This article analyzes and reviews the Public Islamic Dividend Fund (PIDF).
The PIDF is a unit trust fund managed by Public Mutual Berhad in Malaysia.
It is one of Public Mutual’s largest unit trust funds, valued at more than MYR3.7 billion or USD822 million as of Dec 2022.
The fund invests primarily in Shariah-compliant equities or stocks of companies based in Malaysia.
Apart from complying with Shariah requirements, the equities or stocks in PIDF also reward shareholders with attractive dividend payouts.
As a result, the Public Islamic Dividend Fund (PIDF) declares cash distributions on a semi-annual basis instead of annually.
Investors looking for regular and Shariah-compliant income may find this unit trust fund attractive as the yield is much better than a fixed deposit.
Let’s head out to the following topics.
Public Islamic Dividend Fund (PIDF) Topics
1. Fund Summary
2. Cash Distribution And Unit Split
3. Income Received
4. Asset Allocation – Equity
5. Asset Allocation – Non-Equity
6. Asset Allocation – Total
7. Cash And Deposits (Liquid Assets)
8. Top 10 Equities – Malaysia
9. Top 10 Equities – Foreign
10. Unit Price Vs Benchmark
11. Review Summary
12. Reference And Credits
The following summary is obtained from the annual report for the financial year ended 30 April 2022.
To provide income by investing in a portfolio of stocks that complies with Shariah requirements and which offer or have the potential to offer attractive dividend yields.
14 Feb 2006
Moderately High – 4 (on a scale of 1 – 5)
Moderate – 14.1 By Lipper Analytics
MYR4.0 billion (USD889 million based on an exchange rate of USD1 = MYR4.5) as of the end of the financial year ended 30 April 2022.
Up To 5%
1.52% Of Fund NAV On Average From 2020 To 2022
Average annual return for the following years ended 30 April 2022.
|Years||Average Annual Return (%)|
Annual total return for the financial year ended 30 April.
|Years||Annual Total Return (%)||Benchmark Return (%)|
In 2022, the Public Islamic Dividend Fund (PIDF) as a whole, which consists primarily of equity, registered an annual total return of -7.08% for the financial year under review and the performance was slightly better than the benchmark’s return of -8.29%.
The total return of -7.08% was achieved based on a cumulative return of equity and money market which came in at -5.56% and 0.06%, respectively, for the financial year ended 30 April 2022.
Adjusting for an expense of 1.58%, the total return of the unit trust fund totaled -7.08% for the financial year 2022.
According to the PIDF’s 2022 annual report, the better performance of the fund compared to the benchmark was primarily due to the fund’s equity holdings within the Basic Materials and Consumer sectors outperforming the broader market during the financial year under review.
On average, the Public Islamic Dividend Fund (PIDF) generated an annual return of 5.68%, 3.35% and 5.38% for the financial year ended 30 April 2022 in a period of 3 years, 5 years and 10 years, respectively.
The PIDF unit trust generated a much better annual return on a longer term, notably at 13.28% on average since the commencement of the fund in 2006.
Therefore, the Public Islamic Dividend Fund (PIDF) has been able to beat inflation in the last 15 years with an average annual return of 13.28%.
Other performance data for the financial year ended 30 April.
Unit Prices (MYR) => prices quoted are ex-distribution
|As at 30 April|
|Highest NAV per unit for the year||0.4117||0.4312||0.3647|
|Lowest NAV per unit for the year||0.3628||0.3376||0.3004|
Net Asset Value (NAV) and Units In Circulation (UIC) as at the end of the financial year
|As at 30 April|
|Total NAV (MYR’000)||4,018,363||4,594,300||4,295,802|
|UIC (in ’000)||10,880,622||11,260,329||12,546,772|
|NAV per unit (MYR)||0.3693||0.4080||0.3424|
Total Expense Ratio
|As at 30 April|
|Total Expense Ratio (%)||1.52||1.52||1.53|
A lower ratio is preferable as it indicates lower expenses of the unit trust fund.
Portfolio Turnover Ratio
|As at 30 April|
|Portfolio Turnover Ratio (time)||0.11||0.18||0.14|
A lower ratio is preferable as it indicates lower trading activities and thus, lower expenses.
The Public Islamic Dividend Fund (PIDF) is one of the unit trust funds having the lowest portfolio turnover ratio between 2022 and 2020, and therefore a much lower trading activity.
The reason for the low trading or rebalancing activities may have to do with the fund’s investing primarily in dividend stocks which are often non-volatile and low risk.
