DBS Asset Management Launches New Capital-Protected Fund For Muslim Community

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Migration to new fund is one of three options provided to
unit holders of its predecessor - Mendaki Growth Fund or ASM
- whose capital protection feature expires this year

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Pioneer ASM Unit Holders To Receive 12 Percent Loyalty Bonus Over Three Years For Switching Either to New Fund Or The Existing Mendaki Global Fund

SINGAPORE, AUG 15 - DBS Asset Management (DBSAM) today announced the launch of the Mendaki Capital Protected Fund or Dana Modal Terjamin Mendaki (DMTM), a new capital-protected fund for the Muslim community.

DMTM, which seeks capital appreciation over the medium term, will invest mainly in government bonds, with global equities making up the rest of its portfolio. The main attraction of DMTM for investors is its capital protection feature, which safeguards investors’ initial investment until the fund’s maturity in three years’ time. In line with its Islamic mandate, the fund manager will refrain from investments into companies involved in businesses like in tobacco, alcohol or gambling.

Joseph Tern, executive director of DBS Asset Management, said DMTM is a fine example of how DBSAM has worked closely with Mendaki Holdings Pte Ltd, the fund promoter, to offer an innovative solution to Muslim investors.

"We are the only fund house to offer a capital-protected fund to the Muslim investing community," Tern said.

"We worked closely for a long time to develop a new fund in line with investors’ needs, and look forward to enhancing our relationship with Muslim investors through such products," Tern added.

DMTM is offered as one of three options to unit holders of the Mendaki Growth Fund or Amanah Saham Mendaki (ASM), a 10-year-old fund whose capital protection feature expires this year. Besides switching to the new DMTM, ASM unit holders may either redeem their units in ASM in exchange for cash or switch to the Mendaki Global Fund (MGLF), an existing fund offered by DBSAM that adheres to the same Islamic investment guidelines. MGLF is a globally-diversified fund and does not have a capital protection feature.

In appreciation of ASM unit holders’ long-standing loyalty and their continued support by investing in the new fund, DBSAM will offer a maximum of 12 percent loyalty bonus over the three years for pioneer ASM unit holders who remain invested in the DMTM. Pioneer unit holders refers to investors who had subscribed to ASM during its offer period between June 10 and October 11, 1991. This group of investors will similarly enjoy the 12 percent loyalty bonus over three years if they choose to switch to MGLF.

"The 12 percent loyalty bonus - an undertaking that is separate from any profit the fund may make - is an unprecedented gesture to thank pioneer ASM unit holders for their continued support. These unit holders form the bulk of our investors in the ASM fund, numbering more than 80 percent of total investors. We thought it was a good way to show our appreciation to these investors who have been with us through thick and thin over the past 10 years," Tern said.

Mendaki Holdings chief executive officer Sumardi Ali said: "Mendaki and DBSAM have worked closely to offer the best solutions to the current ASM investors. The three options made available to the investors will enable them to choose the type of investments that match their expectations in terms of risk and returns. To current ASM unit holders and those who intend to start investing but are not ready to take the risk, DMTM provides a good vehicle to begin with."

DBSAM will waive the 3 percent initial sale charge or switching fee for all ASM unit holders who opt to switch to either fund. It has also extended the capital protection period for all pioneer ASM unit holders to September 29, 2001, to give them sufficient time to consider the options.

DBSAM will also offer promotional discounts off the sales charge for new investors in DMTM.

Background on ASM

ASM was set up in 1991, with the objective of promoting unit trust investment as a long-term savings option among local Muslims. The majority of unit holders – over 80 per cent – are pioneer investors who had subscribed to the fund during the offer period between June 10 and October 11, 1991. These pioneer unit holders are covered under the capital protection scheme and will enjoy a loyalty bonus if they switch to either DMTM or MGLF before the expiry date.

The performance of the fund did not reach the level of expectation as it was affected by several economic crises. ASM reached its highest value of S$1.45 in 1993, and paid out dividends between 1993 and 1997.

Unit holders who bought ASM after the launch offer are not entitled to the capital protection feature. For these unit holders, the loyalty bonus does not apply but they still have the option of either cashing out at the prevailing bid price, or switching their investment to either DMTM, which provides capital protection, or MGLF. The 3 percent sales fee is also waived in this case.

About DBS Asset Management (DBSAM)

For over 20 years, DBS Asset Management (DBSAM) has been providing innovative investment solutions to clients. Today, it is Singapore's largest retail fund manager, with $2.1 billion under management. DBSAM’ total assets under management is close to $4.7 billion, as at end June 2001. DBSAM prides itself on its commitment to investment management and client servicing excellence, as evidenced by its strong customer loyalty. More than two-thirds of its clients have maintained their accounts with DBSAM for over five years, while one-third has maintained their relationship with DBSAM for over 10 years. Over the past year, DBSAM received the following awards:

Investment Fund Awards (2000):

• DBS Shenton Income Fund
• DBS Horizon Global Bond Fund (US$)
• DBS Horizon European Equity Fund

S&P's Investment Funds Performance Awards (2000):

• DBS Shenton Income Fund
• DBS Horizon Global Bond Fund (US$)
• DBS Horizon Asia (ex-Japan) Equity Fund
• OPTIONS FOR ASM UNIT HOLDERS UPON FUND EXPIRY

• Applicable to pioneer ASM investors who subscribed to the fund during the offer period between June 10 and October 11, 1991.