The Public Islamic Opportunities Fund (PIOF) is a unit trust fund managed by Public Mutual Berhad in Malaysia.
It is a moderately large fund with an estimated value slightly exceeding MYR1 billion or US$222 million based on an exchange rate of USD1 to MYR4.5.
The PIOF invests primarily in Shariah-compliant equities or stocks of companies traded on the Malaysian stock exchange.
The unit trust fund is suitable for investors looking for growth but can stomach the risk that comes with the volatility of the fund.
The reason is that the PIOF is highly risky and does not pay dividends on a regular basis.
Therefore, the Public Islamic Opportunities Fund (PIOF) is not suitable for investors looking for dividend income as the cash distribution policy is incidental, meaning that cash distribution is at the discretion of the manager and is based on the performance of the fund.
Apart from complying with Shariah requirements, the equities or stocks within the PIOF portfolio are primarily from companies of small market capitalization at the point of purchase.
While this practice has been the objective of the unit trust, the PIOF may remain invested in counters which have moved above the market capitalization range stated in the fund’s investment policy and strategy.
Again, investors looking for regular cash distribution may find the Public Islamic Opportunities Fund (PIOF) unattractive as the fund does not pay a regular dividend.
Instead, income-seeking investors can consider the Public Islamic Dividend Fund (PIDF) which pays out cash distribution on a bi-annual basis.
All said, let’s head out to the following topics.
Enjoy!
Public Islamic Opportunities Fund (PIOF) 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 (Liquidity)
8. Top 10 Equities – Malaysia
9. Top 10 Equities – Foreign
10. Unit Price Vs Benchmark
11. Review Summary
12. Reference And Credits
13. Disclosure
Fund Summary
The following summary is obtained from the annual report for the financial year ended 31 July 2022.
Category
Equity
Investment Objective
To achieve capital growth through investments in companies with small market capitalization which comply with Shariah principles.
Launch Date
28 Jun 2005
Distribution Policy
INCIDENTAL
Risk Level
Very High – 5 (on a scale of 1 – 5)
Volatility
Very High – 28.0 By Lipper Analytics
Size
MYR1.0 billion (USD222 million based on an exchange rate of USD1 = MYR4.5) as of the end of the financial year ended 31 July 2022.
Shariah Compliant
Yes
Sales Charge
Up To 5%
Expenses
1.57% Of Fund NAV On Average From 2020 To 2022
Performance
Average annual return for the following years ended 31 July 2022.
| Years | Average Annual Return (%) |
|---|---|
| 1 Year | -15.31 |
| 3 Years | 16.42 |
| 5 Years | 6.55 |
| 10 Years | 12.81 |
| Since Commencement | 27.52 |
Annual total return for the financial year ended 31 July.
| Years | Annual Total Return (%) | Benchmark Return (%) |
|---|---|---|
| 2022 | -15.31 | -7.34 |
| 2021 | 15.98 | 19.36 |
| 2020 | 51.91 | 1.17 |
| 2019 | -7.05 | -9.72 |
| 2018 | -4.29 | -17.47 |
As mentioned in prior discussions, the Public Islamic Opportunities Fund (PIOF) is highly volatile.
The volatility of the unit trust can be seen in the performance table above.
As seen, the fund registered an outstanding return of 51.9% in 2020 but suffered a massive setback of -15.3% in 2022.
Therefore, if you were invested in the unit trust in 2022, you would see your investment having a loss of a massive -15%.
However, on a long-term basis, the return of the PIOF has been positive.
For example, the average annual return of the Public Islamic Opportunities Fund was an outstanding 16.4% in the 3-year period ended on 31 July 2022.
An even more impressive result was that the PIOF unit trust managed to gain 27.5% on average in annual return since its commencement in 2005.
Therefore, the longer you are invested in the fund, it seems the better the return is.
In short, the Public Islamic Opportunities Fund (PIOF) has been able to beat inflation by a massive margin in the last 18 years with an average annual return of 27.5%.
Other performance data for the financial year ended 31 July.
