I'm neither talking about how much commission the agent or PM earned.

I'm emphasizing if an agent helping clients to buy sell without giving advice, OR not telling the hidden clause or hidden risk, just the surface of the fund then even a penny paid to the agent is only a waste.

This post has been edited by debbieyss: May 20 2011, 12:22 PM

Oh, i'm just stating the agent's cut hehe. BTW, y do U think most agents dont propose bond funds? No commission leh

Yeah, i agree with U, most are just Sales Agents, thus, buyer beware.
U should see some of these fellows running from PM to ING during the 2007-2008 PM's PCSF fiasco. These sales agents promised 20%pa++ to customers and when kaka hits the fan (PCSF plunged), they changed mobile numbers, moved, etc. and joined another fund house. I saw these with my own little beady eyes - i'm in PM, went to ING's & Prudential's agent talks / recruitment too on invitation from friends in the industry. I gotta take my hat off to them - totally no conscience at all. It must be good being born without one

This post has been edited by wongmunkeong: May 20 2011, 12:30 PM

so how much is the commission ? better for me if i become own agent ?

JinXXX, if U invest at least $10K pa from your EPF OR about $6K cash to equity funds in PM, you'll more that recover your yearly agent cost + get access to historical data (NAVs) like those i posted. If U + family + close friends all combined, whoa... imagine the savings!

For details on commissions, yearly incentives and career benefits (for funds held by yr customers), please get in touch with the nearest Public Mutual agent recruiter. Sorry dearie - like i mentioned, i'm unsure whether PM will come after me if i reveal it here - i still intend to be my best agent/customer + i'm an investor at heart, not a recruiter/sales agent.

This post has been edited by wongmunkeong: May 20 2011, 12:50 PM

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gark, for what i understand, dividend paid according to how many units you hold, no? The lower price you buy at the more units you gain, no? Even in the end you sell your Unit Trust, it would be according to what price you bought at and how many units you hold, eg:
year 2000 bought 1000 units at RM0.15 = RM150
year 2001 bought 1000 units at RM0.10 = RM100
RM250 bought 2000 units

year 2008 sell 2000 units at RM1 = RM2000 - RM250 = earned RM1750
Am i right?

Please explain further, i'm confused. Thanks!

cherroy, can explain further for the bolder part?
For what I understand, both dividend types (shock or unit trust), you need to pay tax before you want to cash out.

well thats depressing... thought can save/earn some bucket load off my own personal investment..

Tell U a semi-secret. U may save a bunch (in terms of making a bunch) if U think in terms of 10 yrs +
Reason: PM gives x.xx% of an agent's portfolio (ie. customers' holding) of loaded funds every year. It may sound small but try and imagine 10 years / 20yrs of your investments' growth... AND your family's... AND your close friends'...

Let's go back to Unit Trust Basic 101:

Lets say 10 investors pay a company (e.g Public Mutual) RM 1,000.00 each. Hence the total fund size is RM 10,000.00 and PubMut will take a 5.5% commission which leaves RM 9,478.67 to invest in various stocks. To make things easier, PubMut will assign a arbitary unit lets say 1 unit = RM 10.00, so investor has 100 units now and each units Net Asset Value, NAV (at the time of inception) is RM 9.4787

Lets say the the basket of stocks increase by 10% (inc dividend received from the stocks) in one year's time, then your total fund size becomes RM 9,478.67 + 10% = RM 10,426.54 and its NAV becomes RM 10.4265.

Lets say at the Pub Mut decide to give our RM 200.00 as dividend. So each investors get RM 200.00/10 =RM 20.00 as dividend. So the total fund now becomes RM 10,426.51 - 200 = RM 10,226.54 and the NAV drops to RM 10.2265.

So you see, declaring dividend or not, makes no difference... your NAV is reflected accordingly. It only increase cost as more paperwork such as postage for sending cheques and issuance of cheques. All these incurs cost which will be deducted from the fund.

Sometimes, Pub Mut to attract new investor may split the unit to make the NAV smaller. So for example Unit Split 1 for 2 means 1 original unit will become two. So the original investors who held 10 units will now have 20 units but the NAV now will be RM 10,2265/2 = RM 5.1132. Please note the total wealth is still the same. It is all playing with numbers.

