Not necessary, buying the wrong fund you are exposed to even more risk.

This is a misconception that unit trust are safe. It is not, some china funds sold since 2008 still have not recover yet.

well, i had to agree to you on buying the wrong funds.

Its about choosing the right fund. Minimal risk mean by comparing with investing by your own. For example : you invest your hard earn money in company A in BSKL,suddenly the stock price drop,100% you lose your money. But if you investing in UT,your money invested in many companies,also not only invested in stock but also in property,forex and etc by professional fund manager. Lets say 1 company drop,there's others to cover the loss.Thats why the risk is minimal,its not 0 risk,but its minimal. Btw just want to share our fund performance since inception. Keyword is patience,longer you invest,more you will get. The best investment is from medium-long term investment.



If interested,can pm me for more info.

1. Diversification usually means getting an average return for less risk, as shares moving up would cancel out losses of shares moving down. Unit trust try to achieve a higher return by adjusting the diversified portfolio for roughly the same amount of systematic risk, so a good measure is to see whether they outperform a diversified benchmark like the klse or emas index.

2. If an equity fund is chosen, usually the risk of the fund is the same as the market, meaning roughly equal systematic risk. The idea is think whether the fund can get you higher returns for the same risk.

3. Liquidity is one of the main attractions of unit trust. No need to pay penalties for withdrawal like fixed deposits, or worry about whether your sell orders on the stock exchange will actually be taken up.

4. Comparing the service charges for any higher risk investment (gold, property, stocks, etc) for an average investment of rm1000 per transaction, most have transaction charges of between 3-6%, so unit trusts are about equal on affordability to other investment.

5. Unit trust is an alternative to savings. It exposes funds to higher risk in order to get a higher return.

The above is assuming equity based funds.

An appropriate strategy would be to follow some golden rules;

1. If you have no idea what you're doing, do ringgit cost averaging

2. Do not invest so much that it cramps your lifestyle or you can't sleep at night

3. Aim for long term, over a period of more than 5 years, unit trusts are the best performing asset class.

If you have further questions I'd be happy to reply.

Minimal risk = very low risk
Lower risk = lower risk
Thus, personally, i think the word "Lower risk" should be used in your sentence, especially when U are comparing investing on our own VS mutual funds AND the "lower risk" part ONLY applies to single stock falling.
IF the entire market or markets fall, U really think mutual funds are "lower risk" than the stocks they are holding?

BTW, i can achieve the same "lower risk" via ETFs for lower upfront cost + lower annual costs
However, ETFs can get hit by sector or market falls too, like mutual funds.

Note - i've nothing against mutual funds, i personally use them as one of my vehicles for investing. It's just that word - "minimal risk" which jumps at me

This post has been edited by wongmunkeong: Mar 13 2014, 07:44 AM

er.. generally i agree with your thoughts, though.. on items like:
3. Liquidity is one of the main attractions of unit trust. No need to pay penalties for withdrawal like fixed deposits, or worry about whether your sell orders on the stock exchange will actually be taken up.

How can U compare to FD ar?
As compared with ETFs and stocks ok lar - however, good ETFs and stocks are also highly liquid & can be easily sold (low bid/ask spread) due to their daily volume.

4. Comparing the service charges for any higher risk investment (gold, property, stocks, etc) for an average investment of rm1000 per transaction, most have transaction charges of between 3-6%, so unit trusts are about equal on affordability to other investment.

U sure on this?
For RM1K transaction, it cost me approximately 1.2% for stocks. In fact, can get even lower if "cash transaction", just like mutual funds where U put in cash first. My 1.2% is via t+3 days to settle the payment.
VS
mutual funds' / unit trusts' 2% to 6% entry cost no matter how much?

BTW, as investors, as we grow our means, does that mean we should still keep doing mutual funds / unit trusts and pay the exorbitant entry costs if we can move $1K, $3K, etc per quarter or month?

1. If you have no idea what you're doing, do ringgit cost averaging
er.. if one has no idea, then DONT even touch until more is known and understood lar.
Dollar averaging into kaka is still kaka right?

3. Aim for long term, over a period of more than 5 years, unit trusts are the best performing asset class.
U sure on this? based on what statistics?
Heck, if true, would ETFs and direct stocks in good businesses be even better?
ie without the 2% to 6% service charges upfront where i lose $ right off
+losing 1.5% to 2.x% EVERY YEAR for management fees +"other costs"
VS compared to just buying-in good value into good businesses' stocks or ETFs?

Again, i'm not against mutual funds / unit trusts yar, just something glaring that i thought looks not too right.
Just thinking & bringing up discussion / clarification points

This post has been edited by wongmunkeong: Mar 13 2014, 08:06 AM

For No 1 & 2 : There is no guarantee a equity fund will always outperform the index, in fact 80% of UT fails to outperform the index, and in fact does poorer. If you want to match the market's risk or Beta a better exposure will be ETF index fund. Index fund have no sales charges, and have very low management fees (0.05% vs 1.5% for UT).

3. Liquidity for UT is actually very weak, it takes a few days for the company to cash in and pay you back not much different time length than cashing in shares and FD. Of course you no need to pay penalty for partial withdrawal because UT you already pay the penalty upfront (in form of hefty 2%-6% sales charge).

4. This is very misleading. UT charges 2%-6% upfront in terms of sales charges, most stocks/ETF charges charges less than 0.5% total for buy/sell. In fact UT is very expensive once all the fees have been accounted for.

5. Another fallacy, NOT all UT can outperform the benchmark, and not all consistently. >80% of the UT fails to outperform the benchmark.

This post has been edited by gark: Mar 13 2014, 10:21 AM

This is a great discussion.

Those are definitely valid points.

I've invested in both stocks and unit trusts over about 8 years, and so far my ut outperform my stocks. Maybe because I treat them the same way (minimal management, small monthly purchases).

So perhaps stocks need more active management from the investor?

So in the end it's still the investors decision to invest I guess.

Could give example of a "kaka" UT investment that we can keep an eye out for it?

anyways happy investing!

hehe - kaka is like PCSF (Public China Select Fund)

Holy sh*t I remember that one...haha yeah it was screwed up. Does it still exist?

Yup and btw, there were a few kaka ones from Southern Bank that was absorbed / incorporated into CWA funds as well

For me any fund which does not outperform the benchmark continuously can be considered as kaka fund...

Some of these bad funds are no longer listed? Where do they go?

Most of the bad funds are closed (money return to investor), merged and some even changed name..

Whatever they need to wipe out the bad name.

dear kuanbro,

should you want to invest, you can invest through Phillip Mutual Bhd that has 26 fund houses as partners. meaning, you can gain access to funds from many utmc through us saving you the time to go to their own respective offices. for more info, kindly pm me.

thank you.

EPF Revises List Of Unit Trust Funds For 2014/2015

The Employees Provident Fund (EPF) today announced the revised list of Fund Management Institutions (FMI) and unit trust funds for 2014/2015 for the EPF Members Investment Scheme (EPF-MIS). The revised list will take effect on 1 April 2014 until 31 March 2015.

Sauce: EPF

Any one is holding Public China Selected Fund ?




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CIMB-Principal launches fund, targets yield of 5%

KUALA LUMPUR: CIMB-Principal Asset Management Bhd, which launched its CIMB-Principal Global Multi Asset Income Fund on Thursday, targets to offer a potential yield of 5%.

URL: http://www.thestar.com.my/Business/Busines...-yield-of-5pct/

Shouldn't you be asking at the other dedicated thread?

https://forum.lowyat.net/topic/2466037/+2280#entry67056635

sorry, newbie