If active trading is your cup of tea, then realised that unit trust is not a suitable vehicle.

Unit trust is for those who are into passive investment, for example, those who needs to jet to Paris on Monday to attend a luncheon with some venture capitalist then Hong Kong on Friday to have dim sum with his MBA mates from HKU. Thereafter having a weekend shopping with his Victoria Secret Model girlfriend in Singapore.

So different strokes for different people.

Xuzen

Actually, I don't trade and I still use the traditional method aka:

"Hello Mr Broker, can I pleeez buy 20 lots of XYZ counter? Thank you" i.e., by Phone.

So I am charge at 0.6 + 0.03 + 0.1 = 0.73% very close to the 0.75% charged by Pub-Mut.

Since I am those buy and hold to get dividend type of investor, these online discount thing don't really entice me that much.

Xuzen

With a flat rate of RM 25.00 per transaction, hence when you are moving high volume around, Pub-Mut is a more cost effective way.

Xuzen

Wow WMK,

I see that there is a treasure trove of useful information presented in the FPAdvisor.

How can I get it? Is it free or need to pay?

I can see that with info, and my Excel Solver function..... wonderful things can happen.

Xuzen

Pai- seh, pai-seh as I am a bona-fide Pub-Mut agent but I have been so kiam-siap with the RM 90. I do not have a FPAdvisor. I have doing it the ol'skool way i.e., EXCEL 2007.

Warning, quant speak ahead: My portfolio is hitting 9.5% p.a with a Sharpe of 1.35 using 3.1% as Risk-free. My VaR is 7.5% with a 95-confidence level over a 36 mths period. How is your baby doing?

Xuzen

Last I check, Pub-Mut still commands the market leader position, and I believe this is mainly attributed to people who are financially savvy in M'sia is still miniscule.

Auntie-auntie and uncle-uncles who rely completely on the advise of agents still are aplenty. I forsee a change in demographic in another 5 to 10 years time. So for the time being, Pub-Mut is still safe.

Xuzen

Yes, it is worth to invest in Unit Trust if you are not well verse to do investment on your own. Historically Some Unit Trust have been shown to beat inflation.

Typical annual fee is 1.5% or slightly more. Some may be as low as 1%. Bond fund can be as low as 0.5% p.a.

Some Mutual Fund from the US has annual fee as low as 0.1%, but that is US, not in Malaysia.

Typical question you should ask when investing are:

i) What is the historical return over 10 years, 5 years or 3 years. They should be preferably above 5% because the typical inflation in Malaysia is around 4% p.a. So the investment must work harder than 4% p.a. (I use 5% to put in some buffer)

ii) How volatile or how much is the standard deviation of the fund? The larger the standard deviation the more volatile the fun i.e., more chances of the fund not hitting its objective.

iii) What are the charges? The lower the better i.e., common sense.

So now, go lar... quickly make your money work harder for you and not you work hard for the money. Good luck.

Xuzen

P/S: Practice dollar cost averaging i.e., put in little by little and and not one lump sum to minimize the risk.

It is wise to choose the auto reinvest dividend option simply because the dividend reinvested is free from the initial sales charge.

Xuzen

All the three funds that you quoted are funds from Pub-Mut that has out-perform their respective benchmark. So it is good to buy them.

Btw PISEF and PRSF, both are invested in 100% locally. Perhaps you would consider buying into foreign funds to diversify?

Xuzen

This post has been edited by xuzen: Nov 18 2012, 10:04 AM

What he actually meant was "This year Public Mutual no issue FREE diary"

I got my diary already.

Wrt sales charge, I have never pay more than 1% for its fund. If you are serious investor and want to build your wealth using the Unit Trust method, take the FIMM-CUTE exam and be an agent for yourself, by yourself.

I also went a step further, to take the CUTA license where in future, my sales charge will be zero.

Xuzen

I have said this and I will say it again, Pub-Mut is a jaguh kampung fund manager.

Only its local funds have beaten the benchmark. Having said that their funds are stuck at the middle. They are neither the best nor the worse, stuck in the middle.

Xuzen

This post has been edited by xuzen: Dec 7 2012, 04:16 PM

Last I checked, both PIX and PSF under-perform their respective benchmark.

Choose PDSF.

Xuzen

I am also in the process of transferring my investment out of Pub-Mut slowly. I forsee this exercise will end by end of this year and thereafter will not renew my FIMM membership and shall terminate my Pub-Mut UTC agency acoordingly.

Bye bye Pub-Mut, I no liek u anymoar.

Xuzen

He he he... I only pay either 1% (KWSP equities) or zero (Bonds) as an agent.

My next target is Phillips Capital or IFast at zero upfront because I have upgraded my FIMM lic to IUTA lic.

Xuzen

Pub-Mut will not feel threathen for now, maybe in 2 - 4 years time they will and they must change their business model.

Internet savvy investors are still in its infancy, people like us make up maybe 0.01% of total AUM in the mkt.

However be warned that the days of commission based agents will shrink as more investors will demand lower cost for their investment.

Zero trailing commision; Fee based advisory is the future trend.

Xuzen

What a coincidence, PFSF makes up about 15% of my finds with Pub-Mut.

Xuzen

According to the brainy people at Morgan Stanley, to evaluate a fund, the parameters one need to measure are:

i) Annualised return of the fund and its benchmark

ii) volatility aka standard deviation of the fund and its benchmark

iii) the beta of the fund wrt its benchmark

Google Modigliani-Modigliani ratio for the formula.

NAV is not part of the equation.

Xuzen

Except for PSSF, the rest are good to go in. But be warned that most are very local funds, PUb-Mut very jaguh kampung, only their local funds are performing above benchmark.... Foreign one ar, so so only.

For actual return, refer to the annualised return column in quarterly fund review newsletter.

For a lay person, you may take the 12 month FD rate as your risk free rate.

For standard deviation, look again at the quarterly fund review and use fund volatility factor as the stan-dev.

For PCSF, I have said it before and will say it again, you do not pay the fund manager 1.5% of your NAV p.a. ti underperform the benchmark.

How can a manager who is suppose to look after the fund, perform worse than the benchmark which is collection of passive i.e., unmanaged collection of equities?

Should dump the fund long time ago liao.

Xuzen

Bad allocation, as your funds are mainly domestic market of the same asset class and of the same benchmark. You are not benefiting from diversification.

Xuzen

On Fri, 1/3/2013 KLSE rebounded to 1,637 pts.

I took the chance to rebalance my portfolio to 80:20 in favour of fixed income compared to 50:50 previously.

Favouring cash position in view of the extreme uncertainty with the coming GE-13.

Preparing my war chest ready for barrel fishing later on.

Xuzen