Tupling of CIMB sees bond funds to perform better

CIMB-Principal Asset Management Berhad's income distributions to three of its Unit Trust Funds show that its funds remain solid despite the challenging market environment, according to J. Campbell Tupling, Chief Executive, CIMB-Principal Asset Management Berhad.

"Due to the nature of bonds having an inverse relationship to interest rates, we believe bond funds will perform better this year following Bank Negara Malaysia's recent cut of the Overnight Policy Rate. In this environment, we expect the price of bonds to appreciate and give more potential capital gain to investors," Tupling declared.

The three trust funds that were provided income distribution for the period ending 31 January 2009 were the CIMB-Principal Xcess Income Fund, the CIMB Islamic Short Term Sukuk Fund and the CIMB-Principal Multi-Maturity Income Fund 1.

The CIMB-Principal Xcess Income Fund, which mainly invests in short-term money market instruments, generated a return of 10.51 percent as of 31 January 2009. It declared a gross distribution of 0.10 sen per unit.

The CIMB Islamic Short Term Sukuk Fund declared a gross distribution of 0.28 sen per unit, or a yield of 0.27 percent. This Shariah-compliant fund offers investors exposure to an income-yielding liquid investment that is less volatile than conventional bond funds.

The CIMB-Principal Multi-Maturity Income Fund 1 generated a gross distribution of 2.55 sen per unit that translates to a distribution yield of 2.51 percent.