Table of contents

Pages

1.0 Introduction …………...…………………………………………………….……… 3

1.1 Unit trust ...…………………………………………………………………... 3

1.2 Types …………………………………………………………………………4

1.2.1 Equity Fun ………………………………………………………….. 4

1.2.2 Fixed income Fund …………………………………………………. 5

1.2.3 Money Market Fund ………………………………………………… 6

1.2.4 Balanced Fund ……………………………………………………….7

1.2.5 Syariah compliant Fund ……………………………………………...8

2.0 Public Growth Fund …………….…………………………………………………... 9

3.0 Public Aggressive Growth Fund ……………………………………………………19

4.0 Mean Return and Standard Deviation ………...…………………………………… 19

4.1 Interpretation of PGF ……………………………………………………......19

4.2 Interpretation of PAGF ………………………………………………………21

5.0 Comparison and Recommendation ………………………………………………….23

5.1 Main Return …………………………………………………………………23

5.2 Variance ……………………………………………………………………..24

5.3 Standard deviation …………………………………………………………..26

6.1 Summary …………………………………………………………………………….28

Introduction

1.1 Unit Trust

The structure of Unit Trust in Malaysia is commonly equivalent to those in

different nations. A unit trust is a type of aggregate speculation plot set up under a
trust deed. It is a venture plot that is overseen expertly. This kind of pooled
finance gathers cash from speculators who have a similar venture goals and look
for the speculation the executives of an organization. The cash is pooled together
to purchase a lot of protections, making a bigger market position for all the
speculators. The pooled monies in the unit trust support are put resources into a
broadened arrangement of protections comprehensive of stocks, securities,
transient currency showcase instruments and different resources, as per the
venture goals of unit trust finance and as allowed under Securities Commission
(SC) Guideline on Unit Trust Funds. Protections are placed into a pool and
afterward financial specialists take an interest in restores that mirror their selected
item. These financial specialists' reserve funds are contributed and overseen.
Distinctive trust reserves have diverse venture goals. Some contribute for
development, some for money, some put exclusively in Malaysia, some across
Asian nations, some on the planet advertise. Venture choices are made by
proficient reserve chiefs designated by the trustees. The directors charge a yearly
expense consequently. The arrangement of advantages possessed by a unit trust is
partitioned 29 into an amount of indistinguishable segment called a 'unit'.
Speculators are the unit holders. Unit trusts are some of the time alluded to as
open-finished assets. At the point when more cash is put into a store, more
resources are purchased. At the point when recovery is made by unit holders, the
administration organizations are obliged to buyback the exceptional units at the
exchanging an incentive without the need to have an optional market. The
exchanging cost is known as the Net Asset Value (NAV). The estimation of the
trust is figured day by day by the trustee. It is the complete market estimation of
the benefits, separated by the quantity of units in issue which give an offer and
offer cost. Unit trust in Malaysia has a solitary cost. Its offer and offer cost are the
 equivalent under this single value system, while the business charge is
pronounced independently.

1.2 Types.

There are many types of funds that can satisfy the needs of different investors as
the following;

1.2.1 Equity fund

An Equity fund is a mutual fund that puts mainly in stocks. It tends to be

effectively or inactively (record subsidize) oversaw. Value reserves are otherwise
called stock assets. Stock common assets are chiefly classified by organization
size, the speculation style of the property in the portfolio and topography. The
size of a value subsidize is dictated by a market capitalization, while the venture
style, reflected in the store's stock possessions, is additionally used to arrange
value shared assets. Value reserves are additionally sorted by whether they are
local (U.S.) or universal. These can be expansive market, provincial or single-
nation reserves. Some claim to fame value subsidizes target business segments,
for example, medicinal services, products and land.

Advantages- Equity support are perfect speculation vehicles for speculators that
are not also versed in money related contributing or don't have a lot of capital
with which to contribute. Value reserves are functional ventures for a great many
people.

The characteristics that make value supports generally appropriate for little
individual speculators are the decrease of hazard coming about because of a
reserve's portfolio broadening and the moderately limited quantity of capital
required to obtain portions of a value subsidize. A lot of venture capital would be
 required for an individual financial specialist to accomplish a comparable level of
hazard decrease through enhancement of an arrangement of direct stock property.
Pooling little financial specialists' capital permits a value reserve to differentiate
adequately without troubling every speculator with huge capital prerequisites.

The cost of the value support depends on the reserve's net resource esteem (NAV)
less its liabilities. An increasingly enhanced store implies that there is more
positive impact of an individual stock's unfriendly cost development on the
general portfolio and on the offer cost of the value support.

1.2.2 Fixed Income Funds

Fixed Income is a sort of speculation security that pays speculators fixed intrigue
installments until its development date. At development, financial specialists are
reimbursed the chief sum they had contributed. Government and corporate
securities are the most well-known kinds of fixed-pay items. In any case, there are
Fixed Income trade exchanged assets and shared subsidizes accessible.

