Kenanga Investors Berhad (353563-P)

Level 14, Kenanga Tower,

237, Jalan Tun Razak

50400 Kuala Lumpur

Tel: 03-2057 3688

Toll Free: 1800-88-3737

www.kenangainvestors.com.my

Strictly for Clients of Kenanga Investors Berhad

August 2018

Market Review and Outlook

1

Mainland China

Market Review

In 2Q 2018, the investment-grade China offshore USD bonds index was relatively stable, down slightly by

0.08%, while the high-yield China offshore USD bonds index fell by a large margin, down 4.43%, under the

background of onshore and offshore increasing defaults. The decline of high-yield bonds in 2Q started with

the new issues’ aggressive price in April and then the market rebounded after the issuance slowed down.

However, in May with the occurrence of some default incidents onshore and offshore, the risk preference

of investors was obviously affected and high-yield bonds and some investment-grade city investment

bonds all fell significantly. By the end of June, there was another significant drop in real estate high-yield

bonds, mainly due to the adjustment of monetization of sheds and the news of the NDRC on restricting the

real estate industry dollar debt financing. Looking forward to the 3Q, the offshore China USD bonds

market is difficult to recover in the short term, and investors are still in a very cautious state, however,

quite a few bonds have already had good investment value.

Mainland China

Outlook & Fund

Strategy

Also in 2Q 2018, from a fundamental perspective, trade friction and deleveraging environment put

pressure on the stock market, and macro indicators such as total social financing and infrastructure

investment had clearly weakened. However, the macro economy still maintains good resilience. Under the

influence of macro uncertainty and exchange rate fluctuations, investors were on the sidelines, waiting for

a clearer signal. We believe that the excessive release of short-term market sentiment often corresponds

to the subsequent stock price restoration, and the core factor depending on the stability of the

fundamental. The weak trend in the previous market was mainly due to the weakening of investors'

expectations, rather than the weakening of the economic fundamentals. And the current market is in a

state of large expected difference. As the US mid-term election approaches, market volatility will continue.

Disclaimer: Kenanga Investors Berhad (“We”) do not make any express or implied representations or warranties as to the accuracy, timeliness or completeness of

the Materials and nothing shall be relied upon as a promise or representation by us. We or our directors or employees will not be liable or responsible to you or any

other parties for any and all liabilities arising directly or indirectly from any reliance on the Materials. We are not responsible for information stated to be obtained or

derived from third party sources or statistical service. Certain of the statements contained in the Materials are statements of future expectations and other forward-

looking statements. These expectations are based on the Target Fund Manager’s current views, assumptions or opinions and involve known and unknown risks and

uncertainties. Views, opinions and estimates may change without notice and are based on a number of assumptions which may or may not eventuate or prove to be

accurate.

August 2018

Kenanga-ICBC China Focus Income Fund

Lee Sook Yee

Sales Charge

Up to 2.00%.

Annual Management Fee

1.13

2.98

1.50% p.a.

FUND OBJECTIVE

Fund Category/Type

FUND PERFORMANCE (%)

RMB Class

10.78

-

Since Inception

-2.24

-6.49

-

RMB 0.8950

Period

30-Dec-16

27-Apr-18

0.00

FUND SIZE *

Lowest

-6.81

HISTORICAL FUND PRICE *

RMB Class

RMB Class

0.00

0.00

0.00

2017

2016

2015

-

-

#Source: Novagni Analytics and Advisory Sdn Bhd ; Lipper,

30 June 2018

CUMULATIVE FUND PERFORMANCE (%) #

BenchmarkPeriod

1 month

3 months

6 months

1 year

3 years

0.31

0.93

1.87

3.80Designated Fund Manager

Date

RMB Class

NAV PER UNIT *

RMB 0.9319RMB 1.11 million

Since Launch

RMB 1.0081

CALENDAR YEAR FUND PERFORMANCE (%) #

Benchmark

3.80

4.78

Highest

-

0.00

2014

2013

-5.44

0.81

-

-

-

USD Class

-

Mixed Asset (Feeder) / Growth

Launch Date

01 October 2015

Trustee

CIMB Commerce Trustee Berhad

Benchmark

3.8% growth in NAV per annum

The Fund seeks to provide long-term capital growth by

investing in the Target Fund (ICBC China Focus Stable

Return Fund).

Source: Novagni Analytics and Advisory Sdn Bhd

-12.00

-8.00

-4.00

0.00

4.00

8.00

12.00

Oct

15

Nov

15

Dec

15

Jan

16

Feb

16

Mar

16

Apr

16

May

16

Jun

16

Jul 1

6

Aug

16

Sep

16

Oct

16

Nov

16

Dec

16

Jan

17

Feb

17

Mar

17

Apr

17

May

17

Jun

17

Jul 1

7

Aug

17

Sep

17

Oct

17

Nov

17

Dec

17

Jan

18

Feb

18

Mar

18

Apr

18

May

18

% Cumulative Return, Launch to 30/06/2018

Kenanga-ICBC China Focus Income Fund Class RMB : -6.81 Kenanga-ICBC China Focus Income Fund Class USD : 0 3.8% p.a : 10.78

5

Not Applicable

DISTRIBUTION HISTORY

Not Applicable

TARGET FUND'S INDIRECT TOP FIVE HOLDINGS

TARGET FUND'S ALLOCATION (% NAV) as at 31/06/2018 *

* Source: Kenanga Investors Berhad, 30 June 2018

The Replacement Information Memorandum dated 3 March 2016 has been deposited with the Securities Commission Malaysia, who takes no responsibility for its

contents. A copy of the Replacement Information Memorandum and product highlights sheet (PHS) is obtainable at our offices. Application for Units can only be made

on receipt of application form referred to in and accompanying the Replacement Information Memorandum and PHS. Investors are advised to read and understand the

relevant Information Memorandum and consider the fees and charges involved before investing. Unit prices and distributions may go down as well as up. Where a

distribution is declared, investors are advised that following the distribution, the NAV per unit will be reduced from cum-distribution NAV to ex-distribution NAV. A Fund’s

track record does not guarantee its future performance. Investors are advised to read and understand the contents of the unit trust loan financing risk disclosure

statement before deciding to borrow to purchase units. The Manager wishes to highlight the specific risks of the Fund are liquidity risk, currency risk, concentration risk

and target fund manager risk.

TARGET FUND'S DIRECT TOP FIVE HOLDINGS

28.84%

20.33%

10.65%

9.99%

2.91%

UBS (LUX) EQUITY FUND CHINA OPPORTUNITY

LYXOR SMART CASH FUND

CHINAAMC SUMMERBOOK FUND

GFI GLOBAL TOTAL RETURN FIXED INCOME FUND

JPM GREATER CHINA FUND

1

2

3

4

1-Oct-15

USD 1.0000 1-Oct-15

Highest

Lowest-

Since Inception

FUND SIZE *

USD Class ASSET ALLOCATION (% NAV) *

Date

USD 1.0000

USD Class

RMB Class ASSET ALLOCATION (% NAV) *

NAV PER UNIT *

-

Initial Offer Price

No Placement

USD Class

RMB 1.0000 (RMB Class) & USD 1.0000 (USD Class)

All fees and charges payable to the Manager and the Trustee are

subject to GST as may be imposed by the government or other

authorities from time to time.

Annual Trustee Fee

0.05% p.a.

Redemption Charge

Nil

88.30%

95.90%

87.80%

11.70%

4.10%

12.20%

April

May

June

FD/NI/Cash

ICBC China Focus Stable Return Fund

25.72%

74.28%

Cash and Others

Funds

and target fund manager risk.

Jun

18