Alredy standby $ to top up on 2/9/2013 

I'm not one to bursts everyone hopes but I kinda have a rough idea as to why SC would shoot down the idea. It is safe to say that all of PNB's fixed priced funds easily accounts for a large majority of the local stock market. If one is to assume that these funds make up say 1/4 of the entire market capitalization, any "run" on PNB where its investors decide to redeem their units would be catastrophic to the stock market.

Remember that these fixed priced funds are pegged at RM1 regardless of its actual NAV. Even if the NAV for these funds are MYR0.70, PNB still has to honor the RM0.30 difference by whatever means necessary, including liquidating its equity securities at fire-sale prices. This has to be done as PNB honors redemption transactions on the spot or issues a cheque for large transactions pretty much on the same day of the transaction.

If you put yourself in the SC's shoes, you can see the systemic risks that these fixed priced fund can cause in the event of a severe economic slowdown and a run on PNB. Having ASB+AS1M+ASW+ASD+ASM wipe out a large chunk of market capitalization is not only bad for the stock market but creates after-effect shocks that can shake the entire economy.

My assessment that PNB's fixed priced fund make up 1/4 of the entire market capitalization maybe on the low side. Judging how large ASB alone is, one could speculate that PNB's exposure to the local equity market might be closer to 1/3.

That's how I come to the conclusion that SC will not sanction future fixed priced funds but....

There's nothing stopping anyone from hoping and wishing there is

Most of the fixed priced funds are classified (by PNB at least) as equity funds and judging from their respective annual reports, their exposure to equity is between 70% to 80% of the entire portfolio. Since PNB is not allowed to invest in overseas equities so pretty much their entire equity exposure is to the local market.

I know I'm being pessimistic but I can see the reasoning for why the SC frowns upon new fixed priced funds. The potential systemic risk of a "run" on PNB and its resulting effects on the stock market is just too large. Except for LTH, no other GLIC is as liquid and fixes its price like PNB. As you rightly pointed out, LTH represents a small footprint compared to PNB.

Mind you, even though the size of KLCI maybe a trillion ringgit, but remember that PNB invests the billions it has mostly in blue-chip stocks.

I'm no math guru but I assume that if you take out PNB's fixed priced funds out of the KLCI, you could just easily wipe out a couple of hundred points. Imagine the effects to the sentiment of the markets if that happens

I think ASM and ASM2020 dividends are more stable.

I hope the AS1M dividend matches the other funds as the initial response was pathetic.

have u guys ever thought of parking your funds in someone else's account?

get a trusted bumiputra fellow / friend. write up a contract. give him 0.5% earning. then u can top up as much as you want into his account.

i know a few of my non-bumi friends do that... i wondered why no one mentioned about this here?

park the fund under ASB. ASB declares 8+% dividend. u give 0.5% to 1.0% dividend to account holder and pocket the rest. it's still better return than ASM / ASW /AS1M

no risk, no gain...