• The Fund will invest not less than 80% of NAV in local/foreign debt securities, deposit, fixed income, other securities or assets or seek return in accordance with the conditions prescribed by SEC laws and the Fund will invest in foreign without limit.• The Fund will invest in investment grade securities and may invest in non-investment grade securities only in case when such securities are rated in investment grade while the Fund invests.
• The Fund may invest in derivatives for the purpose of Efficient Portfolio Management (EPM) and fully hedge foreign exchange rate risk.
• The Fund may enter into the reverse repo transaction and securities lending, and may invest in structured notes.
Details of Investment
The portfolio will be splited in 2 parts :
Part 1 The fund will invest in both domestic and foreign debt instruments and or deposits. As well as may hold securities or any other assets as specified in the notification of the Office of the SEC for investment in fixed income funds at approximately 100% of NAV. However, in the event that the Fund is required cash collateral for entering into a Part 2 transaction, the Fund may invest in Part I less than 100% of NAV.
Part 2 The Fund will be a counterparty in bond forward contracts transactions (the “Bond Forward”) as the buyer of the reference bonds. With details as follows
Principal and Return payment conditions
Condition 1 No occurance of any event affecting the payment and delivery of the reference bonds occurs before the scheduled termination date.
The Fund will pay the principal return on investment in debt instruments and/or deposits and returns from entering into Bond forwards transactions deducted from related fees and expenses to unitholders.
Condition 2 If any event affecting the payment and delivery of the reference bonds occurs before the scheduled termination date.
1) The Fund is required to withdraw deposits or unwind some investment positions in order to pay the bank counterparty as a bond forward seller equal to the pre-agreed bond forward price includes expenses incurred and the bank counterparty will deliver the reference bonds to the fund. The unitholders, therefore, may not receive principal and return on such deposits. When the Fund receives the payment from the reference bonds, the Fund will pay in proportion to the number of unit held by the unitholders.
2) The Fund will hold the rest foreign fixed income securities and/or foreign deposit to maturity and will distribute their principal and return to the unitholders of the Investment Units proportionately based on their share of the Investment Units.
Please study details from Fund Fact Sheet of KEC8-AI