General FAQs
1. Are the Funds' returns guaranteed?
No, returns of funds are not guaranteed as they invest in assets (for example, shares and bonds) which fluctuate in value on a daily basis. The price of the Funds' investments will rise and fall and consequently cause unit prices to rise and fall. Therefore, we cannot guarantee fund returns.
2. How much do I need to invest in the Principal Asset Management Berhad's investment funds?
You can start with as little as RM500 in any Fund.
The minimum initial investment for CIMB-Principal Bond Fund, CIMB-Principal Strategic Bond Fund, CIMB Islamic Enhanced Sukuk Fund and CIMB Islamic Sukuk Fund is RM2,000 or such amounts as the Manager may from time to time decide.
The minimum initial investment for CIMB-Principal Enhanced Opportunity Bond Fund is RM5,000 or such amounts as the Manager may from time to time decide.
The minimum initial investment for CIMB-Principal Deposit Fund, CIMB-Principal Money Market Income Fund, CIMB Islamic Money Market Fund and CIMB Islamic Deposit Fund is RM10,000 or such amounts as the Manager may from time to time decide.
3. Is there a Regular Savings Plan?
Yes, the Regular Savings Plan allows you to make regular monthly investments of RM200 or more directly from your account held with a bank approved by Principal Asset Management Berhad or Approved Distributor with mininum initial investment of RM500.
However, the minimum initial investment for the Regular Savings Plan for CIMB-Principal Bond Fund, CIMB-Principal Strategic Bond Fund, CIMB Islamic Enhanced Sukuk Fund, CIMB Islamic Sukuk Fund is RM2,000 and the minimum initial investment for the Regular Savings Plan for CIMB-Principal Deposit Fund and CIMB Islamic Deposit Fund is RM10,000.00.
The Regular Savings Plan does not apply to all close-ended funds and the following funds:
- CIMB Islamic Money Market Fund
- CIMB-Principal Money Market Income Fund
4. How can an investor make regular investments into the Regular Savings Plan?
Monthly investments made via the Regular Savings Plan will be processed when the application or monthly investment cheque is received by the Manager. Monthly investment can be made by arranging a standing instruction with the Approved Distributors to credit a pre-determined amount to the Fund each month. You can cancel your Regular Savings Plan at any time by providing written instructions to the relevant Approved Distributors to cancel your standing instruction.
5. Is there any exit fee when an investor withdraws his units?
No, there is no withdrawal fee charged except for the following funds:
- CIMB-Principal Strategic Income Bond Fund
A Withdrawal Penalty of up to 3.0% of the NAV per unit is chargeable on any withdrawal made prior to the Maturity Date. All Penalties borne by Unit holders will be retained by the Fund.
- CIMB-Principal Strategic Income Bond Fund 2
A Withdrawal Penalty of up to 3.0% of the NAV per unit is chargeable on any withdrawal made prior to the Maturity Date. All Penalties borne by Unit holders will be retained by the Fund.
- CIMB-Principal Enhanced Opportunity Bond Fund
A Withdrawal Penalty of up to 3.0% of the NAV per unit is chargeable on any withdrawal made prior to the Maturity Date. All Penalties borne by Unit holders will be retained by the Fund.
Payment will be paid in RM within ten (10) calendar days.
6. Can I switch between the Funds?
Switching will be conducted based on the value of your investment in a Fund. The minimum amount for a switch must be equivalent to the minimum withdrawal amount applicable to a Fund or such amounts as the Manager may from time to time decide. Please note that the minimum amount for a switch must also meet the minimum initial investment amount or the minimum additional investment amount (as the case may be) applicable to the fund to be switched into. Unit holders must at all times maintain at least the minimum balance required for a Fund to stay invested in that Fund. The Manager may, at its absolute discretion, allow switching into (or out of) a Fund, either generally (for all Unit holders) or specifically (for any particular Unit holder).
Since switching is treated as a withdrawal from one (1) fund and an investment into another fund, you will be charged a Switching Fee equal to the difference (if any) between the Application Fees of these two (2) funds.
For example, you had invested in a fund with an Application Fee of 2.0% on the NAV per unit and now wish to switch to another fund which has an Application Fee of 5.5% on the NAV per unit. Hence, you will be charged a Switching Fee of 3.5% on the NAV per unit on the amount switched.
In addition, the Manager imposes a RM100 administrative fee for every switch made out of a Principal Asset Management Berhad fund. However, the Manager has the discretion to waive the Switching Fee and/or administrative fees.
Switching may also be subject to a withdrawal charge should the fund to be switched out from impose a Withdrawal Fee.
Switching into any Principal Asset Management Berhad fund is ultimately at the investor's personal choice and option. However, Muslim investors are encouraged to switch into any other Principal Asset Management Berhad Shariah fund rather than into any other Principal Asset Management Berhad conventional fund as it is not permitted from the Shariah perspective.
No switching facility is available for closed ended funds. Hence Switching Fee is not applicable.
7. How is the switching of Funds processed?
An investor will redeem out of Fund A at redemption/bid price and come in to Fund B at Fund B's Net Asset Value (NAV) rounded UP to the nearest quarter cent.
