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  • Annual Report for

    30 April 2017

    AmConservative

  • AmConservative

    TRUST DIRECTORY

    Manager

    AmFunds Management Berhad

    9th & 10

    th Floor, Bangunan AmBank Group

    55 Jalan Raja Chulan

    50200 Kuala Lumpur

    Board of Directors

    Raja Maimunah Raja Abdul Aziz

    Mustafa Mohd Nor

    Tai Terk Lin

    Sum Leng Kuang

    Goh Wee Peng

    Investment Committee

    Sum Leng Kuang

    Tai Terk Lin

    Mustafa Mohd Nor

    Zainal Abidin Mohd Kassim

    Trustee

    HSBC (Malaysia) Trustee Berhad

    Auditors and Reporting Accountants

    Ernst & Young

    Taxation Adviser

    Deloitte Tax Services Sdn Bhd

  • AmConservative

    CONTENTS

    1 Managers Report

    10 Independent Auditors Report to the Unitholders

    13 Statement of Financial Position

    14 Statement of Comprehensive Income

    15 Statement of Changes in Equity

    16 Statement of Cash Flows

    17 Notes to the Financial Statements

    38 Statement by the Manager

    39 Trustees Report

    40 Directory

  • 1

    MANAGERS REPORT

    Dear Unitholders,

    We are pleased to present you the Managers report and the audited accounts of AmConservative

    (Fund) for the financial year ended 30 April 2017.

    Salient Information of the Fund

    Name AmConservative (Fund)

    Category/

    Type

    Fixed Income/Income

    Objective AmConservative aims to preserve capital and provide a stream of income* by

    having a bigger exposure to fixed income investments than equities.

    Note: *The income could be in the form of units or cash.

    Duration AmConservative was established on 11 September 2003 and shall exist for as long

    as it appears to the Manager and the Trustee that it is in the interests of the

    unitholders for it to continue. In some circumstances, the unitholders can resolve at

    a meeting to terminate the Fund.

    Performance

    Benchmark

    15% FTSE Bursa Malaysia Top100 Index

    (obtainable from: www.bursamalaysia.com)

    85% Quantshop Medium MGS Index

    (source www.fundslogic.com)

    Income

    Distribution

    Policy

    Income distribution (if any) is paid at least twice every year.

    Breakdown

    of Unit

    Holdings by

    Size

    For the financial year under review, the size of the Fund stood at 11,489,994 units.

    Size of holding As at 30 April 2017 As at 30 April 2016

    No of units

    held

    Number of

    unitholders

    No of units

    held

    Number of

    unitholders

    5,000 below 55,537 21 53,181 20

    5,001-10,000 96,408 13 135,241 18

    10,001-50,000 628,764 34 711,543 38

    50,001-500,000 1,117,113 8 1,428,883 11

    500,001 above 9,592,172 3 14,669,137 3

    http://www.bursamalaysia.com/

  • 2

    Fund Performance Data

    Portfolio

    Composition

    Details of portfolio composition of the Fund for the financial years as at 30 April are

    as follows:

    FY

    2017

    %

    FY

    2016

    %

    FY

    2015

    %

    Construction 0.81 2.37 1.25

    Consumer products 3.18 1.95 1.16

    Finance 2.93 - -

    Industrial products 1.98 1.12 1.37

    Plantations - 0.97 0.76

    Properties 4.55 2.24 1.05

    Technology - 3.28 1.36

    Trading/Services 5.26 3.52 4.51

    Corporate bonds 71.24 76.02 78.28

    Malaysian Government Securities 5.30 - -

    Cash and others 4.75 8.53 10.26

    Total 100.00 100.00 100.00

    Note: The abovementioned percentages are calculated based on total net asset

    value.

    Performance

    Details

    Performance details of the Fund for the financial years ended 30 April are as follows:

    FY

    2017

    FY

    2016

    FY

    2015

    Net asset value (RM) 7,391,161 10,484,179 14,696,610*

    Units in circulation 11,489,994 16,997,985 23,990,824*

    Net asset value per unit (RM) 0.6433 0.6168 0.6126*

    Highest net asset value per unit (RM) 0.6540 0.6294 0.6131*

    Lowest net asset value per unit (RM) 0.6093 0.6007 0.5862*

    Benchmark performance (%) 4.13 2.87 3.21

    Total return (%)(1)

    8.83 4.75 3.58

    - Capital growth (%) 4.45 0.78 3.58

    - Income distribution (%) 4.38 3.97 -

    Gross distribution (sen per unit) 2.70 2.43 -

    Net distribution (sen per unit) 2.70 2.43 -

    Management expense ratio (%)(2)

    1.69 1.74 1.77

    Portfolio turnover ratio (times)(3)

    0.25 0.53 1.38

    * Above prices and net asset value per unit are not shown as ex-distribution.