Unit Prices (MYR) => prices quoted are ex-distribution
| As at 31 July | |||
|---|---|---|---|
| 2022 | 2021 | 2020 | |
| Highest NAV per unit for the year | 0.7140 | 0.6677 | 0.5741 |
| Lowest NAV per unit for the year | 0.5022 | 0.5108 | 0.2623 |
Net Asset Value (NAV) and Units In Circulation (UIC) as at the end of the financial year
| As at 31 July | |||
|---|---|---|---|
| 2022 | 2021 | 2020 | |
| Total NAV (MYR’000) | 999,452 | 1,023,671 | 1,083,206 |
| UIC (in ’000) | 1,906,167 | 1,593,212 | 1,892,252 |
| NAV per unit (MYR) | 0.5243 | 0.6425 | 0.5724 |
As seen in the table above, total NAV of the Public Islamic Opportunities Fund (PIOF) was roughly MYR1 billion as of 31 July 2022 and the NAV had been nearly the same during the 3-year period between 2020 and 2022.
In fact, the total NAV had slightly gone down as of 2022 compared to that of 2020.
Despite the relatively stable NAV, the unit price of the fund fluctuated considerably.
As seen, the unit price of PIOF increased by 12% from 2020 to 2021 and decreased by 18% from 2021 to 2022.
Again, the relatively large unit price swing year over year depicts the volatility of the fund.
Total Expense Ratio
| As at 31 July | |||
|---|---|---|---|
| 2022 | 2021 | 2020 | |
| Total Expense Ratio (%) | 1.57 | 1.57 | 1.57 |
A lower ratio is preferable as it indicates lower expenses of the unit trust fund.
Portfolio Turnover Ratio
| As at 31 July | |||
|---|---|---|---|
| 2022 | 2021 | 2020 | |
| Portfolio Turnover Ratio (time) | 0.14 | 0.25 | 0.25 |
A lower ratio is preferable as it indicates lower trading activities and thus, lower expenses.
The Public Islamic Opportunities Fund (PIOF) 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 investment objective which focuses primarily on small market capitalization stocks.
That said, the unit trust fund will remain invested in stocks that have moved above the market capitalization range stated in the fund’s investment policy and strategy.
Despite having several multi-bagger winners, the fund will remain invested in these particular stocks and this will result in lower trading activity.
Read on to find out the multi-bagger winners within the fund.
Cash Distribution And Unit Split
| Declaration Date | |||
|---|---|---|---|
| 2022 | 2021 | 2020 | |
| 07-29 | 07-29 | 07-31 | |
| Net Distribution Per Unit (Cent In MYR) | 2.00 | 2.00 | – |
| Average Yield (%) | 2.8 – 4.0 | 3.0 – 3.9 | – |
| Net Distribution To Net Income Ratio (%) | -21 | 21 | – |
| Net Distribution To Cash Flow From Operations Ratio (%) | -40 | 16 | – |
| Unit Split | – | – | – |
As mentioned, the Public Islamic Opportunities Fund (PIOF) is invested primarily in small capitalization stocks and only pays dividends incidentally.
As seen in the table above, the unit trust declared cash distributions or dividends in 2022 and 2021 but not in 2020.
Therefore, the PIOF does not pay cash distributions or dividends on a regular basis and it pays dividends according to the discretion of the fund manager.
In 2022, the Public Islamic Opportunities Fund (PIOF) declared a cash distribution of 2 cents per unit, a similar figure compared to that of 2021 which also totaled 2 cents per unit.
The average yield in 2022 came in between 2.8% and 4.0%, nearly the same yield compared to that of 2021, but still a handsomely good rate that beats a fixed deposit.
The average yield was slightly better in 2021, which came in between 3.0% and 3.9%, depending on the purchase price of the unit trust.
The PIOF did not declare any cash dividends in 2020.
Nevertheless, the fund had a negative net cash distribution to income ratio in the year 2022, calculated at -21%, driven primarily by a net loss from investment which totaled MYR190 million compared to MYR149 million of net gain from investment reported in 2021.
From a cash flow perspective, a similar negative ratio was reported in the year 2022, calculated at -40%, driven primarily by negative net cash from operating activities.
On the other hand, a net cash distribution to cash flow from operation ratio of 16% was reported for the year 2021 when the fund generated a positive operating cash flow of MYR193 million.
