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Annual Report for

Advantage Global Equity Volatility Focused30 April 2020

Advantage Global Equity Volatility Focused

TRUST DIRECTORY

Manager AmFunds Management Berhad

9th & 10th Floor, Bangunan AmBank Group 55 Jalan Raja Chulan 50200 Kuala Lumpur

Board of Directors Jeyaratnam A/L Tamotharam Pillai

Dato’ Mustafa Bin Mohd Nor Tai Terk Lin

Sum Leng Kuang Goh Wee Peng

Investment Committee Sum Leng Kuang

Tai Terk Lin Dato’ Mustafa Bin Mohd Nor

Zainal Abidin Bin Mohd Kassim Goh Wee Peng

Trustee Deutsche Trustees Malaysia Berhad

Auditors and Reporting Accountants Ernst & Young PLT

Taxation Adviser Deloitte Tax Services Sdn Bhd


CONTENTS

1 Manager’s Report

19 Independent Auditor’s Report to the Unitholders

23 Statement of Financial Position

24 Statement of Comprehensive Income

25 Statement of Changes in Equity

26 Statement of Cash Flows

27 Notes to the Financial Statements

50 Statement by the Manager

51 Trustee’s Report

52 Directory

1

MANAGER’S REPORT

Dear Unitholders,

We are pleased to present you the Manager’s report and the audited accounts of Advantage Global Equity Volatility Focused (“Fund”) for the financial year ended 30 April 2020.

Salient Information of the Fund

Name

Advantage Global Equity Volatility Focused (“Fund”)

Category/ Type

Wholesale (Feeder Fund) / Income and Growth

Name of the Target Fund

HSBC Global Investment Funds – Global Equity Volatility Focused

Objective The Fund aims to provide long term total return from a combination of income* and capital growth by investing in a portfolio of global equities. Note: * The income could be in the form of units or cash. Any material change to the investment objective of the Fund would require Unit Holders’ approval.

Duration The Fund was established on 20 August 2015 and shall exist for as long as it appears to the Manager and the Trustee that it is in the interests of the unitholders for it to continue. In some circumstances, the unitholders can resolve at a meeting to terminate the Fund.

Performance Benchmark

MSCI All Country World Index (“MSCI ACWI”) (obtainable from www.aminvest.com)

Note: The MSCI All Country World Index (“MSCI ACWI”) is only used as a reference for investment performance comparison purpose. The Fund is not managed against MSCI ACWI. The risk profile of the Fund is not the same as the risk profile of the MSCI ACWI. Source: MSCI. The MSCI information may only be used for your internal use, may not be reproduced or redisseminated in any form and may not be used as a basis for or a component of any financial instruments or products or indices. None of the MSCI information is intended to constitute investment advice or a recommendation to make (or refrain from making) any kind of investment decision and may not be relied on as such. Historical data and analysis should not be taken as an indication or guarantee of any future performance analysis, forecast or prediction. The MSCI information is provided on an “as is” basis and the user of this information assumes the entire risk of any use made of this information. MSCI, each of its affiliates and each other person involved in or related to compiling, computing or creating any MSCI information (collectively, the “MSCI Parties”) expressly disclaims all warranties (including, without limitation, any warranties of originality, accuracy, completeness, timeliness, non-infringement, merchantability and fitness for a particular purpose) with respect to this information. Without limiting any of the foregoing, in no event shall any MSCI Party have any liability for any direct, indirect, special, incidental, punitive, consequential (including, without limitation, lost profits) or any other damages.

2

Income Distribution Policy

MYR Hedged Class Subject to availability of income, distribution will be paid at least quarterly and can be in the form of units or cash. Other Classes except for MYR Hedged Class Subject to availability of income, distribution will be paid at least quarterly and will be reinvested into the Class. Note: Income distribution amount (if any) for each of the Classes could be different subject to the sole discretion of the Manager. For MYR Hedged Class only, if income distribution earned does not exceed MYR1,000, it will be automatically reinvested.

Breakdown of Unit Holdings by Size

For the financial year under review, the size of the Fund for AUD Hedged Class (AUD) stood at 5,752,956 units and for MYR Hedged Class (MYR) stood at 42,873,192 units. AUD Hedged Class (AUD)

Size of holding As at 30 April 2020 As at 30 April 2019

No of units held

Number of unitholder

No of units held


5,000 and below - - - -

5,001-10,000 - - - -

10,001-50,000 - - - -

50,001-500,000 - - - -

500,001 and above 5,752,956 1 10,423,387 1

MYR Hedged Class (MYR)

Size of holding As at 30 April 2020 As at 30 April 2019

No of units held


No of units held


5,000 and below - - - -

5,001-10,000 - - - -

10,001-50,000 - - - -

50,001-500,000 - - - -

500,001 and above 42,873,192 1 57,514,609 1

3

Fund Performance Data

Portfolio Composition

Details of portfolio composition of the Fund for the financial years as at 30 April are as follows:

FY 2020

%

FY 2019

%

FY 2018

%

Foreign collective investment scheme 95.15 98.69 95.34

Forward contract 1.78 -0.48 -1.00

Cash, other assets and liabilities 3.07 1.79 5.66

Total 100.00 100.00 100.00

Note: The abovementioned percentages are calculated based on total net asset value.

Performance Details

Performance details of the Fund for the financial years ended 30 April are as follows:

FY 2020

FY 2019

FY 2018

Net asset value (USD)*

- AUD Hedged Class 3,619,347 7,936,900 9,353,712

- MYR Hedged Class 9,952,521 15,355,218 9,338,023

Units in circulation*

- AUD Hedged Class 5,752,956 10,423,387 11,407,799

- MYR Hedged Class 42,873,192 57,514,609 33,356,326

Net asset value per unit in USD*

- AUD Hedged Class 0.6291 0.7615 0.8199

- MYR Hedged Class 0.2321 0.2670 0.2799

Net asset value per unit in respective currencies*

- AUD Hedged Class (AUD) 0.9612 1.0824 1.0862

- MYR Hedged Class (MYR) 0.9970 1.1032 1.0974

Highest net asset value per unit in respective currencies*



Lowest net asset value per unit in respective currencies*



Benchmark performance (%)

- AUD Hedged Class 0.73 10.22 10.98

- MYR Hedged Class -3.16 8.62 1.16

Total return (%)(1)

- AUD Hedged Class -9.25 1.69 9.45


Capital growth (%)

- AUD Hedged Class -11.37 -0.28 7.85


Income distribution (%)

- AUD Hedged Class 2.12 1.97 1.60

- MYR Hedged Class 2.06 1.97 3.13

Gross distribution per unit in respective currencies

- AUD Hedged Class (AUD) 2.29 cent 2.14 cent 1.61 cent

- MYR Hedged Class (MYR) 2.27 sen 2.16 sen 3.22 sen

(Forward)

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FY 2020

FY 2019

FY 2018

Net distribution per unit in respective currencies

- AUD Hedged Class (AUD) 2.29 cent 2.14 cent 1.61 cent

- MYR Hedged Class (MYR) 2.27 sen 2.16 sen 3.22 sen

Management expense ratio (%)(2) 0.41 0.44 0.49

Portfolio turnover ratio (times) (3) 0.36 0.22 0.76

* Above prices and net asset value per unit are shown as ex-distribution. Note: (1) Total return is the actual return of the Fund for the financial years computed

based on the net asset value per unit and net of all fees. (2) Management expense ratio (“MER”) is calculated based on the total fees and

expenses incurred by the Fund divided by the average fund size calculated on a daily basis. The MER decreased by 0.03% as compared to 0.44% per annum for the financial year ended 30 April 2019 mainly due to decrease in expenses.

(3) Portfolio turnover ratio (“PTR”) is calculated based on the average of the total acquisitions and total disposals of investment securities of the Fund divided by the average fund size calculated on a daily basis. The PTR increased by 0.14 times (63.6%) as compared to 0.22 times for the financial year ended 30 April 2019 mainly due to increase in investing activities.

Average Total Return (as at 30 April 2020)

Advantage Global Equity Volatility

Focused(a) %

MSCI ACWI(b) %

One year

- AUD Hedged Class -9.25 0.73

- MYR Hedged Class -7.71 - 3.16

Three years

- AUD Hedged Class 0.33 7.20

- MYR Hedged Class 1.39 2.09

Since launch (20 August 2015)



Annual Total Return

Financial Years/Period Ended (30 April)


Focused(a) %

MSCI ACWI(b)

%

2020

- AUD Hedged Class -9.25 0.73

- MYR Hedged Class -7.71 - 3.16

2019



2018



(Forward)

5

Financial Years/Period Ended (30 April)


Focused(a) %

MSCI ACWI(b)

%

2017



2016(c)

- AUD Hedged Class 2.97 -4.60

- MYR Hedged Class 3.36 -5.79

(a) Source: Novagni Analytics and Advisory Sdn Bhd. (b) MSCI All Country World Index (“MSCI ACWI”) (obtainable from

www.aminvest.com) (c) Total actual return for the financial period from 20 August 2015 (date of

commencement) to 30 April 2016. The Fund performance is calculated based on the net asset value per unit of the Fund. Average total return of the Fund and its benchmark for a period is computed based on the absolute return for that period annualised over one year. Note: Past performance is not necessarily indicative of future performance and that unit price and investment returns may go down, as well as up.

Fund Performance

AUD Hedged Class (AUD) For the financial year under review, the Fund registered a negative return of 9.25% comprising of negative 11.37% capital and 2.12% income distribution. Thus, the Fund’s negative return of 9.25% has underperformed the benchmark’s return of 0.73% by 9.98%. As compared with the financial year ended 30 April 2019, the net asset value (“NAV”) per unit of the fund decreased by 11.20% from AUD1.0824 to AUD0.9612, while units in circulations decreased by 44.81% from 10,423,387 units to 5,752,956 units. The line chart below shows comparison between the annual performances of Advantage Global Equity Volatility Focused and its benchmark, MSCI All Country World Index, for the financial period/years ended 30 April.

6

MYR Hedged Class (MYR) For the financial year under review, the Fund registered a negative return of 7.71% comprising of negative 9.77% capital growth and 2.06% income distribution. Thus, the Fund’s negative return of 7.71% has underperformed the benchmark’s negative return of 3.16% by 4.55%. As compared with the financial year ended 30 April 2019, the net asset value (“NAV”) per unit of the fund decreased by 9.63% from RM1.1032 to RM0.9970, while units in circulations decreased by 25.46% from 57,514,609 units to 42,873,192 units. The line chart below shows comparison between the annual performances of Advantage Global Equity Volatility Focused and its benchmark, MSCI All Country World Index, for the financial period/years ended 30 April.

Note: Past performance is not necessarily indicative of future performance and that unit price and investment returns may go down, as well as up.

