Thanks for one of our visitors here for asking me about this matter. Let me summarized technical detail of Mutual Fund or Unit Trust.
- Mutual Fund is a group of selected stocks/bonds that are professionally picked by the fund Manager. The picked stocks/bonds are believed to yield acceptable returns.
- The selling price will be charge around 6.7% percent above the Net Asset Value (buying price)
- Selling price = the price you have to pay to buy the mutual fund
- Buying price(NAV) = the price that you will get when you sell your mutual fund
- There is a 1.5% annual fee (depends on type of unit trust) that you have to pay each year.
When will I know that I have actually gained profit?
Mutual fund price is just like usual stock price, which goes up and down everyday. The price is determined at the end of trading period each day. Below is the price table for Public Mutual Funds:
Basically, you will buy your mutual fund using ‘sell’ price (right-hand price) and you will sell your mutual fund using ‘NAV/buy’ price (left-hand). To earn profit, the current NAV must exceed the sell price when you bought that fund. From past performance, Public mutual could achieve 6-15% per year.
Example of calculation:
A year ago, I bought RM10000 Ittikal Unit trust with selling price RM 0.7500 per unit. So total unit that I get was 10000 / 0.75 = 13333.33 unit
Yesterday, the NAV/buy price has became RM 0.8004. I decided to sell all my unit trust. So the total money that I get from the selling is 13333.33 x 0.8004 = RM 10672
Basically, I earned RM672 from this investment.
Hope this could answer some of your questions.
#1 by Mohd. Awang Razdi Bin Mutalib on July 18, 2006 - 10:29 pm
Thanks for the info.
By the way, can you get your profit by monthly, or it is fixed for a year?
thanks.
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#2 by Irwan on July 18, 2006 - 11:10 pm
Dear Mr. Awang Razdi,
mutual fund have 2 kind of profit.
1. the appreciation of the value ie. the the NAV value increase over time
2. the distribution yield. Distribution yield is given according to the type of fund. Some funds give 6-8 % per year if the business is good. What it means by distribution yield is a percentage given to shareholder in term of bonus units. However, after the distribution, the NAV will reevaluate to the same percentage of the distribution.
In simple term: If the distribution yield is declared as 5%, the NAV will be reduced by 5%.
To answer your question, there is no monthly or yearly profit. It’s just depend on the price perunit at the current moment.
By the way, as far as I know, Maybank offers online service for unit trust. You can buy and sell your unit trust just with clicks of buttons. So you will have a total control of when to buy and when to sell. That’s neat
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#3 by Mohd. Awang Razdi Bin Mutalib on July 18, 2006 - 11:23 pm
thanks for the great info.
I will invest in unit trust very soon.
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#4 by Irwan on July 18, 2006 - 11:33 pm
oh don’t thanks me.. it’s my pleasure to have you here. good luck on your investment
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#5 by Ummi on July 21, 2006 - 1:02 pm
Interesting…. Very interesting….
Thanx for the compact and precise explanation. I’ve seen the buy/sell price on tv & newspaper all my life but only today that I understood what they mean!!! Thanx Irwan
Personally, the stock market is the scariest business that I could ever imagine. Not only I don’t understand a thing (ehem…hehehe… *blush*), I believe that you’ll go bankrupt if you ever get involved in it!
Thankyou for sharing your real-life experience. I’m getting more and more interested in this now hehehe….
Keep us updated with more info please.
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#6 by tunkukai on July 27, 2006 - 2:49 pm
Irwan,
Thanks so much for your explaination. Read and kinda get into the mood to start investing now. I have only about rm2k to invest. Is it sufficient or is there a minimum amount needed for investment. I believe by starting small, there ‘ll be a chance for me to learn and grow from there
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firdaus reply on December 18th, 2009:
hi..sorry if intrude to flatform..but just want to share some knowledge and idea.. investing in unit trust wont make you go bankrupt as you imagine. In fact unit trust investment will provide you with straight forward investment with less headache..but reasonable return. Initial investment is only 1K, you may surprise what this 1k could do for you after some years invested..you may reach me at myfuture_money@yahoo.com
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#7 by Irwan on July 29, 2006 - 2:29 pm
Tunkukai,
the minimum investment for Ittikal fund is RM500, it is the hottest fund(syariah) in Public Mutual offering. Just checkit out at your nearest Public Mutual branch. zBtw, I’m reading a book about the flaws of mutual fund. Will keep ya updated..
