ABFi

RESPONSIBILITY STATEMENT

This Prospectus has been reviewed and approved by the Directors of AmInvestment Services Berhadand they collectively and individually accept full responsibility for the accuracy of the information. Hav-ing made all reasonable inquiries, they confirm to the best of their knowledge and belief, there are nofalse or misleading statements, or omission of other facts which would make any statement in theProspectus false or misleading.

STATEMENT OF DISCLAIMER

The Securities Commission has approved the issue of, offer for subscription or purchase, or issue aninvitation to subscribe for or purchase units in respect of the public offering and a copy of this Prospec-tus has been registered with the Securities Commission.

The approval, and registration of this Prospectus, should not be taken to indicate that the SecuritiesCommission recommends the Fund or assumes responsibility for the correctness of any statementmade or opinion or report expressed in this Prospectus.

The Securities Commission is not liable for any non-disclosure on the part of the management com-pany responsible for the Fund and takes no responsibility for the contents in this Prospectus.The Se-curities Commission makes no representation on the accuracy or completeness of this Prospectus,and expressly disclaims any liability whatsoever arising from, or in reliance upon, the whole or any partof its contents. INVESTORS SHOULD RELY ONTHEIR OWN EVALUATIONTOASSESSTHE MERITS AND RISKS OF THE INVESTMENT. IN CONSIDERING THE INVEST-MENT, INVESTORS WHO ARE IN ANY DOUBT ON THE ACTION TO BE TAKENSHOULD CONSULT THEIR STOCKBROKER, BANK MANAGER, SOLICITOR, AC-COUNTANT OR OTHER PROFESSIONALADVISERS IMMEDIATELY.

Admission to the Official List of Bursa Malaysia Securities Bhd is not to be taken as an indication of themerits of the invitation, funds or of its units.

ADDITIONAL STATEMENTS

Investors are advised to note that recourse for false or misleading statements or acts made in con-nection with the Prospectus is directly available through sections 248, 249 and 357 of the Capital Mar-kets and Services Act 2007.

Securities listed on Bursa Malaysia Securities Bhd are offered to the public premised on full and accu-rate disclosure of all material information concerning the issue for which any person set out in section236 of the Capital Markets and Services Act 2007, e.g. directors and advisers, are responsible.

ABF ii

LICENSING DISCLOSURE STATEMENT

The following is a licensing disclosure statement requirement pursuant to the IIC License Agreementdated 8 July 2005, entered into between International Index Company Limited andAmInvestment Serv-ices Berhad: -

“Markit iBoxx® is a registered trademark of International Index Company Limited (“IIC”) and has been li-censed for the use by AmInvestment Services Berhad (“AIS”) and/or its affiliates. IIC does not approve, endorseor recommend AIS and/or its affiliates or the ABF Malaysia Bond Index Fund (“ABF Fund”).

Investments of the ABF Fund are made on the basis of an iBoxx® index provided by IIC, which is obtained froma source considered reliable, but IIC and its employees, suppliers, subcontractors and agents (together “IIC As-sociates”) do not guarantee the veracity, completeness or accuracy of the ABF Fund or other information fur-nished in connection with any ABF Fund. No representation, warranty or condition, express or implied, statutoryor otherwise, as to condition, satisfactory quality, performance, or fitness for purpose are given or assumed byIIC or any of the IIC Associates in respect of any ABF Fund or any data included in it or the use by any personor entity of the ABF Fund or that data and all those representations,warranties and conditions are excluded saveto the extent that such exclusion is prohibited by law.

IIC and the IIC Associates shall have no liability or responsibility to any person or entity for any loss, damages,costs, charges, expenses or other liabilities whether caused by the negligence of IIC or any of the IIC Associatesor otherwise, arising in connection with the use of the ABF Fund”.

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DEFINITIONS

ABFiii

In this Prospectus, unless where the context requires otherwise, the following words and abbrevia-tions shall have the following meanings: -

Act

AIS or the Manager

AIM or the Investment Manager

AmInvestment Group

Asian Governments

Application Cancellation Fee

Auditor

Bursa Depository

Bursa Securities

Business Day(s)

CDS

CDS Account

Securities Commission Act 1993

AmInvestment Services Berhad (154432-A)(a member of AmInvestment Group)

AmInvestment Management Sdn Bhd (379438-T)(a member of AmInvestment Group)

AmInvestment Group Berhad (657000-X) and its subsidiary andassociated companies

collectively, the governments of China, Indonesia,Korea,Hong Kong,Philippines, Malaysia, Singapore and Thailand

Fee set out in the Participating DealerAgreement which may at thediscretion of the Manager be charged upon the cancellation of (1)each Creation Application and (11) each Redemption Applicationand the maximum level of which shall be determined by the Man-ager, in consultation with the Participating Dealers, from time totime and set out in the Prospectus

The auditor for the time being of the Trust appointed

Bursa Malaysia Depository Sdn Bhd (165570-W)

Bursa Malaysia Securities Berhad (635998-W)

A day (other than Saturday, Sunday or public holidays) on which:(i) Financial Institutions are open for business in Kuala Lumpur

and money market transactions are carried on in KualaLumpur; and

(ii) Bursa Securities is open for trading of securities; and(iii) the Benchmark Index is compiled and published; or(iv) such other day as may be agreed upon between the Manager

and the Trustee and notified to the Participating Dealers fromtime to time.

Central Depository System

An account established at Bursa Depository for a Depositor forthe recording of deposit of securities and for dealing in such secu-rities by the Depositor

ABF iv

Clearing House

Central Depositories Act

CMSA

Custodian

Dealing Day

Deed

Depository

Directors

EMEAP

ETF

Financial Institution(s)

Fund

FYE(s)

Government

Latest Practicable Date

Bursa Malaysia Securities Clearing Sdn Bhd (109716-D)

The Securities Industry (Central Depositories) Act, 1991 or anystatutory modification, amendment or re-enactment thereof forthe time being in force

Capital Markets and Services Act 2007

The person or persons for the time being appointed by theTrusteeas the custodian of theTrust to hold all the FundAssets or any partthereof

Each Business Day during the continuance of the Fund (commenc-ing on the date of this Prospectus) and/or such other day as theManager may, in consultation with the Trustee, from time to timedetermine but shall not include a Business Day on which a forcemajeure event occurs or is continuing

The deed dated 12 July 2005, as supplemented by the Supple-mentery Deed dated 20 June 2007, between the Trustee, the Man-ager and the Unitholders constituting the Fund as amended by anyother deed supplemental thereto

Bursa Malaysia Depository Sdn Bhd

Board of Directors of the Manager

Executives’ Meeting of East Asia and Pacific Central Banks

Exchange traded fund

A licensed bank, licensed discount house, licensed finance companyor licensed merchant bank as defined in Section 2 (1) of the Bank-ing and Financial InstitutionsAct, 1989 or a licensed Islamic bank asdefined in Section 2 of the Islamic Banking Act, 1983

The ETF as established by the Deed as from time to time modifiedor added to and called the "ABF Malaysia Bond Index Fund" or bysuch other name as the Manager shall decide, and the Trustee hasagreed to act as Trustee on the terms set out in the Deed

Financial year(s) ended or ending 31 December, as the case may be

Government of Malaysia

31 May 2009

ABFv

Listing

Listing Requirements

Manager Fee

Prospectus

RM and sen

SC

Trustee or HSBC Trustee

Unit(s)

Unitholder(s)

Admission to the Official List and the listing of and quotation forthe Units on the Main Board of Bursa Securities

The listing requirements of Bursa Securities

The Manager Fee as set out in Section 5.3 of this Prospectus

Prospectus for ABF Malaysia Bond Index Fund

The monetary units in the lawful currency of Malaysia

Securities Commission of Malaysia

HSBC (Malaysia) Trustee Berhad (1281-T)

1 undivided share in the Fund

Any person registered as holding a Unit in accordance with theprovisions of the Deed

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ABF vi

Glossary ofTerms in relation to theABF

ABF

Benchmark Index

Cash Dealing Day

Cash Issue Component

Cash Redemption Component

Asian Bond Fund

The Markit iBoxx® ABF Malaysia Bond Index provided by IIC orsuch other index as may be determined by the Manager with theapproval of the Trustee from time to time

For the purpose of creation of Units: -(i) any Dealing Day immediately following the day on which Bursa

Securities’ nominal closing price for the Units traded on BursaSecurities is at a five percent (5%) (or such other percentageas the Manager may determine from time to time with theapproval of theTrustee) premium or more above the valuationof a Unit; and/or

(ii) the last day of the month on which (or if not a Dealing Day, theDealing Day immediately following the last day of the month onwhich) the Benchmark Index is rebalanced

For the purpose of redemption of Units: -(i) any Dealing Day immediately following the day on which Bursa

Securities’ nominal closing price for the Units traded on BursaSecurities is at a five percent (5%) (or such other percentageas the Manager may determine from time to time with theapproval of theTrustee) discount or more below the valuationof a Unit; and/or

(ii) the last day of the month on which (or if not a Dealing Day, theDealing Day immediately following the last day of the month onwhich) the Benchmark Index is rebalanced

On an In-Kind Creation of Units, the amount of cash required tobe paid per Creation Unit on the issue of those Units, whichamount shall be equal to the difference between the SubscriptionValue of the Creation Units at theValuation Point on the relevantTrade Date and the value of the Index Securities, Non-Index Secu-rities and/or other investments exchanged in specie for those Unitsand vested in the Trustee in accordance with the Deed, calculatedas at theValuation Point on that Trade Date

The amount of cash required to be paid per Redemption Unit onan In-Kind Redemption of Units, which amount shall be equal tothe difference between the value of the Redemption Units at theValuation Point on the relevant Trade Date on which such Unitsare redeemed and the value of the Index Securities,Non-Index Se-curities and/or other investments transferred in specie to the re-deeming Unitholder in respect of such Units in accordance withthe Deed, calculated as at theValuation Point on that Trade Date

ABFvii

Creation Application

Creation Securities

Creation Unit

Dealing Deadline

Deposited Property

Distribution Account

Eligible Market

Fund Assets

Income

The application made by Participating Dealers to create new Unit(s)

In relation to any issue of Units, the Index Securities, Non-IndexSecurities and/or other investments which together with the CashIssue Component (if any), comprise an In-Kind Creation Basket oran aggregation thereof to be deposited, subject to the Deed, withthe Fund by or for the account of a Participating Dealer pursuantto a Creation Application submitted by that Participating Dealer inaccordance with the Deed and the Participating DealerAgreement

The Units which will be issued upon delivery to the Trustee of anIn-Kind Creation Basket as from time to time determined by theManager, with the approval of the Trustee and duly notified by theManager to the SC and the Participating Dealers.As an illustration,as at the Latest Practicable Date, a Creation Unit comprises27,750,000 Units

For the purposes of CreationApplication(s) and/or RedemptionAp-plication(s), 2.00 p.m. on any particular Dealing Day or such othertime as the Manager (with the approval of the Trustee) may fromtime to time determine and notify to the Participating Dealers

All the assets (including cash) for the time being held or deemed tobe held pursuant to the Deed excluding (i) the income and (ii) anyamount for the time being standing to the Credit of the Distribu-tion Account.

An account (which may be a sub-account of a bank account) towhich is credited the Income Entitlement

A market that: -(a) is regulated by a regulatory authority within Malaysia;(b) operates regularly;(c) is open to the public; and(d) has adequate liquidity for the purpose of the Fund

All the assets for the time being and from time to time held ordeemed to be held pursuant to the Deed including all DepositedProperty and Income but excluding any amount for the time beingstanding to the credit of the Distribution Account

The income of the Fund which comprises all interest, dividends andother distributions/income which accrues in respect of the FundAssets including all or any part of the realised capital gains andlosses on the sale or realisation or disposal of Fund Assets as theManager may, with the consent of the Trustee may, but need not,from time to time and at any time determine shall also enter into

ABF viii

Income Entitlement

IIC

Index Licensor

Index Securities

Initial Creation

In-Kind Creation

In-Kind Creation Basket

In-Kind Redemption

In-Kind Redemption Basket

the calculation of the income of the Fund.

The amount of any income or gain of the Fund calculated in re-spect of a Unit on a Business Day and allocated to a Unitholder

International Index Company Limited (Company No. 4215405), acompany incorporated in England andWales whose registered ad-dress is at 5th Floor 2 More London Riverside, London, SE1 2AP,United Kingdom and having a business address at Geotheplatz 5,60313 Frankfurt am Main, Germany.

The index service provider, currently IIC or such other index serv-ice provider as determined by the Manager from time to time withthe approval of the Trustee

RM denominated debt obligations issued or guaranteed by theGovernment (or any otherAsian Government), by an agency or in-strumentality of the Government (or any otherAsian Government),by a Government (or any otherAsian Government) sponsored en-tity or a quasi-Government entity (or a quasi-government entity ofany other Asian Government) and RM denominated debt obliga-tions issued by supranationals and other fixed income securities, ineach case which are for the time being constituent securities of theBenchmark Index

The creation of such number of Units that will be created and set-tled prior to the Listing of the Units on Bursa Securities

The creation of Creation Units in exchange for a deposit by a Par-ticipating Dealer of In-Kind Creation Basket(s)

The portfolio of Index Securities, Non-Index Securities, other in-vestments and/or the Cash Issue Component (if any) determinedby the Manager in respect of each Dealing Day that is required tobe delivered pursuant to a CreationApplication for a Creation Unit

The redemption of Units by the surrender of the requisite numberof Redemption Unit(s) by a Participating Dealer in exchange for In-Kind Redemption Basket(s)

The portfolio of Index Securities, Non-Index Securities, other in-vestments and/or the Cash Redemption Component (if any) de-termined by the Manager in respect of each Dealing Day that isrequired to be delivered pursuant to a RedemptionApplication fora Redemption Unit

ABFix

Issue Price

Licence Agreement

Non-Index Securities

Participating Dealer

Participating Dealer Agreement

Redemption Application

Redemption Price

Redemption Securities

Redemption Unit

The price per Unit at which Units are from time to time issued orto be issued, in Creation Unit aggregations, and which shall be theprice per Unit ascertained in accordance with the provisions of theDeed

The agreement dated 8 July 2005 entered into between IIC and theManager

RM denominated securities which are not Index Securities butwhich are issued by an issuer of any Index Security and are in theopinion of the Manager, substantially similar to comparable IndexSecurities and are likely to behave in a manner that is consistentwith the investment objective of the Fund

A participating organization of Bursa Securities or a financial insti-tution licensed by Bank Negara Malaysia, who is appointed by theManager as a Participating Dealer pursuant to the terms of a Par-ticipating Dealer Agreement

The agreement entered into between a Participating Dealer, theManager and theTrustee setting out, inter alia, the arrangements inrespect of the creation and the issue of Unit(s) and the redemptionand cancellation of Unit(s)

The application made by a Participating Dealer to redeem existingUnit(s)

The price per Unit at which Units are from time to time redeemed,in Redemption Unit aggregations, and which shall be ascertained inaccordance with the provisions of the Deed

In relation to any redemption of Units, the Index Securities, Non-Index Securities and/or other investments which together with theCash Redemption Component (if any), comprise an In-Kind Re-demption Basket or an aggregation thereof to be distributed, sub-ject to the Deed, from the Fund to or for the account of aParticipating Dealer pursuant to a Redemption Application sub-mitted by that Participating Dealer in accordance with the Deedand the Participating Dealer Agreement

The Units required to be delivered to the Trustee in exchange foran In-Kind Redemption Basket as from time to time determinedby the Manager, with the approval of the Trustee and duly notifiedby the Manager to the SC and the Participating Dealers.As an il-lustration, as at the Latest Practicable Date, a Redemption Unitcomprises 27,750,000 Units

ABF x

Relevant Rating Agency

Settlement Date

Supervisory Committee

SubscriptionValue

Trade Date

Valuation Point

Either: -(a) Rating Agency of Malaysia Berhad (208095-U);(b) Malaysian Rating Corporation Berhad (364803V); or(c) Such other equivalent rating agencies as determined by the

Manager with the approval of the Trustee from time to time

With respect to creations and redemptions, the Business Day(s)after the relevant Trade Date set out in the Participating DealerAgreement or such other day after the relevantTrade Date as maybe determined and agreed upon between theTrustee and the Man-ager (on either a general or case by case basis) and notified to theParticipating Dealers provided always that the Manager, with theapproval of theTrustee,may at its discretion extend the settlementdate and such extension shall be on such terms and conditions (in-cluding as to the payment of any fees it may determine to representthe administrative costs involved in extending such date) as theManager may,with the approval of theTrustee,determine from timeto time and at any time

The supervisory committee constituted in accordance with, andhaving the powers set out, in the Deed

The value per Creation Unit at the relevantValuation Point

The Dealing Day on which the Manager receives a valid CreationApplication or a valid Redemption Application in accordance withthe Deed and the Participating Dealer Agreement

Such time or times on each Dealing Day as determined by the Man-ager from time to time with the approval of the Trustee providedthat there shall always be aValuation Point on each Dealing Day

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ABFxi

FinancialTerms

Correlation

Imperfect Correlation

Liabilities

Measures the degree to which the periodically measured total re-turn of one investment resembles that of another investment. Anindex is a theoretical financial calculation while the Fund is an ac-tual investment portfolio. The performance of the Fund and theBenchmark Index will vary somewhat due to fees and expenses,transaction costs, variations in their constituent securities, marketimpact and timing variances

When the measured degree of total return of one investment doesnot fully resemble that of another investment which the former in-vestment was anticipated to mirror

The outstanding liabilities, cost and expenses of the Fund including(without limitation): -

(a) unpaid administrative fees and expenses including the ManagerFee and the Trustee’s fee;

(b) all fees and expenses set out in the Deed and all duties, taxes,governmental charges, brokerage, transfer fees, or othercharges or expenses incurred by the Manager and/or theTrustee in relation to or in connection with any transaction,dealing or instrument or as a consequence of such transaction,dealing or instrument;

(c) accrued charges in respect of or owing in relation to any IndexSecurities, Non Index Securities and/or other investments;

(d) amounts required to meet all present liabilities and anappropriate allowance for any contingent liabilities;

(e) any provision for tax which in the opinion of the Managershould be taken into account and such sum (if any) as in theestimate of the Manager will fall to be paid or reclaimed inrespect of taxation related to income and transactions prior tothe relevant date;

(f) the amount outstanding in respect of any borrowing permittedby applicable laws and the amount of any unpaid interest andexpenses in respect thereof;

(g) any other cost or expenses payable but not paid which areexpressly authorised by any of the provisions of the Deed tobe payable out of the Fund Assets; and

ABF xii

NAV

NAV per Unit

(h) any other amounts required to meet liabilities or otherexpenditure which in the opinion of the Manager with theapproval of theTrustee should be taken into account and whichhave not otherwise been taken into account in determiningthe amount of the liabilities in any of the preceding paragraphsof this definition; and

Liabilities shall (where appropriate) be treated as accruing from dayto day

The following as from time to time and at any time determined bythe Manager in its discretion: -

(a) the value of all Fund Assets; and

(b) any other amounts,which in the opinion of the Manager, shouldbe included for the purpose of making a fair and reasonabledetermination of the gross value of the Trust having dueregard to generally accepted accounting standards and principlescurrent from time to time

less

(a) all Liabilities; and

(b) any other amounts which in the opinion of the Manager, shouldbe deducted: -

(i) for the purpose of making a fair and reasonabledetermination of the value of the Fund having due regardto generally accepted accounting standards and currentprinciples from time to time; or

(ii) as a provision for any tax which would be payable by theTrustee or the Unitholders on the disposal of all or any ofthe Fund Assets

NAV divided by the number of Units in issue

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TABLE OF CONTENTS

ABFxiii

CORPORATE DIRECTORY xv-xvii

1. EXECUTIVE SUMMARY 11.1 Summary Particulars of the Fund 11.2 Fees, Charges and Expenses 6

2. GENERAL INFORMATION ON EXCHANGETRADED FUNDS 92.1 Mechanics of an ETF 92.2 Benefits and Risks of an ETF 92.3 Comparison with Parallel Investment Products 102.4 Performance Indicators and Benchmarks 10

3. THE ABF MALAYSIA BOND INDEX FUND 113.1 Overview 113.2 Listing of the Fund on Bursa Securities 113.3 Investment Objective and Strategies 123.4 Investment Scope and Restrictions 143.5 Description of the Benchmark Index 163.6 Income Distribution Policy 173.7 Valuation of the Fund Assets 183.8 Valuation bases for all related securities and instruments of the Fund 18

4. RISK FACTORS 194.1 Risk Factors Specific to the Fund 194.2 Risk Factors Relating To Passive Investments 224.3 Risk Factors Relating to the Benchmark Index 234.4 Other Risk Factors 24

5. FEES, CHARGES AND EXPENSES 255.1 Fees and Charges Payable by a Typical Investor 255.2 Fees and Charges Payable by Participating Dealers 255.3 Fees and Expenses Incurred by the Fund 26

6. CREATIONAND REDEMPTION OF UNITS 316.1 Creation and Redemption of Units 316.2 Obtaining information on the In-Kind Creation/Redemption Baskets 396.3 Trading the Units 39

7. PERFORMANCE INFORMATION 41

8. THE MANAGER 438.1 Corporate Information 438.2 Duties and Responsibilities 438.3 Funds Under Management 438.4 Historical Financial Information 448.5 Directors and Key Personnel 448.6 Investment Committee 478.7 Supervisory Committee 48

ABF xiv

8.8 Material Litigation 528.9 Customer Identification Program 52

9. THE INVESTMENT MANAGER 549.1 Corporate Information 549.2 Duties and Responsibilities 549.3 Directors and Key Personnel 559.4 Material Litigation 58

10. THETRUSTEE 5910.1 Trustee 5910.2 Financial Position 5910.3 Experience in Trustee Business 5910.4 Directors and Key Personnel 6010.5 Duties and Responsibilities of Trustee 6210.6 Retirement or Removal or Replacement of the Trustee 6210.7 Power of Trustee to Remove, Retire or Replace the Manager 6210.8 Trustee’s Statement of Responsibility 6310.9 Trustee’s Disclosure of Material Litigation 6310.10 Trustee’s Delegate 63

11. SALIENTTERMS OFTHE DEED 6411.1 The Deed 6411.2 Altering the Deed 6411.3 Rights and Limitations of the Holders 6411.4 Liabilities of the Holders 6511.5 Fees and Charges Permitted by the Deed 6511.6 Removal, Replacement and Retirement of Management Company

and Trustee 6711.7 Termination of the Trust 6811.8 Unitholders Meeting 69

12. RELATED PARTYTRANSACTION 70

13. TAXATION 72

14. FURTHER INFORMATION 7714.1 Material Agreements 7714.2 Consents 7714.3 Documents for Inspection 77

15. DIRECTORS’ DECLARATION 78

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ABFxv

CORPORATE DIRECTORY

MANAGER

Registered Office

Head Office

Board of Directors

Investment Committee

Audit Compliance Committee

Company Secretary

INVESTMENT MANAGER

Registered Office

AmInvestment Services Berhad (154432-A)(a member of AmInvestment Group)

