Manulife Malaysia Equity Fund - Manulife Insurance Berhad

Loan Financing Risk
In the case of an investor who obtains loan financing to invest in a fund, the
higher the margin of financing, the greater the potential for losses as well as
gains. The financing cost may be higher than the gains derived (if any) from
investing in the fund. It is important for investors to understand the inherent
risks of investing with borrowed money which include the following:
(a) borrowing increases the magnitude for gains as well as losses;
(b) an investor’s ability to provide additional collateral may be affected should
the value of investment falls below a certain level; and
(c) an investor’s ability to service its loan instalments may be affected by
unforeseen circumstances such as the investor’s loss of employment.
Investment Manager Risk
The performance of the unit trust fund depends, amongst other things, on
the expertise of the Investment Manager. Poor management of the fund will
jeopardise the investment of unit holders through reduction in net asset value
of the fund which may ultimately lead to losses to unit holders.
To mitigate this risk, the Investment Manager has in place a disciplined
investment process and practises prudent risk management.
Market Risk
Market risk arises due to economy-wide perils which affect businesses causing
fluctuations in market values of the securities. As a result, investors are
exposed to market uncertainties, and no matter how many securities are held,
developments in the economic, political and social environment may have
a positive or negative impact on the market price of the securities. Market
risk cannot be eliminated but may be reduced through diversification. The
Investment Manager will attempt to diversify the portfolio, and monitor the
investment climate and market conditions to take measures, where necessary
and appropriate, to mitigate this risk.
Company Specific Risk
This is the risk of investing in a specific company. Any fluctuations in the price
of the securities may affect the NAV of a fund. This risk is reduced through
the diversification process that the Investment Manager will employ in the
management of the fund.
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