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#8 by Mamat on September 13, 2006 - 12:34 am
Salam,
Basically, I don’t think you get RM672 for your RM10,000. You should have deducted your RM672 for various fees.
For people who not fully buying the max units of their ASB units, I advised them to invest their money into ASB first. Then, focus on other channels of investment.
Btw, nice for having this sharing/discussion about investing though. Keep up the good work Irwan!
[Reply]
#9 by Thoumi on November 12, 2006 - 2:21 pm
Salam,
Very interesting. About the ASB, can someone share hows it work? I’m new in investment so hope some one can share some link for beginner lime me
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#10 by Irwan on November 12, 2006 - 2:34 pm
ASB is the simplest form of investment. it’s just invest and profit scenario because the capital is guaranteed by government. You might ask why government want to bear the risk of losing money. The answer is our government wants a lot more people to invest in the market, especially Malays. That’s why the ASB limited the investment to Malays just to encourage the investing habits among the Malays.
You can go to any bank/post office to start investing in ASB. Ask them to open an ASB account for you and they will be glad to do so. that’s all what it takes.
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#11 by missyaliaa on December 6, 2006 - 11:28 am
Hi there, I’ve just started working for only 5 months and knowing the importance of investing; I hope to start my investment asap to achieve my financial goals. Would like to get your opinion what essential investments steps I should do right now in order to cover more grounds later in the future.
Fyi,my initial plan would be to take up the ASB loan, and then taking UT. However, I am confused on which is the best loan offer I should take up (different banks seems to offer diff rates) and does it matter how much I loan? As for UT, the myriad of funds makes it confusing for me to choose.
You guys rawk and thanks in advance
[Reply]
cek kem reply on January 24th, 2009:
Missyallia, u must know how much the profit you’ll get when the loan matured.Every bank has their own package. Choose the lowest package.
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firdaus reply on December 18th, 2009:
hi..congratulation for good future planning on investment..This something amazing as you hv just started working, but have seen the importance of saving/ investment for better future.
Well, ASB was good to save and earn some return..if need to borrow/loan for this investment my simple formula is: calculate how much you need to pay monthly X 12 month and compare it to the return( dividen) if its +ve thats was ok..
however if you’re aiming for long term investment i strongly recommend you to start with unit trust..you may reach me at myfuture_money@yahoo.com for more details of how to invest
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#12 by Irwan on December 6, 2006 - 4:42 pm
hi Syaliaa, realizing that investment is a part realizing our financial dream is a very crucial part. for the start-up, i suggest that you go with ASB, which is what you have exactly planned.
If you opt for loan, u have to top up the investment with your own money too. From other visitor calculations/suggestions, it’s the best way of doing asb loan. About which bank is the best, i can’t really comment coz i don’t have any experience
. maybe other visitors can suggest one.
UT is a good way to diversify but it can’t beat ASB’s profit/risk ratio. If only you want to get more return with extra risk, UT is the way to go. if not, i suggest you just stick with ASB until it reaches the limit.
It can be said that most moderate-risk UTs are proportion to composite index, so choosing which one is the best is quite hard. Public Mutual is a good unit trust if we considered it’s past performance. my Ittikal Fund from PM soared about 20% in 6 months, thanks to the composite index’s hike.
regards
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#13 by Adnan Hamzah on December 7, 2006 - 11:34 pm
Every investment comes with risk i.e. the higher the return potential, the higher the risk. unfortunately, many UT agents only mentioned about the return without explaining about the risk.
Secondly, all UT comes with charges. Therefore, if the unit price increased by let say 6%, it doesn’t mean that you have made a profit of 6% because you buy the unit at selling price, which is already 5% to 6.7% higher than unit price.
Next, increase in unit price also means nothing unless you sell your unit at that price. UT is not like FD. It is like owning a house, although the market price is high you get nothing unless you can sell your house at that price.