22nd Floor, Bangunan AmBank Group55, Jalan Raja Chulan 50200 Kuala LumpurTelephone No. : (03) 2036 2633E-mail : ammutual@ambg.com.myWebsite : www.ammutual.com.my

9th Floor, Bangunan AmBank Group55, Jalan Raja Chulan 50200 Kuala LumpurTelephone No. : (03) 2032 2888Fax No. : (03) 2031 5210E-mail : ammutual@ambg.com.myWebsite : www.ammutual.com.my

Kok Tuck CheongDatin Maznah MahbobHarinder Pal SinghProf. Dr.Annuar Bin Md Nassir (Independent)Dr. Mahani Binti Zainal Abidin (Independent)Lee Siang Korn @ Lee Siang Chin (Independent)

Prof. Dr.Annuar Bin Md Nassir (Independent)Dr. Mahani Binti Zainal Abidin (Independent)Lee Siang Korn @ Lee Siang Chin (Independent)Harinder Pal Singh

Kok Tuck CheongProf. Dr.Annuar Bin Md Nassir (Independent)Dr. Mahani Binti Zainal Abidin (Independent)

Koid Phaik Gunn (MAICSA 7007433)Toh Li Ang (MAICSA 7024717)

22nd Floor, Bangunan AmBank Group55, Jalan Raja Chulan 50200 Kuala Lumpur

AmInvestment Management Sdn Bhd (379438-T)(a member of AmInvestment Group)

22nd Floor, Bangunan AmBank Group55, Jalan Raja Chulan 50200 Kuala Lumpur

ABF xvi

Business Office

TRUSTEE

Registered

Business Office

Trustees’ Delegate

SUPERVISORY COMMITTEE

AUDITORSAND REPORTINGACCOUNTANTS

TAX CONSULTANTS

PARTICIPATING DEALERS

9th & 10th Floor, Bangunan AmBank Group55, Jalan Raja Chulan 50200 Kuala LumpurTelephone No. : (03) 2032 2888Fax No. : (03) 2031 5210

HSBC (Malaysia) Trustee Berhad (1281-T)

Suite 901, 9th Floor,Wisma Hamzah-Kwong HingNo. 1, Leboh Ampang 50100 Kuala LumpurTelephone No. : (03) 2074 3200Fax No. : (03) 2078 0145

Suite 901, 9th Floor,Wisma Hamzah-Kwong HingNo. 1, Leboh Ampang 50100 Kuala LumpurTelephone No. : (03) 2074 3200Fax No. : (03) 2078 0145

The Hongkong and Shanghai Banking Corporation Limited (ascustodian) and assets held through HSBC Nominees (Tem-patan) Sdn Bhd (258854-D) and/or HSBC Nominees (Asing)Sdn Bhd (4381-U)

No. 2, Lebuh Ampang, 50100 Kuala LumpurTelephone No.: (03) 2270 3652Fax No. : (03) 2078 0145

Means the supervisory committee constituted in accordancewith, and having the powers set out in the Deed

Ernst &Young (AF 0039)

Level 23A, Menara Milenium, Jalan DamanlelaPusat Bandar Damansara 50490 Kuala LumpurTelephone No. : (03) 7496 8000

Deloitte KassimChan Tax Services Sdn Bhd (36421-T)

Level 16, Uptown 11, Jalan SS21/ 58Damansara Uptown 47400 Petaling Jaya, SelangorTelephone No. : (03) 7725 1888

1. AmInvestment Bank Berhad (23742-V)(a member of AmInvestment Group)

22nd Floor, Bangunan AmBank Group55, Jalan Raja Chulan, 50200 Kuala LumpurTelephone No.: (03) 2036 2633

ABFxvii

PRINCIPAL BANKERS

INDEX LICENSOR

LISTED ON

2. Malayan Banking Berhad (3813-K)

4th Floor, Menara Maybank100, Jalan Tun Perak, 50050 Kuala LumpurTelephone No: (03) 20708833

3. CIMB Investment Bank Berhad(18417-M)

10th Floor, Bangunan CIMB, Jalan SemantanDamansara Heights, 50490 Kuala LumpurTelephone No: 1300 88 0900

AmBank (M) Berhad (8515-D)

Level 18, Menara Dion50450 Kuala LumpurTelephone No. : (03) 2026 3939

HSBC Bank Malaysia Berhad (KL Main Office)

2, Lebuh Ampang50100 Kuala LumpurTelephone No: 2050 7878

International Index Company Limited

Goetheplatz 560313 Frankfurt am MainGermanyTelephone No: +49 69 299 868 140

Main Board of Bursa Securities

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ABF 1

The information set out in this section is only a summary of the salient information onthe Fund as derived from the full text of the Prospectus. Investors should read and un-derstand the whole Prospectus prior to deciding whether to invest. Keep in mind, how-ever, that no fund should be relied upon as a complete investment program.

1.1 SUMMARY PARTICULARS OFTHETRUST

Item

Name of Fund

Category of Fund

Type of Fund

Benchmark Index

InvestmentObjective

InvestmentStrategy

Investment Scope

InvestmentRestrictions

Brief Description

ABF MALAYSIA BOND INDEX FUND

Fixed Income ETF

Income

Markit iBoxx® ABF Malaysia Bond Index

A listed bond fund that is passively managed against thegiven benchmark and the returns will be expected tocorrespond closely to the performance of the Bench-mark Index

Any material change to the Fund’s investment objective willrequire the Unitholder’s approval by way of special resolution.

A passive strategy whereby the Manager aims, by wayof representative sampling, to achieve a return on theFund Assets that closely tracks the returns of theBenchmark Index

Includes RM denominated sovereign, quasi-sovereignand supranationals’ debt securities, derivatives (includ-ing options and futures on Malaysian interest rates, under-lying securities and/or on the Benchmark Index) and cashand cash equivalents.

The Fund intends to invest in swaps and forwards onMalaysian interest rates, underlying securities and/oron the Benchmark Index upon such terms and condi-tions as may be imposed.

The following are some investment restrictions (whichare not exhaustive): -� The Fund shall maintain adequate investments in

cash and cash equivalents for the purpose of normalFund operations;

Reference inProspectus

3

3.1

-

3.5

3.3

3.3

3.4

3.4

EXECUTIVE SUMMARY

ABF2

Investor Profile

Brief DescriptionReference inProspectus

3.1

� Investments in cash and cash equivalents areordinarily restricted to a maximum of 10% of theNAV of the Fund;

� The Fund may invest in derivatives to the extentpermitted by the SC’s Guidelines on ExchangeTraded Funds, the SC and other applicable laws.The derivatives exposure shall be no more than20% of the NAV of the Fund;

� Derivatives investments may only be undertakento enable the Fund to manage the duration andimprove tracking;

� Investments of the Fund in cash and cash equivalentsare restricted to a maximum holding of fivepercent (5%) of the NAV of the Fund in one singleinstitution;

� Investment in Non-Index Securities shall notcomprise more than 30% of the NAV of the Fund;

� In endeavouring to have the performance of theFund track the performance of the BenchmarkIndex in line with the tracking error target, thenumber of securities held by the Fund may be equalto or less than the number of constituent securitiesin the Benchmark Index.Therefore, the weightingsof such securities in the Fund may be equal to orhigher than the weightings of the same securities inthe Benchmark Index.Under normal circumstances,the smaller the tracking error target, the less thedeviation from the number and weightings of theconstituent securities in the Benchmark Index.

The Fund is designed for investors who seek an "index-based" approach to investing in a portfolio of RM de-nominated Government and quasi-Government debtsecurities. Units may also be used as an asset allocationcomponent or as a trading instrument.Whilst the Fundmainly invests in a portfolio of bonds issued by the Gov-ernment and other Index Securities, the Fund itself isnot guaranteed by the Government or any Governmentagency. Unlike most conventional unit trusts and mu-tual funds, which are only bought and sold at closingNAV, the Units have been designed to be tradable in thesecondary market on Bursa Securities on an intra-daybasis, and to be created and redeemed principally in-kind in a Creation Unit and Redemption Unit or multi-

Item

ABF 3

Initial AuthorisedFund Size

Units in Circulation

Creation/Redemption ofUnits

Creation UnitBlock Size

Summary ofRisk Factors

Brief DescriptionReference inProspectus

6

6

4

ples thereof at the NAV calculated with respect to eachDealing Day. These in-kind creation and redemptionarrangements are designed to protect ongoing investorsfrom adverse effects on the portfolio of the Trust thatcould arise from frequent cash creation and redemp-tion transactions.

1,000,000,000 Units

As at the Latest Practicable Date, 481,921,800 units

Creation of UnitsParticipating Dealers (either for their own account orfor the account of their clients) may apply for Units inthe following manner: -- in-kind i.e. via delivery of Index Securities, Non-

Index Securities, other investments and/or cashportion (if any) in exchange for new Units; or

- cash (in exceptional circumstances only and at thediscretion of the Manager)

Redemption of UnitsParticipating Dealers (either for their own account orfor the account of their clients) may redeem Units inthe following manner: -- in-kind i.e. via delivery of existing Units in exchange

for Index Securities, Non-Index Securities, otherinvestments and/or cash portion (if any); or

- cash (in exceptional circumstances only and at thediscretion of the Manager)

Currently, 27,750,000 units.

This quantity of units may change from time to time asdetermined by the Manager, approved by the Trusteeand notified to the Participating Dealers.

The following is a list of risk factors (which may not beexhaustive) which should be carefully considered be-fore investing in the Fund:-

Risk Factors Specific to the Fund� Market

Item

ABF4

Trading of Units

Trading BoardLot Size

Brief DescriptionReference inProspectus

6.3

6.3

� Interest rate� Income� Credit and settlement� Liquidity� Use of futures and options contracts involving

certain risks� Use of repurchase agreements involving certain

risks� Asset class� Non Capital Guaranteed� Units may be delisted from Bursa Securities� Units may trade at prices other than NAV� Trading units on Bursa Securities may be

suspended� Reliance on Participating Dealers/market makers� Redemption� Counterparty and settlement risk� EMEAP’s investment in the Fund� Risk of withdrawal of approval by the SC

Risk Factors Relating to Passive Investments� Tracking error� Lack of discretion of the Manager to adapt to

market changes� Concentration of the Benchmark Index in certain

issuers

Risk Factors Relating to the Benchmark Index� Termination of license to use Benchmark Index� Compilation of the Benchmark Index� Changes of Composition of the Benchmark Index� Errors or inaccuracies in the Benchmark Index

Other Risk Factors� Political, economic and social� Currency

Unitholders may trade (buy and sell) Units on the MainBoard of Bursa Securities

100 Units

Item

ABF 5

IncomeDistribution Policy

Manager

InvestmentManager

ParticipatingDealers

Trustee

Please refer to the relevant sections in the Prospectus as set out above for addi-tional specific information on the respective items on the Fund.

As the above strictly represents a summary of the particulars of the Fund, pleaseread and understand the Prospectus before investing in the Units.

There are fees involved and investors are advised to consider them before investingin the Fund.Unit prices and distributions payable, if any,may go down as well as up.For information concerning risk factors which should be considered by prospectiveinvestors, see “risk factors” commencing on page 20.

Past performance of the Fund is not an indication of its future performance.

Prospective Unitholders should read and understand the contents of the Prospec-tus and, if necessary, consult their adviser(s).

Brief DescriptionReference inProspectus

3.6

8

9

-

10

FrequencySemi-annually, if any

Mode of income distribution(i) Via cheque; or(ii) Telegraphic transfer to your nominated bank

account (for amounts of at least RM50,000 only);or

(iii) Such other method acceptable to the Manageror Trustee (as the case may be) as the Unitholdermay from time to time specify.

Unless a written request to the contrary is receivedfrom Unitholders prior thereto, the Manager may rein-vest the income distribution in further Units in accor-dance with the provisions of the Deed.

AIS

AIM

AmInvestment Bank Berhad, CIMB Investment BankBerhad, Malayan Banking Berhad and such other per-sons to be appointed by the Manager from time to time

HSBC (Malaysia) Trustee Berhad

Item

ABF6

1.2 FEES,CHARGESAND EXPENSES

(a) Fees and charges payable by a typical investor

This table describes the charges that a typical investor may incur (based on the charges im-posed by Bursa Securities as at the Latest Practicable Date which charges may be variedfrom time to time) when you buy or sell Units in the Fund on Bursa Securities.

Charges from trading theUnits on Bursa Securities

Brokerage Fee

Clearing Fee

Stamp Duty

Further information on the charges an investor will incur from trading the Units onBursa Securities may be found at www.bursamalaysia.com or www.klse.com.my.

(b) Fees and charges payable by Participating Dealers

Only Participating Dealers are allowed to request the Manager to create and/or redeemUnits in the Fund.This will be done in accordance with the terms and conditions set outin the Participating Dealer Agreement. Participating Dealers will incur additional feesshould they request for creation and/or redemption of Units with the Manager.

Fees charged by the Manager and/or theTrustee for the creation and redemption of Unitsare set out in the Participating Dealer Agreement and includes any out-of-pocket ex-penses incurred by the Manager and/or the Trustee arising from the request for creationand/or redemption by the Participating Dealers.

The table below describes the said fees: -

Type of fee/charge

Processing Fee

Administration Fee

%/ RM

Maximum of 0.30% of the contract value (subject to min-imum of RM12).

On-market transaction: 0.03% (subject to maximum ofRM1000 per contract).

Direct-business transaction: 0.03% (subject to minimum ofRM10 and maximum of RM1000 per contract).

0.1% of the contract value (rounded up to the nearest RM),subject to a maximum of RM200.

Description

RM200 payable to the Manager or such amount as may bedetermined by the Manager.

RM50 payable to the Trustee or such amount as may be de-termined by the Trustee.

ABF 7

Application CancellationFee

Duties and Charges

# To prevent any "dilution" of the Fund's property, the Manager also has the discretion tocharge additional fees in respect of duties and charges of the Fund relating to differencesbetween the buying and selling prices of securities, the market value of these securities andother dilutive costs incurred by the Fund ("dilution charge"), particularly for large orders.These additional fees are as explained more fully in Section 5 – Fees, Charges and Expenses,of this Prospectus.To the extent such provision for normal charges and dilution charges isgreater than the actual duties and charges and dilution incurred then such excess shall befor the account of the Fund.To the extent such provision for normal charges and dilutioncharges is less than the actual duties and charges and dilution incurred then the Fund willbear any such deficiency.

It is not envisaged that there will be any other fees and charges to be imposed by the Man-ager in the ordinary course in respect of in-kind creation and redemption of Units. Never-theless, the Manager has the discretion to charge such sum as it considers to berepresentative of an appropriate provision for fees and charges to the extent any substituteCash Issue Component or Cash Redemption Component is payable on a creation or re-demption of Units and on cash creation or redemption of Units.

(c) Fees and expenses incurred by the Fund

This table describes the fees and expenses that the Fund incurs: -

Charges

Annual Manager Fee

Annual Trustee’s fee

License fee (2)

� For the amount up to the Initial Funding Amount

RM200 payable to the Manager or such amount as may bedetermined by the Manager, in consultation with the Partic-ipating Dealers.

The amount as may be incurred by the Manager and/orTrustee from time to time in connection with such creation/redemption which includes any fee charged by Bursa De-pository on each account allotted with new Units and eachaccount debited with redeemed Units which is presently, andsubject to change from time to time by Bursa Depository,RM2.20 per account allotted or debited subject to a mini-mum of RM50. A dilution charge of up to 80 basis points(0.80%) on the nominal value of the Fund can also be levied.#

% / RM

0.10%(1)

0.07%(1)

0.0175% per annum x Ini-tial Funding Amount

ABF8

� For the amount over the Initial Funding Amount, butless than 275% of the Initial Funding Amount

� For the amount over 275% of the Initial FundingAmount

subject to a minimum fee of USD21,234 (ApproximatelyRM73,979 as at the Latest Practicable Date)

Initial Funding Amount is USD115,400,000 (ApproximateRM438,520,000 at launch of fund)

Other fund expenses

Notes: -(1) Applied to the NAV of the Fund.(2) The license fee is payable to IIC, the provider of the Benchmark Index.(3) There will be other fees or expenses incurred by the Fund such as audit fees, tax agent’s fees,

printing and stationery, bank charges, investment committee fees for independent members,lodgement fees for annual reports, out-of-pocket expenses of the Supervisory Committee andother expenses permitted by the Deed.

Other Information

Current deed is dated 12 July 2005 has been entered into between AIS as the Manager, HSBCTrustee as theTrustee of the Fund and the Unitholders.A Supplemental Deed dated 20 June 2007has also been entered into between AIS as the Manager, HSBC Trustee as the Trustee of the Fundand the Unitholders.

For enquiries about this Fund,please call 2032 2888 between 8.45 a.m.to 5.45 p.m.(Monday-Thurs-day) and 8.45 to 5.00 p.m. (Friday).

Please refer to Section 5 for further details on the fees, charges and expenses relating toinvesting in the fund.You should read and understand the contents of the Prospectus and,if necessary, consult your adviser(s).

There are fees involved and investors are advised to consider them before investing in theFund.Unit prices and distributions payable, if any,may go down as well as up. For infor-mation concerning risk factors which should be considered by prospective investors, see“risk factors”commencing on page 20.Past performance of the Fund is not an indicationof its future performance.

0.01% per annum (1)

No charge

0.04% (3) (estimate)

THE REST OFTHIS PAGE IS INTENTIONALLY LEFT BLANK

ABF 9

GENERAL INFORMATION ON ETF

2.1 Mechanics of an ETF

ETFs are unit trust funds that are exchange-listed and open-ended with the unique in-kind cre-ation/redemption mechanism supported by a system involving participating dealers and marketmakers.

ETFs are usually index funds with the investment objective to achieve the same return as a par-ticular benchmark index e.g. the Bursa Malaysia Kuala Lumpur Composite Index or the MarkitiBoxx®ABF Malaysia Bond Index.This is achieved by investing in the securities that are includedin the said benchmark index, either by holding all the securities or a representative sample ofthe securities included in the index. In practice, there is often a percentage difference betweenthe index's actual return and that of the ETF’s which is normally known as tracking error.

By purchasing a unit of the ETF, an investor will benefit from the diversification of an index basedfund plus the flexibility of a listed security. ETFs have also certain advantages over other unlistedconventional index-based unit trust funds including lower operating and transaction costs.

As a safeguard for investors, the manager of the fund is not allowed to hold the fund’s assets inits own name. Instead, a trustee is appointed to act as custodian of the fund’s assets.

ETFs differ from unlisted conventional unit trust funds as the units are tradable on a stock ex-change and are not bought and sold from the manager. Hence, retail investors who wish to buyor sell the units do not generally purchase or redeem the units directly from the ETF but buyand sell the units on the stock exchange at the prevailing market prices at which the units trade.

In addition to existing units in issue, new ETF units can also be created by participating dealersin block creation unit aggregations.This creation process involves depositing the in-kind cre-ation basket. Existing ETF units can also be redeemed by participating dealers in block redemp-tion unit aggregations in return for the in-kind redemption basket.This feature allows arbitrageopportunities that typically establish a mechanism that minimises the gap between the ETF netasset value and the ETF unit price quoted.The assets of the ETF assets also generate incomethrough income and dividends paid from those investments. Depending on the distribution pol-icy of the ETF, some or all of this may be paid to investors as income.

2.2 Benefits and Risk of an ETF

The benefits of investing in ETFs include, inter alia, the following: -

Liquidity and Flexibility. Investors may buy and sell the units on the stock exchange anytimeduring trading hours. Market makers are appointed to provide liquidity.

Professional administration. Investors have access to services which help them keep track oftheir investments such as client service staff to answer enquiries, notification of relevant infor-mation as provided by the stock exchange, semi-annual and annual reports etc.

Lower Expenses. ETFs are normally passively managed funds which require less managementthan a normal unit trust fund and being listed, require less administration, which usually results

ABF10

in lower management fees.

Transparency. Information on ETFs, including bid/ask prices, traded prices and net asset value,creation/redemption baskets are published on the stock exchange and are generally publiclyavailable.

Correlation. The market price of the Units as traded on Bursa Securities is expected to veryclosely correlate to the NAV of the Fund on a per Unit basis.

2.3 Comparison with Parallel Investment Products

Parallel investment products to ETFs, depending on their investment objectives, include unlistedunit trust funds and listed closed end funds.The returns and risk profiles of these funds shouldnot differ significantly if their investment objectives are similar. Parallel investment products tothese funds include listed securities, bonds, short-term money market instruments and struc-tured products.The risk of investing in the underlying securities directly is generally higher thaninvesting in units of a diversified fund. In addition,with ETFs, investors are able to purchase Unitsin the ETF representing the underlying securities of which such investors may otherwise be un-able to afford and/or directly hold.

2.4 Performance Indicators and Benchmarks

Performance indicators are normally used to determine the relative performances of trust funds.A common performance indicator includes the rolling return which is a measure of how the fundhas 'typically' performed. Instead of looking at a fund's return from just one single period, therolling return allows the review of returns in any given period that is required.Rolling return av-erages out all of the fund's returns to every month-end over its lifetime to date, or for any pe-riod during the fund's lifetime.

The performance of an index fund is usually measured against an appropriately chosen bench-mark. For example, in order to evaluate the performance of an equity fund that invests in shareslisted on Bursa Securities, the Kuala Lumpur Stock Exchange Composite Index or the KualaLumpur Stock Exchange Emas Index might be the appropriate benchmarks.A bond fund, suchas the Fund, that invests in fixed income securities may use the Markit iBoxx® ABF MalaysiaBond Index or the Malaysian Government Securities Index as its benchmark.

Tracking Error is another performance indicator used to measure how well a fund manager isachieving the objective of mirroring the performance of the benchmark index and is the stan-dard of the difference between the fund’s total return and the total return of the benchmarkindex. Generally, the tracking error for equity ETFs is higher than that for bond ETFs.A track-ing error of +50 basis points (+0.50%) of the NAV of the fund is common for bond ETFs.

In respect of the Fund, a description of the Benchmark Index is set out in Section 2.5 of thisProspectus.

ABF 11

THE ABF MALAYSIA BOND INDEX FUND

3.1 Overview

The Fund is an “index fund” which seeks investment returns (before fees and expenses) thatclosely replicates the total returns of the Markit iBoxx® ABF Malaysia Bond Index, an indicatorof investment returns of RM denominated debt securities issued by sovereign or quasi-sover-eign entities or supranationals.

The Fund is established under the terms of the Deed which is governed by the laws of Malaysia.