Performance of the Target Fund

Fund Performance Review of the Target Fund – HSBC Global Investment Funds - Global Equity Volatility Focused (AM2) (“the Target Fund”)

Period Fund return1 in USD as at 30 April 2020

Reference Benchmark2 return in USD as at 30

April 2020

1 month 5.60% 10.71%

3 months -16.61% -11.97%

6 months -13.59% -7.68%

1 year -10.69% -4.96%

3 years (annualized) 0.77% 4.46%

5 years (annualized) 0.72% 4.37%

Since Inception3 (annualized)

1.32% 4.36%

(Forward)

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1Net of relevant prevailing sales charges 2Reference Benchmark: MSCI AC World Net 3Inception Date: 26 June 2014 Past performance is not indicative of future performance Over one year, the Target Fund declined by 10.69% in USD terms and over 3 months, declined by 16.61% in USD terms. May 2019 Contributors to relative performance included Everest Re, which delivered better than expected earnings for the quarter, driven by lower catastrophe losses and higher revenues from insurance premiums. Additionally, Guangdong Investment, an infrastructure investment company, gained given its defensive characteristics. Detractors included Phillips 66, which fell on weaker oil prices. Furthermore, 3M saw negative momentum continue throughout May after lowering its profit expectations and stating it will cut jobs to counteract the poor performance. The company cite weakness across automotive and electronics divisions as well as lacklustre demand from China. During the period, no positions were initiated, whilst Unicredit was sold. Sector and country allocation effects are residual to the stock selection process. Sector allocation was neutral for the month as contribution from an underweight exposure to Consumer Discretionary was offset by an underweight exposure to Utilities. Country allocation was positive given an overweight exposure to the UK. Style factor effects were positive for the period. June 2019 Contributors to relative performance included IQVIA Holdings, which gained following an investor day where management updated their longer term targets as synergies from the Quintiles/IMS merger continue to drive revenue and margin growth. Additionally, Phillips 66 gained with higher oil prices given rising tensions in the Middle East. Detractors included Deutsche Wohnen, which fell in the aftermath of an announcement from Berlin city senate member for urban development, who proposed a five-year rent freeze in the city. Furthermore, Everest Re Group saw some profit taking at the end of the month following a period of strong gains. During the period, there was no portfolio turnover. Sector and country allocation effects are residual to the stock selection process. Sector allocation was neutral for the month as contribution from an underweight exposure to Real Estate was offset by an underweight exposure to Consumer Discretionary. Country allocation was neutral. Style factor effects were neutral for the period. July 2019 Contributors to relative performance included Tokyo Electron, which gained with other chip-makers on higher chip prices, a result of production cuts in response to Japan’s decision to limit the sale of key manufacturing materials to South Korean companies. Additionally, Phillips 66 gained with other refiners as gasoline futures advanced in the aftermath of news that Philadelphia Energy Solutions was to close

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its refinery, the largest on the east coast. The positive news flow continued as the company reported solid earnings that saw all segments finish ahead of consensus. Detractors included SAP, which fell after posting slower growth in new cloud bookings, a metric that indicates future revenues. The company cited trade tensions for a delay in software spending in Asia. Additionally, Secom fell on no stock-specific news. During the period, positions were initiated in Orsted and Philip Morris International, whilst Altria, Barrick Gold, British American Tobacco and Sekisui was sold. Sector and country allocation effects are residual to the stock selection process. Sector allocation was negative for the period given an underweight exposure to Communication Services, whilst at the country level, effects were positive given an overweight exposure to the UK. Style factor effects were neutral for the period. August 2019 Detractors from relative performance included Prudential, which fell with others in the insurance industry on trade tensions and falling government yields, a source of income for the industry. Furthermore, BHP fell with iron ore prices on the back of weakening demand amid trade tensions and recovering supply. Contributors included Home Depot, which gained as the company confirmed same store sales had increased in the second quarter, with the company citing the stable housing market and a healthy consumer as the main drivers. Additionally, Secom advanced on strong first quarter earnings that showed solid operating profits and investments in security services, a catalyst for long-term expansion. During the period, there was no portfolio turnover. Sector and country allocation effects are residual to the stock selection process. At the sector level, effects were negative for the period given an underweight exposure to Real Estate. At the country level, effects were also negative given an overweight exposure to the UK. Style factor effects were neutral for the period. September 2019 Contributors to relative performance included Everest Re and Muenchener Rueckver, which advanced with other insurers as Hurricane Dorian changed direction, subsequently missing landfall, and avoiding the potential of costly damage. Detractors included Guangdong Investment, which fell with other defensive names as global equities saw a rotation out of defensives to more value oriented equities. Additionally, Cyberagent fell after some profit taking following recent strong quarterly earnings. During the period, there was no portfolio turnover. Sector and country allocation effects are residual to the stock selection process. At the sector level, effects were positive for the period, however, no one sector elicited a material effect. At the country level, effects were neutral as contribution from an underweight exposure to the USA was offset by an underweight exposure to

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Switzerland and overweight the Netherlands. Style factor effects were neutral for the period. October 2019 Contributors to relative performance included Leggett & Platt, which gained on news that the US Department of Commerce placed anti-dumping tariffs on all future imports of Chinese mattresses in response to their findings that the goods had flooded the US market at below fair market value. Additionally, Phillips 66 gained at the start of the month on the back of an announced share repurchase program, and finished the month strongly on the back of a solid earnings beat. Detractors included Capgemini, which fell after guidance was cut as a result of softening UK banking demand on the back of Brexit concerns. Furthermore, IQVIA saw some pullback during the month on no stock specific news. The stock remains a top performer for the year, sizeably outperforming the market and peers. During the period, a position was initiated in M&G, whilst no positions were sold. Sector and country allocation effects are residual to the stock selection process. At the sector level, effects were neutral with no one sector eliciting a material effect. At the country level, effects were negative given an overweight exposure to the UK. Style factor effects were neutral for the period. November 2019 Detractors from relative performance included Secom, which saw some profit taking following a period of strong returns and third quarter results that came in ahead of consensus. Furthermore, Compass Group fell sharply on restructuring charges due to a weaker outlook at its European business, given the deteriorating macro environment in Europe. Contributors included Walt Disney, which released fourth quarter results that came in ahead of consensus driven by lower than expected operating expenses. Additionally, Humana advanced with other healthcare names on news of a more moderate healthcare policy than was originally thought. During the period, positions were initiated KBC Group and LG Household & Health Care, whilst HSBC Holdings and Kao Corp were sold. Sector and country allocation effects are residual to the stock selection process. At the sector level, effects were marginally positive given an underweight exposure to Real Estate. At the country level, effects were marginally negative given an overweight exposure to the UK.

Style factor effects were neutral for the period.

December 2019 During the period the Target Fund outperformed the index.

Stock selection was the main driver of performance with the top contributors including Orsted, a utility services company that develops, constructs and operates offshore wind farms and power stations, and Samsung Electronics. Detractors from relative performance included Walt Disney and Phillips 66, a downstream energy company whose operations include oil refining, marketing and transportation.

10

During the period, there was no portfolio turnover. Sector and country allocation effects are residual to the stock selection process. At the sector level, effects were negative given an overweight exposure to Industrials. At the country level, effects were also negative given an overweight exposure to Germany. Style factor effects were neutral for the period. January 2020 During the period the Target Fund underperformed the index. Detractors from relative performance included Phillips 66, a US based downstream energy company, and ICBC, a Chinese based bank that offers deposits, loans, fund underwriting, foreign currency settlements and other services. Contributors included BAE Systems, a UK based manufacturer of weapons and defence systems, and Cyberagent, a Japanese based company that operates a blog media website, an advertising agency and foreign exchange website. The company also creates PC and mobile contents such as advertisements and games. During the period, there was no portfolio turnover. Sector and country allocation effects are residual to the stock selection process. At the sector level, effects were neutral. At the country level, effects were also negative given an overweight exposure to the UK and underweight exposure to the US. Style factor effects were neutral for the period. February 2020 Detractors from relative performance included BHP Group a global resources company that explores and mines minerals such as coal, iron ore, gold and copper, and Phillips 66, a US based downstream energy company. Contributors included Rentokil Initial, a provider of facilities management and essential support services, such as pest control, hygiene and work-wear to governments and commercial sector organisations, and ICBC, a Chinese based bank that offers deposits, loans, fund underwriting, foreign currency settlements and other services. During the period, a position was initiated in Visa, whilst Eni, Citigroup and M&G were sold. Sector and country allocation effects are residual to the stock selection process. At the sector level, effects were negative given an overweight exposure to Industrials. At the country level, effects were also negative given an overweight exposure to the UK. Style factor effects were neutral for the period. March 2020 During the period the Target Fund outperformed the index. Contributors to relative performance included Guangdong Investment, an infrastructure company that operates water supply, power and electricity and other

11

infrastructure businesses, and Secom a provider of security services including online centralised security, home security systems and home medical services. Detractors from relative performance included Phillips 66, a US based downstream energy company, and BNP Paribas, a French banking institution that provides services including asset management and investment advisory. During the period, no positions were initiated, whilst Masco and Otsuka were sold. Sector and country allocation effects are residual to the stock selection process. At the sector level, effects were neutral, whilst at the country level, effects were positive given an underweight exposure to Brazil. April 2020 Contributors to relative performance included Iqvia, a US based health care services company that offers a broad range of solutions including clinical development strategies and prescriptive analytics, and Phillips 66, a US based downstream energy company. Detractors from relative performance included Everest Re, a provider of reinsurance services to property and casualty insurers in the United States and international markets, and an underweight position in Amazon.com. During the period, a position was initiated in Fastenal, whilst United Technologies was sold. Sector and country allocation effects are residual to the stock selection process. At the sector level, effects were negative given an underweight exposure to Consumer Discretionary. At the country level, effects were also negative given and overweight exposure to the UK and underweight the USA.

Source: HSBC Global Asset Management (Singapore) Limited, as at 30 April 2020

Has the Fund achieved its objective?

For the financial year under review, the Fund is in line with its stated objective to provide long-term capital growth by investing in the Target Fund which invests primarily in a portfolio of global equities.

Strategies and Policies Employed

Strategies and Policies of the Target Fund Investment Objective The Target Fund aims to provide long-term total return (meaning capital growth and income) by investing in shares (or securities that are similar to shares) of companies around the world. The Target Fund aims to have a lower volatility (less fluctuation in the Target Fund’s share prices) than the MSCI All Country World Index. Investment Strategy In normal market conditions, at least 90% of the Target Fund’s assets are invested in company securities. The Target Fund can also invest in Real Estate Investment Trusts financial derivative instruments and collective investment schemes. There aren’t restrictions on the market values of the companies held in the Target Fund. The Target Fund uses a technique called portfolio optimisation that selects stocks that are less correlated to one another. This has the effect of diversifying the Target Fund which should in turn lower its volatility. The Target Fund 's maximum exposure to China A-shares and China B-shares is 20% of its assets. The Target

12

Fund will not invest more than 10% of its assets in a combination of participation notes and convertible securities. See the Prospectus for a full description of the investment objectives and derivative usage. Source: HSBC Global Asset Management (Singapore) Limited, at 30 April 2020 Strategies and Policies of the Fund

For the financial year under review, the Fund seeks to achieve its investment objective by investing a minimum of 95% of the Fund’s NAV in the HSBC Global Investment Funds - Global Equity Volatility Focused.