Despite having a negative operating cash flow and incurring a loss after tax in 2022, the PIOF went ahead to pay out a cash distribution, possibly from the pool of cash derived from the sale of investments that totaled MYR130 million in the same financial year.
Also, the Public Islamic Opportunities Fund (PIOF) has never initiated a unit split in the 3 years from 2020 to 2022.
Income Received
| As at 31 July | ||
|---|---|---|
| 2022 MYR’000 | 2021 MYR’000 | |
| Profit From Shariah‑Based Placements | 1,215 | 706 |
| Distribution Income | 1,896 | 2,109 |
| Dividend Income | 25,243 | 18,474 |
| Total Income | 28,354 | 21,289 |
| Average NAV | 1,011,562 | – |
| Average Yield % | 2.8 | – |
The table above shows the breakdown of the income received by the unit trust fund PIOF.
As seen, the Public Islamic Opportunities Fund (PIOF) received various sources of income such as profit from Shariah‑based placements, distribution income, and dividend income.
In 2022, the PIOF received a total income of MYR28 million compared to a total income of MYR21 million reported in 2021, representing a growth of a massive 33% year-on-year.
As a result, the average income yield for the financial year 2022 came in at 2.8%, which in my opinion was quite good considering that other unit trust funds’ yield totaled less than 1%.
Despite the moderate amount of income received, it is an important source of cash for the unit trust fund.
The total income received covers not only all the expenses but also contributes toward the distribution of dividends or cash to investors.
For example, in 2022, total expenses such as trustee’s fee, management fee, audit fee, etc, of the fund came in at MYR18 million.
Therefore, the PIOF’s total income managed to pay the entire expense of the fund and still had a leftover of MYR10 million which was used as part of the cash distribution to unit holders.
Asset Allocation – Equities
| As at 31 July (% of NAV) | |||
|---|---|---|---|
| 2022 % | 2021 % | 2020 % | |
| Malaysia | |||
| Basic Materials | 0.3 | 0.3 | 0.4 |
| Communications | 5.1 | 6.6 | 4.6 |
| Consumer Cyclical | 5.1 | 1.7 | 1.8 |
| Consumer Non-Cyclical | 3.7 | 2.4 | 2.7 |
| Energy | – | – | 1.4 |
| Financial | 4.5 | 3.2 | 3.9 |
| Industrial | 39.7 | 39.3 | 50.2 |
| Technology | 16.7 | 20.7 | 9.6 |
| TOTAL MALAYSIA | 75.1 | 74.2 | 74.6 |
| Japan | |||
| Industrial | 0.7 | 2.2 | 1.1 |
| Korea | |||
| Basic Materials | – | – | 0.4 |
| Industrial | 2.0 | 1.7 | – |
| Technology | – | 1.4 | – |
| Sub Total | 2.0 | 3.1 | 0.4 |
| Singapore | |||
| Industrial | – | – | 5.6 |
| Taiwan | |||
| Industrial | 2.8 | 4.4 | 2.6 |
| Technology | 0.1 | 2.2 | 3.5 |
| Sub Total | 2.9 | 6.6 | 6.1 |
| United States | |||
| Consumer Non-Cyclical | – | – | 1.7 |
| Technology | 1.7 | 7.9 | 2.8 |
| Sub Total | 1.7 | 7.0 | 4.5 |
| TOTAL FOREIGN | 7.3 | 19.8 | 17.7 |
| TOTAL EQUITY SECURITIES | 82.4 | 94.0 | 92.3 |
In terms of equity holdings, Malaysian’s companies made up the largest portion of the Public Islamic Opportunities Fund (PIOF) equity portfolio, reportedly at 75.1% of NAV as of 31 July 2022.
From the table above, the Malaysia equity percentage did not change much in the last 3 years between 2020 and 2022.
On the flip side, the case was different for foreign equity holding of the fund.
In 2022, foreign equity contributed only 7.3% of PIOF’s NAV, down significantly from the 2021 figure of 19.8%.
In terms of Malaysian equity, the Industrial sector was the biggest holding of the unit trust fund, reportedly at 39.7% NAV as of 31 July 2022.