The Fund is designed for investors who seek an "index-based" approach to investing in a port-folio of RM denominated Government and quasi-Government debt securities.Units may also beused as an asset allocation component or as a trading instrument.Whilst the Fund mainly investsin a portfolio of bonds issued by the Government and other Index Securities, the Fund itself isnot guaranteed by the Government or any Government agency. Unlike most conventional unittrusts and mutual funds, which are only bought and sold at closing NAV, the Units have been de-signed to be tradable in the secondary market on Bursa Securities on an intra-day basis, and tobe created and redeemed principally in-kind in a Creation Unit and Redemption Unit or multi-ples thereof at the NAV calculated with respect to each Dealing Day.These in-kind creation andredemption arrangements are designed to protect ongoing investors from adverse effects on theportfolio of the Fund that could arise from frequent cash creation and redemption transactions.

The Manager of the Fund is AIS. AIS is wholly-owned by AmInvestment Bank, a Malaysian in-vestment bank.As at the Latest Practicable Date,AIS has more than 20 years experience in unittrust management and currently manages 46 funds with a total fund size of approximately RM8.3billion.AIS is backed by 116 staff of which 90 were executive staff and 26 were non-executivestaff.The investment management function is contracted to AIM, a fund manager licensed by theSC.AIM has more than 10 years experience in providing fund management and investment ad-visory services specialising in Malaysian cash and fixed income securities, Malaysian equities andIslamic investments. It has 74 staff, of whom 63 are executive staff and 11 are non-executivestaff.As at the Latest Practicable Date,AIM manages 89 private funds and 46 unit trust funds withtotal funds valued at approximately RM16.3 billion.

The Trustee of the Fund is HSBC (Malaysia) Trustee Berhad, a registered trust company underthe Trust Companies Act, 1949.The Trustee is a member of the HSBC Holdings Plc. group ofcompanies and forms part of the global network of trust companies within HSBC Holdings Plc.TheTrustee has been in operation since 1937 and is the trustee for 187 unit trust funds, includingfive wholesale funds and two ETF as at the Latest Practicable Date.

3.2 Listing of the Fund on the Bursa Securities

The Fund is listed on the Main Board of Bursa Securities and up to 1,000,000,000 units of theFund can be quoted and listed on the Main Board of Bursa Securities. In this respect, the ap-proval-in-principle for the listing of and quotation for up to 1,000,000,000 Units of the Fund onthe Main Board of Bursa Securities was obtained from Bursa Securities on 24 June 2005.As atthe Latest Practicable Date 481,921,800 Units has been issued and listed on the Main Board ofBursa Securities.

ABF12

Pursuant to Section 14 (1) of the Central Depositories Act, Bursa Securities hasprescribed the Units as a prescribed security. In consequence thereof, the Units of-fered through this Prospectus will be deposited directly with Bursa Depository andany dealings in these Units will be carried out in accordance with the aforesaidActand the rules of Bursa Depository.

3.3 Investment Objective and Strategies

The Fund is a listed bond fund that is passively managed against the given benchmark index andthe returns will be expected to correspond closely to the performance of the Benchmark Index.

Any material change to the investment objective of the Fund would require unitholder’s approval.

The Manager will seek to achieve the Fund's investment objective by investing the Fund Assetsprimarily in Index Securities but also in Non-Index Securities by adopting a representative sam-pling strategy or similar strategy. Representative sampling is a strategy of investing in a repre-sentative sample of securities in the Benchmark Index which have a similar investment profileas that of the Benchmark Index. Securities selected have aggregate characteristics (such as yieldand duration) similar to those of the Benchmark Index.The Fund generally will not hold all thesecurities that are included in the Benchmark Index.

As such, there is no guarantee or assurance of exact or identical replication at anytime of the performance of the index. Index composition may change and securitiesmay be delisted. Often, the return of the Fund may have a small percentage of tracking erroras compared to the return of the Benchmark Index.

In view of Malaysia’s fixed income market liquidity, the Manager will be permitted to invest in cer-tain Non-Index Securities in order to minimize the Fund's tracking error relative to the per-formance of the Benchmark Index.The total exposure to Non-Index Securities is limited to30% of the Fund's total NAV. Nonetheless, the Manager intends to invest in Index Securities tothe extent practicable and consistent with achieving the investment objective of the Fund.

The Manager will rebalance the FundAssets from time to time to reflect any changes to the com-position of, or the weighting of securities in the Benchmark Index with a view to minimize track-ing error of the Fund’s overall returns relative to the performance of the Benchmark Index.Such rebalancing may include making investments in Non-Index Securities.The Fund Assets willbe rebalanced in 3 instances: -

(i) monthly, when there has been changes in the components of the Benchmark Index i.e.when there has been exclusions and/or inclusions of securities from the said index;

(ii) within the month,when there has been a significant inflow of coupon from the componentsof the Fund Assets which necessitates the rebalancing of the Fund Assets; and

(iii) when there has been a substantial creation and/or redemption of Units which necessitatesthe rebalancing of the Fund Assets.

ABF 13

Derivatives will be used for efficient portfolio management and to help achieve the investmentobjective of the Fund by closely matching the Fund's portfolio with the Benchmark Index aswell as with other characteristics important to tracking the Benchmark Index.

Unlike "actively managed" unit trusts, the Fund does not try to outperform the Benchmark Indexand does not seek temporary defensive positions when markets decline or appear overvaluedby some standards.Accordingly, a fall in the Benchmark Index will result in a corresponding fallin the NAV of the Fund.

Correlation.This measures the degree to which the periodically measured total return of oneinvestment resembles that of another investment.An index is a theoretical financial calculationwhile the Fund is an actual investment portfolio.The performance of the Fund and the Bench-mark Index will vary somewhat due to fees and expenses, transaction costs, variations in theirconstituent securities, market impact and timing variances.

The Manager expects that, over the long term, the correlation between the Fund's total returnand that of the Benchmark Index, before fees and expenses, will be 95% or better.A figure of100% would indicate perfect correlation. It is expected that the tracking error between pre-ex-pense total returns of the Fund and its related Benchmark Index will be +50 basis points(+0.50%) on an annual basis.The tracking error is a measure of the variation between the Fund'stotal return and the total return of the Benchmark Index.The Fund 's pre-expense total returnsmeasured on an annual basis should differ from the total return of the Benchmark Index by lessthan this tracking error amount most of the time on average over the long term.While theManager expects to achieve the above correlation, neither the Manager nor theTrustee can en-sure that the actual correlation of the Fund’s total returns, before fees and expenses, and thatof the Benchmark Index is less than the anticipated correlation.

Strategies to minimise tracking error. In order to minimize the tracking error, it is the inten-tion of the Manager that the Fund will be passively managed with its portfolio's duration, yieldcurve and credit risk matched closely to that of the Benchmark Index at all times.

The Fund's portfolio securities will be chosen in a way that the Fund's average portfolio dura-tion, sector, maturity bucket distribution, yield curve risk and credit risk is similar to that of theBenchmark Index, subject always to availability of the relevant Index Securities in the market atthe time of investment or purchase.

Index Securities are always preferred to Non-Index Securities as portfolio holdings in order tomatch the Benchmark Index. It is therefore the intention of the Manager to invest in Non-IndexSecurities as a substitute for Index Securities when the required Index Securities are unavailableat a reasonable price in the market at the time of investment or purchase.

On a daily basis, the portfolio's performance will be monitored closely against that of the Bench-mark Index. It is the Manager's intention that should the difference between the performanceof the portfolio and the benchmark be larger than a pre-determined amount, currently 5 basispoints (0.05%) (although this may be subject to change to a different amount reasonably deter-mined by the Manager without notice to investors) in a day (without any distortion caused bycash inflows or outflows), the Manager intends to reassess the portfolio's risk position by ref-

ABF14

erence to average portfolio duration, sector and maturity bucket distribution against the bench-mark. During the process of Unit creation and redemption, the Manager will aim to completeall the required security purchases and sales prior to the day's end and thereby minimise theFund's cash holdings.

Investors should note that any material changes to the Fund’s investment objectives would re-quire Unitholders’ approval.

3.4 Investment Scope and Restrictions

Investment Scope

The Manager is authorised to invest in the following types of assets or instruments subject tothe investment restrictions more particularly set out in the Deed: -

(i) Index Securities;(ii) Non-Index Securities;(iii) cash, (revolving) deposit accounts, fixed deposits with banks and cash equivalents

denominated in RM;(iv) derivatives permitted under the SC’s Guidelines on Exchange Traded Funds and the SC

which includes options and futures on Malaysian interest rates, underlying securities and/oron the Benchmark Index excluding the writing of uncovered options denominated in RM.The Fund intends to invest in swaps and forwards on Malaysian interest rates, underlyingsecurities and/or on the Benchmark Index subject to the SC’s approval and upon suchterms and conditions as may be imposed; and

(v) such other investments determined by the Manager from time to time and at any time withthe approval of the Supervisory Committee provided that such investments are allowedby the relevant regulatory authorities and are consistent with the investment objective ofthe Fund.

Investment Restrictions

The following are certain investment restrictions imposed on the Manager: -

(1) Debt Securities

(a) In endeavouring to have the performance of the Fund track the performance of theBenchmark Index in line with the tracking error target, the number of securities heldby the Fund may be equal to or less than the number of constituent securities in theBenchmark Index.Therefore, the weightings of such securities in the Fund may beequal to or higher than the weightings of the same securities in the Benchmark Index.Under normal circumstances, the smaller the tracking error target, the less thedeviation from the number and weightings of the constituent securities in theBenchmark Index.

(b) From time to time, the securities selection criteria used for the inclusion orexclusion of securities into the Benchmark Index may be revised or amended by the

ABF 15

Index Licensor. Upon receipt of notification of such changes from the Index Licensor,investments in bond securities shall be made according to the new criteria asstipulated by the Benchmark Index, as soon as practicable, with due regard to liquidityand market conditions.

(c) The Non-Index Securities shall not comprise more than 30% of the NAV of the Fund.

(d) The Manager shall have the responsibility for effecting any adjustments in the FundAssets to conform to changes in the composition and/or weighting of the BenchmarkIndex or the composition and/or weighting of the FundAssets relative to the BenchmarkIndex.The Manager shall use its professional skill, care and judgment to ensure thatthe investment objective is met.

(2) Cash

(a) Subject to Section 3.4 (1) above and Section 3.4 (3) below, the Fund shall maintainadequate investments in cash and cash equivalents for the purpose of normal Fundoperations including but not limited to realignment of benchmark weights, additionalfunding to and withdrawal from the Fund and supporting derivative positions.

(b) Investments of the Fund are ordinarily restricted to a maximum holding of 10% of theNAV of the Fund in cash or cash equivalents.

(c) The Manager may make deposits with those institutions which meet the Manager'scriteria for such deposit takers (which criteria are arrived at/decided upon by theManager by using its professional skills, and by exercising care and diligence), or as maybe determined by the Manager for this purpose from time to time.

(d) Investments of the Fund in cash and cash equivalents are restricted to a maximumholding of 5% of the NAV of the Fund in one single institution.

(3) Derivatives

(a) Subject to Section 2.4 (3) (b) and (c), the Fund may invest in derivatives to the extentpermitted by the SC’s Guidelines on Exchange Traded Funds, the SC and otherapplicable laws.

(b) The derivatives exposure shall be no more than 20% of the NAV of the Fund.

(c) Derivatives investments may only be undertaken to enable the Fund to manage theduration and improve tracking.

(4) Counterparty Ratings

(a) Banks and counterparties for debt securities transactions that are not settled on adelivery versus payment basis must be rated A3 and above by the Relevant RatingAgency for at least one of the following rating types: -

ABF16

(i) Long term senior unsecured debt or equivalent rating type;

(ii) Issuer rating from the Relevant Rating Agency; and

(iii) Long term issuer credit rating from the Relevant Rating Agency.

(b) If a long term senior unsecured debt or issuer rating is not available, banks in relationto fixed deposits maturing in less than 1 year and counterparties for debt securitiestransactions that are settled in less than 1 year must be rated P1 or its equivalent bythe Relevant Rating Agency.

(c) A Bank or debt securities counterparty which does not meet the rating requirementsin paragraphs (a) and (b) above can still be appointed provided that it is a counterpartyapproved by theTrustee upon the recommendation of the Manager.

The aforesaid investment restrictions and limits have to be at all times complied with based onthe most up-to-date valuation of the investments and instruments of the Fund. However, a 5%allowance in excess of any restriction or limit is permitted where the restriction or limit isbreached through an appreciation or depreciation of the NAV of the Fund (whether as a resultof an appreciation or depreciation of the investments of the Fund, or as a result of repurchaseof Units or payments made from the Fund). If the relevant restriction or limit is breached, theManager will not make any further acquisitions of the investments which breach the relevant re-striction or limit and the Manager will within a reasonable period of not more than 3 monthsfrom the date of the breach take all necessary steps and actions to rectify the breach.

3.5 Description of the Benchmark Index

The Benchmark Index, namely the Markit iBoxx®ABF Malaysia Bond Index is currently providedby IIC through the IIC License Agreement.

The Markit iBoxx® ABF Malaysia Bond Index is an indicator of investment returns of Index Se-curities as determined by the Index Licensor and which are for the time being constituent se-curities of the Benchmark Index.

As at the Latest Practicable Date, the top 10 components of the Fund and the % of NAV assignedto them are as follows: -

THE REST OFTHIS PAGE IS INTENTIONALLY LEFT BLANK

ABF 17

Issuer

Malaysian GovernmentMalaysian GovernmentMalaysian GovernmentMalaysian GovernmentMalaysian GovernmentMalaysian GovernmentMalaysian GovernmentMalaysian GovernmentMalaysian GovernmentMalaysian Government

Maturity

25-02-201330-04-201415-06-201228-09-201128-04-201107-02-201815-02-201715-09-201631-10-201830-07-2019

Coupon(%)

3.7025.0943.7183.8333.7564.2403.8144.2624.2955.734

% NAV

9.939.368.067.016.955.885.704.883.913.31

Stock Code

MN03003VMN04002WMJ060005MN01001VMJ050004MS03002HMN070002MO060001GN080031MS04003H

As at the Latest Practicable Date, the top 10 components of the Benchmark Index and theweightings assigned to them by the Benchmark Index are as follows: -

Stock Code

MN04002WMN01001VMN03003VMS03002HMJ050004MJ060005MN070002MO060001GN080031MS04003H

Information on the Benchmark Index can be obtained from www.indexco.com.

In the event that the Markit iBoxx® ABF Malaysia Bond Index ceases to be available, the Man-ager will seek to procure the immediate use of an alternative index (if necessary, customised bythe Index Licensor or the Manager) that, in the opinion of the Manager, is substantially similarto the Benchmark Index and will manage the Fund's portfolio using that alternative index, tak-ing into account the interests of Unitholders.The use of that alternative index will be subject tothe prior approval of the Trustee and the SC.

The SC reserves the right to withdraw the approval of the Fund if the Benchmark Index is nolonger considered by the SC to be acceptable.

3.6 Income Distribution Policy

Income distribution, if any, will be on a semi-annual basis.

Issuer

Malaysian GovernmentMalaysian GovernmentMalaysian GovernmentMalaysian GovernmentMalaysian GovernmentMalaysian GovernmentMalaysian GovernmentMalaysian GovernmentMalaysian GovernmentMalaysian Government

Maturity

30-04-201428-09-201125-02-201307-02-201828-04-201115-06-201215-02-201715-09-201631-10-201830-07-2019

Coupon(%)

5.0943.8333.7024.2403.7563.7183.8144.2624.2955.734

ABF weight(%)

8.678.237.636.866.805.874.183.853.403.32

ABF18

The Manager shall compute the Income daily over the duration of the Fund.

Unitholders may either: -

(i) Receive a cheque; or(ii) Instruct the Manager to deposit the income earned into the Unitholder’s nominated

bank account via telegraphic transfer (for amounts of at least RM50,000 only); or(iii) Such other method acceptable to the Manager or Trustee (as the case may be) as the

Unitholder may from time to time specify.

Unless a written request to the contrary is received from Unitholders prior thereto, the Man-ager may reinvest the income distribution in further Units in accordance with the provisions ofthe Deed.

3.7 Valuation of the FundAssets

A summary of our obligations in relation to the valuation of assets of the Fund are as follows:

(a) Valuation or revaluation of any assets of the Fund may be made at least once a day.

(b) Valuation and revaluation of authorized investments will be carried out in accordancewith the Deed and in line with SC’s valuation guidelines:� The value of Index Securities and Non-Index Securities shall be determined by

reference to prices provided by the Index Licensor or a Bond Pricing Agency (BPA).Where prices are not available from the Index Licensor or BPA, the indicative yield(s)quoted by licensed financial institutions will be used.

� Bank deposits and deposits placed with financial institutions will be valued byreference to the principal value and interest/ profit accrued.

(c) Where the Manager is of the opinion that the valuation principles as specifically set outin the Deed do not properly reflect the realisable value of a trust asset that investment isto be valued in accordance with another principle determined by the Manager, verified byan approved auditor and approved by the Trustee.

3.8 Valuation bases for all related securities and instruments of the Fund

The valuation of the Fund will be carried out at least once a day at the valuation point, which isthe end of each Business Day.The valuation point of the Fund refers to such time(s) on a Busi-ness Day as may be decided by the Manager whereby the NAV of the Fund is calculated.The pric-ing policy adopted for the Fund is based on forward pricing, whereby the NAV of the Fund willbe based on the next valuation point after an application (e.g. for creation or redemption) is re-ceived from Participating Dealers.

The price per unit of the Fund will be based on “Single Pricing” meaning that all creations andredemptions are based on a single pricing (i.e. NAV per unit).

ABF 19

RISK FACTORS

4.1 Risk Factors Specific to the Fund

4.1.1 Market

The Fund's NAV and trading prices will react to securities markets movements. In-vestors may lose money over short periods due to fluctuation in the Fund's NAV andtrading price in response to market movements, and over longer periods during mar-ket downturns.

4.1.2 Interest rate

The Fund invests in fixed-income securities, and therefore is subject to interest rate risk.Interest rate risk is the risk that the value of the Fund Assets may decline because ofrising interest rates. Interest rate risk is generally lower for short-dated bonds andhigher for long-dated bonds.

4.1.3 Income

The income from the FundAssets may decline because of falling interest rates.This canresult when, in a declining interest rate market, the Fund receives in-kind deposits ofportfolio securities in connection with creations of new Units, or reinvests proceedsof securities sold out of the portfolio in longer-term securities as part of the Fund's at-tempt to match the maturity or duration of the Benchmark Index, at interest rates thatare below the portfolio's then-current earnings rate.

4.1.4 Credit and settlement

The Fund is subject to credit and settlement risk. Credit risk is the risk that an issuerof a bond will be unable to meet its obligation to make interest and principal payments.Settlement risk is the risk that a counterparty trading with the Fund is unable to set-tle a trade due to changing financial or market conditions.The Fund bears the risk ofissuer and settlement default.

However, the following mitigating considerations should be noted: -

- The majority of the issuers of the bonds in the Fund are Government or quasi-Government agencies. To-date, there has been no default on any Governmentbonds; and

- The Manager and Investment Manager have credit risk management controlsin place for selection of trading counterparties.

4.1.5 Liquidity

The price at which portfolio securities may be purchased or sold by the Fund upon anyrebalancing activities or otherwise (necessary to track the Benchmark Index) and thevalue of the Units will be adversely affected if trading markets for the securities com-prised in the Fund Assets are limited or absent or if spreads are wide.

ABF20

4.1.6 Use of futures and options contracts involving certain risks

To the extent permitted by the SC and under the SC’s Guidelines on ExchangeTradedFunds, the Manager may invest the Fund Assets in futures and options contracts inorder to seek performance that corresponds to the Benchmark Index and to managecashflows.There is no guarantee that such techniques will achieve their desired result.There are certain investment risks in using futures and options contracts. Such risks mayinclude: (i) the inability to close out a futures or option contract caused by the non-ex-istence of a liquid secondary market; and (ii) an imperfect correlation between pricemovements of the futures or options contracts with price movements of the subjectportfolio securities or the Benchmark Index.

4.1.7 Use of repurchase agreements involving certain risks

Such risk arises if, for example, the seller of securities under a repurchase agreement de-faults on its obligation to repurchase the underlying securities, as a result of its insolvencyor otherwise, and the Fund is required to dispose of such securities which could involveadditional costs or delays. If the seller becomes insolvent and is subject to liquidation orreorganization under applicable bankruptcy or other laws, the Fund's ability to disposeof the underlying securities may be restricted. Finally, it is possible that the Fund may notbe able to substantiate its interest in the underlying securities. If the seller fails to re-purchase the securities, the Fund may suffer a loss to the extent the proceeds from thesale of the underlying securities are less than the repurchase price.

4.1.8 Asset class

The returns generated from the securities in which the Fund invests may not providereturns equivalent to that of other classes of securities or different asset classes. Thesecurities in which the Fund invests may be subject to cycles of underperformance rel-ative to that of other classes of securities.

4.1.9 Non Capital Guaranteed

Investors should be aware that the price of Units and the income arising therefrommay rise or fall. Investors should note that they may not get back their original invest-ments and that they may not receive any distributions.

4.1.10 Units may be delisted from Bursa Securities

Bursa Securities imposes certain requirements for the continued listing of securities in-cluding the Units. No assurance can be given that the Fund will continue to meet therequirements necessary to maintain the listing of Units on Bursa Securities or thatBursa Securities will not change the Listing Requirements.

However, in the event the Fund is delisted from Bursa Securities, it will continue toexist as a unit trust fund and shall comply with the SC’s Guidelines on UnitTrust Funds.

ABF 21

4.1.11 Units may trade at prices other than NAV

As with any ETF, the market price of Units will be subject to a “bid/ask” spread — beingthe difference between the prices being bid by potential purchasers and the prices beingasked by potential sellers. Units may trade below, at, or above their NAV.The NAV ofUnits will fluctuate with changes in the market value of the Fund Assets whereas thetrading prices of Units will fluctuate in accordance with market supply and demandforces. In times of severe market volatility or when there is an imbalance in the num-ber of buyers and sellers of Units, the bid/ask spread may increase significantly.Whenthe market price of Units is falling rapidly, Units are most likely to be traded at a dis-count to the NAV per Unit, which may be the time when most investors would wantto sell their Units.

However, given that Participating Dealers / market makers can engage in In-Kind Cre-ation and In-Kind Redemption, these activities should narrow the discounts or premi-ums of the traded price to the NAV.

4.1.2 Trading Units on Bursa Securities may be suspended

Investors will not be able to purchase or sell Units on Bursa Securities during any periodthat Bursa Securities suspends trading of the Units.Bursa Securities may suspend tradingof the Units whenever it determines that it is appropriate in the interests of a fair and or-derly market to protect investors.The creation and redemption of Units may also be sus-pended in the event that the trading of Units on Bursa Securities is suspended.