ASB? If you read Utusan Malaysia early this week, then you should know that it doesn’t comply to Syariah.
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#14 by Piji on January 23, 2007 - 9:26 pm
Mr. Adnan, pardon me if I say that your claim needs to be justified. If it is true that ASB does not comply with the syariah, I don’t think there is a social announcement regarding that issue by the government. There are just merely writers’ claims which have mixed views about that. I don’t blame them because they have the right to say whatever they think, based on what they perceive. The government, on the other hand, does not say that ASB is wrong and would absolutely not allow ASB to operate if it violates syariah law. We have the ministers to lead and tell us, and they will tell us and prompt ASB to stop if it truely violates this law. Let them do their jobs and we as the members of this society, follow the pathway that have been created in front of us. The objective of our government is to create another channel to increase the bumis’ wealth. If you understand politics and the nature of our complex society, you can understand why the government is doing this for us. And please don’t make a religion sounds too rigid, as if the absolute truth is already being sentenced, for the truth lies not in the writers’ perception-laden words.
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#15 by surveyor on January 27, 2007 - 8:39 am
Salam.
Hi Irwan,
I must say that this is a great reference site for beginners in the investment world. Glad I came across this site and thanks for sharing so much information. I’m still surveying which unit trust is the best. Before this I’m investing in ASB, since my friend said that some of the money goes to non-halal business and of course the dividen we obtain also not halal. Therefore I checked the JAKIM e-fatwa site and I found a fatwa from Terengganu stating that if the halal status of the business/ investment process in doubtful, it should be avoided. However it only depends on certain states like Terengganu and Selangor but somehow a contradict decision made by Majlis Fatwa Negeri Sarawak.
This site will be helpful for all of us to make our decision whether or not to continue/ start our investment in ASB.
http://www.e-fatwa.gov.my/mufti/fatwa_prosearch.asp?search=asb.
As for me, I decided to sell back almost all of my shares in ASB and will start investing in one of the Islamic trust funds soon.
[Reply]
#16 by ameer on March 9, 2007 - 10:45 am
Kategori : Muamalat
Tajuk :
HUKUM WANG DIVIDEN DAN BONUS ASB
Isu :
Jawatankuasa Perunding Hukum Syara’(Fatwa) Negeri Selangor telah menerima surat daripada seorang hamba Allah daripada Tanjung Malim yang bertanyakan berkenaan dengan hukum wang dividen dan bonus ASB dengan soalan seperti berikut :
1.1. Adakah wajib dikeluarkkan zakat daripada wang bonus dan dividen ASB.
1.2. Bolehkah wang tersebut digunakan bagi menunaikan Fardhu Haji Ke Tanah Suci Mekah.
Maka Jawatankuasa Perunding Hukum Syara’ (Fatwa) telah diminta memberikan fatwanya mengenai permasalahan tersebut.
Keputusan :
1. Ahli Jawatankuasa Perunding Hukum Syara’ (Fatwa) telah membincangkan perkara di atas dengan penuh teliti dan panjang lebar dan mengambil keputusan seperti berikut :
1.1. Zakat Daripada Wang Bonus Dan Dividen ASB
Keputusannya :
” Wang bonus dan dividen yang diterima daripada hasil pelaburan ASB adalah tidak diwajibkan zakat kerana pelaburan bercanggah dengan hukum syara’ ”
1.2. Bolehkah wang digunakan pergi menunaikan Haji ke Tanah Suci Mekah
Keputusannya
” Ahli Jawatankuasa yang hadir bersetuju memberi pandangan bahawa oleh kerana pelaburan ASB pada masa ini, terdapat pelaburan di tempat-tempat yang bercanggah dengan hukum syara’, maka ia tidak
diharuskan sehingga pihak ASB membersihkan dan tempat-tempat tersebut.
Ahli Jawatankuasa Perundingan Hukum Syara’(Fatwa) yang hadir bersetuju memberi pandangan bahawa. oleh kerana pelaburan ASB pada masa ini terdapat pelaburan di tempat-tempat yang bercanggah dengan hukum syara’. maka ia tidak diharuskan sehingga pihak ASB membersihkan dari tempat-tempat tersebut.
http://www.e-fatwa.gov.my/mufti/fatwa_search_result.asp?keyID=1155
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#17 by chambink on April 21, 2007 - 8:58 am
Talking about ASB, there is other PNB fund. From the disussion only ASB and UT being mention. How about ASN, ASN2 and ASW 2020. Is this fund not as good as ASB and UT.
