RHB ASIAN HIGH YIELD FUND UPDATE - 1 April 2020

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RHB ASIAN HIGH YIELD FUND UPDATE – 1 April 2020

Fidelity Funds Asian High Yield Fund (“Target Fund”) Portfolio Update:
Source: Fidelity International, 23 March 2020

Note: The opinions expressed are as of date and are subject to change at any time due to changes in market or economic
conditions. There is no guarantee that a positive investment outcome will be achieved. This is not intended to be relied upon
as a forecast, research or investment advice and is not a recommendation, offer or solicitation to buy or sell any investments
or to adopt any investment strategy.

Market Views
The global macroeconomic and market backdrop has deteriorated meaningfully in recent weeks. Hopes of the coronavirus
staying relatively contained have been replaced by fear of significant disruptions to the global economy into the second half
of the year. We acknowledge the challenges in measuring the impact of the outbreak, and of the oil shock.

On one hand, while the reaction to the COVID-19 epidemic will likely prompt further demand and supply shocks in the months
ahead, the world economy will recover, and could do so relatively quickly given accommodative rates and policies across
the globe, and concerted efforts to combat the virus.

The slum of oil prices will have direct impact to oil and related industries/ credits and indirectly impact towards risks sentiment.
The direct impact on the Target Fund is low since the Target Fund has minimal exposure to energy sector. Within Asia
economies, India and Indonesia are relatively more sensitive to oil price and likely to see more volatilities in the near term.

Looking ahead, the spread of coronavirus across the globe will lead to lower business activities and productivity resulted in
dented demand of oil, combined with supply to be increased from key oil production countries could result to continue
weaknesses on oil prices. Oil related companies with highly leverage balance, weak cash flow generation abilities and
immediate funding requirements are likely to be tested under the difficult business environment.

However, we are likely to still be in the correction process. We also note that most asset allocators were likely long risk in
some way going into February, and the unwinding or hedging of exposure to leveraged products caught up in the sell-off is
still playing out. These moves can be significant, relatively unobservable and will take time to unravel.

Asian High Yield markets registered modest gains in February. High coupon income supported performance, outweighing
the negative impact from credit spread widening. Risk appetite was hit as China’s and regional economic growth faced
headwinds amid the outbreak, as evidenced by the manufacturing PMI falling to a record low at 35.7. The PBoC responded
with a cut in one- and five-year loan prime rate by ten and five basis points, respectively. Additionally, local supply side easing
policies of administrative nature were introduced to support the liquidity position of property developers. We expect more
stimulus to come, with China that may be “first in - first out” of the virus scare. We remain overweight the asset class, with
coupon income that provides a welcome cushion to total returns in what remains a very volatile and uncertain market
backdrop.

The virus outbreak is going to have a short-term negative impact on China’s and regional economic growth. However, the
impact is likely to remain transitory as business activities in China are gradually returning back to normal. China has the
willingness and ability to response via stimuli in monetary and fiscal terms. It is likely that the authorities will launch more
easing measures from time to time in order to maintain social and economic stability, and this should benefit / stabilize fixed
income markets in general. That said, policy responses are likely to remain balanced with an objective to keep overall risks
under control.

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RHB ASIAN HIGH YIELD FUND UPDATE – 1 April 2020

Portfolio Positioning
There is no major changes in the fund positioning in view of the latest market developments. We remain cautiously
constructive on Asian High Yield market for 2020.

Income continues to be the key drivers for total return for Asian High Yield strategies, where CHY fund will provide higher
income opportunities with a strong focus in China.

The Target Fund continues to focus on liquidity in order to aim to meet potential redemption as well as capture investment
opportunities in the market.

Valuations are very attractive on the back of recent market movements whilst volatilities is likely to remain elevated for near
term. Asian High Yield continues to offer attractive additional spreads pick up under the low interest rate environment when
compared to historical levels as well as against US and European High Yield. Within Asian High Yield, single B an BB range
credits offer spreads pickup over BBBs as well.

Liquidity management remains our key focus for the Fund. Cash and equivalents are around 4-6% for the Fund. We’ve been
working closely with our specialised traders to ensure sufficient liquidity being generated from our cash bonds holdings.

Asian High Yield asset class default rates. Going forward, default rates is likely to be around 2-3% range in 2020. We reiterate
that default rates is a lagging indicator, as companies or credits would go through period of stress before default.

As of end February 2020, duration for the Target Fund is around 3 years, and running yield north of 8%. The Target Fund is
more tilted to BB- for average portfolio rating, and annualised volatility around 5-6%. Overweight on property, around 40-
45%, followed by consumption around 9%. Underweight on energy names. Across different sectors, property has been
relatively more resilient and the Target Fund’s overweight position in property names contributed to relative return.

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RHB ASIAN HIGH YIELD FUND UPDATE – 1 April 2020

Why Consider RHB Asian High Yield Fund?
1. High Yield Markets Outperform
   Return and volatility profiles favor HY bonds over equities

    Source: Fidelity International, Bloomberg. ICE BofAML Bond Indices: Q490 (Blended Index ACCY with 20% sector Level
    4 Cap and 3% issuer cap) for Asian High Yield, ACYC for China High Yield. Shanghai Stock Exchange Composite Index
    for China A-Shares. MSCI AC Asia ex Equity Index for Asian ex Japan Equities as of February 2020. Fidelity Funds -
    China High Yield Fund A-ACC-USD and Asian High Yield Fund A-ACC-USD (Gross Returns). Past performance is not
    an indicative of future performance.