Cash Distribution And Unit Split
|Final & Interim Distribution Per Unit (Cent In MYR)||0.50||0.50||0.75||1.25||0.25||0.25|
|Net Distribution Per Unit (Cent In MYR)||1.00||2.00||0.50|
|Average Yield (%)||2.4 – 2.8||4.6 – 5.9||1.4 – 1.7|
|Net Distribution To Net Income Ratio (%)||-34||22||–|
|Net Distribution To Cash Flow From Operations Ratio (%)||48||29||–|
As mentioned, the Public Islamic Dividend Fund (PIDF) is primarily an income distribution fund.
As such, the unit trust has been declaring cash distribution or dividends without fail since 2013.
However, the table above shows only the cash distributions for the last 3 years between the financial year 2020 and 2022.
In 2022, the Public Islamic Dividend Fund (PIDF) declared an interim and a final cash dividend or cash distribution of 1 cent per unit, a much lower figure compared to that of 2021 which totaled 2 cents.
Despite the lower cash distribution in 2022, the average yield came in at between 2.4% and 2.8%, still a handsomely good rate compared to that of a fixed deposit.
The average yield was much better in 2021, coming in at between 4.6% and 5.9%, depending on the purchase price of the unit trust.
From the perspective of net income after tax, the declared cash distribution in 2022 consumed a total of -34% of net income after tax.
The negative ratio was due to the negative net income generated in the financial year 2022 which totaled -MYR320 million.
The ratio of cash distribution to net income was a healthy 22% in 2021 as the fund earned a net income after tax of MYR1.1 billion.
That probably explained a lower cash distribution in 2022 compared to 2021 as the unit trust fund incurred a net loss in 2022.
In terms of operating cash flow, cash distributions in the financial years 2022 and 2021 consumed only 48% and 29%, respectively, of operating cash flow.
Therefore, there was adequate cash flow in the fund to cover the cash distributions and the fund was still left with extra cash that could be saved for reinvestment in the future.
All in all, the Public Islamic Dividend Fund (PIDF) has been a well-managed unit trust fund in the sense that it did not simply declare a large sum of cash distribution just to attract investors.
For your information, the net loss after taxation in 2022 was MYR320 million while the respective operating cash flow generated in the same financial year was MYR293 million.
Also, the Public Islamic Dividend Fund (PIDF) has never initiated a unit split in the 3 years from 2020 to 2022.
|As at 30 April|
|2022 MYR’000||2021 MYR’000|
|Profit From Shariah‑Based Placements||2,510||2,828|
|Average Yield %||3.2||–|
The table above shows the breakdown of the income received by the unit trust fund PIDF.
As seen, the Public Islamic Dividend Fund (PIDF) received various sources of income such as profit from Shariah‑based placements, distribution income, and dividend income.
In 2022, the PIDF received a total income of MYR140 million compared to a total income of MYR136.5 million reported in 2021.
As a result, the average income yield for the financial year 2022 totaled a massive 3.2%, which in my opinion was quite substantial considering that other unit trust funds yield less than 1%.
Despite the massive income received by the unit trust fund, the PIDF was still unable to use the income alone for cash distribution as the expenses of the fund came up to MYR69 million in 2022 and MYR77 million in 2021.
Adjusted for expenses, the Public Islamic Dividend Fund (PIDF) was left with less than MYR50 million which was obviously not adequate to cover the cash distribution.
This trend will likely continue into the future considering that a massive growth rate in income within the unit trust is unlikely to materialize.
Therefore, the PIDF still has to count on investment gains in the future to cover the cash distributions.
Asset Allocation – Equities
|As at 30 April (% of NAV)|
|2022 %||2021 %||2020 %|
|TOTAL EQUITY SECURITIES||95.6||98.1||92.6|
In terms of equity holdings, Malaysian’s companies made up the largest portion of the Public Islamic Dividend Fund (PIDF) equity portfolio, reportedly at 77.7% of NAV as of 30 April 2022.
From the table above, the Malaysia equity percentage did not change much in the last 3 years between 2020 and 2022.
At the second spot was the United States, topping 13.7% of the fund’s NAV as of 30 April 2022.
Again, the U.S. equity percentage did not change much in the last 3 years between 2020 and 2022.
For your information, the equity holdings for these 2 countries alone, namely the U.S. and Malaysia, made up more than 90% of the unit trust’s NAV as of 2022 and in other financial years of 2021 as well as 2020.