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#18 by Peter.L on May 6, 2007 - 6:22 pm
Sir, i am 26 yrs old and still very new in the financial world… my friend told me about the Mutual Fund and ask me to invest…well how should i start???
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#19 by Irwan on May 6, 2007 - 9:06 pm
Hi Sir, Thanks for visiting my blog.
You should start like you are starting everything else. First of all, you have to know you capability as investor. You might want to take risk personality quiz here.
http://www.irwan.biz/check-who-are-you/
this will give you insight on how much you can afford to spend on investment and what type of investment suit you.
Then you have to find the best mutual fund that fit your investing personality.
I thing this hould be enough to get get you started.
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#20 by zahaly on May 18, 2007 - 4:25 pm
Good explanation on UT by My Irwan.
I don’t agree with high return comes with high risk. Looks to Warren Buffett, the most successful investor in the world, his philosophy of investing in the stock market by buying undervalued companies leads him to consistently in the top spot in Forbes list of the most riches man in the world.
In Malaysia, we have iCapital fund that practices the same philosophy. You can read my other opinion on this in my blog (in Malay) at BlogSAHAM
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#21 by tunkukai on May 21, 2007 - 2:23 pm
Irwan ,
Thanks alot for the explainations. It ‘s indeed handy and could be a stepping stone for anyone who wants to put their foot in the investment world.
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#22 by naan on August 2, 2007 - 11:13 pm
Hi Irwan,
Very good explanation to Mr Peter. Your how-to-get-started guide is brief and easy to understand. No technicals that can confuse new investors.
I’m a remisier and also a UT agent. I have clients who invest both in unit trusts and stocks. Unit trust for med to LTerm investment as he is buying a basket of shares. The risk is lower than investing in stock mkt. Investing in stock mkt provides higher returns(depends on mkt sentiment and timing). Higher Risk = Higher Returns.
To be a successful stock mkt investor, one need to be knowledgeable abt the mkt.
But unfortunately, some of the retail players are speculators. They make money from the mkt, and they also lose BIG money.
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#23 by Don on August 6, 2007 - 5:18 pm
Alo Mr.Irwan,
Wat smart person you are
Can you check my calculation as below?
I invested RM2000 in PBIF. Selling price at RM0.68. So, my units is (2000/0.68) = 2941.18 units. Then after 6 month,the NAV/buy price has became RM 0.8004. I decided to sell all my unit trust. So the total money that I get from the selling is 2941.18 x 0.8004 = RM RM 2354.12.
Basically, I earned RM354.12 from this investment.
But, service charges is 6.5% per NAV per unit. Then deducted (6.5%*0.8004*2941.18) = RM 153.07.
Excluding annual mangement fee, I only gain RM201.10.
It’s right?
Thank you
[Reply]
#24 by Irwan on August 6, 2007 - 7:21 pm
Mr Don,
The difference between selling and nav/buy price is that selling price already includes the 6.5% fee. if your stated selling price is the correct selling price,you don’t have to re-include 6.5% fee when you calculate the earnings.
thus, from your calculation, RM354.12 is the net income of your investment (in exclusion of the annual fee)
[Reply]
#25 by Irwan on August 6, 2007 - 7:43 pm
Mr naan,
I strongly agree with you that our investors are largely speculators. This actually defeats the purpose of mutual fund where we move the burden of speculating the market to the fund managers.
Most mutual fund investors don’t really know how to time the market, that’s why we choose mutual fund instead of directly investing in equity market ourselves. However, some of us feel that mutual fund is too easy and we need to do something to make us look more in control.
So some of us inevitably feel that market is now too high, or will imminently go down. Or we feel that upcoming events (like General Election) will definitely take the market down with it. All of the feeling of wanting to do something might really hurt the investors themselves.
Be careful of such insecure feeling. Good investing.