4.1.13 Reliance on Participating Dealers / market makers

While the Manager aims to appoint a number of Participating Dealers/market makersto provide liquidity and to facilitate In-Kind Creation and In-Kind Redemption, theremay be circumstances where there is no or insufficient or ineffective Participating Deal-ers/market makers thereby compromising the liquidity of the Units.

4.1.14 Redemption

Units are generally not redeemed for cash. Redemption is usually in-kind, in Redemp-tion Unit aggregations and RedemptionApplications are made by Participating Dealers.Investors are generally expected to sell the Units on Bursa Securities.

4.1.15 Counterparty and settlement risk

Counterparty risk is the risk that the party trading with the Fund will be unable tomeet its obligation to make payments or to settle a trade due to a deterioration of thecounterparty's financial situation or some other failure by the counterparty.The Fundbears the risk of settlement failures.Any such failure may have a material adverse effecton the Fund and/or the value of the Units.

ABF22

4.1.16 EMEAP’s investment in the Fund

EMEAP member central banks and monetary authorities are like any other investorsin the Fund and each of them is entitled to dispose of their respective interest in theUnits they hold.There are no guarantees that the EMEAP member central banks andmonetary authorities will continue to be investors in the Fund. Should the EMEAPmember central banks and monetary authorities decide to sell or redeem all or a por-tion of their Units, it may have a materially adverse effect on the Fund and the price ofthe Units.

4.1.17 Risk of withdrawal of approval by the SC

The SC, which is the primary securities regulator in Malaysia, has approved the Fundsubject to certain conditions more particularly described in Section 14 of this Prospec-tus. As set out in the SC’s Guidelines on Exchange Traded Funds, the SC is to be noti-fied of any events that may affect the acceptability of the Benchmark Index which theFund is tracking, including but not limited to the following: -

(i) changes in methodology for compiling or calculating the Benchmark Index;

(ii) changes in the components of the Benchmark Index i.e. the exclusion and/orinclusion of securities from the said index; and

(iii) changes in the weighting of the Benchmark Index constituents due to, for example,corporate activities or significant market movements.

Based on the aforesaid, the SC reserves the right to withdraw its approval of the Fund,if the Benchmark Index is no longer considered acceptable.

4.2 Risk Factors Specific to Investing in Passive Investments

4.2.1 Tracking error

Changes in the NAV of the Fund may not replicate exactly changes in the BenchmarkIndex, which the Fund’s investment objective is to track closely, i.e. tracking error. Fac-tors such as fees and expenses of the Fund, liquidity of the market, imperfect correla-tion of returns between the Fund's securities and those in the Benchmark Index,changes to the Benchmark Index and regulatory policies may affect the Manager's abil-ity to achieve close correlation with the Benchmark Index of the Fund. Imperfect cor-relation between the returns of the Fund and the Benchmark Index is more likely tohappen to the extent that the Fund invests in securities that are Non-Index Securities.The Fund's returns may therefore deviate from those of the Benchmark Index.

4.2.2 Lack of discretion of the Manager to adapt to market changes

Unlike many unit trusts, the Fund is not "actively managed".The Fund does not try tooutperform the Benchmark Index and does not seek temporary defensive positions

ABF 23

when markets decline or appear overvalued by some standards.The Fund will not ad-just the composition of its portfolio of assets except in order to narrow any discrep-ancy in the duration and risk profile of the Benchmark Index and the Fund Assets, i.e.“passively managed”. Accordingly, a fall in the Benchmark Index will result in a corre-sponding fall in the NAV of the Fund.

4.2.3 Concentration of the Benchmark Index in certain issuers

The Benchmark Index and the investments of the Fund may be concentrated in secu-rities of a single or several issuers. Changes in the financial condition of an issuer,changes in specific economic or political conditions that affect a particular issuer andchanges in general economic or political conditions can affect the value of an issuer'ssecurities. Such issuer-specific changes may have an impact on the securities held bythe Fund.

4.3 Risk Factors Relating to the Benchmark Index

4.3.1 Termination of license to use Benchmark Index

The Manager and theTrustee have been granted a license by IIC to use the BenchmarkIndex in order to create the Fund based on the Benchmark Index. The Fund may notbe able to fulfil its objective and may be terminated if the License Agreement is termi-nated.The Fund may also be terminated if its Benchmark Index ceases to be compiledor published and there is no replacement index using the same or substantially similarformula for the method of calculation as used in calculating the Benchmark Index.

Notwithstanding the above, the License Agreement provides, inter-alia, for the Agree-ment to be mutually terminated by any party in certain situations after the delivery ofa termination notice. In such event, after the notice period, the Manager may be ableto secure the services of an alternative index service provider thus ensuring an or-derly transition with minimum disruption (if any) during the period of changeover.

4.3.2 Compilation of the Benchmark Index

The securities which comprise the Benchmark Index are determined and composed byIIC without regard to the performance of the Fund. The Fund is not sponsored, en-dorsed, sold or promoted by IIC and it makes no representation or warranty, expressor implied, to investors in the Fund or other persons regarding the advisability of in-vesting in securities generally or in the Fund particularly. IIC has no obligation to takeinto consideration the needs of theTrustee, the Manager or investors in the Fund in de-termining, composing or calculating the Benchmark Index and consequently there canbe no guarantees that its actions will not prejudice the interests of the Fund, the Man-ager or the investors.

Whilst the above are valid risks concerns, it should be noted that the same arises asthe Fund is structured in the manner where the index service provider is independent,inter-alia, of the Fund and the Manager. However, investors should note that this struc-

ABF24

ture does provide some measure of protection to Unitholders e.g. collusion possibili-ties are avoided which may otherwise be potentially to the detriment of Unitholders.

4.3.3 Change of Composition of the Benchmark Index

The composition of the Benchmark Index may change as Index Securities mature or areredeemed or as new securities are included in the Benchmark Index. When this hap-pens the weighting or composition of the securities owned by the Fund would bechanged by the Investment Manager in order to achieve the investment objective. Thus,an investment in Units will generally reflect the Benchmark Index as its constituentschange and not necessarily the way it is comprised at the time of an investment in Units.

4.3.4 Errors or Inaccuracies in the Benchmark Index

The Fund is passively managed by tracking the Benchmark Index. In the case where er-rors or inaccuracies occur in the Benchmark Index, the Fund’s ability to track theBenchmark Index will be affected.The Fund’s returns may therefore deviate from thoseof the Benchmark Index

4.4 Other Risk Factors

4.4.1 Political, Economic and Social

Any material changes in the political, economic or social conditions prevailing in Malaysiaand/or in any otherAsian Government country (if the Fund invests in securities of suchgovernment) could have a material adverse effect on the economy and/or the NAV ofthe constituent securities of the Benchmark Index and consequently on the value of theUnits.

4.4.2 Currency

It is a risk associated with investments that are in foreign currencies denomination.When the foreign currencies fluctuate in an unfavourable movement against the Ring-git, the investment may face currency loss in addition to the capital gains/losses.This leadto a lower NAV of the Fund.

THE REST OFTHIS PAGE IS INTENTIONALLY LEFT BLANK

ABF 25

FEES, CHARGES AND EXPENSES

5.1 Fees and charges payable by aTypical Investor

This table describes the charges that a typical investor may incur (based on the charges im-posed by Bursa Securities as at the date of the Latest Practicable Date which charges may bevaried from time to time) when you buy or sell Units in the Fund on Bursa Securities.

Charges from trading theUnits on Bursa Securities

Brokerage Fee

Clearing Fee

Stamp Duty

Further information on the charges an investor will incur from trading the Units on Bursa Se-curities may be found at www.bursamalaysia.com or www.klse.com.my

5.2 Fees and charges payable by Participating Dealers

Participating Dealers will incur additional fees should they request for creation and/or re-demption of Units with the Manager. Fees charged by the Manager and/or the Trustee for thecreation and redemption of Units are set out in the Participating Dealer Agreement and in-cludes any out-of-pocket expenses incurred by the Manager and/or theTrustee arising from therequest for creation and/or redemption by the Participating Dealers.

The table below describes the said fees: -

Type of fee/charge

Processing Fee

Administration Fee

Application CancellationFee

%/ RM

Maximum of 0.30% of the contract value (subject to minimum ofRM12).

On-market transaction: 0.03% (subject to maximum of RM1000per contract).

Direct-business transaction: 0.03% (subject to minimum of RM10and maximum of RM1000 per contract).

0.1% of the contract value (rounded up to the nearest RM), sub-ject to a maximum of RM200.

%/ RM

RM200 payable to the Manager or such amount as may be de-termined by the Manager.

RM50 payable to the Trustee or such amount as may be deter-mined by the Trustee.

RM200 payable to the Manager or such amount as may be de-termined by the Manager, in consultation with the ParticipatingDealers.

ABF26

Duties and Charges

Note: -# To prevent any "dilution" of the Fund's property, the Manager also has the discretion to charge

additional fees in respect of duties and charges of the Fund relating to differences between thebuying and selling prices of securities, the market value of these securities and other dilutive costsincurred by the Fund ("dilution charge"), particularly for large orders.These additional fees are asexplained more fully in Section 6.1.5 of this Prospectus.To the extent such provision for normalcharges and dilution charges is greater than the actual duties and charges and dilution incurredthen such excess shall be for the account of the Fund.To the extent such provision for normal chargesand dilution charges is less than the actual duties and charges and dilution incurred then the Fundwill bear any such deficiency.

It is not envisaged that there will be any other fees and charges to be imposed by the Manager inthe ordinary course in respect of in-kind creation and redemption of Units. Nevertheless, the Man-ager has the discretion to charge such sum as it considers to be representative of an appropriateprovision for fees and charges to the extent any substitute Cash Issue Component or Cash Re-demption Component is payable on a creation or redemption of Units and on cash creation or re-demption of Units.

5.3 Fees and expenses incurred by the Fund

This table describes the fees and expenses that the Fund incurs: -

Charges

Annual Manager Fee

Annual Trustee’s fee

License fee (2)

� For the amount up to the Initial Funding Amount *

� For the amount over the Initial Funding Amount, butless than 275% of the Initial Funding Amount

� For the amount over 275% of the Initial Funding Amount

The amount as may be incurred by the Manager and/or Trusteefrom time to time in connection with such creation/ redemp-tion which includes any fee charged by Bursa Depository oneach account allotted with new Units and each account debitedwith redeemed Units which is presently, and subject to changefrom time to time by Bursa Depository, RM2.20 per account al-lotted or debited subject to a minimum of RM50. A dilutioncharge of up to 80 basis points (0.80%) on the nominal value ofthe Fund can also be levied.#

% / RM

0.10% (1)

0.07% (1)

0.0175% per annum x Ini-tial Funding Amount

0.01% per annum (1)

No charge

ABF 27

subject to a minimum fee of USD21,234 (ApproximatelyRM73,979 as at the Latest Practicable Date)

Initial Funding Amount is USD115,400,000 (ApproximateRM438,520,000 at launch of fund)

Other fund expenses (3)

Notes: -(1) Applied to the NAV of the Fund.(2) The license fee is payable to IIC, the provider of the Benchmark Index.(3) There will be other fees or expenses incurred by the Fund such as audit fees, tax agent’s fees,

printing and stationery, bank charges, investment committee fees for independent members,lodgement fees for annual reports, out-of-pocket expenses of the Supervisory Committee and otherexpenses permitted by the Deed.

Where the Manager effects any cash creations and redemptions, the portion of portfolio trans-actions will increase as the Fund invests cash creation receipts or funds cash redemption amounts.The Manager expects that most portfolio transactions will be effected on a principal (as opposedto an agency) basis and, accordingly, it does not expect to have to incur significant brokerage.Purchases from brokers/dealers will include the spread between the bid and ask price.

The primary objective of the Manager in placing orders for the purchase and sale of the IndexSecurities, Non-Index Securities and/or other investments, when adjusting the Fund Assets toreflect changes in the Benchmark Index,or in respect of a cash creation or redemption, is to ob-tain the most favourable net results taking into account such factors as price, commission orspread and size of the order.Where it is consistent with this objective, it is the Manager's prac-tice to place such orders with brokers/dealers who supply research, market information andquotations and statistical information to the Manager,which may be useful to the Manager in pro-viding its services as manager of the Fund and/or may be useful to the Manager in providingservices to other clients (including other funds managed by the Manager), other than as man-ager of the Fund.

It is the Manager’s policy to channel all rebates, if any, received from brokers/dealers to the Fund.Soft commissions received for goods and services which are of demonstrable benefit toUnitholders such as fundamental databases, financial wire services, technical analysis software andstock quotation system incidental to investment management of the Fund are retained by theManager.

However, the Manager will not accept or enter into soft-dollar commissions/arrangements unlesssuch soft-dollar commissions/arrangements would reasonably assist it in its management of theFund, and the Manager shall ensure at all times that transactions are executed on the best avail-able terms taking into account the relevant market at the time for transactions of the kind and sizeconcerned,do not prejudice the interests of the Fund and/or the Unitholders, and no unnecessarytrades are entered into in order to qualify for such soft-dollar commissions/arrangements.

The aforementioned fees may be expressed in the form of a ratio i.e.management expenses ratio

0.04% (1) (estimate)

ABF28

(“MER”). The MER is the ratio of all the incidental costs incurred in operating the Fund tothe average NAV of the Fund calculated on a daily basis and is paid directly from the Fund whichincludes: -

(a) Manager Fee;(b) Trustee Fee; and(c) Fund expenses.

The Fund’s MER is calculated in accordance with the following formula: -

MER = Fees of the Fund + recoverable expenses of the Fund X 100Average NAV of the Fund (calculated on a daily basis)

The Trustee and the Manager shall be entitled to make payment out of the Fund Assets thefollowing fees, costs and expenses to the extent they have been incurred in relation to the Fund:-

(a) any costs, fees and expenses to be paid under any license and data supply contracts inrelation to the Index Licensor entered into by the Trustee and/or the Manager inrespectof the Fund;

(b) the processing or handling fees levied by any person for rendering services to effect anyacquisition, disposal or any other dealings whatsoever in the FundAssets and any expensesin relation thereto including commissions/fees paid to brokers and/or dealers in effectingdealings in the investments of the Fund;

(c) all professional fees relating to the agreeing and/or contesting of taxation liabilities orrecoveries to be discharged out of or paid into the Fund;

(d) all fees, charges, expenses and disbursements of any legal adviser or counsel, accountant,auditor, investment adviser, valuer, broker, banker, tax adviser, computer expert or otherprofessional advisers employed or engaged by the Trustee or the Manager in theestablishment of the Fund, in maintaining, preserving and protecting the Fund Assets andin the ongoing performance of their respective duties and obligations under the Deed;

(e) all fees, charges, expenses and disbursements incurred in relation to the safe-custody,acquisition, holding, registration, realisation of or other dealing with any investment or theholding of any investment or the custody of the documents of title thereto (includinginsurance of documents of title against loss in shipment, transit or otherwise and chargesmade by agents of the Trustee for retaining documents in safe-custody), any applicablefees and expenses of the custodian, joint-custodian and/or sub-custodian appointedpursuant to the provisions of the Deed and all transactional fees as may be agreed from

RM

672,214

RM

356,802

%

0.13

%

0.07

RM

146,882

%

0.03

RM

1,175,898

%

0.23

%

0.23

Manage Fee Trustee’s Fee Other Expenses MERTotal AnnualExpenses

ABF 29

time to time between the Manager and theTrustee in relation to all transactions involvingthe whole or any part of the Deposited Property;

(f) all charges and expenses incurred for any meeting of Unitholders other than convened byand for the benefit of the Manager and the Trustee;

(g) the fees and expenses incurred by the Manager and the Trustee in obtaining and/ormaintaining the listing and quotation of the Units on Bursa Securities, and/or theauthorisation or other official approval or sanction of the Fund under the CMSA or anyother relevant law or regulation;

(h) the fees and expenses incurred in connection with depositing and holding Units withBursa Depository and the Clearing House (and in any other securities depository orclearing system);

(i) all charges, costs and expenses incurred by the Manager and the Trustee in respect ofand/or in connection with the maintenance of a website or webpages (as the case may be)dedicated entirely to the Fund and communications with and/or notifications to theUnitholders, the registrar and/or any relevant authorities including notifications made inrelation to the Fund in Bursa Securities, newspaper(s) in Malaysia and such other formsof communication permitted / acceptable under the SC’s Guidelines on ETFs and as theManager may from time to time determine;

(j) all fees, costs and expenses incurred in respect of distributing, lodging and registeringthis Prospectus;

(k) all fees, costs and expenses incurred in respect of preparing any deeds supplemental to theDeed and in respect of preparing any agreement in connection with the Fund other thanthose for the benefit of the Manager or the Trustee;

(l) all costs incurred in respect of the preparation, publication and distribution of the auditedaccounts and unaudited semi-annual accounts and of all cheques, statements, notices andother documents relating to the Fund;

(m) all fees and expenses properly incurred by the auditor in connection with the Fund;

(n) all fees and expenses incurred in connection with the removal of the Manager, theTrusteeor the auditor or the appointment of a new manager, a new trustee or new auditor;

(o) all expenses incurred in the collection of Income (including expenses incurred in obtainingtax repayments or relief and agreement of tax liabilities) or the determination of taxation;

(p) all expenses associated with the distributions declared pursuant to the Deed includingwithout limitation fees for the revalidation or reissuance of any distribution cheque orwarrant or telegraphic transfer;

ABF30

(q) all fees and expenses incurred by the Manager and the Trustee in winding-up andterminating the Fund;

(r) fees for the valuation of the Fund by independent valuers for the benefit of the Fund;

(s) all fees and expenses of the independent members of the Investment Committee and theout-of-pocket expenses of the Supervisory Committee; and

(t) Such other charges, costs, expenses and disbursements as permitted under the applicablelaws which the Trustee is entitled to charge to the Fund.

THEREARE FEES INVOLVEDAND INVESTORSAREADVISEDTO CONSIDERTHEMBEFORE INVESTING INTHE FUND.

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ABF 31

CREATION AND REDEMPTION OF UNITS

6.1 Creation and Redemption of Units

CreationApplications/RedemptionApplications from the Participating Dealers for the creation/redemption of Units in accordance with the Participating DealerAgreement are expected underthe following circumstances: -

(a) to facilitate Participating Dealers’ clients’ requests for creation; and

(b) to create liquidity in the market as part of the Participating Dealers’ market making function.

Investors should note that the Fund is not like a typical unit trust offered to the public. Investors,whether retail or otherwise, should acquire or dispose of Units by trading Units on Bursa Se-curities. New Units are only issued to Participating Dealers. Hence, investors, whether retail orotherwise, may only create / redeem Units via applications for Creation / Redemption Unitsthrough a Participating Dealer, subject to the terms and conditions of the Deed and based onthe procedures set out in the Participating Dealer Agreement.

The prices at which creations and redemptions occur are based on the NAV of the Fund Assetsat the next Valuation Point on the Dealing Day after a Creation/Redemption application is re-ceived in a form set out in the Participating Dealer Agreement.

The Manager may permit Participating Dealers to use a reverse repurchase transaction in con-nection with or submitted with any Creation Application/Redemption Application or redemp-tion application in accordance with the Participating DealerAgreement, the Deed and applicablelaws.

Creation/Redemption of Units will be based on the NAV of the Fund, as at the next ValuationPoint of the Fund.

ABF32

A brief illustration of the creation and redemption process is set out below: -

Diagram 2: Illustration of the Creation and Redemption Process

# Illustrative, based on valuation of the Fund as at the Latest Practicable Date.

6.1.1 In-Kind Creation

Investors (who are not Participating Dealers) who wish to create Units via In-KindCreation must approach a Participating Dealer to do so on their behalf in such mini-mum number of Units that may be notified together with the In-Kind Creation Basket.Investors (who are Participating Dealers) who wish to create Units via In-Kind Creationmay approach the Manager to do so.The Manager may, in its discretion, approve theCreation Application upon such terms as it deems fit. For such purpose, investors maybe required to complete a form as required by the Manager or the Participating Dealer.In addition, the Manager or the Participating Dealer may request the investor to makecertain representations and/or furnish certain certifications. Investors should be awarethat their particular broker or dealer may not have executed a Participating DealerAgreement and therefore, Creation Applications have to be placed by the investor’sbroker or dealer through a Participating Dealer that has entered into the ParticipatingDealer Agreement. Unless otherwise permitted by the SC’s Guidelines on ExchangeTraded Funds, the Manager shall only accept Creation Applications from ParticipatingDealers.

Bond portfolio and/orcash equivalent

27,750,000Units #

Bond portfolio and/orcash equivalent

27,750,000Units #

Trade Units

Trade UnitsPD trades bonds for in-kind creation and re-demption

Retailinvestors

Bursa Securi-ties

BondMarket

Participating Dealer(“PD”)

The Fund

IN-KINDCREATION

IN-KINDREDEMPTION

ABF 33

The Manager shall determine the Index Securities, Non-Index Securities, other invest-ments and/or Cash Issue Component (if any) comprising the In-Kind Creation basket ap-plicable to Creation Applications to create Units in Creation Units or multiples thereofsubmitted with respect to that Dealing Day.Generally, the Manager will permit creationsby Participating Dealers of Creation Units or multiples thereof on a continuous basis onevery Dealing Day.

The Manager may,with the approval of theTrustee and notification to the SC,change thenumber of Units comprising a Creation Unit aggregation for the purpose of effecting cre-ations of Units.Any change in the In-Kind Creation Basket, and/or Creation Units shallbe notified to the SC.

Creation Applications received from Participating Dealers before the Dealing Deadlineof 2.00 p.m.on each Dealing Day and accepted by the Manager will be issued at an IssuePrice based on the closing NAV of the Fund Assets on that Dealing Day.

CreationApplications received from Participating Dealers after the Dealing Deadline oron a day which is not Dealing Day shall be deemed to be received by the Manager be-fore the Dealing Deadline for the next Dealing Day. Investors placing Creation Applica-tions for Units should provide sufficient time to permit proper submission of theCreation Applications by the Participating Dealers to the Manager prior to the DealingDeadline on the relevant Dealing Day.

Subsequent to the submission of the CreationApplication, the Participating Dealer mustdeliver to theTrustee (on behalf of the Fund) the Creation Securities and the Cash IssueComponent (if any) for each Creation Unit, in accordance with the procedures set outin the Participating Dealer Agreement.

The creation of Units in Creation Unit aggregations will only be carried out if the fol-lowing are satisfied: -

(i) The Creation Securities and the Cash Issue Component (if any) to be deliveredto the Trustee (on behalf of the Fund) has been approved by the Manager; and

(ii) The Creation Securities and the Cash Issue Component (if any) as approved initem (i) above has been delivered to the Trustee (on behalf of the Fund) to theTrustee’s satisfaction and any processing and other fees payable have been paidin full.

If any of the above is not satisfied, the Creation Application may be cancelled. Partici-pating Dealers will be liable for all direct and indirect losses incurred by the Fund re-sulting from Creation Applications submitted by them that are cancelled after the timefor cancellation (if applicable) set out in the Deed or Participating Dealer Agreementhas passed, including processing fees, cancellation fees, duties, charges and any interestcosts incurred by the Fund and any losses arising in respect of the Fund’s purchaseand/or sale of investments in connection with such cancellation.