The Technology sector came in at 16.7% of NAV in 2022, making it the second biggest sector within the Malaysian equity portfolio of the fund.
These 2 sectors alone made up nearly 60% of PIOF’s total NAV in 2022.
Despite the significant equity composition in the Industrial and Technology sectors, 2022 marked the biggest drop in NAV percentage compared to 2021 and 2020.
Perhaps, the fund managed was less bullish about these 2 sectors in 2022 and beyond.
Of all the sectors in the fund, the Consumer Cyclical saw the biggest percentage increase, topping as much as 5.1% in 2022, up nearly 4 percentage points from 1.7% reported in 2021.
On the other hand, Technology holding was down considerably to 16.7% in 2022 from 20.7% reported in 2021.
Despite having considerable rebalancing activities among Malaysian equities, the overall NAV percentage for Malaysian equity did not change significantly year on year between 2020 and 2022.
For foreign equity holding, we saw the biggest percentage drop with respect to PIOF’s NAV in 2022.
For example, PIOF’s total U.S. equity holding was down to only 1.7% NAV in 2022 from 2021.
Similarly, Taiwan equity holding within the unit trust fund was reduced by more than half and was down to only 2.9% of NAV as of 31 July 2022.
In short, we are seeing a significant reduction in foreign equity holding of the Public Islamic Opportunities Fund (PIOF) in 2022 compared to 2021 and 2020.
Asset Allocation – Non-Equity
| As at 31 July (% of NAV) | |||
|---|---|---|---|
| 2022 % | 2021 % | 2020 % | |
| Collective Investment Funds – Malaysia | 3.4 | 3.3 | 3.9 |
| Warrants – Malaysia | 0.7 | 0.6 | – |
| Shariah-Based Placements With Financial Institutions | 9.4 | 3.9 | 3.7 |
| TOTAL NON-EQUITY | 13.5 | 7.8 | 7.6 |
In terms of non-equity holdings in the fund, the Public Islamic Opportunities Fund (PIOF)’s position in this type of investment had nearly doubled in 2022 compared to 2021 and 2020.
The most significant jump in non-equity holdings of the fund was seen in Shariah-Based placements with financial institutions which totaled a massive 9.4% in 2022.
For your information, Shariah-based placement is a type of investment equivalent to a deposit that generates interest income.
As seen in the table above, Shariah-based placements jumped to 9.4% NAV in 2022 compared to only 3.9% NAV reported in 2021.
The significant rise in deposits in 2022 may illustrate an unfavorable stock market in 2022 and beyond.
Nevertheless, the Public Islamic Opportunities Fund (PIOF)’s positions in other non-equity holdings have remained unchanged in 2022.
For example, PIOF still held roughly 3% of collective investment funds in its portfolio as of the financial year 2022 compared to 2021, and also a similar percentage of warrants in its portfolio.
While making up only 13.5% of PIOF’s portfolio, these non-equity holdings mark a significant shift in the strategy of the unit trust fund and that is fewer holdings of equity.
With a considerable amount of cash on hand, the fund manager may be able to make opportunistic buying of undervalued stocks.
Asset Allocation – Total
Change In Portfolio Exposures
| As at 31 July | |||
|---|---|---|---|
| 2022 % | 2021 % | Change (%) | |
| Investment Type | |||
| Shariah-Compliant Equity And Equity-Related Securities | 83.3 | 95.0 | -11.7 |
| Islamic Money Market | 16.7 | 5.0 | +11.7 |
As seen in prior discussions, the Public Islamic Opportunities Fund (PIOF) has significantly grown its cash holding as of 2022.
This particular equity and non-equity composition are reflected in the table above.
As seen, the PIOF’s total equity and equity-related securities have decreased to only 83.3% NAV as of the financial year 2022 compared to a whopping 95% NAV reported in 2021.
Similarly, the PIOF’s Islamic money markets (deposit and cash-related) have increased by 11.7% to 16.7% as of 31 July 2022, up from 5% reported in 2021.
Again, the significant shift from equity to cash in 2022 within the fund’s portfolio may represent an unfavorable equity market in 2022 and beyond.
