i'm quite confused when someone said distribution from unit trust aren't same as dividend...
for me, both are pay out when the company makes money and after paying the price/nav will be adjusted.
or do i misunderstand anything?

it's actually same.both pay out but for unit trust you dont get the money.it will be reinvested back by alloting more units to you

source:I'm a CIMB unit trust consultant

This post has been edited by greddym3: Dec 1 2011, 11:42 PM

cimb got do unit trust ??

yes. go to : http://www.cimb-principal.com.my/

although not as popular as public mutual,the performance is as good

if walk in directly...how much service charge? 5.5% or above also?

No lar.. They can pay investor cash also, just that if the dividend is too small, it will be more cost effective to get the unit reinvested and acquire more units.

English - reaction / response of stock's price or mutual fund's NAV is NOT THE SAME but SIMILAR

Mutual Funds pay out (either cash or re-invested) and their NAV will be adjusted lower EXACTLY to the value paid out +/- the fund's holdings (stocks/bonds/cash/etc) movement for the day.

Stocks pay out and their MARKET PRICE:
a. Usually drops but to the exact value paid out is highly unlikely
b. May stay
c. May surge

All the above for stocks is due to bid/offer of free market.
VS
Mutual Funds aint strictly a bid/offer thing - fund house HAS TO BUY BACK at NAV of end day (usually) price.

This post has been edited by wongmunkeong: Dec 2 2011, 05:52 AM

The theory is same, but there is difference for investors as the nature of both investment instruments is different.

Both unit trust and stock price will be adjusted accordingly after distribution/dividend payout.

The difference is here:
- Stock pay dividend basically means that the company is earning profit and main shareholders willing to share the profit with small shareholders, so investors will think this is better prospect.

- Stock price may surge after dividend payout as investors are more confident. So demand is higher, pushing up the price. Stock price is affected by supply and demand.

- Unit trust fund price won't be affected by supply and demand, but only the value of the stocks hold by the fund.

What you guys think if a unit trust consultant says, You don't worry, I will give you at least 10% dividend every year but dont ask how...Is it too good to be true in a roller coaster world of economy nowadays? I myself planning to put my money for at least 5-10 years if I do invest in a unit trust

Find another unit trust consultant. That guy is not telling the truth.

Care to share a tidbits of truth?

Yr reply should then be:
Can i have that in a written contract + specifics of the pay out period and by who for each specific year IF yr investments dont grow at a clip of 10%pa compounded, signed by U (the UT CON-in-sultant) & Fund house's CEO or at least the Fund Manager(s).

That should be the last U'll see of the fellow.

Statistically, a 10yr period would for PM's equity funds would get about 6%pa to 9%pa CAGR, assuming "so-so" market performance at the end of the 10yrs.
Please note that if the markets' performance at the end of the 10th year period is at a run-up, one may hit >10%pa if one were to lock-in then
OR if the markets' performance at the end of the 10th year period is a crash... er... 3%CAGR 2%pa CAGR pun boleh kena
beware how the statistics are shown - always ask for ending periods in say end 1998 or end 2008 (bad years)
VS mid 2010 so-so year
VS 2011 great before EU fears started weighing in (which month did KLCI hit it's highest ar - which month heheh - i'm getting old & foggy)

walk in also same rate.no difference than using agent

yes.good detailed explaination


dividend (distribution) every year maybe yes,but at least 10% every year is a no no.dont trust that guy

This post has been edited by greddym3: Dec 2 2011, 12:04 PM

Yep thanks a lot...I already knew the vulnerability of it and we playing with a risk in equity funds...Honestly speaking, there is an element of bluffing in his statement after I heard it...So what your comments on buying UT in half price nowadays, is it good to take advantage of the lower price? Can I really ask this in this thread? Can rite...

hi guys, thank you for your prompt reply...
that means i can assume distribution and dividend as realized profit right?

Pay dividend 10%, but later the unit NAV decrease like dog.. Hahaha
So end up, its just the same old thing

I would say, please get lost.
Do not invest your hard earned money, especially with someone that not willing to explain properly.

Even above that so called Consultant also not telling the truth.
Unit trust if declare distribution, they can in the form of cash. There is no mandatory that distribution must be reinvested back.

What about the yearly maintenance/fees for UT ? It's quite a % also.
I'd rather buy blue-chips/dividend-stock myself from KLSE.

It varies for each fund, but generally range of 1.5%-1.8% annual management fee for equity funds.