ABF Malaysia Bond Index Fund

About ETFs

1)	What is an ETF?
2)	What are the advantages of investing in an ETF?
3)	What are the minimum investment units?
4)	What are the expected returns?
5)	Do ETFs provide income distribution?
6)	What do I have to pay when buying and selling ETFs?
7)	How are transactions in ETFs settled?
8)	What determines the price of an ETF?
9)	How are ETFs different from unit trusts?
10)	What are the risks of investing?
11)	What should I do before investing in an ETF?
12)	Why are ETFs so popular in other countries?

1) What is an ETF?

ETF is essentially a security that tracks an index, with commodities or basket of stocks like an index fund, but trades like a stock on an exchange, thus experiencing price changes throughout the day as it is bought and sold.

2) What are the advantages of investing in an ETF?

Liquidity & Flexibility - You may buy or sell ETFs through your remisier or via online trading during normal trading hours similar to equity. Like traditional stocks, ETFs can be traded intraday.

Low cost investment - ETF offers low expense ratio, generally lower than unit trusts. The transaction cost is similar to trading of ordinary shares.

Diversification - ETF provides you with a diversified portfolio of instruments - all in a single fund.

Easy access to information - Market price of an ETF is available on real-time throughout the trading day at the Bursa's MASA* feed.

* MASA means "Maklumat Saham" which is a computerized display of real-time price.

3) What are the minimum investment units?

ETFs are tradable in a minimum board lot of 100 units.

4) What are the expected returns?

Investment returns generally corresponds to the price and yield performance of their underlying indices.

5) Do ETFs provide income distribution?

Most ETFs distribute income to their holders either annually or semi-annually. You are advised to look at the distribution policy in the prospectus or offering document of the ETF.

6) What do I have to pay when buying and selling ETFs?

When you buy or sell the ETF, you will incur normal stock market transaction costs such as brokerage commission, stamp duty, and clearing fee.

7) How are transactions in ETFs settled?

In the same manner as share transactions i.e. not later than 3 working (market) days after the transaction date (T+3).

8) What determines the price of an ETF?

The market price of an ETF is usually very close to the Net Asset Value (NAV) of the fund i.e. market value of the underlying stocks and any net income not distributed. However, the price of an ETF can be affected by demand and supply in the market.

9) How are ETFs different from unit trusts?

Product	ETFs	UNIT TRUSTS (for Bond Funds)
Diversification
Price Transparency
Entry Fee	*	Up to 2% of NAV per unit
Management Fees	0.5% p.a. of the NAV or lower	0.75% - 2% p.a. of the NAV
Traded through Broker
Cash Settlement	**T+3	Upfront
Liquidity

* Please note brokerage fee of up to 0.70%, clearing fee of 0.04% and stamp duty are applicable when trading securities on Bursa Malaysia
**T+3 means third business day after trade date

10) What are the risks of investing?

Market risk - Performance of the ETF will be directly affected by the performance of the basket of securities in the fund.
Tracking Error - The price of the ETF may not be able to replicate the performance of the index.
The units may trade at a discount or premium against the NAV of the Fund, subject to the demand and supply for the units.

11) What should I do before investing in an ETF?

You are advised to know the following before investing:

Investment objective and strategy of the ETF
Information on the index that the ETF is tracking
Distribution policy
Fees and charges that will be borne by you as an investor
Sources of trading information of the ETF
Information on the management company

12) Why are ETFs so popular in other countries?

ETFs has garnered a strong following in the US and Europe in the last 10 years. Most ETFs are passively managed index funds with a correspondingly low management fee. ETFs are listed and traded on stock exchanges, so buying and selling ETF units are as easy as calling your remisier.
Source: AmInvestment Bank Berhad

Disclaimer

AmInvestment Services Bhd
We recommend that you read and understand the contents of the Prospectus for ABF Malaysia Bond Index Fund ("the Fund") dated 13 July 2008 (and expires on 12 July 2009) that has been registered with Securities Commission, who takes no responsibility to its contents before investing. You may view the prospectus from the Fund’s website at www.abfmy1.com.my or visit us at our nearest representative office for a copy of the prospectus. Unit prices and income distribution, if any, may rise or fall. Past performance of a fund is not indicative of future performance. Please consider the fees, charges and risks involved including, but not limited to the risk that units may be delisted from Bursa Malaysia, market risk, tracking error and the risks relating to the Benchmark Index. AmInvestment Services Berhad does not guarantee any returns on the investments.

iBoxx®
iBoxx® is a registered trademark of International Index Company Limited ("IIC") and has been licensed for the use by AmInvestment Services Berhad ("AIS") and/or its affiliates. IIC does not approve, endorse or recommend AIS and/or its affiliates or the ABF Malaysia Bond Index Fund. This product is not sponsored, endorsed or sold by IIC and IIC makes no representation regarding the suitability of investing in the product.