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#26 by kkchow23 on August 6, 2007 - 11:05 pm
Hi Don,
I’m not sure what fund you’ve invested in? PBIF? But based on the given selling and buying price for the fund. The simple estimate return is 17.71% or RM354.12.
Selling price already included the 6.5% service charge. Management/trustee fee, etc.. are all calculated and could be obtained from Accountants’ Report in prospectus. Therefore, investor don’t need to worry about that.
For more samples :
http://financial-freedom-unit-trust.blogspot.com/2007/07/public-mutual-fund-performance-chart.html
http://financial-freedom-unit-trust.blogspot.com/2007/07/public-mutual-fund-performance-chart_27.html
[Reply]
#27 by Don on August 7, 2007 - 9:31 am
thank for you feedback irwan and kkchow23
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#28 by Zuraini on September 1, 2007 - 5:37 pm
Hello Everybody,
How’s everything? When I started to join PM, my perspective is similar to Mr. Irwan. Yet, there is better way to manage your PM funds and gain better returns than ordinary investors. Some people say speculative, I would say analysis.
Imagine that you’re investing an amount of lump sum at Public Ittikal fund on month of Feb 2000 and expected to gain an average return for 3 years. What was happened in this period? You’re not gaining as you expected. In fact you lost around 7% from your investment.
And now drag your duration of investment to another year. You only gained around 22% for 4 years. If you calculate, the average return is only 5% per year. Is it a good investment? Of course there is a way to handle this situation. By using concept of dollar-cost averaging, your agent might advise you to top up the investment or extend the duration of investment since the market was bullish. What if you didn’t have the money? Or you didn’t want to take further risk, since you never know what would happen next few years?
Learn the smart way of investing in unit trust. It requires analysis and skills. With God will, I can further elaborate the situation. Please contact me if you’re really serious in investing in unit trust. Send an email to zuraini.yusof@gmail.com. Happy investing, take care and have a great day!
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#29 by Mr Chin on September 3, 2007 - 5:02 pm
Dear All readers,
I heard/read some PB Equity fund eg. PCSF service charge is 6.5% and some PB Bond fund eg. PISBF service charge is only 0.25%. Will I be right when I say if I invest RM 100,000 into PISBF first and later switch to PCSF (Just Pay RM25 or waived if Gold member), I can save 6.25% service charge (6.5%-0.25%) that will save around RM 6250 ? Appreciate if anyone can help to clarify the issue. Thanks.
Rgds,
Mr Chin
[Reply]
#30 by kkchow23 on September 3, 2007 - 5:37 pm
Hi Mr. Lim,
The units in unit trust are categorized into two:
1) loaded
2) low-loaded.
Loaded units are units previously already with 6.5% service charge (equity/balanced – 5.45% if during promotional). Non-loaded units are units previously already with 0.25% service charge (bond/money market).
From low-loaded switch to equity/balanced funds, you’ll have to include 6.5% service charge.
Unless you do switching from loaded(bond) / equity/balanced to another equity/balanced funds, there’ll be no additional charges except for the RM25.
[Reply]
#31 by Mr Chin on September 3, 2007 - 6:29 pm
Dear kkchow23,
Thank you for your reply.
I can see there are number of BOND available for switching eg.PSBF,PIEBF,PISBF .
For a Scenario
============================
(When I decided to invest in PB)
1. If I First invest in a Loaded Fund A eg.PCSF => I pay 6.5%
(When I decided to take less risk)
2. Then,I switch all to a Low-Loaded Fund B eg.PISBF =>I pay RM 25
(When I decided to take more risk)
3. Next,If I switch back to Loaded Fund A eg.PCSF => I have to pay 6.5% AGAIN ??? , which end up paying total 13% in this scenario???
Pls helps. Thanks.
Rgds,
Mr Chin
[Reply]
#32 by Irwan on September 4, 2007 - 11:34 am
i can confirm that if you do between equity-to-equity, you don’t have to pay the 6.5% fee again. it’s just RM25 per transfer for both ways. I heard it’s also like that for equity-to-bond transfer but i’m not sure about that the reverse (bond-to-equity).
correct me if I’m wrong.