Treasury securities and bills, metropolitan securities, corporate securities, and

declarations of store (CDs) are for the most part instances of fixed-pay items.
Securities exchange over the counter (OTC) on the security market and auxiliary
market

Organizations and governments issue obligation protections to fund-raise to

subsidize everyday activities and account huge ventures. Fixed-pay instruments
pay financial specialists a set loan cost return in return for speculators loaning
their cash. At the development date, financial specialists are reimbursed the first
sum they had contributed known as the head
 Preferences - Fixed-pay protections are suggested for traditionalist financial
specialists looking for a differentiated portfolio. The level of the portfolio
committed to fixed pay relies upon the speculator's venture style. There is
additionally a chance to broaden the portfolio with a blend of fixed-salary items
and stocks making a portfolio that may have half in fixed pay items and half in
stocks.

Security reserves regularly put resources into corporate and government

securities. Government security finances convey essentially no default chance
and, accordingly, can go about as a sanctuary for speculators in the midst of
vulnerability, however, regularly offer lower yields than practically identical
corporate security reserves. Corporate securities convey the extra hazard that the
guarantor will most likely be unable to make head or intrigue installments. Thus,
they will in general compensation higher loan fees to represent the extra hazard.
Corporate security assets can be part into venture grade security reserves and
beneath speculation evaluation, or garbage, security reserves.'

1.2.3 Money market funds

A Money market funds is a sort of common store that puts just in exceptionally
fluid instruments, for example, money, money comparable protections, and high
FICO assessment obligation-based protections with a present moment,
development under 13 months. Subsequently, these assets offer high liquidity
with an exceptionally low degree of hazard.

While they sound profoundly comparable, a currency advertise support isn't

equivalent to a currency showcase account (MMA). The previous is a venture,
supported by a speculation finance organization, and subsequently conveys no
assurance of head. The last is an enthusiasm acquiring sparing record offered by
 money related organizations, with constrained exchange benefits and protected by
the Federal Deposit Insurance Corporation (FDIC).

Currency showcase reserves for the most part put resources into declarations of
store (CDs), business paper and momentary Treasury bills. These assets are
constantly intended to be protected ventures planning to keep up a low offer cost ,
however they likewise will in general offer moderately low yields. While these
assets don't convey the Federal Deposit Insurance Corporation (FDIC) protection
that bank items do, currency advertise reserves have customarily given a serious
extent of wellbeing.

Advantages - Money market funds may be appropriate for customers who:

a) Have an investment goal with a short time horizon

b) Have a low tolerance for volatility, or are looking to diversify with a more
conservative investment
c) Need the investment to be extremely liquid

While the returns on money market funds are generally not as high as those of
other types of fixed income funds, such as bond funds, they do seek to provide
stability, and can therefore play an important role in the portfolio. Investors can
use money market funds in a few ways:

a) To offset the typically greater volatility of bond and equity investments

b) As short-duration investments for assets that may be needed in the near term
(such as an emergency fund)
c) As a holding place for assets while waiting for other investment opportunities
to arise (such as in the core position for your brokerage account).

1.2.4 Balanced funds

A Balanced fund is a common reserve that contains a stock segment, a security

segment and now and then a currency showcase segment in a solitary portfolio.
For the most part, these assets adhere to a generally fixed blend of stocks and
bonds. Their possessions are adjusted among value and obligation with their
target among development and pay. Thus, their name "adjusted." Balanced assets
are designed for financial specialists who are searching for a blend of wellbeing,
salary, and unobtrusive capital appreciation.

A Balanced fund is a sort of half-breed support, a speculation finance that is

described by enhancement among at least two resource classes. The sums the
store puts into every benefit class typically should stay inside a set least and most
extreme worth. Another name for a fair reserve is a benefit allotment finance.
Adjusted reserve portfolios don't really change their benefit blend dissimilar to
lifecycle, deadline, and effectively oversaw resource allotment reserves, which
develop in light of the financial specialist's evolving hazard return craving and age
or generally speculation economic situations.

Advantages - Investment-grade securities, for example, AAA corporate obligation

and U.S. Treasury's give premium pay through semi-yearly installments, while
enormous organization stocks offer quarterly profit pay-outs to upgrade yield.
Additionally, as opposed to reinvest appropriations, resigned financial specialists
may get money to support their pay from benefits, individual reserve funds, and
government sponsorships.

While they exchange day by day, exceptionally evaluated bonds and Treasury's
don't encounter the value swings that values understanding. In this way, the
strength of the fixed-intrigue protections forestalls wild bounces in the offer cost
of a decent reserve. Likewise, obligation security costs don't move in lockstep
 with stocks they regularly move the other way. This security steadiness gives the
store balance, further streamlining its portfolio's net resource esteem.

Since adjusted assets once in a while need to change their blend of stocks and
bonds, they will in general have lower all out-cost proportions (ERs). In addition,
since they naturally spread a speculator's cash over an assortment of kinds of
stocks, they limit the danger of choosing an inappropriate stocks or divisions. At
last, adjusted assets permit speculators to pull back cash intermittently without
upsetting the benefit assignment.

