, Philippines, Hong Kong, China ‘H’ Shares, Taiwan and South Korea; and 10% 3-month Islamic Interbank Money Market (IIMM) rate.
Q7: What is the investment strategy for PIALEF?
- PIALEF is actively managed and focuses on investing mainly in Shariah-compliant securities with market capitalization of US$1 billion and above in domestic and regional markets with the aim of achieving capital growth over the medium to long term period.
- To achieve increased diversification, the fund may invest up to 98% of its NAV in selected Asian markets which include South Korea, China, Taiwan, Hong Kong, Philippines, Indonesia, Singapore, Thailand and other permitted markets.
- The fund generally maintains equity exposure of 75% to 98% of its NAV. The balance of the fund’s NAV will be invested in sukuk such as sovereign sukuk, corporate sukuk and Islamic money market instruments to generate returns.
Q8: What level of risks will we be looking at when investing in PIALEF?
- As the fund’s equity exposure generally ranges from 75% to 98% of its NAV, PIALEF may experience significant volatility in times of adverse market movements.
- The asset allocation, liquidity management and diversification strategies employed are central to the efforts to manage the risks posed to the fund.
Q9: Who should invest in PIALEF?
- PIALEF is suitable for existing and prospective investors who:
- Have aggressive risk-reward temperament.
- Are medium- to long-term investors.
- Can withstand extended periods of market highs and lows in pursuit of capital growth.
- Would like to be in the position to reap benefits from the recovery in Asia Pacific markets.
Q10: When is PIALEF going to be launched?
Q11: What is the Initial Issue Price? And when is the offer period?
- The initial issue price is RM0.2500 per unit during the 21-day offer period from 19 January 2010 to 8 February 2010.
Q12: What is the approved fund size of PIALEF?
- The approved fund size for PIALEF is 1.5 billion units.
Q13: Please tell us the service charge and the annual management fee involved when investing in PIALEF. Is there any repurchase charge?
- The service charge is up to 5.5% of the NAV per unit. The annual management fee is 1.6% per annum of the NAV.
- There is no repurchase charge.
Q14: What is the minimum initial investment and minimum additional investment of the fund?
- The minimum initial investment is RM1, 000 and minimum additional investment is RM100.
Q15: Will there be any special promotion to support the launch of PIALEF? Please give us the details.
- There will be special service charges offered during the period of 19 January 2010 to 8 February 2010 for investment of RM5, 000 and above per transaction. The special service charges are as below:
|Investment amount per transaction
||Special Service Charge
|RM5000 to RM9,999 per transaction
||5.25% of Initial Issue Price per unit
|RM10,000 and above per transaction
||5.00% of Initial Issue Price per unit
Investors who signed up for the Direct Debit Instruction (DDI) during the offer period will enjoy a special service charge rate of 5.25% of NAV per unit for as long as the Direct Debit is active. Terms and conditions apply.