Actually no. My equities are getting the beating but my fixed income value maintain or rose slightly compare to a month ago. BTW, I have 13% in MM for contingencies, so actually 50% in fixed income right now. Got the ammo ready in anticipation of market downturn.

My agent continue to meet us on monthly basis. She said to make sure we stay with her as she get 0.0x% a year of the total funds under her name.

PIINCOME & PSBF

This post has been edited by kimyee73: Aug 29 2013, 04:11 PM

worse, you now pay tax to the government. Better don't have redistribution.

of course he understand. he is the famous Uncle Looi of FSM thread...

luckily it is not with his grandmaster

That is his grandmaster loh

You will need to diversify a bit to achieve your goal. PIEF is not the best return fund. Look for fund with Lipper Leaders rating of 5-5-5 or 5-4-5 such as PFSF, PDSF, PISSF, PIDF etc. With these fund, you may "safely" use 8% as annualized return in your calculation. If you're risk taker, look for small cap funds and surf the wave with VCA, and you may be blessed with above average return.

I do believe that 5-5-5 funds have slightly higher return with most of them having annualized return of more than 10% over the 5-10 years period. I consider them evergreen funds and they form the backbone of my portfolio with IRR of 9.8% over the last 10 years.

For me 3 years is pretty short to look at the consistency and capital preservation. I would look at 1-5-10 years return and how consistent they are relative to peers and how well they recover from market crash like 2008 event. My portfolio construction is also not following the usual recommendation of diversification. Lipper Leaders rating also don't change that frequent to affect my portfolio and many of the funds I've invested for the last 5-10 years. That is me. You and others might look at different criteria.

[Fund Name] - [LL Rating] - [1,3,5,10 years annualized return]
PIEF - 3-5-3 - 8.09%, 9.62%, 7.35%, N/A%
PRSF - 5-5-5 - 7.69%, 11.38%, 10.83%, 13.62%
PFSF - 5-5-5 - 12.83%, 14.35%, 12.01%, N/A%
PDSF - 5-5-5 - 9.07%, 12.21%, 10.23%, N/A%
PIDF - 5-5-5 - 9.06%, 12.11%, 9.44%, N/A%
PISEF - 5-5-5 - 10.64%, 13.83%, N/A%, N/A%
PISSF - 5-4-4 - 7.5%, 10.7%, 10.6%, N/A%

LL rating is Consistent Return - Preservation - Total Return

For newer funds that don't have 10 years data, I would look at their 1-3-5 years annualized return but Lipper Leaders rating would be my first filter to choose stable high return fund.

Let me take a shot at explaining this.

First you need to understand that different fund has different unit face value. Example Fund A is RM1, fund B is 25sen and fund C is 50sen. If you do not understand what is face value, Google face value. At value of RM1 = 1 unit Fund A, 4 unit Fund B and 2 unit Fund C. So, you cannot compare NAV of fund A to Fund B to Fund C because they have different face value.

But if NAV for Fund A is RM1 and NAV for Fund B is also RM1, then Fund B is very expensive because the value has gone up 4x from initial price of 25sen to now RM1. But of course the manager would not allow Fund B to become so expensive, they will try to bring the value back down to 25sen again by "dividend redistribution", in this case, divide the 1 unit into 4 unit and bring down price to 25sen. 1 unit x RM1 = 4 unit x 25sen.

Now to your question.
You may not make extra money if Fund A has high NAV by switching it to lower NAV Fund B but lost switching fee instead.
Example.
Fund A face value is RM1 and NAV is now RM1.50. Let say you have 1000 unit.
Fund B face value is RM0.50 and NAV is now RM0.60
When you switch from Fund A to Fund B, you sell Fund A for RM1500 and buy Fund B at RM0.60 and get 2500 unit of Fund B. RM1 x 1000 unit = RM0.60 x 2500 units. In fact you might get less than 2500 units if you need to pay switching fee.

What will make you more money is how fast NAV will go up. If Fund A value is going up at 20% a year and Fund B value is going up at 10% a year, you will make less money by switching from Fund A to Fund B.

I hope it is clearer to you on your plan to switch.

I think you should tell exactly what is Fund A and Fund B so that sifu here can advise on your plan. Fundamentally your understanding of NAV cheapness is still flawed after so many sifus' explanation. I'll give it another shot later if you still don't get it, right now need to sign-out first.

Aiyah Pink, I know lah but since he don't understand so many being written, I just want to make sure he is not comparing funds of different par value and thought it is cheap. Apparently he knows that thru his RON example.

PRSF is one of the better fund in PM EPF stable with 3y annualized return of 10.8%. PDSF is 10.1%, PAUEF is 7.31%, PEF is 5.91% and PSGEF is new fund with 1y return at 7.6%. You don't want to simply switch from a good fund to a lesser one unless you know there is a big potential upside in the other funds and current valuation is quite cheap (not by looking at the NAV.

BTW, are you clear about NAV already and why you should not look at it to determine if the fund is cheap or not?

Let say a fund is like water reservoir but this reservoir consist of many small water tanks of equal footprint of let say 1meter square (1m2). The water tank are connected together by pipes at the bottom, so all tanks water level would be equal to each other, up and down together. Let say the company that own this reservoir is selling a stake in the water tanks to investors and the price is determined by the water level in the tank. You, bb100, invested in 4000 of such tank that cost you rm4k. Since the water level is at 1m, the price is rm1 per tank. There is a stream that flow into the reservoir and over time, the water level increases. The water level is now at 1.2m and price is now rm1.2 per tank and your investment now worth rm4.8k. The owner now decided to build more water tanks and connect them together as well. For every 2 tank, the owner built 1 more tank and distribute it pro-rate to their investors. So now you own 6000 of such tank but since the tank are connected together, the water level drop to 0.8m causing the price of each tank to drop to RM0.80. But you now own 6000 tank and your investment is not affected as it is still worth rm4.8K. But you can also decline the additional 2000 tanks and take rm1.6K in cash instead. This is call dividend redistribution and the NAV is the water level. Let call this reservoir B.

Now, there is another water reservoir A with similar setup. The stream that flow into this reservoir has different flow rate than reservoir B, so the water level rises faster/slower than reservoir B and the price per tank is also higher/lower. Now do you want to make the investment base on the water level or on the flow rate? The flow rate here is annualized return. The water level could drop because the owner build more tank or there is a drought.

I have all PDSF, PRSF, PISEF, Lee Sook Yee fund and Chen Fan Fai fund and more

I would suggest that you invest 70% of the $ lump sum and 10% every 3 months afterward. This would take advantage of better lump sum return but at the same time have sufficient fund to top up in case the fund going south. I would do this if I have lots of cash to invest. The return is better than DCA in most market condition.

On my indicators, PFSF has not been performing as well. Moved below it's 39 weeks moving average twice last year and W%R indicator also shows accumulate on low if still want to hold this fund. However it has been moving up in last couple of weeks and now slightly above its MA.

All my PM funds are from EPF, so has to be jaguh kampung. Anyway, my overseas are all in TDAmeritrade. So, I'm good