ABF34

The Deed and the Participating DealerAgreement allows the Manager to reject a Cre-ation Application submitted to the Manager in certain situations.The Manager will no-tify the Participating Dealer of any rejection of a Creation Application submitted bythat Participating Dealer.

To be effective, the Creation Application: -

(i) must be given to the Manager by a Participating Dealer in accordance with theParticipating Dealer Agreement;

(ii) must specify the round number of Creation Unit aggregations;

(iii) where applicable, must include the certifications contemplated in the ParticipatingDealer Agreement in respect of creation of Units, together with such othercertifications and opinions of counsel as the Trustee and the Manager mayconsider necessary to ensure compliance with applicable laws; and

(iv) must be in Creation Unit aggregations.

Subject to the Deed and the Participating DealerAgreement, a CreationApplication oncegiven cannot be revoked or withdrawn without the consent of the Manager.

6.1.2 In-Kind Redemption

Investors (who are not Participating Dealers) who wish to redeem Units via In-Kind Re-demption must approach a Participating Dealer to do so on their behalf, in such mini-mum number of Units that may be notified together with the In-Kind RedemptionBasket. Investors (who are Participating Dealers) who wish to redeem Units via In-Kind Redemption may approach the Manager to do so.The Manager may, in its discre-tion, approve the Redemption Application upon such terms as it deems fit. For suchpurpose, investors may be required to complete a form as required by the Manager orthe Participating Dealer. In addition, the Manager or the Participating Dealer may re-quest the investor to make certain representations and/or furnish certain certifications.Investors should be aware that their particular broker or dealer may not have exe-cuted a Participating Dealer Agreement and therefore, Redemption Applications haveto be placed by the investor's broker or dealer through a Participating Dealer that hasentered into the Participating Dealer Agreement. Unless otherwise permitted by theSC’s Guidelines on ExchangeTraded Funds, the Manager shall only accept RedemptionApplications from Participating Dealers.

The Manager shall determine the Index Securities, Non-Index Securities, other invest-ments and/or the Cash Redemption Component (if any) comprising the In-Kind Re-demption Basket applicable to applications to redeem Units in Redemption Units ormultiples thereof submitted with respect to that Dealing Day. Generally, the Managerwill permit redemptions by Participating Dealers of Redemption Units or multiplesthereof on a continuous basis on every Dealing Day.

ABF 35

The Manager may, with the approval of the Trustee and notification to the SC, changethe number of Units comprising a Redemption Unit aggregation for the purpose of ef-fecting redemption of Units.Any change in the In-Kind Redemption Basket and/or Re-demption Units shall be notified to the SC.

RedemptionApplications received from Participating Dealers before the Dealing Dead-line of 2.00 p.m.on each Dealing Day and accepted by the Manager will be issued at thatDealing Day's Redemption Price. Redemption Applications received from ParticipatingDealers after the Dealing Deadline or on a day which is not Dealing Day shall bedeemed to be received by the Manager before the Dealing Deadline for the next Deal-ing Day. Investors placing Redemption Applications to redeem Units should providesufficient time to permit proper submission of the applications by the ParticipatingDealers to the Manager prior to the Dealing Deadline on the relevant Dealing Day.

The Redemption Securities and Cash Redemption Component (if any) shall be trans-ferred or paid by the Trustee in accordance with the Participating Dealer Agreementprovided that the Units, which are the subject of the Redemption Application, havebeen delivered to the Trustee or its nominee and the full amount of the Cash Re-demption Component (if negative) and any processing and other fees payable have beenpaid in full.The Unitholder on whose behalf a Redemption Application is made by aParticipating Dealer shall be deemed to authorise (i) the transfer of the RedemptionSecurities by book entry to the designated ‘RENTAS’ securities account and (ii) thepayment of the Cash Redemption Component by book entry payment to the desig-nated cash account or by telegraphic transfer to a bank account in the name or to theorder, in each case, of that Participating Dealer by or through whom that RedemptionApplication was made.

No Redemption Securities shall be delivered and no Cash Redemption Componentshall be paid unless the Units which are the subject of the RedemptionApplication havebeen delivered to theTrustee or its nominee for redemption by such time as the Man-ager shall for the time being prescribe in the Participating Dealer Agreement for suchRedemptionApplication.The Manager may at its discretion and with the approval of theTrustee extend the settlement period, such extension to be on such terms and condi-tions as the Manager may determine.

The Deed and the Participating Dealer Agreement allows the Manager to reject a Re-demption Application submitted to the Manager in certain situations.The Manager willnotify the Participating Dealer of any rejection of a Redemption Application submittedby that Participating Dealer.

In the event those Units are not delivered to the Trustee or its nominee for redemp-tion in accordance with the foregoing: -

(i) the RedemptionApplication may be cancelled (except that the applicable processingand other fees shall remain due and payable); and

ABF36

(ii) the Manager may, but shall not be bound to, charge the applicant a cancellation feeof such amount as it may from time to time determine to represent theadministrative costs involved in processing the Redemption Application, and anylosses arising in respect of the Fund's sale and purchase of securities and anyinterest costs incurred by the Fund in connection with such failed redemption.

To be effective, the Redemption Application: -

(i) must be given to the Manager by a Participating Dealer in accordance with theParticipating Dealer Agreement;

(ii) must specify the round number of Redemption Unit aggregations;

(iii) where applicable, must include the certifications contemplated in the ParticipatingDealer Agreement in respect of redemptions of Units, together with such othercertifications and opinions of counsel as theTrustee and the Manager may considernecessary to ensure compliance with applicable laws; and

(iv) must be in Redemption Unit aggregations.

In the event that the total number of Units in respect of which RedemptionApplicationsare received by the Manager on a Dealing Day exceeds 30% (or such other percentageas the Manager may determine and notify to the Participating Dealers) of the NAV of theFund in any particular day of the total number of Units in issue (disregarding any Unitswhich have been agreed to be issued), the Manager shall be entitled to limit the totalnumber of Units which Holders are entitled to redeem on that Dealing Day to 30% (orsuch higher percentage as the Manager may determine and notify to the ParticipatingDealers) in any particular case of the total number of Units in issue (disregarding anyUnits which have been agreed to be issued).

Subject to the Deed and the Participating Dealer Agreement, a Redemption Applicationonce given cannot be revoked or withdrawn without the consent of the Manager.

6.1.3 Creation by cash

Participating Dealers (either for their own account or for the account of their clients) mayonly apply for Units using cash on a Cash Dealing Day in exceptional circumstances at thediscretion of the Manager, provided it is not detrimental to the Unitholders. Such in-vestors may be required to complete a form as required by the Participating Dealer orthe Manager.Payment of Units may be made in such manner and/or to such bank accountas the relevant Participating Dealer or, as the case may be, the Manager may specify.

Unless otherwise permitted by the SC’s Guidelines on Exchange Traded Funds, theManager shall only accept Creation Applications from Participating Dealers.

The minimum number of Units that may be created will be the number of Units noti-fied together with the In-Kind Creation Basket.

ABF 37

The Issue Price of each Unit shall be ascertained as follows: -

(i) By dividing the value of the NAV at the nextValuation Point on a Dealing Day bythe number of Units in issue; and

(ii) By adjusting the resulting total per Unit to the nearest RM0.01 (with fractions ofRM0.005 being round up).

Applications for subscription of Units using cash must reach the Manager before theDealing Deadline for a Cash Dealing Day, which is 2.00 p.m. or if that day is not a Deal-ing Day, then on the immediately following Dealing Day.

If the request for subscription of Units using cash is received by the Manager after theDealing Deadline but on that Cash Dealing Day, it shall be deemed to be received bythe Manager on the next Dealing Day.This means that if your application is received bythe Manager after 2.00 p.m.on a Cash Dealing Day, the Issue Price you pay per Unit willbe based on the Issue Price on the following Dealing Day. Investors placing applicationsfor Units should provide sufficient time to permit proper submission of the applicationsby the Participating Dealers to the Manager prior to the Dealing Deadline on the rel-evant Cash Dealing Day.

6.1.4 Redemption by Cash

Participating Dealers (either for their own account or for the account of their clients)may only apply for redemption of Units for cash on a Cash Dealing Day and in excep-tional circumstances at the discretion of the Manager, provided it is not detrimental tothe Unitholders. Such Unitholder may be required to complete a form as required bythe Manager or the Participating Dealer.

Unless otherwise permitted by the SC’s Guidelines on Exchange Traded Funds, theManager shall only accept Redemption Applications from Participating Dealers.

There is no minimum holding amount for the Units.The minimum number of Unitsthat may be redeemed will be the number of Units notified together with the In-KindRedemption Basket. Unitholders who hold less than the minimum redemption amountof Units may sell their Units for cash by trading the Units on Bursa Securities.

The net redemption proceeds shall be ascertained as follows: -

(i) By dividing the value of the NAV at the nextValuation Point on a Dealing Day bythe number of Units in issue;

(ii) By adjusting the resulting total per Unit to the nearest RM0.01 (with fractions ofRM0.005 being round up); and

(iii) By multiplying the resulting total by the number of Units to be redeemed.

ABF38

Applications to redeem Units for cash must reach the Manager before the DealingDeadline for a Cash Dealing Day, which is 2.00 p.m. or if that day is not a Dealing Day,then on the immediately following Dealing Day.

In the event that the total number of Units in respect of which Redemption Applica-tions are received by the Manager on a Dealing Day exceeds thirty percent (30%) (orsuch other percentage as the Manager may determine and notify to the ParticipatingDealers) of the NAV of the Fund in any particular day of the total number of Units inissue (disregarding any Units which have been agreed to be issued), the Manager shallbe entitled to limit the total number of Units which Holders are entitled to redeem onthat Dealing Day to 30% (or such higher percentage as the Manager may determine andnotify to the Participating Dealers) in any particular case of the total number of Unitsin issue (disregarding any Units which have been agreed to be issued).

If the request to redeem Units for cash is received by the Manager after the DealingDeadline but on that Cash Dealing Day, it shall be deemed to be received by the Man-ager on the next Dealing Day.This means that if your application is received by theManager after 2.00 p.m. on a Cash Dealing Day, the Redemption Price you get will bebased on the Redemption Price on the following Dealing Day. Investors redeemingUnits should provide sufficient time to permit proper submission of the applications bythe Participating Dealers to the Manager prior to the Dealing Deadline on the relevantCash Dealing Day.

Payment will be made within 6 Business Days after the Cash Dealing Day on which theRedemption Application is made subject to the provisions of the Deed and/or the Par-ticipating Dealer Agreement.

6.1.5 Dilution

The NAV of the Fund could be reduced as a result of costs incurred in investing cashsubscriptions received on an application for Units, in paying cash redemption proceedson a redemption of Units, or incurred in respect of dealing in portfolio securities, du-ties, taxes or other normal costs of the Fund. In addition, there may be dilution costsdue to the difference between the buying and selling prices of such securities and themarket value of these securities. In order to prevent any potential adverse effect on in-vestors in the Fund and to avoid a dilution of the Fund's property due to such dutiesand charges and/or dilution costs, the Manager has the discretion to charge a fee com-prising normal charges and dilution charges to investors to compensate for any de-crease in the Fund's NAV when Units are created or redeemed.Any such fee paid tothe Fund, will become part of the property of the Fund. Such fee (if any) will be deter-mined by the Manager as the Manager may consider represents the appropriate provi-sion for duties and charges. If the actual duties and charges incurred by the Fund areless than the Manager's provision therefore, such difference will be for the benefit ofthe Fund and to the extent such duties and charges incurred by the Fund are more thanthe provision therefore, then any such deficiency will be borne by the Fund.

ABF 39

6.2 Obtaining information on the In-Kind Creation/Redemption Baskets

Details of the In-Kind Creation/Redemption Baskets and the corresponding Unit aggregationswill be made available via daily announcements by the Manager on Bursa Securities and on theFund’s website at www.abfmy1.com.my.The Manager does not accept any responsibility for anyerrors of the details published or for any non-publication, non-telecast, late publication or latetelecast of such details and shall incur no liability in respect of any action taken or loss sufferedby the investors in reliance upon such publication or telecast (as the case may be).

6.3 Trading the Units

Units of the Fund are listed for trading on Bursa Securities. Units can be bought and soldthroughout the trading day like other publicly-traded shares.There is no minimum investment.Although Units are generally purchased and sold in "board lots" of 100 Units, brokerage firmsmay permit investors to purchase or sell Units in smaller "odd-lots", although prices of Unitstraded in "odd-lots" may differ slightly from Units purchased and sold in "board lots".

When buying or selling Units through a broker, investors will incur customary brokerage, stampduty and clearing fees. Unit prices are reported in RM per Unit. Pursuant to Section 14 (1) ofthe Central Depositories Act, Bursa Securities has prescribed the Units as a prescribed secu-rity. In consequence thereof, the Units will be deposited directly with Bursa Depository and anydealings in these Units will be carried out in accordance with the aforesaid Act and the rules ofBursa Depository.

Investors owning Units of the Fund are beneficial owners as shown on the records of BursaDepository. Bursa Depository serves as the securities depository for all Units of the Fund.Asa beneficial owner of Units, you are not entitled to receive physical delivery of Unit certificatesor to have Units registered in your name, and you are not considered a registered owner ofUnits.Therefore, to exercise any right as an owner of Units, you must rely upon the proceduresof Bursa Depository.These procedures are the same as those that apply to securities listed onBursa Securities.

Unit Trading Prices

The trading prices of Units on Bursa Securities may differ in varying degrees from their dailyNAVs and can be affected by market forces such as supply and demand, economic conditionsand other factors.Unitholders may keep track of the current market price of the Units via BursaSecurities’ website at www.bursamalaysia.com on a daily basis.

The Units are traded on the board as determined by Bursa Securities in accordance with therelevant tick-size rules as set by Bursa Securities.This may be different from the bid/ask spreadof the Underlying Securities.

Market Making

It is the intention of the Manager to facilitate the provision of liquidity for investors through theappointment of Participating Dealers/market makers who are required to maintain a market for

ABF40

the Units. In maintaining a market for Units, the Participating Dealers/market makers may realiseprofits or sustain losses in the amount of any differences between the prices at which they buythe Units and the prices at which they sell the Units.Any profit made by the Participating Deal-ers/market makers may be retained by them for their absolute benefit and they shall not be li-able to account to the Trustee in respect of such profits.

Although Participating Dealers/market makers may buy and sell Units just like retail investorsvia Bursa Securities, there is no guarantee or assurance as to the price at which a market willbe made. A list of Participating Dealers/market makers appointed by the Manager may be ob-tained from Bursa Securities’ website. The Manager will also notify Bursa Securities of anychanges to the list of Participating Dealers/market makers.

Keeping abreast with developments of the ABF/Customer services of the Manager

The Manager shall also deliver a copy of the interim and annual report of the Fund to eachUnitholder without charge within 2 months of the end of the financial year/period of the Fund.Additional copies of the said reports may be requested by the Unitholder subject to the pay-ment of a reasonable sum as may be determined by the Manager.

Where applicable, the Manager will send to Unitholders their tax vouchers which sets out suchinformation that is needed to complete a tax return.

Updated information on the Fund can be obtained from the Manager’s website and as announcedon Bursa Securities from time to time.

THE REST OFTHIS PAGE IS INTENTIONALLY LEFT BLANK

ABF 41

PERFORMANCE INFORMATION

7. PERFORMANCE INFORMATION-ABF MALAYSIA BOND INDEX FUND

Actual/Annualised Returns (as at 31 December 2008)

One year

Since launch of fund (13 July 2005)

Distribution

Distribution paid (net of tax) RM

Distribution net of tax (sen per unit)

Distribution to unitholders is from the following sources:

Interest incomeUndistributed net incomebrought forward– realised

Accretion of discountNet realised gain/(loss)on sale of investments

Distribution equalisationAmortisation of premium

Less: ExpensesTotal amount ofdistribution

Past performance of the Fund is not an indication of future performance.

The Fund’s annual report is available upon request.

Actual%

7.7

16.5

Annualised%

7.7

4.5

2006

16,660,076

3.10

2007

22,409,364

4.65

2008

7,469,788

1.55

Financial years/period ended 31 December

RM

10,328,395

378,450156,236

(1,359,262)-

(858,133)8,645,686

(1,175,898)

7,469,788

%

138.2

5.12.1

(18.2)-

(11.5)115.7(15.7)

100.0

%

91.4

22.11.2

0.9-

(9.5)106.1(6.1)

100.0

RM

20,481,148

4,963,548270,943

201,884-

(2,137,286)23,780,237(1,370,873)

22,409,364

RM

20,958,338

7,615,338194,078

(1,968,014)(1,989,234)(6,672,608)18,137,898(1,477,822)

16,660,076

%

125.8

45.71.2

(11.8)(11.9)(40.1)108.9(8.9)

100.0

2008 2007 2006Financial years/period ended 31 December

ABF42

PortfolioTurnover Ratio

The portfolio turnover ratio of the Fund for the financial year ended 31 December 2008 is 0.33times, decreased by 0.06 times (15.4%) as compared to 0.39 times in 2007 mainly due to increasein average fund size.

Sectoral Composition

Malaysian Government securitiesQuasi-Government securitiesCash and othersTotal

Note:The abovementioned percentages are based on total invest market value plus cash.

Top Five Investment of the Fund:

1.2.3.4.5.

Note: Above securities (provided by Bank Negara Malaysia) issued by Malaysian Government.

Past performance of the Fund is not an indication of future performance.

The Fund’s annual report is available upon request.

Index composition may change and securities may be delisted.

As at31 December 2008

(%)

88.310.71.0

100.0

Stock Code

MN03003VMJ060005MH060003MN01001VMJ080001

% NAV

9.689.579.516.756.74

Stock Code

MH060003MN03003VMJ060005MI04001AMI04004Z

% NAV

11.049.999.949.119.07

Stock Code

MN03003VMV88002XMJ060005MI04001AMI04004Z

% NAV

15.6611.079.749.568.90

2008 2007 2006As at 31 December

THE REST OFTHIS PAGE IS INTENTIONALLY LEFT BLANK

ABF 43

8.1 Corporate information

The Manager,AIS,was incorporated in Malaysia under the CompaniesAct,1965 on 9 July 1986 andcommenced operations in the same year. Its authorised share capital is RM10,000,000comprising 10,000,000 ordinary shares of RM1.00 each while its issued and paid-up sharecapital as at 31 May 2009 was RM5,539,000 comprising 5,539,000 ordinary shares of RM1.00 each.

AIS is a company with more than 20 years experience in unit trust management. As at theLatest Practicable Date, the total number of funds under management was 46 with a total fundsize of approximately RM8.3 billion.

As at the Latest Practicable Date,AIS was backed by 116 staff of whom 90 were executive staffand 26 were non-executive staff.

AIS is wholly-owned by AmInvestment Group Berhad.

8.2 Duties and responsibilities

The Manager is responsible for setting the investment policies for the Fund and implementingstrategies to meet these objectives.The Manager is also responsible for the Fund’s portfolio, is-suing Units and preparing and issuing the Prospectus.

8.3 Funds under management

As at the Latest Practicable Date, the following are the funds under the management of AIS:-

1)2)3)4)5)6)7)8)9)10)11)12)13)14)15)16)17)18)19)20)21)

AmCash ManagementAmIncomeAmAl-AminAmBondAmBon IslamAmDynamic BondAmIncome PlusAmConservativeAmBalancedAmTotal ReturnAmIttikalAmCumulative GrowthAmNew FrontierAmIslamic BalancedAmIslamic GrowthAmDividend IncomeAmIncome ExtraAmIncome AdvantageABF Malaysia Bond Index FundAmIncome RewardAmIncome Premium

AmGlobal Property Equity FundAmOasis Global Islamic EquityAmSchroder European Equity AlphaAmAsia-Pacific Property EquitiesAmGlobal BondAmAsian IncomeAmMulti Assets-Capital GuaranteedAmPan European Property EquitiesAmGlobal AgribusinessAmGlobal Enhanced EquityYieldAmDual Opportunities - Capital ProtectedAmGlobal Climate ChangeAmPrecious MetalsAmGlobal Currencies – Capital ProtectedAmGlobal Emerging Market OpportunitiesFBM30etfAmEmerging Markets BondNamaa’ Asia-Pacific Equity GrowthAmNamaa’ Asia-Pacific Equity GrowthAmCommodities ExtraAmCommodities Active - Capital Protected

22)23)24)25)26)27)28)29)30)31)32)33)34)35)36)37)38)39)40)41)42)

THE MANAGER

ABF44

43)44)

8.4 Historical financial information

The following is a summary of the financial position of the Manager:-

Issued and paid-up capitalShareholders’ fundsTurnoverPretax profit/ (loss)After tax profit/ (loss)

8.5 Directors and key personnel

BOARD OF DIRECTORS

The Board of Directors of AIS is entrusted with the responsibility for the overall management ofthe Company. The following table sets forth information regarding the directors of the Manager:-

Name

Kok Tuck CheongDatin Maznah MahbobHarinder Pal SinghProf. Dr.Annuar Bin Md NassirDr. Mahani Binti Zainal AbidinLee Siang Korn @ Lee Siang Chin

KEY PERSONNEL

The following table sets forth information regarding the key personnel of the Manager:-

Name

Harinder Pal SinghDesmond Ling Toh WhyeLeslie Cheah Loy HinNg Chze HowGrace Lok Choon LeeNervinderjeet KaurBakri JamaluddinPhajneek Kaur

as at 31 March (RM)2009(‘000)

5,53945,45664,02426,77519,899

2008(‘000)

5,53940,84293,28826,68119,250

2007(‘000)

5,53926,721105,68517,68912,775

Status

Non-IndependentNon-IndependentNon-IndependentIndependentIndependentIndependent

Designation

Principal Officer/ Director, OperationsDirector, Finance & Strategic ManagementDirector,Treasury SolutionsDirector, Retail FundsHead of Group SalesDirector, Legal & Regulatory ComplianceHead, Legal & Regulatory ComplianceCompliance Officer

AmCash 30AmStaples

AmTriple 30 - Capital ProtectedAmConstant Extra

45)46)

ABF 45

Name

Addy SuhutChristopher Geh Chong Beng

PROFILE OF DIRECTORS

Kok Tuck Cheong, is the Managing Director and Chief Executive Officer of AmInvestmentBank Berhad. He has been with the AmBank Group since 1981. Mr. Kok also sits on the Boardof AmFraser International Pte Ltd (Singapore), AmFraser Securities Pte Ltd. (Singapore), AIMand AmInvestment Group Berhad. Mr. Kok was appointed to the Board of AIS on 9 November2001. Mr. Kok holds a Bachelor of Science (Hons) in Commerce and Accounting and Master ofScience in Financial Managerial Control from the University of Southampton.