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#33 by Zuraini on September 4, 2007 - 8:16 pm
Greetings,
Switching fund from Bond/MoneyMarket to equity if LOW-LOADED units then have to pay service charge(SC) usually 6.5% RM25. But if it’s LOADED, you only have to pay RM25.
Remarks:
Loaded – you have paid SC usually 6.5% at point of purchase
Low-loaded – you only pay SC 0.25% at point of purchase
For those who have joined PM, please read Master Prospectus under Key Features of the Funds. For PM syariah based fund page 16-17. You got to understand this, or you may ask your agent for further details.
TQ.
[Reply]
#34 by Zuraini on September 4, 2007 - 8:57 pm
Hello Again everybody,
Switching is a very sensitive subject to discuss. Some agents might say don’t do or try to avoid it because don’t know how to tolerate the risk. UT itself has degree of risk for investors to tolerate. For me, as to protect the interest of my investors I’ll guide them to use it whenever necessary with some analysis and tolerance of risks.
Look back at the situation for last 2 months and last Feb or back to year 2000. Some of us are losing up to 16% on some of funds. Well, if you are really looking for a real long term investment it’s ok especially EPF investment. But for cash investor between 3-5 yrs might not be ok. You never know how much you can absorb the risk.
I’m arranging appointment for serious potential investors only. And if you have already had an agent and satisfied with his/her service, just stick to it. I’ll educate new comers before investing and use certain tool when time comes. Then up to you to decide.
Which one is good? You have an option and use it, or keep quiet.
I’m really glad if you can email to me at zuraini.yusof@gmail.com for more information. Only serious investors please.
TQ
[Reply]
#35 by kkchow23 on September 4, 2007 - 10:47 pm
Hi Mr Chin,
Based on you scenario,
1. PCSF (investor pays 6.5% service charge) loaded units
2. Switch to PISBF (investor pays RM25) loaded units
3. Switch to PCSF (investor pays RM25) loaded units
———————————————————-
Give another scenario,
1. PISBF (investor pays 0.25% service charge) low-loaded units
2. Switch to PCSF (investor pays RM25 6.5% service charge) loaded units
3. Switch to PISBF (investor pays RM25) loaded units
———————————————————–
Last but not least, Irwan’s example
1. PIOF (investor pays 6.5% service charge) loaded units
2. PIADF (investor pays RM25) loaded units
Hope that answers most of the doubts…
Sorry for the late reply
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#36 by Mr Chin on September 5, 2007 - 12:09 pm
Thank you for everybody especially kkchow, Zuraini and Irwan. I think I am crystal clear regarding the meaning of “Loaded” and “Low-Loaded” units by now far more than the description and table in the Master prospectus. Thanks.
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#37 by kkchow23 on September 8, 2007 - 4:18 pm
This is something true about an experience that slyeo related to me from his friend and I hope people will take notice about and not be fooled. Servicing agent advised to switch from one fund to another fund (equity to bond). But in actual fact, it’s redeeming and then reinvesting the money into another fund (cheque involved). This will cause the investor to profit less cause he’ll have to pay service charges again when he reinvest the money. Moreover, if it’s a so-called equity switch to bond, he’ll charge 0.25% which is more that the actual switching of RM25. Then, if want to switch back to equity, now have to pay another 6.5% and RM25. This is so burden to the investor and profit for the unethical agent (he’ll receive the commission).
Please try learn about your investment and what’s happening to your fund. If there’s any problem, I’ll be glad to help if possible.
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#38 by Zuraini on September 9, 2007 - 12:29 am
Greetings,
First of all would like to thank to all new comers who have just joined PM. Welcome guys! For those who still want to learn further on unit trust(UT) products, I believe this is one of the best blogs for you guys to start.
I guess most of bloggers here know that Public Mutual is the best for UT investors because of consistency in returns. Well, it’s not only that. If you are up to date especially in information technology, all your investments in PM is just at your finger tip. Most of investors miss this out.
