Amanah Saham Malaysia (ASM) 2012 Dividend Distribution, Questions Left Unanswered!

Unit holders for Amanah Saham Malaysia (ASM) finally get to enjoy one of the highest ever dividend + bonus ever since 2009. A declaration of 6.5% in dividend plus and a "special income distribution" of 0.3% allows unit holders to enjoy a total of 6.8% in returns. 

Background:

In a press release by Amanah Saham Nasional Berhad dated 13 March 2013, ASNB states that the bonus issue is a token of appreciation for ASM investors. See below:

Historically, ASM's income distributions for 2010 and 2011 have never include any form of extra bonus for unit holders. Then I thought perhaps the additional bonus issue can be can be found in the annual report for ASM. Alas, after glancing through the 2012 Annual Report for ASM, I could not find a single statement that refers to the "extra 0.3%". 

What I can find from the Annual Report, it only the dividend distribution as shown below:

Only Dividend Distribution is Recorded

The financial statement taken from the same report indicates that the net profit after tax is distributed as 6.5cents per unit only. Once again where is 0.3%??

Some of you might say why bother, "dapat extra 0.3%, ok mah!"  Well food for thought, if extra unrecorded monies can be distributed to investors, so can the opposite happen.

Why do I question the transparency?

Let me begin with a case comparison first:

Here is a sample of annual returns from a Unit Trust X, a top performing Equity Malaysia unit trust fund between 2010 till 2012:

Here is the annual returns for ASM from 2010 till 2012:

Comparison:

Both funds are invested into Malaysia equity and yet somehow in 2010 when the returns of the Unit Trust X is 32.71%, ASM declares 6.30% in return. In 2012, Unit Trust X gained 13.95% while ASM declares 6.5%. 

Points to Ponder:

The year 2012 is not considered as a Bull Market for Malaysia Equity and yet the dividend returns from ASM increased plus added bonus. Is that logical?

What about 2010 then? Where Unit Trust X is able to give high returns (32.71%), ASM declared a lowly 6.3% with NO added bonus. Still logical?

Summary

Obviously the comparison above can be rather unfair especially when we talk about fund size. It is much more difficult to provide positive returns for RM12.6 billion worth of funds managed by ASM as compared to RM85.95 million in funds managed by Unit Trust X. 

Secondly the equities/shares owned by ASM and Fund X are totally different. Therefore the performance and dividend declaration would also be differ between ASM and Fund X. 

Thirdly, during a Bearish market, ASM is still able to give positive dividend returns while Fund X could be making losses. (You can read my case study on ASB and how they are able to generate dividends even during a Bear Market)

What's bugging me here is the transparency of the fund. I find myself asking the following:

1. An Annual Report that does not correlate with the actual payout announced? 
2. An unaccountable income of "0.3% special income declaration"? 
3. Are the figures from the past Annual Reports really correct? 
4. Have you been receiving dividends that are not proportional to the performance of the market? 

All these questions might be left unanswered.

Note : This post is written not to speculate but to raise questions on the importance of having transparent and accurate reporting. Perhaps what I have written above could be wrong. Could it be because I failed to understand the complexities of financial reporting? Or perhaps I could have missed out on the details since I only manage to "glance" through the annual report. 

Cheers and Happy Investing!

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