Datin Maznah Mahbob, is the Chief Executive Officer of the Funds Management Division ofAmInvestment Group and is also the Chief Executive Officer/ Executive Director of AIM. She isresponsible for business strategy and management of the Funds Management Division and isthe designated person responsible for investment strategy formulation for all fundsmanagement activities by AIM. Datin Maznah Mahbob has been in the funds managementindustry since 1987. Prior to this, she was in the Corporate Finance Department ofAmMerchantBank (now known as AmInvestment Bank) for three years. She is a graduate of the Institute ofChartered Secretaries and Administrators (UK). She holds the Fund Manager's Representativeand Futures Fund Manager's Representative licences. She was appointed to the Board of AIS on29 December 2005. She also sits on the Board ofAMMB Nominees (Tempatan) Sdn Bhd,AMMBNominees (Asing) Sdn Bhd and AmLabuan (L) Ltd.

Harinder Pal Singh, is the Principal Officer/ Director of Operations of AIS. He is responsiblefor the overall management of all operational functions of AIS and AIM. He was seconded to AISin May 2001. Prior to his secondment, he was attached to the Corporate Services Departmentof AmInvestment Bank Berhad as a Manager from 1998 to 2000. He holds a Bachelors degreein Accounting from the University of Malaya, Kuala Lumpur. He was appointed to the Board ofAIS on 22 September 2008.

Prof.Dr.Annuar Bin Md Nassir, holds a Ph.D. and is a Professor in Finance and Dean of theFaculty of Economics and Management, Universiti Putra Malaysia. He has been with theuniversity since 1985.He was appointed to the Board ofAIS on 4 September 1992.On 31 March2003 he retired as a Director and was reappointed to the position on 8 April 2003. He wasappointed to the Investment Committee of the Fund on 18 January 2007.

Dr. Mahani Zainal Abidin (Independent) was appointed Director-General, Institute ofStrategic and International Studies, Malaysia in May 2007. Dr. Mahani obtained a Ph.D(development economics) from the University of London in 1992. She was Professor in theDepartment of Applied Economics at the Faculty of Economics and Administration, Universityof Malaya. In 1998, Dr. Mahani was appointed a member of theWorking Group for the NationalEconomic Action Council, a body established by the Malaysian Government to formulatemeasures to initiate recovery from the economic and financial crisis. She was a Board Memberof the Malaysia Employees Provident Fund (1998-2000). In 2001,Dr.Mahani was appointed as the

Designation

Head, Risk Management & Investment ComplianceHead, Retail Product Development

ABF46

Head, Special ConsultancyTeam on Globalisation of the National Economic Action Council. Shealso serves as Deputy Chairman of the National Accreditation Board from May 2003 untilOctober 2007. In 2005,Dr.Mahani was appointed as the Deputy Director-General,Departmentof Higher Education, Ministry of Higher Education Malaysia. Dr.Mahani was appointed to theBorad of AIS on 14 July 2004. She was appointed to the Investment Committee of the Fund on18 January 2007.

Lee Siang Korn @ Lee Siang Chin is a Fellow of the Institute of Chartered Accountants inEngland andWales, and also a member of the Malaysian Association of Certified PublicAccountants. Mr. Lee was appointed to the Board of AIS on 20 December 2006. He embarkedon a career in corporate finance which spanned over a decade. In 1983, he joined AmInvestmentBank Berhad as general Manager, Corporate Finance and later became the Managing Director ofAmSecurities Sdn Bhd. Mr. Lee left AmSecurities in 1999 but remains as Non-Executive Director.Currently Mr. Lee is also a non-executive board member of Am-Fraser Securities Pte Ltd(Singapore), the Social Security Organisation of Malaysia (“SOCSO”),UniAsia LifeAssurance BhdandValue Partners Group Limited (Hong Kong).

PROFILE OF KEY PERSONNEL

Harinder Pal Singh (as mentioned above)

Desmond Ling Toh Whye, is the Director, Finance and Strategic Management. He isresponsible for all accounting matters of our funds as well as the financial matters of AIS andAIM. He is also responsible for the financial and change management strategies of FMD and theintegration of cross functional strategies across FMD. He has over 12 years of experience inareas of collection investment schemes and audit of companies in the financial and capital mar-kets. Prior to his present appointment, he has served the SC, and was an auditor with KPMG.He holds a Bachelor of Business (Accounting) degree from Curtin University, Perth,Australia.Heis a Certified Practising Accountant with CPA Australia and is a Chartered Accountant with theMalaysian Institute of Accountants.

Leslie Cheah Loy Hin, is the Director,Treasury Solutions.He is responsible for developing thecorporate market segment for unit trust fund products. He joined AIS on 1 June 2003. Prior tohim joiningAIS, he served as the Head ofTreasury (Northern Region) ofAMMB Holdings Berhadand later led the Bond Desk Sales and DistributionTeam of Am-Merchant Bank (now known asAmInvestment Bank).He was one of the pioneering staff during the set up ofAmFutures Sdn Bhdand AmInternational (L) Ltd. Leslie holds a Diploma in Accounting and is an Associate MemberofThe Institute of Chartered Secretaries and Administrators (UK) and also a National Memberof The Financial Market Association of Malaysia.

Ng Chze How, is the Director, Retail Funds of AIS. He is responsible for developing AIS’s unittrust retail market segment since joining in April 2007. Prior to his present role, he was servingas Chief Officer, Sales & Distribution in one of the top five unit trust companies in Malaysia. Heis a graduate from University of Strathclyde, UK, holding a degree majoring in Management andMarketing and is a Certified Financial Planner. His working experience includes Consumer,Commercial, International Banking and Investment services.He has more than 12 years experiencein the financial services industry employed by various local and international conglomerates.

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Grace Lok Choon Lee is the Head of Group Sales. She joined AIS in October 2001. She isresponsible in supporting the AmBank Group distribution channels of AIS. Prior to her presentappointment, she was the Training Manager, handling the training matter of the distributionchannels. She was attached to one of the largest unit trusts companies in Malaysia and afinancial planning firm in Malaysia before joiningAIS. She holds a Bachelor of Science in ComputerScience and a Masters of Science in Human Resource Development both from Pittsburgh StateUniversity, Kansas, USA.

Nervinderjeet Kaur is the Director, Legal and Regulatory Compliance. She has more than 13years experience in the financial services industry attained in Malaysia and Australia.. She is re-sponsible for the overall supervision and compliance with the regulatory requirements of bothAmInvestment Services Berhad and AmInvestment Management Sdn Bhd. She holds a Bachelorof Laws from University of London, United Kingdom.

Bakri Jamaluddin is the Head, Legal & Regulatory Compliance.He joinedAIS in June 2007.Heis responsible for the overall supervision and compliance with the regulatory requirements ofboth AIS and AIM. He holds a Bachelor of Law from International Islamic University, Malaysia.

Phajneek Kaur is the Compliance Officer. She is the designated person responsible forcompliance matters. She joined AIS in January 2006. She works closely with the regulatoryauthorities on reviewing the industry best practices and ensuring compliance with the laws andregulations pertinent to the unit trust industry. She holds a LLB (Hons) from University ofLondon and the Certificate of Legal Practice (CLP).

Addy Suhut, is the Co-Head of Analytics and Investment Risk. He started off as a FinancialMarketsAnalyst at Bank Negara Malaysia before becoming a Private EquityAnalyst in a Malaysianprivate equity group.While at the private equity group, Addy had a stint as a Risk Managerduring which he had set up the group’s Risk Management Department.After later becoming afund manager with a Malaysian asset management company and later with a multinational insurer,Addy became the Quant & Risk Manager at that multinational insurer, where he wasresponsible for quantitative strategy, investment risk management, and performance analytics.Addy is a certified Financial Risk Manager (FRM) and a Chartered Financial Analyst (CFA)charterholder.He holds an MBA (Finance) degree from International Islamic University Malaysia,and a BSc Economics degree from the London School of Economics.

Christopher Geh is the Head, Retail Product Development, Retail Funds of the FundsManagement Division.He joinedAIS in June 2007.He is responsible for the overall developmentof all retail unit trust funds under Retails Funds. He has over 6 years of experiences in thefinancial services industry employed by various global and local conglomerates. He holds aBachelor of Business Administration (Finance) from Seattle University,Washington, USA.

8.6 Investment committee

As required by the SC’s Guidelines on ETFs, the Manager shall establish an InvestmentCommittee for the Fund whose role is to ensure that the investment management of the Fundis consistent with:-

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(a) the Fund’s investment objective;(b) the Deed;(c) the SC’s Guidelines on ETFs and other applicable laws;(d) the internal investment restrictions and policies; and(e) acceptable and efficacious investment management practices within the industry.

The Investment Committee shall comprise such number of members as are prescribed by theSC’s Guidelines on Exchange Traded Funds and shall have the powers set out therein.The ap-pointment of members of the Investment Committee must be approved by the SC.The Invest-ment Committee meeting will usually be held once a month.

In the event of any conflict between the decisions, instructions, requirements and/or directionsof the Investment Committee and of the Supervisory Committee in relation to the investmentmanagement of the Fund, the decisions, instructions, requirements and/or directions of the In-vestment Committee will prevail provided that such decisions, instructions, requirements and/ordirections are made in accordance with the role, powers and duties set out in the SC’s Guide-lines on Exchange Traded Funds and/or other applicable laws.

The Investment Committee comprises the following members:-

Name

Prof. Dr.Annuar Bin Md NassirDr. Mahani Binti Zainal AbidinLee Siang Korn@Lee Siang ChinHarinder Pal Singh

The profiles of Prof. Dr Annuar Bin Md Nassir, Dr. Mahani Binti Zainal Abidin and Mr HarinderPal Singh are set out in Section 8.5 above.

8.7 Supervisory Committee

(1) To the extent permitted or required by applicable laws, the Manager shall,with the approvalof the Trustee, establish a Supervisory Committee which shall be constituted as follows: -

(a) the Supervisory Committee shall consist of at least 3 members.All members of theSupervisory Committee shall be subject to the prior approval of the SC. Thechairman of the Supervisory Committee shall be appointed by the members of theSupervisory Committee from among themselves. The Supervisory Committeemembers shall serve until their resignation or removal.

(b) (i) Subject to section (c) below, after the initial appointments to the SupervisoryCommittee, all further appointments shall be made by the Supervisory Committeeitself, by majority vote, on a basis to be determined by it.

(ii) A Supervisory Committee member may be removed and replaced with orwithout cause at any time by a majority of the members of the Supervisory

Status

IndependentIndependentIndependentNon-Independent

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Committee by notice to the relevant Supervisory Committee member.

(iii) A Supervisory Committee member may resign at any time by giving thirty (30)Business Days’ notice to the other members of the Supervisory Committee, theTrustee and the Manager.

(c) notwithstanding the above, if there are less than 3 members of the SupervisoryCommittee remaining at any time subject to the provisions of the Deed, the Managerwith the approval of theTrustee shall be entitled to appoint additional persons to bemembers of the Supervisory Committee.All members of the Supervisory Committeeshall be independent of theTrustee,the Manager and connected persons of both of them;

(d) the quorum for a meeting of the Supervisory Committee shall be the presence of nofewer than one half of its members (or their respective alternates) being not lessthan 2 in number and such quorum shall be present both at the commencement ofbusiness and also when such business is voted upon. Subject to the provisions insection (g) below, all resolutions of the Supervisory Committee shall be passed by asimple majority vote of the members (or their respective alternates) present orrepresented; provided that a quorum is present. In the event of a tie, the chairman ofthe Supervisory Committee shall have a second or casting vote.

(e) any member of the Supervisory Committee may at any time appoint a person to behis alternate for the purposes of participating in meetings of the SupervisoryCommittee and may at any time terminate such appointment.While so appointed analternate shall have all the rights, powers and privileges of his appointor.

(f) the Supervisory Committee shall meet whenever a matter under the Deed requiresthe Supervisory Committee’s approval, consent or agreement (and in any event itshall meet at least once annually).Any 1 member of the Supervisory Committee may,at any time, convene a meeting of the Supervisory Committee provided that not lessthan 2 Business Days’ notice of such meeting shall be given to all members of theSupervisory Committee (and their respective alternates).The Manager or theTrusteemay also, at any time, convene a meeting of the Supervisory Committee, providedthat not less than 7 Business Day’s notice of such meeting shall be given to allmembers of the Supervisory Committee (and their respective alternates). In eachcase such notice may be waived by all the members of the Supervisory Committee(and their respective alternates).

(g) the Supervisory Committee may dissolve itself permanently by resolution passed bynot less than 75% of all the members of the Supervisory Committee (and not theiralternates), and in which event: -

(i) any matter requiring the approval, consent or agreement of the SupervisoryCommittee shall not require its approval, consent or agreement;

(ii) there shall be no requirement to convene or hold meetings of the SupervisoryCommittee in accordance with the provisions of the Deed; and

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(iii) the Trustee and the Manager shall continue to manage and administer the Fundin accordance with the terms of the Deed as if all references to the SupervisoryCommittee had been removed and deleted from the Deed,

(2) The Supervisory Committee shall, subject to applicable laws: -

(a) oversee matters pertaining to the management and administration of the Fund;

(b) in connection with the management and administration of the Fund under and inaccordance with the terms of this Deed: -

(i) have the right to make recommendations to (but not without being under anyobligation to) the Manager on matters relating to strategic (but not day to day)issues related to the structure, management and administration of the Fund;

(ii) have the power to (but without being any obligation to) require the Manager toreport to the Supervisory Committee on any matter, act or thing pertaining totheir management or administration of the Fund, and in relation to the exerciseof any discretion by the Manager under and in accordance with the terms of thisDeed, including without limitation, in respect of the appointment or removal ofany Service Provider (as hereinafter defined) and the Manager’s current andfuture marketing plan; and

(iii) approve, consent or agree, direct or make recommendations to the Trusteeand/or the Manager on such other matters as are set out in this Deed requiringthe approval, consent or agreement of the Supervisory Committee or in respectof which the Supervisory Committee may direct or make recommendations tothe Trustee and/or the Manager;

(c) (i) have the power to recommend to the Manager that the Trustee be removed, inwhich case the Supervisory Committee shall give notice in writing to theManager that it wishes the Trustee to retire; and

(ii) upon receipt of such notice, the Manager shall give notice thereof to the SC; and

(iii) within 60 Business Days of its receipt of the Supervisory Committee’s notice,the Manager shall convene, a meeting of Unitholders for the purpose of proposinga special resolution to remove the Trustee and if a special resolution is so passed,theTrustee shall be removed in accordance with the provisions of the Deed;

(d) (i) have the power to recommend to the Trustee that the Manager be removed, inwhich case the Supervisory Committee shall give notice in writing to theTrusteethat it wishes the Manager to retire;

(ii) upon receipt of such notice, the Trustee shall give notice thereof to the SC; and

(iii) within 60 Business Days of its receipt of the Supervisory Committee’s notice,

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theTrustee shall convene, a meeting of Unitholders for the purpose of proposinga special resolution to remove the Manager and if a special resolution is so passed,the Trustee shall be removed in accordance with the provisions of the Deed.

(e) in relation to its duties set out in the Deed, have power to delegate to such personor persons as the Supervisory Committee considers appropriate and fit and properfor carrying out such duties provided that the Supervisory Committee shall retainoverall responsibility for such duties as may be delegated.The Supervisory Committeemay also instruct any attorneys, bankers, accountants, brokers, lawyers and otherprofessional persons as it sees fit.

(3) (i) The Supervisory Committee, and any member of the Supervisory Committee, shallbe entitled to give or refuse to give or abstain from giving its approval, consent oragreement to any such matter, and on such terms and subject to such conditions asit sees fit in its absolute discretion without being liable therefore provided that if anysuch refusal or abstention, is prejudicial to the interest of the Unitholders or wouldresult in a breach or non-compliance with applicable laws, the Manager and/orTrusteemay proceed without such approval, consent or agreement (as the case may be).

(ii) Members of the Supervisory Committee shall not be responsible or liable for anyact or failure to act or other omission of the Trustee or the Manager or any action,costs, claims, damages, expenses or liabilities which the Trustee, the Manager or anyUnitholder or any other person who may be interested in any Units may suffer orincur as a result of any act or failure to act or other omission or the giving or theirrefusal to give or abstention from giving their approval, consent or agreement to anymatter or for any advice, recommendation, direction, instruction or information givenor provided by the Supervisory Committee to the Trustee and/or the Manager.

(4) Subject to applicable laws,nothing in the Deed shall prevent any member of the SupervisoryCommittee from contracting or entering into any financial, investment, banking (includingforeign exchange), trustee, insurance, secretarial, joint venture or partnership or othertransaction of any kind whatsoever with,or from providing services of any kind to, the Fund,any Unitholder, any Fund Investment (as hereinafter defined), or any other person in anyfiduciary or other capacity (including for the avoidance of doubt acting as trustee in relationto any Fund Investment) or from being interested in any contract, transaction, joint ventureor partnership or from being a director or employee of or consultant to any FundInvestment (as hereinafter defined).Any member of the Supervisory Committee shall notbe liable to account for any profits or benefits made or derived from or in connection withany such contract, transaction, joint venture or partnership or other transaction. In thissection,“Fund Investment”means any company,person,partnership, joint venture, Fund,association, sovereign, state, government, government agency, body of persons or entity ofany kind whatsoever in which the assets in the Fund are, or are proposed to be, invested.

(5) The Trustee and Manager shall provide to each member of the Supervisory Committee(and their respective alternates) at least 2 Business Days before each meeting held inaccordance with the provisions of the Deed, and otherwise upon written request by theSupervisory Committee, a report which shall contain such information as the Supervisory

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Committee shall from time to time reasonably request but shall include (but not belimited to), in so far as the Trustee and/or the Manager are aware of them:-

(a) details of any material events or material changes relating to the management,operation and administration of the Fund; and

(b) details of any material breaches by the Trustee, the Manager or any of the Fund’sService Providers of the duties and responsibilities imposed on each of them under,as the case may be, the Deed or any of the agreement(s) relating to theTrust to whichthey are a party.

(6) In the event that there is no member appointed to/remaining in the SupervisoryCommittee for a continuous period of 1 month or more, notwithstanding the other termsof the Deed: -

(a) any matter requiring the approval, consent or agreement of the SupervisoryCommittee shall not require its approval, consent or agreement;

(b) there shall be no requirement to convene or hold meetings of the SupervisoryCommittee in accordance with the provisions of the Deed; and

(c) the Trustee and the Manager shall continue to manage and administer the Fund inaccordance with the terms of the Deed as if all references to the SupervisoryCommittee had been removed and deleted from the Deed, until such time as at least3 members/new members are appointed to the Supervisory Committee inaccordance with the provisions of the Deed.

(7) For the purposes of this section, “Service Provider” means any person appointed by theTrustee and/or the Manager (as the case may be) to provide services to or for the purposesof the Fund and includes any person to whom the provision of such services is delegated,and shall include, but not be limited to, Participating Dealers and any custodian of theinvestments comprising assets of the Fund.

8.8 Material litigation

As at the Latest Practicable Date, the Manager is not engaged in any material litigation and ar-bitration, including those pending or threatened, and there are no facts likely to give rise to anyproceedings which might materially affect the business or financial position of the Manager.

8.9 Customer identification program

Pursuant to the relevant laws of Malaysia on anti-money laundering,we have an obligation to pre-vent the use of the Fund for money laundering purposes.As such, a procedure for identificationof investors has been imposed. In relation to any CreationApplication, the Manager requires theapplicants to provide their names, date of birth, national registration identity number, residen-tial and business address, (and mailing address if different), name of beneficial owner, address ofbeneficiary, national registration identity card number of beneficiary, date of birth of beneficiary

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or other official identification when the applicants open or reopen an account.

Additional information may be required by the regulatory authorities in certain situations.Ap-plications without such information may not be accepted and the application amount shall be re-turned to the applicant.To the extent permitted by applicable laws, the Manager reserves theright to place limits on transactions in the applicants’ accounts until their identity is verified.

In the event of any breaches to the applicable laws,we have a duty to notify the relevant authorityon the said breaches.

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THE INVESTMENT MANAGER

9.1 Corporate information

The Investment Manager, AmInvestment Management Sdn Bhd was incorporated in Malaysiaunder the Companies Act, 1965 on 12 March 1996. Its authorised share capital is RM5,000,000comprising 5,000,000 ordinary shares of RM1.00 each while its issued and paid-up share capitalas at 31 May 2009 was RM2,000,000 comprising 2,000,000 ordinary shares of RM1.00 each. Itsregistered office is at 22nd Floor, Bangunan AmBank Group, 55 Jalan Raja Chulan, 50200 KualaLumpur.

AmInvestment Management Sdn Bhd is a fund manager licensed by the SC on 4 March 1997. Ithas more than 10 years experience in providing fund management and investment advisory serv-ices particularly in Malaysian cash and fixed income securities, Malaysian equities and Islamic in-vestments.

As at the Latest Practicable Date,AmInvestment Management Sdn Bhd managed 89 private fundsand 46 unit trust funds with total funds valued at approximately RM16.3 billion backed with 74staff of whom 63 were executive staff and 11 were non-executive staff.

9.2 Duties and responsibilities

The Investment Manager will set the strategic direction and risk management policies of theFund.The Investment Manager will generally carry out investment and advisory activities in re-lation to the Fund Assets in accordance with the provisions of the Deed.

The general functions, duties and responsibilities of the Investment Manager include, but are notlimited to, the following: -

(a) To manage the Fund’s assets and liabilities for the benefit of Unitholders;

(b) To be responsible for the day-to-day management of the Fund;

(c) To carry out the activities in relation to the assets of the Fund in accordance with theprovisions of the Deed;

(d) To set the strategic direction of the Fund in respect of investments and giverecommendations to the Manager on the acquisition, divestment or enhancement ofassets of the Fund in accordance with its stated investment strategy;

(e) To use its best endeavours to carry on and conduct its business in a proper and efficientmanner and to ensure that the Fund is carried on and conducted in a proper and efficientmanner and to conduct all transactions with or for the Fund at arm’s length;

(f) To monitor the performance of the Fund’s portfolio on a regular basis, which maycontain proposals and forecasts on net income, capital expenditure, sales and valuations,explanations of major variance to previous forecasts, written commentary on key issuesand underlying assumptions; and

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(g) To ensure that the Fund is managed within the ambit of the Deed, the CMSA, the securitieslaws and the relevant guidelines at all times.

9.3 Directors and key personnel

BOARD OF DIRECTORS

The following table sets forth information regarding the Board of Directors of the InvestmentManager:-

Name

Cheah Tek KuangKok Tuck CheongDatin Maznah MahbobAshok RamamurthyYvonne Phe Kheng Peng

KEY PERSONNEL

The following table sets forth information regarding the key personnel of the Investment Manager:-

Name

Datin Maznah Bt. MahbobAndrew WongYoke LeongNancy ChowYuenYuenGoh Wee PengGomathy NambiarHoe Cheah HowCheah G-KhuenAbdul Razak MamatQuah Su-Yin

PROFILE OF DIRECTORS

The profiles of Mr KokTuck Cheong and Datin Maznah Mahbob are set out in Section 10.5 above.