2. Attractive Valuations for Asian High Yield

    Source: Fidelity International, ICE BofA Merrill Lynch bond indices, option adjusted spreads, as at 17 March 2020.

3. Target Fund – Expertise in Asian High Yield. One of Largest and Longest running Asian High Yield Fund
   Fidelity has been managing High Yield bonds since 2000. Fidelity started managing Asian High Yield bonds in 2007. We
   are a pioneer in “frontier” high yield markets such as Asia and Europe.

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RHB ASIAN HIGH YIELD FUND UPDATE – 1 April 2020

4. Target Fund – Well Diversified with strong focus on Income, which is a Key Contributor to Total Return

   Source: Fidelity International, as of February 2020. Performance returns are computed gross of fees and on a NAV-NAV
   basis with dividends reinvested in USD terms of the A-ACC-USD share class. The A-ACC-USD share class was launched
   on 2 April 2007. The Fund’s reference benchmark is the ICE BofAML Q490– Blended Index: ACCY, 20% Lvl4 Cap 3%
   Constrained. Returns for periods exceeding 1 year are on an annualised basis. Past performance is not an indicative of
   future performance.

5. Target Fund – Prudent Risk Management
   Less concentration, more diversification

   Market-weighted
       Easy to compute
       Significant concentration / less diversity
       Captive to capital intensive sectors

   Issuer and sector constrained
        Improved issuer and sector risk management
        Less concentration / more diversity
        Protected against rating agency methodologies
        Better prepared for future growth

Source: Fidelity International. ICE BofAML Bond Indices: ACHY - Asian Dollar High Yield Corporate Index; ACCY - ACHY,
3% issuer cap; Q490 for Fidelity’s customised approach - Blended Index: ACCY, 20% sector Level 4 Cap, 3% issuer cap,
as of February 2020.

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RHB ASIAN HIGH YIELD FUND UPDATE – 1 April 2020

DISCLAIMER
This update has been prepared by RHB Asset Management Sdn Bhd (“RHBAM”) and is solely for your information only. It
may not be copied, published, circulated, reproduced or distributed in whole or part to any person without the prior written
consent of RHBAM. In preparing this update, RHBAM has relied upon and assumed the accuracy and completeness of all
information available from public sources or which was otherwise reviewed by RHBAM. Accordingly, whilst we have taken
all reasonable care to ensure that the information contained in this update is not untrue or misleading at the time of publication,
we cannot guarantee its accuracy or completeness and make no representation or warranty (whether expressed or implied)
and accept no responsibility or liability for its accuracy or completeness. You should not act on the information contained in
this update without first independently verifying its contents.

Any opinion, management forecast or estimate contained in this update is based on information available as the date of this
update and are subject to change without notice. It does not constitute an offer or solicitation to deal in units of any RHBAM
fund and does not have regard to the specific investment objectives, financial situation or the particular needs of any specific
person who may receive this. Investors may wish to seek advice from a financial adviser/unit trust consultant before
purchasing units of any funds. In the event that the investor chooses not to seek advice from a financial adviser/unit trust
consultant, he should consider whether the fund in question is suitable for him. Past performance of the fund or the manager,
and any economic and market trends or forecast, are not necessarily indicative of the future or likely performance of the fund
or the manager. The value of units in the fund, and the income accruing to the units, if any, from the fund, may fall as well as
rise.

A Product Highlights Sheet (“PHS”) highlighting the key features and risks of the RHB Asian High Yield Fund is available
and investors have the right to request for a PHS. Investors are advised to obtain, read and understand the PHS and the
contents of the Information Memorandum dated 5 April 2019 and its supplementary(ies) (if any) (“the Information
Memorandum”) before investing. The Information Memorandum has been registered with the Securities Commission
Malaysia who takes no responsibility for its contents. Amongst others, investors should consider the fees and charges
involved. Investors should also note that the price of units and distributions payable, if any, may go down as well as up.
Where a distribution is declared, investors are advised that following the issue of additional units/distribution, the NAV per
unit will be reduced from cum-distribution NAV to ex-distribution NAV. Any issue of units to which the Information
Memorandum relates will only be made on receipt of a form of application referred to in the Information Memorandum. For
more details, please call 1-800-88-3175 for a copy of the PHS and the Information Memorandum or collect one from any of
our branches or authorised distributors. Subscription of units of the Fund is only open to sophisticated investors.

The Manager wishes to highlight the specific risks for the Fund are management risk, currency risk, country risk and pricing
and valuation risk and the specific risks of the target fund are bonds, debt instruments & fixed income (including high yielding
securities), lower rated/ unrated securities, qualified foreign institutional investors (“QFII”) risks, emerging and frontier
markets risk, currency risk, distribution out of capital risk, securitised or structured debt instruments, derivatives related risks,
risks in relation to specific derivative instruments. These risks and other general risks are elaborated in the Information
Memorandum.