We call it TELEMUTUAL. A state of the arts in servicing industry, where all information can be retrived and transactions can be done thru a PHONE. The services including:
* latest fund price
* fund information
* stock market commentary
* balance
* repurchase/redeem
* EPF next withdrawal date
* best of all, SWITCHING
Well you got your choices, either utilize your agent OR do it yourself, just in case. Usually I will advice my client to fill up this form along with the other investment forms, especially cash investors.
Until next time, I’ll show you other great gadget when dealing with unit trust… In case you have any other inquires don’t hesitate to contact me at zuraini.yusof@gmail.com.
Thank you and take care!
[Reply]
#39 by slyeo on September 10, 2007 - 3:16 pm
I really think all agents should educate the clients/investors so that they understand what Unit Trust really is, how it works & explain clearly the reason for each recommended move. Maybe the clients are too busy or not interested to know more about unit trust, as long as their agents can monitor their funds & help them reap good profit. So, perhaps I shouldn’t be too surprised to see that many investors simply leave their investment to their agents to monitor and do as the agents instruct, without understanding the rationale behind each action.
As a result, investors may suffer consequences like profitting less that what they could have gained because some moves may actually benefit the agent more at the expense of investors as they may not be aware of the implication, fees/surcharges involved etc. Hence, I strongly advise all investors to get a second opinion before any action is taken and be in control of your own investment.
Another observation is that many investors invest in unit trust as if it’s the share market, I guess that’s why there’s so much discussion on switching, like in share market we sell off within months, weeks or even days to get some quick profit. In unit trust, we’re talking about investment, not speculating or quick profit-taking. Any excessive switching would disturb the growth & performance of the fund in the long run and affect the job of the fund manager. I guess that’s why fees are imposed to prevent investors from ‘speculating’ as if they’re selling shares in the stock market. Imagine a majority of investors switch or repurchase after gaining a profit of say 5-10% within a short period of time, this won’t do the unit trust industry any good!!
A general glance at the quarterly fund review will tell us that most funds, excluding bond, give an average return rate of close to 100% if not more, so why settle for less by speculating in months/weeks instead of investing in years (1-5 or even longer)? On the other hand, UT is not 100% risk free, so nothing is guaranteed and the fund review can only be used as a reference to guide us in our investment. Switching or reinvesting at the right time could help us lock in & secure our profit, but if executed wrongly we get less that our fund is capable of giving us.
[Reply]
#40 by Zuraini on September 10, 2007 - 8:34 pm
Hi Everbody,
As mentioned earlier some of us might not be comfortable to discuss about some of the features in unit trust for some reasons. I guess words like “excessive”, “speculate”, reward and risk tolerance should be elaborate further so that investors know what they are dealing with.
Most of the readers here have come to me to get clear picture on these scenarios. They’re happy when there is transparency. There is no obligation when you get opinions from other agent. Grab as many information as you can. Make your own judgment. As to respect some of the opinions, I would rather not to discuss it here.
Get your fact and figures first before take any risk. It’s your hard earning money, and you deserve to know more. Take care guys!
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#41 by Zuraini on September 10, 2007 - 8:50 pm
Hello again,
There is a great investment suitability questionnaire in one of the web about unit trust.
http://www.hsbc.com.my/1/2/personal-banking/investments/unit-trusts/unit-trusts-transaprency-and-impartiality
The questions help new investors understand their attitude towards risk and rewards tolerance. In the end, the analysis will determine which type of risk category you fall into.
I think this is a great tool. But unlike Public Mutual web, I won’t be able to find their fund performances. I wonder why?
Try this out and have fun!
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#42 by kkchow23 on September 12, 2007 - 11:21 pm
I’ll agree with what slyeo said. ” Any excessive switching would disturb the growth & performance of the fund in the long run and affect the job of the fund manager. “ The reason why we invest thru unit trust is because we want someone with the knowledge to invest on our behalf and hopefully gives us profit in return, someone who’s professional (fund managers). If we’re to act as a fund manager, then it’s even better just to invest directly in shares, etc… that’ll even save the service charges of 6.5%. Use switching to our benefit and not for a loss cause.
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#43 by Zuraini on September 13, 2007 - 12:41 am
Salam Ramadhan untuk muslimin dan muslimat yang melayari blog ini. Hiasi bulan yang mulia dan penuh keberkatan ini dengan amal ibadah dan kebajikan, Insyallah. Selamat bersahur dan berpuasa!
