PUBLIC MUTUAL NEW FUND : PUBLIC ISLAMIC ALPHA-40 GROWTH FUND

Alpha is defined as excess returns obtained as a result of certain investment strategies undertaken by a fund. One of the strategies for a fund to achieve alpha or excess returns is via ‘focus investing’ which involves maintaining a concentrated portfolio of stocks that are expected to outperform the broader market over time.
In contrast to general equity funds which hold a broader portfolio of 60 stocks or more, funds which practice focus investing provide investors with the opportunity to participate in higher potential returns over the medium to long-term due to the concentration of stocks. In general, these funds are suitable for investors with higher risk profiles as the fund’s concentrated portfolio may result in increased volatility over short-term periods.

Public Islamic Alpha-40 Growth Fund (PIA40GF) is an Islamic equity fund that seeks to achieve capital growth by investing up to a maximum of 40 Shariah-compliant stocks listed in the domestic and regional markets. The fund is able to adopt a more focused investment strategy and achieve potentially higher returns as it concentrates its investment in a portfolio of not more than 40 stocks. To achieve increased diversification, the fund may invest up to 30 percent of its net asset value (NAV) in regional markets.
On the economic front, Malaysia’s economy is expected to rebound by 6.8 percent^{1 in 2010 from a contraction of 1.7 percent1 in 2009 following a recovery in the manufacturing and services sectors. However, Gross Domestic Product (GDP) growth is envisaged to moderate to 5.2 percent1 in 2011 as export growth moderates. However, on the domestic front, investment and consumer spending is envisaged to be resilient amidst an environment of accommodative interest rates, rising disposable incomes and favourable demographic trends.}