1.2.5 Syariah Compliant Fund

Syariah Compliant fund are speculation subsidizes administered by the necessities

of Shariah law and the standards of the Muslim religion. Shariah-consistent assets
are a sort of socially dependable contributing.

Shariah-consistent assets are one of numerous classifications found in socially

capable contributing. Like other socially dependable assets inside the natural,
social and administration (ESG) universe, the assets screen potential portfolio
speculations for explicit prerequisites wanted by supporters of the Muslim
religion.

There are four principle denials in this speculation. To start with, the denial of
'riba' implies that intrigue pay isn't allowed. The second is the preclusion of
'gharar', that remembers the limitations for vulnerability, hazard and peril. The
following is the denial of 'maisir', that restricts betting and interest in business
identified with it. Finally, a few exercises that are unhelpful to the general public
are prohibited. These incorporate restricted food and drinks and shameless
exercises. Speculation of Islamic assets in stocks that identify with the above
confined business exercises isn't permitted.
 Advantages - Shariah-compliant funds have numerous necessities that must be
clung to. A portion of the prerequisites for a Shariah-agreeable store incorporate
the prohibition of speculations which infer a greater part of their salary from the
offer of liquor, pork items, sex entertainment, betting, military gear or weapons.
Different attributes of a Shariah-consistent reserve incorporate a selected Shariah
board, a yearly Shariah review and purging certain disallowed sorts of salary, for
example, enthusiasm, by giving them to a foundation.

These guidelines can add unpredictability and expenses to the administration of a

Shariah-agreeable reserve. For instance, Shariah sheets are comprised of Islamic
researchers whose expenses can run into a great many dollars for each year,
adding to the general expense of dealing with the reserve. The researchers have
differing translations of Islamic law, making it troublesome and tedious for them
to show up at an accord for examination and execution with respect to a game-
plan.

Mainstream classifications of venture for Syariah Compliant fund incorporate

land and trade exchanged assets. Private value is additionally viewed as a wise
venture yet conveyed intrigue is viewed as an issue inside Shariah law.

2.0 Public Growth Fund (PGF)

2.1 Fund Profile

Public Growth Fund (PGF) is one of equity fund in Public Mutual Berhad. It is
also a growth fund. A growth fund is a diversified portfolio of stocks that
has capital appreciation as its primary goal, with little or no dividend pay-outs.
The portfolio mainly consists of companies with above-average growth that
reinvest their earnings into expansion, acquisitions, and/or research and
development (R&D). Most growth funds offer higher potential capital
appreciation but usually at above-average risk.

This high-risk, high-reward mantra makes growth funds ideal for those not
retiring anytime soon. Investors need a tolerance for risk and a holding
period with a time horizon of five to 10 years. Growth fund holdings often have
 high price-to-earnings and price-to-sales multiples. This trade-off from investors
is the above-average revenue and earnings gains these companies produce.

Objective of PGF fund are to achieve long-term capital appreciation with income
considered incidental.

The unit trust is launched on 11.12.1984. PGF financial year end is 31 July. The
manager of this fund is Public Mutual Berhad and the trustee of fund is
AmanahRaya Trustee Berhad. The distributor of fund is Unit trust consultants
(UTCs) of Public Mutual Berhad.

2.2 Composition

The composition of the fund are the typical asset classes of PGF. Therefore, the
asset are equity and equity-related securities, which include:

a) Index stocks, blue chip stocks and growth stocks.

b) Stocks of IPO companies seeking a listing in Eligible Markets
c) Warrants

The others composition of the PGF asset are collective investment schemes, fixed
income securities and liquid assets which include money market instruments and
deposits.

2.3 Proportion

The asset allocation of the equity fund is 70% to 98% of net asset value (NAV).
The balance of the fund’s NAV may be invested in fixed income securities and
liquid assets which include money market instruments and deposits. However,
their allocation of foreign assets is up to 30% of the fund’s NAV.

The location of assets are in Malaysia, while the asset up to 30% of NAV may be
invested in foreign markets which include; China, Hong Kong, South Korea,
Taiwan, Singapore, Thailand, Indonesia and United States of America. The other
permitted markets where the regulatory authority is an ordinary or associate of the
IOSCO.
 PGF have their own investment approach which is the equity fund are Bottom-up
approach in stock selection process which relies on fundamental research where
the financial health, industry prospects, management quality and past track
records of companies are assessed. The asset allocation between fixed income
securities and money market instruments will depend on economic growth,
interest rate trends and market liquidity conditions. Although the fund is actively
managed, the frequency of its trading strategy will very much depend on market
opportunities.

2.4 Investor

The fund is suitable for long-term investors who can withstand ups and downs of
the stock market in pursuit of capital growth.