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#44 by aak on September 14, 2007 - 4:33 pm
Hi Irwan,
A consultant from CIMB Wealth Advisors approached me to invest in unit trust. Mentioning about 10-15% p.a. return in 3-5 years. Is it guaranteed return?
Please advise.
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#45 by kkchow23 on September 16, 2007 - 7:30 pm
There’s never guaranteed returns in unit trust.
Even for capital guaranteed funds, you’re assured that you’ll get back at least your initial investment if you keep it within a designated period of time.
http://financial-freedom-unit-trust.blogspot.com/2007/08/capital-guaranteed-fund-explained.html
What we can say is that basically if you based on past performance, your chances are more likely to obtain around 15% returns.
When investing in unit trust, there’s always risk. Without risk, definitely the returns won’t be that high. Take for example fixed deposit (FD), you’ll get the returns based on the rates offered.
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#46 by aak on September 17, 2007 - 10:24 am
Thanks for the info.
Some people are afraid of changes. Tend to stick to what they know best… Save your savings in the safest place where the return is secured.
Say EPF yield around 4-5% p.a. An EPF holder has the choice to invest his/ her money in unit trust, but some don’t want to take that risk. So, their money will grow slower, slower than the inflation rate now.
In the end, after retirement, they end up with small amount of money to live for the next 20-30 years.
Why not take the risks for a small portion from your EPF Account 1. At least it’s a start to financial freedom, right. I don’t have minimum EPF Account 1 to invest yet, but I save in ASB and Unit Trust Savings Fund.
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#47 by hakimie on September 18, 2007 - 8:42 am
Assalamualaikum and good morning to all forumer.I’m 24 years old from KB.I’ve just invested in Public Islamic Asia balanced Fund last Sunday with sum of RM 10700.I will top-up it later.
Is it correct by join it when the unit price is low rather than when it is high.This fund is newly launched.
I’m new in this forum and I’ve join Internet Based Investment before this.
can you all give as many as you can the tips about the investment.
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#48 by kkchow23 on September 18, 2007 - 10:33 pm
Hi aak,
Changes are unavoidable in this current situation. If you try look at the bigger picture, since inflation rate tends to grow higher and higher, we have few choices left for us. In order to cope with it, we must make sure that our savings actually appreciate more than the inflation rate.
It’s actually good to start investing even if it’s just a small amount in the beginning. Remember the magic of compounding effect.
http://financial-freedom-unit-trust.blogspot.com/2007/05/compounded-savings-plan.html
If your still new, then why not try few funds available at the market and see how it’ll perform. There’s no harm diversify your investment. Happy investing
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#49 by MK Leow on September 19, 2007 - 4:29 pm
Hi,
i want to ask about public mutual unit trust.
is it good bank for investment?
Im in consider invest at PBIBF, PBCMF, PBICMF. but i dont know which one is good?
Because this is my first time in investment and I have only about RM1000 to invest. i start from small amount first.
if i invest in PBICMF and my fund is RM1000, so how many profit i can get and how to calculate?
Thanks for everyone.
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#50 by kkchow23 on September 19, 2007 - 11:23 pm
Hi MK Leow,
Refering to the funds your considering, they’re PB Series Funds distribute by Public Bank branches, sales by customer service officer.
1) PBIBF (Bond Fund-Shariah)Mar,2006 – conservative
2) PBCMF (Money Market Fund)Jan,2007 – conservative
3) PBICMF (Money Market Fund-Shariah)May,2007 – conservative
For PBIBF, for 1 year performance roughly about 4.81%
For PBCMF, since launch roughly about 2.05%
For PBICMF, since launch roughly about 0.95%
Bond funds tend to outperform more than money market funds.
Basically we say that both PB series funds and Public series funds are the same as it’s managed by the same fund managers available Public Mutual. The difference is only the service provided. Depending on preferences, sometimes you might consider having a servicing agent or just going to the customer service officer at the bank. Try check out my blog if your free. If you would like to know more about the Public series funds and how to financially manage your investment, you can contact me kkchow23@hotmail.com
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