As a result, equity holdings for other countries such as Hong Kong, Korea, Taiwan and Thailand in PIDF had been negligible between 2020 and 2022.
Also, you can see from the table above that the equity holdings of the fund for Malaysian companies had been concentrated on sectors that were defensive and that consists of strong dividend payers, such as Consumer Non-Cyclical, Industrial, Basic Materials, Communications and Utilities.
In addition, these are the top 5 sectors of the Public Islamic Dividend Fund (PIDF) for Malaysian equities and took up more than 60% of the fund’s NAV as of 2022.
For equities in the U.S., the Technology sector had been the largest holding in the PIDF’s portfolio, topping 9.2% of NAV as of 2022, a significant rise from 2020.
You may notice that the equity percentage in most sectors in countries such as Malaysia and U.S. had barely changed between 2020 and 2022.
Perhaps, this explains the low rebalancing activities (trading activities) of the Public Islamic Dividend Fund (PIDF).
As seen in prior discussions, the portfolio turnover ratio for PIDF measured only 0.11 as of 2022, a very low ratio indeed.
Asset Allocation – Non-Equity
|As at 30 April (% of NAV)|
|2022 %||2021 %||2020 %|
|Collective Investment Funds – Malaysia||1.0||0.9||1.1|
|Shariah-Based Placements With Financial Institutions||4.6||2.6||4.8|
In terms of non-equity holdings in the fund, the Public Islamic Dividend Fund (PIDF)’s position in this type of investment remained nearly the same in the last 3 years from 2020 to 2022.
For example, the collective investment funds in Malaysia in the portfolio had remained the same since 2020, roughly at 1%.
For your information, a collective investment fund is a pool of investments such as ETF, REIT and unit trust.
On the other hand, Shariah-based placement is a type of investment equivalent to a deposit.
This particular investment in PIDF also had been nearly the same in terms of the percentage of NAV between 2020 and 2022, topping just 4.6% as of 2022.
On a cumulative basis, the total non-equity investment in Public Islamic Dividend Fund (PIDF) came in at 5.6% of NAV as of 2022, a slightly higher figure compared to that of 2021.
In short, the Public Islamic Dividend Fund (PIDF) held only a small portion of non-equity investment in its portfolio.
Asset Allocation – Total
Change In Portfolio Exposures
|As at 30 April|
|2022 %||2021 %||Change (%)|
|Shariah-Compliant Equity And Equity-Related Securities||95.3||97.2||-1.9|
|Islamic Money market||4.7||2.8||+1.9|
As of 30 April 2022, the equity portfolio of the Public Islamic Dividend Fund (PIDF) came in at 95.3%, a reduction of 1.9% from 2021.
On the other hand, the money market portfolio of the fund grew from 2.8% to 4.7% as of 30 April 2022.
The higher percentage of the money market may represent an unfavorable stock market going forward as the fund held slightly more cash in 2022 than in 2021.
Cash And Deposits (Liquid Assets)
|As at 30 April|
|2022 (MYR’000)||2021 (MYR’000)|
|Shariah‑Based Placements With Financial Institutions||185,679||121,846|
|Cash At Banks||6,176||7,098|
|Total Net Assets|
|Net Asset Value (“NAV”)||4,018,363||4,594,300|
|Ratio Of Liquid Assets To NAV (%)||4.8||2.8|
The table above shows the total liquid assets of the Public Islamic Dividend Fund (PIDF).
Liquid assets consist primarily of deposits and cash at bank.
In the case of the Public Islamic Dividend Fund, the deposits are Shariah‑Based placements.
As seen in the table above, the Public Islamic Dividend Fund (PIDF) held cash and Shariah‑Based placements of MYR192 million as of 2022, roughly 50% higher than the figure in 2021.
In 2021, the Public Islamic Dividend Fund (PIDF) held just MYR129 million of cash and Shariah‑Based placements.
With respect to the fund’s NAV, the ratio came in at 4.8% and 2.8% for the financial years 2022 and 2021, respectively.
Therefore, the ratio in 2022 was almost twice the number in 2021.
The significant rise in liquid assets in 2022 compared to 2021 may represent an unfavorable equity market in 2022 and beyond.
Perhaps, the fund manager may be expecting a bearish outlook for the Malaysian stock market in the foreseeable future.