So now, after one year, Pub Mut will take 1.5% some more from the collective fund for administrative charges. Hence the fund now becomes RM 10,2265.54 - 1.5% = RM 10,073.14. Hence the NAV now becomes RM 10,073.14/200 = RM 5.0366.

So dear investors, if you do not wish that your investment, the minimal your fund manager must increase your fund by 1.5%.

Some ask, how much savings you get if you are the agent yourself?

Out of the 5.5% Pub Mut will pay half of it to its agents. So if you are the agent yourself, you save 2.75%.

And there is an annual RM 100.00 reccurent license fee which is paid to FIMM (Federation of Investment Managers which is the governing body for Unit Trust Agents).

Look out for Unit Trust Advance 202 in my next posting.

Xuzen

---

Added on May 21, 2011, 3:11 pmAnd my next posting will try to answer some of the question posed to me by a fellow forumer in my PM inbox. So here's looking at you kid.



This post has been edited by xuzen: May 21 2011, 03:11 PM

they earn 2.75% of the commission

in short

dividend is not important, and even worse, it's taxable. it's like passing $ from left to right pocket with tax incurred.
split, like xuzen mentioned, it's only to attract new investors to make the NAV look 'affordable'

for those who's unwilling to incur the 5.5%, there are always some certain good funds from OSK-UOB, Kenanga, pacific etc..from 2% onwards, or even less sometimes.

I thought when we buy at low price of unit trust, years later if the stock market's performance performs better, NAV will increase, and thus when we sell, we will gain more.

Difficult to understand...

Yup yup - from FundSupermart right?

yes ur rite, buy low sell high theory is valid .most important, is to read up and research the background of the funds properly before buying. as we know, some funds are even struggling to break even @ IPO price even after 3years or more.

Thanks for your reply, appreciate it cos I got to understand as much as possible to make decision which fund to go for before everything is too late.

I have finally finished reading this entire thread... Tired!

Few questions here:

1. PBSmall Cap fund already closed on 4 May 2011, right? Does that mean even the existing investor wants to top up money into it, it is not allowed?
Secondly, is it a trick from Public Mutual to open the fund at this point of time as now the market is too hot, KLCI is almost breaking the historical height, they expect investors buy in at high price then after KLCI crash, price drop and investors lose money?

2. TO kuchingfight, from your statement above, how does it relevant to what gark has pointed out? He said 'It doesn't matter if the NAV is high or low, the investment stays the same.' Would you elaborate further?

This post has been edited by debbieyss: May 21 2011, 04:59 PM

I wish Fund Houses were so interested in investors' well being VS. the chance to charge service & management fees

1.yes, it depends, sometimes when the fund manager sees some opportunity in market, he may decide to increase the fund limit. and off course not overincreased it as it may dilute earnings


2.i think what he meant was(just what i think), if the fundamental investment of a unit trust fund is good & strong, u may just enter @ any time by means of applying DCA or other methods. As, a good fundamental fund will recover overtime when it drops. And, it's hard to time the entry into market, so in the long run, u wil gain regardless when the NAV purchased @ high/low time, off course u would have "gain" even more when the NAV drops

This post has been edited by kucingfight: May 21 2011, 08:32 PM

i prefer unit split rather than the dividend income, due to the tax implication.

It will be a double tax situation, when the individual stocks declared income distribution its already tax once b4 paying out to mutual fund, and then when mutual fund declared dividend to their investors, there will be another round of tax....

I dont understand why must mutual fund in Msia like to declare dividend, some other foreign mutual fund like Franklin Templeton, Fidelity never declare dividend even their company is registered in tax heaven country. that is why a mutual fund initial offeringf price of USD10/unit could grow to as good as USD50 over time. So when investor encash their investment, can have 100% capital gain, without paying tax twice.

It's because there are a lot of naive mutual fund investors in Malaysia market. They cannot understand that is dividend irrelevant theory , which means dividend distribution come to the cost of downward adjusting the NAV. So they don't appreciate the advice to do 'home-made dividend' instead by redeeming part of the units. So later these investors will put back the dividend into the fund again and being charged 5.5% again, how stupid is this?

It depends on what kind of fund you are going to invest. If the fund is value investing type, then you might not be able to enjoy good return during bull market, instead you should buy the fund during end-bear or early-bull market. Knowing the fund type and style of your fund manager give you advantage to decide when to buy and sell.