2.5 Risks

a) Specific security risk:

Prices of a particular security may fluctuate in response to the circumstances

affecting individual companies. As such, adverse price movements of a particular
security invested by the fund may adversely affect the fund’s NAV and unit price.

b) Unlisted security risk:

This risk relates to investments in securities which are not listed on a securities
exchange, such as stocks of unlisted companies. Investment in unlisted securities
may subject the fund to liquidity risks upon the disposal of these securities which
may impact the value of the fund.

c) Interest rate risk:

Interest rate risk refers to the impact of interest rate changes on the valuation of
fixed income securities and liquid assets. When interest rates rise, fixed income
securities prices generally decline, and this may lower the market value of the
fund’s investment in fixed income securities. The reverse applies when interest
rates fall. The returns of the fund’s investments in liquid assets move in tandem
with interest rates. A decline in interest rates will lower the returns of the fund’s
 investments in liquid assets. For example, when interest rates fall, deposit
placements would be reinvested at lower interest rates and subsequently yield
lower returns to the fund.

d) Credit risk:

Credit risk relates to the creditworthiness of the issuer of the securities or liquid
assets which is dependent on the issuer’s ability to make timely payments of
interest and/or principal. In the event that the issuer of a security or liquid assets
defaults in the payment of interest and/or principal, the value of the fund may be
adversely affected.

e) Currency risk:

If the fund invests in assets denominated in foreign currency, the fund may be
exposed to currency fluctuation risks. If the currencies in which the investments
are denominated depreciate against the local currency, the fund’s NAV may be
adversely affected and vice versa. To mitigate such risk, the fund may undertake
hedging strategies. However, the fund would not benefit from any potential
upside if currencies move in the opposite direction of the hedging strategy.

f) Country risk:

Funds with foreign investments may be affected by changes in the economic and
political climate, restriction on currency repatriation or other developments in the
law or regulations of the country in which the fund invests in. For example, the
deteriorating economic condition or potential restrictive investment regulations
imposed in such countries may adversely affect the value of the investments
undertaken by the fund in those affected countries. This in turn may cause the
NAV of the fund or prices of units to fall. Regional/country funds which may
invest a greater portion of their NAV in foreign markets and may be more
affected by changes in the political and economic conditions of the
region/country.
g) Concentration risk:

As PCASEF’s investments are concentrated in China, this increases its exposure

to market, political, legal, economic and social risks of that country. This may
result in greater volatility of the fund’s returns as compared to portfolios with
broad-based regional or global investments.

h) Industry/Sector risk:

Industry/sector risk arises when the fund is predominantly invested in specific

industries or sectors. Due to the reduced degree of diversification by
industries/sectors, the fund may be more vulnerable to factors associated with the
industries/sectors it is invested in.

• PFEPRF: Any material changes associated with the property investment and
development sector and real estate investment trusts (REITs) may have an adverse
impact on the NAV of the fund.

• PFECTF: Any material changes associated with the consumer sector may have
an adverse impact on the NAV of the fund.

• PFETIF: Any material changes associated with the telecommunications and

infrastructure sector may have an adverse impact on the NAV of the fund.

• PINDGF, PRSEC, PSSF and PSTEF: Any material changes associated with the
sectors that the funds invest in may have an adverse impact on the NAV of the
funds.

• PLTF: Any material changes associated with the consumer and technology
sectors may have an adverse impact on the NAV of the fund.

i) Risk associated with investments in warrants:

The market price of warrants held by the fund may be impacted by changes in
market price of the underlying securities as well as the exercise price and expiry
 date of the warrants. Any adverse movements in the market price of the warrants
may impact the fund’s NAV and unit price.

j) Risk associated with investments in equity linked participation notes:

Equity linked participation notes are instruments designed to track designated

securities. The movement of these notes are similar to the underlying shares listed
in their respective markets. These notes are issued by international foreign
broking houses for investment by investors who are not able to invest directly in
the underlying foreign shares. These notes are purchased and sold by investors in
a similar manner to the trading of shares. Investments in equity linked
participation notes involve counterparty risk whereby the issuer of the notes may
not be able to fulfil its obligation. It also presents market risk as these notes may
not track the movement of their underlying shares closely.

3.0 Public Aggressive Growth Fund (PAGF)

3.1 Fund Profile

Public Aggressive Growth Fund (PAGF) is one of equity fund in Public Mutual
Berhad. It is an aggressive growth fund that seeks capital gains by investing in
aggressive growth stocks. Investments held in these funds are companies that
demonstrate high growth potential. Aggressive growth funds seek to provide
above average market returns however their underlying investments are often
volatile causing high share price volatility.

Aggressive growth funds are identified in the market as offering above average
returns for investors willing to take some additional investment risk. They are
expected to outperform standard growth funds by investing more heavily in
companies they identify with aggressive growth prospects. Aggressive growth
funds invest in growth stocks with relatively more aggressive projections
for revenue and earnings than the standard growth stock universe. Because
aggressive growth stock funds are investing based on forward-looking
assumptions and multiple growth phases, they can have higher comparable risk.
These funds typically do not fall into a standard category grouping reported by
 mutual fund research providers. They will typically be found in the growth fund
category with fund names such as: aggressive growth fund, capital appreciation
fund or capital gain fund. Their main focus is to invest for superior capital gains.