CheahTek Kuang is a non-independent non-executive director ofAmInvestment Group Berhad.Currently he is also the Group Managing Director of AMMB Holdings Berhad.

Mr. Cheah joined AmMerchant Bank (now known as AmInvestment Bank) in 1978 and served inthe then Banking and Corporate Finance Department from October 1978 till May 1983. He wasthen named as one of the three Senior General Managers ofAmMerchant Bank.He was re-desig-nated to a non-executive director onApril 2005 and assumed the position of Group Managing Di-rector of AMMB Holdings Berhad.

Status

Non-IndependentNon-IndependentChief Executive Officer/Executive DirectorNon-IndependentNon-Independent

Status

Chief Executive Officer/Executive DirectorChief Investment Officer of EquitiesDirector, Marketing and Product DevelopmentHead, Fixed IncomeEconomistFund Manager, Fixed IncomeDirector, Investment Solutions InstitutionalDirector, Investment Solutions-IslamicHead, Institutional Funds Services

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Mr. Cheah has been actively involved in various aspects of the development of AmInvestmentBank as well asAMMB Holdings Berhad Group generally.As one of the senior management team,Mr. Cheah was involved in the growth of AmInvestment Bank, subsequent to its acquisition byTan Sri Dato’ Azman Hashim in 1982, from being the ‘youngest’ merchant bank to being one ofthe largest investment banks today. Mr. Cheah has a Bachelor of Economics (Honours) degreefrom the University of Malaya and is a Fellow of Institute of Bankers Malaysia. Prior to joiningAmInvestment Bank,he served in the Malaysian Industrial DevelopmentAuthority.Mr.Cheah alsohas directorships in the subsidiary companies of AMMB Holdings Berhad including AMFB Hold-ings Berhad,AmBank (M) Berhad andAmBank Berhad. In addition,Mr.Cheah is currently a boardmember of the Employees Provident Fund and Bursa Malaysia Berhad.

Ashok Ramamurthy an Australian, is a non-independent non-executive director of AmIn-vestment Management Sdn Bhd. He was appointed to the Board of AmBank on 18 November2008. He is currently the Group Chief Financial Officer and the Deputy Group Managing Di-rector of AHB.The Group CFO of AMMB is accountable for the delivery of superior financialperformance to meet all financial regulatory reporting requirements.The Deputy Group Man-aging Director is the Senior ANZ representative in AmBank Group and accountable for build-ing enduring relationships between “Partners”.This is a key role representing ANZ interests asa Director of the Board and various sub-committees of the Board of the major AmBank Groupsubsidiaries.MrAshok has over 25 years of experience,most of which has been withANZ acrossmultiple geographies including Australia, New Zealand and India. His most recent role prior tojoining AmBank, was a Director of Operations and Shared Services in which he helped set up a“Global Offshoring Hub” for ANZ India. He has also held a number of senior ANZ Banking,strategy, transformation and finance files over the last 15 years, including as the senior CFO orCOO for some of the largest Divisions/Businesses withinANZ including Personal Banking,Bank-ing Products,Wealth Management, Funds Management and Insurance, Markets and NZ Division.Mr Ashok holds a Bachelor of Commerce (Accounting) and Master in Business Administration(Finance) from leading institutions in India.

Yvonne Phe Kheng Peng is a non-independent non-executive director ofAmInvestment Man-agement Sdn Bhd. Currently she is also the Co-head,Treasury & Markets,AmBank (M) Berhad.She has been in the fund management industry since 1996 and has wide experience in manag-ing money market, fixed income and capital stable portfolios. She holds a Bachelors of Commerce(Accounting and Finance) from University of New South Wales,Australia.

PROFILE OF KEY PERSONNEL

The profile of Datin Maznah Mahbob is set out in Section 8.5, above.

AndrewWongYoke Leong is the Chief Investment Officer of Equities. He is the designatedperson responsible for the investment management of all equities funds managed byAIM.His du-ties included formulating strategies to optimize returns for the funds within the risk frameworkrequired including asset allocation. Prior to his present appointment he was the Head of In-vestment Division (Equities and Fixed Income) at a regional insurance company.He holds a Mas-ter of BusinessAdministration from University of Oklahoma City,USA and an Engineering degreefrom National University of Singapore. He also holds the Capital Markets Services Representa-tive Licence.

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Nancy ChowYuenYuen is the Director of Marketing and Product Development and is re-sponsible for marketing, communications and branding for Funds Management Division (FMD).She is also responsible for FMD strategic business which involves the development of strategicproducts, domestic and foreign ventures. She has 17 years experience in dealing, sales and mar-keting of treasury and financial products and funds. Prior to joining the company, she was the pi-oneer Head of Treasury (northern region) of AmInvestment Bank. She holds a Bachelor ofCommerce degree from the University of New SouthWales, Sydney. She also holds the CapitalMarkets Services Representative License.

GohWee Peng is the Head of Fixed Income, Senior Fund Manager and the designated personresponsible for the investment management of the Fund and all domestic fixed income funds. Shestarted her career in financial industry since 1997. She has vast experience in financial industryin different role, i.e.money broking, analyst, fixed income bond trading and fund management. Shejoined AIM in 2002.Her career path begin to blossom when she put her foot in the company asanalyst cum fund manager under the guidance of the current CIO of Fixed Income,Yvonne Phe.In the past 6 years in AIM, she has been managing various fixed income funds, i.e. unit trust andinstitutional mandate. She is responsible in over seeing the domestic fixed income mandate guid-ing a team of fund managers. Her key role including formulating trading and investment strate-gies for the team by identifying opportunity in different market trend. Other then preparingclients reports, she presents to the clients market outlook and strategies for the portfolio onthe regular basis. She also holds the Capital Markets Services Representative License.

Gomathy Nambiar is the Economist whose primary responsibility involves presenting theglobal and domestic economic outlook against a backdrop of risk and uncertainties to the Port-folio Strategy Committee on a monthly basis. She has over 20 years of work experience and hasbeen involved in the analysis of domestic and regional economic policies over a large part of hercareer with public and private sector. She holds a Bachelor in Economics (Hons) from Univer-sity Malaya and Master’s in Development Economics from Williams College, Massachusetts anda Master’s in Demography from University of Pennsylvania.

Hoe Cheah How is a Fixed Income Fund Manager. He manages fixed income unit trust fundsand institutional clients' portfolios. He also assists in the formulation of trading and investmentstrategies for fixed income portfolios. His key responsibilities are preparing periodic reports toclients on funds' performances, interest rate trend and local bond market activities and makingrecommendations on trading or investment strategies. He also conducts credit analysis and re-views on bond issuing companies.He performs company visits at regular basis ond produces fol-low-up reports. He holds a Bachelor of Commerce in Finance (1st Class Honours) from CurtinUniversity of Technology,Australia. He is a qualified CFA charterholder. He also holds the Cap-ital Markets Services Representative Licence.

Cheah G-Khuen is the Director Investment Solution - Institutional and is responsible for thebusiness growth of the institutional fund management business. He holds a Bachelor of Eco-nomics degree from Monash University. He has 20 years experience in the funds managementindustry. He also holds the Capital Markets Services Representative License.

Abdul Razak Mamat is Director Investment Solution - Islamic and is responsible for the busi-ness growth of the institutional fund management business particularly the Islamic Market. He

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holds a Bachelor of Arts degree in Accounting and Finance from the University of East London,United Kingdom. He has 20 years experience in the fund management industry. He also holdsthe Capital Markets Services Representative License.

Quah Su-Yin is the Head of Institutional Fund Services. She is responsible for client servicingfor existing institutional clients and servicing all institutional funds channels. She also acts as a li-aison with lawyers on matters relating to the portfolio management agreements and investmentmandates. She holds a Bachelor of Laws and Economics degree from University of Adelaide Aus-tralia and a Master’s of Business Administration (Australian Graduate School of Management)from the University of New South Wales and the University of Sydney Australia. She also holdsthe Capital Markets Services Representative License.

9.4 Material litigation

As at the Latest Practicable Date, the Investment Manager is not engaged in any material litiga-tion and arbitration, including those pending or threatened, and there are no facts likely to giverise to any proceedings which might materially affect the business or financial position of the In-vestment Manager.

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THE TRUSTEE

10.1 Trustee

TheTrustee is HSBC (Malaysia)Trustee Berhad (Company No.1281-T), a company incorporatedin Malaysia since 1937 and registered as a trust company under the Trust Companies Act 1949,with its registered address at Suite 901, 9th Floor,Wisma Hamzah-Kwong Hing, No.1 Lebuh Am-pang, 50100 Kuala Lumpur.TheTrustee is a member of the HSBC Holdings Plc. group of compa-nies and forms part of the global network of trust companies within HSBC Holdings Plc.

10.2 Financial Position

The Trustee has a paid-up capital of RM500,000.00.As at 31 December 2008, its shareholders’funds totalled RM14.35 million and it achieved a profit before tax of RM10.47 million.

The following is a summary of the past performance of theTrustee based on audited accounts forthe last three years:

Paid-up Share CapitalShareholders’ FundsTurnoverProfit before TaxProfit after Tax

10.3 Experience inTrustee Business

Since 1993, theTrustee has acquired experience in the administration of unit trusts and as at theLatest Practicable Date is theTrustee for 187 unit trust funds including 2 ETFs and 5 wholesalefunds.

As at Latest Practicable Date, theTrustee has a workforce of 48 employees consisting of 34 ex-ecutives and 14 non-executives.A good number of the staff has been with theTrustee for manyyears.This element of continuity reflects an intrinsic characteristic of trust services.TheTrusteealso believes in building team and talents by recruiting new members with relevant experiencesto replace the long serving retired colleagues.

Each client’s account is under the supervision of a trust officer who is able to focus his personalattention on the administration of the account and reports directly to his immediate manager.

TheTrustee also has a Compliance Section whose responsibilities is to ensure that theTrustee’sbusiness is carried on in accordance with all relevant laws, codes, rules and standards of goodmarket practice.

Year Ended 31 December2008

RM (‘000)

50014,35317,84410,4717,755

2007RM (‘000)

5006,598

16,9119,1656,442

2006RM (‘000)

5005,196

12,7056,1674,707

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10.4 Directors and key personnel

BOARD OF DIRECTORS

The following table sets forth information regarding the Board of Directors of the Trustee:-

Names of DirectorsMr Jonathan William AddisMs Lim Liang HuaDato’ Ranita Mohd HusseinMs Zainon BabaMr Alastair E MurrayMr Tay Shik HengMr Tay Swee Gim (Alternate to Ms Lim Liang Hua)Ms Hew Su Chan (Alternate to Mr Tay Shik Heng)Ms Wong Su Kuin (Alternate to Mr Alastair E Murray)

KEY PERSONNEL

The following table sets forth information regarding the key personnel of the Trustee:-

Name

Lim Liang HuaYeeYit SeengMaziahYongLim Gim LeeLeong LiYimLau SookYeeJanice Chang Hui ChingYap Fook MengJuliet Soon Boon Leng

PROFILE OF KEY PERSONNEL

Lim Liang Hua, Managing Director, joined HSBC (Malaysia) Trustee Berhad in April 2004 andbrings with her over 20 years of legal advisory and problem solving skills in the banking and fi-nancial services industry. She holds a Bachelor of Economics and Bachelor of Laws (LLB) fromMonash University,Australia. She was admitted to practice as a Barrister & Solicitor inVictoria,Australia in 1984 and was called to the Malaysian Bar in 1985. She was in private practice forthree years in the Klang Valley before joining the corporate sector, namely the banking and fi-nancial institutions industry. She was the Chief Legal Adviser and Company Secretary for thePhileo Allied Bank Group and the United Overseas Bank Group in Malaysia. Prior to her join-ing HSBC, she was Chief Executive Officer in an established trust company.

Status

Managing DirectorManager OperationsHead, Unit TrustHead, Fund AdministrationHead, Business SupportHead, Compliance, Control and Internal AuditHead, Corporate TrustHead, System & AdminHead, Documentation

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YeeYit Seeng, Operations, Manager, joined HSBC (Malaysia) Trustee Berhad in July 1984. Heholds a Diploma in Banking and Finance and is a SeniorAssociate of Institut Bank-Bank Malaysia.He has more than 22 years of experience in trust operations including client service, sys-tems/projects & office administration, compliance, internal control & audit, and business devel-opment. He was also seconded to the HSBC Back-end Processing Office in Cyberjaya, Malaysiato support the global securities operations.

MaziahYong, Head, UnitTrust, joined HSBC (Malaysia)Trustee Berhad in November 2007. Sheholds an Advanced Diploma In Law from Institut Teknologi MARA. Prior to her joining HSBC,she has more than 15 years working experience in trust administration, especially relating to unittrust schemes.

Lim Gim Lee, Head, Fund Administration, joined HSBC (Malaysia) Trustee Berhad in Decem-ber 2008. She holds an Advanced Diploma in Business Administration - Institute of Business Ad-ministration and Management (IBAM). She was one of the pioneer staff in setting up two unittrust management companies and has more than 13 years working experience in the unit trustindustry.

Leong LiYim, Head, Business Support, joined HSBC (Malaysia) Trustee Berhad in December2007. She holds a Diploma in Banking and Finance of Institut Bank-Bank Malaysia and a Diplomain Business Management from The Association of Business Executives. She has more than 17years experience in securities industry, including overseeing the settlement operations for for-eign institutional clients, retail clients margin financing, systems implementation and being the li-aison party with regulatory bodies, like Bursa Malaysia. Prior to her joining HSBC Trustee, shewas Head of Settlement, HSBC Securities Services in Malaysia.

Lau SookYee, Head, Compliance, Internal Control and Audit, joined HSBC (Malaysia) TrusteeBerhad in September 2005. She has more than 20 years experience in banking and treasury op-erations in both merchant and commercial banks.

Janice Chang Hui Ching, Head, Corporate Trust, joined HSBC (Malaysia) Trustee Berhad inNovember 2004. She holds a Bachelor of Business majoring in Economics & Finance from RMITUniversity,Australia. Prior to her joining HSBC, she has more than 7 years experience in UnitTrust Schemes and Corporate Bonds/Private Debt Securities in an established trust company.

Yap Fook Meng, Head, System & Admin, joined HSBC (Malaysia) Trustee Berhad in August2007. He holds a Diploma in Banking and Finance and is a Senior Associate of Institut Bank-Bank Malaysia. He has more than 25 years experience in banking operations, including systemsimplementation and support with HSBC Bank Malaysia Berhad. Besides local banking experi-ence, he had been seconded to other HSBC Group offices in United Kingdom and Brazil for sys-tems implementation and support.

Juliet Soon Boon Leng, Head, Documentation, joined HSBC (Malaysia) Trustee Berhad inJune 2008. She holds a Bachelor of Laws (LLB) from University of Glamorgan,Wales and wascalled to the Malaysian Bar in 2001. She was in private practice for more than 3 years, handlingmostly banking and financial documentation. Prior to her joining HSBC, she was Manager, Legal& Documentation in an investment bank.

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10.5 Duties and responsibilities of theTrustee

TheTrustee’s main functions are to act as trustee and custodian of the assets of the Fund and tosafeguard the interests of Unit Holders of the Fund. In performing these functions, theTrustee hasto exercise all due care and vigilance and is required to act in accordance with the provisions ofthe Deed,Capital Markets and ServicesAct 2007 and the Securities Commission’s Guidelines onUnit Trust Funds.Apart from being the legal owner of the Fund’s assets, the Trustee is also re-sponsible for ensuring that the Manager performs its duties and obligations in accordance withthe provisions of the Deed, Capital Markets and Services Act 2007 and the Guidelines.

10.6 Retirement or Removal or Replacement of theTrustee

TheTrustee may retire upon giving six (6) months’ notice to the Manager of its desire to do so,or such shorter period as the Manager and the Trustee may agree, and may by Deed appoint inits stead or as an additional trustee a new trustee approved by the relevant authorities andunder any relevant law.

TheTrustee may be removed and another trustee may be appointed by Special Resolution of theUnit Holders at a duly convened meeting of which notice has been given to the Unit Holdersin accordance with the Deed.

10.7 Power ofTrustee to Remove, Retire or Replace the Manager

The Manager may be removed by the Trustee on the grounds that the Manager:

(a) the Manager has gone into liquidation, except for the purpose of amalgamation orreconstruction or some similar purpose; or has had a receiver appointed; or has ceasedto carry on business; or is in breach of any of its obligations or duties under the Deedor the relevant laws; or has ceased to be eligible to be a management company underrelevant laws; or

or

(b) the Manager has failed or neglected to carry out its duties to the satisfaction of theTrusteeand the Trustee considers that it would be in the interests of Unitholders for it to do soafter the Trustee has given notice to it of that opinion and the reasons for that opinion,and has considered any representations made by the Manager in respect of that opinion,and after consultation with the relevant authorities and with the approval of Unitholdersby way of a Special Resolution.

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10.8 Trustee’s statement of responsibility

The Trustee has given its willingness to assume the position as Trustee of the Fund and all theobligations in accordance with the Deed, all relevant laws and rules of law.

10.9 Trustee’s Disclosure of material litigation

As at 31 May 2009, the Trustee is not engaged in any material litigation and arbitration, includ-ing those pending or threatened, and there are no facts likely to give rise to any proceedingswhich might materially affect the business or financial position of theTrustee and any of its del-egates.

10.10 Trustee’s delegate

The Trustee has appointed The Hongkong And Shanghai Banking Corporation Ltd as custodianof the quoted and unquoted local investments of the Fund.The assets of the Fund are heldthrough their nominee company, HSBC Nominees (Tempatan) Sdn Bhd. If and when the Fundshould invest overseas,HSBC InstitutionalTrust Services (Asia) Limited will be appointed as thecustodian of the foreign assets of the Fund. Both The Hongkong And Shanghai Banking Corpo-ration Ltd and HSBC Institutional Trust Services (Asia) Limited are wholly owned subsidiariesof HSBC Holdings Plc, the holding company of the HSBC Group.The custodian’s comprehen-sive custody and clearing services cover traditional settlement processing and safekeeping aswell as corporate related services including cash and security reporting, income collection andcorporate events processing.All investments are automatically registered into the name of theFund.The custodian acts only in accordance with instructions from the Trustee.

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SALIENT TERMS OF THE DEED

The Deed is a complex document and the following is a summary only. Investors should refer to theDeed itself to confirm specific information or for a detailed understanding of the Fund.The Deed is avail-able for inspection at the registered office of the Manager.

The Deed dated 12 July 2005 had been entered into between AmInvestment Services Berhad as theManager, HSBCTrustee as theTrustee of the Fund and the Unitholders.The Fund is constituted by theDeed and regulated primarily by the CMSA and the SC’s Guidelines on Exchange Traded Funds. Sub-sequently, a Supplementary Deed dated 20 June 2007 had been entered into among AIS, as the Man-ager, HSBC (Malaysia) Trustee Berhad, as the Trustee of the Fund and the Holders of Units.The Deeddated 12 July 2005 and the Supplementary Deed dated 20 June 2007 shall collectively be referred toas the Deed.The terms and conditions of the Deed and of any deed supplemental thereto are bindingon each Unitholder as if he had: -

(a) been a party to and had executed this Deed and any such supplemental deed;

(b) thereby covenanted for himself and for all such persons to observe and be bound by all theprovisions thereof; and

(c) thereby authorised the Trustee and the Manager respectively to do all such acts and things as thisDeed or any such supplemental deed may require.

11.1 The Deed

Some of the more important provisions of the Deed have been summarised in this Prospectus.

The Deed describes how a Fund is to operate and sets out the rights and liabilities of aUnitholder and the duties and obligations of the Manager and the Trustee.

11.2 Altering the Deed

The Manager and the Trustee may alter the Deed in the future in certain circumstances speci-fied in the Deed and securities laws.Unless theTrustee believes that the amendments proposedwill not materially prejudice the rights of Unitholders, the amendments can only be made if ap-proved by a special resolution passed at a meeting of Unitholders.The SC may also at its dis-cretion, require changes to be made to a Deed.

11.3 Rights and Limitations of Holders

An investor is deemed to be a Unitholder:-(i) when Units are issued to them pursuant to a Creation Application; or(ii) when investors purchase Units from the Main Board of Bursa Securities.

Each Unit held in the Fund entitles you to an equal and proportionate beneficial interest in theFund.However, you do not own or have a right to any particular asset held by the Fund and can-not participate in management decisions except in very limited circumstances as set out in theDeed.

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You have the right to: -

(i) Receive income distribution (if any);

(ii) Sell your Units;

(iii) Call, attend and vote at meetings (the rules governing the holding of meetings are setout in the Deed); and

(iv) Receive annual and interim reports of the Fund.

11.4 Liabilities of the Holders

The Deed limits your liability to the value of your investments in the Fund.Accordingly, if theFund's liabilities exceed its assets, no Unitholder,will be personally liable to indemnify theTrusteeor the Manager or any of their respective creditors.

11.5 Fees and Charges Permitted by the Deed

(a) Management fees

The amount of the Manager’s Fee chargeable to the Fund shall not exceed a maximum ofone percent (1%) per annum of the NAV of the Fund as stipulated in Section 21(2) of theDeed.The current level of the Manager’s Fee shall be stated in the Prospectus and theManager’s Fee shall not be higher than that disclosed in the Prospectus unless: -

(i) the Manager has obtained the prior written approval of theTrustee and the SupervisoryCommittee (if applicable);

(ii) the Manager has notified the Holders of the higher rate and its effective date;(iii) a supplementary prospectus stating the higher rate of the annual Manager’s Fee is

issued thereafter; and(iv) ninety (90) days have elapsed since the effective date of the supplementary prospectus.

(b) Trustee fees

The amount of the Trustee’s Fee chargeable to the Fund shall not exceed a maximum ofpoint five percent (0.5%) per annum of the NAV of the Fund as stipulated in Section 21(4)of the Deed.The current level of theTrustee’s Fee shall be stated in the Prospectus and theTrustee’s Fee shall not be higher than that disclosed in the Prospectus unless: -

(i) the Trustee has obtained prior written approval of the Manager;(ii) the Manager has notified the Holders of the higher rate and its effective date;(iii) a supplementary prospectus stating the higher rate of the annual Trustee’s Fee is

issued thereafter; and(iv) ninety (90) days have elapsed since the effective date of the supplementary prospectus.

