HwangDBS Declares Fifth Income Distribution for the HwangDBS Enhanced Deposit Fund
Kuala Lumpur, 29 April 2008 – HwangDBS Investment Management Berhad (Formerly known as Hwang-DBS Investment Management Berhad) (“HwangDBS IM” or the Company) declared an annual income distribution for its second institutional fund, an income-type bond fund, the HwangDBS Enhanced Deposit Fund (“EDF” or the Fund).
HwangDBS IM declared a final income distribution of 2.50 cents for the financial year ending 30 April 2008. The Fund has registered a return of 11.04 per cent1 on the net asset value per unit (“NAV/Unit”) since inception and all unit holders registered as at 22 April 2008 were eligible to receive the income allotment. This income distribution represents EDF fifth income distribution since its launch on 18 April 2005. Thus, EDF has outperformed its benchmark, the Maybank 3-Mth Fixed Deposit Rate, by a return of 1.73 per cent2. EDF has, to date, distributed a total of 5.20 cents in the three years since its inception.
Teng Chee Wai, Chief Executive Officer and Executive Director of HwangDBS IM commented, “HwangDBS IM is pleased to declare this income distribution. In such tough times, we are certainly mindful of the need to manage the consistency of our funds’ performances and to ensure that we meet with the objectives of our funds – in this instance, providing our investors with a steady income stream in the form of bi-annual income distributions. The volatile bond market which started in August, mainly driven by the sub-prime mortgage crisis in US affected us as we were faced with large redemptions on the Fund. However, the Fund performance was relatively stable as compared to the high market volatility given its shorter duration and good quality AAA and AA-rated bond holdings.”
Conversely, February was a markedly more active month for Ringgit Malaysia (“RM”) corporate bonds. Issues by the Export-Import Bank of Korea and Westport were completed and received favourably by the market. Further issues in the pipeline by CIMB Bank and OCBC Bank are other positives for the domestic debt capital markets, proving that the US subprime mortgage crisis had limited impact on Malaysia's credit market.
EDF is an income-type bond fund that seeks to provide investors with a steady income stream in the form of distribution through investments primarily into a diversified and relatively high-grade investment portfolio of fixed income securities over the short to medium term. It focuses on investing in high quality AAA and AA-rated bonds and sought undervalued bonds which had potential upgrade or yield compression. The Fund also participated in a number of primary corporate bond issues.
1 Source: Lipper as at 31 March 2008
2 Source: Maybank 30Mth Fixed Deposit Rate, 9.31 per cent as at 31 March 2008