Portfolio Structure

This table below is the asset allocation of the Fund for the financial years under review.

As at 30.4.2020

%

As at 30.4.2019

%

Changes

%

Foreign collective investment scheme 95.15 98.69 -3.54

Forward contract 1.78 -0.48 2.26

Cash, other assets and liabilities 3.07 1.79 1.28

Total 100.00 100.00

For the financial year under review, the Fund has invested 95.15% of its NAV in the foreign collective investment scheme, 1.78% in forward contract and the balance of 3.07% was held in cash, other assets & liabilities.

Cross Trades

There were no cross trades undertaken during the financial year under review.

Distribution/ Unit Splits

During the financial year under review, the Fund declared income distributions, detailed as follows: AUD Hedged Class (AUD)

Date of distribution

Distribution per unit (sen)

NAV per unit Cum-Distribution

(AUD)

NAV per unit Ex-Distribution

(AUD)

24-Jul-19 0.22 1.0953 1.0931

22-Oct-19 1.00 1.0924 1.0824

23-Jan-20 0.48 1.1538 1.1493

23-Apr-20 0.59 0.9320 0.9262

MYR Hedged Class (MYR)

Date of distribution

Distribution per unit (sen)

NAV per unit Cum-Distribution

(RM)

NAV per unit Ex-Distribution

(RM)

24-Jul-19 0.23 1.1182 1.1159

22-Oct-19 0.97 1.1197 1.1100

23-Jan-20 0.48 1.1868 1.1819

23-Apr-20 0.59 0.9666 0.9606

There was no unit split declared for the financial year under review.

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State of Affairs

There has been neither significant changes to the state of affairs of the Fund nor any circumstances that materially affect any interests of the unitholders during the financial year under review.

Rebates and Soft Commission

Soft commissions received from brokers/dealers are retained by the Manager only if the goods and services provided are in the form of research services that assist in the decision-making process relating to the Fund’s investments. During the financial year under review, the Manager had received on behalf of the Fund, soft commissions as allowed under regulatory requirements to carry out investment management functions for the Fund. These soft commissions received by the Manager are deemed to be beneficial to the unitholders of the Fund.

Market Review

May 2019

Global Equities fell during May as Sino-US trade tensions once again became more heated, raising concerns of global growth and spurring investors to seek safe-haven assets.

The US and China were the worst performers as trade tensions escalated with both countries imposing sanctions on one another’s exports. The US also saw weak economic data during the month with figures showing less business investment and lower consumer spending. A similar picture could be seen in China as Industrial Production data and retail sale figures both came in light of expectations.

At the opposite end of the spectrum was Russia, which gained from investors seeking investments that are relatively unaffected by the ongoing trade tensions, and off the back of Gazprom’s decision to hike its dividend. Brazil also gained as the reports confirmed that the country’s government was ready to enact much needed social security and tax reforms.

Across the central banks; The US Federal Reserve stated its belief that slower inflation is “transitory”, although remains sensitive to downside risks to growth. Soft economic growth and few signs of underlying inflation pressures mean that the European Central Bank remains in dovish mode. In the UK, the Bank of England projected a stronger UK growth trajectory, although rate hikes remain less likely amid Brexit uncertainty. The Bank of Japan has stated its intention to keep rates on hold until at least spring 2020. Low inflation implies this timetable could be extended. In China, amid downside risks to growth, the People’s Bank of China vowed to continue with targeted stimulus, while keeping the renminbi stable.

June 2019

Global Equities gained during June on an easing of Sino-US trade tensions and more dovish sentiments from the major central banks.

The US and China were the main drivers of returns for global equities as both advanced on easing trade tensions. The Argentinian equity market also saw strong gains through the month as the incumbent president, Macri, chose Pichetto as a candidate for vice president, implying a more centrist stance.

At the opposite end of the spectrum was Pakistan, which saw the market fall on FX headwinds, with the Rupee the only emerging market currency to fall during the period.

Across the central banks; a lack of inflation pressure has allowed the US Federal Reserve to adopt a more dovish tone amid increased downside risks to growth. At its June meeting, European Central Bank President Draghi opened the door to policy easing, noting renewed asset purchases had been discussed. Contrastingly, in the UK, the Bank of England continues to have a bias to hike, conditional on a

14

smooth Brexit. In Japan, inflation is set to remain well below the Bank of Japan’s 2% target, thus, we expect monetary policy to remain expansionary for the time being. Finally, in China, the 2019 Government Work Report provided a mandate for looser policy by the People’s Bank of China.

July 2019

Global Equities gained modestly in July as positive moves seen across developed markets were offset by weakness across emerging markets given US dollar strength.

The main driver of performance was US equities, which were buoyed by the tech sector given that a number of companies delivered solid earnings releases and rose on speculation of renewed trade talks with China. Turkish equities also advanced over the period as the country’s central bank decided to cut interest rates, citing an improved inflation outlook, and resulting in a rally in the Lira.

The main laggards included the UK, which performed well in local currency terms, however, weakness in the pound resulted in poor performance in USD terms. South Korean equities also finished in negative territory amid an ongoing trade dispute with Japan.

Across the central banks; a lack of inflation pressure is allowing the US Federal Reserve to lean against the increased downside risks to growth. While market pricing may prove to be too aggressive, some “insurance” policy easing is very likely. The European Central Bank also looks increasingly likely to engage in policy easing, although it faces some constraints. In the UK, the Bank of England switched to an easing bias, reflecting increased downside risks from global conditions and Brexit. In Japan, soft underlying growth and below-target inflation mean the Bank of Japan policy will likely remain expansionary. In China, the 2019 Government Work Report provided a mandate for looser policy by the People’s Bank of China.

August 2019

Global equities fell in August amid an escalation in US-China trade tensions and some disappointing economic data releases in Europe and China.

The main driver of performance was US equities, which finished in negative territory on the back of growth concerns and the ongoing trade tensions. Chinese equities also lagged as the US imposed new tariffs on Chinese imports. UK equities followed close behind given Brexit uncertainty and the increased likelihood that the UK may leave the EU without a deal.

At the other end of the spectrum was Egypt, which gained on news that the central bank had cut interest rates.

Across the central banks; at July’s US Federal Reserve policy meeting, Chair Powell confirmed that the 25bp rate cut was ‘insurance’ against slower global growth, trade tensions and weak inflation. The European Central Bank struck a dovish tone, with the September meeting likely to see rate cuts and a re-launch of its bond buying programme. The Bank of England struck a cautious tone at its August’s meeting, with the path for policy ultimately affected by upcoming political developments. The Bank of Japan has signalled it could ease policy if economic activity cools or it sees a strengthening of the Yen. Finally, amid trade headwinds, the People’s Bank of China is likely to act to maintain stable credit growth, with targeted support to private sector businesses.

September 2019

Global equities advanced in September on softening Sino-US trade tensions and a

15

more dovish stance by the major central banks.

At the country level, the two main drivers of performance were the US and Japan, which both gained on the back of easing trade tensions and a more dovish US Federal Reserve. Moreover, Turkey equities also performed well as the Turkish Central bank took action to combat disinflation and reduced interest rates sizeably. At the opposite end of the spectrum was China, which finished flat as gains realised earlier in the month were offset by news that President Trump was considering blocking US investment in China and delisting a number of Chinese companies listed in the US. However, the month ended on a softer note with a number of tariff exemptions being announced.

Across the central banks; The US Federal Reserve is likely to continue its gradual easing of policy in the near term to reduce the chance that US growth is dragged lower by soft global growth and persistent geopolitical uncertainty. The European Central Bank delivered a substantial easing package at its September meeting, including the restarting of net asset purchases. The Bank of England remains non-committal on the policy outlook, with future decisions ultimately affected by upcoming political developments. The Bank of Japan has signalled it could ease policy if activity cools or the yen strengths. Finally, the People’s Bank of China has signalled its willingness to offer more policy support if needed, but large-scale stimulus is unlikely.

October 2019

Global equities rose in October as the US and China agreed a truce in their trade conflict with an interim “mini” deal, subsequently allaying fears of a global economic slowdown.

At the country level, the US was one of the best performers as the market gained on positive news from the Sino-US trade negotiations. US equities were also buoyed by the Fed decision to cut interest rates and signalling that there are unlikely to be any changes, in either direction, in the near future. Following close behind was Japanese equities, which also gained on the positive trade news emanating from the US and China, in addition to indications from the UK and EU that a “Hard Brexit” will be avoided.

At the opposite end of the spectrum was Turkey, where equity markets saw a pullback on concerns of potential US sanctions in response to the Turkish military action in Northern Syria.

Across the central banks; The US Federal Reserve cut rates at its October meeting amid subdued inflation expectations, soft global growth and persistent geopolitical uncertainty. The European Central Bank signalled that a significant degree of monetary accommodation is still required to meet their inflation objective. The Bank of England remains non-committal on the policy outlook, with future decisions ultimately affected by upcoming political developments. The Bank of Japan signalled that it could ease policy to achieve its inflation target, although has provided little detail on potential easing options. Finally, the People’s Bank of China eased policy in September and are willing to offer more support if needed, but large-scale stimulus is unlikely.

November 2019

Global equities rose in November as the US and China came closer to agreeing the terms of a “phase one” trade deal.

At the country level, the US was the main driver as it gained on positive news regarding a preliminary trade deal with China, better than expected corporate earnings and solid economic data releases. The UK also gained as polls showed

16

that the conservative party would gain a majority in the house of commons, avoiding the chances of a hung parliament and the resultant political uncertainty.

At the opposite end of the spectrum was Brazil, which saw a pullback on a weakening Real and political protests across the region, specifically surrounding conflicts within Bolsonaro’s party. Korean equities also performed poorly on a combination of currency weakness and a weak earnings season.

Across the central banks; The US Federal Reserve cut rates at its November meeting but signalled an end to the easing cycle as long as there isn’t a material weakening in data. The European Central Bank remained in “wait and see” mode as they assess the impact of their significant policy easing package in September. In the UK, two Bank of England members voted for a rate cut in November, but the majority of rate-setters prefer to see how the political situation develops. The Bank of Japan signalled it could ease policy to achieve its inflation target, however, it provided little detail on potential easing options. While in China, the People’s Bank of China eased policy slightly and signalled that they may offer more support where needed, but large-scale stimulus is unlikely.

December 2019

Global equities rose in December as the US and China agreed terms for a “phase one” trade deal.

As expected, given the positive trade news, both the US and China equity markets advanced and were the main driver of returns. At the opposite end of the spectrum was the UAE and Israel, which were the only two countries to finish in negative territory.