The unit trust is launched on 25.4.1994. PGF financial year end is 31 October.
The manager of this fund is Public Mutual Berhad and the trustee of fund is
Maybank Trustee Berhad. The distributor of fund is Unit trust consultants (UTCs)
of Public Mutual Berhad.

Objective of PAGF fund are to seek high capital growth over the medium to long
term period through investments in situational and high growth stocks.

3.2 Composition

The composition of the fund are the typical asset classes of PAGF. Therefore, the
asset are equity and equity-related securities, which include:

a) Index stocks, blue chip stocks and growth stocks.

b) Stocks of IPO companies seeking a listing in Eligible Markets
c) Warrants

The others composition of the PAGF asset are collective investment schemes,
fixed income securities and liquid assets which include money market instruments
and deposits.

3.3 Proportion

The asset allocation of the equity fund is 75% to 98% of the fund net asset value
(NAV). The balance of the fund’s NAV may be invested in fixed income
securities and liquid assets which include money market instruments and deposits.
However, their allocation of foreign assets is up to 30% of the fund’S NAV.

The location of assets is in Malaysia, while the asset up to 30% of NAV may be
invested in foreign markets which include; China, Hong Kong, South Korea,
Taiwan, Singapore, Thailand, Indonesia and United States of America. The other
permitted markets where the regulatory authority is an ordinary or associate of the
IOSCO.
 PAGF have their own investment approach which is their equity fund are Bottom-
up approach in stock selection process which relies on fundamental research
where the financial health, industry prospects, management quality and past track
records of companies are assessed. The asset allocation between fixed income
securities and money market instruments will depend on economic growth,
interest rate trends and market liquidity conditions. Although the fund is actively
managed, the frequency of its trading strategy will very much depend on market
opportunities.

3.4 Investor

The fund is suitable for long-term investors who are able to withstand ups and
downs of the stock market in pursuit of capital growth.

3.5 Risks

a) Specific security risk:

Prices of a particular security may fluctuate in response to the circumstances

affecting individual companies. As such, adverse price movements of a particular
security invested by the fund may adversely affect the fund’s NAV and unit price.

b) Unlisted security risk:

This risk relates to investments in securities which are not listed on a securities
exchange, such as stocks of unlisted companies. Investment in unlisted securities
may subject the fund to liquidity risks upon the disposal of these securities which
may impact the value of the fund.

c) Interest rate risk:

Interest rate risk refers to the impact of interest rate changes on the valuation of
fixed income securities and liquid assets. When interest rates rise, fixed income
securities prices generally decline and this may lower the market value of the
fund’s investment in fixed income securities. The reverse applies when interest
rates fall. The returns of the fund’s investments in liquid assets move in tandem
with interest rates. A decline in interest rates will lower the returns of the fund’s
 investments in liquid assets. For example, when interest rates fall, deposit
placements would be reinvested at lower interest rates and subsequently yield
lower returns to the fund.

d) Credit risk:

Credit risk relates to the creditworthiness of the issuer of the securities or liquid
assets which is dependent on the issuer’s ability to make timely payments of
interest and/or principal. In the event that the issuer of a security or liquid assets
defaults in the payment of interest and/or principal, the value of the fund may be
adversely affected.

e) Currency risk:

If the fund invests in assets denominated in foreign currency, the fund may be
exposed to currency fluctuation risks. If the currencies in which the investments
are denominated depreciate against the local currency, the fund’s NAV may be
adversely affected and vice versa. To mitigate such risk, the fund may undertake
hedging strategies. However, the fund would not benefit from any potential
upside if currencies move in the opposite direction of the hedging strategy.

f) Country risk:

Funds with foreign investments may be affected by changes in the economic and
political climate, restriction on currency repatriation or other developments in the
law or regulations of the country in which the fund invests in. For example, the
deteriorating economic condition or potential restrictive investment regulations
imposed in such countries may adversely affect the value of the investments
undertaken by the fund in those affected countries. This in turn may cause the
NAV of the fund or prices of units to fall. Regional/country funds which may
invest a greater portion of their NAV in foreign markets and may be more
affected by changes in the political and economic conditions of the
region/country.
g) Concentration risk:

As PCASEF’s investments are concentrated in China, this increases its exposure

to market, political, legal, economic and social risks of that country. This may
result in greater volatility of the fund’s returns as compared to portfolios with
broad-based regional or global investments.

h) Industry/Sector risk:

Industry/sector risk arises when the fund is predominantly invested in specific

industries or sectors. Due to the reduced degree of diversification by
industries/sectors, the fund may be more vulnerable to factors associated with the
industries/sectors it is invested in.

• PFEPRF: Any material changes associated with the property investment and
development sector and real estate investment trusts (REITs) may have an adverse
impact on the NAV of the fund.

• PFECTF: Any material changes associated with the consumer sector may have
an adverse impact on the NAV of the fund.