Top 10 Equities – Malaysia
|As at 30 April 2022|
|Average Purchased Price (MYR)||Fair Value (MYR’000)||Percent Of NAV (%)|
|Equity Securities||Related Sectors|
|Tenaga Nasional Berhad||Utilities||12.00||284,425||7.1|
|Petronas Chemicals Group Berhad||Basic Materials||7.13||275,744||6.9|
|Press Metal Aluminium Holdings Berhad||Basic Materials||3.05||265,168||6.6|
|IHH Healthcare Berhad||Consumer Non-Cyclical||5.05||166,170||4.1|
|Axiata Group Berhad||Communications||5.37||143,054||3.6|
|Telekom Malaysia Berhad||Communications||5.23||142,437||3.5|
|Nestle (Malaysia) Berhad||Consumer Non-Cyclical||60.90||136,064||3.4|
|Sime Darby Plantation Berhad||Consumer Non-Cyclical||5.38||137,621||3.4|
|Inari Amertron Berhad||Technology||2.92||118,750||2.9|
The table above shows the top 10 equity holdings of the Public Islamic Dividend Fund (PIDF) for Malaysian companies traded on the Kuala Lumpur Stock Exchange.
At the top of the table, Tenaga Nasional Berhad took up 7.1% of the unit trust’s NAV or MYR284 million, making it the largest equity holding of the fund for Malaysian companies.
At 6.9% of NAV or MYR276 million, Petronas Chemicals Group Berhad topped the second spot as one of the largest equity holdings of the fund.
Press Metal Aluminium Holdings Berhad came in at 3rd place at 6.6% of NAV or MYR265 million.
For your information, all equities in the top 10 positions are mega-cap companies that pay attractive dividends.
This trend is not unexpected as the PIDF is an income-driven unit trust that focuses on distributing cash to investors.
Apart from being dividend-driven, the top 10 equity holdings alone made up 44% of the fund’s NAV, or nearly MYR1.8 billion as of 30 April 2022.
In my opinion, this equity composition is quite diversified and is not concentrated on only a limited number of companies as the ratio was less than half of the fund’s NAV.
That said, on average, each equity in the top 10 holdings took up only 4.4% of the Public Islamic Dividend Fund (PIDF)’s NAV, which is moderately low.
As a result, the Public Islamic Dividend Fund (PIDF) is a diversified, non-volatile, and low-risk unit trust.
Despite the diversified portfolio and dividends, the unit trust fund will depend mainly on Malaysian economic growth as the total Malaysian equity alone contributed a massive 78% of NAV to the fund.
Therefore, if Malaysian economic growth comes to a standstill, the Public Islamic Dividend Fund (PIDF) will likely be negatively impacted.
Top 10 Equities – Foreign
|As at 30 April 2022|
|Fair Value (MYR’000)||Percent Of NAV (%)|
|Equity Securities||Related Sectors|
|ASML Holding N.V. – NYS||Technology||98,698||2.5|
|Alphabet Inc – Class A||Communications||88,346||2.2|
|Taiwan Semiconductor Manufacturing Co., Ltd||Technology||79,568||2.0|
|Abbott Laboratories||Consumer Non-Cyclical||52,884||1.3|
|Samsung SDI Co., Ltd||Technology||45,928||1.1|
|Samsung Electronics Co Ltd||Technology||42,051||1.1|
|Meta Platforms Inc||Communications||38,466||1.0|
|TOTAL EQUITY – FOREIGN||–||703,653||17.6|
The table above shows the top 10 foreign equity holdings of the Public Islamic Dividend Fund (PIDF) as of 30 April 2022.
Of the top 10 holdings, 7 of them are U.S. equities while 2 are traded on Korea Stock Exchange and 1 is from Taiwan.
Among the equities, Microsoft Corp topped the table at 3.1% of the fund’s NAV or MYR124 million.
Next is Apple Inc, with 2.8% of NAV or MYR114 million as of 30 April 2022.
ASML Holding N.V. took 3rd place at 2.5% of NAV or MYR99 million.
Similar to Malaysian equity, the Public Islamic Dividend Fund (PIDF)’s foreign equity also comprised mostly dividend-paying companies.
For example, of the top 10 foreign equities, 7 of them are dividend payers excluding Alphabet Inc, Meta Platforms Inc, and Adobe Inc.
Therefore, this equity composition is not unexpected because the PIDF is an income-driven fund that invests primarily in dividend stocks.
Last but not least, the top 10 equity holdings alone contributed 17.6% NAV to the fund or MYR704 million as of 30 April 2022.
This particular percentage of NAV is moderately low and makes the PIDF unit trust less exposed to foreign equity.