Across the central banks; After three cuts in 2019, the US Federal Reserve has signalled a pause and now appears data dependent, with the bar for a rate cut far lower than for a rate hike. Given low growth and inflation, the European Central Bank may engage in more policy action, however, divisions remain on the Governing Council. In the UK, two Bank of England MPC members voted for a rate cut in December, although the bulk of members prefer to see how the political situation develops. Stressing downside risks from abroad, the Bank of Japan signalled it could ease policy if economic activity continues to cool, while the People’s Bank of China continues to nudge interest rates lower and is willing to offer more support if needed, but large-scale stimulus is unlikely.

January 2020

Global equities fell in January as a rally early in the month was offset amid uncertainty following the outbreak of the novel coronavirus (2019-nCoV) in China.

At the country level, very few countries finished in positive territory as concerns surrounding the spread of the coronavirus, and its potential impact to global growth, deterred many investors. The worst performers included the US, and the UK, which retreated as the commodity heavy index suffered amid falling oil and metal prices.

Across the central banks; After three cuts in 2019, the US Federal Reserve signalled a pause with growth levels at around trend. The European Central Bank could engage in more aggressive quantitative easing and/or deposit rate cuts, given weak growth and inflation, however, splits on the Governing Council may constrain action.

In the UK, weak growth and inflation led to two Bank of England MPC members voting for a rate cut in January. The Bank of Japan signalled it could ease policy if economic activity cools, while in China the People’s Bank of China continued easing policy late in 2019 and is likely to offer more support if needed, but large-scale stimulus is unlikely.

17

February 2020 Global equities fell in February as a rally earlier in the month following a fall in new cases of COVID-19 in China was offset by fears of a pandemic following a jump in new cases more globally.

Across the central banks; the bar for a rate cut by the US Federal Reserve is far lower than for a rate hike, especially given the downside risks from COVID-19. The European Central Bank could engage in more aggressive QE and/or deposit rate cuts amid the economic impact of the virus. The Bank of England voted 7-2 to keep rates on hold in January, but policy easing remains possible amid Brexit uncertainty. Following a sharp economic contraction in Q4 and the ongoing risks, the Bank of Japan is likely to ease; although they remain fairly constrained. The People’s Bank of China has been easing monetary policy in response to the outbreak of COVID-19 in China – we expect this to continue until activity has recovered.

March 2020

Global equities sold off in March, reflecting a sharp deterioration in the global economic outlook as COVID-19 containment measures were ramped up.

Central banks and finance ministries across the globe eased policy at an unprecedented pace, including measures not seen before. The US Federal Reserve, European Central Bank and Bank of England all significantly boosted asset purchase programmes and introduced huge liquidity provision measures. Fiscal policy was loosened in previously-unseen ways in many developed economies, with the recently approved US stimulus package the largest in the country's history. Emerging market central banks also took similar measures and cut interest rates rapidly.

However, it is important to note that macro policy cannot stop the precipitous near-term fall in output, which is a supply shock. The aim is to prevent significant second round effects on demand and a persistent reduction in supply capacity.

April 2020

MSCI All Country World returned 10.6% in April as the COVID-19 containment measures across the world have proved effective in slowing down the number of new cases whilst in China, restrictions are being gradually lifted for the economy to return back to economic activity.

US stocks rose as the number of new COVID-19 cases began to plateau, showing signs of a slowdown in the spread of the virus, and the US Federal Reserve expanded its lending programmes and support in credit markets to high yield ETFs. Given this, markets were able to shrug off the data releases of the rapidly rising US unemployment rate and the first batch of weak quarterly corporate earnings. The S&P500 rose 12.7% in the month.

European stocks rose as the COVID-19 pandemic in Europe neared its peak and policymakers across the region discussed strategies to relax containment measures. Investor optimism overcame the negative economic sentiment from the record low PMI data in the Eurozone and the UK and weak quarterly corporate earnings. The Stoxx Europe 600 rose 6.2% and the FTSE All Share rose 5.0% in the month.

Asian stocks rose as China gradually eased its lockdown measures, with businesses reopening and people returning to work. Elsewhere, a raft of stimulus support packages was announced across the region including Japan’s $1.1trn stimulus package and Hong Kong’s $18bn relief measures. The Shanghai Composite rose 4.0% and the Nikkei 225 rose 6.8% in the month.

18


Market Outlook

While the COVID 19 pandemic represents a very significant challenge for the global economy, the recent sell off has materially increased our measure of prospective returns. Our measure of the global equity risk premium (excess return over cash) now looks very attractive. After the recent sharp falls in developed market government bond yields, the relative attractiveness of equities over bonds has increased further. Further, a much looser global policy setting means there is scope for a recovery in risk assets as global economic conditions stabilise.

However, investor should be aware of the risks. The outbreak and quick spread of COVID 19 highlights that we remain in an “age of uncertainty”. What began in China as a localised shock has now become a “sudden stop” in global activity. Global corporate earnings growth is expected to significantly deteriorate. Volatility is likely to remain elevated whilst there are risks that containment measures create lasting damage to the supply side of the economy. Your equity portfolio aims to deliver diversified global equity exposure with lower volatility. Lower volatility can offer a smoother performance pattern that can help investors stay invested and capture long-term returns. The portfolio aims to invest in companies with an attractive combination of profitability and valuation. These quality companies typically have sustainable business models, strong balance sheets and good management. These stocks are combined with an aim to deliver a portfolio with lower volatility.


Additional Information

The following information was updated: 1) The following information was updated in the First Supplementary Information

Memorandum dated 5 July 2019:

Income Distribution Policy

MYR Hedged Class Subject to availability of income, distribution will be paid at least quarterly and can be in the form of units or cash. Other Classes except for MYR Hedged Class Subject to availability of income, distribution will be paid at least quarterly and will be reinvested into the Class. Note: Income distribution amount (if any) for each of the Classes could be different subject to the sole discretion of the Manager. For MYR Hedged Class only, if income distribution earned does not exceed MYR1,000, it will be automatically reinvested.

2) Seohan Soo resigned as a Non-Independent, Non-Executive Director for

AmFunds Management Berhad with effect from 1st January 2020.

Kuala Lumpur, Malaysia AmFunds Management Berhad 24 June 2020

Independent auditors’ report to the unitholders of


Report on the audit of the financial statements

Opinion

We have audited the financial statements of Advantage Global Equity Volatility Focused (“theFund”), which comprise the statement of financial position as at 30 April 2020, and the statementof comprehensive income, statement of changes in equity and statement of cash flows for thefinancial year then ended, and notes to the financial statements, including a summary ofsignificant accounting policies, as set out on pages 23 to 49.

In our opinion, the accompanying financial statements give a true and fair view of the financialposition of the Fund as at 30 April 2020, and of its financial performance and cash flows for thefinancial year then ended in accordance with Malaysian Financial Reporting Standards andInternational Financial Reporting Standards.

Basis for opinion

We conducted our audit in accordance with approved standards on auditing in Malaysia andInternational Standards on Auditing. Our responsibilities under those standards are furtherdescribed in the Auditor’s Responsibilities for the Audit of the Financial Statements section of ourreport. We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our opinion.

Independence and other ethical responsibilities

We are independent of the Fund in accordance with the By-Laws (on Professional Ethics,Conduct and Practice) of the Malaysian Institute of Accountants (“By-Laws”) and theInternational Code of Ethics for Professional Accountants (including International IndependenceStandards) (“IESBA Code”), and we have fulfilled our other ethical responsibilities in accordancewith the By-Laws and the IESBA Code.

Information other than the financial statements and auditors’ report thereon

The Manager is responsible for the other information. The other information comprises theinformation in the annual report of the Fund, but does not include the financial statements of theFund and our auditors’ report thereon.

Our opinion on the financial statements of the Fund does not cover the other information and wedo not express any form of assurance conclusion thereon.

19


Advantage Global Equity Volatility Focused (cont’d.)

Information other than the financial statements and auditors’ report thereon (cont’d.)

In connection with our audit of the financial statements of the Fund, our responsibility is to readthe other information and, in doing so, consider whether the other information is materiallyinconsistent with the financial statements of the Fund or our knowledge obtained in the audit orotherwise appears to be materially misstated.

If, based on the work we have performed, we conclude that there is a material misstatement ofthis other information, we are required to report the fact. We have nothing to report in this regard.

Responsibilities of the Manager and the Trustees for the financial statements

The Manager is responsible for the preparation of the financial statements of the Fund that give atrue and fair view in accordance with Malaysian Financial Reporting Standards and InternationalFinancial Reporting Standards. The Manager is also responsible for such internal control as theManager determines is necessary to enable the preparation of financial statements of the Fundthat are free from material misstatement, whether due to fraud or error.

In preparing the financial statements of the Fund, the Manager is responsible for assessing theFund’s ability to continue as a going concern, disclosing, as applicable, matters related to goingconcern and using the going concern basis of accounting unless the Manager either intends toliquidate the Fund or to cease operations, or has no realistic alternative to do so.

The Trustee is responsible for ensuring that the Manager maintains proper accounting and otherrecords as are necessary to enable true and fair presentation of these financial statements.

Auditor’s responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements of theFund, as a whole are free from material misstatement, whether due to fraud or error, and to issuean auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance,but is not a guarantee that an audit conducted in accordance approved standards on auditing inMalaysia and International Standards on Auditing will always detect a material misstatementwhen it exists. Misstatements can arise from fraud or error and are considered material if,individually or in the aggregate, they could reasonably be expected to influence the economicdecisions of users taken on the basis of these financial statements.

20



Auditor’s responsibilities for the audit of the financial statements (cont’d.)

As part of an audit in accordance with the approved standards on auditing in Malaysia andInternational Standards on Auditing, we exercise professional judgment and maintainprofessional skepticism throughout the planning and performance of the audit. We also:

• Identify and assess the risks of material misstatement of the financial statements of theFund, whether due to fraud or error, design and perform audit procedures responsive tothose risks, and obtain audit evidence that is sufficient and appropriate to provide a basisfor our opinion. The risk of not detecting a material misstatement resulting from fraud ishigher than for one resulting from error, as fraud may involve collusion, forgery, intentionalomissions, misrepresentations, or the override of internal control.

• Obtain an understanding of internal control relevant to the audit in order to design auditprocedures that are appropriate in the circumstances, but not for the purpose of expressingan opinion on the effectiveness of the Fund’s internal control.

• Evaluate the appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related disclosures made by the Manager.

• Conclude on the appropriateness of the Manager’s use of the going concern basis ofaccounting and, based on the audit evidence obtained, whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Fund’s ability tocontinue as a going concern. If we conclude that a material uncertainty exists, we arerequired to draw attention in our auditors’ report to the related disclosures in the financialstatements or, if such disclosures are inadequate, to modify our opinion. Our conclusionsare based on the audit evidence obtained up to the date of our auditors’ report. However,future events or conditions may cause the Fund to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the financial statements of theFund, including the disclosures, and whether the financial statements of the Fund representthe underlying transactions and events in a manner that achieves fair presentation.

We communicate with the Manager regarding, among other matters, the planned scope andtiming of the audit and significant audit findings, including any significant deficiencies in internalcontrol that we identify during our audit.

