ASB delivers higher returns than other similar conventional investment instruments like fixed deposit

by DASHVEENJIT KAUR/ pic by MUHD AMIN NAHARUL

WEAK equity markets and the US-China trade tension dragged Permodalan Nasional Bhd’s (PNB) income distribution for the Amanah Saham Bumiputera (ASB) scheme to the lowest level in 29 years.

The country’s largest fund management company with a total assets under management of RM311.9 billion as of last month announced a distribution of 5.5 sen per unit including a 0.5 sen bonus for the scheme.

A total of RM9 billion will be distributed to 10 million unitholders who own 167.3 billion units under PNB’s flagship scheme.

Last year, the fund management company paid a total of seven sen per unit including a bonus of 0.5 sen.

The scheme, which was introduced in 1990, has been PNB’s glistening symbol of success with high income distribution levels. It has distributed about RM152 billion to investors since the scheme was introduced 29 years ago.

PNB chairman Tan Sri Dr Zeti Akhtar Aziz said the financial market environment has become much more challenging this year due to volatility and the ongoing US-China trade tensions, coupled with the subsequent slowdown in global trade weighing on external demand and export performance in regional markets.

“Notwithstanding this, ASB was able to deliver a total income distribution of RM9 billion for the financial year of 2019 (FY19) out of its realised gains, buffeted by its increasing international investments as planned under PNB’s Strategic Asset Allocation framework,” she said in Kuala Lumpur yesterday.

The local stock market’s main index is about 7% lower, while profits and dividend distribution for many companies including under PNB’s stable have been weak.

Global trade growth has already lost a few percentage points as Washington and Beijing continue to bicker on tariff frameworks and market openings.

Zeti said unitholders should be aware that the funds would have some good years and some challenging years.

“If we would have invested entirely in domestic equity, we would have been experiencing losses, according to our local benchmark index and in fact, negative returns,” she said.

But ASB delivered higher returns than other similar conventional investment instruments like fixed deposit.

Zeti said if the performance of the fund is benchmarked against Malayan Banking Bhd’s 12-month fixed deposit and for FY19, ASB will outperform by 2.4%.

“Relative to the FTSE Bursa Malaysia Kuala Lumpur Composite Index one-year price return as at Dec 16, 2019, ASB outperformed the index by 12.7%,” she said.

The computation of the income distribution and bonus for ASB is based on the average minimum monthly balance held throughout the fund’s financial year.

The units re-invested from the income distribution and bonus will be credited into the unitholders’ account on Jan 2, 2020.

Amanah Saham Nasional Bhd (ASNB) also announced an income distribution of 2.75 sen per unit for its first variable price fund ASN for FY19.

This reflects a dividend yield of 4.4% based on the net asset value of the fund as at Dec 16, 2019.

The total payout of RM49 million will benefit more than 1.22 million unitholders with over 1.78 billion units in the fund, she said.

As of Nov 30, 2018, ASN recorded a net income of RM53.5 million for the first 11 months of its financial year.