More About The Fund

1. What is FTSE Bursa Malaysia KLCI etf (“FBM KLCI etf”)?
FBM KLCI etf (“the Fund”) tracks the performance of FTSE Bursa Malaysia KLCI (“the Index”) which provides investors easy access to top 30 listed companies*, effectively buying into Malaysian equity market performance. As FBM KLCI etf’s units are being traded on the stock market, investors can easily trade through their remisiers or via online trading.

FBM KLCI etf is formerly known as FBM30etf, Malaysia’s first equity ETF listed on Bursa Malaysia on 19 July 2007.

* 30 largest Malaysian companies based on market capitalization that meet free-float and liquidity-requirements.

2. Can you tell me more about the index which FBM KLCI etf tracks?
FBM KLCI etf tracks the premier Malaysia stock market index, FTSE Bursa Malaysia KLCI (the Index) which comprises 30 largest companies. The index is based on top 30 companies based on market capitalization that meets free float liquidity requirements, providing investors a highly investable and tradable index. The Index will be calculated by FTSE and will be updated real-time every 15 seconds. The Index constituents are reviewed periodically in June and December every year and can be obtained from Index Composition.

FTSE Group is an independent global company whose sole business is the creation and management of indices and associated data services. FTSE serves thousands of clients worldwide.

3. Why would I want to invest in FBM KLCI etf?

• Easy access to diversification – exposure to top 30 Malaysian companies with a single trade
• Flexibility – buy and sell during trading hours just like a stock from 9 am to 5 pm Malaysian time.
• Low cost – Management fee is 0.5% unlike an actively managed unit trust fee which is normally around 1.5%. to 2%. Plus, FBM KLCI etf has no entry fees.
• Transparency – you know what top 30 Malaysian stocks you are buying into (e.g. Public Bank, Sime Darby, Bumiputra Commerce Holdings, Tenaga Nasional, IOI Corporation and Malayan Banking)*. Prices are available real-time throughout the trading day.
• Liquidity – you can buy and sell FBM KLCI etf’s units easily, just like a stock.
• Affordability – invest with just a little more than RM100

* as at 30 June 2009

4. Does FBM KLCI etf provide income distribution?
As FBM KLCI etf will be holding stocks and cash in its portfolio, it may be entitled to receive dividends on the holdings of shares. The Manager endeavors to pay out all such income after deducting expenses, fees and tax. However, the exact amount to be determined will be at the absolute discretion of the Manager. Income distribution (if any) is expected on a semi-annual basis.

As of 6 July 2009, the actual semi-annual income distributions of the Fund are as follows:

5. What are the costs involved to buy FBM KLCI etf compared to unit trusts and holding individual stocks?
FBM KLCI etf has a lower management fees of 0.5% per annum compared to an actively managed fund (about 1.5% - 2%)* or index fund (about 1%)*. FBM KLCI etf has no entry fees (upfront fees) compared to unit trusts that typically incur entry charges of 3% to 6%. To attain the diversification that FBM KLCI etf offers, you would need to buy 30 individual stocks plus the trading costs of each transaction.

* Source: Lipper Hindsight, as at 24 June 2009

6. Is trading volume an indication of how easily you can buy and sell units of FBM KLCI etf i.e. liquidity?
No. The trading volume is not indicative of FBM KLCI etf’s liquidity. The Fund appoints participating dealers to accumulate the necessary stocks that make up a basket that can be divided into tradable units to meet the investors’ demand and supply of the Fund. We have 4 participating dealers, namely stock broking companies which are AmInvestment Bank, JF Apex Securities, TA Securities Holdings and Malacca Securities.

7. Who are the Manager and Investment Manager for FBM KLCI etf?
FBM KLCI etf’s Manager is AmInvestment Services Berhad, while the Investment Manager is AmInvestment Management Sdn Bhd. These two companies are under the Funds Management Division (FMD) of AmInvestment Group Berhad. FMD has nearly three decades of experience in managing funds and investments. FMD emerged as the pioneer in exchange traded funds (ETFs) when it introduced Malaysia’s first bond ETF, ABF Malaysia Bond Index Fund in 2005 and Malaysia’s first equity ETF, FBM30etf (now known as FBM KLCI etf) in 2007.

Transaction Details

1. How do I buy or sell FBM KLCI etf?
Similar to trading shares, you need to have two accounts (to be obtained from stockbroking companies):
1) Central Depository System (CDS) account
2) Trading account (stockbroking companies to advise on procedures)

If you do not have these accounts yet, just follow 3 easy steps below to open the CDS account:

Step 1:
Go to any stockbroking companies in Malaysia. Please visit Bursa Malaysia for a list of the brokers.

Step 2:
Complete the account opening form and two (2) specimen signature cards.

Step 3:
If you are Malaysians, submit the documents together with two (2) certified true copies of your Malaysian National Registration Identity Card (NRIC). As for foreigners, you will need to pay the account opening fee and submit two (2) certified true copies of your passport.

You may then buy or sell FBM KLCI etf through your broker/remisier or via online trading during normal trading hours.

2. What is the stock name and stock code of FBM KLCI etf?
Stock Short Name: FBMKLCI-EA
Stock Code: 0820EA

3. What is the trading currency of FBM KLCI etf?
FBM KLCI etf is trading in Malaysian Ringgit.

4. How does FBM KLCI etf settle?
In the same manner as share transactions, which is not later than 3 working (market) days after the transaction date i.e. T+3.

5. What is the minimum sum of investment?
Based on a minimum board lot size of 100 units, the minimum investment for FBM KLCI etf would be the Fund’s market price per unit multiply by 100. For example, if the price per unit is RM1.10, FBM KLCI etf’s minimum investment will be RM110.