21



Ernst & Young PLT Lee Pei Yin

202006000003 (LLP0022760 - LCA) & AF 0039 No. 03189/05/2021 J

Chartered Accountants Chartered Accountant

Kuala Lumpur, Malaysia

24 June 2020

Other matters

This report is made solely to the unitholders of the Fund, as a body, in accordance with theGuidelines on Unlisted Capital Markets Products under the Lodge and Launch Frameworkissued by Securities Commissions Malaysia and for no other purpose. We do not assumeresponsibility to any other person for the content of this report.

22


STATEMENT OF FINANCIAL POSITION

AS AT 30 APRIL 2020

2020 2019 Note USD USD

ASSETS

Investment 4 12,913,844 22,988,019

Derivative assets 5 244,467 -

Amount due from Target Fund Manager 6 - 249,000

Amount due from Manager 7 23,388 23,204

Distribution receivable - 55,105

Cash at banks 495,096 421,217TOTAL ASSETS 13,676,795 23,736,545

LIABILITIES

Derivative liabilities 5 2,727 112,127

Amount due to Manager 7 99,186 328,074

Amount due to Trustee 8 528 1,042

Sundry payables and accrued expenses 2,486 3,184

TOTAL LIABILITIES 104,927 444,427

EQUITY

Unitholders’ capital 10(a)(b) 16,696,472 23,627,172

Accumulated losses 10(c)(d) (3,124,604) (335,054)TOTAL EQUITY 10 13,571,868 23,292,118

TOTAL EQUITY AND LIABILITIES 13,676,795 23,736,545

NET ASSETS ATTRIBUTABLE TO UNITHOLDERS

− AUD Hedged Class 10 3,619,347 7,936,900

− MYR Hedged Class 10 9,952,521 15,355,218

13,571,868 23,292,118

UNITS IN CIRCULATION

− AUD Hedged Class 10(a) 5,752,956 10,423,387 − MYR Hedged Class 10(b) 42,873,192 57,514,609

NET ASSET VALUE (“NAV”) PER UNIT IN USD

− AUD Hedged Class 0.6291 0.7615 − MYR Hedged Class 0.2321 0.2670

NAV PER UNIT IN RESPECTIVE CURRENCIES

− AUD Hedged Class (AUD) 0.9612 1.0824 − MYR Hedged Class (MYR) 0.9970 1.1032

The accompanying notes form an integral part of the financial statements.

23


STATEMENT OF COMPREHENSIVE INCOME

FOR THE FINANCIAL YEAR ENDED 30 APRIL 2020


INVESTMENT LOSS

Distribution income 462,950 746,709

Net loss from investment:

− Financial assets at fair value through profit or

loss (“FVTPL”) 9 (2,835,099) (1,311,601)

Other unrealised foreign exchange gain 13 99

(2,372,136) (564,793)

EXPENDITURE

Manager’s fee 7 (59,329) (77,072)

Trustee’s fee 8 (8,763) (10,974)

Auditors’ remuneration (1,571) (1,652)

Tax agent’s fee (798) (839)

Other expenses (1,023) (1,662)

(71,484) (92,199)

Net loss before tax (2,443,620) (656,992)

Less: Income tax 12 - -

Net loss after tax (2,443,620) (656,992)

Other comprehensive income - -

Total comprehensive loss for the financial year (2,443,620) (656,992)

Total comprehensive loss comprises the following:

Realised loss (1,120,470) (798,728)

Unrealised (loss)/gain (1,323,150) 141,736

(2,443,620) (656,992)

Distributions for the financial year

Net distributions 13 345,930 447,005

Gross/net distributions per unit in respective currencies

− AUD Hedged Class (AUD) 13 2.29 cent 2.14 cent− MYR Hedged Class (MYR) 13 2.27 sen 2.16 sen


24


STATEMENT OF CHANGES IN EQUITY


Retained

earnings/

Unitholders’ (Accumulated Total

capital loss) equity Note USD USD USD

At 1 May 2018 17,922,792 768,943 18,691,735

Total comprehensive loss for

the financial year - (656,992) (656,992)

Creation of units

− AUD Hedged Class 10(a) 2,283,078 - 2,283,078

− MYR Hedged Class 10(b) 8,194,005 - 8,194,005

Reinvestments of distributions

− AUD Hedged Class 10(a) 181,960 - 181,960

− MYR Hedged Class 10(b) 265,045 - 265,045

Cancellation of units

− AUD Hedged Class 10(a) (3,177,653) - (3,177,653)

− MYR Hedged Class 10(b) (2,042,055) - (2,042,055)

Distributions

− AUD Hedged Class 13 - (181,960) (181,960)

− MYR Hedged Class 13 - (265,045) (265,045)Balance at 30 April 2019 23,627,172 (335,054) 23,292,118

At 1 May 2019 23,627,172 (335,054) 23,292,118

Total comprehensive loss for

the financial year - (2,443,620) (2,443,620)

Creation of units


− MYR Hedged Class 10(b) 4,108,832 - 4,108,832

Reinvestments of distributions


− MYR Hedged Class 10(b) 240,161 - 240,161

Cancellation of units

− AUD Hedged Class 10(a) (4,186,608) - (4,186,608)

− MYR Hedged Class 10(b) (7,755,152) - (7,755,152)

Distributions

− AUD Hedged Class 13 - (105,769) (105,769)

− MYR Hedged Class 13 - (240,161) (240,161)Balance at 30 April 2020 16,696,472 (3,124,604) 13,571,868


25


STATEMENT OF CASH FLOWS


2020 2019

USD USD

CASH FLOWS FROM OPERATING AND

INVESTING ACTIVITIES

Proceeds from sale of investment 10,658,513 1,932,614

Purchase of derivative instruments (1,415,302) (1,470,363)

Distribution received 518,055 691,604

Manager’s fee paid (62,650) (75,574)

Trustee’s fee paid (9,277) (10,707)

Tax agent’s fee paid (844) (759)

Payments for other expenses (3,246) (3,662)

Purchase of investment (2,109,000) (7,266,000)

Net cash generated from/(used in) operating and

investing activities 7,576,249 (6,202,847)

CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds from creation of units 4,665,193 10,766,629

Payments for cancellation of units (12,167,563) (4,899,048)

Net cash (used in)/generated from financing activities (7,502,370) 5,867,581

NET INCREASE/(DECREASE) IN CASH AND

CASH EQUIVALENTS 73,879 (335,266)

CASH AND CASH EQUIVALENTS AT

BEGINNING OF FINANCIAL YEAR 421,217 756,483

CASH AND CASH EQUIVALENTS AT END OF FINANCIAL YEAR 495,096 421,217

Cash and cash equivalents comprise:Cash at banks 495,096 421,217


26


NOTES TO THE FINANCIAL STATEMENTS


1. GENERAL INFORMATION

2. BASIS OF PREPARATION OF FINANCIAL STATEMENTS

Standards effective during the financial year

Standards issued but not yet effective

Advantage Global Equity Volatility Focused (“the Fund”) was established pursuant to a

Deed dated 23 July 2015 (“the Deed”), between AmFunds Management Berhad as the

Manager, Deutsche Trustees Malaysia Berhad as the Trustee and all unitholders.

The Fund aims to provide long term total return from a combination of income and capital

growth by investing in a portfolio of global equities. Being a feeder fund, a minimum of 95%

of the Fund’s NAV will be invested in the HSBC Global Investment Funds – Global Equity

Volatility Focused (“Target Fund”), which is a separate unit trust fund managed by HSBC

Investment Funds (Luxembourg) S.A. (“Target Fund Manager”). As provided in the Deeds,

the “accrual period” or financial period shall end on 30 April and the units in the Fund were

first offered for sale on 20 August 2015.

The financial statements were authorised for issue by the Chief Executive Officer of the

Manager on 24 June 2020.

The financial statements of the Fund have been prepared on a historical cost basis, except

as otherwise stated in the accounting policies and comply with Malaysian Financial

Reporting Standards (“MFRS”) as issued by the Malaysian Accounting Standards Board

(“MASB”) and International Financial Reporting Standards (“IFRS”).

The adoption of MFRS which have been effective during the financial year did not have

any material financial impact to the financial statements.

The Fund will adopt the following MFRSs and Amendments to MFRSs when they become

effective in the respective financial periods and these MFRSs and Amendments to MFRSs

are not expected to have any material impact to the financial statements of the Fund upon

initial application.

27




2. BASIS OF PREPARATION OF FINANCIAL STATEMENTS (CONT’D.)

Standards issued but not yet effective (cont’d.)

Effective for

financial periods

beginning on or after

Revised Conceptual Framework for Financial Reporting 1 January 2020

Amendments to MFRS 3 - Definition of a Business 1 January 2020

Amendments to MFRS 101 and MFRS 108 - Definition of Material 1 January 2020

Amendments to MFRS 7, MFRS 9 and MFRS 139 - 1 January 2020

Interest Rate Benchmark Reform

MFRS 17 Insurance Contracts 1 January 2021

Amendments to MFRS 10 and MFRS 128: Sale or Contribution Deferred

of Assets between an Investor and its Associate or Joint Venture

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

3.1 Income recognition

(i) Distribution income

(ii) Gain or loss on disposal of investment

3.2 Income tax

Income is recognised to the extent that it is probable that the economic benefits will

flow to the Fund and the income can be reliably measured. Income is measured at the

fair value of consideration received or receivable.

Distribution income is recognised when the Fund’s right to receive payment is

established.

On disposal of investment, the net realised gain or loss on disposal is measured

as the difference between the net disposal proceeds and the carrying amount of

the investment. The net realised gain or loss is recognised in profit or loss.

Current tax assets and liabilities are measured at the amount expected to be

recovered from or paid to the tax authorities. The tax rates and tax laws used to

compute the amount are those that are enacted or substantively enacted at the

reporting date.

Current taxes are recognised in profit or loss except to the extent that the tax relates

to items recognised outside profit or loss, either in other comprehensive income or

directly in equity.

28




3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D.)

3.3 Functional and presentation currency

3.4 Foreign currency transactions

3.5 Statement of cash flows

The Fund adopts the direct method in the preparation of the statement of cash flows.

3.6 Distribution

3.7 Unitholders’ capital

3.8 Financial assets – initial recognition and measurement

(i) Initial recognition

Financial assets and financial liabilities are recognised when the Fund becomes

a party to the contractual provisions of the instrument. Regular way purchases

and sales of financial assets are recognised using trade date accounting or

settlement date accounting. The method used is applied consistently for all

purchases and sales of financial assets that belong to the same category of

financial assets.

Functional currency is the currency of the primary economic environment in which the

Fund operates that most faithfully represents the economic effects of the underlying

transactions. The functional currency of the Fund is United States Dollar (“USD”)

which is the currency in which the sale and purchase of the Fund’s investment are

denominated and settled. The Fund has also adopted USD as its presentation

currency.

Transactions in currencies other than the Fund’s functional currency (foreign

currencies) are recorded in the functional currency using exchange rates prevailing at

the transaction dates. At each reporting date, foreign currency monetary items are

translated into USD at exchange rates ruling at the reporting date. All exchange gains

or losses are recognised in profit or loss.

