Prior to making an investment, prospective investors should consider the following risk factors in addition to the other information set out in this Master Prospectus:

General Risks

Risk of Non-Compliance

This is the risk of the Manager not complying with internal policies, the Deed, securities law and guidelines, whether by oversight or by omission, or if the Manager acts fraudulently or dishonestly. Non-compliance risk may adversely affect the investment of Unit Holders if the Manager is forced to sell the investments of the fund at a discount to resolve the non-compliance. In order to mitigate this risk, the Manager has imposed stringent internal compliance controls.

Loan Financing Risk

In the case of an investor who obtains loan/ financing to invest in a fund, the financing cost may be higher than the gains derived (if any) from investing in the fund. It is important for investors to understand the inherent risks of investing using financing facility which includes the following:

(a) borrowing/financing increases the magnitude for gains as well as losses;

(b) an investor’s ability to provide additional collateral (when units are used as collateral) may be affected should the value of investment falls below a certain level. If the provision of the units is not made within the prescribed time, the investor’s units may be sold to settle the loan/financing amount; and

(c) an investors ability to service its installments may be affected by unforeseen circumstances such as the investor’s loss of employment.

Shariah-compliant unit trust fund’s investor is advised to seek for Islamic financing to finance their acquisition.

Inflation Risk

This refers to the likelihood of a unit holder’s investments not growing proportionately to the inflation rate resulting in the unit holder’s decreasing purchasing power even though the investment in monetary terms may have increased. This risk can be minimised by investing in securities that can provide positive real rate of return.

Specific Risks

Risks related to MAGF

Market Risk

Market risk refers to potential losses that may arise from changes in the market prices of the Fund’s investments. The prices of securities that the Fund invests in may fluctuate due to various factors, for example, events or news relating to the general market or economic conditions. Such movements in the prices of securities will cause the prices or NAV of the Units to fluctuate. The Fund may invest in a well-diversified portfolio of securities from different sectors which would help mitigate this risk so that the adverse movement of securities from any one sector would not impact too greatly on the value of the Fund.

Stock Specific Risk

Any fluctuation in the value of a particular security may affect the price of Units. The impact is however minimized by the Fund investing in a wide portfolio of investments, thus spreading the element of risk.

Liquidity Risk

This is defined as the ease with which a security can be sold at or near its fair value depending on the trading volume of that security in the market. Generally, securities of smaller companies or smaller markets are subject to greater liquidity risk due to their smaller trading volumes, which is mainly due to there being a smaller amount of those securities being issued and being in circulation. If the Fund has a large portfolio of securities that are less liquid, the said securities may be sold at a discount to its fair value as a result of a large redemption of units, which in turn would adversely affect the value of the Fund. To mitigate liquidity risk, the Manager will review and monitor the Fund continuously, and actively manage asset allocations of the Fund. In addition, the Manager will practice prudent liquidity management to enable the Fund to meet short term obligations.

Risks related to MASF

Market Risk

Market risk refers to potential losses that may arise from changes in the market prices of the Fund’s investments. The prices of securities that the Fund invests in may fluctuate due to various factors, for example, events or news relating to the general market or economic conditions. Such movements in the prices of securities will cause the prices or NAV of the Units to fluctuate. The Fund may invest in a well-diversified portfolio of securities from different sectors which would help mitigate this risk so that the adverse movement of securities from any one sector would not impact too greatly on the value of the Fund.

Stock Specific Risk

Any fluctuation in the value of a particular security may affect the price of Units. The impact is however minimized by the Fund investing in a wide portfolio of investments, thus spreading the element of risk.

Liquidity Risk

This is defined as the ease with which a security can be sold at or near its fair value depending on the trading volume of that security in the market. Generally, securities of smaller companies or smaller markets are subject to greater liquidity risk due to their smaller trading volumes, which is mainly due to there being a smaller amount of those securities being issued and being in circulation. If the Fund has a large portfolio of securities that are less liquid, the said securities may be sold at a discount to its fair value as a result of a large redemption of units, which in turn would adversely affect the value of the Fund. To mitigate liquidity risk, the Manager will review and monitor the Fund continuously, and actively manage asset allocations of the Fund. In addition, the Manager will practice prudent liquidity management to enable the Fund to meet short term obligations.

Risks related to MAIF

Market Risk

Market risk refers to potential losses that may arise from changes in the market prices of the Fund’s investments. The prices of securities that the Fund invests in may fluctuate due to various factors, for example, events or news relating to the general market or economic conditions. Such movements in the prices of securities will cause the prices or NAV of the Units to fluctuate. The Fund may invest in a well-diversified portfolio of securities from different sectors which would help mitigate this risk so that the adverse movement of securities from any one sector would not impact too greatly on the value of the Fund.

Stock Specific Risk

Any fluctuation in the value of a particular security may affect the price of Units. The impact is however minimized by the Fund investing in a wide portfolio of investments, thus spreading the element of risk.