6. Where can I get the latest price information on FBM KLCI etf?
Each ETF has a market price and Net Asset Value (NAV). Theoretically, the unit price of an ETF should not differ much from the NAV of the Fund. The market price is the price where you buy and sell the Fund based on the market’s supply and demand. You may also ask your remisier or go to your online trading website for real time prices of FBM KLCI etf. The market price of the Fund is also published at www.bursamalaysia.com throughout the trading day.

The Fund’s Net Asset Value (NAV) is the market value of the underlying securities held by the Fund minus its liabilities computed at the end of the day. It can be obtained from the Fund’s website at Fund Values or www.bursamalaysia.com. Participating dealers help to ensure FBM KLCI etf’s market price usually trades very close to its NAV price.

7. Where can I find the latest information on FBM KLCI etf?
The latest information about FBM KLCI etf is available on this website and www.bursamalaysia.com. You may also inquire from your remisier or broker.

Other Fund Information

1. How often does FBM KLCI etf rebalance its portfolio?
FBM KLCI etf’s Manager will rebalance FBM KLCI etf’s holdings in the portfolio as and when it is necessary to improve its tracking to FTSE Bursa Malaysia KLCI. The Index is reviewed periodically every 6 months in June and December by FTSE Bursa Malaysia Index Advisory Committee.

2. How long can I hold the units for? Do they expire?
Being an open ended fund, the Fund’s units have no expiry or maturity. They exist as long as FBM KLCI etf exists. In the event of the winding down of FBM KLCI etf, its assets will be sold and the proceeds distributed proportionately back to unit holders.

3. Can FBM KLCI etf’s units be exchanged for shares?
Although a unit of FBM KLCI etf represents a share in a trust holding through a portfolio of shares, retail investors do not normally exchange their units for a proportional part of the portfolio. Hence, retail investors usually sell their units on the exchange for cash.

There is a fixed quantity of the Fund’s units to be exchanged for the underlying shares (Redemption Unit Block) which are carried out by a participating dealer. Please refer to the Manager for more details.

4. Do investors get a certificate for FBM KLCI etf’s units they own? How does an investor check how many units they own?
No, FBM KLCI etf’s units are listed on Bursa Malaysia and therefore are scripless just like shares. Certificates representing the units are actually deposited into the stock exchange, Bursa Depository Sdn Bhd. (“BDSB”). The BDSB keeps track of the ownership of the units and send CDS Statements detailing the security and the amount owned to its account holders. If there is a need to check specifically on how many of FBM KLCI etf’s units an investor owns, they may obtain it from the CDS Statement which can be requested from BDSB.

5. Am I entitled to any bonus issues arising from the underlying shares?
No, however, when underlying shares/stocks in the portfolio held by FBM KLCI etf have bonus issues, the benefits will be accrued to FBM KLCI etf and the value is reflected in the NAV of FBM KLCI etf’s units.

6. Are there any Bursa Malaysia’s enhancements to look forward to on ETFs?

Equity etf is at 2 decimal points whereby the minimum change or minimum bid size is 1 sen (RM0.01)*. FBM KLCI etf is priced at approximately 1/1000 of FTSE Bursa Malaysia KLCI value. Bursa Malaysia will be enhancing the price quotation system to display ETF unit prices from 2 decimal places to 3 decimal points by 3rd quarter of 2009. This will allow the market price of FBM KLCI etf to better reflect its NAV i.e. thus, a more precise value of the Fund’s asset price value.

* Note: Bond etf is at 3 decimal points whereby the minimum change or minimum bid size is 0.1 sen (RM0.001)*

Trustee Information

1. Who is the Trustee for FBM KLCI etf?
FBM KLCI etf’s trustee is HSBC (Malaysia) Trustee Berhad. The appointed Trustee is a member of the HSBC Holdings Plc group of companies and forms part of the global network of trust companies within HSBC Holdings Plc.

2. What is the role of a trustee?
The Trustee’s main functions are to act as a custodian of the assets of the Fund and to safeguard the interests of unitholders in the Fund. In performing these functions, the Trustee has to exercise all due care and vigilance and is required to act in accordance with the provisions of the Deed, Capital Markets & Services Act (CMSA) and the SC’s Guidelines on ETFs. Apart from being the legal owner of the Fund Assets, the Trustee is also responsible for ensuring that the Manager performs its duties and obligations in accordance with the provisions of the Deed, CMSA and the above Guidelines.

3. Where are the assets kept? How safe are they?
All assets owned by FBM KLCI etf including shares, derivatives, rights and cash, are held in trust by HSBC (Malaysia) Trustee. In the event the Trustee cease to continue conducting business, the Fund Manager will find a new Trustee and all the assets of FBM KLCI etf will be transferred to the new Trustee. If the Fund Manager winds down its business, the Trustee will find a new Fund Manager to manage FBM KLCI etf’s assets.

Technical Terms

Participating Dealers (PDs)
Specific parties, usually stock broking companies, are appointed by the Fund Manager to create and redeem FBM30etf units, thereby increasing the supply or reducing the excess supply in the market respectively. This function, together with the responsibility to put up bid and ask prices on the exchange helps the FBM30etf units to trade at prices near to its IOPV.

Indicative Optimized Portfolio Value (IOPV)
It is essentially an indication of the real-time NAV of FBM KLCI etf. It is calculated using the real-time last trade price of the underlying shares traded on Bursa Malaysia and multiplying those prices with the quantity of corresponding shares in the In-Kind Creation Basket plus the value of the cash component in the In-Kind Creation Basket. The In-Kind Creation Basket is essentially the portfolio that a PD must tender to FBM KLCI etf in exchange for a specified number of FBM KLCI etf’s units. It is usually a representative subset of the composition of the portfolio in FBM KLCI etf.