Cash equivalents are short-term, highly liquid investment that is readily convertible to

cash with insignificant risk of changes in value.

Distributions are at the discretion of the Fund. A distribution to the Fund’s unitholders

is accounted for as a deduction from realised income. A proposed distribution is

recognised as a liability in the period in which it is approved. Distribution is either

reinvested or paid in cash to the unitholders on the income payment date.

Reinvestment of units is based on the NAV per unit on the income payment date,

which is also the time of creation.

The unitholders’ capital of the Fund meets the definition of puttable instruments and is

classified as equity instruments under MFRS 132 Financial Instruments: Presentation

(“MFRS 132”).

29





3.8 Financial assets – initial recognition and measurement (cont’d.)

(ii) Initial measurement

(iii) “Day 1” profit or loss

3.9 Financial assets – classification and subsequent measurement

3.10 Financial assets under MFRS 9

(i) Classification and measurement

All financial assets are recognised initially at fair value plus, in the case of

financial assets not recorded at FVTPL, transaction costs that are attributable to

the acquisition of the financial asset. All financial liabilities are recognised initially

at fair value and, in the case of financial liabilities not recorded at FVTPL, net of

directly attributable transaction costs.

At initial measurement, if the transaction price differs from the fair value, the

Fund immediately recognises the difference between the transaction price and

fair value (a “Day 1” profit or loss) in profit or loss provided that fair value is

evidenced by a quoted price in an active market for an identical asset or liability

(i.e. Level 1 input) or based on a valuation technique that uses only data from

observable markets. In all other cases, the difference between the transaction

price and model value is recognised in profit or loss on a systematic and rational

basis that reflects the nature of the instrument over its tenure.

The Fund subsequently measures its investment in collective investment schemes

(“CIS”) and unquoted derivative instruments at FVTPL. Distributions earned whilst

holding the investment is recognised in profit or loss when the right to the payment

has been established. Gains and losses on the investment, realised and unrealised,

are included in profit or loss.

The classification of financial assets depends on the Fund’s business model of

managing the financial assets in order to generate cash flows (“business model

test”) and the contractual cash flow characteristics of the financial instruments

(“SPPI test”). The business model test determines whether cash flows will result

from collecting contractual cash flows, selling the financial assets, or both and

the assessment is performed on a portfolio basis. The SPPI test determines

whether the contractual cash flows are solely for payments of principal and

interest and the assessment is performed on a financial instrument basis.

30





3.10 Financial assets under MFRS 9 (cont’d.)

(i) Classification and measurement (cont’d.)

The Fund may classify its financial assets under the following categories:

Financial assets at amortised cost

Financial assets at FVOCI

Financial assets at FVTPL

A financial asset is measured at amortised cost if it is held within a business

model whose objective is to hold financial assets in order to collect contractual

cash flows and its contractual terms give rise on specified dates to cash flows

that are solely payments of principal and interest on the principal amount

outstanding. The Fund includes in this category deposits with financial

institutions, cash at banks, amount due from the Target Fund Manager, amount

due from the Manager and other receivables.

A financial asset is measured at fair value through other comprehensive income

(“FVOCI”) if its business model is both to hold the asset to collect contractual

cash flows and to sell the financial asset. In addition, the contractual terms of

the financial assets give rise on specified dates to cash flows that are solely

payments of principal and interest on the outstanding principal.

These investment are initially recorded at fair value and transaction costs are

expensed in the profit or loss. Subsequent to initial recognition, these investment

are remeasured at fair value. All fair value adjustments are initially recognised

through OCI. Debt instruments at FVOCI are subject to impairment assessment.

Any financial assets that are not measured at amortised cost or FVOCI are

measured at FVTPL. Subsequent to initial recognition, financial assets at FVTPL

are measured at fair value. Changes in the fair value of those financial

instruments are recorded in “Net gain or loss on financial assets at FVTPL”.

Distribution income elements of such instruments is recorded separately in

“Distribution income”. Exchange differences on financial assets at FVTPL are not

recognised separately in profit or loss but are included in net gain or net loss on

changes in fair value of financial assets at FVTPL.

Instruments that qualify for amortised cost or FVOCI may be irrevocably

designated as FVTPL, if doing so eliminates or significantly reduces a

measurement or recognition inconsistency. Equity instruments are normally

measured at FVTPL, nevertheless, the Fund is allowed to irrevocably designate

equity instruments that are not held for trading as FVOCI, with no subsequent

reclassification of gains or losses to profit or loss.

31





3.11 Financial liabilities – classification and subsequent measurement

3.12 Derecognition of financial instruments

(i) Derecognition of financial asset

- the rights to receive cash flows from the asset have expired, or

-

-

-

(ii) Derecognition of financial liability

3.13 Financial instruments – expected credit losses (“ECL”)

-

-

-

Financial liabilities issued by the Fund are classified as financial liabilities at amortised

cost, where the substance of the contractual arrangement results in the Fund having

an obligation either to deliver cash or another financial asset to the holder. After initial

measurement, financial liabilities are subsequently measured at amortised cost using

the effective interest method. Amortised cost is calculated by taking into account any

discount or premium on acquisition and fees or costs that are an integral part of the

effective interest rate.

A financial asset (or, where applicable a part of a financial asset or part of a

group of similar financial assets) is derecognised when:

the Fund has transferred its rights to receive cash flows from the asset or

has assumed an obligation to pay the received cash flows in full without

material delay to a third party under a “pass-through” arrangement; and

either:the Fund has transferred substantially all the risks and rewards of the

asset, or

the Fund has neither transferred nor retained substantially all the risks

and rewards of the asset, but has transferred control of the asset.

A financial liability is derecognised when the obligation under the liability is

discharged, cancelled or expired. Gains and losses are recognised in profit or

loss when the liabilities are recognised, and through the amortisation process.

The Fund assesses on a forward-looking basis the ECL associated with its financial

assets at amortised cost. The Fund recognises a loss allowance for such losses at

each reporting date. The measurement of ECL reflects:

an unbiased and probability-weighted amount that is determined by evaluating a

range of possible outcomes;

the time value of money; and

reasonable and supportable information that is available without undue cost or

effort at the reporting date about past events, current conditions and forecasts of

future economic conditions.

The ECL in respect of financial assets at amortised cost, if any, is recognised in profit

or loss.

32





3.13 Financial instruments – expected credit losses (“ECL”) (cont’d.)

3.14 Determination of fair value

3.15 Classification of realised and unrealised gains and losses

3.16 Significant accounting estimates and judgments

The fair value of foreign exchange - forward contracts is calculated by making

reference to prevailing forward exchange rates for contracts with similar maturity

profiles in the market. Derivative are carried as assets when the fair value is positive

and as liabilities when the fair value is negative.

Realised gains and losses on disposals of financial instruments classified at FVTPL

are calculated using the weighted average method. They represent the difference

between an instrument’s initial carrying amount and disposal amount.

Financial assets together with the associated allowance are written off when it has

exhausted all practical recovery efforts and there is no realistic prospect of future

recovery. The Fund may also write-off financial assets that are still subject to

enforcement activity when there is no reasonable expectation of full recovery. If a

write-off is later recovered, the recovery is credited to profit or loss.

For the investment in CIS, fair value is determined based on the closing NAV per unit

of the foreign CIS. Purchased cost is the price that the Fund paid when buying it

investment. The difference between purchased cost and fair value is treated as

unrealised gain or loss and is recognised in profit or loss. Unrealised gains or losses

recognised in profit or loss are not distributable in nature.

Unrealised gains and losses comprise changes in the fair value of financial

instruments for the period and from reversal of prior period’s unrealised gains and

losses for financial instruments which were realised (i.e. sold, redeemed or matured)

during the reporting period.

The preparation of the Fund’s financial statements requires the Manager to make

judgments, estimates and assumptions that affect the reported amounts of revenues,

expenses, assets and liabilities, and the disclosure of contingent liabilities at the

reporting date. However, uncertainty about these assumptions and estimates could

result in outcomes that could require a material adjustment to the carrying amount of

the asset or liability in the future.

The Fund classifies its investment as financial assets at FVTPL as the Fund may sell

its investment in the short-term for profit-taking or to meet unitholders’ cancellation of

units.

No major judgments have been made by the Manager in applying the Fund’s

accounting policies. There are no key assumptions concerning the future and other

key sources of estimation uncertainty at the reporting date, that have a significant risk

of causing a material adjustment to the carrying amounts of assets and liabilities

within the next financial year.33




4. INVESTMENT

2020 2019

USD USD

Financial assets at FVTPL

At cost:

Foreign CIS 13,830,385 22,227,530

At fair value:

Foreign CIS 12,913,844 22,988,019

Details of investment are as follows:

Fair value

as a

Number Fair Purchased percentage

Foreign CIS of units value cost of NAV

USD USD %

2020

HSBC Global Investment

Funds– Global Equity

Volatility Focused Fund (“Target Fund”) 1,346,033 12,913,844 13,830,385 95.15

Shortfall of fair value overpurchased cost (916,541)

2019

HSBC Global Investment

Funds– Global Equity

Volatility Focused Fund (“Target Fund”) 22,227,530 22,988,019 22,227,530 98.69

Excess of fair value overpurchased cost 760,489

A minimum of 95% of its NAV will be invested in the Target Fund. However, the asset

allocation may be reduced due to creation of units at the point of reporting date. The ratio

will be adjusted back to the minimum level after the reporting period, if need be.

34




5.

Maturity Notional Fair value

date amount USD

2020

Australian Dollar 29.5.2020 98,898 88

Australian Dollar 29.5.2020 115,524 (147)

Australian Dollar 29.5.2020 5,190,530 99,056

Australian Dollar 29.5.2020 136,912 2,611

Ringgit Malaysia 29.5.2020 1,306,918 963

Ringgit Malaysia 29.5.2020 1,029,418 3,414

Ringgit Malaysia 29.5.2020 40,745,653 135,498

Ringgit Malaysia 29.5.2020 842,903 2,837

Ringgit Malaysia 29.5.2020 727,657 (2,580)

2019

Australian Dollar 31.5.2019 11,769,086 (98,316)

Ringgit Malaysia 31.5.2019 62,330,402 (13,546)

Ringgit Malaysia 31.5.2019 1,125,992 (265)

6. AMOUNT DUE FROM TARGET FUND MANAGER

The amount due from the Target Fund Manager was for the sale of investment where

settlement was not due as at the financial year end.

The normal trade credit period is three business days.

The table below shows the fair values of derivative financial instruments, recorded as

assets (being derivatives which are in a net gain position) or liabilities (being derivatives

which are in a net loss position), together with their notional amounts. The notional

amount, recorded gross, is the amount of a derivative's underlying asset, foreign exchange

currency and is the basis upon which changes in the value of derivatives are measured.

The notional amounts indicate the volume of transactions outstanding at the end of the

financial year.