• PFETIF: Any material changes associated with the telecommunications and

infrastructure sector may have an adverse impact on the NAV of the fund.

• PINDGF, PRSEC, PSSF and PSTEF: Any material changes associated with the
sectors that the funds invest in may have an adverse impact on the NAV of the
funds.

• PLTF: Any material changes associated with the consumer and technology
sectors may have an adverse impact on the NAV of the fund.

i) Risk associated with investments in warrants:

The market price of warrants held by the fund may be impacted by changes in
market price of the underlying securities as well as the exercise price and expiry
date of the warrants. Any adverse movements in the market price of the warrants
may impact the fund’s NAV and unit price.
 j) Risk associated with investments in equity linked participation notes:

Equity linked participation notes are instruments designed to track designated

securities. The movement of these notes are similar to the underlying shares listed
in their respective markets. These notes are issued by international foreign
broking houses for investment by investors who are not able to invest directly in
the underlying foreign shares. These notes are purchased and sold by investors in
a similar manner to the trading of shares. Investments in equity linked
participation notes involve counterparty risk whereby the issuer of the notes may
not be able to fulfil its obligation. It also presents market risk as these notes may
not track the movement of their underlying shares closely.

4.0 Mean Return and Standard Deviations

4.1 Interpretation of Public Growth Fund (PGF)

Public Growth Fund (PFG)

Year of 2019

Month, (n) Monthly closing NAV, x

(Unit trust fund price)

December 0.4383

November 0.4366

October 0.4437

September 0.4387

August 0.4390

July 0.4595

June 0.4547

May 0.4517
 April 0.4565

March 0.4645

February 0.4497

January 0.4495

Total, ∑ x 5.3824

∑x 5.3824
Mean Return, x 1 =
n
= 12
= 0.4485

For PGF, the expectation end of period price is 0.4485. The mean (expected) return is the
expected price less the current price divided by the current price.

Variance, σ 2

2
∑( X −x 1)
=
n

= [ (0.4383−0.4485)2 + (0.4366−0.4485)2 + (0.4437−0.4485)2 + (0.4387−0.4485)2 +

(0.4390−0.4485)2 + (0.4595−0.4485)2 + (0.4547−0.4485)2 + (0.4517−0.4485)2
+ (0.4565−0.4485)2 + (0.4645−0.4485)2 + (0.4497−0.4485)2 + (0.4495−0.4485)2
] / 12

= 9.392 x 10−4 /12

= 0.0009392 / 12

= 0.000078267

Variance is the risk being taken for the unit trust. The variance is the statistic most
frequently used to measure risk. Variance defined as the expectation of the squared
differences from the mean. Hence, the variance for the unit trust is 0.000078267
 Standard deviation, σ

=
√ ∑( X −x1 )2
n

= √ 0.000078267

= 8.847 x 10−3

= 0.008847

We shall be using a standard deviation, which is a square root of the variance. The
standard deviation is a measure of (down side) risks. Hence, the standard deviation of
PGF is 0.008847.

4.2 Interpretation of Public Aggressive Growth Fund

Month, (n) Monthly closing NAV, x
Public Aggressive (Unit trust fund price) Growth Fund
(PAGF)
December 0.5992

Year 2019 November 0.5978

October 0.6086

September 0.6007

August 0.6024

July 0.5965

June 0.5945

May 0.5893

April 0.5969

March 0.6241

February 0.6023

January 0.6048

Total, ∑ x 7.2171
 ∑x 7.2171
Mean Return, x 1 =
n
= 12
= 0.6014

For PAGF, the expectation end of period price is 0.6014. The mean (expected) return is
the expected price less the current price divided by the current price.

Variance, σ 2

∑( X −x 1)2
=
n

= [ (0.5992−0.6014)2 + (0.5978−0.6014)2 + (0.6086−0.6014)2 + (0.6007−0.6014)2 +

(0.6024−0.6014)2 + (0.5965−0.6014)2 + (0.5945−0.6014)2 + (0.5893−0.6014)2
+ (0.5969−0.6014)2 + (0.6241−0.6014)2 + (0.6023−0.6014)2 + (0.6048−0.6014)2
] / 12

= 8.4234 x 10−4 / 12

= 0.000070195

Variance is the risk being taken for the unit trust. The variance is the statistic most
frequently used to measure risk. Variance defined as the expectation of the squared
differences from the mean. Hence, the variance for the unit trust is 0.000070195

Standard deviation, σ

√
2
∑( X −x1 )
=
n
 = √ 0.000070195

= 8.3782 x 10−3

= 0.008378

We shall be using a standard deviation, which is a square root of the variance. The
standard deviation is a measure of (down side) risks. Hence, the standard deviation of
PAGF is 0.008378

5.0 Comparison and recommendation

5.1 Mean return

Mean return, in securities analysis, is the expected value, or mean, of all the likely
returns of investments comprising a portfolio. A mean return is also known as an
expected return or how much a stock returns on a monthly basis. In capital
budgeting, a mean return is the mean value of the probability distribution of
possible returns.