Cash And Deposits (Liquid Assets)
| As at 31 July | ||
|---|---|---|
| 2022 (MYR’000) | 2021 (MYR’000) | |
| Liquid Assets | ||
| Shariah‑Based Placements With Financial Institutions | 93,590 | 40,157 |
| Cash At Banks | 83,718 | 16,174 |
| Total Net Assets | ||
| Net Asset Value (“NAV”) | 999,452 | 1,023,671 |
| Ratio Of Liquid Assets To NAV (%) | 17.7 | 5.5 |
The table above shows the total liquid assets of the Public Islamic Opportunities Fund (PIOF).
Liquid assets consist primarily of deposits and cash at bank.
As shown in the table above, total liquid assets totaled MYR177 million in 2022, a rise of more than 200% from that of 2021 which totaled only MYR56 million.
With respect to NAV, the ratio came in at 18% in 2022 compared to only 3% in 2021.
Therefore, there was a significant rise in liquidity within the Public Islamic Opportunities Fund on a year-on-year basis.
As mentioned, the significant rise in liquidity in 2022 compared to 2021 may represent an unfavorable equity market in 2022 and beyond as the fund held significantly more cash in 2022 than in 2021.
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 31 July 2022 | ||||
|---|---|---|---|---|
| Average Purchased Price (MYR) | Fair Value (MYR’000) | Percent Of NAV (%) | ||
| Equity Securities | Related Sectors | |||
| Frontken Corporation Berhad | Industrial | 0.64 | 78,010 | 7.8 |
| Uchi Technologies Berhad | Industrial | 1.49 | 55,575 | 5.6 |
| Inari Amertron Berhad | Technology | 0.79 | 54,638 | 5.5 |
| D&O Green Technologies Berhad | Technology | 3.18 | 50,975 | 5.1 |
| V.S. Industry Berhad | Industrial | 0.54 | 36,762 | 3.7 |
| Kelington Group Berhad | Industrial | 0.63 | 35,840 | 3.6 |
| SKP Resources Bhd | Industrial | 1.09 | 35,581 | 3.6 |
| Dufu Technology Corp. Berhad | Technology | 2.81 | 30,679 | 3.1 |
| MBM Resources Berhad | Consumer Cyclical | 3.09 | 28,328 | 2.8 |
| Scientex Packaging (Ayer Keroh) Berhad | Industrial | 1.04 | 27,969 | 2.8 |
| Total | – | – | 434,357 | 43.6 |
All Malaysian equities held by The Public Islamic Opportunities Fund (PIOF) are traded on the Kuala Lumpur Stock Exchange.
That said, Frontken Corporation Berhad, an engineering firm that services the semiconductor industry, topped the chart above at 7.8% NAV or MYR78 million as of 2022.
At 5.6% NAV or MYR56 million, Uchi Technologies Berhad, also an engineering firm, claimed the 2nd spot as one of the largest positions within the unit trust fund.
Inari Amertron Berhad, a manufacturer of electrical and electronic components, was ranked in the 3rd place as of 2022 with 5.5% NAV or MYR55 million.
Of all the top 10 equity within the PIOF, 6 of them are from the Industrial sector while 3 are from the Technology sector.
On a cumulative basis, all top 10 Malaysian equity in the fund contributed 44% NAV or MYR434 million as of 2022.
This top 10 equity composition is highly concentrated on the Industrial and Technology sectors and is in line with what we saw in the prior discussion.
Again, the Malaysian equity position in the Industrial and Technology sectors alone contributed nearly 60% of the fund’s NAV.
Another trend worth mentioning is that all top 10 stock holdings in PIOF are small market capitalization companies which the fund has held for quite some time.
In addition, you can find out from the average purchased price located in the table above that most of the stocks were winning counters as of January 2023.
Some of the stocks have even gone up several times their average purchased price as of January 2023.
While the portfolio capitalizes on the growth of small market capitalization companies, the unit trust fund will likely depend on the growth of the Malaysian economy as a whole and more specifically, the growth of the export sector.
For your information, the total Malaysian equity alone contributed a massive 75% NAV to the fund while equity holdings in the Industrial and Technology sectors made up nearly 60% of the fund’s NAV as of 2022.