DERIVATIVE INSTRUMENTS

Derivative instruments comprise forward currency contracts. The forward currency

contracts entered into during the financial year were for hedging against the currencies

exposure arising mainly from creation of unitholders in the foreign currencies that are not

denominated in USD. As the Fund has not adopted hedge accounting during the financial

year, the change in the fair value of the forward currency contract is recognised

immediately in the statement of comprehensive income.

35




7. AMOUNT DUE FROM/TO MANAGER


(a) Due from Manager

Creation of units (i) 23,388 23,204

(b) Due to Manager

Redemption of units (ii) 95,040 320,607

Manager’s fee payable (iii) 4,146 7,467

99,186 328,074

(i) The amount represents amount receivable from the Manager for units created.

(ii) The amount represents amount payable to the Manager for units redeemed.

(iii)

2020 2019

% p.a. % p.a.

Manager’s fee charged by the Target Fund Manager,

on the NAV of the Target Fund (Note a) 1.50 1.50

Manager’s fee charged by the Manager, on the NAV

of investment in the Target Fund (Note b) 0.30 0.30

Manager’s fee charged by the Manager, on the

remaining NAV of the Fund (Note b) 1.80 1.80

Note a)

Note b)

The normal credit period in the previous and current financial years for Manager’s fee

payable is one month.

The Fund’s share of Manager’s fee to the Target Fund Manager has been

accounted for as part of net unrealised changes in fair value of investment in

foreign CIS.

The Manager’s fee of the Fund chargeable in the Statement of

Comprehensive Income relates to 0.30% on the NAV of investment in the

Target Fund and 1.80% on the remaining NAV of the Fund.

As the Fund is investing in the Target Fund, the Manager’s fee was charged as

follows:

The normal credit period in the previous and current financial years for creation and

redemption of units is three business days.

36




8. AMOUNT DUE TO TRUSTEE

9. NET LOSS FROM INVESTMENT

2020 2019

USD USD

Net loss on financial assets at FVTPL comprised:

– Net realised (loss)/gain on sale of investment (105,146) 26,510

– Net realised loss on settlement of derivative contracts (1,415,302) (1,470,363)

– Net realised gain/(loss) on foreign currency

exchange 8,512 (9,385)

– Net unrealised (loss)/gain on changes in fair value

of investment (1,677,030) 66,050

– Net unrealised gain from revaluation of

derivative contracts 353,867 75,587

(2,835,099) (1,311,601)

10. TOTAL EQUITY

Total equity is represented by:

2020 2019

Note USD USD

Unitholders’ capital − AUD Hedged Class (a) 4,956,581 8,481,122

Unitholders’ capital − MYR Hedged Class (b) 11,739,891 15,146,050

Accumulated losses

− Realised losses (c) (2,449,868) (983,468)

− Unrealised (loss)/gain (d) (674,736) 648,414

13,571,868 23,292,118

Trustee’s fee is at a rate of 0.05% (2019: 0.05%) per annum on the NAV of the Fund,

calculated on a daily basis.

The normal credit period in the previous and current financial years for Trustee’s fee

payable is one month.

37




10. TOTAL EQUITY (CONT’D.)

(a) Unitholders' capital/units in circulation – AUD Hedged Class

Number of Number of

units USD units USD

At beginning of the

financial year 10,423,387 8,481,122 11,407,799 9,193,737

Creation during the

financial year 754,490 556,298 2,916,818 2,283,078

Distribution reinvested

(Note 13) 147,726 105,769 238,967 181,960

Cancellation during

the financial year (5,572,647) (4,186,608) (4,140,197) (3,177,653)

At end of the

financial year 5,752,956 4,956,581 10,423,387 8,481,122

(b) Unitholders' capital/units in circulation – MYR Hedged Class

Number of Number of

units USD units USD

At beginning of the

financial year 57,514,609 15,146,050 33,356,326 8,729,055

Creation during the

financial year 14,844,470 4,108,832 30,776,922 8,194,005

Distribution reinvested

(Note 13) 931,343 240,161 1,015,090 265,045

Cancellation during

the financial year (30,417,230) (7,755,152) (7,633,729) (2,042,055)

At end of the

financial year 42,873,192 11,739,891 57,514,609 15,146,050

(c) Realised - distributable

2020 2019

USD USD

At beginning of the financial year (983,468) 262,265

Net realised loss for the financial year (1,120,470) (798,728)

Distributions out of realised income (Note 13) (345,930) (447,005)

At end of the financial year (2,449,868) (983,468)

2020 2019

20192020

38




10. TOTAL EQUITY (CONT’D.)

(d) Unrealised - non-distributable

2020 2019

USD USD

At beginning of the financial year 648,414 506,678

Net unrealised (loss)/gain for the financial year (1,323,150) 141,736

At end of the financial year (674,736) 648,414

11. UNITS HELD BY RELATED PARTIES

The related parties and their relationship with the Fund are as follows:

Related parties Relationship

AmFunds Management Berhad The Manager

AmInvestment Bank Berhad

AMMB Holdings Berhad

Subsidiaries and associates of AMMB Subsidiaries and associate companies of the

as disclosed in its financial ultimate holding company of the Manager

statements

12. INCOME TAX

Pursuant to Schedule 6 of the Income Tax Act 1967, provided that the exemption shall not

apply to the interest paid or credited to a unit trust that is a wholesale fund which is a

money market fund. Interest income earned by Funds other than other money market fund

is exempted from tax.

Holdings company of the Manager

Income tax payable is calculated on investment income less deduction for permitted

expenses as provided for under Section 63B of the Income Tax Act, 1967.

Ultimate holding company of the Manager

There were no units held by the Manager or any related party as at 30 April 2020 and 30

April 2019.

39




12. INCOME TAX (CONT’D.)

2020 2019

USD USD

Net loss before tax (2,443,620) (656,992)

Taxation at Malaysian statutory rate of 24% (2019: 24%) (586,469) (157,678)

Tax effects of:

Income not subject to tax (198,082) (219,590)

Loss not allowed for tax deduction 767,394 355,140

Restriction on tax deductible expenses 13,307 17,201

Non-permitted expenses for tax purposes 2,371 3,016

Permitted expenses not used and not available for

future financial years 1,479 1,911

Tax expense for the financial year - -

13. DISTRIBUTIONS

2020 2019

USD USD

Distribution income 417,414 539,204

Less: Expenses (71,484) (92,199)

Total amount of distributions 345,930 447,005

Gross/net distributions per unit in respective currencies

− AUD Hedged Class (AUD) 2.29 cent 2.14 cent

− MYR Hedged Class (MYR) 2.27 sen 2.16 sen

Distributions made out of:

− Realised income [Note 10(c)] 345,930 447,005

Comprising:

Distributions reinvested 345,930 447,005

The above distributions have been proposed before taking into account the net realised

loss of USD1,511,936 (2019: USD1,453,238) and net unrealised loss of USD674,736

which are carried forward to the next financial year.

Distributions to unitholders for the financial year are from the following sources:

A reconciliation of income tax expense applicable to net loss before tax at the statutory

income tax rate to income tax expense at the effective income tax rate of the Fund is as

follows:

40




14.

The Fund’s MER is as follows:

2020 2019

% p.a. % p.a.

Manager’s fee 0.34 0.37

Trustee’s fee 0.05 0.05

Fund’s other expenses 0.02 0.02

Total MER 0.41 0.44

15. PORTFOLIO TURNOVER RATIO (“PTR”)

16. SEGMENTAL REPORTING

17.

Target Fund ManagerUSD %

HSBC Investment Funds (Luxembourg) S.A. 12,510,000 100.00

The PTR of the Fund, which is the ratio of average total acquisitions and disposals of

investment to the average NAV of the Fund calculated on a daily basis, is 0.36 times (2019:

0.22 times).

MANAGEMENT EXPENSE RATIO (“MER”)

The MER of the Fund is the ratio of the sum of annualised fees and expenses incurred by

the Fund to the average NAV of the Fund calculated on a daily basis.

Transaction value

As stated in Note 1, the Fund is a feeder fund whereby a minimum of 95% of the Fund’s

NAV will be invested in the Target Fund.

As the Fund operates substantially as a feeder fund which invests primarily in the Target

Fund, it is not possible or meaningful to classify its investment by separate business or

geographical segments.

TRANSACTIONS WITH THE TARGET FUND MANAGER

Details of transactions with the Target Fund Manager for the financial year ended 30 April

2020 are as follows:

There was no transaction with financial institutions related to the Manager, during the

financial year.

The above transactions were in respect of investment in foreign CIS. Transactions in this

investment do not involve any commission or brokerage.

41




18. FINANCIAL INSTRUMENTS

(a) Classification of financial instruments

Financial Financial Financial

assets/ assets at liabilities at

liabilities amortised amortised

at FVTPL cost cost Total

USD USD USD USD

Assets

Investment 12,913,844 - - 12,913,844

Derivative assets 244,467 - - 244,467

Amount due from

Manager - 23,388 - 23,388

Cash at banks - 495,096 - 495,096

Total financial assets 13,158,311 518,484 - 13,676,795

Liabilities

Derivative liabilities 2,727 - - 2,727

Amount due to Manager - - 99,186 99,186

Amount due to Trustee - - 528 528

Sundry payables and

accrued expenses - - 2,486 2,486

Total financial liabilities 2,727 - 102,200 104,927

Assets

Investment 22,988,019 - - 22,988,019

Amount due from

Target Fund Manager - 249,000 - 249,000

Amount due from

Manager - 23,204 - 23,204

Dividend receivables - 55,105 - 55,105

Cash at banks - 421,217 - 421,217

Total financial assets 22,988,019 748,526 - 23,736,545

The significant accounting policies in Note 3 describe how the classes of financial

instruments are measured, and how income and expenses, including fair value gains

and losses, are recognised. The following table analyses the financial assets and

liabilities of the Fund in the statement of financial position by the class of financial

instrument to which they are assigned, and therefore by the measurement basis.

2020

2019

42




18. FINANCIAL INSTRUMENTS (CONT’D.)

(a) Classification of financial instruments (cont’d.)

Financial Financial Financial

assets/ assets at liabilities at

liabilities amortised amortised

at FVTPL cost cost Total

USD USD USD USD

2019 (cont’d.)

Liabilities

Derivative liabilities 112,127 - - 112,127

Amount due to Manager - - 328,074 328,074

Amount due to Trustee - - 1,042 1,042

Sundry payables and

accrued expenses - - 3,184 3,184

Total financial liabilities 112,127 - 332,300 444,427

and losses

2020 2019

USD USD

Net loss on financial assets at FVTPL (2,835,099) (1,311,601)

Income, of which derived from:

− Distribution income from financial assets

at FVTPL 462,950 746,709

− Other unrealised foreign exchange gain 13 99

(b) Financial instruments that are carried at fair value

The Fund’s financial assets and liabilities are carried at fair value.