Mean returns are calculated by adding the product of all possible return
probabilities and returns and placing them against the weighted average of the
sum. When calculating a mean return through the return probability formula to
display portfolio return, it is often referred to as a geometric mean return since it
evokes the formula for means used in geometry. However, the simple geometric
mean does not adequately capture the full scope of the mean return as used in the
stock market. The geometric mean return formula is primarily used for
investments that are compounded, while other simple interest accounts average
mean could be found by simply adding the rates and divided by the time periods.
Alternatively, a geometric mean return formula can illustrate the rate per period of
a holding period return, with the holding period return acting as the total return
over multiple periods of time.
 Mean returns are not the same as average monthly returns, because a mean return
would only reflect the average return if the time period used in the calculation was
exactly a year and if all the probably weights happened to be precisely the same,
which is improbable. Thus, mean return is more of a broad term instead of an
average monthly statistic over a period.

The mean return of unit fund price NAV monthly from Public Growth Fund
(PGF) is 0.4485 and Public Aggressive Growth Fund (PAGF) is 0.6014.

This show that the expected return NAV of PGF is lower than PAGF. Meaning,
the return NAV of PAGF value is more profit than PGF.

Mean returns attempt to quantify the relationship between the risk of a portfolio
of securities and its return. It assumes that while investors have different risk
tolerances, rational investors will always seek the maximum rate of return for
every level of acceptable risk. It is the mean, or expected, return that investors try
to maximize at each level of risk.

It is same with PAGF and PGF. PAGF is a very high-risk unit trust fund
compared to PGF. The higher risk of the fund will give the more return from the
fund investment. The risk level of PAGF is 5 while PGF is 4 shows that PAGF is
better fund investment than PGF.

Mean returns can also help investors more accurately visualize a proportional
change in wealth over the time horizon and through analysis, show what the rate
wealth could potentially continue at.

5.2 Variance

Mean-variance analysis is the process of weighing risk, expressed as

variance, against expected return. Investors use mean-variance analysis to make
decisions about which financial instruments to invest in, based on how much risk
they are willing to take on in exchange for different levels of reward. Mean-
variance analysis allows investors to find the biggest reward at a given level of
risk or the least risk at a given level of return.

Mean-variance analysis is one part of modern portfolio theory, which assumes

that investors will make rational decisions about investments if they have
complete information. One assumption is that investors want low risk and high
reward. There are two main parts of mean-variance analysis: variance and
expected return. Variance is a number that represents how varied or spread out the
numbers in a set are. For example, variance may tell how spread out the returns of
a specific security are on a daily or weekly basis. The expected return is a
probability expressing the estimated return of the investment in the security. If
two different securities have the same expected return, but one has lower
variance, the one with lower variance is the better pick. Similarly, if two different
securities have approximately the same variance, the one with the higher return is
the better pick. In this case, the variance (PGF) of these unit trust is 0.000078267.
Meanwhile, for PAGF, the variance of these investments is 0.000070195. As we
could see, the variance of PAGF (0.000070195) is lower than PGF
(0.000078267). Therefore, PAGF is the one with lower variance is better pick.

Variance is neither good nor bad for investors in and of itself. However, high
variance (PGF) in a stock is associated with higher risk, along with a
higher return. Low variance (PAGF) is associated with lower risk and a lower
return. High variance stocks tend to be good for aggressive investors who are less
risk averse, while low variance stocks tend to be good for conservative investors
who have less risk tolerance.

Variance is a measurement of the degree of risk in an investment. Risk reflects the

chance that an investment's actual return, or its gain or loss over a specific period,
is higher or lower than expected. There is a possibility some, or all, of the
investment will be lost.
 For example, a 30-year-old executive, stepping upward through the corporate
ranks with a rising income, can typically afford to be more aggressive, and less
risk-averse, in selecting stocks. Investors of this kind usually want to have some
high variance (PGF) stocks in their portfolios. In contrast, a 68-year-old on a
fixed income is likely to make a different type of risk/return trade off,
concentrating instead on low variance (PAGF) stocks.

In investing, the variance of the returns among assets in a portfolio is analysed as

a means of achieving the best asset allocation. The variance equation, in financial
terms, is a formula for comparing the performance of the elements of a portfolio
against each other and against the mean.

Variance is calculated by taking the differences between each number in the data
set and the mean, then squaring the differences to make them positive, and finally
dividing the sum of the squares by the number of values in the data set.

Variance measures variability from the average or mean. To investors, variability

is volatility, and volatility is a measure of risk. Therefore, the variance statistic
can help determine the risk an investor assumes when purchasing a specific
security.

5.3 Standard variance

The standard deviation is a statistic that measures the dispersion of a dataset

relative to its mean and is calculated as the square root of the variance. It
is calculated as the square root of variance by determining the variation between
each data point relative to the mean. If the data points are further from the mean,
there is a higher deviation within the data set; thus, the more spread out the data,
the higher the standard deviation.