    Note:

    (1) Total return is the annualised return of the Fund for the respective financial years computed based on the net asset value per unit and net of all fees.

    (2) Management expense ratio (MER) is calculated based on the total fees and expense incurred by the Fund divided by the average fund size calculated on a

    daily basis. The MER decreased by 0.05% as compared to 1.74% per annum for

    the financial year ended 30 April 2016 mainly due to decrease in expenses.

    (3) Portfolio turnover ratio (PTR) is calculated based on the average of the total acquisitions and total disposals of investment securities of the Fund divided by

  • 3

    the average fund size calculated on a daily basis. The PTR decreased by 0.28

    times (52.8%) as compared to 0.53 times for the financial year ended 30 April

    2016 mainly due to decrease in investing activities.

    Average Total Return (as at 30 April 2017)

    AmConservative(a)

    %

    15% of FBM KLCI/

    FBMT 100 & 85%

    MMGS(b)

    %

    One year 8.83 4.12

    Three years 5.70 3.35

    Five years 6.47 3.63

    Ten years 4.71 3.99

    Annual Total Return

    Financial Years Ended

    (30 April)

    AmConservative(a)

    %

    15% of FBM KLCI/

    FBMT 100 & 85%

    MMGS(b)

    %

    2017 8.83 4.12

    2016 4.75 2.87

    2015 3.58 3.21

    2014 8.35 3.12

    2013 6.94 5.01

    (a) Source: Novagni Analytics and Advisory Sdn Bhd.

    (b) Until 9 September 2009-

    85% Medium Malaysian Government Securities Index (MMGS) & 15% FTSE Bursa Malaysia KLCI (FBMT KLCI).

    Effective from 10 September 2009 onwards-

    85% Medium Malaysian Government Securities Index (MMGS) & 15% FTSE Bursa Malaysia Top 100 Index (FBMT 100). (Obtainable from:

    www.bursamalaysia.com for FBMT100 and source: www.fundslogic.com for

    MMGS).

    The Fund performance is calculated based on the net asset value per unit of the

    Fund. Average total return of the Fund and its benchmark for a period is computed

    based on the absolute return for that period annualised over one year.

    Note: Past performance is not necessarily indicative of future performance and

    that unit prices and investment returns may go down, as well as up.

    Fund

    Performance

    For the financial year under review, the Fund registered a return of 8.83%

    comprising of 4.45% capital growth and 4.38% of income distribution.

    Thus, the Fund return of 8.83% has outperformed the benchmarks return of 4.12%

    by 4.71%.

    As compared with the financial year ended 30 April 2016, the net asset value

    (NAV) per unit of the Fund increased by 4.30% from RM0.6168 to RM0.6433,

    while units in circulations decreased by 32.40% from 16,997,985 units to

  • 4

    11,489,994 units.

    The line chart below shows comparison between the annual performances of

    AmConservative and its benchmark, 85% MMGS and 15% FBMT 100, for the

    financial years ended 30 April.

    Note: Past performance is not necessarily indicative of future performance and

    that unit prices and investment returns may go down, as well as up.

    Has the Fund

    achieved its

    objective?

    For the financial year under review, the Fund has met its objective by preserving the

    capital and providing a stream of income by having a bigger exposure to fixed

    income investments than equities.

    Strategies and

    Policies

    Employed

    Equity

    For the financial year under review, the Fund achieved its objective by investing up

    to a maximum 30% of its NAV in income producing equity securities. Value-add

    from equity investments is derived from active stock selection with focus on

    undervalued stocks relative to its earnings growth potential and/or its intrinsic value.

    In the event that outlook for equity investments is not conducive, the Fund can

    choose to have zero exposure in equity securities.

    Fixed Income

    For the financial year under review, the Fund achieved its objective by investing up

    to a maximum 100% of its NAV in fixed income instruments. In buying and selling

    fixed income instruments for the Fund, the Manager used active tactical duration

    management, yield curve positioning and credit spread arbitraging. This approach

    also involves an analysis of general economic and market conditions. It also involves

    the use of models that analyse and compare expected returns and assumed risk.

    Under this approach, the Manager focused on fixed income instruments that would

    deliver favourable return in light of the risk. The Investment industry outlook that

    provide the potential for capital appreciation.

    The Manager has adopted an active trading stance, and will not consider portfolio

    turnover as a limiting factor in ensuring that the Fund meets its investment