Still no action... I, too have asked around and none of the sevice provider can give me simple answers like what is the Sales charge, annual management fee, agent fee etc.

They say wait till Oct to get a clearer picture.

Xuzen

Off my mind, I recall reading somewhere that around 1.5% of Malaysian citizen pays the highest tier tax, i.e 29 million x 1.5% = 435,000 tax-payers

This PRS scheme is only as good as the tax relief. I won't be surprise, financially savvy contributors will not put more than RM 3,000.00 p.a.

Once the tax relief is gone, the whole PRS scheme will be redundant.

Xuzen

Lets say your total income for 2012 is RM 103,000.00.

The tax you have to pay to our beloved govt is RM 14,315.00 (first RM100K) + RM 780.00 (next RM 3K @ 26%) = RM 15,095.00 accoding to the LHDN schedule.

If you have made a RM 3,000 contribution to PRS, then you need to pay RM 14,315.00 only because the govt allowed you a RM 3,000.00 tax relief from this scheme. In essense you save RM 780.00 in tax.

If that is the case, you are actually contributing only RM 3,000.00 - 780.00 = RM 2,220.00. So in essense, you have already made a 26% gain.

Understand?

Xuzen

If you cannot stomach a 70% equity: 30% fixed income exposure, then you can opt for 20% equity: 80%fixed income fund aka conservative.

It all depends on contributor risk profile.

Xuzen

Funny enough, the people who are very interested in this PRS scheme tend to be people who are at the highest tax bracket.

Those at the say 3% tax bracket tend not to be so interested in this PRS thingy.

I have an epiphany:

Since some PRS provider are giving zero upfront charges and all else being equal, guess my money will go into PRS vis-a-vis traditional cash investment into UT.

Bye bye Pub-Mut; hello HwangDBS.

I am happy this PRS happened, maybe it will kick-start the beginning of zero upfront era for the industry.

Yeah, Pub-Mut the lumbering and slumbering giant will probably awaken by this and start to give better return to its investors. Zero upfront fee would be a good start.

Xuzen

Pub-Mut PRS is a seperate entity, it does not count towards the Gold Status. So, no free insurance & free will writing for you.

Xuzen

---

Added on December 10, 2012, 4:21 pmWhy so kia-si (scare to die?)

It is only after all RM 3K p.a. and that is 3% exposure in total of your annual income (assuming the income is RM 100K p.a.).

Furthermore, even the aggresive fund is invested in 70% equities and 30% fixed income. 70% equities = RM 2,100.00 into equities = Value at risk of 2.1% in total only. Therefore no need to be so kia-si.

Try seeing the bigger picture and do not be so myopic.

Xuzen



This post has been edited by xuzen: Dec 10 2012, 04:21 PM

Yoda says, "Emo is bad for investment.

Make bad decision one will, when smoking hot female agent assist, yes?"

Xuzen

Let'c compare:

Public Mutual Growth Fund vs Hwang Growth

Both start at zero present value. Let's assume both the fund will give an average return of 10% per annum for 10 years (N = 10). The annual payment is RM 3,000.00.

With a sales charge of 3%, the PMT for Pub-Mut will be RM 3,000/1.03 = RM 2,912.62, Hwang PMT = RM 3,000.00

So we have, N = 10, Mode = Begin since we put the money at the beginning of the period.

For Pub-Mut, the annual expense ratio is 1.56%; whereas for Hwang is 1.84%

Public Mutual, the real effective rate of return will be, i = (10 - 1.56)/1.0156 = 8.31%

For Hwang, the real effective rate of return will be, i = (10 - 1.84)/1.0184 = 8.01%

For Pub-Mut:

PV = 0; PMT = 2,912.62; N = 10; i = 8.31%; Mode = Begin; Find FV = RM 46,378.45

For Hwang:

PV = 0; PMT = 3,000; N = 10; i = 8.01%; Mode = Begin; Find FV = RM 46,963.11

Conclusion:

Hwang wins Pub-Mut i.e., zero upfront fee wins over upfront fee.

Xuzen

P/S: The above calculation is based on my trustee little friend aka Monsieur Hewlett-Packard 10B-II

This post has been edited by xuzen: Dec 20 2012, 03:03 PM

I substituted N=20 and the result shows that Pub-Mut wins Hwang by about 0.5% at year 20th.

However, even after the fifth year, other parameters come into play and lower management fee will be secondary to risk adjusted performance wrt benchmark.

In other words, a different set of parameters will be used to evaluate the funds. Namely: Sharpe, Treynor, Sortino, Modigliani ratio et al.

Xuzen

You agent rite, with zero sales charge, how you earn a living ar?

Xuzen

Ha ha ha LOL LOL LOL......
Xuzen

With this new info, it looks like RHB-PRS is the best bang for the buck.

Xuzen

For RHB-PRS argument:
i) RHB-PRS YTD ROI is 8.6%; Hwang-PRS = 7.6%
ii) AMF = 1.8% for Hwang; 1.5% for RHB

Argument against RHB-PRS
i) RHB-PRS growth is 100% M'sia equity exposure; whereas Hwang is Asian ex-Japan exposure with around 33% M'sia equity exposure. Hence RHB less diversification and more local centric.

Xuzen

Biggest advantage of PRS = zero sales charge. Can still withdraw..... Just pay 8% penalty to LHDN only.

Once I attended Yap Ming Hui's seminar and he said look at your bank account and other saving vehicle.... Which one has the most money in it?

He said it is KWSP isn't it? Most of the participants said yes. Yap said why is it the biggest chunk? Because you can not get it out.... Hence it is by far the biggest saving you'll ever have. He said human nature makes us very vulnerable to want to withdraw the money and spend it.... It is just human nature.

Xuzen

Oops. sorry... yeah you are right, can only withdraw from a/c B which is 30% of your total sum invested.

Xuzen

Gilabola,

When the news of this acquisition broke out three months ago, I too asked the same question? I got hold of their relationship manager and asked him that.

The answer I got was this: "fund management is very much the fund manager and it's team. As long as the team is there intact, no matter who is the owner of the company, it should not change". My take is that Affin would be wise to let status quo reign since the current fund management team is doing well.

Xuzen

My reasons:

I) Suckish IRR compare to PRS
II) Too many complicated charges here and there i.e., not straight-forward.
III) It is an annuity plan, macam pension... every month take the same amount until mati. No fun, no syiok. Boring aje. Inflation potong stim somemore.
IV) I want to see money, lots of it... many zeros. I want to go Batam, Golok & Haadyai every month after I retire.

The above are my reasons. Others may have different views.

This is not a personal rebut to MNet, more like I need to further clarify and elaborate on MNet's generalised statement for the benefit of other readers.

Protection in this context means Life coverage and in the basic rule of finance, remember this, "There is no free lunch", all comes with a cost. So when a product is built in with a life protection, a premium has already been levied on the product itself, so don't think it is free.

Hence, if for someone who already bought whole-life elsewhere, why should he pay extra for something which he does not need? This brings me back to my statement on life assurance products. In order to cross sell and boost sales, many of these life company are mixing creatively to sell their goods. That is why there is a lot of hidden charges and lack of transparency in the industry. Client may be paying extra for something that he may not need.

Xuzen

Mr Uwindrah, can you please me your CMSRL number, so that I may check with the relevant authority to verify that you are a bona-Fide Planner. Thanks.

Xuzen

I bet the so called financial planner don't even know about CMSRL......

Xuzen