8. What prices do we apply in a switch?
Take for example, an investor who switches from Fund A to Fund B. The bid/buying price of Fund A will be used to convert the units to a Ringgit value amount. The NAV of Fund B will then be used to convert the value in Ringgit back to units of Fund B.
9. Why does the unit price fall after a distribution?
Income earned by the Fund during the financial year is accrued in its unit’s price until the end of the distribution period. When an income distribution is declared, any interest income and realized capital profits are paid to unit holders. Consequently, the Fund's net asset value per unit, and therefore the application (offer) and withdrawal (bid) prices will tend to fall by approximately the same amount as the income distribution.
10. If an investor chooses to reinvest their distributions, at what unit price and date will it be executed at?
The reinvestment of the distributions will be at the NAV price, after distribution payout, at the last business day of the year.
11. What will happen to monies not claimed by investors - distribution or withdrawal?
Unclaimed monies - after 12 months, the Trustee will credit to the Consolidated Trust account and lodge it with the Registrar which will be held for a further 12 months to enable owners of the monies to collect.
General Risks of Investing in Unit Trust Funds
Any investment carries with it an element of risk. Therefore, prior to making an investment, prospective investors should consider the following risk factors.
Returns Not Guaranteed
Investors should be aware that by investing in a unit trust fund, there is no guarantee of any income distribution, returns or capital appreciation.
General Market Risk
Any purchase of securities will involve some element of market risk. Hence, a unit trust fund may be prone to changing market conditions as a result of:
- global, regional or national economic developments;
- governmental policies or political conditions;
- development in regulatory framework, law and legal issues
- general movements in interest rates;
- broad investor sentiment; and
- external shocks (e.g. natural disasters, war and etc.)
In addition, the following risk factors should also be considered:
Security specific risk
There are many specific risks which apply to the individual security. Some examples include the possibility of a company defaulting on the repayment of the coupon and/or principal of its debentures, and the implications of a company’s credit rating being downgraded.
Liquidity risk
Liquidity risk can be defined as the ease with which a security can be sold at or near its fair value depending on the volume traded in the market.
Inflation risk
Inflation rate risk is the risk of potential loss in the purchasing power of your investment due to a general increase of consumer prices.
Loan Financing Risk
If a loan is obtained to finance the purchases of units of any unit trust fund, investors will need to understand that:
- Borrowing increases the possibility for gains as well as losses;
- If the value of the investment falls below a certain level, investors may be asked by the financial institution to top up the collateral or reduce the outstanding loan amount to the required level;
- The borrowing cost may vary over time depending on the fluctuations in interest rates;
- The risks of using loan financing in light of investors’ investment objectives, attitude towards risk and financial circumstances should be carefully assessed.
Risk of Non-Compliance
This refers to the current and prospective risk to the unit trust fund and the investors’ interest arising from non-conformance with laws, rules, regulations, prescribed practices and internal policies and procedures by the manager.
Manager’s Risk
The performance of any unit trust funds is dependent amongst others on the experience, knowledge, expertise and investment techniques/process adopted by the manager and any lack of the above would have an adverse impact on the fund’s performance thereby working to the detriment of Unit holders.
Foreign Exchange Administration
The rules in relation to Foreign Exchange Administration are as follows:
Foreign Exchange Administration Rule
Resident unit trust companies, closed-end funds, entities offering collective investment schemes and fund managers are allowed to invest abroad on behalf of their resident and non-resident clients-
- up to 100% of Net Asset Value (NAV) or total funds belonging to resident clients without domestic ringgit borrowing and non-resident clients;
- up to 50% of NAV or total funds belonging to their resident clients with domestic ringgit borrowing.
For further information, kindly refer to BNM’s website at www.bnm.gov.my
Foreign Exchange Control Issues / Impact on ASEAN CIS
- RM denominated ASEAN CIS (“RM CIS”) must be offered only in Malaysia;
- All RM settlement and management of RM exposure arising from the issuance of CIS shall be undertaken with an onshore bank;
- Where proceeds from the RM CIS will be invested abroad, such proceeds shall be converted to foreign currency with an onshore bank before remittance abroad;
- Proceeds from the RM CIS shall not be used for investment in RM derivatives or RM instruments offered offshore;
- Resident and non-resident fund managers meet the following eligibility criteria as set out by SC to fully utilise the RM CIS proceeds for investment abroad:
(i) CIS is offered in at least 2 other foreign jurisdictions;
(ii) 2/3 of CIS is raised outside of Malaysia.
For further information, kindly refer to SC’s website at www.sc.com.my
Securities Industry Dispute Resolution Center (SIDREC)
If you are an individual or a sole proprietor investor and dissatisfied with the outcome of our dispute resolution process, you can refer your dispute to the Securities Industry Dispute Resolution Center ("SIDREC") via the following modes. You may do so either within 180 days of receiving the final answer from us or within 90 days from the date you had filed the complaint, irrespective of whether a final answer has been sent by us.
(a) via phone to: 603-2282 2280
(b) via fax to: 603-2282 3855
(c) via email to: info@sidrec.com.my
(d) via letter to: Securities Industry Dispute Resolution Center (SIDREC), Unit A-9-1, Level 9, Tower A, Menara UOA Bangsar, No. 5, Jalan Bangsar Utama 1, 59000 Kuala Lumpur