CIMB-Principal eyes RM300m in sales from new fund - Global Dividend Maximiser Fund

http://www.thestar.com.my/Business/Busines...fund/?style=biz

I still do not understand how compounding interest works on unit trust.... anyone can share?

while waiting for more value added responses, try this...hope it helps
http://mycpf.cpf.gov.sg/NR/rdonlyres/1E64E...IVincentDIS.pdf
http://www.fundsupermart.com.my/main/resea...?articleNo=4803
https://secure.fundsupermart.com/main/mypag...dCompounder.tpl?
http://www.publicmutual.com.my/LinkClick.a...Mng%3d&tabid=86

This post has been edited by yklooi: May 27 2015, 06:52 PM

The II and AI is too big. Out of my capability.

The attached link only shows the concept of compounding interest, but it did not exhibit how investing unit trust can be benefited from it. Since the value of unit trust fund is primarily affected by fluctuation of price and unit held for the fund. Lets put it this way, if i bought at rm1.00 per share for RM1000, and the price increase to rm1.20 at next year (earning become RM1200), and drop to rm0.90 at the third year, then the value of fund at the third year will be (price x unit held = RM900. (Correct me if I am wrong). Therefore, I am experiencing loss in this scenario.


But if I got consistent annual return of 10% for example, then it increase NAV yearly and compound interest shall apply in this case, however, since the performance data which figure % pa shown is annualized (fund price could experience 1 year high and 1 year low), then the application of compounding will be ambiguous.

Need sifus to clarify this for me. thanks

IF, (fund price could experience 1 year high and 1 year low), then the application of compounding will be ambiguous....
same logic...if the fund continued to be in RED for 3 years...then there is not benefits.

it shows the concept, but this concept cannot be compared to the investment that had fixed results (ex. FD (assuming rate no change)).
in this case of FD....the compounding interest affect can be seen as the interest earned can be added into the calculation of next year interest rate.
but for investment like UTs that has no guarantee of returns.....what ever you earned can be wiped out too.....

but if one were to keep investing ...in the longer terms......the effect could be seen....


This post has been edited by yklooi: May 28 2015, 09:12 AM

Compounding interest or compound interest simply means "interest on interest".

You will get compounded interest when you don't take out the interest, and let it remain together with the principal.

Similarly, you will get CAGR (compound annual growth rate) when you do not take out any growth in the unit trust. (CAGR is also known as the annualized rate.)

When you take out the interest, it is called "simple interest". For example, RM1000 at a consistent 10% p.a. for 10 years, you will get 100% growth, when interest or growth is taken out every year.

But, if the growth is NOT taken out, and if we still get 100% in 10 years, then the annualized rate can be calculated; and it is 7.2% p.a. (Please google the formula on how to calculate the compounded or annualized rate.)

==================

In your above examples, they have nothing to do with compounding interest or annualized growth; just some examples of random growth rate in each year and how they will affect the investment differently.

What matters, to the investor, is the growth at the end of the invested period. Then the compounding interest or annualized rate can be calculated.

Of course, what happen to the fund at each particular year matters too, as you have shown in your above examples. If the fund goes negative in the current year, it will have to crawl much harder, and at a much higher rate of growth to not only recover the lost, but to also provide a positive growth the following year or years.

Affin Hwang AM launches DVF fund

http://www.thestar.com.my/Business/Busines...fund/?style=biz

Anybody investing direct with eastspring investment agents?

For epf, how much they charge ar?

Better direct or via fsm?

you can continue to wait for responses or can try contact EI directly and posts the answer here?

haha... still got sometime to wait before I pick up the call or email them..

If I was right, their charges are the same as any unit trust agents which is the standard rate of 3% sales charge.

FSM is lower since they are charging at 2%.

The only one I know that can give lower is Financial Planners which can give 0% sales charge for EPF through iFast, but I doubt any FP would be willing to do this unless NAV transfer.

Bro.. what do you mean nav transfer?

Amanah Mutual unveils new open-ended syariah-compliant fund
http://www.thestar.com.my/Business/Busines...fund/?style=biz

NAV stands for Net asset value.

NAV transfer is a fund transfer from one nominee to another nominee or a fund to another fund.
For example : I have a client who already invest in Public Mutual EPF with an agent. To attract the client to invest with me, I offer 0% sales charge to the client if the client redempt his investment with Public Mutual and invest with me.

Another example is : A client already invest in FSM EPF. To attract the client to invest with me, I offer 0% sales charge to his current and upcoming EPF investment.

These are just examples. Does not mean it is usually done in real life since this type of offer is pretty much a race to the bottom for the FP.

Bro... but what I understand for EPF. It cannot be transfer. When you sell, monies go back to EPF. Then have to take out again to invest with you or some other FP.

Correct me if I am wrong...

I believe that is what he meant.

Yup

Hi guys,

I am fairly new to Unit Trusts stuff. Have been reading a lot these last few weeks on various things about it.

I think may be a little pedantic here. Whilst looking at various fees and charges imposed, I noted the phrase:

Trustee's fees: subject to minimum of RM 18,000 per annum

In examples on how to calculate expense ratio that I managed to google, only added all the relevant "percentages of charges" so to speak, and you come to a certain figure.

My question is: When does this "minimum of RM 18,000 per annum" actually apply?

Sorry if this sounds silly - can't seem to find any explanation out there.

Many thanks guys

This post has been edited by mowgli1234: Jun 17 2015, 02:11 PM

All fund management fee including the trustee fee will be lumped together as percentage of NAV. The percentage is termed as management expenses ratio (MER).

All fund management fee is deducted on daily basis from posted/published daily fund NAV/price.

You no need to worry much about it and you need to aware that the lower the MER, the more prudent the fund is.

When you buy a fund, you should be more concern or vigilant on the upfront service charge which could be as high as 6.5% depending on the sales channel.