Unit Trust Buying FAQ

Posted on April 21, 2012

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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 CIMB-Principal’s investment funds?
You can start with as little as RM500 in any Fund.

However, the minimum initial investment for CIMB-Principal China-India-Indonesia Equity Fund and CIMB-Principal Australian Equity Fund is RM1,000 or such amounts as the Manager may from time to time decide.

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 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 CIMB-Principal or Approved Distributor.However, the minimum initial investment for the Regular Savings Plan for CIMB-Principal Bond Fund, CIMB-Principal Strategic Bond Fund, CIMB-Principal Deposit Fund, CIMB Islamic Enhanced Sukuk Fund, CIMB Islamic Sukuk Fund is RM500 and the minimum initial investment for the Regular Savings Plan for CIMB Islamic Deposit Fund, CIMB-Principal China-India-Indonesia Equity Fund and CIMB-Principal Australian Equity Fund, CIMB-Principal Asia Pacific Dynamic Income Fund is RM1,000.00.

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 Lifecycle Funds
    Up to 1.0% – A Withdrawal Fee of up to 1.0% of the NAV per unit is levied on a withdrawal made within two (2) years from the date the investment is accepted by the Manager. The Withdrawal Fee may differ between distribution channels. All Withdrawal Fees borne by Unit holders will be retained by the relevant Funds.
  • CIMB Islamic Kausar Lifecycle Funds
    Up to 1.0% – A Withdrawal Fee of up to 1.0% of the NAV per unit is levied on a withdrawal made within two (2) years from the date the investment is accepted by the Manager. The Withdrawal Fee may differ between distribution channels. All Withdrawal Fees borne by Unit holders will be retained by the relevant 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.
    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 CIMB-Principal fund. However, this RM100 administrative fee is waived for the first four (4) switches out of a Fund in every calendar year and 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 CIMB-Principal fund is ultimately at the investor’s personal choice and option. However, Muslim investors are encouraged to switch into any other CIMB-Principal Shariah fund rather than into any other CIMB-Principal conventional fund as it is not permitted from the Shariah perspective.

For CIMB-Principal Lifecycle Funds & CIMB Islamic Kausar Lifecycle Funds, switching is allowed: within the CIMB-Principal Lifecycle Funds / CIMB Islamic Kausar Lifecycle Funds; and from other CIMB-Principal funds into any of these Funds.

Subject always to the Manager’s absolute discretion, switching out from any of these CIMB-Principal Lifecycle Funds & CIMB Islamic Kausar Lifecycle Funds into other funds is not allowed.

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.
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