Therefore, if the growth of the Malaysian economy comes to a standstill, especially in the export sector, the Public Islamic Opportunities Fund (PIOF) will likely be negatively impacted.
All in all, the Public Islamic Opportunities Fund (PIOF) captures primarily the growth of the Technology and Industrial sectors in Malaysia as most counters within these sectors are engineering firms and manufacturers that not only service but also supply products to local as well as oversea markets.
Top 10 Equities – Foreign
| As at 31 July 2022 | |||
|---|---|---|---|
| Fair Value (MYR’000) | Percent Of NAV (%) | ||
| Equity Securities | Related Sectors | ||
| Marvell Technology, Inc (U.S.) | Technology | 16,893 | 1.7 |
| LEENO Industrial Inc (Korea) | Industrial | 12,034 | 1.2 |
| TXC Corporation (Taiwan) | Industrial | 9,981 | 1.0 |
| Daejoo Electronic Materials Co., Ltd (Korea) | Industrial | 8,195 | 0.8 |
| Jeol Ltd (Japan) | Industrial | 6,797 | 0.7 |
| LOTES Co., Ltd (Taiwan) | Industrial | 6,427 | 0.7 |
| Speed Tech Corp (Taiwan) | Industrial | 5,962 | 0.6 |
| Gold Circuit Electronics Ltd (Taiwan) | Industrial | 5,191 | 0.5 |
| Visual Photonics Epitaxy Co., Ltd (Taiwan) | Technology | 1,045 | 0.1 |
| Boshiwa International Holding Ltd (HK) | Consumer Cyclical | – | – |
| TOTAL EQUITY – FOREIGN | – | 72,525 | 7.3 |
The Public Islamic Opportunities Fund (PIOF) held only 10 foreign equities as of 31 July 2022.
As shown in the table above, the majority of foreign equities are from the Industrial sector and are traded on Taiwan Stock Exchange
At the top of the chart, Marvell Technology from the U.S. comprised 1.7% NAV or MYR17 million as of 31 July 2022, making it the largest foreign equity holding in the fund.
LEENO Industrial Inc from Korea took the 2nd spot at 1.2% NAV or MYR12 million.
TXC Corporation from Taiwan claimed the 3rd place at 1% NAV or MYR10 million.
At the bottom of the chart is Boshiwa International Holding Ltd which has gone bankrupt and has been delisted from the Hong Kong Stock Exchange in 2020.
All foreign equities held by the unit trust fund comprised only 7% NAV or MYR73 million as of 2022.
Therefore, the foreign equity position within the PIOF was small and was concentrated mainly in the Industrial sector, similar to the Malaysian equity portfolio which was also concentrated in the same sector.
In short, the Public Islamic Opportunities Fund (PIOF) was minimally exposed to foreign equity as of 2022.
Unit Price Vs Benchmark
PIOF Unit Price Vs FBMSCAP Index
For your information, the FTSE Bursa Malaysia Small Cap Index (FBMSCAP) is the selected Benchmark for Public Islamic Opportunities Fund (PIOF).
Constituents are screened according to the Malaysian Securities Commission’s Shariah Advisory Council (SAC) screening methodology.
In this section, we compare the PIOF unit price with the FBMSCAP index to check the sensitivity of the unit price with respect to the index.
As shown, the Public Islamic Opportunities Fund (PIOF) unit price tracks closely the volatility of the FBMSCAP index.
The correlation is expected as the equity holdings within the PIOF’s portfolio resemble that of FBMSCAP’s constituents.
As shown in the chart above, both the PIOF unit price and the FBMSCAP index have been on a powerful uptrend after reaching a bottom in October 2022.
As of January 2023, the PIOF unit price has reached MYR52.67 cents per unit, one of the record highs ever reported since October.
Similarly, the FBMSCAP index also has been rising after hitting a record low in October 2022.
As of January 2023, the FBMSCAP index reached nearly 15,000, down slightly from its record high reported in December 2022.
In the following section, we will find out the relationship between the unit price of the fund and the FBMSCAP index.
For example, for every 100-point change in the FBMSCAP index, how much of that will affect the PIOF unit price?
