Case Study: Cimb-Principal Asset Management Berhad

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CIMB-Principal Asset Management Berhad (CIMB-Principal) is a premier asset management corporation with local investment abilities. Established in 1995, it is one of the largest asset management corporations in Malaysia with local footmark covering Singapore, Indonesia and Thailand.
CIMB-Principal aims to be Southeast Asia’s most valued investment management company offering whole asset management solutions. It manufactures and allocates a comprehensive range of unit trust funds, and achieves customised portfolio commands for corporations, institutions, as well as government and pension funds. Its locally imploded team of dedicated investment professionals offers expertise ranging from equity, fixed income, cash management, and Shariah-compliant
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As the Fund is denominated in Ringgit Malaysia, investments in foreign currencies will cause the Fund to be uncovered to currency risk. Fluctuations in the exchange rates between the foreign currencies and Ringgit Malaysia may influence the cost of the Unit Holders’ investments in the Fund.
Counterparty risk
The Fund will be exposed to credit risk of the counterparties with whom the Fund trades with. The Fund might place Deposits, invest in money market instruments, and also enter into derivative contracts for hedging objective. In the event that the counterparty is not able to achieve its requirements especially in the event of insolvency, this might lead to a loss to the Fund. Counterparty risk might be moderated by guiding credit evaluation on the counterparty to ascertain the creditworthiness of the counterparty.
Money market fund- RHB Money Market Fund
Interest Rate Risk
Prices of debentures generally change in opposite direction with interest rates. When interest rates increase, prices of debentures will normally decrease. This increase in interest rate would cause the investor to face the risk of capital loss. But when interest rates decrease, prices of debentures would normally increase, therefore, investors would see capital
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This might arise when the trading volume is low and where there is a lack of demand for the security. If a unit trust fund has a huge portfolio of stocks issued by smaller companies, the relatively illiquidity of these stocks can affect the value of the fund to fall. This is because there are normally less ready buyers of such stocks compared with the stocks of larger and more established companies.
Market Risk
Any purchase of securities will contain an element of risk. A unit trust fund that principally invests in listed stocks will be prone to the fluctuation in the performance of the stock markets, caused by changing market conditions as a result of global, regional or national economic conditions, political developments, governmental policies and social environment which will in turn influence the price of the

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