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(c) Other Fees and Charges

TheTrustee and the Manager shall be entitled to pay the following fees, costs and expensesfrom the Fund Assets to extent they have been incurred in relation to the Fund:-

� any costs, fees and expenses to be paid under any licence and data supply contractsin relation to the Index Licensor entered into by the Trustee and/or the Manager inrespect of the Trust;

� the processing or handling fees levied by any person for rendering services to effectany acquisition, disposal or any other dealings whatsoever in the Fund Assets and anyexpenses in relation thereto including commissions/fees paid to brokers and/or dealersin effecting dealings in the Investments of theTrust;

� all professional fees relating to the agreeing and/or contesting of taxation, liabilities orrecoveries to be discharged out of or paid into the Trust;

� all fees, charges, expenses and disbursements of any legal adviser or counsel,accountant, auditor, investment adviser, valuer, broker, banker, tax adviser, computerexpert or other professional advisers employed or engaged by the Trustee or theManager in the establishment of the Trust, in maintaining, preserving and protectingthe Fund Assets and in the ongoing performance of their respective duties andobligations under this Deed;

� all fees, charges, expenses and disbursements incurred in relation to the safe-custody,acquisition, holding, registration, realisation of or other dealing with any Investmentor the holding of any Investment or the custody of the documents of title thereto(including insurance of documents of title against loss in shipment, transit orotherwise and charges made by agents of theTrustee for retaining documents in safecustody), any applicable fees and expenses of the Custodian, joint-custodian and/orsub-custodian appointed pursuant to the provisions of this Deed and all transactionalfees as may be agreed from time to time between the Manager and the Trustee inrelation to all transactions involving the whole or any part of the Deposited Property;

� all charges and expenses incurred for any meeting of Holders other than convenedby and for the benefit of the Manager and the Trustee;

� the fees and expenses incurred by the Manager and the Trustee in obtaining and/ormaintaining the listing and quotation of the Units on Bursa Securities, and/or theauthorisation or other official approval or sanction of theTrust under the Act or anyother relevant law or regulation;

� the fees and expenses incurred in connection with depositing and holding Units withthe Depository and the Clearing House (and in any other securities depository orclearing system);

� all charges, costs and expenses incurred by the Manager and the Trustee in respectof and/or in connection with the maintenance of a website or webpages (as the casemay be) dedicated entirely to theTrust and communications with and/or notificationto the Holders, the Registrar and/or any relevant authoritiesincluding notificationsmade in relation to the Trust in Bursa Securities, newspaper(s) in Malaysia and suchother forms of communication permitted/acceptable under the Guidelines and as theManager may from time to time determine;

� all fees, costs and expenses incurred in respect of distributing, lodging and registeringthe first Prospectus;

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� all fees, costs and expenses incurred in respect of preparing any deeds supplementalto this Deed and in respect of preparing any agreement in connection with theTrustother than those for the benefit of the Manager or the Trustee;

� all costs incurred in respect of the preparation, publication and distribution of theaudited accounts and unaudited semi-annual accounts and of all cheques, statements,notices and other documents relating to the Trust;

� all fees and expenses properly incurred by the Auditor in connection with theTrust;� all fees and expenses incurred in connection with the removal of the Manager, the

Trustee or the Auditor or the appointment of a new manager, a new trustee or newauditor;

� all expenses incurred in the collection of Income (including expenses incurred inobtaining tax repayments or relief and agreements of tax liabilities) or thedetermination of taxation;

� all expenses associated with the distributions declared pursuant to this Deed includingwithout limitation fees for the revalidation or reissuance of any distribution chequeor warrant or telegraphic transfer;

� all fees and expenses incurred by the Manager and the Trustee in winding-up andterminating the Trust;

� fees for the valuation of theTrust by independent valuers for the benefit of theTrust;� all fees and expenses of the independent members of the Investment Committee and

the out-of-pocket expenses of the Supervisory Committee; and� such other charges, costs, expenses and disbursements as permitted under the

applicable laws which the Trustee is entitled to charge to the Trust.

11.6 Removal, replacement and retirement of management company andTrustee

Retirement and removal of the Manager

The Manager may retire from the management of the Trust upon giving to the Trustee six (6)month's notice in writing of its desire to do so or such lesser time as the Manager and Trusteeagree upon.

The Manager covenants that it will retire from the management of the Trust when required todo so by the trustee by notice in writing if:-

i) the Manager goes into liquidation or provisional liquidation (except for the purpose ofamalgamation or reconstruction or some similar purpose) or is placed under officialmanagement or ceases to carry on business or if a receiver, or a receiver and manager isappointed in relation to the property of the Manager and is not removed or withdrawnwithin thirty (30) days of the appointment;

ii) the Manager has contravened its obligations to the Holders in a manner that, in thereasonable opinion of theTrustee, adversely affects those Holders and, within such periodas is specified by theTrustee in a written notice to the Manager, the contravention(s) havenot been remedied;

iii) the Holders by Special Resolution resolve that the Manager must be removed; or

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iv) the approval of the Manager to act under provisions of the Act and the regulations isrevoked.

Retirement and removal ofTrustee

The Trustee may retire as Trustee of the Trust upon giving six(6) months notice in writing to theManager or such lesser period of notice as the Manager and theTrustee agree upon.

TheTrustee covenants, subject to the provisions of the Act and the regulations thereunder, that itwill retire from theTrust if and when required to do so by the manager by notice in writing if:-

i) the Trustee goes into liquidation or provisional liquidation (except for the purpose ofamalgamation or reconstruction or some similar purpose) or is placed under officialmanagement or ceases to carry on business or if a receiver, or receiver and manager, isappointed in relation to all or substantially all of the property of the Trustee and is notremoved or withdrawn within thirty (30) days of the appointment;

ii) the approval of the Trustee to act under provisions of the Act and the regulations isrevoked;

iii) the Holders by Special Resolution resolve that the Trustee should be removed; or

iv) the Trustee has contravened its obligation to the Holders in a manner that, in thereasonable opinion of the Manager, adversely affects those Holders and,within such periodas is specified by the Manager in a written notice to theTrustee, the contravention(s) havenot been remedied.

11.7 Termination of theTrust

(1) TheTrust shall be deemed to have commenced on the date of this Deed and shall continueuntil determined by the Trustee under the provisions hereinafter contained.

(2) Notwithstanding the termination of the Trust, the Holder of any Unit in respect of whichany amount remains unpaid shall remain liable for such amount until payment to thatHolder by the Trustee of the final distribution to be made in accordance with the Deed.

(3) The Trust may be terminated by the Trustee, with the approval of the Manager and theSupervisory Committee (except in the case of Clause 33(3)(f) by notice in writing ashereinafter provided in any of the following events, namely:-

(a) if it becomes illegal or in the opinion of the Trustee impossible or impracticable tocontinue the Trust;

(b) if the Trust shall become liable to taxation (whether in Malaysia or elsewhere) inrespect of income or capital gains at a rate considered by the Manager to beexcessive in relation to the rate which would be borne by the Holders if they owneddirectly the Index Securities in question;

(c) if the Units cease to be listed on the Bursa Securities;

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(d) if the Trust ceases to be authorised under the Act;(e) if the Licence Agreement is terminated and new Licence Agreement relating to the

Relevant Index is not entered into by the Trustee and the Manager;(f) if the Manager goes into liquidation (other than voluntary liquidation for the purpose

of reconstruction or amalgamation upon terms previously approved in writing by theTrustee) or shall be adjudge a bankrupt or insolvent or appoints liquidators or if areceiver shall be appointed in respect of the property or undertaking of the Manageror any part thereof or the Manager is the subject of any analogous proceedings orprocedure in each case under the law of Malaysia or such other law as may beapplicable in the circumstances where, after the expiration of a period of three (3)months, the Trustee has not appointed a new Manager; or

(g) if on the expiration of three (3) months after notifying the Manager that in theTrustee’s opinion a change of Manager is desirable in the interests of the Holders andthe trustee has not found another company ready to accept the office of Manager ofthe Trust of which the Trustee and SC shall approve.

The decision of the Trustee and the Manager in any of the events specified in this Clause33 (with the exception of Clause 33(3)(f)) shall be final and binding upon all parties con-cerned but the Trustee and the Manager shall be under no liability on account of any fail-ure to terminate the Trust.

(4) The Trustee shall give written notice of termination of the Trust to the Holders andParticipants in the manner herein provided and shall by notice fix the date at which suchtermination is to take effect, which date shall not be less than three (3) months after theservice of such notice (except where the Trust is terminated by reason that it is illegal tocontinue in accordance with Clause 33(3)(a) in which case termination may take effectforthwith without any prior notice to Holders or Participants).

(5) The Trust may be terminated at any time by Special Resolution of the Holders and suchtermination shall take effect from date on which such Special Resolution is passed or suchlater date (if any) as the Special Resolution may provide.

11.8 Unitholders Meeting

The Second Schedule Item 5 of the Deed stipulates that at any meeting at least (5) Holderspresent in person or by proxy registered as holding ten percent (10%) of the Units for the timebeing in issue shall form a quorum for the transaction of business except for the purpose of pass-ing a Special Resolution.The quorum for passing a Special Resolution shall be at least five (5)Holders present in person or by proxy registered as holding not less than fifteen percent (15%)of the Units in issue. No business shall be transacted at any meeting unless the requisite quo-rum is present at the commencement of business.

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OTHER INFORMATION

12. RELATED PARTYTRANSACTION

Neither theTrustee nor the Manager may act as principal to buy or sell investments from or totheTrustee for the account of the Fund or otherwise deal as principal with the Fund. However,with the prior written consent of the Trustee, any connected person of the Manager may dealas agent or principal in the sale or purchase of securities and other investments to or from theFund. There will be no obligation on the part of such connected person to account to the Fundor to Unitholders for any benefits so arising and any such benefits may be retained by the rele-vant party, provided that such transactions are entered into on an arm's length basis and at thebest price available to the Fund having regard to the kind, size and time of the transaction.

Any cash of the Fund may be deposited with any connected person of the Trustee or Manageror invested in certificates of deposit or banking investments issued by any such connected per-son provided that interest received on any such deposits or banking instruments shall be keptat a rate not lower than the prevailing commercial rate for a deposit of that size and term. Bank-ing or similar transactions may also be undertaken with or through a connected person.

With the prior written consent of theTrustee, the Manager may effect transactions by or throughthe agency of another person for the account of the Fund with whom the Manager or any of itsconnected persons have an arrangement for the supply of goods, services or other benefits.

Where the Manager or any connected person of the Manager receives any cash rebate of all orany part of any commission paid out of the Fund, the Manager or that connected person shallnot be entitled to retain that cash rebate but shall account for and pay the same to the Trusteeto be held as Fund property.

The Manager is responsible for selecting brokers and dealers through whom transactions for theaccount of the Fund are to be executed (which may include the Manager, the Trustee or a con-nected person of either of them).The Manager shall ensure that the aggregate value of all trans-actions effected in any accounting period through brokers and dealers who are connectedpersons of the Manager shall not exceed 50% of the aggregate value of all transactions effectedfor the account of the Fund during that accounting period.

The Manager may, in accordance with applicable law and regulation, effect agency cross transac-tions where both the sale and purchase of an investment are effected for clients (including theFund on the one hand) of the Manager and/or its connected persons provided that the sale andpurchase decisions are in the interests of both clients, permitted within the investment guide-lines/objectives of both clients and the transactions are executed on an arm’s length basis and atthe best price available to the Fund having regard to the kind, size and time of the transaction.

The Manager may, in the course of its business, have potential conflicts of interest with the Fund.In such circumstances, the Manager will have regard to its obligations under theTrust Deed and,in particular, to its obligation to act in the best interests of the Fund and the Unitholders so faras practicable, having regard to its obligations to other clients when undertaking any invest-ments where conflicts of interest may arise. In the event that such conflicts do arise, the Man-ager will use its best efforts to resolve such conflicts fairly.

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The Fund will have dealings with parties related to the Manager. The related parties includeAmInvestment Management Sdn Bhd, AmInvesment Bank Berhad, AmBank (M) Berhad andAmIslamic Bank Berhad.

Trading in securities by staff is allowed, provided that the policies and procedures in respect ofthe personal account dealing are observed and adhered to. On a periodical basis, the directors,investment committee members and staff shall disclose to the Compliance Unit, their portfolioholdings and dealing transactions. Further, the abovementioned shall make disclosure of theirholding of directorship and interest in any company.

As HSBC (Malaysia) Trustee Berhad is Trustee and service provider for the Fund, there maybe proposed related party transactions involving or in connection with the Fund in the follow-ing events:

(1) where the Fund invests in instrument(s) offered by the HSBC Group (e.g. placement ofmonies, structured products, etc);

(2) where the Fund is being distributed by the HSBC Group as IUTA;(3) where the assets of the Fund are being custodised by the HSBC Group both as

sub-custodian and global custodian of the Fund (i.e.Trustee’s delegate); and(4) where the Fund obtains financing as permitted under the Guidelines, from the HSBC

Group.

The Trustee has in place policies and procedures to deal with any conflict of interest situation.TheTrustee will not make improper use of its position as the owner of the Fund's assets to gain,directly or indirectly, any advantage or cause detriment to the interests of Unitholders.Anyrelated party transaction is to be made on terms which are best available to the Fund andwhich are not less favourable to the Fund than an arms-length transaction between independ-ent parties.

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TAXATION

Deloitte KassimChanTax Services Sdn BhdLevel 16, Uptown 11 Jalan SS21/58Damansara Uptown47400 Petaling JayaSelangor Darul Ehsan

21 May 2009

The DirectorsAmInvestment Services BerhadLevel 22, Bangunan AmBank GroupNo 55, Jalan Raja Chulan50200 Kuala Lumpur

Dear Sirs

ABF MALAYSIA BOND INDEX FUND (“THE FUND”)–TAXATION OFTHE FUNDAND UNITHOLDERS

1. This letter has been prepared for inclusion in the Prospectus dated 13th July 2009 (“the Prospectus)in connection with the offer of the Fund’s units listed on the main board of Bursa MalaysiaSecurities Berhad.

2. TAXATION

The following is general information based on Malaysian tax law in force at the time of lodging thisprospectus and investors should be aware that the tax law may be changed at any time.To an ex-tent, the application of tax law depends upon an investor’s individual circumstances.The informa-tion provided below does not constitute tax advice.The Manager therefore recommends that aninvestor consult his accountant or tax adviser on questions about his individual tax position.

As the Fund’sTrustee is resident in Malaysia, the Fund is regarded as resident in Malaysia and is li-able to pay Malaysian income tax (“income tax” or “tax”).The taxation of the Fund is governedprincipally by Sections 61 and 63B of the Malaysian Income Tax Act, 1967 (“MITA”).

Unitholders are also liable to pay income tax on income distributions they are paid by the Fund.

3. TAXATION OFTHE FUND

3.1 IncomeTax

The income of the Fund in respect of dividends, interest or profits from deposits and otherinvestment income (other than income which is exempt from tax) derived from or accruingin Malaysia is liable to income tax.The income tax rate applicable to the Fund is 25%.

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Profit from disposal of share investments, tax exempt dividends and tax exempt interest aslisted in the Appendix attached received by the Fund are not subject to income tax.

Discount or profit received from the sale of bonds or securities issued by Pengurusan Dana-harta Nasional Berhad or Danaharta Urus Sendirian Berhad within and outside Malaysia is ex-empt from the payment of income tax.

The Fund may receive dividends, profits and other income from investments outside Malaysia.Income derived from sources outside Malaysia and received in Malaysia by a resident unit trustis exempt from Malaysian income tax. However, such income may be subject to foreign tax inthe country from which the income is derived.

Expenses being manager’s remuneration, maintenance of register of Unitholders, share regis-tration expenses, secretarial, audit and accounting fees, telephone charges, printing and sta-tionery costs and postage,which are not allowed under the general deduction rules, qualify fora special deduction, subject to a minimum of 10% and a maximum of 25% of such expensespursuant to Section 63B of the MITA.

The tax credit attached to taxable dividends received by the Fund i.e. tax deducted at sourceat the prevailing tax rate is available for set-off against tax payable by the Fund. No additionaltax will be payable by the Fund on the taxable dividends received. However, such tax or partthereof will be refundable to the Fund if the total tax so deducted at source exceeds the taxliability of the Fund by virtue of deduction of allowable expenses.

With effect from the year of assessment 2008, a single-tier company income tax system hasreplaced the imputation system.The Fund is not liable to tax on any dividends paid, creditedor distributed to the Fund under the single tier tax system, where the company paying suchdividend is not entitled to deduct tax under the MITA.

3.2 Real Property GainsTax ("RPGT")

Gains on disposal of shares in real property companies by the Fund after 31 March 2007 willno longer be subject to real property gains tax pursuant to Real Property Gains Tax (Exemp-tion) (No.2) Order 2007.

4. TAXATION OF UNITHOLDERS

4.1 Taxable Distribution

Unitholders will be taxed on an amount equivalent to their share of the total taxable incomeof the Fund to the extent such income is distributed to them.Taxable distributions carry a taxcredit in respect of the tax chargeable on that part of the Fund. Unitholders will be subject totax on an amount equal to the net taxable distribution plus attributable underlying tax paid bythe Fund.

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Unitholders

Malaysian tax residents:

� Individual and non-corporateUnitholders (such as co-operatives,associations and societies)

� Trust bodies

� Corporate Unitholdersi. A company with paid up capital in

respect of ordinary shares of notmore than RM2.5 million (at thebeginning of the basis period for ayear of assessment)

ii. Companies other than (i) above

Non-Malaysian tax residents:

� Individual and non-corporate unitholders

� Corporate unitholders and trust bodies

MalaysianTax Rates

� Progressive tax rates ranging from 0%to 27%

� 25%

� 20% for every first RM500,000 ofchargeable income

� 25% for chargeable income in excess ofRM500,000

� 25%

� 27%

� 25%

Income distributed to Unitholders are generally taxable as follows in Malaysia :-

The tax credit that is attributable to the income distributed to the Unitholders will be avail-able for set off against tax payable by the Unitholders.There is no withholding tax on taxabledistributions made to non-resident Unitholders.

4.2 Tax Exempt Distribution

Tax exempt distributions made out of gains from realization of investments and other exemptincome earned by the Fund will not be subject to Malaysian tax in the hands of Unitholders,whether individual or corporate, resident or non-resident.All Unitholders do not pay tax onthat portion of their income distribution from the Fund’s distribution equalisation account.

4.3 DistributionVoucher

To help complete a Unitholder’s tax returns, the Manager will send the Unitholder a distribu-tion voucher as and when distributions are made.This sets out the various components of theincome distributed and the amount of attributable income tax already paid by the Fund.

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4.4 Sale,Transfer or Redemption of Units

Any gains realized by a Unitholder on the sale, transfer or redemption of his units are gener-ally tax-free capital gains unless the Unitholder is an insurance company, a financial institutionor a person trading or dealing in securities. Generally, the gains realized by these categories ofUnitholders constitute business income on which tax is chargeable.

4.5 Reinvestment of Distribution

Unitholders who receive their income distribution by way of investment in the form of the pur-chase of new units will be deemed to have received their income distribution after tax and rein-vested that amount in the Fund.

4.6 Unit Splits

Unit splits issued by the Fund are not taxable in the hands of the Unitholders.

Yours faithfully

SAW SOOK MOOIExecutive Director

Deloitte refers to one or more of Deloitte Touche Tohmatsu, a SwissVerein, and its network of member firms, each of which is a legally separate and inde-pendent entity. Please see www.deloitte.com/my/about for a detailed description of the legal structure of Deloitte Touche Tohmatsu and its member firms.

© 2009 Deloitte KassimChan Tax Services Sdn Bhd.All rights reserved.

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Appendix

Tax Exempt Interest Income of UnitTrusts

1. Interest or discount paid or credited to unit trusts in respect of the following will be exempt from tax:-

� Securities or bonds issued or guaranteed by the Government; or

� Debentures, other than convertible loan stock, approved by the Securities Commission; or

� Bon Simpanan Malaysia issued by the Central Bank of Malaysia.

2. Interest derived from Malaysia and paid or credited by any bank or financial institution licensed under theBanking and Financial Institutions Act 1989 or the Islamic Banking Act 1983.

3. Interest received in respect of bonds and securities issued by Pengurusan Danaharta Nasional Berhadwithin and outside Malaysia.

4. Interest derived from bonds, other than convertible loan stock, paid or credited by any company listed inMalaysia Exchange of Securities Dealing and Automated Quotation Berhad.

5. Interest in respect of any savings certificates issued by the Government.

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14.1 Material agreements

Save as disclosed below, there are no other material agreements which have been entered intoin relation to the Fund as at the date of this Prospectus: -

(a) The Deed dated 12 July 2005 between theTrustee,Manager and the Unitholders constitutingthe Fund;

(b) The Supplementary Deed dated 20 June 2007 entered into among the Trustee, Managerand the Unitholders.

(c) The Participating Dealer Agreement dated 13 July 2005 between AmInvestment Bank,Manager and Trustee;

(d) The Participating Dealer Agreement dated 11 January 2006 entered into betweenCommerce International Merchant Bankers Berhad, the Manager and the Trustee;

(e) The Participating dealerAgreement dated 11 January 2006 entered into between MalayanBanking Berhad, the Manager and the Trustee; and

(f) IIC License Agreement dated 8 July 2005 entered into between the Index Licensor andthe Manager.

14.2 Consents

The written consent of the Investment Manager to the inclusion in this Prospectus of their namesand letters in the form and context in which they are contained in this Prospectus has been givenbefore the issue of this Prospectus and has not subsequently been withdrawn.

The written consent of theTax Consultant to the inclusion in this Prospectus of their names andletters in the form and context in which they are contained in this Prospectus has been given be-fore the issue of this Prospectus and has not subsequently been withdrawn.

The written consent of the HSBC (Malaysia) Trustee Berhad, as the Trustee, to the inclusion inthis Prospectus of their name in the form and context in which they are contained in thisProspectus has been given before the issue of this Prospectus and has not subsequently beenwithdrawn.

14.3 Documents for inspection

Copies of the following documents may be inspected at the registered office of the Managerand/or Trustee during normal business hours for a period of 12 months from the date of thisProspectus: -

(a) The material agreements referred to in Section 14.1 of this Prospectus;(b) The latest annual and interim reports of the Fund (if any);(c) The audited financial statements of the Manager and the Fund for the last 5 financial years

ended 31 March 2008;(e) The tax advice referred to in Section 13 of this Prospectus; and(f) The letters of consent referred to in the Section 14.2 of this Prospectus.

FURTHER INFORMATION

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DIRECTORS’ DECLARATION

This Prospectus has been seen and approved by the directors of the Manager of the Fund, and they col-lectively and individually accept full responsibility for the accuracy of all information contained hereinand confirm, having made all enquiries which are reasonable in the circumstances, that to the best oftheir knowledge and belief, there are no other facts the omission of which would make any statementherein misleading.

Kok Tuck CheongDatin Maznah MahbobHarinder Pal SinghProf. Dr.Annuar Bin Md NassirDr. Mahani Binti Zainal AbidinLee Siang Korn @ Lee Siang Chin

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