Let’s move on to find out.
Positive Changes
| Positive Changes | |||
|---|---|---|---|
| FBMSCAP Index Changes | PIOF Unit Price Changes In MYR | Rise Ratio | |
| Date | |||
| 01/03/2022 | 8.68000 | 0.0006 | 0.000069 |
| 12/30/2022 | 42.21000 | -0.0007 | -0.000017 |
| 12/27/2022 | 43.76000 | 0.0000 | 0.000000 |
| 12/22/2022 | 58.69000 | -0.0002 | -0.000003 |
| 12/14/2022 | 51.14000 | 0.0007 | 0.000014 |
| 12/09/2022 | 123.94000 | 0.0016 | 0.000013 |
| 12/05/2022 | 151.92000 | -0.0020 | -0.000013 |
| Average | – | – | 0.000023 |
The table above shows the correlation between the FBMSCAP index and the PIOF unit prices in an upward direction.
Based on the 90-day data between Sept and Dec 2022, the average ratio came in at 0.000023.
At this ratio, a 1-point index increment in the FBMSCAP index will result in an MYR0.000023 increase in the PIOF unit price.
For a 100-point index increment, the PIOF unit trust fund will increase by MYR0.0023 or MYR0.23 cents on average.
Negative Changes
| Negative Changes | |||
|---|---|---|---|
| FBMSCAP Index Changes | PIOF Unit Price Changes In MYR | Fall Ratio | |
| Date | |||
| 12/29/2022 | -12.21000 | 0.0013 | -0.000106 |
| 12/28/2022 | -134.84000 | -0.0042 | 0.000031 |
| 12/23/2022 | -11.44000 | 0.0005 | -0.000044 |
| 12/21/2022 | -109.33000 | -0.0021 | 0.000019 |
| 12/20/2022 | -73.28000 | -0.0018 | 0.000025 |
| 12/19/2022 | -38.21000 | -0.0030 | 0.000079 |
| 12/16/2022 | -42.14000 | 0.0019 | -0.000045 |
| Average | – | – | 0.000011 |
The table above shows the correlation between the FBMSCAP index and PIOF unit prices in a downward direction.
Based on the 90-day data between Sept and Dec 2022, the average ratio came in at 0.000011.
The average ratio indicates that when the FBMSCAP index falls by 1 index point, the PIOF unit price will fall by about MYR0.000011 on average.
From a 100-point perspective, the PIOF unit price will fall by about MYR0.0011 or MYR0.11 cents on average.
As the rising ratio is twice as large as the falling ratio, the Public Islamic Opportunities Fund (PIOF) unit price is more sensitive to an index rise than an index drop.
Therefore, the PIOF unit trust rises faster than it drops when the FBMSCAP index moves.
This trend bodes well for the unit trust fund as it is more resilient to a market downturn and it is less volatile during a market decline.
Review Summary
The Public Islamic Opportunities Fund (PIOF) capitalizes on the growth of small-cap equity.
The fund is concentrated in the Malaysian equity market with a NAV ratio of 75% as of 2022 while foreign equity made up only 7% of NAV.
Therefore, the fund has minimal foreign equity exposure as of 2022.
Moreover, the PIOF held equity mainly in the Industrial and Technology sectors.
Equity in these 2 sectors alone topped 57% of NAV as of 2022.
Companies within the Industrial and Technology sectors are primarily involved in engineering, design, manufacturing, and servicing of local and oversea clients.
Besides, some of these firms pay attractive dividends.
Despite having a substantial amount of income that yields nearly 3% as of 2022, the unit trust fund does not distribute cash dividends on a regular basis.
Therefore, the PIOF is not a good choice for dividend income seekers.
As of the financial year 2022, the Public Islamic Opportunities Fund (PIOF) held a substantial amount of cash in its balance sheets.
As seen, the cash held in the fund topped as much as 17% of NAV as of 31 July 2022.
The massive amount of cash may signal an unfavorable stock market going forward.
In short, the Public Islamic Opportunities Fund (PIOF) is high-risk and highly volatile and capitalizes primarily on the growth of the Malaysian economy.
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) FBMSCAP index
Disclosure
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