Level 1: quoted (unadjusted) prices in active markets for identical assets or liabilities;

Level 2:

Level 3:

other techniques for which all inputs which have a significant effect on the

recorded fair values are observable; either directly or indirectly; or

The Fund uses the following hierarchy for determining and disclosing the fair value of

financial instruments by valuation technique:

techniques which use inputs which have a significant effect on the recorded

fair value that are not based on observable market data.

Income, expense, gains

43




18. FINANCIAL INSTRUMENTS (CONT’D.)

(b) Financial instruments that are carried at fair value (cont’d.)

Level 1 Level 2 Level 3 Total

USD USD USD USD

Financial assets at

FVTPL:

– Investment - 12,913,844 - 12,913,844

– Derivative assets - 244,467 - 244,467

- 13,158,311 - 13,158,311

Financial liability at

FVTPL:

– Derivative liabilities - 2,727 - 2,727

Financial assets at

FVTPL:– Investment - 22,988,019 - 22,988,019

Financial liability at

FVTPL:

– Derivative liabilities - 112,127 - 112,127

(c)

• Amount due from Target Fund Manager

• Amount due from/to Manager

• Distribution receivable

• Cash at banks

• Amount due to Trustee

• Sundry payables and accrued expenses

The following table shows an analysis of financial instruments recorded at fair value by

the level of the fair value hierarchy:

There are no financial instruments which are not carried at fair values and whose

carrying amounts are not reasonable approximation of their respective fair values.

2020

2019

Financial instruments that are not carried at fair value and whose carrying

amounts are reasonable approximation of fair value

The following are classes of financial instruments that are not carried at fair value and

whose carrying amounts are reasonable approximation of fair value due to their short

period to maturity or short credit period:

44




19. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

(a) Market risk

(i) Price risk

Percentage movements

in price by: 2020 2019

USD USD

-5.00% (645,692) (1,149,401) +5.00% 645,692 1,149,401

(ii) Currency risk

Market risk, in general, is the risk that the value of a portfolio would decrease due to

changes in market risk factors such as equity prices, interest rates, foreign exchange

rates and commodity prices.

The Fund is exposed to a variety of risks that include market risk, credit risk, liquidity risk,

single issuer risk, regulatory risk, country risk, management risk and non-compliance risk.

Price risk refers to the uncertainty of an investment’s future prices. In the event of

adverse price movements, the Fund might endure potential loss on its investment

in the Target Fund. In managing price risk, the Manager actively monitors the

performance and risk profile of the investment portfolio.

Sensitivity of the

The result below summarised the price risk sensitivity of the Fund’s NAV due to

movements of price by -5.00% and +5.00% respectively:

Fund’s NAV

Risk management is carried out by closely monitoring, measuring and mitigating the above

said risks, careful selection of investment coupled with stringent compliance to investment

restrictions as stipulated by the Capital Market and Services Act 2007, Securities

Commission’s Guidelines on Unlisted Capital Market Products under the Lodge and Launch

Framework and the Deed as the backbone of risk management of the Fund.

The result below summarised the currency risk sensitivity of the Fund’s NAV due

to appreciation/depreciation of the Fund’s functional currency against currencies

other than the Fund’s functional currency.

Currency risk is associated with the Fund’s assets and liabilities that are

denominated in currencies other than the Fund’s functional currency. Currency

risk refers to the potential loss the Fund might face due to unfavorable fluctuations

of currencies other than the Fund’s functional currency against the Fund’s

functional currency.

45




19. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONT’D.)

(a) Market risk (cont’d.)

(ii) Currency risk (cont’d.)

(a) AUD Hedged Class

2020 2019

USD USD

Hedged amount 7,778 59,479

Percentage movements in

currencies other than the 2020 2019Fund’s functional currency: USD USD

+5.00% 406 2,974 -5.00% (406) (2,974)

(b) MYR Hedged Class

2020 2019

USD USD

Hedged amount 68,048 15,596

Percentage movements in

currencies other than the 2020 2019Fund’s functional currency: USD USD

+5.00% 6,324 780 -5.00% (6,324) (780)

Assets/(liabilities) USD % of USD % ofdenominated in equivalent NAV equivalent NAV

Australian Dollar

Amount due from

Manager 336 - * - -

Amount due to

Manager - - (311,745) (1.34)

336 0.00 (311,745) (1.34)

Notional amount

Sensitivity of the Fund’s NAV

2020 2019

The net unhedged financial assets and financial liabilities of the Fund that are not

denominated in Fund’s functional currency are as follows:

Notional amount

Sensitivity of the Fund’s NAV

46





(a) Market risk (cont’d.)

(ii) Currency risk (cont’d.)

Assets/(liabilities) USD % of USD % ofdenominated in equivalent NAV equivalent NAV

Malaysian Ringgit

Amount due from

Manager 23,052 0.17 23,204 0.10

Amount due to

Manager (95,040) (0.70) (8,862) (0.04)

Cash at bank 13,559 0.10 8 - *

(58,429) (0.43) 14,350 0.06

* represents less than 0.01%

(b) Credit risk

(c) Liquidity risk

Cash at banks are held for liquidity purposes and are not exposed to significant credit

risk.

The Fund, as a feeder fund, invests significantly all its assets in the Target Fund. The

Target Fund manages the risk by setting internal counterparty limits and undertaking

internal credit evaluation to minimise such risk.

Liquidity risk is defined as the risk that the Fund will encounter difficulty in meeting

obligations associated with financial liabilities that are settled by delivering cash or

another financial asset. Exposure to liquidity risk arises because of the possibility that

the Fund could be required to pay its liabilities or redeem its units earlier than expected.

This is also the risk of the Fund experiencing large redemptions, when the Investment

Manager could be forced to sell large volumes of its holdings at unfavorable prices to

meet redemption requirements.

Credit risk is the risk that the counterparty to a financial instrument will cause a financial

loss to the Fund by failing to discharge an obligation. Credit risk applies to short-term

deposits, distributions receivable and derivatives assets. The issuer of such

instruments may not be able to fulfill the required interest payments or repay the

principal invested or amount owing. These risks may cause the Fund’s investment to

fluctuate in value.

2020 2019

47





(c) Liquidity risk (cont’d.)

(d) Single issuer risk

(e) Regulatory risk

(f) Country risk

(g) Management risk

(h) Non-compliance risk

The specific risks associated to the Target Fund include market risk, securities risk,

emerging market risk, settlement and credit risks, regulatory and accounting standards

risks, political risk, custody risk and liquidity risk.

This is the risk of the Manager, the Trustee or the Fund not complying with internal

policies, the Deed of the Fund, securities law or guidelines issued by the regulators.

Non-compliance risk may adversely affect the investment of the Fund when the Fund is

forced to rectify the non-compliance.

Poor management of the Fund may cause considerable losses to the Fund that in turn

may affect the NAV of the Fund.

The risk of price fluctuation in foreign securities may arise due to political, financial and

economic events in foreign countries. If this occurs, there is a possibility that the NAV

of the Fund may be adversely affected.

The Fund’s financial liabilities have contractual maturities of not more than six months.

The Fund maintains sufficient level of liquid assets, after consultation with the Trustee,

to meet anticipated payments and cancellations of units by unitholders. Liquid assets

comprise of deposit with licensed financial institution and other instruments, which are

capable of being converted into cash within 5 to 7 days. The Fund’s policy is to always

maintain a prudent level of liquid assets so as to reduce liquidity risk.

The Fund, as a feeder fund, invests significantly all its assets in the Target Fund. The

Target Fund is restricted from investing in securities issued by any issuer in excess of a

certain percentage of its NAV. Under such restriction, the risk exposure to the

securities of any single issuer is diversified and managed by the Target Fund Manager

based on internal/external ratings.

Any changes in national policies and regulations may have effects on the capital

market and the NAV of the Fund.

48




20. CAPITAL MANAGEMENT

No changes were made in the objective, policies or processes during the financial years

ended 30 April 2020 and 30 April 2019.

The primary objective of the Fund’s capital management is to ensure that it maximises

unitholders’ value by expanding its fund size to benefit from economies of scale and

achieving growth in NAV from the performance of its investment.

The Fund manages its capital structure and makes adjustments to it, in light of changes in

economic conditions. To maintain or adjust the capital structure, the Fund may issue new or

bonus units, make distribution payment, or return capital to unitholders by way of redemption

of units.

49


STATEMENT BY THE MANAGER

For and of behalf of the Manager

GOH WEE PENG

Chief Executive Officer

AmFunds Management Berhad

Kuala Lumpur, Malaysia

24 June 2020

I, Goh Wee Peng, for and on behalf of the Manager, AmFunds Management Berhad, for

Advantage Global Equity Volatility Focused (the “Fund”) do hereby state that in the opinion of the

Manager, the accompanying statement of financial position, statement of comprehensive income,

statement of changes in equity, statement of cash flows and the accompanying notes are drawn

up in accordance with Malaysian Financial Reporting Standards and International Financial

Reporting Standards so as to give a true and fair view of the financial position of the Fund as at

30 April 2020 and the comprehensive income, the changes in equity and cash flows of the Fund

for the financial year then ended.

50

TRUSTEE’S REPORT

TO THE UNITHOLDERS OF ADVANTAGE GLOBAL EQUITY VOLATILITY FOCUSED

(a)

(b)

(c)

For Deutsche Trustees Malaysia Berhad

Ng Hon Leong Richard Lim Hock Seng

Head, Trustee Operations Chief Executive Officer

Kuala Lumpur

24 June 2020

We have acted as Trustee for Advantage Global Equity Volatility Focused (the “Fund”) for the

financial year ended 30 April 2020. To the best of our knowledge, for the financial year under

review, AmFunds Management Berhad (the “Manager”) has operated and managed the Fund in

accordance with the following:-

limitations imposed on the investment powers of the Manager under the Deed(s), the

Securities Commission’s Guidelines on Unlisted Capital Market Products under The

Lodge and Launch Framework, the Capital Markets and Services Act 2007 and other

applicable laws;

valuation and pricing of the Fund is carried out in accordance with the Deed(s) of the

Fund and any regulatory requirements; and

creation and cancellation of units for the Fund are carried out in accordance with the

Deed(s) of the Fund and any regulatory requirements.

We are of the view that the distributions made during the financial year ended 30 April 2020 by

the Manager are not inconsistent with the objectives of the Fund.

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DIRECTORY

Head Office 9th & 10th Floor, Bangunan AmBank Group 55, Jalan Raja Chulan, 50200 Kuala Lumpur Tel: (03) 2032 2888 Facsimile: (03) 2031 5210 Email: [email protected]

Postal Address AmFunds Management Berhad P.O Box 13611, 50816 Kuala Lumpur

For enquiries about this or any of the other Funds offered by AmFunds Management Berhad Please call 2032 2888 between 8.45 a.m. to 5.45 p.m. (Monday to Thursday),

Friday (8.45 a.m. to 5.00 p.m.)

03 2032 2888 | aminvest.com | [email protected] m

AmFunds Management Berhad 198601005272 (154432-A)

advantage global equity volatility focused€¦ · portfolio turnover ratio (times) (3) 0.36 0.22...

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