However, some exposure to foreign equity is good for the fund as the PIDF does not have to be entirely dependent on Malaysia’s economic growth.
Unit Price Vs Benchmark
For your information, the FTSE Bursa Malaysia EMAS Shariah Index (FBMS) has been designed to provide investors with a broad benchmark for Shariah-compliant investment.
Constituents are screened according to the Malaysian Securities Commission’s Shariah Advisory Council (SAC) screening methodology.
In this section, we compare the PIDF unit price with the FBMS index to check on the sensitivity of the unit price with respect to the index.
As seen, the unit price of the Public Islamic Dividend Fund (PIDF) tracks closely the volatility of the FBMS index.
The trend is expected as the equity holdings within the PIDF’s portfolio resemble that of FBMS’s constituents.
As shown in the chart above, both PIDF unit price and the FBMS index have been on an uptrend since bottoming out in October 2022.
As of December 2022, the PIDF unit price has reached MYR33.41 cents per unit, one of the highest records ever reported since October.
The uptrend of the PIDF also has been in-line with that of the FBMS index where it hit the 10,500 level as of Dec 2022, also one of the record highs since October.
In the following section, we will find out the relationship between the unit price of the fund and the FBMS index.
For example, for every 100-point change in the FBMS index, how much of that will affect the PIDF unit price?
Let’s move on to find out.
|FBMS Index Changes||PIDF Unit Price Changes In MYR||Rise Ratio|
The table above shows the correlation between the FBMS index and the PIDF unit prices in an upward direction.
Based on the 90-day data between Sept and Dec 2022, the average ratio came in at 0.000049.
At this ratio, a 1-point index increment in the FBMS index will result in an MYR0.000049 increase in the PIDF unit price.
For a 100-point index increment, the PIDF unit trust fund will increase by MYR0.0049 or MYR0.5 cents on average.
|FBMS Index Changes||PIDF Unit Price Changes In MYR||Fall Ratio|
The table above shows the correlation between the FBMS index and PIDF unit prices in a downward direction.
Based on the 90-day data between Sept and Dec 2022, the average ratio came in at 0.000106.
The average ratio indicates that when the FBMS index falls by 1 index point, the PIDF unit price will fall by about MYR0.000106 on average.
From a 100-point perspective, the PIDF unit price will fall by about MYR0.0106 or MYR1.1 cents on average.
As the falling ratio is twice as large as the rising ratio, the Public Islamic Dividend Fund (PIDF) unit price will be more sensitive to an index drop than an index rise.
As a result, the PIDF unit trust will have a unit price drop more than a unit price rise when the FBMS index moves.
A negative perspective about the Public Islamic Dividend Fund (PIDF) is that it is more sensitive to a market decline than a market rise as seen in the data above.
That said, the PIDF unit price will decline at twice the rate when the market drops.
Therefore, the volatility of the fund will be much greater during a market downturn.
Another negativity worth mentioning is that the income received by the PIDF unit trust is still insufficient to cover the cash distribution despite the fund being invested in mostly dividend-paying equities.
In this aspect, the PIDF still has to rely on investment gains to ensure sufficient cash distributions for investors.
This is a negative drawback as the unit trust fund may not be able to declare a cash distribution or provide only a small cash distribution if it suffers a serious investment loss like it did in the financial year of 2022.
The fund may have to draw down from its reserve in order to provide a capital return to investors.
Nevertheless, the Public Islamic Dividend Fund (PIDF) has been paying out generous cash distributions in the last 10 years since 2013.
As of 2022, the dividend yield came in between 2.1% and 2.8%, depending on the purchased unit price, which was slightly better than the return of a fixed deposit.
In addition, the Public Islamic Dividend Fund (PIDF) has been enjoying a very good average annual return since its commencement in 2006.
The unit trust fund managed to register an average annual return of a massive 13% since 2006, taking into account the expenses, unit split, and cash distributions.
In short, the Public Islamic Dividend Fund (PIDF) is moderately low-cost (only 1.52% of NAV on average between 2020 and 2022), but provides a good return to investors, especially for those seeking steady cash dividends.
References and Credits
1. All financial information in this article was obtained and referenced from the following links:
a) Public Mutual Unit Trust Fund
b) FBMS index
The content in this article is for informational purposes only and is neither a recommendation nor advice to purchase a security. The Public Islamic Dividend Fund (PIDF) is not in any way sponsored, endorsed, sold, or promoted by StockDividendScreener.com.
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