Standard deviation is a statistical measurement in finance that, when applied to

the annual rate of return of an investment, sheds light on the historical volatility of
that investment. The standard deviation of PAGF is 0.008378, while PGF is
0.008847. This is show that PGF is the greater standard deviation of securities,
match with the greater variance (PGF is high variance than PAGF) between each
price and the mean, which shows a larger price range.

In simple terms, a greater standard deviation of PGF indicates higher volatility,

which means the mutual fund's performance fluctuated high above the average but
also significantly below it. Therefore, many investors use the terms volatility and
standard deviation interchangeably.

A lower standard deviation such as PAGF isn't necessarily preferable. It all

depends on the investments one is making, and one's willingness to assume the
risk. When dealing with the amount of deviation in their portfolios, investors
should consider their personal tolerance for volatility and their overall investment
objectives. More aggressive investors may be comfortable with an investment
strategy that opts for vehicles with higher-than-average volatility, while more
conservative investors may not.

Standard deviation is one of the key fundamental risk measures that analysts,

portfolio managers, advisors use. Investment firms report the standard deviation
of their mutual funds and other products. A large dispersion shows how much the
return on the fund is deviating from the expected normal returns. Because it is
easy to understand, this statistic is regularly reported to the end clients and
investors.

Standard deviation of historical mutual fund performance is used by investors to

predict a range of returns for various mutual funds. Although its usefulness in
measuring volatility of past performance can provide an indicator of future
volatility and can therefore help an investor prevent the mistake of buying a
mutual fund that is too aggressive, the volatility of a single mutual fund is not
necessarily a concern in portfolio construction.

In fact, funds that have had past periods of extreme volatility can be
complimentary to other funds in the portfolio that help balance the fluctuations of
the aggressive fund. If the long-term returns are high enough to justify the short-
 term fluctuations, and the investor understands and accepts the risk, volatile funds
can provide a valuable purpose.

6.0 Summary
A unit trust is a form of collective investment scheme set up under a trust deed. It is an
investment scheme that is managed professionally. This type of pooled fund collects
money from investors who have the same investment objectives and seek the investment
management of a company. The money is pooled together to buy large amounts of
securities, creating a larger market position for all the investors.

There are many types of funds that can satisfy the needs of different investors as the
following; equity fund, fixed income fund, money market fund, balanced fund and
Syariah compliant fund.

Public Growth Fund (PGF) is one of equity fund in Public Mutual Berhad. It is also a
growth fund. A growth fund is a diversified portfolio of stocks that has capital
appreciation as its primary goal, with little or no dividend payouts. The portfolio mainly
consists of companies with above-average growth that reinvest their earnings into
expansion, acquisitions, and/or research and development (R&D). Most growth funds
offer higher potential capital appreciation but usually at above-average risk.

Public Aggressive Growth Fund (PAGF) is one of equity fund in Public Mutual Berhad.
It is an aggressive growth fund that seeks capital gains by investing in aggressive growth
stocks. Investments held in these funds are companies that demonstrate high growth
potential. Aggressive growth funds seek to provide above average market returns
however their underlying investments are often volatile causing high share
price volatility.

The mean return of unit fund price NAV monthly from Public Growth Fund (PGF) is
0.4485 and Public Aggressive Growth Fund (PAGF) is 0.6014. This show that the
expected return NAV of PGF is lower than PAGF. Meaning, the return NAV of PAGF
value is more profit than PGF. PAGF is a very high-risk unit trust fund compared to PGF.
The higher risk of the fund will give the more return from the fund investment. The risk
level of PAGF is 5 while PGF is 4 shows that PAGF is better fund investment than PGF.

The variance (PGF) of these unit trust is 0.000078267. Meanwhile, for PAGF, the
variance of these investments is 0.000070195. As we could see, the variance of PAGF
(0.000070195) is lower than PGF (0.000078267). Therefore, PAGF is the one with lower
variance is better pick. Variance is neither good nor bad for investors in and of itself.
However, high variance (PGF) in a stock is associated with higher risk, along with a
higher return. Low variance (PAGF) is associated with lower risk and a lower return.
High variance stocks tend to be good for aggressive investors who are less risk averse,
while low variance stocks tend to be good for conservative investors who have less risk
tolerance.

The standard deviation of PAGF is 0.008378, while PGF is 0.008847. This is show that
PGF is the greater standard deviation of securities, match with the greater variance (the
variance of PGF is higher than PAGF) between each price and the mean, which shows a
larger price range. In simple terms, a greater standard deviation of PGF indicates higher
volatility, which means the mutual fund's performance fluctuated high above the average
but also significantly below it. Therefore, many investors use the terms volatility and
standard deviation interchangeably. A lower standard deviation such as PAGF isn't
necessarily preferable. It all depends on the investments one is making, and one's
willingness to assume the risk. When dealing with the amount of deviation in their
portfolios, investors should consider their personal tolerance for volatility and their
overall investment objectives. More aggressive investors may be comfortable with an
investment strategy that opts for vehicles with higher-than-average volatility, while more
conservative investors may not.