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Fund Info : More About The Fund

More about the Fund

1. What is ABF Malaysia Bond Index Fund ("the Fund")?
2. Can you tell me more about the index which the Fund tracks?
3. Why would I want to invest in the Fund?
4. Does the Fund provide income distribution?
5. Who are the Manager and Investment Manager for the Fund?

Transaction Details

1. How do I buy or sell the Fund?
2. What is the stock short name and stock code of the Fund?
3. What is the minimum investment amount?
4. What transaction fees do I need to pay when I buy or sell the Fund?
5. How is the market price of the Fund determined?
6. Where can I get the latest price information on the Fund?

Other Fund Information

1. Will the Fund’s portfolio change?
2. How long do I need to hold the Fund before selling it? Do the Fund’s units expire?
3. How do I know if the Fund Manager is doing a good job?
4. How different is the Fund compared to regular unit trusts?

Trustee Information

1. Who is the Trustee for the Fund?
2. What is the role of a Trustee?
3. Where are the assets? How safe are they?


1. What is ABF Malaysia Bond Index Fund ("the Fund")?

The Fund is Southeast Asia's first bond exchange traded fund listed on Bursa Malaysia on 13 July 2005. It invests in a portfolio of mainly Malaysian government bonds denominated in Ringgit Malaysia. The Fund is an effective and cost efficient index-tracking fund that investors can buy and sell anytime through their stockbroker or via online trading during market trading hours, like any other ordinary stocks.

2. Can you tell me more about the index which the Fund tracks?

The Fund tracks Markit iBoxx® ABF Malaysia Bond Index (Benchmark Index) which consists of mainly Malaysian government bonds. The list of the components may change on a periodical basis and can be obtained from the Annual Report.

The Benchmark Index is managed and administered by International Index Company (IIC), which encompasses the credit derivative, fixed income and FX index businesses within the Markit group.
Markit is a financial information services company with over 1,200 employees in Europe, North America and Asia-Pacific.*
* Source: www.iboxx.com, as at 21 July 2009

3. Why would I want to invest in the Fund?

1. Accessibility – easy exposure to Malaysian Government Securities with low investment amount compared to investing in bonds directly
2. Flexibility & liquidity – buy and redeem the Fund anytime at current market price throughout the exchange trading day
3. Low cost – the Fund has no entry fees. Management fee is 0.1% (unlike an actively managed bond unit trust fee which is normally around 1%)
4. Transparency – you know what bond holdings you are buying into via the Annual Report
5. Income distribution – semi-annually (if any)

4. Does the Fund provide income distribution?

Yes, income (if any) is distributed twice a year. All coupons received from the holdings of a portfolio of bonds are paid out as income, net of other fees and expenses.

As of 20 July 2009, the actual semi-annual income distributions of the Fund are as follows:

Period​​ Income Distribution per unit
Amount (sen)
Interim Financial Year Ended December 2005​ 1.55
Final Financial Year Ended December 2005​​​​ 1.55​
Interim Financial Year Ended December 2006​​ 1.55​
Final Financial Year Ended December 2006​​​ 1.55​
Interim Financial Year Ended December 2007​​ 1.55​
Final Financial Year Ended December 2007​​ 1.55​
Interim Financial Year Ended December 2008​ 1.55​
Final Financial Year Ended December 2008​​ 2.0​
Interim Financial Year Ended December 2009​ 1.85
Final Financial Year Ended December 2009​​ 1.85
Interim Financial Year Ended December 2010​ 2.0
Final Financial Year Ended December 2010​​ 2.0
Interim Financial Year Ended December 2011​ ​​1.75
Final Financial Year Ended December 2011​​ 1.75​​
Interim Financial Year Ended December 2012​ 1.75​​
Final Financial Year Ended December 2012​ 1.75​
Interim Financial Year Ended December 2013​ 1.75​​
Final Financial Year Ended December 2013​ 1.75​​
Interim Financial Year Ended December 2014​ 2.00​

 

5. Who are the Manager and Investment Manager for the Fund?

The Fund’s Manager is AmFunds Management Berhad, which is marketed under the AmInvest brand. AmFunds Management Berhad has nearly three decades of experience in managing funds and investments. AmFunds Management Berhad 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 the Fund?

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, 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 the Fund through your broker/remisier or via online trading during normal trading hours.

2. What is the stock short name and stock code of the Fund?

Stock Short Name: ABFMY1
Stock Code: 0800EA

3. What is the minimum investment amount?

Based on a minimum board lot size of 100 units, the minimum investment for the Fund would be the Fund’s market price per unit multiplied by 100. For example, if the price per unit is RM1.10, the Fund’s minimum investment will be RM110.

4. What transaction fees do I need to pay when I buy or sell the Fund?

Like buying or selling equities, you need to pay brokerage commission, stamp duty and clearing charges.

5. How is the market price of the Fund determined?

The price of the Fund is market-driven, but in general, the Fund's NAV is trading close to the market value of the index's underlying bonds, plus any net income not distributed.

6. Where can I get the latest price information on the Fund?

To find out the latest price information, you may contact your remisier, or obtain it from your online trading website or Bursa Malaysia throughout the trading day. Alternatively, you may also refer to major newspapers on the following day for the closing prices.

Other Fund Information

1. Will the Fund’s portfolio change?

Yes, the portfolio in the Fund can change. The Fund Manager will rebalance the holdings in the portfolio periodically if necessary to improve its tracking to the Benchmark Index.

2. How long do I need to hold the Fund before selling it? Do the Fund’s units expire?

You should consider holding the Fund for a longer term view and enjoy the income distributions. The Fund invests in government bonds and therefore there are little short term profit opportunities. Alternatively, you can also trade in the Fund for capital gains if you anticipate an interest rate cut.

The Fund's units have no expiry or maturity. They exist as long as the Fund exists. In the event of the winding down of the Fund, its assets will be sold and the proceeds distributed proportionately back to unit holders.

3. How do I know if the Fund Manager is doing a good job?

The higher the correlation between the Fund and the index shows that the Fund Manager is doing a good job.

4. How different is the Fund compared to regular unit trusts?

 
THE FUND
UNIT TRUSTS
(for Bond Funds)
Diversification
Price Transparency
Entry Fee
*
Up to 2% of NAV per unit***
Management Fees
0.10% p.a. of the NAV
Up to 1.20% p.a. of the NAV***
Traded through Broker
Cash Settlement
**T+3
Upfront
* Please note brokerage fee of up to 0.30%, clearing fee of 0.03% and stamp duty are applicable when trading securities on Bursa Malaysia
**T+3 means third business day after trade date
***Source: Lipper Hindsight, as at 30 June 2009


Trustee Information:

1. Who is the Trustee for the Fund?

The Fund’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 of 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 and Services Act (CMSA) and the Securities Commission’s Guidelines on ETFs. Apart from being the legal owner of the Fund's 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? How safe are they?

All assets owned by the Fund 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 the Fund 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 the Fund's assets.