The asset allocation strategy for this Fund is as follows:
- between 70% to 98% (both inclusive) of the Fund’s NAV will be invested in Shariah-compliant Malaysian equities; and
- up to 30% of the Fund’s NAV in other Shariah-compliant investments and Shariah-compliant liquid assets, with at least 2% of the Fund’s NAV to be maintained in Shariah-compliant liquid assets.
For this Fund, the investment into Sukuk must satisfy a minimum credit rating of “A3” or “P2” by RAM or equivalent rating by MARC; “BBB” by S&P or equivalent rating by Moody’s or Fitch. In line with its objective, the investment strategy and policy of the Fund is to rebalance the portfolio to suit market conditions in order to reduce short-term volatility and provide consistency in capital growth.
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CIMB-Principal combines a top-down asset and sector allocation process with a bottom-up stock selection process. The asset allocation decision is made after a review of macroeconomic trends in Malaysia and other global economies. In particular, CIMB-Principal analyzes the direction of gross domestic product growth, interest rates, inflation, currencies and government policies.
CIMB-Principal will then assess their impact on corporate earnings and determine if there are any predictable trends. These trends form the basis for sector selection. Stock selection is based on the growth style of equity investing. As such, the criteria for stock selection would include improving fundamentals and growth at “reasonable valuations”. Stock valuation fundamentals considered are earnings per share growth rate, return on equity, price earnings ratio and net tangible assets multiples.
Who is suitable for this Fund? They are investors who:
- have a medium to long-term investment horizon;
- want a portfolio of investments that adhere to the Shariah principles;
- want a diversified portfolio that includes Shariah-compliant equities and Sukuk; and/or
- are seeking capital appreciation over medium to long-term.
Source: CIMB-Principal Asset Management
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