Liquidity Risk

This is defined as the ease with which a security can be sold at or near its fair value depending on the trading volume of that security in the market. Generally, securities of smaller companies or smaller markets are subject to greater liquidity risk due to their smaller trading volumes, which is mainly due to there being a smaller amount of those securities being issued and being in circulation. If the Fund has a large portfolio of securities that are less liquid, the said securities may be sold at a discount to its fair value as a result of a large redemption of units, which in turn would adversely affect the value of the Fund. To mitigate liquidity risk, the Manager will review and monitor the Fund continuously, and actively manage asset allocations of the Fund. In addition, the Manager will practice prudent liquidity management to enable the Fund to meet short term obligations.

Reclassification of Shariah Status Risk

This risk refers to the risk that the currently held Shariah-compliant securities in the portfolio of Islamic funds may be reclassified to be Shariah non-compliant in the periodic review of the securities by the SACSC or the Shariah Adviser. If this occurs, the value of the Fund may be adversely affected where the Manager will take the necessary steps to dispose of such securities in accordance with SACSC’s and/or Shariah Adviser’s advice.

Risks related to MADF

Market Risk

Market risk refers to potential losses that may arise from changes in the market prices of the Fund’s investments. The prices of securities that the Fund invests in may fluctuate due to various factors, for example, events or news relating to the general market or economic conditions. Such movements in the prices of securities will cause the prices or NAV of the Units to fluctuate. The Fund may invest in a well-diversified portfolio of securities from different sectors which would help mitigate this risk so that the adverse movement of securities from any one sector would not impact too greatly on the value of the Fund.

Stock Specific Risk

Any fluctuation in the value of a particular security may affect the price of Units. The impact is however minimized by the Fund investing in a wide portfolio of investments, thus spreading the element of risk.

Liquidity Risk

This is defined as the ease with which a security can be sold at or near its fair value depending on the trading volume of that security in the market. Generally, securities of smaller companies or smaller markets are subject to greater liquidity risk due to their smaller trading volumes, which is mainly due to there being a smaller amount of those securities being issued and being in circulation. If the Fund has a large portfolio of securities that are less liquid, the said securities may be sold at a discount to its fair value as a result of a large redemption of units, which in turn would adversely affect the value of the Fund. To mitigate liquidity risk, the Manager will review and monitor the Fund continuously, and actively manage asset allocations of the Fund. In addition, the Manager will practice prudent liquidity management to enable the Fund to meet short term obligations.

Risks related to MAMMF

Credit Risk

This refers to the possibility that an issuer may not be able to make timely interest/profit or principal payments. A default in the payment of interest/profit and principal will adversely affect the value of the Fund. However, this risk can be minimised through investing in instruments that have a minimum rating of BBB by the RAM or other local rating agencies while employing a portfolio diversification strategy. Any downgrading of a particular instrument below the minimum rating will either be liquidated or scrutinised for its creditworthiness.

Interest Rate Risk

The risk refers to the effect of interest rate changes on the market value of a bond portfolio. In the event of rising interest rates, bond prices will fall and vice versa, thus affecting the NAV of the Fund. However, investors should be aware that should the Fund hold a bond till maturity, such price fluctuations would dissipate as it approaches maturity, and thus the growth of the NAV shall not be affected at maturity. In order to mitigate interest rates exposure of the Fund, the Manager will actively manage the duration of the bond portfolio.

Reinvestment Risk

This is a risk that future proceeds (profit and/or capital) are reinvested at a lower potential profit rate. Reinvestment risk is especially evident during periods of falling interest rates where the coupon/profit payments are reinvested at less than the yield to maturity (actual profit rate) at the time of purchase.

Risks related to MASMMF

Credit Risk

This refers to the possibility that an issuer may not be able to make timely profit or principal payments. A default in the payment of profit and principal will adversely affect the value of the Fund. However, this risk can be minimised through investing in instruments that have a minimum rating of BBB by the RAM or other local rating agencies while employing a portfolio diversification strategy. Any downgrading of a particular instrument below the minimum rating will either be liquidated or scrutinised for its creditworthiness.

Profit Rate Risk

The risk refers to the effect of profit rate changes on the market value of a sukuk portfolio. In the event of rising profit rates, sukuk prices will fall and vice versa, thus affecting the NAV of the Fund. However, should the Fund hold a sukuk till maturity, such price fluctuations would dissipate as it approaches maturity, and thus the growth of the NAV shall not be affected at maturity. In order to mitigate profit rates exposure of the Fund, the Manager will actively manage the duration of the sukuk portfolio.

Reinvestment Risk

This is a risk that future proceeds (profit and/or capital) are reinvested at a lower potential profit rate. Reinvestment risk is especially evident during periods of falling profit rates where the coupon/profit payments are reinvested at less than the yield to maturity (actual profit rate) at the time of purchase.